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MM 411 ADVERTISING & SALES MANAGEMENT
Unit-1 Basics on Advertising (10hrs)
Meaning, nature, functions &types of Advertising,Advertising and Communication. Stage in Advertising
Communication,Advertising Research,Advertising Agency- Role &function, Client-agency relationship.
Unit-II Media Planning and Advertisement effectiveness (10hrs)
Advertising Media- Types/ Classification, Media Planning Process, Media Scheduling , Creativity, Creative
Strategy and Copy Writing, Evaluation of advertising effectiveness.
Unit-III Sales Management-I (10hrs)
Nature & Scope of sales management,personal selling and salesmanship Sales Organization Management of sales
force-recruitment, selection and training of sales personnel.
Unit-IV Sales Management-II (10hrs)
Motivation &morale of sales force, Compensation of sales person, Evaluation & Supervision of sales
personnel,Sales Budget, Sales Quotas, Sales territories, Sales control & Cost Analysis.
Case Studies on above topics (8Hrs)
References: 33
1. Chunawalla, S.A., Advertising, Sales and Promotion Management, Himalaya Publishing House, Mumbai.
2. Kapoor, Fundamentals of Sales Management, MacMillan, New Delhi.
3. Batra, Myers and Aaker, Advertising Management, Pearson, New Delhi.
4. Mohan M, Advertising Management Concept & Cases, Tata McGraw Hill, New Delhi.
MM 411 ADVERTISING & SALES MANAGEMENT
Unit-1 Basics on Advertising (10hrs)
Meaning, nature, functions &types of Advertising,Advertising and Communication. Stage in Advertising
Communication,Advertising Research,Advertising Agency- Role &function, Client-agency relationship.
https://www.managementstudyguide.com/advertising-management.htm
Advertising Agencies - Meaning, its Role and Types of Agencies
“The work of a tailor is to collect the raw material, find matching threads, cut the cloth in desired shape,
finally stitch the cloth and deliver it to the customer.”
Advertising Agency is just like a tailor. It creates the ads, plans how, when and where it should be
delivered and hands it over to the client. Advertising agencies are mostly not dependent on any
organizations.
These agencies take all the efforts for selling the product of the clients. They have a group of people
expert in their particular fields, thus helping the companies or organizations to reach their target customer
in an easy and simple way.
The first Advertising Agency was William Taylor in 1786 followed by James “Jem” White in 1800 in
London and Reynell & Son in 1812.
Role of Advertising Agencies
1. Creating an advertise on the basis of information gathered about product
2. Doing research on the company and the product and reactions of the customers.
3. Planning for type of media to be used, when and where to be used, and for how much time to
be used.
4. Taking the feedbacks from the clients as well as the customers and then deciding the further
line of action
All companies can do this work by themselves. They can make ads, print or advertise them on televisions
or other media places; they can manage the accounts also. Then why do they need advertising agencies?
The reasons behind hiring the advertising agencies by the companies are:
 The agencies are expert in this field. They have a team of different people for different functions
like copywriters, art directors, planners, etc.
 The agencies make optimum use of these people, their experience and their knowledge.
 They work with an objective and are very professionals.
 Hiring them leads in saving the costs up to some extent.
There are basically 5 types of advertising agencies.
1. Full service Agencies
 Large size agencies.
 Deals with all stages of advertisement.
 Different expert people for different departments.
 Starts work from gathering data and analyzing and ends on payment of bills to the
media people.
2. Interactive Agencies
 Modernized modes of communication are used.
 Uses online advertisements, sending personal messages on mobile phones, etc.
 The ads produced are very interactive, having very new concepts, and very
innovative.
3. Creative Boutiques
 Very creative and innovative ads.
 No other function is performed other than creating actual ads.
 Small sized agencies with their own copywriters, directors, and creative people.
4. Media Buying Agencies
 Buys place for advertise and sells it to the advertisers.
 Sells time in which advertisement will be placed.
 Schedules slots at different television channels and radio stations.
 Finally supervises or checks whether the ad has been telecasted at opted time and
place or not.
5. In-House Agencies
 As good as the full service agencies.
 Big organization prefers these type of agencies which are in built and work only for
them.
 These agencies work as per the requirements of the organizations.
There are some specialized agencies which work for some special advertisements. These types of
agencies need people of special knowledge in that field. For example, advertisements showing social
messages, finance advertisements, medicine related ads, etc.
Social and Economical Aspects of Advertising
“Every coin has two sides”
Advertising is praised but also criticized by critics in their own ways. Advertising has many positive
impacts along with its negative pictures. As the President of American Association of Advertising
Agencies, John O’ Toole has described advertise is something else. It is not related to studies, but it
educates. It is not a journalist but gives all information. And it is not an entertaining device but entertains
everyone.
Now let’s go through the economic and social aspects of advertising.
Economic role of Advertising
Value of Products:
The advertised products are not always the best products in the market. There are some unadvertised
products also present which are good enough. But advertising helps increase value for the products by
showing the positive image of the product which in turn helps convincing customers to buy it. Advertising
educates consumers about the uses of the products hence increasing its value in minds of the
consumers. For e.g. mobile phones were first considered as necessity but nowadays the cell phones
come with number of features which makes them mode of convenience for consumers.
Effect on Prices:
Some advertised products do cost more than unadvertised products but the vice versa is also true. But if
there is more competition in the market for those products, the prices have to come down, for e.g., canned
juices from various brands. Thus some professional like chartered accountants and doctors are not
allowed to advertise.

But some products do not advertise much, and they don’t need much of it and even their prices are high
but they are still the leaders in market as they have their brand name. e.g., Porsche cars
Effect on consumer demand and choices:
Even if the product is heavily advertised, it does not mean that the demand or say consumption rates will
also increase. The product has to be different with better quality, and more variety than others. For E.g.,
Kellogg’s cornflakes have variety of flavors with different ranges to offer for different age groups and now
also for people who want to loose weight thus giving consumers different choices to select from.
Effect on business cycle:
Advertising no doubt helps in employing more number of people. It increases the pay rolls of people
working in this field. It helps collecting more revenues for sellers which they use for betterment of product
and services. But there are some bad effects of advertisements on business cycle also. Sometimes,
consumer may find the foreign product better than going for the national brand. This will definitely effect
the production which may in turn affect the GDP of the country.
The economic aspects are supported by the Abundance Principle which says producing more products
and services than the consumption rate which helps firstly keeping consumers informed about the options
they have and secondly helps sellers for playing in healthy and competitive atmosphere with their self
interest.
Social role of Advertising:
There are some positive and some negative aspects of advertising on the social ground. They are as
follows.
Deception in Advertising:
The relation between the buyers and sellers is maintained if the buyers are satisfied with what they saw in
advertise and what they got after buying that product. If seller shows a false or deceptive image and an
exaggerated image of the product in the advertisement, then the relation between the seller and buyers
can’t be healthy. These problems can be overcome if the seller keep their ads clean and displays right
image of the product.
The Subliminal Advertising:
Capturing the Minds of the consumers is the main intention of these ads. The ads are made in such a way
that the consumers don’t even realizes that the ad has made an impact on their minds and this results in
buying the product which they don’t even need. But “All ads don’t impress all consumers at all times”,
because majority of consumers buy products on basis of the price and needs.
Effect on Our Value System:
The advertisers use puffing tactics, endorsements from celebrities, and play emotionally, which makes
ads so powerful that the consumers like helpless preys buy those products.
These ads make poor people buy products which they can’t afford, people picking up bad habits like
smoking and drinking, and buy products just because their favorite actor endorsed that product. This
affects in increased the cost of whole society and loss of values of our own selves.
Offensiveness:
Some ads are so offensive that they are not acceptable by the buyers. For example, the ads of denim
jeans showed girls wearing very less clothes and making a sex appeal. These kinds of ads are irrelevant
to the actual product. Btu then there is some ads which are educative also and now accepted by people.
Earlier ads giving information about birth control pills was considered offensive but now the same ads are
considered educative and important.
But at the last, there are some great positive aspects which help
 Development of society and growth of technologies
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 Employment
 Gives choices to buyers with self interest
 Welcomes healthy competition
 Improving standard of living.
 Give information on social, economical and health issues.
Steps in Advertising Process
“Mass demand has been created almost entirely through the development of Advertising”
Calvin Coolidge in the New York Public Library.
For the development of advertising and to get best results one need to follow the advertising process step
by step.
The following are the steps involved in the process of advertising:
1. Step 1 - Briefing: the advertiser needs to brief about the product or the service which has to be
advertised and doing the SWOT analysis of the company and the product.
2. Step 2 - Knowing the Objective: one should first know the objective or the purpose of
advertising. i.e. what message is to be delivered to the audience?
3. Step 3 - Research: this step involves finding out the market behavior, knowing the competitors,
what type of advertising they are using, what is the response of the consumers, availability of
the resources needed in the process, etc.
4. Step 4 - Target Audience: the next step is to identify the target consumers most likely to buy
the product. The target should be appropriately identified without any confusion. For e.g. if the
product is a health drink for growing kids, then the target customers will be the parents who are
going to buy it and not the kids who are going to drink it.
5. Step 5 - Media Selection: now that the target audience is identified, one should select an
appropriate media for advertising so that the customers who are to be informed about the
product and are willing to buy are successfully reached.
6. Step 6 - Setting the Budget: then the advertising budget has to be planned so that there is no
short of funds or excess of funds during the process of advertising and also there are no losses
to the company.
7. Step 7 - Designing and Creating the Ad: first the design that is the outline of ad on papers is
made by the copywriters of the agency, then the actual creation of ad is done with help of the
art directors and the creative personnel of the agency.
8. Step 8 - Perfection: then the created ad is re-examined and the ad is redefined to make it
perfect to enter the market.
9. Step 9 - Place and Time of Ad: the next step is to decide where and when the ad will be
shown.
The place will be decided according to the target customers where the ad is most visible clearly
to them. The finalization of time on which the ad will be telecasted or shown on the selected
media will be done by the traffic department of the agency.
10. Step 10 - Execution: finally the advertise is released with perfect creation, perfect placement
and perfect timing in the market.
11. Step 11 - Performance: the last step is to judge the performance of the ad in terms of the
response from the customers, whether they are satisfied with the ad and the product, did the ad
reached all the targeted people, was the advertise capable enough to compete with the other
players, etc. Every point is studied properly and changes are made, if any.
If these steps are followed properly then there has to be a successful beginning for the product in the
market.
Advertising Techniques - 13 Most Common Techniques Used by the Advertisers
Today every company needs to advertise its product to inform the customers about the product, increase
the sales, acquire market value, and gain reputation and name in the industry. Every business spends lot
of money for advertising their products but the money spent will lead to success only when the best
techniques of advertising are used for the product. So here are some very common and most used
techniques used by the advertisers to get desired results.
1. Emotional Appeal
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This technique of advertising is done with help of two factors - needs of consumers and fear The advertisers using this technique show that the families or kids using their product are a
factor. Most common appeals under need are: happy go lucky family. The ad always has a neat and well furnished home, well mannered kids
and the family is a simple and sweet kind of family. E.g. a dettol soap ad shows everyone in the
family using that soap and so is always protected from germs. They show a florescent color line
 need for something new covering whole body of each family member when compared to other people who don’t use this
 need for getting acceptance soap.
 need for not being ignored 10. Patriotic Advertisements
 need for change of old things
 need for security These ads show how one can support their country while he uses their product or service. For
 need to become attractive, etc. e. g some products together formed a union and claimed in their ad that if you buy any one of
Most common appeals under fear are: these products, you are going to help a child to go to school. One more cellular company ad
had a celebrity showing that if the customers use this company’s sim card, then they can help
control population of the country.
 fear of accident 11. Questioning the Customers
 fear of death
 fear of being avoided The advertisers using this technique ask questions to the consumers to get response for their
 fear of getting sick products. E.g. Amway advertisement keeps on asking questions like who has so many farms
 fear of getting old, etc. completely organic in nature, who gives the strength to climb up the stairs at the age of 70, who
2. Promotional Advertising makes the kids grow in a proper and nutritious ways, is there anyone who is listening to these
entire questions. And then at last the answer comes - “Amway : We are Listening.”
12. Bribe
This technique involves giving away samples of the product for free to the consumers. The
items are offered in the trade fairs, promotional events, and ad campaigns in order to gain the
attention of the customers. This technique is used to bribe the customers with some thing extra if they buy the product
3. Bandwagon Advertising using lines like “buy one shirt and get one free”, or “be the member for the club for two years
and get 20% off on all services.”
13. Surrogate Advertising
This type of technique involves convincing the customers to join the group of people who have
bought this product and be on the winning side. For e.g. recent Pantene shampoo ad which
says “15crores women trusted Pantene, and you?” This technique is generally used by the companies which cannot advertise their products
4. Facts and Statistics directly. The advertisers use indirect advertisements to advertise their product so that the
customers know about the actual product. The biggest example of this technique is liquor ads.
These ads never show anyone drinking actual liquor and in place of that they are shown
Here, advertisers use numbers, proofs, and real examples to show how good their product
drinking some mineral water, soft drink or soda.
works. For e.g. “Lizol floor cleaner cleans 99.99% germs” or “Colgate is recommended by 70%
These are the major techniques used by the advertisers to advertise their product. There are some
of the dentists of the world” or Eno - just 6 seconds.
different techniques used for online advertising such as web banner advertising in which a banner is
5. Unfinished Ads
placed on web pages, content advertising using content to advertise the product online, link advertising
giving links on different sites to directly visit the product website, etc.
The advertisers here just play with words by saying that their product works better but don’t Advertising Budget and Factors Affecting it
answer how much more than the competitor. For e.g. Lays - no one can eat just one or Horlicks “Money does matter a lot.”
- more nutrition daily. The ads don’t say who can eat more or how much more nutrition. Advertising Budget is the amount of money which can be or has to be spent on advertising of the
6. Weasel Words product to promote it, reach the target consumers and make the sales chart go on the upper side
and give reasonable profits to the company.
In this technique, the advertisers don’t say that they are the best from the rest, but don’t also Before finalizing the advertising budget of an organization or a company, one has to take a look on the
deny. E.g. Sunsilk Hairfall Solution - reduces hairfall. The ad doesn’t say stops hairfall. favorable and unfavorable market conditions which will have an impact on the advertising budget. The
7. Endorsements market conditions to watch out for are as follows:

The advertisers use celebrities to advertise their products. The celebrities or star endorse the  Frequency of the advertisement
product by telling their own experiences with the product. Recently a diamond jewellery ad had  Competition and Clutter
superstar Amitabh Bacchan and his wife Jaya advertising the product. The ad showed how he
impressed his wife by making a smart choice of buying this brand. Again, Sachin tendulkar, a  Market Share of the Product
cricket star, endorsed for a shoe brand.  Product Life Cycle Stage
8. Complementing the Customers 1. Frequency of the Advertisement

Here, the advertisers used punch lines which complement the consumers who buy their This means the number of times advertise has been shown with the description of the product
products. E.g. Revlon says “Because you are worth it.” or service, in the granted time slots. So here, if any company needs more advertising frequency
9. Ideal Family and Ideal Kids for its product, then the company will have to increase its advertising budget.

