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Authors: Tapan k.

Panda & Sunil Sahadev Course: BBA

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Learning Objectives
1) 2) 3) 4) 5) 6) 7) 8) Sales & Distribution Management Evolution of Sales Management Evolution of Personal Selling Strategies Nature and Role of Sales Management Types of Personal Selling Types of Selling Difference between Selling and Marketing The Sales Management Process

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Sales & Distribution Management
As a Composite Function of Marketing, it has evolved into key area of Marketing Expertise and Knowledge It focuses on: Development of Sound Sales and Distribution Strategy Management of Marketing Channels Sales Force Management of an Organization

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Sales & Distribution Management
Traditionally, marketers focused on Developing Methods and Practices to enhance Sales Force Productivity and Efficiency focusing on Individuals Performance Now focus is on the Process (Formulating Strategies and Methods for improving Selling Approach) involved in the Enhancement of Performance

Sales Force Downsizing Application of Information Technology Enhance use of Telemarketing Key Account Management The use of Independent Sales Organizations Electronic Data Interchange Cross Functional Team Selling

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Marketings Early Development
Marketing was the natural outgrowth of Production Surpluses Trading was the beginning of Modern Marketing System After purchasing goods, Traders resold them in other Geographical Locations Traders were chiefly Responsible for the Physical Distribution of Goods Town Economy: Medieval Economic Organizations in which commercial activities were concentrated in the Local Population Centers Agricultural Middleman: Early businessperson who purchased Staple Products from the countryside and transported them to Local Market for resale Guild System (Association of Craftsmen): The Guild System provided the background from which First Industrial Society emerged

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Marketings Early Development
Bagman: Eighteenth Century Salesperson who sold Goods produced by the Developing Factory System Bagman emerged in Late Eighteenth Century during Englands Industrial Revolution Bagman are the first True Salespersons as they sold Goods for Firms in which they did not have any Ownership They are called Bagman as they sold their Goods from Sample Bags Sometime after 1810, there developed Two Methods of Personal Selling Horse-Drawn Wagons called Wagon Peddlers Retailing: Result of Strict Licensing requirements impose on Peddlers

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Marketings Early Development Credit Investigators: Supplier Employed people who evaluated Retailers Credit and developed Good Will. Commercial Traveler : Credit Investigators later on started to sell Merchandise to Retailer Greeters: Supplier Employed Sales Reps who Solicited Business from Retailers on buying Trips Rural and Small Town Retailers both made annual Trips to Cities to buy Merchandise They shifted their base to Railroad Stations

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Marketings Early Development Drummers: 19th Century Salespeople who journeyed to merchants places of business Increase competition made Greeters to travel Outside the City The term Greeter was replaced by Drummer There are Two Views about the Term Drummer They Drummed up Sales for Manufactures and Wholesalers which they represented The trunks which were used for carrying Samples, Personal Items were shaped like Drums

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Selling in 20th Century From Production to Sales At first, Selling was overshadowed by tremendous growth of Manufacturing (Industrial Revolution) Focus was on Production rather than Selling

Production Surpluses resulted in Re-emergence of Sales Era until WWII Great Depression >> Aggressive Selling >> Need for Successful Marketing Creation and Rapid Growth of Corporate Departments designed to Support Sales Effort e.g. Marketing Research Postwar Era >> Modern Sales Era >> Professional Salespeople >> Greater Emphasis on Educated Sales People and Extensive Sales Training

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Selling in 20th Century
Traditional Sales Approaches During the Modern Sales Era Traditional Sales Function called Salesmanship Approach Emerged Salespeoples behavior was considered the Key Ingredient in Sales Process Success or Failure of a Sales Call was depended on how the Salesman handled a Prospect

There were Three Variations of Traditional Sales Approaches: Canned Sales Presentation Stimulus Response Theory Selling Formulas

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Selling in 20th Century
Traditional Sales Approaches Canned Sales Presentation A prepared, Structured Sales Script memorized by Salespeople First used in Door to Door Selling and Now in Telemarketing Company considers the Best Way to Sell Major Weakness Prospect is treated as essentially Passive

Stimulus Response Theory


If the Salesperson Says or Does the Proper thing (Provides the Right Stimulus) then Prospect will respond to the Stimulus by buying Good or Service

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Selling in 20th Century
Traditional Sales Approaches Selling Formulas Salespeople has to lead Prospects through various Steps in a Persuasive manner Arthur Fredrick Sheldon Selling Course AIDR: Attention, Interest, Desire, Resolve are four progressive Identifiable Stages before making Purchase Decision AIDA: Attention, Interest, Desire, Action

