Unit 5 Sales Management

Sales Management
1
Session 1 & 2
 Sales Management
• Objectives
• Theories of Selling
• Sales Function
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Sales
Finished goods in
inventory
Distributo
r
Retailer
Customer
Consumer
Pankaj Arora Sales and Distribution 3

Management
Sales Management is defined as ” The
 Planning
 Direction and
 Control of personal selling
Including
1. Recruiting,
2. Selecting
3. Equipping
4. Assigning
5. Routing
6. Supervising
7. Paying and motivating
as these tasks apply to personal sales force” -AMA

Management
Objectives
 Sale of Products/Services
 Add profits to Business operations
 Fulfill social obligations
Organizing planning and implementing the

sales efforts to achieve corporate goals
related to market shares, Sales Volume and
return on investments (ROI)

Management
Theories of personal
selling
 AIDAS
 Right set of circumstances
 Buying formula
 “Behavior Equation” Theory

Management
AIDAS
 Attention
 Interest
 Desire
 Action
 Satisfaction

Management
Right set of circumstances
o “Everything was right for that sale”..Sum
up Second theory. It is also called
Situation-Response theory
o This is Seller-Oriented Theory: It stress the
importance of sales person controlling the
situation.

Management
. Buying Formula Theory
 .This Theory was given by late E.K.

Strong Junior.
 Identify the problems of the buyer
 Identify his needs
 Map your product to his needs
 Provide a appropriate solution to
him and justify the sale
Need Solution Purchase Satisfactio

n
Management
Behavior Equation Theory
 B=P*D*K*V
where
 B= Response or the internal response
tendency, i.e. The act of Purchasing a Brand
 P = Predisposition
 D = Present Drive (Motivation Level)
 K = “Incentive Potential”, i.e. The Value of
Product or its Potential Satisfaction to buyer.
 V = Intensity Of all cues
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Knowledge about the
Product / Customers / Technology
 Contextual knowledge to close the sale
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Steps In Selling
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Explanation:- I
 Prospecting: In sales, the process of identifying
likely customers by searching lists of previous
customers, lists of trade associations,
government publications, and a variety of
other sources. Systematically collecting names
of the prospects (called leads).
 Steps in Prospecting:-
 Formulating Prospect Definition
 Searching out Potential Account
 Qualifying Prospects
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II
 Presentation & Demonstration:- The crucial
task of Selling is communicating about Product
to buyer. A typical sales presentation follow
AIDA approach.
Usually in sales Presentation there is
demonstration.
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III
 Sales Resistance / Handling Objection :- During
sales presentation or at the time of closing
sale, a salesman can encounter objection from
the prospects
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IV
 Closing the sale: It result for order into Product
& Services. It is climax of whole game of
selling
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5 E’s
1. Effective
2. Efficient
3. Enjoyable
4. Enthusiastic
5. Ethical…
Write an article on : An Effective Sales Manager

Management
Traditional
. Vs Relationship
. . Negotiate a win-win & stay around
 Do the deal & disappear
. . Long term thinking and acting
Building the business on relationships
 Short term thinking and acting 
 Building the business on deals

 Keeping all customers and clients
 Getting new customers  Relationship focused for results
 Selling focused  Incentive for long term relationships

and revenue
 Incentive for doing the deal
 Swift,strong,safe and enduring results
through relationship building
 Race for sales result
 After sales support and  After sale support and service seen as
service –poor. investment in the relationship
Rewards incentives for doing

 Rewards incentives for maintaining
and growing relationship and revenue
deals
The deal is the end pursuit of
 Sale just the beginning of the pursuit
deals of the long term relationship.
Management
Sales Management
Function
 Ques to be ask in Class.
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Session 3
 Sales planning
 Strategic role of sales

management
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Before We Start Sales Plan Let Us
Understand Some Basic Term
 Market Potential:- A market potential is an estimate of
the maximum possible sales opportunity present in
particular market segment & open to all seller of a
good or services during a stated future period.
 Sales Potential:- A sales Potential is an estimate of

the maximum possible sales opportunity present in
particular market segment open to specified company
selling goods or services during a stated period.
 Sales Potential represent sales opportunity available to a

particular manufacturer/ Seller such as while a market
opportunity indicate sales opportunity available to an entire
industry
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Sales planning-
Steps
1. Objective setting
2. Designing sales force-Structure & Size
3. Deciding sales force compensation
4. Recruiting and Selecting sales force
5. Training to sales people
6. Guiding and Motivating the sales force
7. Performance rating of the sales force

Management
Planning sales call
Looking ahead on the basis of present and immediate past.
1. Objectives
2. Scope of business
 Can be daily ,weekly, monthly, quarterly or annual plan

 The plan before hand makes the manager responsible for
the execution and forces a comparision between anticipated
progress and actual achievements and also searches the
means of proper implementation

Management
Strategic Role of Sales
Management
Key Decision areas
 Determine the size of sales force
 Decision regarding type and quality of sales force required
 Designing the sales organization
 Territory designing
 Recruitment and training procedures
 Task Allocation
 Compensation of Sales force
 Performance appraisal and control system
 Feedback Mechanism to be adopted
 Managing channel relationships
 Co-ordination with Marketing Deptt.