2. Competition and Clutter
The companies may have many competitors for its product. And also there are plenty of
advertisements shown which is called clutter. The company has to then increase their
advertising budget.
3. Market Share
To get a good market share in comparison to their competitors, the company should have a
better product in terms of quality, uniqueness, demand and catchy advertisements with
resultant response of the customers. All this is possible if the advertisement budget is high.
4. Product Life Cycle Stage
If the company is a newcomer or if the product is on its introduction stage, then the company
has to keep the budget high to make place in the market with the existing players and to have
frequent advertisements. As the time goes on and product becomes older, the advertising
budget can come down as then the product doesn’t need frequent advertising.
When the market conditions are studied thoroughly, then the company has to set up its
advertising budget accordingly. For setting advertising budget, there are four methods:
They are as follows.
 Percentage Of Sales: In this method, the budget is decided on the basis of the sales
of the product from previous year records or from the predicted future sales. This is a
pure prediction based method and best applicable to the companies which have fixed
annual sales. But if in case there is a requirement for more promotional activities then
this method has a disadvantage because there will be decrease in advertisements as
the budget is fixed.
 Affordability: this method is generally used by the small companies. Only the
companies which have funds and can afford advertising opt for this method. The
companies can go for advertising at any time in whole year whenever they have
money to spend. The amount spent also varies from time to time as per the
advertisements takes place.
 Best guess: This method is basically for newcomers who have just entered the
market and they have no knowledge or say they are not aware of how the market is
and how much to spend on advertising. Thus, this method is applied by the higher
level executives of the company as they are the only experienced people.
Thus, doing the homework and then moving forward, i.e. searching for best market conditions and setting
the best advertising budget will have a great impact on improvement and development of the company.
Advertising Campaigns - Meaning and its Process
Advertising campaigns are the groups of advertising messages which are similar in nature. They share
same messages and themes placed in different types of medias at some fixed times. The time frames of
advertising campaigns are fixed and specifically defined.
The very prime thing before making an ad campaign is to know-
Why you are advertising and what are you advertising ?
Why refers to the objective of advertising campaign. The objective of an advertising campaign is to
 Inform people about your product
 Convince them to buy the product
 Make your product available to the customers
The process of making an advertising campaign is as follows:
1. Research: first step is to do a market research for the product to be advertised. One needs to
find out the product demand, competitors, etc.
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2. Know the target audience: one need to know who are going to buy the product and who
should be targeted.
3. Setting the budget: the next step is to set the budget keeping in mind all the factors like media,
presentations, paper works, etc which have a role in the process of advertising and the places
where there is a need of funds.
4. Deciding a proper theme: the theme for the campaign has to be decided as in the colors to be
used, the graphics should be similar or almost similar in all ads, the music and the voices to be
used, the designing of the ads, the way the message will be delivered, the language to be used,
jingles, etc.
5. Selection of media: the media or number of Medias selected should be the one which will
reach the target customers.
6. Media scheduling: the scheduling has to be done accurately so that the ad will be visible or be
read or be audible to the targeted customers at the right time.
7. Executing the campaign: finally the campaign has to be executed and then the feedback has
to be noted.
Mostly used media tools are print media and electronic media. Print media includes newspaper,
magazines, pamphlets, banners, and hoardings. Electronic media includes radio, television, e-mails,
sending message on mobiles, and telephonic advertising. The only point to remember is getting a proper
frequency for the ad campaign so that the ad is visible and grasping time for customers is good enough.
All campaigns do not have fix duration. Some campaigns are seasonal and some run all year round. All
campaigns differ in timings. Some advertising campaigns are media based, some are area based, some
are product based, and some are objective based. It is seen that generally advertising campaigns run
successfully, but in case if the purpose is not solved in any case, then the theory is redone, required
changes are made using the experience, and the remaining campaign is carried forward.
Models of Advertising Scheduling
Scheduling directly refers to the patterns of time in which the advertisement is going to run. It helps fixing
up the time slots according to the advertiser so that the message to be delivered will reach target
audience in a proper way with proper timings. There are basically three models of advertising scheduling
as follows:
1. Continuity: This model is very good option for the products or services which don’t depend on
season for advertisements. They run ads whole year round. The advertisements under this type
run at regular and fixed intervals. The main advantage here is reminding about your products to
the customers continuously. This model helps maintain a continuous and complete purchase
cycle. This is a best model for the products having continuous demand all the year round. There
can be a Rising Continuity in which some specific products are been advertised in the peak
seasons for e.g. floaters are advertised more in rainy season while some products fall under a
Falling Continuity in which either ads for new products are run or if there is any other change in
the existing product. E.g. packaging of Pediasure, a kid’s health drink is recently changed.
2. Flighting: This model is also called bursting. As the name suggests, this an absolute season
based products model. The ads here run at very irregular intervals. Advertisements are for very
shorter periods and sometimes no ads at all. The ads are in concentrated forms. So, the biggest
advantage here is there is very less waste of funds as the ads run only at the peak time when
the product demand is on high. Television and radio are the most used media types in this
method. So the advertisers who cannot afford the year long ads, this is a best option. E.g. ads
for warm clothes in Indian Market.
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3. Pulsing: This model is the combination of both continuity and flighting scheduling. Here, ads
run whole year round but at a lower sidxe that means less ads, and heavy advertisements are
preferred at the peak time. So this model has advantages of both the other models. Generally
scheduling is fixed for a month. There are six types of scheduling method here.
 Steady pulse has fixed schedule for 12 months.
 Seasonal pulse has bunches of ads season wise.
 Period pulse regular basis ads.
 Erratic pulse refers to irregular ads normally used for changing old patterns.
 Start up pulse is used for new product with heavy advertisements.
 Promotional pulse refers to short period single use ads used basically for promoting
products or events.
Using this interface, you can set the time periods in which you want to run your campaign. Then
click OK button.
Thus, points to remember while scheduling an advertisement are:
Print Media includes business magazines, trade publications, newspapers, technical journals, etc. To
 Selecting a proper media type for running ads make print media work efficiently, there are some do’s and don’ts to be kept in mind:
 Selecting a correct time for running ads so that the purpose is solved.
 Advertisements should be sufficient enough (in number) to deliver the message to the  Visual image of the ad should be very sharp and prominent
target.
Industrial Advertising - Business to Business Advertising
 The ad should be so impressive that readers get attracted towards reading it
The most popular terminology used for industrial advertising is Business to Business advertising. This  The highlight should be on the service or product offered and not the source by which it is being
type of advertising generally includes a company advertising its products or services for the companies offered
which actually uses same or similar products or services or we can say that the advertising company  Let the ad be simple to be read (with no difficult fonts)
should produce the products which the other company needs for its productions or functions. For e.g.  The picture shown should not be irrelevant with the product.
some mineral water companies which work on a smaller scale outsource the packaging bottles, the caps  The ad should reflect the company’s image.
for bottles, the cover with name printed on it, etc. so for this, the advertisements of the manufacturers of  The ad should to be in logical sequence if it is of two or more pages.
bottles, caps and outer packaging paper can work.
A smaller to smaller and largest of all, every company has to do industrial advertising. For e.g. if a
 Headlines should be catchy and suiting the product image.
company is making coffee powder, it will sell its powder to the distributors who in turn will sale it to the  And lastly, at the bottom of the page, the company name, address and phone number of the
retailers and wholesalers and also to the big companies who has a coffee machine for their employees. respected office should be mentioned clearly without fail.
Thus companies manufacturing any products can be advertised to the other companies, like raw Direct Marketing includes:
materials, the machineries used by other companies, spare parts of the machines which makes it work,
anything. 1. Direct Mail - here, the newsletters, data sheets, and the brochures of the company are directly
Role of Industrial Advertising mailed to the customers’ postal address.
2. Telephonic Advertising - the advertising is done by calling up the customers on there
telephones, giving messages on mobile phones, etc.
 It minimizes the hunt for buyers.
3. Online Advertising - includes companies sending e-mails to the customers or other companies
 It helps in increasing sales of the company. enclosing information about their products ant services, putting online banners, providing e-
 It helps in making more and more distribution channels. shopping options, etc.
 It makes company work more efficiently to produce the desired product or service. The advertisers also use other ways for promoting their products like participating in trade shows, trade
 It creates awareness among the customers or other companies about the products and expos, and fairs.
services. Thus, the companies can use any or every type of advertising, the important motto being increase in
Process of Industrial Advertising sales, producing best quality products, maintaining good relations with the customers, and achieving the
desired goal.
Ethics in Advertising
The strategies used in industrial advertising differ from company to company, as different companies have
Ethics means a set of moral principles which govern a person’s behavior or how the activity is conducted.
different products to be advertised. So, a single rule cannot work for all the companies’ advertisements.
And advertising means a mode of communication between a seller and a buyer.
But the basic process which can lead to a successful advertisement is: knowing the objective for
Thus ethics in advertising means a set of well defined principles which govern the ways of
advertising - identifying the target companies - researching about the market conditions and the
communication taking place between the seller and the buyer. Ethics is the most important feature of
competitors - creating the ad to be delivered - selecting media to be used - what should be the budget
the advertising industry. Though there are many benefits of advertising but then there are some points
allotted - execution of the advertisement - getting the feedbacks from the customers.
which don’t match the ethical norms of advertising.
Media types in Industrial Advertising
An ethical ad is the one which doesn’t lie, doesn’t make fake or false claims and is in the limit of
decency.
The media generally used in the industrial advertising is print media and direct marketing.

Nowadays, ads are more exaggerated and a lot of puffing is used. It seems like the advertisers lack
knowledge of ethical norms and principles. They just don’t understand and are unable to decide what is
correct and what is wrong.
The main area of interest for advertisers is to increase their sales, gain more and more customers, and
increase the demand for the product by presenting a well decorated, puffed and colorful ad. They claim
that their product is the best, having unique qualities than the competitors, more cost effective, and more
beneficial. But most of these ads are found to be false, misleading customers and unethical. The best
example of these types of ads is the one which shows evening snacks for the kids, they use coloring and
gluing to make the product look glossy and attractive to the consumers who are watching the ads on
television and convince them to buy the product without giving a second thought.
Ethics in Advertising is directly related to the purpose of advertising and the nature of advertising.
Sometimes exaggerating the ad becomes necessary to prove the benefit of the product. For e.g. a
sanitary napkin ad which shows that when the napkin was dropped in a river by some girls, the napkin
soaked whole water of the river. Thus, the purpose of advertising was only to inform women about the
product quality. Obviously, every woman knows that this cannot practically happen but the ad was
accepted. This doesn’t show that the ad was unethical.
Ethics also depends on what we believe. If the advertisers make the ads on the belief that the
customers will understand, persuade them to think, and then act on their ads, then this will lead to positive
results and the ad may not be called unethical. But at the same time, if advertisers believe that they can
fool their customers by showing any impractical things like just clicking fingers will make your home or
office fully furnished or just buying a lottery ticket will make you a millionaire, then this is not going to work
out for them and will be called as unethical.
Recently, the Vetican issued an article which says ads should follow three moral principles - Truthfulness,
Social Responsibility and Upholding Human Dignity.
Generally, big companies never lie as they have to prove their points to various ad regulating bodies.
Truth is always said but not completely. Sometimes its better not to reveal the whole truth in the ad but at
times truth has to be shown for betterment.
Pharmaceutical Advertising - they help creating awareness, but one catchy point here is that the
advertisers show what the medicine can cure but never talk about the side effects of that same thing or
the risks involved in intake of it.
Children - children are the major sellers of the ads and the product. They have the power to convince the
buyers. But when advertisers are using children in their ad, they should remember not to show them alone
doing there work on their own like brushing teeth, playing with toys, or infants holding their own milk
bottles as everyone knows that no one will leave their kids unattended while doing all these activities. So
showing parents also involved in all activities or things being advertised will be more logical.
Alcohol - till today, there hasn’t come any liquor ad which shows anyone drinking the original liquor. They
use mineral water and sodas in their advertisements with their brand name. These types of ads are called
surrogate ads. These type of ads are totally unethical when liquor ads are totally banned. Even if there are
no advertisements for alcohol, people will continue drinking.
Cigarettes and Tobacco - these products should be never advertised as consumption of these things is
directly and badly responsible for cancer and other severe health issues. These as are already banned in
countries like India, Norway, Thailand, Finland and Singapore.
Ads for social causes - these types of ads are ethical and are accepted by the people. But ads like
condoms and contraceptive pills should be limited, as these are sometimes unethical, and are more likely
to loose morality and decency at places where there is no educational knowledge about all these
products.
Looking at all these above mentioned points, advertisers should start taking responsibility of self
regulating their ads by:
 design self regulatory codes in their companies including ethical norms, truth, decency, and
legal points
 keep tracking the activities and remove ads which don’t fulfill the codes.
 Inform the consumers about the self regulatory codes of the company
 Pay attention on the complaints coming from consumers about the product ads.
 Maintain transparency throughout the company and system.
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When all the above points are implemented, they will result in:
 making the company answerable for all its activities
 will reduce the chances of getting pointed out by the critics or any regulatory body.
 will help gain confidence of the customers, make them trust the company and their products.
Measuring Advertising Effectiveness
“When a child writes the examination papers, he has to see the result come what it may be, so that he
comes to know where he is wrong and where he should pay more attendance. This will help him work
better in future.”
This is exactly the case of the advertisement. The work is not complete if the effectiveness of advertise is
not measured. This is the only way to know how the advertisement is performing, is it reaching the targets
and is the goal achieved.
It is not at all possible to measure advertisement effectiveness accurately as there are many factors like
making a brand image, increasing the sales, keeping people informed about the product, introducing new
product, etc, which affect the effectiveness of an advertisement.
We all know that there are some companies who advertise at very low level but still their products are a hit
and some companies indulge in very heavy advertisements but they don’t get desirable results. But then,
there are some traditional and modern tools to measure most of the effectiveness of an advertisement
through which the advertiser can or may get more and more information about how their ads and product
are performing in the market. According to Philip Kotler and Armstrong, the Gurus Of Marketing, there are
two most popular areas which need to be measured for knowing the effectiveness of advertisement and
they are:
 Communication Effect
 Sales Effect
Communication Effect Research consists of three types of researches:
1. Direct Rating Method - here, customers are directly asked to rate the advertisement and then
these rating are calculated.
2. Portfolio Tests - here, the customers see the ads and listen carefully to the ads and all the
contents of the ads and then they are asked to recall the ad and the contents. Then the
calculations are done with help of this data.
3. Laboratory tests - here, the apparatus to measure the heart rates, blood pressure,
perspiration, etc are used on the customer after he watches the ad, to know the physiological
reactions of the body.
Sales Effect Research totally depends on the sales of the company. The sales keep varying from time to
time. There are some factors affecting sales like product availability, the price of the product, contents of
the product, and sometimes the competitors. So this method is a little difficult than the communication
one. The company doing sales effect research generally bothers about the sales of the product, they try to
know whether or not the money they are spending on the ads is enough or excess.
As earlier said, it is not possible to measure each and everything and the chances are at the lower end if
the company has many ads running through various mediums at the same time. So suggestion is that the
advertiser or the company should use appropriate and different methods which are most suitable for the
media under use.
 The company can hold surveys and product recognition tests
 Questionnaire or feedback flyers can be distributed and customers could be asked to fill it up.
 Toll free number can be highlighted on the ads so that customers can call up.
 The response rates can be increased by telling customers what to do. For e.g. some ads have
lines in flashy color like “Hurry Up” or “No one can eat just one” or “be the first” etc.
These are the traditional ways. Now days, internet is the modern tool for measuring the effectiveness of
an advertisement. There are some types such as:

Integrated direct marketing - This is an internet based tool where they have a response corner designed
on the websites. Whenever the customers visit the sites, they fill up their contact details and give
feedbacks. Thus the company supplies more information and sends newsletters and also gets the idea for
further action. But then its not that only online advertiser have this facility but then advertisers who don’t
work online can use coupons, discount vouchers, etc. to do this.
Analysis tool - there is an analysis tool available on internet by using which the advertiser will know how
many customers are visiting the site, who are shopping online, how many pages are viewed, etc. which in
turn will help advertiser to measure the effectiveness.
Internet is the most easy, cheaper and cost effective way to measure the effectiveness because here no
money is wasted as the ad is only viewed when the customer want to view it where as in normal print
method or using TV, the ad sometimes goes unwatched or unattended and viewed for the sake of
viewing.
Advertising Myths - Ifs and Buts of the Advertising Industry
Advertising is considered as the best tool to make people aware of the product a company wants to sell.
This is the best way to communicate with the audience and to inform them about the product but with a
proper media selection and of course timing. But there are some myths which have been creating
problems in the path of successful advertising. We have tried to clarify some misinterpretations about
the ifs and buts of the advertising industry.
Advertising Myths
1. Advertising works only for some business
Wrong. Advertising works for each and every company or business it only it is executed
properly. But due to bad advertising, many ad campaigns fail to work in desired way and the
people think that advertisements are not their cup of tea. They must understand one simple rule
of advertising - it should be for right people at right time through right medium on right place.
2. Advertising is only needed when business is slow
Wrong. Who said that the big and successful brands don’t advertise their products? Advertising
is a continuous process with some renovations whenever needed. But, yes, when the business
really is going slow or at its low, the advertising will have to be heavy and more in number. This
will help the product to improve its market value and make people aware of the product.
3. If the product is not selling, advertise it
This is just not true. Just think about it. If you are selling a product which is not at all in vogue,
and no one is using it, how will it get clear from the shelf. You need to understand the need of
customers and then sell the product. Advertise doesn’t mean selling anything you want but it
means selling what customers wants.
4. Advertise creates needs
No. The people already had cassettes to play and listen to music they liked when they didn’t
have the option of CDs. It is technology which came in, and it was only then CDs were
advertised and sold. Advertise only replaces the old things with new, it doesn’t creates needs.
5. Advertise effects persist for decades
It’s the quality of the product which persists. Advertise no doubt helps increasing sales of the
product and stays in memory of the people, but minds are captured by the product itself.
6. Humuor in ads
Sometimes humour gets in the way of delivering message properly to the consumers but not
every time it creates problems. Many of the times it helps people to remember the ad and the
product and helps creating a positive attitude towards the advertise.
7. Sex sells
Not always. Some advertisers use sex for just increasing the sales and forget that the product
doesn’t need this type of ad at all. Remember once models Milind Soman and Madhu Sapre
posed naked for a shoe brand. It was really irrelevant.
8. Creativity is the most important factor
The ad should be no doubt creative enough to attract consumers but it not the only selling
factor. There has to be good message to deliver, best media selection, and best quality of the
product to make the product and ad both successful.
9. Advertising costs so much
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Advertise needs money but one has to also consider the results in forms of increased sales,
increased reputation in industry, recognition for product and also increased market value of
product which advertisements brings along. Lets consider advertising as investment and not
expense.
Thus these are the most common myths of the ad industry which are working as hurdles in the way of
bright future of advertisers and advertising and we need to overcome these hurdles and rise.
Future of Advertising
Advertising is still all about the ‘ifs and buts of a product’, presented in a glowing rainbow like picture trying
to attract consumers….but what is the future of advertising in coming years ?
Lets go way back when the idea of advertising a product was regarded as some kind of a big deal. Then
the advertisements were very limited, and it took lots and lots of efforts to make a single advertisement.
And the customers then, had no option other than watching those advertisements. Now, time has
changed. Since last 20 years or lets just consider last 10 years, there has been a dramatic change in the
world of advertisement. And this will not have a stopage in coming years. The change doesn’t mean that
the advertising agencies will all be shut down and firms will take over. It just means that the existing
advertising agencies will have to experience a change in the industry and within. They will be redefined
and reinvented so that they can survive in the years ahead. The agencies which gave their number of
years to this industry will also change for good, be capable to cope up with new challenges, new
competition and new attitudes of the consumers. Once a article was written on change in advertising in
1992 and the title then also suits now, it said - Advertising Age : Change or Die and very well said. To
understand what is going to change and what will remain the same should be on the top of the list of the
advertisers.
Now is the beginning of the digital era. The agencies had a system of having some few creative people
who used to come with ideas for ads. That was the time when giving an ad in radio and television was
very expensive. But now no one minds actually about the cost for such ads because consumers are
responding well. But now and onwards, internet and technology has taken a front seat. Lets talk about the
mass media. Today every tv serial, all movies running in theatres and all breaks in the radio channels
have fillers called ads. But in the coming years, the ads can be shown to the consumers only if they want
to see and not because the advertiser want them to see it. The cost of using internet and digital gadgets is
everyday dropping down so the customers don’t mind spending on these things other that fooling
themselves with the colorful advertisements. The future will be in favour of the advertisers and
advertisements but only at the cost of proper management and proper use of digital technologies and
internet.
The Bond
Nowdays, no one trusts the ad industry because there is no transparency. The ethics are not being the
part of ads anymore. In coming years, the bond of trust has to be again rebuilt between the consumers
and the advertisers. The advertisers will have to work hard to gain the confidence of the customers.
More Creativity
The creative people of the agencies should not limit their creativity by only working with the old style
menu. This is the time to explore with help of internet and digital tools.
Differentiated Products
The advertisers should launch a product which will be completely different but excellent to use. Then only
the voice will be heard.
Attract Talent
More and more quality people should be hired today who will be leaders for tomorrow. They will be the
people who will lead the industry in the future with the best quality being coping up will everything. Better
HR practices should also be appointed.
These are some points which may help advertisers to survive and survive in a better way in the future.
The people who will not change can just not stay in this new industry.
News Based Advertising: Ethical or Not!

Maybe you read the article that was shared on Facebook that said “10 best places to visit this summer”
and maybe that article ended up influencing your choice for summer vacation destination. You may have
thought that this article was written by a user or a travel enthusiast that wanted to share their experience.
In the worst case you may have thought that this article was written by a news reporter? What if I told you
that this article is a part of a disturbing trend called “news based advertising” wherein corporations
sponsor content that is shared with users and intended to influence their decisions. In this article
we will understand more about news based advertising as well as the ethical implications that impact the
issue.
The Rise of News Based Advertising
Online advertising has reached a saturation point. The situation is so severe that the pay per click model
is almost irrelevant. Less than 0.2% of people that view an online advertisement actually click it.
Therefore, there is a serious lack of trust between consumers that view online advertisements and
companies that sponsor them. This is leading to big budgets earmarked for online advertisements going
down the drain.
This sparked off a new trend. Companies like Buzzfeed have come into existence and have brought along
the news based advertising model. Consumers tend to engage a lot more with such content. Not only do
they read the content avidly, but they also share the content on social media giving it their stamp of
approval. The method has become so effective that traditional media companies like Time Inc have also
created special teams to meet the demands of their clients. Corporate behemoths like General Electric
and Chevron have also been known to extensively use news based advertisements.
What is News Based Advertising ?
The simplest definition of news based advertising is that news articles actually do the work of
advertisements. An advertisement is camouflaged as a news article. For instance if a company
wanted to promote a brand of cereal as a healthy breakfast option, they would get an article written with
the title “ 5 healthy breakfast options” wherein they would list 4 other options which are already accepted
by the public and then add their brand to the list as well.
Media houses like Buzzfeed and ScoopWhoop are required to disclose that these articles are sponsored
by corporations. However, the disclosure happens in a form that is not obvious and difficult to find. Hence,
the law is followed in letter but not is spirit.
The Principle of Separation of News and Advertisements
Media houses have always been required to ensure that the revenue that they generate from
advertisements does not impact their news reporting. News is an important part of the social fabric and it
is important that the news is not polluted via corporate interests. Media houses are therefore believed to
have a basic responsibility that they clearly mark their advertisements as advertisements. This will enable
the user to determine what content has been genuinely reported and what content has been sponsored
and therefore might have ulterior motives.
Why Editorial Independence is Important for Society ?
The trend of news based advertising is disturbing to say the least. This is because news based
advertisements misuse the trust of the consumers. This is trickery to say the least. It is not long before
consumers realize this and this trust gets shattered. Media houses may have to most to lose.
Consider for instance, if Volkswagen has an extremely cozy relationship with media houses. Then it can
influence news reports on how its carbon emission negligence is reported! The society needs to know the
full extent of negligence that has been committed by a profit mongering corporation but the same may be
prevented or misdirected by news reporters because of their financial dependence on such firms.
This is one of those situations where the interests of business and the interests of society are clearly at
conflict with one another. Society deserves to have an unbiased and uninfluenced reporting of the events
around them. News based advertising is a deterrent to this independence. As mainstream companies are
joining this trend, the future looks dangerously unstable and bleak!
Why Editorial Independence is Difficult to Protect ?
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Editorial independence is difficult to protect because consumers have started expecting free stuff.
Well nothing in life is free. Media houses incur production and editorial expenses that consumers are
unwilling to pay. On the other hand, corporations are more than happy to pay for such expenses if media
houses mix advertisements with regular news articles.
This has put pressure on all media houses. The ones that are indulging in this seemingly unethical
practice are reaping financial rewards. This has made them the darling of investors on stock exchanged.
The companies that still choose to be ethical are facing grim financial situations. They face the danger of
hostile takeovers from other companies.
As a result, pretty much every media house is on board with news based advertising. Some are using
their own brand to do so whereas others are more careful and have created subsidiaries to detach
themselves from this questionable practice.
Ad Spending: A Primer
The advertising budget is a residual expense. This means that every additional dollar that is spent on
advertising comes straight out of the profit. Also, if advertisements are done cheaply, it straight away
impacts the bottom line. This is the reason why fourth quarters traditionally have lowest advertising
spends. If companies know that they are going to miss their sales targets, they try to cut down on planned
advertising expenses so that the profit remains unaffected. In this article, we will understand more
about ad spending and how it impacts the sales of a company.
Common Pitfalls in Ad Spending
 The most common method of accounting for advertising is to allocate the brand’s advertising
budget amongst the SKU’s sold. Hence, a few cents or dollars are apportioned to each SKU
being sold. The problem is that this method does not provide the feedback necessary to
improve the process. The company is not able to determine whether its ad spending is
sufficient. Since there are no precise metrics available to measure the impact of advertising
dollars on the sales generated, the result is a black box. Companies keep spending huge sums
of money on ad budgets because they believe that these budgets contribute to sales. However,
they have no proof or no way to determine whether this belief is the actual truth.
 Advertisers believe that the benefits of advertising only accrue in the long term. However, they
warn against cutting the advertising spends in the short term as well. The metric most
commonly cited to make this argument is the advertisement spending to sales ratio. In many
cases, this ratio has an elasticity of greater than one. This means that a dollar spent on
advertising creates more than a dollar in sales. This also means that if advertising spends are
reduced, the result is a disproportional drop in sales. However, the problem with this method is
that it ties the efficiency of the ads with the money spent. However, nowadays, online marketing
has evolved. This is allowing companies to spend less money on ads and yet be more effective.
This method of analysis, therefore, disregards the productivity gains and compels companies to
be inefficient and continue spending more.
 There is a lack of tools which provides real-time data about the ad spends as well as the benefit
that they generate. Most tools look at the situation after a time lag. There is a need to obtain
real-time feedback so that actions can be taken proactively and not retroactively.
Alternative Ways To Gauge The Efficiency Of Ad Spends
Another way to gauge the efficiency of advertising spends is to compare the share of voice that a brand
generates to its market share. Note that the metric does not involve monetary terms. Instead, it involves
share of voice. Hence, if a brand is able to generate more impact with a lesser budget, this act is
appreciated by this metric.
The rationale behind this is that similar brands have similar cost structures in the market. Also, since
markets tend to be oligopolistic it is easy to determine the share of voice generated by other companies
as well. Hence, a comparison is enabled between the advertising effort and the outcome in the form of
sales. This allows companies to benchmark against each other. This benchmarking then enables
identification and adoption of best practices.
Ad Spends and Lifecycle of the Brand

The introduction of a new brand requires considerable effort. It is for this reason that when new brands
are introduced, their market share will be much lower as compared to their share of voice. In fact,
sometimes the entire sales revenue is less than the ad spends. Such companies need to aggressively
pursue more sales rather than worrying about ad spends.
On the other hand, brands like Kellogg’s, Coca-Cola etc. which have been on the market for long require
a stable share of voice. Since these brands are mature, any growth in sales happens because of
population growth. Advertising has very less impact here. Hence, companies try to optimize their ad
spends instead of aggressively pursuing more sales.
The scale of the brand also has a relationship with the advertising spends. For instance, a bigger brand
has to do billions of dollars’ worth of ads. It is for this reason that they tend to get airtime and creative
services at a cheaper rate compared to a startup that may have a budget of a few million dollars.
Cutting Down Ad Expenses
Several companies have tried to cut down ad expenses when the brand becomes mature. This strategy is
often called milking the brand. This strategy takes advantage of a brand when it is at its peak. As a result,
sales are generated without corresponding ad expenses and the company makes huge profits for a short
time. However, over time the sales start declining. Many companies believe in the brand life cycle theory.
They believe that the sales of a brand will inevitably decline. Hence, they try to make the most money
when the brand is at its peak. This cut in ad spending turns out to be a self-fulfilling prophecy and
inevitably leads to the decline.
Unit-II Media Planning and Advertisement effectiveness (10hrs)
Advertising Media- Types/ Classification, Media Planning Process, Media Scheduling , Creativity, Creative
Strategy and Copy Writing, Evaluation of advertising effectiveness.
What is Media Planning?
Media planning is the process by which marketers determine where, when, and how often they
will run an advertisement in order to maximize engagements and ROI. The media plan might split
advertising spend and resources between various online and offline channels such as broadcast,
print, paid ads, video ads or native content.
In today’s competitive marketing landscape, marketers need to serve consumers with the right
message, at the right time, on the right channel in order to see engagements. Media planning is
where marketers determine what these “rights” are.
An effective media plan will result in a set of advertising opportunities that target a specific
audience and fit in with the organization’s marketing budget. When establishing a media plan,
marketers will often factor in the following considerations:
 Who does the ad need to reach?
 What is the marketing budget?
 Conversion goals
 Frequency of the message
 Reach of the message
 How to define success
Media planning is most often done by media planners at advertising agencies. Media planners
must work with media buyers and the client organization to develop a strategy to maximize ROI
on media spend. Media planners are required to have a firm understanding of the organization’s
brand and target audience, various media platforms and developing media trends.
The Difference Between Media Planning and Media Buying
Media planning and media buying are related processes that often happen in conjunction with one
another; however, they are different.
Media Planning
Media planning is more involved with formulating a strategy, evaluating its effectiveness, and
adjusting, while buying is the execution of the strategy.
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As noted, the media planner will evaluate brand and audience to determine the correct
combination of messaging and media mix on which to advertise in order to reach consumers in a
positive, impactful way.
Media Buying
Media buying is the process of purchasing ad space across various channels and platforms in
coordination with the agreed-upon media plans and monitoring campaigns as they run. This
means evaluating platform formats and rates to ensure they coincide with the plan, negotiating
costs, keeping abreast of media trends and building relationships with counterparts at various
channels and platforms. Media buying often leverages one of the following popular strategies:
 Manual bidding
 Direct buys
 Programmatic buys
 Real-time bidding
Challenges of Media Planning
Media planning can be challenging because there are so many contributing factors that must be
accounted for, and because many believe that media planning strategies and processes have not
modernized along with marketing. Challenges include but are not limited to :
 Consumer-Level Targeting: The media plan must understand consumers at a granular
level to determine what types of messages resonate with them, requiring in -depth
analytics.
 Platform Preference: Brands must also know the various channels and platforms
that target audience members engage with and when. This will allow them to effectively
choose media on which to run campaigns. All of this must be do ne with budget and
media spend in mind.
 Heavy Budget Focus: Media planning continues to revolve around budget rather than
customer engagement. There is limited flexibility in a budget and plan to allow marketers
to course correct as campaigns run and new insights are discovered. Modern media
planning requires the flexibility to allocate budget to different channels if they prove to
be more successful.
 Integrating Measurements: Because there are so many channels online and offline, it
has become infinitely more difficult for marketers to measure the success of these
campaigns alongside each other to determine which are most effective and which should
be updated.
Today, media planning has to adapt to focus on the consumer experience using flexible budgets
and real-time, unified measurements that allow for media plan optimizations in-campaign.
The Essentials of Creating a Media Plan
Creating a media plan is a detailed process that requires planners to consider the needs of target
consumers as well as the goals of the business. Here are the essential steps and considerations
marketers must make when creating a media plan.
Determine media goals and objectives
It might be easy to assume that the goal is to drive conversions or engagement; however, that
would oversimplify this step. Goals may vary by department, or there might be multiple objectives
for one campaign. For example, for the sales team and sales goals, increased revenue is the
objective. However, marketing objectives might be to increase brand awareness. Knowing the
main goal of the campaign will determine how it runs, as well as messaging.
Once clear goals are established, media planners must conduct research into market trends and
the competitive landscape. This research will offer visibility into where sim ilar brands and goals
have achieved success in the past, informing planning decisions. For example, perhaps a brand