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Sales Management
Selling in 20th Century
Emergence of the Marketing Concept During 1950s and 1960s, The Marketing Concept emerged as a Framework for Business Philosophy of Customer Orientation The formation of Technically Qualified Sales Support Departments aided in Professionalization of Field Sales Force

Major Changes under Customer Orientation Philosophy are:


Problem Solving Role of Salesperson

Helping customers to buy rather than attempting to sell them something Building Long Term Relationships Questioning and Need Analysis has replaced Sales Presentations

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Personal Selling Strategies

Persuasion Negotiation Consultative Selling Business Management Partnership Strategies

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Personal Selling Strategies
1. Persuasion: The peddlers carried their inventory and their goal was to Persuade Buyers to buy goods at hand

2. Negotiation: As competition grew and buyers had a choice to opt for a particular player:

It became requirement to Understand the Needs of Customers Modification of Products, Prices and other Related Services

3. Consultative Selling (1970s): The sellers were required to identify New Needs and Uses for the existing products:
Consultative Selling required Sellers to think like Buyers

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Evolution of Personal Selling Strategies
4. Business Management (1980s 1990s): Emphasis was put on Management of Sales Territories and Accounts as Profit Centers Salespersons were expected to have Financial Knowledge Training in Business Management and Practice of Business Management Strategies

5. Partnership Strategies:
Linking of Information Systems of Buyers and Sellers to improve Product Planning and Reducing Inventory

Information Sharing
Salespersons are trained on Data Processing, Data Warehousing & Mining, Financial Analysis and Relationship Building Strategy

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Types of Personal Selling
1. Industrial Selling: It is basically termed as Business to Business Selling and it is grouped into Four Categories based on Consumer Base: 1. Selling to Resellers: Wholesalers or Retailers which buy Finished Goods and resells them to End Users

2. Selling to Business Users: This means Output of one Producer enters the Production Process of another Producer to manufacture a Final Good
3. Institutional Selling: Institutional Customers use products in their Daily Operations

Products are used to Support Buyers Business rather than Producing Buyers Products
4. Selling to Government: In most countries, Government is a Leading Buyer

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Types of Personal Selling
2. Retail Selling: Retailing is defined as defined as all the Activities directly related to Sales of Products and Services to Ultimate Consumer In Retail Environment, a customer approaches the seller 3. Service Selling: Services are Activities or Benefits provided to a consumers and Services are different from Products in 4 Areas: 1. Services are Intangible 2. Services are Produced, Sold and Consumed at the Same Time 3. Services cannot be Standardized 4. Services cannot be Stored or Inventoried

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Types of Selling
The diverse nature of Buying Situations demand a Diverse Pattern of Selling Function and Selling Function varies according to nature of Selling Tasks: 1. Order Taker Salespeople A. Inside Order Takers are the Sales Assistants and their role is just to Complete the Transactions B. Delivery Salespeople: Their job is to Deliver Products to the consumers C. Outside Order Takers visit the customers regularly and their primary task is to Respond to Customer Calls rather than seek New Customers 2. Order Creators Missionary Salespeople are the sales staff who do not close a sale but Persuade the customers to Promote a Sellers Brand Medical Representatives

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Types of Selling
1. Order Getters Salespeople: These are the salespeople whose objective is to Persuade customers to make a Direct Purchase. A. New Business Salespeople persuade New Buyers and Non Users to buy companys Products & Services

B. Organization Salespeople are the Industrial Sellers who try to establish and nurture long term relationships with Organizational Buyers
C. Consumer Salespeople comprise of Door to Door Salespeople who sell Products & Services for Individual Consumption D. Technical Support Salespeople support Frontline Salespeople when product is Technically Complex or needs negotiations demanding Financial Attention E. Merchandisers provide Sales Support in Retail and Wholesale Selling. The give advice on Display, Execution of Sales Promotion Programs and help in display of Point of Purchase Material and marinating Stock Levels
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Difference between Selling & Marketing
Selling
1. Emphasis on Product 2. Product First & then Decision to sell it

Marketing
1. Emphasis on Consumer Needs and Wants 2. Understanding of Customer Needs & then a Product or Service to satisfy these Needs 3. Management is Profit Oriented 4. Planning is Long Term New Products, Tomorrow's Markets & Future Growth 5. Stressed Needs of Buyer 6. View business as Consumer Satisfying Process 7. Emphasizes on Innovation