Management
Sales Strategy-1
Relationship Strategy
Establishing and maintaining a partnership type

relationship internally as well as with the customer is
a vital aspect of selling.
The sales force that builds a effective relationship

with the customer and provides valuable service are
usually high performers and top achievers

Management
Sales Strategy-2
 Double Win Strategy
Both customer and the sales person come
out of the sales with a sense of
satisfaction.
“The sales person is a problem solver”
Results
1. Repeat business
2. Future referrals

Management
Sales
Strategy-3
Instant Service
 Q-Highest Quality
 C-Lowest cost
 D-Least delivery times

Management
Sales
Strategy-4
Hard Sell Soft Sell
 Concern for self  Concern for
 Talking customer
 Pushing product  Listening
 Presenting
 Providing buying
features opportunities
 Advocating
 Presenting
without benefits
acknowledging  Acknowledging
needs

Management
Session 4
 Sales Quota
 Sales Territory
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Sales Quotas/targets
Refers to
 an expected routine assignment to sales
units,such as territory,districts and branches

etc.
 Also assigned to sales people (individual
/groups) over a particular time period

and are used to plan control and
evaluate selling activities of a company.

Management
. Sales quotas
Quantitative goal that is assigned to an unit of
.
sales organization
Provides performance targets
Sales Provides standards Sales
Quotas Quotas provide control Objectives
Quotas are motivational

Management
. Types of Quotas
Basic types
.
Sales Quota
Expense Activity
Volum combinations
Quotas Quotas
e
Quota
s

Management
. Sales Volume Quotas
Sales
Volume
. Quotas
Product Product Sales Sales Sales Sales Sales

Line Range Division Territories Districts Offices Force

Management
Expense quotas
 Related to selling costs within reasonable
limits.
 Sales person may receive a expense
budget which may be a percentage of the
territory’s sales volume.
 The sales person must spend only this
amount.

Management
Activity Quotas
 Number of sales presentation
made
 Number of service calls made
 Number of dealers visited
 Number of calls made for recovery
 Number of new accounts opened.

Management
WHAT IS A SALES TERRITORY?
 A sales territory is composed of a

group of customers or a
geographic area assigned to a
salesperson.
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WHO IS RESPONSIBLE FOR
TERRITORIAL DEVELOPMENT ?
 Development of sales territories is

usually the responsibility of the
sales manager overseeing the
larger sales units within the
organization.
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WHY ESTABLISH SALES
TERRITORIES?
• To obtain Proper market coverage.

• To establish a salesperson’s
responsibility.
• To evaluate performance.
• To reduce sales expense.
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Why sales territories may not be
developed:
• Salespeople may be more motivated

if they are not restricted.
• The company may be too small.
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Session 5
 Sales Control
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Sales Control
 Is a function of every
management to ensure the
operations are being carried out as
per the plan to achieve the
objectives.

Management
. Types of Sales Control
Type of Prime Purpose of control Approaches
.control
Annual Plan
responsibility
Top Level To Examine whether the -Sales anaysis
1 control Managers planned results are being -Mkt Shares analysis
achieved -Mktg expenses to sales
ratio
Profitability Sales Controller To Examine where the Customer attitude

2 Control company is making and Tracking profitability
loosing money -Product territory
-Market Share
-Trade Channel
-Order Size
-Sales audit

Management
Steps in designing a sales control system
.
 .
Objective setting
 Designing different control levels
 Designing a report system and
feedback system
 Deciding tools and techniques of
control
 Variance analysis and reasons
thereof Sales and Distribution
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Management
. Sales Audit
Sales audit is a
.
 Comprehensive
 periodic
 Systematic
 Independent examination
of a company’s
 environment
 objectives
 strategies and
 activities
To determine problem areas an opportunities to

recommend a plan of action to improve the company’s
sales performance
Management
. Aim of Audit
 Find the true and accurate position of
. sales
 To exercise control over future
planning and over the results of a

company
 To analyze the past performance and
learn from the mistakes made

 To bring alertness to the organization
 To award increments promotions and
give extra rewards

Management
Session 6 & 7
 Organizing the sales force
• Recruitment,
• Selection and
• Training the sales force.

Management
. Recruitment
Process of locating and attracting job
.
applicants.
Finding potential job applicants Identifying future good employees
Getting them to apply for the job Provide information about company

Management
Recruitment Sources
 Advertisements.
 From Inside (friends/collegues).
 Recruitment agencies.
 Educational Institutes.
 Competitors and other industries.