has long relied on email campaigns but research reveals that competitors have had greater
success with native ads. This demonstrates how the organization should shift its plan.
Of course, when determining goals and setting objectives, media plans must factor in budgets.
However, marketers should try to avoid assigning strict dollar amounts to specific channels.
Rather, a flexible approach to marketing budget will allow for optimizations to be made as
campaigns run.
Determine Target Audience
Marketing today is driven by creating positive customer experiences. This means that when
developing messaging and selecting where to display those messages across the media mix,
marketers need to be focusing on specific audience needs.
First, marketers need to examine which segment of the overall audience they are trying to
engage. From there, marketers need to look at attribution measurements and engagement
analytics to understand the types of ads these users engage with, which creative is most
effective, and importantly, which channels these consumers use. While marketers often consult
demographic information such as age, location, general interests, etc., they should be sure to
incorporate person-level data gathered through a unified measurement approach to get the most
tailored results.
Frequency & Reach
Another key component of a media plan is considering reach and frequency. Reach refers to how
many people the campaign will be in front of over a specific amount of time. Frequency refers to
how many times the consumer will be exposed to the ad over the course of the campaign .
There are a few popular approaches that marketers take when selecting frequency.
 Continuity: This approach to frequency means that ads will run on a consistent
schedule over the course of the campaign: for example, two ads per week. This strategy
is often used for goods that are not seasonal and require regular reinforcement to stay
top of mind.
 Flighting: “Flights” refer to internment or alternating periods of advertisements followed
by pauses in advertising on the channel altogether. This strategy wor ks well for
seasonal products or for those with less ad budget. For example, when there is a pause
in a flighted television campaign, marketers may choose to run print ads instead.
 Pulsing: This is a combination of flighting and continuity. Pulsed campaign s will
incorporate low-intensity consistent advertising that is augmented by flights of higher -
intensity ads during times when additional messaging can have a high impact.
Selecting the Right Media
Goals, audience, reach, frequency, and budget all contri bute to the ultimate decision of which
media to invest in.
There are a variety of online and offline channels for marketers to choose from, and they must
use the information they gathered in the research and goal-setting phases to determine which
channels will bring them the most success.
Here are some of the most popular channels that marketers choose when media planning, along
with their attributes.
Offline Media
 Magazines
o They have a long shelf life and often stay in a consumer’s possession for two to four weeks
after being read.
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o Information in this medium tends to be retained longer, since people read faster than they
can listen.
o Research has shown there is a higher amount of trust in magazine ads than in other forms
of media. Consumers are also less resistant to these kinds of advertisements, as these
often tie in with their interests.
o Publications tend to be very targeted (e.g., running magazines or cooking magazines).
o They reach a secondary audience in addition to the target audience, since they are passed
along to family and friends.
 Newspapers
o When selecting this medium, marketers can choose which section of the newspaper ads are
placed for further targeting. If they want to target those interested in fashion, they can select
that section of the newspaper for their ad.
o Newspapers have a desirable audience for many marketers. Consider the following:
 Newspaper readers are more likely to have higher education and earn a higher salary. This
can be important when selecting ad space based on demographics.
 The older the demographic, the longer they will spend reading the newspaper.
o Advertising with local newspapers is a great way to ensure a brand’s message stays local.
 Radio
o Radio ads have a local appeal, allowing you to target specific areas or regions of the
country.
o It is an easy medium to build frequency with your target audience.
o According to research, exposure to a radio ad and time to purchase is the shortest of any
medium. Additionally, if paired with other forms of media, the overall campaigns were more
effective.
o This tends to be a lower-cost medium.
 TV & Cable
o This media is highly visual and can demonstrate products in everyday life. For example, if
you sell a cleaning product, consumers can see the benefits of your product and how these
can be applied in their home.
o This is very pervasive, as the average American watches approximately five hours of
television a day.
 Out of Home
o Media such as billboards are large and get attention. In a busy area, your message can
reach 10,000 people in a month.
o Out of home isn’t limited by billboards, only your creativity is. It is an extremely mobile
option. (e.g., using displays to advertise luggage at an airport)
Online Media
 Digital Publications
o Many digital publications have opportunities for you to email their database through a
personalized email or newsletter.
o They can track open rates and understand conversion rates to your site or asset.
o These are often specialized publications, making it easy to reach your target audience, and
are great tools for lead generation campaigns.
 PPC
o Advertisers can capitalize on search intent.
o Advertisers can retarget people who have visited their site.
o PPC is an extremely cost-effective medium.
 Social Media
o Like PPC, social media is an extremely cost-effective medium.

o It is also extremely targeted, allowing marketers to target by interests, age, marriage status,
etc.
o Social platforms are constructed on a basis of community, which allows your brand to
connect more personally with consumers. It also gives your brand the chance for content to
go viral.
 Programmatic Advertising
o Programmatic advertising is extremely targeted, using an algorithm to find and target
specific audiences across digital platforms. When looking into this, there are two methods to
consider:
 Programmatic Bidding - uses demand side platforms to buy ads on the digital market
based on target audience.
 Real-Time Bidding - allows advertisers to bid on impressions to their target audience. If
their bid wins, the ad is displayed right away.
Media Planning Tips
As marketers being to strategize on new media plans, they should keep these ideas in mind:
 Reach: Select outlets and times that will best reach your target audience. For example,
buying ad space during a live televised event (such as a sports game) ensures that
viewers will be watching the program live and not fast forward through the commercials.
 Establish clear goals: Is this a branding campaign, or are you looking to generate
leads? How many people are you looking to reach?
 Engagement: How do you encourage people to talk about your brand? Make sure
creative has clear direction on what would resonate with this target audience based on
demographics and viewership. Additionally, make sure you have a way to test the
effectiveness of creative.
 Attribution Models: Make sure that your team is using a marketing attribution
model that can effectively track offline and online media. Using the right attribution
model can ensure your team is making choices that make sense when planning media.
MBA Notes - Media Planning Process
- March 11, 2017
Question - Define media planning, also explain steps in development of media plan.
Answer
The word Media came from the Latin word "Middle". Media carry message to or from a targeted audience
and can add meaning to the message.
Media Planning, in advertising, is a series of decisions involving the delivery of message to the targeted
audience. Media Plan, is the plan that details the usage of media in an advertising campaign including costs,
running dates, markets, reach, frequency, rationales, and strategies.
Steps in Development of Media Plan
1. Market Analysis
Every media plan begins with the market analysis or environmental analysis.Complete review of internal
and external factors is required to be done. At this stage media planner try to identify answers of the
following questions:
 Who is the target audience?
 What internal and external factors may influence the media plan?
 Where and when to focus the advertising efforts?
The target audience can be classified in terms of age, sex, income, occupation, and other variables. The
classification of target audience helps media planner to understand the media consumption habit, and
accordingly choose the most appropriate media or media mix.
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2. Establishing Media Objective
Media objectives describes what you want the media plan to accomplish. There are five key media
objectives that a advertiser or media planner has to consider - reach, frequency, continuity, cost, and weight.
1. Reach - Reach refers to the number of people that will be exposed to to a media vehicle at least
once during a given period of time.
2. Frequency - Frequency refers to the average number of times an individual within target
audience is exposed to a media vehicle during a given period of time.
3. Continuity - It refers to the pattern of advertisements in a media schedule. Continuity
alternatives are as follows:
o Continuous: Strategy of running campaign evenly over a period of time.
o Pulsing: Strategy of running campaign steadily over a period of time with intermittent
increase in advertising at certain intervals, as during festivals or special occasions
like Olympics or World-Cup.
o Discontinuous: Strategy of advertising heavily only at certain intervals, and no
advertising in the interim period, as in case of seasonal products.
4. Cost - It refers to the cost of different media
5. Weight - Weight refers to total advertising required during a particular period.
3. Determining Media Strategies
Media strategy is determined considering the following:
1. Media Mix - From the wide variety of media vehicles, the advertiser can employ one vehicle or
a mix suitable vehicles.
2. Target Market
3. Scheduling - It shows the number of advertisements, size of advertisements, and time on
which advertisements to appear.
o Seasonal Pulse: Seasonal products like cold creams follows this scheduling.
o Steady Pulse: According to this scheduling one ad is shown over a period of time, say
one ad per week or one ad per month.
o Periodic Pulse: A regular pattern is followed in such scheduling, as in case of
consumer durable, and non durable.
o Erratic Pulse: No regular pattern is followed in such scheduling.
o Start-up Pulse: Such scheduling is followed during a new campaign or a launch of a
new product.
o Promotional Pulse: It is for short time, only for a promotional period.
4. Reach and frequency
5. Creative Aspects - Creativity in ad campaigns decides the success of the product, but to
implement this creativity firm must employ a media that supports such a strategy.
6. Flexibility - An effective media strategy requires a degree of flexibility.
7. Budget Considerations - In determining media strategy cost must be estimated and budget
must be considered.
8. Media Selection - It covers two broad decisions - selection of media class, and selection of
media vehicle within media class.
4. Implementation of Media Plan
The implementation of media plan requires media buying. Media Buying refers to buying time and space in
the selected media. Following are the steps in media buying:
 Collection of information: Media buying requires sufficient information regarding nature of target
audience, nature of target market, etc.
 Selection of Media/Media Mix: Considering the collected information and ad-budget, media or
media mix is selected which suits the requirements of both - target audience and advertiser.
 Negotiation: Price of media is negotiated to procure media at the lowest possible price.
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 Issuing Ad - copy to media: Ad-copy is issued to the media for broadcast or telecast ADVERTISEMENTS:
Process # 2. Determination of Characteristics and Qualities to Be Possessed By the Salesforce:
 Monitoring performance of Media: Advertiser has to monitor whether the telecast or broadcast of
ad is done properly as decided. Job Description/Analysis:
It is concerned with the determination of nature of duties and responsibilities involved in performing effectively a
 Payment - Finally, it is the responsibility of advertiser to make payment of media bills on time. particular job. Job description is concerned with a job and not the individuals. It gives details of the job to be
5. Evaluation and Follow-up
performed and the qualities and qualifications required.
Evaluation is essential to assess the performance of any activity. Two factors are important in evaluation of
The man specification indicates the exact requirements needed for a particular job. On the basis of nature of duties,
media plan:
the requirements also may change. While planning man specification, emphasis should be given to the basic
 How successful were the strategies in achieving media objectives? considerations-
 Was the media plan successful in accomplishing advertising objective? ADVERTISEMENTS:
Successful strategies help build confidence and serve as reference for developing media strategies in (i) Can he do the job?
future, and failure is thoroughly analyzed to avoid mistakes in future. (ii) Will he do the job?
Generally speaking, the following qualities are required of a salesman:
i. General Qualities- Good personality, sound health, intelligence, honesty and integrity of character, sociability,
Unit-III Sales Management-I (10hrs) consistency, and power of observation.
Nature & Scope of sales management,personal selling and salesmanship Sales Organization Management of sales ADVERTISEMENTS:
force-recruitment, selection and training of sales personnel. ii. Particular Qualities- Educational qualifications, past experience, knowledge of the product, customers and market,
languages known.
Sales Force Management: Recruitment, Training, Supervision and Sales Performance Evaluation iii. Technical Knowledge- Knowledge about the chemical or mechanical aspects of the product to be sold, knowledge
Read this article to learn about Sales Force Management, Evaluation of Sales Performance by the of legal implications involved in the sales activities, etc.
Process # 3. Source of Recruitment of Salesforce:
Management and six areas for managerial decisions regarding the sales force- (1) Recruitment and
After job analysis and man-specification, every possible source should be tapped to select the most efficient
selection of Sales force (2) Training of Sales force (3) Remuneration and expenses of Sales force (4) salesman.
Supervision and direction (5) Motivation of Salesmen (6) Control and evaluation or assessment of sales ADVERTISEMENTS:
performance. Let us review, in brief, important activities of sales management. The various sources are as follows:
Sales Force Management and Evaluation of Sales Performance (a) Company’s own staff (promotion)
Sales Force Management # 1. Recruitment and Selection of Sales force: (b) Competing firms (not ethical — higher salary)
Recruitment involves searching for prospective candidates and encouraging them to apply for the job. Vacancies are (c) Employment exchanges
finalised, advertised and applications are collected from interested candidates. Selection is concerned with choosing (d) Educational institutions
most suitable candidates out of many available or interested. Available candidates are scrutinised, tests and (e) Situation Wanted’ columns of newspapers
interviews are conducted to find out most suitable candidates. (f) ‘Situation Vacant’ advertisements
Salesman is the important corner-stone upon which sales organisation is built. Success or failure of the firm depends (g) Casual applicants
upon the type of salesman selected. Therefore, selection must be made carefully. It is the duty of the Sales Manager (h) Recommended candidates.
to select salesmen. (i) Placement agencies.
ADVERTISEMENTS: Process # 4. Selection of Salesforce:
But, selecting a proper salesman is a major challenge due to a number of reasons: From these sources, applications are received and screening of the applications is made. Applications which satisfy
(a) Selling jobs becoming more difficult to perform because of the greater complexity of the products and services, the job descriptions and man-specifications are only considered for selection. The selected applicants are called for
the multiplicity of channels of distribution, etc. psychological test. If they fare well in the above two they will be referred from the referees mentioned by the
(b) Markets today are highly competitive. applicants.
(c) Selling as a career or profession has not been fully accepted and hence, there is only limited number of salesmen If a good report is given by the references, the candidates will be called from medical examination. If the candidates
who would qualify. are physically fit, they will be called for final interview and appointment order is issued. The appointment order
ADVERTISEMENTS: should be clear, at least in the following aspects: designation, salary and allowances and mode of appointment, i.e.,
(d) There is a noted absence of institutions where salesmanship is taught. temporary or permanent.
Recruitment of salesmen involves the following processes: Sales Force Management # 2. Training of Sales force:
1. Deciding the quantity of salesforce. There is an old belief that “Salesmen are born and not made.” Once in a while, we may come across a salesman who
2. Determination of the characteristics and qualities to be possessed by the salesman. is capable of selling a refrigerator to an Eskimo, but this is rare. The salesman has to educate the customers about
ADVERTISEMENTS: products, sell the same with benefit to the customer and profit for the company. Therefore, he should have
3. Tapping the various sources of recruitment. excellent knowledge about products, competition, market dynamics, buying motives, and selling skills.
4. Careful selection of the candidates and finalising the employment. The Need for Training of Salesforce:
Process # 1. Deciding the Quantity of Sales force: The need of training salesman arises from the fact that a newly appointed salesman does not have the knowledge
Before the selection is undertaken, the Sales Manager should assess the need for sales force in quantitative terms, about the product he has to sell. He may not have knowledge about customers and buying motives. He may not
e.g., how many sales men are required, based on expansion of business and attrition due to retirement and know how to sell the product or how to present them to the prospective buyers.
resignation.
 Page 13 / 21