3. Management is Sales Volume Oriented 4. Planning is Short Term todays Products & Markets 5. Stresses needs of Seller 6. Views business as Goods Producing Process 7. Emphasizes on staying with existing Technology and Reducing Costs

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


Difference between Selling & Marketing
Selling
8. Different departments work separately

Marketing
8. All departments work in Integrated manner 9. Consumer determines price, price determines cost 10. Marketing views customers as the very beginning of a Business

9. Cost determines price

10. Selling views customers as last link in Business

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


The Sales Management Process
Sales Management is the process of attaining Sales Force Goals in Effective and Efficient Manner through Planning, Staffing, Training, Leading and Controlling Organizational Resources. Sales Management Process covers Three Interrelated Steps: 1. Formulation of a Strategic Sales Management Programme

Evaluating Environmental Issues Effecting Organization (SWOT, PEST, Core Competencies) Organizing and Planning Over All Personal Selling Efforts Integrating Over All Personal Selling Strategy with other Elements of Marketing Strategy

2. Implementation of Strategic Sales Management Programme


Selecting, Training, Leading and Motivating appropriate Sales Personnel Designing & Implementing Policies and Procedures to direct Efforts of Salespeople to achieve desired Corporate Objectives

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 1: Introduction to Sales Management


The Sales Management Process
Sales Management is the process of attaining Sales Force Goals in Effective and Efficient Manner through Planning, Staffing, Training, Leading and Controlling Organizational Resources. Sales Management Process covers Three Interrelated Steps: 3. Evaluation and Control of Sales Force Performance

Developing Methods and Practices for Monitoring & Evaluating Individual & Group Sales Force Performance Taking Corrective Steps either in Formulation or Implementation Programmes to achieve Corporate Goals

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Learning Objectives
Market/ Sales Forecast and Market Demand Marketing Decision Support System Importance of Sales Forecasting The Forecasting Process Approaches to Forecasting Sales Forecasting Methods

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Market/ Sales Forecast and Market Demand
Market/ Sales Forecast: It is the estimated Rupee or Unit Sales for a Specific Future Time Period based on Companys Marketing Plan and an Assumed Market Environment It depends on: Industry Sales The Market Share of the Firm The Growth Rate in the Category The Performance of Product Line and Individual Products Market Market Demand: It is the Sum Total of All Individual Demand for a Product or Service It depends on: Consumer Preferences (Advertising, Innovation, Changes on Customs &Traditions) Income Levels of Consumers Price of other Goods

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Marketing Decision Support System (MDSS)
MDSS is an Ongoing, Future Oriented Information Structure designed to Collect, Collate, Categorize, Edit, Store and Retrieve Information to Aid Decision Making in an Organizations Sales & Marketing Programs It involves Problem Solving Technology consisting of People, Knowledge, Software & Hardware It collects Data from Transaction System & Analytical System and provide Analysis for Decision Making A Valuable MDSS provides Fast, Less Expensive and more Complete Information for Sales Management Decision Making Senior Management can Continually Monitor Sales, Markets, Performance of Sales People and Other Marketing Systems in details MDSS is Key for Accurate Sales Forecasting

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Importance of Sales Forecasting:
Success of Business depends on Sales Forecasting because: Supply Chain Management & Value Chain Management depends on Demand Patterns of Product Procurements can be Channelized as per Demand Inventory Level during Production and Final Output Inventory can be Regulated and Modified depending on the Sales Patterns It forms the Basis for developing Production Schedules It helps managers to decide Sales Quotas to different Segments, Zones & Individual Salesmen It forms the Basis for Developing Sales Budgets An Integration of all these Variables help in Developing Marketing Plan, Growth Strategies & Marketing Offer
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Sales Forecasting Process
It is defined as Series of Decisions & Actions in Identifying the Sales Forecasting Objectives, Determining the Independent & Dependent Variables, Developing a Forecasting Procedure and using the Available Data in the Selected Method to Estimate Future Sales Supply Chain Management & Value Chain Management depends on Demand Patterns of Product Sales Forecasting Objectives: Rupee Sales, Unit Sales or Number of Salespeople Hired Dependent Variables are the Variables which are Forecasted (Rupee Sales, Unit Sales or Salespeople Hired) Independent Variables are the Market Factors which influence Dependent Variables (Quantitative) Forecasting Methods & Methods: Quantitative or Qualitative Sales Forecast is finalized and it is Evaluated and Modifications are made if Marketing Conditions Change
by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Approaches to Sales Forecasting
There are Two Approached to Sales Forecasting: 1. Break Down Approach General Environment Forecast: It is the Study of Factors of Internal & External Environments that influence to a Significant Levels (Pricing, Product Changes, Distribution, Promotion, Financial Resources, Management Skills, Technology, Economy etc.) Industry Forecast/ Market Potential: The Sum Total of All Individual Demand for a Product or Service or the entire Industry