Management
Who does Recruiting?
 Personnel manager
 Higher level sales executives
 At times outsourced

Management
How is it done?
 Job description - identify the duties,
requirement responsibilities and conditions
involved in the job.
 Job analysis – result of formal job analysis-

should be in writing-Entails what duties and
responsibilities of a sales position are-and on
what basis the new employee will be
evaluated-is used in recruiting selecting
training, compensationg and evaluating

Management
Selection Procedure
 Hiring Profile
 Application Scrutiny
 Interview
 Psychological testing
 Reference Check
 Physical Examination
 Job offer

Management
Training
 Give a man fish he will eat it , Train a man how
to catch a fish he will feed his Family.
This statement shows the importance of

Training
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Training Process
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Training the Sales force
 Aim of training
 Building sales training programme
 Identifying initial training needs
1. Job specifications
2. Trainee’s background and experience
3. Sales related marketing policies

Management
Training Types
 On Market place
 On competitors
 On handling competition
 On communication
 On negotiating

Management
Training Methods
 Lectures
 Personnel conferences
 Demonstrations
 Role Playing
 Gaming/Simulation
 On job Training

Management
Session 8
• Compensation
• Evaluation of Sales Force
(**Assignment)

Management
Compensation
Compensation plans for the sales force
are designed to achieve several
objectives
 Assist the company to meet sales
projections
 To reward individual sales persons
 To bring earnings to desired level

Management
Formal Compensation Process
.
Determine
compensation
.
Establish the sales
Objectives and
strategies
Determine
force objectives Compensation
factors
Appraisal and recycling Implement long and

short range progammes
Measure individual, group and Communicate compensation policy

Organizational performance
Relate rewards to
performance

Management
Methods of compensation
 Salary
 Straight commission
 Target Commission
 Bonus, Profit sharing, fringe benefits
 Reimbursement of expenses

Management
Evaluation of Sales Force
Major steps
 Establishing sales goals and objectives
 Developing the sales plan
 Setting performance standards
 Allocating resources and sales efforts in
implementing the sales plan

 Evaluating sales force performance
 Implementing corrective actions

Management
MBO
Management by objective:
Mutual goal setting between
sales manager and sales
person

Management
Stages in effective performance evaluation
.
. Performance Planning
Performance Appraisal
Performance Review

Management
Evaluating effort
 Cost of sale
 Profit contribution
 Per unit sale
 Repeat sale
 Territory sale density
 Retailer relationship

Management
Evaluating effort
 Quotas
 Selling expense ratio
 Gross margin ratio
 Territorial market share- industry sales to company sales
 Sales coverage effectiveness ratio- convert prospects to
customers
 Call frequency ratio
 Non selling activities
 average order size
 Calls per day
 Order call ratio
 Average cost per call

Management
Thank You
Pankaj Arora 66

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Sales Management

Pankaj Arora Sales and Distribution 3

Pankaj Arora Sales and Distribution 4

Organizing planning and implementing the

Pankaj Arora Sales and Distribution 5

Pankaj Arora Sales and Distribution 6

Pankaj Arora Sales and Distribution 7

Pankaj Arora Sales and Distribution 8

 .This Theory was given by late E.K.

Need Solution Purchase Satisfactio

 Contextual knowledge to close the sale

 Searching out Potential Account

Write an article on : An Effective Sales Manager

Pankaj Arora Sales and Distribution 17

 Building the business on deals

 Selling focused  Incentive for long term relationships

Rewards incentives for doing

 Strategic role of sales

 Sales Potential:- A sales Potential is an estimate of

 Sales Potential represent sales opportunity available to a

Pankaj Arora Sales and Distribution 22

 Can be daily ,weekly, monthly, quarterly or annual plan

Pankaj Arora Sales and Distribution 23

 Decision regarding type and quality of sales force required

 Designing the sales organization

 Recruitment and training procedures

 Compensation of Sales force

 Performance appraisal and control system

 Feedback Mechanism to be adopted

 Managing channel relationships

 Co-ordination with Marketing Deptt.

Pankaj Arora Sales and Distribution 24

Establishing and maintaining a partnership type

The sales force that builds a effective relationship

Pankaj Arora Sales and Distribution 25

Pankaj Arora Sales and Distribution 26

Pankaj Arora Sales and Distribution 27

Pankaj Arora Sales and Distribution 28

units,such as territory,districts and branches

/groups) over a particular time period

Pankaj Arora Sales and Distribution 30

Pankaj Arora Sales and Distribution 31

Pankaj Arora Sales and Distribution 32

Product Product Sales Sales Sales Sales Sales

Pankaj Arora Sales and Distribution 33

Pankaj Arora Sales and Distribution 34

Pankaj Arora Sales and Distribution 35

 A sales territory is composed of a

 Development of sales territories is

• To obtain Proper market coverage.

• Salespeople may be more motivated

Pankaj Arora Sales and Distribution 41

Profitability Sales Controller To Examine where the Customer attitude

Pankaj Arora Sales and Distribution 42

To determine problem areas an opportunities to

planning and over the results of a

learn from the mistakes made

 To award increments promotions and

give extra rewards

Pankaj Arora Sales and Distribution 46

Pankaj Arora Sales and Distribution 47

Pankaj Arora Sales and Distribution 48

Pankaj Arora Sales and Distribution 49

 Job analysis – result of formal job analysis-