Even old salesman need training to acquaint them with the new products of the firm or those of the competitors, to This can be achieved by developing regular reading habits, upgrade technical knowledge, managerial and selling
explain to them the improved sales technique or simply as a refresher course. skills. He has to improve skills in communication, public-speaking and presentations.
The extent of training will depend upon following: It is, therefore, apt to say that “salesmen are not born, nor made, but they are born and made.” There must be
1. How difficult and complicated is the selling job concern? definitely certain in-born qualities and these qualities should be strengthened with proper amount of training.
2. The level of education and previous training the salesman possesses. Salesmanship is not a matter of personality alone, but a systematic utilisation of one’s personality. It is realised that
3. Previous selling experience of the salesmen. no product could be sold unless ‘the presentation’ is made in an efficient and convincing manner.
4. The type of buyer to be approached. In case of an expert buyer, more knowledge of the product to be sold is the Advantages of Training the Salesforce:
absolute necessity. A firm having well-designed training schemes gains the following advantages:
In general, a good training scheme would include the following: Advantage # 1. Greater Sales Volume:
Training Scheme # (1) Basic Principle of Salesmanship: A scientifically designed training programme helps to increase the sales volume.
Salesmen, to be effective in their sales efforts, should know fully the buying motives of customers and the selling Advantage # 2. Reduces Cost of Production:
points of the products. They should be well-versed with the methods of approaching the customers. They should Increased selling helps to reduce cost of production.
know the effective way of arousing the interest in the product and the art of creating desire for it. Advantage # 3. Early Selling Maturity:
They should be able to meet the objections raised by the customers. The training programme should stress on the Training reduces the time to be spent by the salesman with each customer in convincing him about the product.
AIDA formula to explain and build the sales presentation. Advantage # 4. Lowers Supervision Cost:
A – Attention – How to get it? In the case of untrained salesmen, sales manager and the other supervisory staff have to pay more visits than those
I – Interest – How to arouse it? needed in the case of trained salesmen to keep a check on their work.
D – Desire – How to develop it? Advantage # 5. Lowers Turnover of Salesforce:
A – Action – How to bring about decision to buy? Proper training makes the salesman well-prepared for the field work. This results in reduced number of salesmen
Training Scheme # (2) Knowledge of the Firm: leaving their job. This lower rate of turnover gives the advantage of reduced costs of recruitment, selection and
The salesman should be well informed about the company i.e., history of the company, its organisational set up, the training of salesmen.
name it has earned, achievement records, sales policies, distribution policies, customer’s service provided by the Advantage # 6. Better Customer Relations:
company, selling outlets, (channels) and so on. Knowledge about the firm’s goodwill and its selling policies goes a A scientifically trained salesman knows how to deal with a particular sales situation. He does not oversell, e.g., he
long way to inject a sense of pride in the salesmen and enable them to do their job as per the firm’s policy. does not sell the wrong quality or type of goods. The salesman advises the customers in business also. Therefore, a
Training Scheme # (3) Knowledge of the Product: cordial pleasant personal relationship with the customer is established. This makes frequent visits to book repeat
To be successful in increasing the sales volume of a product, salesmen should possess the requisite knowledge of the orders possible.
product. Good physical appearance alone will not help him to sell the product. Therefore, a salesman must have a Other Advantages:
detailed knowledge regarding- nature of the product, methods of production, materials used, method of packing, (a) Items leaving higher margin of profit can be more easily sold.
uses of the product, etc. This knowledge could be gained only out of properly organised training by the company. (b) Reduced losses due to bad debts.
Training Scheme # (4) Knowledge about the Customers: (c) Reduces selling cost.
A salesman must have a perfect knowledge of customers to whom the products are to be sold. Furthermore, (d) Greater sales volume per call of the salesman.
consumers are human beings and their behaviour would be different from one another. Their buying motives would (e) Reduced number of complaints from customers.
be different from one another. Each customer would be different as to the nature and type. (f) Reduced number of calls per order.
Their modes may change and often their temperaments too. Some of the types of customers are: silent and talkative (g) Better demonstration and sales presentation.
customers, and ill-mannered, suspicious, nervous, hesitant, argumentative and ill-tempered customers. (h) Sale of complete line of products is possible.
Buying motives include considerations of health, comfort and convenience, such as sense of fear, fashion, (i) The number of salesforce could be kept at the minimum.
recreation, affection, hobbies, and habits. (j) Buyer’s demand for a better knowledge of the product could be satisfied only by a trained salesman.
All these necessitate the salesman to acquire the knowledge of ‘customer psychology.’ The training is required to Methods of Training:
study at least three factors- What motivates the buyer to buy? What is the nature and requirement of the customer? Method # A. Individual Methods:
How to deal with different types of customers? (1) Initial or Break-In Training:
Training Scheme # (5) Knowledge of Competitors: The trainee is asked to work in different departments and study for himself. He may be guided but often left free.
Apart from the knowledge regarding the firm represented by the salesman and its products, they must possess the After a specific period, he would be asked to work in his field.
knowledge relating to their products and policies of the competing firm. (2) Special Assignments:
Training Scheme # (6) Matters Pertaining to the Day to Day Work: Slightly easier assignments are given and his capacity in handling problems is watched. Shortcomings, if any, are
Salesman should also be given training to know the following: brought to his notice for future guidance e.g., senior and junior lawyers.
(a) To draft periodical reports to the firm (3) Field Coaching:
(b) Receipt of and replying letters The newly recruited salesman is asked to work along with an experienced salesman in the field. This method creates
(c) Preparation of orders and bills self-confidence, enthusiasm in the newly recruited salesman.
(d) Maintenance of accounts (4) Sales Manuals:
(e) Arrangements of display and demonstration of products. These are tailored books where a number of problems are stated together with suggested answers. This is prepared
(7) Knowledge of self- This is partly a personal quality and partly to be developed by constant self-training. Every out of company’s past experience and might contain valuable information. These are given to salesman for self-
individual has certain strengths, weaknesses, and limitations. In order to become an effective salesperson, one study.
should seek knowledge in all relevant subjects and apply the same in day-to-day work. Method # B. Group Methods:

(1) Lecture Method:
This is the easiest and quickest method of imparting information to the trainees. Most of the training methods are
based on this principle, simply because of its assured success. It is theoretically-oriented and the practical aspects
are ignored. In spite of these defects, lecture method forms the cornerstone of various training methods.
(2) Audio-Visual Methods:
It is a ‘telling and showing’ method. This method is often used as a supplementary to the lecture method. The visual
aids such as filmstrips, slides, charts, posters, etc., are capable of providing more exposition to the lectures and
making it more interesting. Demonstration is possible under this method.
(3) Conference Method:
Sales conference and seminars are usual nowadays with most organisations. Such methods are useful in sharing the
experiences of the experienced people. However, it is not a good method of training for the newly recruited
salesmen.
(4) Discussion and Case Method:
For those who have basic knowledge on the subject this method is quite good. A particular problem is given to
various groups and each group is asked to discuss it and put forward its suggestions. Later on, all these suggestions
are analysed by all the groups together. This enables to have a correct idea of the problem, and a better solution.
(5) Role-Playing:
Under this method, each participant is asked to play a role. A situation is suggested and each one will have to act just
like what he is expected to do in real-life situation. This method is a lively one and uses confidence in taking
independent decisions. Later on the role played by the participants is analysed and the shortcomings are pointed
out.
Method # C. On-the-Job Methods:
This method stresses practice-oriented training.
(1) Field Training:
The new representative works in the field meeting various categories of customers.
(2) Job Rotation:
The salesman is trained in all departments and he would be asked to work in all sections of each department. This
would give him a clear idea of inter-departmental relationship, which would give him an idea about the company.
Further, he may also be asked to work in the factory to know how products are processed. All these would give him
enough tools to overcome the resistance of the customers in the sales field.
Method # D. Off-the-Job Method:
Many associations generally issue journals, bulletins and other publications to enable their members to perform
their duties more promptly and efficiently. The salesperson can become a member of such associations to upgrade
his knowledge and skills.
Method # E. Follow-Up Training:
Training is not temporary but should be continuous. Even the trained salesmen require periodic training termed as
‘refresher training’ or ‘follow-up training.’ Periodic training is essential as frequent changes are always encountered
in the marketing scene. Change in consumer preferences, changes in Government policy, change in product, etc. in
order to make the salesman abreast of all these developments, constant training is essential.
Sales Force Management # 3. Remuneration of Sales force:
Man is a wanting animal. An employee is never contended with what is given to him. He always wants more
remuneration. Therefore, remuneration is an evergreen challenge to any business or service. It is more so to a sales
organisation. Success of a firm using salesmen to increase sales volume at minimum selling cost depends upon a
contended, efficient and loyal salesforce and are closely related to the method by which sales efforts of the
salesmen are compensated for.
Why pay well? The importance of paying well cannot be over-estimated. There are certain basic reasons as to why
the salesforce is to be paid well.
Reason # (1) To Attract Best Salesmen:
Gifted and talented salesmen can be attracted only when a firm is prepared to reward amply the services rendered.
There is no harm in paying a little more than others, as it pays in terms of improved level of performance.
Reason # (2) To Keep Salesforce Contended:
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There is a direct link between payment made to them and the satisfaction. Man performs his duties, looks after well
and then he is happy and contended or satisfied. A satisfied employee puts heart and soul together to maximise the
work performance.
Reason # (3) To Build Up Loyalty:
The aim of sound sales organisation is to build not only competent salesforce but to have people who are prepared
to serve for a long time. Loyal staff makes the organisation rich. Good pay-masters have this advantage “pay well
and keep the employee” is the watch-word. A loyal staff avoids problems of recruitment, selection, and training and,
therefore, the dilemmas of labour turnover.
Reason # (4) To Guarantee Sound Employer-Employee Relation:
Misunderstandings normally arise due to many matters and disparity in treatment. Salesforce of one selling house
compares the pay with that of others in the sales line. If there is disparity, the morale of salesmen is affected.
Handsomely paid, well-treated salesmen have no scope for grudges or grumbling and as such relations would be
sound, with the utmost harmonised effort.
Elements of a Good Remuneration Plan:
A good remuneration plan should fulfil the following requirements. Fulfilment of these requirements will make it a
sound plan, which will help in developing a loyal salesforce. Loyalty will ensure long service with the firm. Thus,
salesmen turnover will be reduced.
Element # (1) Should provide adequate income to maintain a decent standard of living compared to that enjoyed by
others in the same line.
Element # (2) Simplicity:
It should be easily understood by salesmen of average intelligence without any training in accountancy or statistics.
Salesmen are suspicious of any plan that they do not understand completely and, as such, it weakens the confidence
and lowers the morale.
Element # (3) Flexibility:
The plan so designed must be capable of being adapted to various selling conditions. For instance, the firm
introducing a new product, commission schemes will work out more profitable. On the contrary, in the case of a
regular product, salary system can be relied upon. Thus, the variable makes it flexible to ensure satisfactory results.
Element # (4) Incentive Oriented:
Monetary reward for extra effort is really a nice and wise stimulus to many of the salesmen who exceed the normal
performance level. Such additional amount results in increased volume of sales. It may be in the form of bonus or
commission. It is to give an impression that the salesmen are compensated for extra ordinary performance.
Element # (5) Low Administration Cost:
The cost of administration of the plan, i.e., the need of help from accountants and clerks, etc. for computing
salesmen’s earnings should be as low as possible.
Element # (6) Fairness:
It must be fair to both the firm and salesmen. Also, there should not be any room for discrimination against or favour
for any individual salesman.
Element # (7) It Is Prompt in Payment:
It is already said that the remuneration should be incentive- oriented. The incentives that are added must be given
to the workers earlier, to have deep- rooted effects upon the minds of the workers. Many times, bonus earnings are
declared but are held up to a quarter, semi-annual and year end.
This delay in paying weakens the desire on the part of employees. By the time he receives the payment, he might
have lost his interest and enthusiasm. At times, delayed payments of such incentives will induce labour turnover.
Therefore, as soon as entitled and earned, they must be paid.
Element # (8) Promotion:
Provisions should be made for increase in salary when a person promotes and also reward employees for a long
service.
Sales Force Management # 4. Supervision:
Supervision means overseeing employees at work. Overseeing of performance is done at all levels of management.
High degree of overseeing is required in the case of salesforce who are constantly on the move. Supervision involves
both the direction (motivation) and control of salesmen and the continuous development of their abilities.
Sales Manager as a supervisor and leader must know his men, their needs, attitudes, aspirations, and perceptions.
Supervision must be tailored to the needs of the individual salesman.

Thus, supervision consists of the following:
(a) Observing, monitoring and reporting the performance of the salesforce,
(b) Counselling and coaching salespeople to remove the defects and weaknesses in their performances.
(c) Giving them adequate information regarding company plans and policies and changes in those policies.
(d) Receiving feedback and solving their business and personal problems.
(e) Motivating the salespeople through appropriate non-financial incentives in order to satisfy egoistic demands of
salespeople.
Sales supervision is directly concerned with the basic need of motivating salesmen by satisfying their needs for
security, opportunity, self-expression, respect and good conditions of work. In addition, it involves training and re-
training, evaluation of performance, providing two-way flow of communication for best understanding, and
improving the personal effectiveness of salesmen.
Sales Force Management # 5. Motivation of Salesmen:
Ability or capacity to work is different from the will to work. You can buy a man’s time; his physical presence at a
given place; his muscular motions per hour or day. But you cannot buy his willingness to work, his enthusiasm or his
loyalty.
Motivation is the act of stimulating someone or oneself to get a desired course of action, to push the right button to
get a desired action, a compliment, a pay-rise, a smile, a promise of promotion, praise, public recognition of merits
and so on. Motivation ignites the will to work. It moves people to take a desired action. Motivation can be either
financial or non-financial. Sales contests, conventions and conferences are examples of motivating salesforce.
Sales Force Management # 6. Control of Sales force:
Control is the act of checking or verifying whether everything occurs in conformity with one charted in the plans.
Supervision and control of salesmen is essential for a sales organisation to achieve maximum success.
However scientific the selection and training of salesmen may be, it is the duty of the Sales Manager to evolve
effective and purposive method of supervising, directing and controlling the activities of the salesmen, so as to
secure the most effective and economical performance from them.
Apart from the fact that salesmen are after all human beings, the need of supervision and control arises basically out
of the following factors:
Need # (1) To Enhance the Efficiency of Salesforce:
The actual sales effected at each branch of each territory are brought to the notice of sales executives from time to
time. This actually can be compared to the targets and deviation or discrepancies can be curbed by taking corrective
actions. By means of constant supervision and control the salesmen are indirectly forced to be active, not to lag
behind.
Need # (2) To Ensure Co-Ordination in the Efforts:
Salesman works independently, often at a long distance from the Sales Manager. Therefore, co-ordination and co-
regulation of salesman’s efforts become necessary.
Need # (3) Nature of Salesforce Demands Controlling:
Salesmen are unique in the sales organisation. There are some people who die for the organisation and as devoted
people they require no supervision or control. There are people who make the unit die in the absence of strict
control and supervision. To make all people to move to the charted course, control of salesmen is a must. Thus, the
nature of salesmen demands control.
Need # (4) To Have Sound Public Relations:
The aim of controlling is not only to secure raise in the profitability but to lay down solid foundations of sales by
carving good public relations, i.e., control envisages the guidance and direction of the personnel, to establish good
relations with the public and maintain goodwill in the market. Kotler says, “Of all the assets, customers are the most
valuable one.” If a firm fails in the eyes of general public, it dies its unwanted premature death.
How Control is exercised?
The ways of controlling are: reports and records, fixing sales territory and quotas, deciding of authority, and field
supervision and remuneration plans.
Way # 1. Reports and Records:
Salesmen are asked to send reports periodically. These reports may be daily, weekly or monthly. These reports
portray valuable information relating to: number of calls made by him; total value and volume of sales transacted,
number of new customers contacted and amount of sales turned out; number of old customers lost and the reasons
for item-wise expenses; facts regarding credit-standing of customers; selection made; bad debts arising out, impact
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of publicity and sales-promotion activities; extent and nature of competition; compliance and adjustments from
customers.
On the other hand, record is the summary prepared from the report based on the actual performance on the part of
every salesman. Reports are useful in two ways- Firstly, necessary action for increasing sales can be taken by the firm
on the basis of careful study of the salesmen report. Secondly, writing fairly detailed report of sales encourages
salesman to develop the useful habit of self-analysis.
Way # 2. Fixing Sales Territories and Sales Quotas:
(a) Sales Quota:
Quota is the amount of business the Sales Manager fixes for every salesman. It is the target that a salesman is to
attain. First the Sales Manager plans the amount of business achieved. Then he allocates quota for each territory.
The quota may be fixed for a year or a month or a quarter or for six months.
The objectives of sales quota are:
(i) To provide a basis for remuneration for sales force,
(ii) The sales quota is the most feasible way of measuring the effectiveness of individual salesmen,
(iii) Quota system stimulates selling effort of salesmen because no salesman would like his sales falling below the
quota.
(iv) To plan and control the selling activities and to infuse the spirit of competition amongst the salesmen.
(b) Sales Territories:
Sales territory implies a geographical area assigned to a salesman for the purpose of marketing the products of the
company. Most firms divide the markets into specific geographical area or zones. Each salesman is assigned a
particular zone in which he is to carry out his selling activities.
The geographical area of the zone allotted to a salesman is in his sales territory. Usually sales territories are
determined on the basis of demand for the products, the extent of competition and available means of
transportation, types of customers and the capacity of salesman.
Objectives of Establishing Sales Territories:
Objective # (a) To Perform Contractual Functions:
Sales territories are established to attain a thorough coverage of potential market for product. The objective of
contacting prospects and old customers can hardly be achieved, unless such a sales territory is assigned to a
salesman. Personnel solicitation is facilitated.
Objective # (b) To Compare the Individual Performance:
Allocation of sales territory provides an excellent opportunity to compare the performance of salesman, such a study
of particular territory reveals the potentiality of the market; and the actual sales volume secured by an individual
salesman is compared with his potentialities.
Objective # (c) To Fix the Responsibility:
The responsibilities of Sales Managers and their talks are clearly defined through territorial assignments. This has an
effect of developing a sense of responsibility towards his job. He tries to fulfil his commitments. That is, the activities
of each sales manager can be evaluated and controlled.
Objective # (d) To Minimise Sales Expenses:
Such territorial assignments are made in order to minimise the sales expenses and maximise the sales efforts. It is so
because wastage of time and energy is avoided by defining the sales tasks.
Objective # (e) To Motivate Salesmen:
Fixing a sales territory allows full freedom to the Sales Manager to use his ability and skills to maximise sales
turnover as there is little interference.
Benefits of Sales Territory:
(a) Activities of each sales manager can be more effectively controlled and evaluated,
(b) Market potentialities of each territory can be more fully tapped,
(c) Sales efforts can be more easily planned and duplication and overlapping of efforts of sales managers are
avoided,
(d) It provides incentive to sales manager to increase more sales in his territory.
Way # 3. Deciding the Authority of Sales Manager:
Often sales managers are the only persons who have contact with customers and salespersons in whose contact
customers of the firm come. For customers they are the firm. Therefore, sales managers and their authority must be
well defined and clearly stated. Usually, catalogues and price lists put limit on the authority of Sales Manager.

But, company may allow certain measure of authority to sales managers on matters such as granting of credit to
customers, discount rates, special concessions, pre-sale and after-sale services, settlements of clients, etc. However,
sales manager has to see that the salesman acts according to instructions. If a salesman goes out of limits he can be
taken to task and explanations can be called for.
Way # 4. Field Supervision:
Control does not pose any problem so long as business is smaller and is confined to a limited area of operation,
where salesmen are working under the very nose of the sales manager. In case of business houses with widespread
business over a vast area, supervision is a must. Example- In large Pharma companies, thousands of medical
representatives are employed.
Supervision, direction and control involve- (a) Observing, monitoring and reporting the performance of the
salesforce, (b) Counselling and coaching salespeople to remove the defects and weaknesses in their performance, (c)
Giving them adequate information regarding company plans and policies and change in those policies, (d) Receiving
feedback and solving their business and personal problems, (e) Motivating the salespeople through appropriate non-
financial incentives in order to satisfy egoistic demands of salespeople.
Sales supervision is directly concerned with the basic need of motivating salesmen by satisfying their needs for
security, opportunity, self-expression, respect and good conditions of work. In addition, it involves training and re-
training, evaluation of performance, providing two-way flow of communication for best understanding, and
improving the personal effectiveness of salesmen. Human relations are of first importance in the sales department.
Under democratic managerial style, we have consultative direction involving continuous communication and co-
operation between the sales manager and his salesmen. Personal communication is most effective. Communication
by means of correspondence should be supplementary.
The sales manager is responsible to develop and maintain the morale of the salesforce. Morale is the mental
readiness of the salesforce to co-operate with the management in the accomplishment of objectives. If morale is
high, output is also high.
Sales Force Management # 7. Evaluation of Sales Performance:
Human beings do have unlimited potential for growth and development, provided there is right work-environment
and the right direction, guidance and help is given by management. The performance appraisal or evaluation is
based on this firm belief in human resource development. Sound evaluation assures superior performance.
There are three reasons to evaluate or appraise the performance of salespeople- (i) To measure performance
against planned sales and marketing objectives, (ii) To distribute rewards for performance, and (iii) To guide the
development of sales force.
Targets for sales performance are set and they act as criteria for comparison with actual accomplishment. Sales
quotas, expense control, personal development objectives are the usual targets for the purpose of evaluation. It is
essential that all evaluation should be forward- looking and aim at future and improved performance.
Sales manager should not give emphasis on finding faults and placing blames on salespeople for past performance.
The salespeople should be given thorough understanding of the reasons for their poor performance as revealed by
evaluation. Humanistic touch is necessary at every stage in supervision, evaluation and control.
Then only management of salespeople will give rich dividends. Performance evaluation should be done periodically
and promotion, pay rise, rewards should be offered to the deserving salespeople. Forward-looking and positive
evaluation and control enable salesmen to secure self-advancement or development. Management by Objectives
(MBO) can be used in the management of salespeople as far as possible.
Effective Sales Performance Measures:
Salesman’s performance can be measured by a number of factors, such as ability to sell a satisfactory volume, ability
to sell at a profit, ability to sell at a low cost, ability to plan and organise his time and efforts, knowledge of products,
policies, customers and competition, ability to attract and hold customers, etc. The salesmen’s reports and records
are used in evaluating performance. Sales quotas also enable in evaluating performance.
Unit-IV Sales Management-II (10hrs)
Motivation &morale of sales force, Compensation of sales person, Evaluation & Supervision of sales
personnel,Sales Budget, Sales Quotas, Sales territories, Sales control & Cost Analysis.
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Case Studies on above topics (8Hrs)
Sales Management
Sales management refers to the administration of the personal selling a company's product line(s). It includes the
planning, implementation, and control of sales programs, as well as recruiting, training, motivating, and evaluating
members of the sales force. In a small business, these various functions may be performed by the owner or by the
sales manager. The fundamental role of the sales manager is to develop and administer a selling program that
effectively contributes to the organization's goals. The sales manager for a small business would likely decide how
many salespeople to employ, how best to select and train them, what sort of compensation and incentives to use to
motivate them, what type of presentation they should make, and how the sales function should be structured for
maximum contact with customers.
Sales management is just one facet of a company's overall marketing mix, which encompasses strategies related to
the "four Ps": products, pricing, promotion, and place (distribution). Objectives related to promotion are achieved
through three supporting functions: 1) advertising, which includes direct mail, radio, television, and print
advertisements, among other media; 2) sales promotion, which includes tools such as coupons, rebates, contests,
and samples; and (3) personal selling, which is the domain of the sales manager.
Although the role of sales managers is multidisciplinary in scope, their primary responsibilities are: 1) setting goals
for a sales force; 2) planning, budgeting, and organizing a program to achieve those goals; 3) implementing the
program; and 4) controlling and evaluating the results. Even when a sales force is already in place, the sales manager
will likely view these responsibilities as an ongoing process necessary to adapt to both internal and external changes.
GOAL SETTING
Goal setting is usually based on a company's overall sales goals, modified by the mix of products to be moved.
Overall sales goals must be met, of course, but balance must also be maintained. A company that makes three
different types of boats, for instance, of which the highest-priced model has the highest profit margins but the
lowest-priced boat is easiest to sell, the goal will be structured to move as many of the highest-priced models as
possible. Balance between regions also enters the goal-setting process. Sales to some regions may be more difficult
(far fewer lakes) but necessary to maintain the company's total volume. If multiple lines are sold (tenting and
trailers, for instance), different goals will apply to each category. Goal setting will depend on product mix. In the
usual case, past history will be a guide and goals will be set in light of the history—and desires to change past
performance—by lifting all sales, high-margin sales, creating sales for new products, etc.
PLANNING, BUDGETING, AND ORGANIZING
After goals are set, the sales manager may accept, or be required to modify, the general approach to sales in the
current year. Both ongoing patterns and new ones require budgeting and, occasionally, changes to the organization.
Fundamental structural issues are involved such as the distribution channel, the forces to be deployed, and the sales
program (incentives, pricing schedules, cooperative advertising programs, etc.) that will be used. A company, for
instance, may be engaged in making a transition from direct sales using its own sales branches as distributors to
using independent distributors. The planning process in the first year may involve finding and starting three new
distributors and closing two company branches and relocating its best sales people. In another operation, the goal
may simply require adding four new sales people and training them. In yet another case, the company may have
decided to distribute some of its production through a "Big Box," thus creating ill-will among its servicing retailers—
and in consequence has decided to offer the retailers a more attractive sales program, higher co-op advertising
participation, and high discounts on four occasions if they hold seasonal sales. Finally, in yet another case, no big
changes are in the offing, but budgets must be formulated anyway, retiring salespeople replaced, and programs
launched in the past continued.
For start-ups, of course, the sales organization must be built from scratch after its general structure has been
determined. In such situations planning, budgeting, and organizing take on rather formidable dimensions. The ideal
approach is to concentrate on hiring the best possible sales people, to bring them on board as rapidly as possible,
and then using them to help with the process.
IMPLEMENTATION
Implementation of the plan will have different emphases depending on whether the operation is up and running or
required to be built or rebuilt. Recruiting, training, and setting compensation are primary implementation activities
of start-ups or expansions. So are designing sales territories and assigning sales goals to each.
Recruiting

Recruiting salespeople ideally requires understanding of the customers and the market, not least its physical aspects,
travel time needed to reach targeted points, and the type of selling involved. Experienced sales managers typically
bring such skills to the job or, if brought in from a different field, will make some preliminary field trips to get a feel.
The manager may seek candidates through advertising, college recruiting, company sources, and employment
agencies. Another excellent source of salespeople is—other salespeople. In this field, to be one is to know one. Sales
recruiting has special characteristics difficult to describe in analytical terms—especially in the small business
environment where relationships tend to be closer. But, indeed, in all areas of sales, managers rely a great deal on
their experience of sales to find people who have the special knack. Generalizations are dangerous, but good sales
people have good communications skills, enjoy human contact, are disciplined, can tolerate rejection with good
humor, respond to rewards, and have a high level of energy—often needed because sales may be tiring, may require
many hours of standing, and occasionally physical effort in demonstrating products. In technical sales, an
engineering background is often required in addition to favorable personality traits. Generalizations are dangerous
because experienced people in this business know that often the outwardly least likely people turn out to be great
producers whereas those who seem ideal miserably fail. Not everything can be determined by administering
personality tests. Good sales people have something in common with entrepreneurs; both categories are notoriously
diverse.
Training
After recruiting a suitable sales force, the manager must determine how much and what type of training to provide.
Most sales training emphasizes product, company, and industry knowledge. Only about 25 percent of the average
company training program, in fact, addresses selling techniques. Because of the high cost, many small businesses try
to limit the amount of training they provide. The average cost of training a person to sell industrial products, for
example, commonly exceeds $30,000. Sales managers can achieve many benefits with competent training programs,
however. For instance, research indicates that training reduces employee turnover, thereby lowering the effective
cost of hiring new workers. Good training can also improve customer relations, increase employee morale, and
boost sales. Common training methods include lectures, cases studies, role playing, demonstrations, on-the-job
training, and self-study courses. Ideally, training should be an ongoing process that continually reinforces the
company's goals.
Compensation
After the sales force is in place, the manager must devise a means of compensating individuals. The ideal system of
compensation reaches a balance between the needs of the person (income, recognition, prestige, etc.) and the goals
of the company (controlling costs, boosting market share, increasing cash flow, etc.), so that a salesperson may
achieve both through the same means. Most approaches to sales force compensation utilize a combination of salary
and commission or salary and bonus. Salary gives a sales manager added control over the salesperson's activities,
while commission provides the salesperson with greater motivation to sell.
Although financial rewards are the primary means of motivating workers, most sales organizations also employ other
motivational techniques. Good sales managers recognize that salespeople have needs other than the basic ones
satisfied by money. For example, they want to feel they are part of a winning team, that their jobs are secure, and
that their efforts and contributions to the organization are recognized. Methods of meeting those needs include
contests, vacations, and other performance-based prizes, in addition to self-improvement benefits such as tuition for
graduate school. Another tool managers commonly use to stimulate their salespeople is quotas. Quotas, which can
be set for factors such as the number of calls made per day, expenses consumed per month, or the number of new
customers added annually, give salespeople a standard against which they can measure success.
Designing Territories and Allocating Sales Efforts
In addition to recruiting, training, and motivating a sales force to achieve the company's goals, sales managers at
most small businesses must decide how to designate sales territories and allocate the efforts of the sales team.
Territories are geographic areas assigned to individual salespeople. The advantages of establishing territories are
that they improve coverage of the market, reduce wasteful overlap of sales efforts, and allow each salesperson to
define personal responsibility and judge individual success. However, many types of businesses, such as real estate
and insurance companies, do not use territories.
Allocating people to different territories is an important sales management task. Typically, the top few territories
produce a disproportionately high sales volume. This occurs because managers usually create smaller areas for
trainees, medium-sized territories for more experienced team members, and larger areas for senior sellers. A
drawback of that strategy, however, is that it becomes difficult to compare performance across territories. An
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alternate approach is to divide regions by existing and potential customer base. A number of computer programs
exist to help sales managers effectively create territories according to their goals. Good scheduling and routing of
sales calls can reduce waiting and travel time. Other common methods of reducing the costs associated with sales
calls include contacting numerous customers at once during trade shows, and using telemarketing to qualify
prospects before sending a salesperson to make a personal call.
CONTROLLING AND EVALUATING
After the sales plan has been implemented, the sales manager's responsibility becomes controlling and evaluating
the program. During this stage, the sales manager compares the original goals and objectives with the actual
accomplishments of the sales force. The performance of each individual is compared with goals or quotas, looking at
elements such as expenses, sales volume, customer satisfaction, and cash flow.
An important consideration for the sales manager is profitability. Indeed, simple sales figures may not reflect an
accurate image of the performance of the sales force. The manager must dig deeper by analyzing expenses, price-
cutting initiatives, and long-term contracts with customers that will impact future income. An in-depth analysis of
these and related influences will help the manager to determine true performance based on profits. For use in
future goal-setting and planning efforts, the manager may also evaluate sales trends by different factors, such as
product line, volume, territory, and market. After the manager analyzes and evaluates the achievements of the sales
force, that information is used to make corrections to the current strategy and sales program. In other words, the
sales manager returns to the initial goal-setting stage.
ENVIRONMENTS AND STRATEGIES
The goals and plans adopted by the sales manager will be greatly influenced by the company's industry orientation,
competitive position, and market strategy. The basic industry orientations available to a firm include industrial
goods, consumer durables, consumer nondurables, and services. Companies that manufacture industrial goods or
sell highly technical services tend to be heavily dependent on personal selling as a marketing tool. Sales managers in
those organizations characteristically focus on customer service and education and employ and train a relatively
high-level sales force. In contrast, sales managers that sell consumer durables will likely integrate the efforts of their
sales force into related advertising and promotional initiatives. Sales management efforts related to consumer
nondurables and consumer services will generally emphasize volume sales, a comparatively low-caliber sales force,
and an emphasis on high-volume customers. In certain types of service activities, e.g., consulting, market research,
and advertising, sales are very often conducted by high-level executives or the principals who actually supervise the
work to be performed—for example senior researchers or account executives.
REGULATION
Besides markets and industries, another chief environmental influence on the sales management process is
government regulation. Indeed, selling activities at companies are regulated by a multitude of state and federal laws
designed to protect consumers, foster competitive markets, and discourage unfair business practices.
Chief among anti-trust provisions affecting sales managers is the Robinson-Patman Act, which prohibits companies
from engaging in price or service discrimination. In other words, a firm cannot offer special incentives to large
customers based solely on volume, because such practices tend to hurt smaller customers. Companies can give
discounts to buyers, but only if those incentives are based on real savings gleaned from manufacturing and
distribution processes.
Similarly, the Sherman Act makes it illegal for a seller to force a buyer to purchase one product (or service) in order
to get the opportunity to purchase another product—a practice referred to as a "tying agreement." A long-distance
telephone company, for instance, cannot require its customers to purchase its telephone equipment as a
prerequisite to buying its long-distance service. The Sherman Act also regulates reciprocal dealing arrangements,
whereby companies agree to buy products from each other. Reciprocal dealing is considered anti-competitive
because large buyers and sellers tend to have an unfair advantage over their smaller competitors.
Several consumer protection regulations also impact sales managers. The Fair Packaging and Labeling Act of 1966,
for example, restricts deceptive labeling, and the Truth in Lending Act requires sellers to fully disclose all finance
charges incorporated into consumer credit agreements. Cooling-off laws, which commonly exist at the state level,
allow buyers to cancel contracts made with door-to-door sellers within a certain time frame. Additionally, the
Federal Trade Commission (FTC) requires door-to-door sellers who work for companies engaged in interstate trade
to clearly announce their purpose when calling on prospects.
Encyclopedia of Management

Sales Management
Sales management involves planning, implementing, and controlling personal contact programs designed
to achieve the sales and profit objectives of the firm. Sales managers are responsible for directing the
firm's sales program; in carrying out this responsibility, a sales manager assigns territories, sets goals,
and establishes training programs. In addition to setting individual goals, sales managers monitor the
performance of their salespeople and continually offer direction and leadership on ways to improve their
performance. As such, sales management involves both organization and motivation.
DIFFERENT STRUCTURES FOR SALES MANAGEMENT
The organizational structure for sales management varies depending on the firm's size and strategy. In
field sales management, the structure consists of the unit manager, district manager, regional manager,
general manager and vice president of sales. The unit manager is often referred to as the manager-in-
training with interaction taking place at the customer level. Key responsibilities for the unit manager
include training new salespeople, recruiting, selling to small accounts, and running district meetings.
District managers, a step up from unit managers, have five to ten years of management experience and
generally manage eight to ten salespeople. District managers typically report to the regional manager,
who is responsible for managing multiple districts in a given geographic area. The general manager is
sometimes referred to as the vice president of sales and marketing. This position is traditionally at the top
of the sales organizational chart, with the VP of Marketing and Sales driving the sales strategy of the firm.
There are distinct differences in bottom- and top-level managers. The main difference is the amount of
time they spend on each of their tasks. Lower-level managers spend the majority of their time on staffing,
directing and monitoring salespeople. Top-level managers generally focus on planning, organizing and
coordinating their sales strategy with overall corporate objectives. They also forecast sales, set objectives,
develop strategies and policies, and establish budgets.
Sales management jobs are found in both consumer and commercial industries, in positions ranging from
district manager, to vice president of marketing and sales, to top sales management of the firm.
Competition for sales management jobs can be intense. Sales managers typically start out as
salespeople, working their way to the top with strong leadership and organizational abilities. The
progression of salespeople into management positions is gradual, with representatives moving into more
executive positions by taking on more responsibility with larger, national accounts. It is likely that a sales
representative will spend a portion of their career as a district or regional sales trainer before moving into
a senior sales management role. The progression of salespeople into management positions varies based
on the size and organizational structure of the organization.
SALES MANAGEMENT STRATEGIES
Sales managers are confronted with several challenges when designing an effective sales strategy. How
should a sales force be structured? How large a sales force is needed? What methods should the sales
force use to deliver their message? Strategies vary based on the number of products that the firm offers
and if the firm sells to one particular type of customer versus selling to many different types of customers.
When selling one product line to a single industry, with customers in many locations, a territorial sales
strategy is used. With this strategy, a sales manager will assign sales representatives to exclusive
territories in a given region. These representatives will sell full product lines consisting of multiple products
to customers in that territory. A good example of this strategy is food equipment sales. A sales
representative for a commercial food equipment company will typically promote the companies full line of
products when selling to restaurants, schools, and cafeterias in their defined territory.
A product sales force strategy is often used when a firm sells along product lines. Using this strategy, a
sales manager will require their representatives to focus on selling a single product or small select group
of products. This strategy is used by managers when products are numerous and complex. This strategy
is widely used in healthcare sales where a salesperson focuses on selling doctors and healthcare
providers specific products that are integral to their specialized area of medicine.
Finally, sales managers may use a customer focused sales force strategy where salespeople specialize in
matching target customers to specific products or services. This strategy helps a company to concentrate
more on building strong, long-term relationships with key customers.
MOTIVATING THE SALES FORCE
A topic of particular interest in sales management is motivation. Motivation is quite possibly the most
important aspect of sales management. If a sales force is properly screened, selected, and trained, and
the product is right, then motivation becomes critical for success. There are
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Many reasons why motivating a sales force is an important part of the sales process. First, salespeople
must cope with acceptance and rejection on a continual basis. They go from being exhilarated as the
result of a big sale to the disappointment that results from being turned down. Often, salespeople will
spend many hours on the road, away from their families, which may affect their overall morale. This,
paired with the fact that salespeople usually operate without managerial supervision, indicates that these
individuals require a high level of self motivation in order to consistently produce good results. And finally,
motivation directly influences the level of enthusiasm a salesperson has in presenting the product or
service to the customer. If a sales representative is passionate and enthusiastic about a product or
service, it can directly influence the customer's decision to purchase, as well as building strong
relationships for future purchases. With that said, it is important to note that sales managers are
responsible for instilling and maintaining an effective level of motivation in their staff. In addition to
providing strong leadership, a sales manager must motivate a sales force in order to achieve pre-
determined sales goals.
Managers can use a variety of tools to successfully motivate their sales force. The most powerful
motivator is a well-designed compensation package. Sales managers can effectively motivate
salespeople by designing a compensation formula that is a good balance of salary, bonuses, and
commissions. Managers define selling objectives in the form of quotas, established compensation levels,
and an effective incentive portion. There are a variety of formulas for compensating salespeople; the
formula depends on linking the firm's overall performance expectations to each salesperson.
Compensation Packages. Straight commission is used by sales managers to reward salespeople for
their accomplishments, rather than their time or efforts. Straight commission compensation fosters
independence for the salesperson. It is a strong motivator in that payout only occurs if a sale is made,
resulting in lower costs for the company. It is a favorable program for organizations that want to minimize
compensation costs; especially for new and growing companies. There are some disadvantages to
straight commission, including the inability of sales managers to control selling activities, as well as high
employee turnover.
Another compensation program frequently used by organizations is salary plus bonus. Essentially, the
salary plus bonus formula includes base salary with a performance-based bonus paid when sales goals
and quotas are achieved. Sales reps may also be evaluated on factors, including creation of new
accounts, average gross margin, and after sales servicing. Unlike straight commission, this program helps
to reduce the rate of employee turnover. The plan also encourages salespeople to build long-term
relationships with their customers. By having the security of a consistent income, salespeople can be
patient with their customers and allow them to take the time needed to make an informed decision. This is
particularly important when buying cycles are long and when sales representatives need time to get
acclimated with the buying cycle of the customer.
When selling complex products or services, a salary plus commission structure may be used to
compensate the sales force. Under this program, a salesperson is guaranteed a base salary and is
awarded a commission based on factors determined by the organization. Typically, a salary plus
commission program is structured around upper and lower thresholds related to sales volume. For
example, a salesperson may earn 4 percent on the first $20,000 of sales volume each month, 5 percent
on an additional $15,000 and 6 percent on sales over $40,000. Other firms may use different criteria, such
as reaching sales quotas on the number of individual products sold in each product category. The
advantages to this method are related to the flexibility of program. Firms are able to customize the
program to meet corporate objectives as they relate to the sales force. Commissions can be spread out
over a given period to ensure reps will continue to offer the customer a high level of service and to
discourage the reps from leaving the company after a big sale.
Salary plus commission and a bonus is a combination of the aforementioned programs. This plan
combines the stability of a salary, the incentive of a commission, as well as special bonus awards. Every
activity of a salesperson is financially recognized by this program and is favored by salespeople because
of the earning potential of the plan. The plan is not as popular as the others because of the complexity
involved to administer the program.
Short-term incentive programs are often used by firms to motivate salespeople beyond standard
compensation packages. Sales contests are the most common incentive used to generate excitement
about selling products and services. The contests usually run for a limited time and include cash prizes or
travel to those salespeople who achieve a certain level of sales. Timing of the contests is crucial.
Typically, contests should be rolled out during the slower seasons of a given industry in order to boost
sales and to generate incremental revenue.

RECRUITING A SUCCESSFUL SALES FORCE
The sales manager is responsible for recruiting salespeople by identifying sources for new employees,
screening applicants, conducting interviews, contacting references, and recommending candidates to the
regional manager. Typically, the regional sales manager recruits and selects new salespeople when
needed. Often, candidates are found
Through universities, Internet sites, or applicants who formally apply to the company through cold-calling
efforts.
Managers should identify certain key qualities when recruiting candidates for employment. Personality is
an important factor when considering a candidate for a sales position. Empathy, ego, and optimism are
good personality attributes to consider when screening candidates for a sales position. Each of these
attributes has a strong correlation to success in sales. Empathy is the ability to sense the reactions of
another person and ego refers to the inner need to persuade another individual for one's own satisfaction.
Both of these traits combined are predictors of a good salesperson and are strongly considered when
recruiting and interviewing job applicants. Additionally, it is important to consider the applicant's level of
optimism as it relates to personal achievement. Optimism and enthusiasm are good indicators of the
ability of a salesperson to manage adversity and is a trait that is often needed to overcome rejection and
slow sale months.
Although most companies have their own selection procedures, a typical candidate selection process will
resemble the following:
1. The district sales manager conducts the first interview; the candidate is accepted and given a formal
application, or they are not accepted and are sent a rejection letter.
2. A candidate who submits an application is invited to a second interview with the district manager.
3. The candidate may spend a day in the field with a salesperson and the district manager receives
feedback from the salesperson on the candidate's level of enthusiasm.
4. The district manager checks the candidate's references and criminal background.
5. The regional sales manager interviews the candidate.
6. The regional manager and district manager discuss the candidate via telephone conference or
personal meeting. A decision is made whether to offer the candidate the position.
7. The regional sales manager formally offers the job to the candidate.
8. If the candidate accepts the offer for the position, he or she must undergo a physical examination.
TOTAL QUALITY MANAGEMENT AND CUSTOMER SATISFACTION
A primary responsibility of a sales manager is managing relations with customers. The emergence of a
global market for products and services has spurred new theories regarding management of products as
they relate to the customer. Total quality management (TQM) is defined as a management process and
set of disciplines that are coordinated to ensure that the organization consistently meets customer
expectations. Originally defined as a manufacturing theory, TQM is now being applied to sales in
particular. In the sales and marketing context, TQM defines the quality of the sales and service effort in
terms of customer satisfaction. Sales and service systems that link individuals, departments, suppliers
and customers are central to TQM. Each department within an organization has a direct responsibility to
the customer in some capacity. Marketing designs its new products with the customer in mind.
Manufacturing focuses on achieving the highest level of product quality. Under TQM, challenging, but
reasonable improvement goals are set for sales and service quality. Innovation and continuous
improvement of the sales and servicing process is paramount to the idea of TQM.
The customer is considered from every aspect of TQM. By focusing on customer expectations and
questioning those expectations using formal techniques, TQM can discover previous misconceptions and
new opportunities. Some fundamental ideas behind TQM are making continuous improvements to
products and services, eliminating defects, doing things right the first time, and understanding that
employees closest to the process know how to improve the process. As a function of sales and service,
TQM focuses on the exchange between the buyer and the seller. Intangible issues such as
responsiveness to varying customer needs, empathy for customer concerns, reliable service performance,
and assurance of service capabilities are considered when managing relationships with customers. This
process is somewhat more difficult than actual management of product quality because customers are
required to be participative in the process. They are expected to offer feedback to the company on
products and services to allow for continuous improvement to the process.
Customer satisfaction is central to the philosophy of total quality management. In sales management,
TQM suggests that organizations need to have the majority of employees in customer support functions,
with fewer staff positions. This will help to eliminate costs associated with management and reduces
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levels in the decision-making process. Fewer levels of management also allows for the organization to be
flexible enough to change quickly to support new sales opportunities. Continuous improvement for all
products and improvement in the selling process allows firms to consistently move forward with innovative
products and services in order to remain competitive in the new global market.
In the twenty-first century global marketplace, managers face many challenges related to fulfilling the
Customer's ever-changing needs and expectations. The concept of customer service has recently
become more complex as a result of globalization of goods and services. Customers are now well-
informed decision makers as a result of the abundance of information that is available online and in the
media. In addition, today's consumer is most concerned with how a salesperson can solve basic problems
and ultimately add value to a product or service. The role of sales intermediaries is now, more than ever,
important to success in this new competitive global marketplace. As a result, sales managers face the
ever-changing challenge of responding to this new environment with innovative techniques for managing
and motivating the sales force.
SEE ALSO Customer Relationship Management; Employee Compensation; Employee Recruitment
Planning; Human Resource Management; Motivation and Motivation Theory; Quality and Total Quality
Management
Sales Management
Sales management refers to the administration of the personal selling a company's product line(s). It
includes the planning, implementation, and control of sales programs, as well as recruiting, training,
motivating, and evaluating members of the sales force. In a small business, these various functions may
be performed by the owner or by the sales manager. The fundamental role of the sales manager is to
develop and administer a selling program that effectively contributes to the organization's goals. The sales
manager for a small business would likely decide how many salespeople to employ, how best to select
and train them, what sort of compensation and incentives to use to motivate them, what type of
presentation they should make, and how the sales function should be structured for maximum contact
with customers.
Sales management is just one facet of a company's overall marketing mix, which encompasses strategies
related to the "four Ps": products, pricing, promotion, and place (distribution). Objectives related to
promotion are achieved through three supporting functions: 1) advertising, which includes direct mail,
radio, television, and print advertisements, among other media; 2) sales promotion, which includes tools
such as coupons, rebates, contests, and samples; and (3) personal selling, which is the domain of the
sales manager.
Although the role of sales managers is multidisciplinary in scope, their primary responsibilities are: 1)
setting goals for a sales force; 2) planning, budgeting, and organizing a program to achieve those goals;
3) implementing the program; and 4) controlling and evaluating the results. Even when a sales force is
already in place, the sales manager will likely view these responsibilities as an ongoing process
necessary to adapt to both internal and external changes.
GOAL SETTING
Goal setting is usually based on a company's overall sales goals, modified by the mix of products to be
moved. Overall sales goals must be met, of course, but balance must also be maintained. A company that
makes three different types of boats, for instance, of which the highest-priced model has the highest profit
margins but the lowest-priced boat is easiest to sell, the goal will be structured to move as many of the
highest-priced models as possible. Balance between regions also enters the goal-setting process. Sales
to some regions may be more difficult (far fewer lakes) but necessary to maintain the company's total
volume. If multiple lines are sold (tenting and trailers, for instance), different goals will apply to each
category. Goal setting will depend on product mix. In the usual case, past history will be a guide and goals
will be set in light of the history—and desires to change past performance—by lifting all sales, high-margin
sales, creating sales for new products, etc.
PLANNING, BUDGETING, AND ORGANIZING
After goals are set, the sales manager may accept, or be required to modify, the general approach to
sales in the current year. Both ongoing patterns and new ones require budgeting and, occasionally,
changes to the organization. Fundamental structural issues are involved such as the distribution channel,
the forces to be deployed, and the sales program (incentives, pricing schedules, cooperative advertising
programs, etc.) that will be used. A company, for instance, may be engaged in making a transition from
direct sales using its own sales branches as distributors to using independent distributors. The planning
process in the first year may involve finding and starting three new distributors and closing two company

branches and relocating its best sales people. In another operation, the goal may simply require adding
four new sales people and training them. In yet another case, the company may have decided to distribute
some of its production through a "Big Box," thus creating ill-will among its servicing retailers—and in
consequence has decided to offer the retailers a more attractive sales program, higher co-op advertising
participation, and high discounts on four occasions if they hold seasonal sales. Finally, in yet another
case, no big changes are in the offing, but budgets must be formulated anyway, retiring salespeople
replaced, and programs launched in the past continued.
For start-ups, of course, the sales organization must be built from scratch after its general structure has
been determined. In such situations planning, budgeting, and organizing take on rather formidable
dimensions. The ideal approach is to concentrate on hiring the best possible sales people, to bring them
on board as rapidly as possible, and then using them to help with the process.
IMPLEMENTATION
Implementation of the plan will have different emphases depending on whether the operation is up and
running or required to be built or rebuilt. Recruiting, training, and setting compensation are primary
implementation activities of start-ups or expansions. So are designing sales territories and assigning sales
goals to each.
Recruiting
Recruiting salespeople ideally requires understanding of the customers and the market, not least its
physical aspects, travel time needed to reach targeted points, and the type of selling involved.
Experienced sales managers typically bring such skills to the job or, if brought in from a different field, will
make some preliminary field trips to get a feel.
The manager may seek candidates through advertising, college recruiting, company sources, and
employment agencies. Another excellent source of salespeople is—other salespeople. In this field, to be
one is to know one. Sales recruiting has special characteristics difficult to describe in analytical terms—
especially in the small business environment where relationships tend to be closer. But, indeed, in all
areas of sales, managers rely a great deal on their experience of sales to find people who have the
special knack. Generalizations are dangerous, but good sales people have good communications skills,
enjoy human contact, are disciplined, can tolerate rejection with good humor, respond to rewards, and
have a high level of energy—often needed because sales may be tiring, may require many hours of
standing, and occasionally physical effort in demonstrating products. In technical sales, an engineering
background is often required in addition to favorable personality traits. Generalizations are dangerous
because experienced people in this business know that often the outwardly least likely people turn out to
be great producers whereas those who seem ideal miserably fail. Not everything can be determined by
administering personality tests. Good sales people have something in common with entrepreneurs; both
categories are notoriously diverse.
Training
After recruiting a suitable sales force, the manager must determine how much and what type of training to
provide. Most sales training emphasizes product, company, and industry knowledge. Only about 25
percent of the average company training program, in fact, addresses selling techniques. Because of the
high cost, many small businesses try to limit the amount of training they provide. The average cost of
training a person to sell industrial products, for example, commonly exceeds $30,000. Sales managers
can achieve many benefits with competent training programs, however. For instance, research indicates
that training reduces employee turnover, thereby lowering the effective cost of hiring new workers. Good
training can also improve customer relations, increase employee morale, and boost sales. Common
training methods include lectures, cases studies, role playing, demonstrations, on-the-job training, and
self-study courses. Ideally, training should be an ongoing process that continually reinforces the
company's goals.
Compensation
After the sales force is in place, the manager must devise a means of compensating individuals. The ideal
system of compensation reaches a balance between the needs of the person (income, recognition,
prestige, etc.) and the goals of the company (controlling costs, boosting market share, increasing cash
flow, etc.), so that a salesperson may achieve both through the same means. Most approaches to sales
force compensation utilize a combination of salary and commission or salary and bonus. Salary gives a
sales manager added control over the salesperson's activities, while commission provides the
salesperson with greater motivation to sell.
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Although financial rewards are the primary means of motivating workers, most sales organizations also
employ other motivational techniques. Good sales managers recognize that salespeople have needs
other than the basic ones satisfied by money. For example, they want to feel they are part of a winning
team, that their jobs are secure, and that their efforts and contributions to the organization are recognized.
Methods of meeting those needs include contests, vacations, and other performance-based prizes, in
addition to self-improvement benefits such as tuition for graduate school. Another tool managers
commonly use to stimulate their salespeople is quotas. Quotas, which can be set for factors such as the
number of calls made per day, expenses consumed per month, or the number of new customers added
annually, give salespeople a standard against which they can measure success.
Designing Territories and Allocating Sales Efforts
In addition to recruiting, training, and motivating a sales force to achieve the company's goals, sales
managers at most small businesses must decide how to designate sales territories and allocate the efforts
of the sales team. Territories are geographic areas assigned to individual salespeople. The advantages of
establishing territories are that they improve coverage of the market, reduce wasteful overlap of sales
efforts, and allow each salesperson to define personal responsibility and judge individual success.
However, many types of businesses, such as real estate and insurance companies, do not use territories.
Allocating people to different territories is an important sales management task. Typically, the top few
territories produce a disproportionately high sales volume. This occurs because managers usually create
smaller areas for trainees, medium-sized territories for more experienced team members, and larger
areas for senior sellers. A drawback of that strategy, however, is that it becomes difficult to compare
performance across territories. An alternate approach is to divide regions by existing and potential
customer base. A number of computer programs exist to help sales managers effectively create territories
according to their goals. Good scheduling and routing of sales calls can reduce waiting and travel time.
Other common methods of reducing the costs associated with sales calls include contacting numerous
customers at once during trade shows, and using telemarketing to qualify prospects before sending a
salesperson to make a personal call.
CONTROLLING AND EVALUATING
After the sales plan has been implemented, the sales manager's responsibility becomes controlling and
evaluating the program. During this stage, the sales manager compares the original goals and objectives
with the actual accomplishments of the sales force. The performance of each individual is compared with
goals or quotas, looking at elements such as expenses, sales volume, customer satisfaction, and cash
flow.
An important consideration for the sales manager is profitability. Indeed, simple sales figures may not
reflect an accurate image of the performance of the sales force. The manager must dig deeper by
analyzing expenses, price-cutting initiatives, and long-term contracts with customers that will impact future
income. An in-depth analysis of these and related influences will help the manager to determine true
performance based on profits. For use in future goal-setting and planning efforts, the manager may also
evaluate sales trends by different factors, such as product line, volume, territory, and market. After the
manager analyzes and evaluates the achievements of the sales force, that information is used to make
corrections to the current strategy and sales program. In other words, the sales manager returns to the
initial goal-setting stage.
ENVIRONMENTS AND STRATEGIES
The goals and plans adopted by the sales manager will be greatly influenced by the company's industry
orientation, competitive position, and market strategy. The basic industry orientations available to a firm
include industrial goods, consumer durables, consumer nondurables, and services. Companies that
manufacture industrial goods or sell highly technical services tend to be heavily dependent on personal
selling as a marketing tool. Sales managers in those organizations characteristically focus on customer
service and education and employ and train a relatively high-level sales force. In contrast, sales managers
that sell consumer durables will likely integrate the efforts of their sales force into related advertising and
promotional initiatives. Sales management efforts related to consumer nondurables and consumer
services will generally emphasize volume sales, a comparatively low-caliber sales force, and an emphasis
on high-volume customers. In certain types of service activities, e.g., consulting, market research, and
advertising, sales are very often conducted by high-level executives or the principals who actually
supervise the work to be performed—for example senior researchers or account executives.
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REGULATION Salesmanship in the twentieth century became increasingly professionalized and scientific. The early
Besides markets and industries, another chief environmental influence on the sales management process sales management textbooks of the 1910s and 1920s were followed by a steadily expanding stream of
is government regulation. Indeed, selling activities at companies are regulated by a multitude of state and books, periodicals, and college courses; more careful planning of salesmen's itineraries; attention to new
federal laws designed to protect consumers, foster competitive markets, and discourage unfair business methods of testing, selecting, and training salesmen; and experimentation with various commission and
practices. salary methods of compensation.
Chief among anti-trust provisions affecting sales managers is the Robinson-Patman Act, which prohibits Traveling salesmen continued to ply their trade well into the twenty-first century. But while salesmen
companies from engaging in price or service discrimination. In other words, a firm cannot offer special selling to businesses thrived—selling drugs to doctors or cosmetics to salons, for example—the door to
incentives to large customers based solely on volume, because such practices tend to hurt smaller door salesman became extremely rare. The rise of the two-income family after the 1970s deprived door to
customers. Companies can give discounts to buyers, but only if those incentives are based on real door salesmen of daytime access to customers. In addition, the rise of the Internet as a marketing device
savings gleaned from manufacturing and distribution processes. and the trend toward gated and policed suburban subdivisions created steep barriers for door to door
Similarly, the Sherman Act makes it illegal for a seller to force a buyer to purchase one product (or work. In many parts of the United States by the end of the twentieth century, the door to door salesman
service) in order to get the opportunity to purchase another product—a practice referred to as a "tying was a thing of the past.
agreement." A long-distance telephone company, for instance, cannot require its customers to purchase
its telephone equipment as a prerequisite to buying its long-distance service. The Sherman Act also
regulates reciprocal dealing arrangements, whereby companies agree to buy products from each other.
Reciprocal dealing is considered anti-competitive because large buyers and sellers tend to have an unfair
advantage over their smaller competitors.
Several consumer protection regulations also impact sales managers. The Fair Packaging and Labeling
Act of 1966, for example, restricts deceptive labeling, and the Truth in Lending Act requires sellers to fully
disclose all finance charges incorporated into consumer credit agreements. Cooling-off laws, which
commonly exist at the state level, allow buyers to cancel contracts made with door-to-door sellers within a
certain time frame. Additionally, the Federal Trade Commission (FTC) requires door-to-door sellers who
work for companies engaged in interstate trade to clearly announce their purpose when calling on
prospects.

TRAVELING SALESMEN
TRAVELING SALESMEN are representatives of business firms who travel through assigned territories to
solicit orders for future deliveries of their employers' goods and services. Unlike peddlers or canvassers,
they seek orders from other business firms and public institutions rather than from individual consumers or
households. Also, unlike peddlers and other itinerant merchants, they usually sell from samples or
descriptions of their products rather than carry goods for immediate delivery.
Although itinerant dealers, such as seagoing and overland traders, emerged early in American economic
life, traveling salesmen were virtually nonexistent before the mid-nineteenth century. Thin, sparsely
developed market areas, small-scale manufacturing, and the lack of branded merchandise lines provided
little incentive for the use of salesmen. Wholesale merchants, who maintained their own contacts with
suppliers, dominated trade. Retailers either made periodic buying trips to major wholesale centers to
replenish their inventories or patronized local wholesale jobbers. After 1840 manufacturers began to take
the initiative and send salesmen in search of customers. This change resulted from (1) the growth of
market opportunities as America became more urban; (2) transportation improvements that reduced travel
time and expense; and (3) growth in manufacturing capacity and the consequent need to sell greater
quantities of goods.
The pioneer traveling salesmen cannot be precisely identified, in part because of definitional problems.
For example, should a company owner or partner who made an occasional visit to distant customers or
agents be classified as a traveling salesman? A Wilming ton, Del., railway equipment manufacturing
company, Bonney and Bush (subsequently Bush and Lobdell and then Lobdell Car Wheel Company),
employed a traveling agent starting in the 1830s and added additional salesmen in the 1850s. Scovill
Manufacturing Company of Waterbury, Conn., which made brassware, experimented with a traveling
salesman from 1832 to 1835 but did not finally adopt that selling method until 1852. The Rogers Brothers
Silverware Company and other metalworking firms also began using traveling salesmen in the early
1850s.
Many states and municipalities, acting at the behest of their local wholesalers, imposed costly licensing
requirements on traveling salesmen entering their jurisdictions. These barriers proved ineffective and
eventually were declared unconstitutional in Robbins v. Taxing District (1887). The U.S. Census reported
7,262 traveling salesmen in 1870 and 223,732 in 1930, but these figures may represent only one-half to
one-third of the true numbers. The number of salesmen undoubtedly increased after 1930.