Company Sales Forecast: The maximum Estimated or the Potential Sales that company may reach in a defined Time Period under given conditions (Percentage of Industry Sales)
Sales Forecast for the Product Lines Individual Product Sales Forecast

by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Approaches to Sales Forecasting
There are Two Approached to Sales Forecasting: 1. Build Up Approach It is the Reverse of the Break Down Approach

Strategic Units or Unit Heads make Individual Forecasts


Individual Forecasts are combined to make Broader Forecast of the Firm Difficult Method when Firm has Large Product Offerings and Serving Multiple Markets

by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Sales Forecasting Methods
Based on the Type of Input Data; there are Two Types of Sales Forecasting Methods: 1. Qualitative Methods: These methods are based on Judgments either of Experts or a Collective Judgments of Knowledgeable People of Industry: A. Experts Opinion Method: Experts in the Specific Area are asked for their Forecast Estimates: Marketing Professionals Distributors/ Dealers Industry Associations Marketing Consultants

It can be in the form of Individual or Group Forecast Group Approach has Two Methods: Key Executives submit Independent Estimates without discussion and Individual Estimates are Averaged into One Estimate Group discusses and presents separate estimates, differences are resolved and Consensus is reached
by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Sales Forecasting Methods
1. Qualitative Methods B. The Delphi Method: This is an improvement on Expert Opinion Method: Group of Experts and Delphi Coordinator are selected

Experts give their Written Responses to Coordinator


Coordinator processes, complies and refers them back to Panel Members for Revision this process continues for several Rounds (Usually Three Rounds)

Process stops when a consensus is reached


Only Coordinator will know all the Members of the Team and only he will have access to all Responses and he runs Statistical Analysis The process aims at Gradual Reduction of Variability This method is widely used for Sales Forecasting regardless of Company Size
by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Sales Forecasting Methods
1. Qualitative Methods C. Sales Force Composite: This method is based on the fact that individuals with Direct Contact with Customers will be better informed Organizations Salespersons come up with their Forecasts Individual Forecasts are summed up to get a Overall Demand Forecast for the product Results can be affected by the:

Staff Biases Lack of Interest in the Process Ignorance about wider Economic Changes and Trends

by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Sales Forecasting Methods
1. Qualitative Methods D. Survey of Buyers Expectations: This method is based on Survey of Buying Intentions and Market Tests The Survey of Buying Intentions involves the selection of a Sample of Potential Buyers and getting information on their likely purchase of Product in Future Forecast based solely on this method tend to be overly Optimistic; as a positive response in survey may not result in Purchase in Future

by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 4: Managing Sales Information


Sales Forecasting Methods
1. Qualitative Methods D. Historical Analogy Method: This method is used for Forecasting the demand for a Product or Service for which there is no Past Data Marketing Personal may use Historical Analogy between Two Similar Products and derive Demand for New Product using Historical Data

by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Learning Objectives
Sales Organization Objectives/ Advantages of Sales Organization Factors Influencing Structure Organizational Principles Span of Control Centralization and Decentralization Integration and Coordination Organizational Design Line Design Organizational Design by Territory Organizational Design by Management Function Organizational Design by Product Organizational Design by Customer Combined Organizational Design Key Account Sales Emerging Organizational Designs Agency & Distribution Selling Shared Sales Force Telemarketing Number of Sales People
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Sales Organization
Definition: A Sales Organization is an organization of Individuals either working together for the marketing of Products & Services manufactured by an enterprise or for Products that are procured by the firm for the purpose of Reselling.

Objectives/ Advantages of Sales Organization


Sales Organization helps to achieve coordination among the activities of individuals Sales Organization defines the duties, roles, rights and responsibilities of Salespeople A proper Sales Organization helps in the flow of both upward and downward communication for taking Sales Related Decisions A proper Sales Organization also removes Duplication of Efforts Sales Organization helps in achieving Effectiveness and Efficiency achieving maximum Sales Targets with minimum Costs

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Objectives/ Advantages of Sales Organization
A Sales Organization serves as the unified Contact or Relationship Point with Customers
Sales Organization contributes to building the morale of Salespeople as they become clear about his position, role and responsibilities

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Factors Influencing Sales Organizational Structure
1. Product & Service Related Factors In case of FMCGs (soaps, oils, toothpaste) the Size of the Organization is Large as a large customer base is to be served Organization will be Complex and Large in Size when both Product Mix and Quantity in each Sale Category is Large

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Factors Influencing Sales Organizational Structure
2. Organization Related Factors If the Size of Enterprise is Small then it will have limited number of Products and Customers and a Simple Structure is required and Vice Versa Organizations having Specialized Products and Serving Niche will have Small and Simple Sales Organization An organization with Limited Financial Resources will prefer to engage intermediaries for distribution and keeps Sales Organization Simple and Vice Versa

If organization follows a Centralized Policy for Sales Related Decisions then Sales Organization will be simple and Vice Versa

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Factors Influencing Sales Organizational Structure
3. Marketing Mix Related Factors Size of the Market also determines the Structure and Size of Sales Organization Global, International, National Market >>> Large Sales Organization Organizations which have Selective Distribution Strategy as compared to Organizations with Intensive Distribution Strategy will have Simple Sales Organization Price Policy also influences the Size and Structure of Sales Organization Low Price Products with High Demand and Large Customer Base >>> Large Sales Organization 4. External Factors The Customs and Traditions used in the past to cater the market influence the Size and Structure of the Sales Organization

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Organizational Principles
1. Span of Control

Span of Control refers to number of Subordinates and Sales Staff under the Supervision of one Sales Manager
Narrow Span of Control: Less or Limited Number of Sales Staff under the Supervision of one Sales Manager Appropriate Model when there are New Recruits to be handled in the field New Recruits learn from Experienced Managers when it is One to One Coaching It has following disadvantages: Complicated Communication Flow Demotivation due to Direct Supervision Resistance by Innovative New Recruits to Traditional Methods of Coaching Isolation of Management from Grassroots Levels Higher Operations Costs Wide Span of Control: Large Number of Sales Staff under the Supervision of one Sales Manager Suitable for experienced Sales Force Limits Growth of Employees and Formulation of Effective Reward System
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Organizational Principles
2. Centralization and Decentralization

The extent of Control and Authority of the Top Management versus the Field Sales Manager over the Sales Force decides the Level of Centralization in an organization
Centralized Organization: In Centralized Organizations; Top Management decides: Recruitment, Selection, Training, Supervisions, Fixation of Quotas, Territory Allocations and Compensation Plans Consistency in Marketing Plans, Uniformity in Products & Services and Coordination & Integration of Sales People are the Advantages of Centralization Helps in saving Recruitment, Selection, Training and Motivational Plan Costs

Decentralized Organization: Field Managers take all the decisions


It helps Organizations to be more Competitive and Responsive at respective Market Levels Greater Freedom to action results in Motivated and Productive Sales Force Combination of Centralized & Decentralized are also used where Recruitment & Training Functions are Centralized
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 5: Sales Organization


Organizational Principles
3. Integration and Coordination

Integration and Coordination relates to Flow and Use of Communication and Marketing Intelligence
Traditional (Butter Fly) Approach: All information flows through the Sales Organization or Sales is the only Upfront Department Modern (Bow Tie) Approach: Organization across all departments is integrated to serve customers Sales Department provided information to:

Research & Development for New Product Development Sales and Marketing Departments interact for deciding Advertising Policy, Sales Promotion, Cooperative Advertising with Intermediaries Sales Department also provides about Financial Arrangements, Credit Policy, Credit Collection Coordinates information on Compensation and Dealer Motivation Plans

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Learning Objectives
Sales Territory Designing a Sales Territory

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Sales Territory Definition: A Sales Territory is a Group of Present and Potential Customers assigned to an individual salesperson, a group of salesperson, a branch, a dealer, a distributor or a marketing organization at a given period of time. Advantages of Sales Territory
It ensures better Market Coverage, Effective Utilization of Sales Force and Efficient distribution of Workload among Salespeople

It enables Sales Managers to Evaluate the Performance of Salespeople, Control over Direct and Indirect Costs of Sales Function and Optimum Utilization of Sales Time by Sales People
Restricting Sales Force to Specific Geographic Areas helps in generating more Sales from the same area

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Sales Territory Advantages of Sales Territory
Sales Territory ensures that Salespeople do not encroach on each others Territory Restricting Sales Force to Specific Area helps salespeople to understand the Current and Latent Needs of Customers and to serve them better Disadvantages of Sales Territory A Sales Territory may not help a New Established Organization or where Sales are made through Personal Relationships Sales Territory may also not suitable for organizations which are selling Highly Sophisticated and Technically Complex Products Organizations which have customer base distributed over a vast Geographic Area may also not establish Territories base on Geographic Area
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Designing Sales Territory
Various Factors are considered while Designing a Sales Territory Size of Organization Level of Competition in each Product Category Number and Quality Level of Products in Portfolio Type and Quality of Services and Customer Support to be provided Quality of Salesperson serving in the Organization

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Designing Sales Territory
Step 1: Select Appropriate Geographical Control Unit Small enough to allow Flexibility but not so small that High Level of Data Computation is needed Homogenous and of Reasonable size to achieve Economies of Scale The Basic units can be Country, State, District, Division or Block with Clear Boundaries Basic Control Units should be based on Trading Area. A Treading Area is made up of a Principal City and the surrounding dependent area

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Designing Sales Territory
Step 2: Criteria Managers identify the Sales Potential of each Geographical Control Unit based on Current Customer Base as well as Future Customer Base Based on Forecasted Sales (for both Current and Potential Customers) and Geographic Size Managers Combine Contiguous Control Units to form Territories Each Sales Territory should as Equal as Possible in terms of Market Potential Differences in the Workload and Sales Potential due to different Levels of Competitive Activity are ignored at this stage It is also assumed that all Salespeople have equal Experience and Capabilities

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Designing Sales Territory
Step 3: Starting Point After ascertaining Sales Potential in Control Units, a Sales Manager should form Tentative Sales Territories Location Point Trading Area Location of Large Account

Central Geographic Location or State Capital

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Designing Sales Territory
Step 4: Territory Shapes Shape of Territory affects the Sales Expenses and Ease of Coverage and Less Time on Travel Wedge Shaped: Used by FMCGs which serve both Urban and Rural Areas Circular Shaped: These are suitable when companies have their accounts distributed across equally sized areas. Salesperson is located in Central Part of the Territory and Travels uniformly to different areas

Cloverleaf Shaped: It is used when accounts are distributed randomly through out the Territory

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 6: Management of Sales Territory


Designing Sales Territory
Step 5: Control Units Adjacent to Starting Point After deciding Starting Point Sales Managers then combine Control Units to build up Market Sales Manager keeps on running totals on the Allocation Criteria for each newly designed Territory The process continues until all Control Units are assigned to each Sales Person At this Level, Sales Territories are tentative and necessary adjustments can be made in future on the basis of Scope of Market Coverage

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 3: The Selling Process


Learning Objectives
Prospecting Identifying Prospects Qualifying Prospects MAN Preparing Pre-approach Call Planning Presenting Approach Probe for Needs Convince the Prospect Handle Objections Close Follow Up

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 3: The Selling Process


The Selling Process
It is a process by which a salesperson Identifies and Locates Prospects Separates the prospects from Suspects Approaches them Makes a Sales Presentation Handles their Objections Close a Sale He also Follows Up with the Existing Customers to Identify further Sales Leads, Measure Success and Customer Satisfaction Level of Current Products & Service Offerings

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 3: The Selling Process


The Selling Process

Prospecting
Identify Qualify

Preparing
Pre - Approach Call Planning

Presenting
Approach Probe for Needs Convince Prospect Handle Objections Close Follow Up

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 3: The Selling Process


Prospecting
It is a process by which a salesperson Identify Potential Buyers who have Need for Products & Services The Ability to Pay for it The Adequate Authority to Buy it

Prospecting is important for Effective Utilization of Selling Time by distinguishing the Prospects from Suspects
Key Steps involved in Prospecting Process are:

Define Target Market Generating Sales Leads Qualifying Prospects (MAN)

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 3: The Selling Process


Prospecting
Define Target Market Determining the type of Person or Organization which is most likely to buy a Product or Service Salesperson can be helped by Researchers, Product Managers, Market Planners and Sales Managers for Defining Target Market Networking Market Survey Generate Sales Leads

A Sales Lead is any Specific Person or Organization that might Need a given Product or Service
Qualifying Prospects Qualifying means: Need and/ or Desire to Buy >> Financial Resources >> Authority MAN: Money > Authority > Need
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Chapter 3: The Selling Process


Prospecting
Identifying Prospects Present Customers Former Customers Cold Calling Spotters Directories and Mailing Lists Prospecting Services Referrals Center of Influence Approach Endless Chain Prospecting Personal Contacts Trade Shows and Exhibits Direct Marketing

Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad