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Introduction to
the course
WELCOME
My contact
Hand phone:
E-mail: lannt@neu.edu.vn
2
Lecturer’s expectations
4
Course Study Assessment
1. Attendance: 10%
2. Individual Exam : 20%
Multiple choice, True/false question
2. Group Assignment & presentation: 20%
Case study
3. Final Exam: 50%
Multiple choice, True/false question, case study, short essay
Course Lectures
Introduction to
sales
management
Learning outcomes
Salesperson
Drummer, Peddler.
Titles:
Characteristics of
Negotiate price; barter.
the sales job:
2-11
Evolution of Personal Selling:
Production
Sales Orientation
Sales Marketing Partnering
Before 1930 1930-1960 1960-1990 1990-Now
Supply ≈ Demand;
Characteristics:
limited competition.
Salesperson
Salesman.
Titles:
2-12
Evolution of Personal Selling:
Marketing
Production Sales
Orientation
Marketing Partnering
Before 1930 1930-1960 1960-1990 1990-Now
2-13
Evolution of Personal Selling:
Partnering
Production Sales
Orientation
Marketing Partnering
Before 1930 1930-1960 1960-1990 1990-Now
Salesperson
Value creators, relationship managers.
Titles:
2-14
What is personal selling?
1-15
Definition
1-16
Definition
1-17
Contributions of Personal Selling:
Salespeople and the Employing Firm
Marketing mix
Personal? Interactive?
Advertising
Sales promotion
Public relation
Personal selling Yes Yes
Internet selling
Still important
Explain a complex product/service
a lack of active selling by intermediaries and the desire to improve
sales
Inability to persuade intermediaries to accept new products
High intermediaries profit margins affecting the final sale price to
customers
A small market with only a few target customers
2.Sales force and its role
Definition
Sales force’s responsibility
Sales force’s classification
Role of sales force
What is sale force
Selling
How to be successful???
Be profit, be valuabe
Administration
Reports
Financial responsibility
Dependson sales person‟s position
Accounts receivable management
Inventory management
Marketing responsibility
Marketing research
Customer
Problem solving
relationship
and system selling
management
Marketing the
product
Case study
HOANG GIA
Company
1-30
Sales force categories
Order-Getting/
?????? Order creating
??????
?????? Order-Taking
??????
?????? Supporting
15-4
Personal Selling Tasks
Order taker
Routine
writing up orders
checking invoices
assuring prompt order
processing
Suggestive selling
Sales force categories
Sale support
A final group involved in selling mostly assist
with the selling activities of other sales
professionals. These include:
Technical Specialists
Office Support
Cross-functional (cross
functional people)
Account service rep
The Sales Process
• Prospecting
• Preapproach and Presentation Planning
• Approaching the Customer
• Sales Presentation Delivery
• Handle objections
•Close the sale
•Follow up activities
FOLLOWING UP
HANDLING OBJECTIONS
Pre-approach (Qualifying)
Finding and analyzing
information about prospects
Evaluating a prospect‟s
potential
Steps in the Preapproach:
Planning the Sale
Rapport-building
Uncover needs
Attention, interest, transition
Creative Selling Process
Questions
Reservations
Understand Concern
Counterarguments
Acknowledge concern
Clues to process
Creative Selling Process
Closing the Sale
Closing signals
Trial close
Asking the prospect to buy
Creative Selling Process
Following Up
Commitments met
Shipment
Performance
Reinforce L-R relationship
Satisfied customers rebuy & recommend
3. Sales management
Definition
Sales management is a business discipline which is
focused on the practical application of sales techniques and
the management of a firm's sales operations. It is an
important business function as net sales through the sale of
products and services and resulting profit drive most
commercial business. These are also typically the goals and
performance indicators of sales management.
Business discipline
Sales techniques
Sales operations:
Net sales
Product & Services
Profit
Performance indicators
Sales Management Model
Transaction Relationships
Individuals Teams
Sales Volume Sales Productivity
Management Leadership
Local Global
Transaction-Focused vs.
Relationship Focused
Transaction-Focused Relationship-Focused
• Short term thinking • Long term thinking
• Making the sale has • Developing the
priority over most relationship takes
other considerations priority over getting
• Interaction between the sale
buyer and seller is • Interaction between
competitive buyer and seller is
• Salesperson is self- collaborative.
interest oriented • Salesperson is
customer-oriented
Case study
1-51
Chapter 2
Organizing the
Achievement of Sales
Objectives
Learning outcomes
1. Sales Strategy
• The relationship between sales
strategy and corporate strategy
• Sales strategy framework
• Sales strategy and product life
cycle
2. Sales organization concept
1. Sales strategy
Board of
directors
Senior
managers
Department
managers
Staff
Organizational Strategy Levels
Strategy Level Key Decision Areas Key Decision Makers
Corporate Mission Corporate Management
Corporate Strategy SBU Definition
SBU Objectives
Corporate Growth Orientation
Levels of Strategy:
Corporate Objectives
Senior Management
Corporate Strategy
Marketing Objectives
Corporate Tactics
Marketing Strategy
Middle Management
Sales Objectives
Marketing Tactics
Sales Strategy
Market Share Sales Organization Objectives Primary Sales Tasks Recommended
Objectives Compensation
System
Build Build sales volume Call on prospective and new Salary plus
Secure distribution accounts incentive
Provide high service levels
particularly pre-sale service
Product/market feedback
Harvest
Divest/Liquida
te
Market Share Sales Organization Objectives Primary Sales Tasks Recommended
Objectives Compensation
System
Build
Hold
Harvest Reduce selling costs Call on and service most Salary plus
Target profitable accounts profitable accounts only and bonus
eliminate unprofitable accounts
Reduce service levels
Reduce inventories
Collaborative
relationship
Cost to
serve Partnership
relationship
Solution
relationship
Transaction
relationship
Commitment High
Low
Selling strategy Approaches
Continue
Salesperson Buyer
Process until
Provides Responses
Purchase
Stimuli Sought
Decision
Mental States Selling
Present Continue
Uncover and
Offering to Selling until
Confirm
Satisfy Purchase
Buyer Needs
Buyer Needs Decision
Problem Solving Selling
Continue
Generate Evaluate Selling
Define
Alternative Alternative until
Problem
Solutions Solutions Purchase
Decision
Consultative Selling
Business Consultant
•Costs
Mutual
Long-term
beneficial •Productivity
relationships
agreements
•Sales
Salesperson’s
creative •Profits
solutions
Matching selling and relationship
strategies
Transaction Solutions Partnership Collaborative
Stimulus response
Mental states
Need satisfaction
Problem solving
Consultative Consultative
Customized
Sales Strategy and PLC
sales
Profit
t1 t2 t3 t4
Introduction
Customer characteristics: the number of new customers are low but
potential
Sales person needs to decrease the risk perceived of customers by:
Brand reputation and credibility
Sample product/ trial product
Consult carefully
Best customer service: before and pos-purchase selling
What about intermediaries?
Growth
Specialization
Centralization
Span of control versus management levels
Line versus staff position
Specialization
Each salesperson could perform all selling tasks for all the
company‟s products to all type of customers (act as generalists) and
each sales managers could perform all management activities
increase the degree of specialization certain individuals
concentrate on performing some of the required activities, sell only
certain products or call on specific type of customers (act as
specialists)
Should the salesforce be specialized?
If the salesforce should be specialized, what type of specialization
is most appropriate?
Approaches to organizing the
sales force
Geographic sales organization
Product sales organization
Market sales organization
Functional sales organization
Geographic sales organization
Salespeople are assigned a geographic area and are responsible for all selling
activities to all accounts within the assigned area
Characteristics:
More tall structure/ centralized
Least specialized
generalists
Advantages:
Salesperson is able to become an „expert‟ on a given region
Customers know exactly who they need to speak with about their problems
No duplication of effort
Lower travel cost
Disadvantages:
Difficult for the salesperson to cover a wide spectrum of products
Difficult for the salesperson to serve different types of customers
Salespeople may not willing to relocate
Product sales organization
Salespeople are assigned for specific product of product lines
Advantages
Salespeople become experts in the assigned product category
Salespeople can better serve the more specific and complex
needs of customers
Provides the ability to control and monitor the marketing of a
particular product
Disadvantages
There may be duplication in the coverage of geographic areas
Customers may be confused about which salespeople to talk
to
Increase travel time and travel cost
The administration is more difficult than others
Market sales organization
Salespeople are assigned specific types of customers and are
required to satisfy all needs of these customers
Characteristics
Specializing by certain customers or specific type of customers
Advantages
Salespeople can work more closely with customers to meet specific needs
of different customer segments
Allow for greater feedback
Best when a small number of customers are the most important
Disadvantages
Salespeople have to know the entire product line
Functional sales organization
Salespeople specialize in performing certain of selling activities
(telemarketing, outside field salesforce, sales engineers, etc)
Characteristics:
Specializing by critical selling tasks
Tend to be more decentralized
Advantages:
The strength of individual salespeople
Concentrate on certain critical tasks
Allocation of resources
Disadvantages
Customers may become confused
Complex system to administer
Increase the cost of having more salespeople to perform specialized
function
Customer needs
different
Market-driven Product/market
specialization driven
specialization
Simple Complex
product range of
offering product
Geography- Product-
driven driven
specialization specialization
Customer need
similar
centralization
A centralized structure: authority and responsibilities are
placed at higher management level >< decentralized
structure
Centralized or decentralized orientation, centralize some
activities and decentralize others
More decentralized orientation:
Transactions relationships
Individuals teams
Management leadership
Decentralization:
High level of environmental uncertainty
Salespeople and sales managers must perform creative and non-
routine activities
Adaptatibility is critical to achieving performance objectives
Centralization:
Low level of environmental uncertainty
Sales organisation activities are routine and repetitive
Performance emphasis is on effectiveness
Span of control versus
management levels
Span of control: the number of individuals who report to each sale
manager
Management levels: the number of different hierarchical levels of sales
management within the organisation
National sales
manager
National sales
manager
Sales Management
Leadership
Learning Objectives
10-93
Managers Versus Leaders
“Not all leaders are managers, nor are all managers
leaders”
Managers
Persons whose influence on others is limited to the appointed
managerial authority of their positions
Leaders
Persons with managerial and personal power who can influence
others to perform actions beyond those that could be dictated by
those persons‟ formal (position) authority alone
What is the Difference Between a leader
and a manager?
Manager Leader
Situational Environment
Communication
Communication
Sales manager Salesperson Leadership
Charateristics Charateristics behaviour
Experience Need, want, demand Telling
Motivation Selling
Status Participating
Deligating
Sales person
G.Dessler, 2003
Leadership Model for Sales
Management
Sales Needs
Power Manager’s
Sales Manager Leadership Salespeople
Effectiveness Other People
Leadership
Power Skills
Anticipation
Salespeople Diagnostic
Other People Selection
Communication
- Influence Strategy
- Communications
Mechanisms
Power and Leadership
Five types of power which may be present in interpersonal
relationships:
Expert Power
Referent Power
Legitimate Power
Reward Power
Coercive Power
Situational factors
Trait Approach
Behavior Approach
Contingency Approach
Manager’s Perspective: Behaviors
Managers Should Demonstrate
1 Clarify the direction your business is taking
5 Be accessible
2 Be a good communicator
4 Be considered trustworthy
Coaching
Mentoring
Teamwork
Planning and conducting intergrative
meetings
Meeting ethical and moral
responsibilities
Coaching
The continuous development of salespeople through supervisory
feedback and role modeling. Suggestions for affective coaching
include:
Take a we approach
Address only one or two problems at a time
Don‟t focus on criticizing poor performance, reinforce good performance
Foster involvement
Recognize differences in salespeople and coach accordingly
Coordinate coaching with more formal sales training
Encourage continual growth and improvement
Insist salespeople evaluate themselves
Obtain agreement with respect to punishments and rewards
Keep good records
Coaching Principles
Let reps know you‟re joining them to observe
Prepare and and offer feedback
observe
Understand objectives of calls, listen carefully
Focus on improving skills
Give feedback Be specific when pointing out good selling skills
and those that could be improved
Demonstrate desired behaviors, explain how and
Be a Role Model why you did the things you did
Give reps chance to use same tactics
10-120
Planning and Conducting
Integrative Meetings
Keep technical presentations succinct
Use visual aids and breakout discussion
groups
Keep salespeople informed of corporate
strategy and their role in it
Minimize operations review
Set a humane schedule . . . allow time for
sharing and adequate breaks
Set and communicate the agenda (when?)
Ask for input from the salespeople
Generate excitement with contests and
other rewards
Chapter 4
Staffing the
sales force
Learning outcomes
$1,400,000
$1,200,000
Average Annual Sales
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
No Testing Standardized Test Highly-Predictive
Standardized Test
Personal traits
Aptitudes
Skills
Knowledge
Qualification
Career aspiration
Special abilities
experience
recruitment and selection procedures for
new sales staff: step 2
Classified Ads
Reaches wide audience
Tend to over-produce under-qualified candidates
Internet Resume Sites
Reaches wide audience
Will continue to grow in importance because of
screening options and ease of access
External sources
Employment Agencies
best if company pays
Schools & Colleges
Poised & easily trained
Lack experience & become bored
Customers, Suppliers & Competition
Legal & ethical issues
Common: insurance, stock broker, office equipment,
clothing
Announcing the recruitment
recruitment and selection procedures for
new sales staff: step 3
Personal interview
Group interview
Testing
Intelligence test
Aptitude test
Proficiency test
Psychological test
Personality test
Skills test
Honesty test
Assessment centre
Conduct
follow up Perform
and sales
evaluation training
Step 1:Assess sales training needs
Discover the gap: the specific performance-related skills,
attitudes, perception and behaviours required for salesforce
success –state of readiness of the salesforce
Typical sales training needs sales training topic
Motivation &
reward system
management
Learning Outcomes
Definition: Motivation
Intrinsic Extrinsic
Motivation is When doing the When rewards
the inner force job is inherently such as pay and
motivating formal
that guides
recognition act as
behaviors and motivators
is concerned
with the
causation of Sense of Pay
specific actions Accomplishment Promotion
Job
Personal Growth
security Recognition
Opportunities
UNDERSTAND WHAT
MOTIVATION IS ALL ABOUT
• What arouses salespeople‟s behavior?
• What influences the intensity of the
behavioral arousal?
• What directs the person‟s behavior?
• How is this behavior maintained over time?
Definition
Motivation refers to the arousal, intensity, direction,
and persistence of effort directed toward job tasks
over a period of time
Salesforce psychology
Motivation
The force within us that activates our behavior. It is a
function of three distinct components: Intensity,
Direction, and Persistence.
Motivation
Feedback
9. Past
experience
1. Environmental
factor
2.Organizational 8. Satisfaction
4.Motivation 5.Performance 6. Reward 7. Equity Intrinsic 10. Job 11. Voluntary
factor level
to work Intrinsic Determination Extrinsic Scope Turnover
Extrinsic
3. Personal
factor
9. Past
experience
Compensation Plans
Selecting compensation plans
Disadvantages
- Straight commission plans contribute little to company
loyalty.
- Problems may also arise if commissions are not limited by
an earnings cap.
Straight Commission: Plan Variations
Constant rates:
Rates that remain unchanged over the pay period. Pay is
linked directly to performance.
Progressive rates:
Rates that increase as salespeople reach pre-specified targets.
Regressive rates:
Rates that decline at some predetermined point.
Financial Compensation:
Performance Bonuses
Performance
Advantages
bonuses: - Organization can direct emphasis to what it
considers important in the sales area.
Personal/ group
- Bonuses are particularly useful for tying
Direct effort rewards to accomplishment of objectives.
toward relatively
short-term
Disadvantages
objectives - It may be difficult to determine a formula
for calculating bonus achievement if the
objective is expressed in subjective terms.
- If salespeople do not fully support the
established objective, they may not exert
additional effort to accomplish the goal.
Financial Compensation:
Combination Plans
Advantages
- Combination pay plans are flexible.
- They are also useful when the skill levels of the salesforce
vary.
- Combination pay plans are attractive to high-potential but
unproven candidates for sales jobs.
Disadvantages
- Combination pay plans are more complex and difficult to
administer.
- A common criticism of combination pay plans is that they
tend to produce too many salesforce objectives.
Non Financial compensation
Sense of Accomplishment:
The internal sense of satisfaction from successful performance
Sales managers should facilitate salespeople’s ability to feel
this sense of accomplishment
Nonfinancial Compensation
Recognition:
The informal or formal acknowledgement of a desired
accomplishment
Job Security:
A sense of being a desired employee that comes from
consistent exceptional performance
Guidelines for Motivating and
Rewarding Salespeople
1. Recruit and select salespeople whose personal motives match
the requirements and rewards of the job.
2. Attempt to incorporate the individual needs of salespeople
into motivational programs.
3. Use job design and redesign as motivational tools
4. Provide adequate job information and assure proper skill
development for the sales force.
5. Concentrate on building the self-esteem of salespeople.
6. Take a proactive approach to seeking out motivational
problems and sources of frustration in the salesforce
THE SEVEN COMPONENTS OF THE SALES
MOTIVATIONAL MIX
Evaluating the
performance of
salespeople
Learning Outcomes
Sales Manager
Evaluation
Salesperson is
evaluated by multiple
raters
Helps salespeople
better understand their Salesperson
ability to add value to
their organization and
their customers
Salesperson performance
evaluation process
Sales environment evaluation
Set sales performance approaches,
perspective,criteria and method
Information collection
Sales Sales performance
for sales performance
environment measurement
evaluation
Outcome-Based Perspective
Focuses on objective measures of results with little
monitoring or directing of salesperson behavior by sales
managers
Behavior-Based Perspective
Incorporates complex and often subjective assessments of
salesperson characteristics and behaviors with considerable
monitoring and directing of salesperson behavior by sales
managers
Perspectives on Salesperson
Performance Evaluation
Outcome-Based Behavior-Based
Little monitoring of people Considerable monitoring of
Little managerial direction of salespeople
salespeople High levels of managerial
Straightforward objectives direction of salespeople
measures of results Subjective measures of
salesperson characteristics,
activities, and strategies
Dimensions of Salesperson
Performance Evaluation
Behavioral Results
Salesperson
Performance
Professional
Profitability
Development
Criteria for Performance
Evaluation
Behavior: Consists of criteria related to activities
performed by individual salespeople
• Sales calls,
• customer complaints,
• required reports submitted,
• training meetings,
• letters and calls
Sales forecasts
and sales
planning
Learning Outcomes
Where are our customers and how many products will they buy?
develop sales programs (sales planning)
Teritory design Sales
forecast
Sale quota setting
Sales budget planning
Sales
Sales quota
budget
Defining the forecast
Product level
Geographic area
Time period
Salespersons forecasts of
accounts
Top- down approach
1992 $ 8.400.000
1993 8.820.000
1994 8.644.000 $8.610.000
1995 8.212.000 8.732.000
1996 8.622.000 8.428.000 $8.520.000
1997 9.484.000 8.418.000 8.574.000
1998 9.674.000 9.054.000 8.740.000
1999 10.060.000 9.579.000 8.998.000
2000 9.868.000 9.460.000
The exponential smothing
1992 $ 8.400.000
1993 8.820.000 $8.400.000 $8.400.000 $8.400.000
1994 8.644.000 8.484.000 8.610.000 8.736.000
1995 8.212.000 8.516.000 8.626.000 8.664.000
1996 8.622.000 8.456.000 8.420.000 8.302.000
1997 9.484.000 8.488.000 8.520.000 8.558.000
1998 9.674.000 8.686.000 9.002.000 9.298.000
1999 10.060.000 8.882.000 9.338.000 9.600.000
2000 9.118.000 9.698.000 9.968.000
The decomposition method
Sales in 2000 = $ 10.060.000
Trend: 5% growth in sales (basic development in porpulation, capital
formation and technology)
Cycle: 10% decrease in sales (business recession)
Erractic event: 5% decrease in sales (increased tension in the Middle
East)
Seasonal: 25% higher in the fourth quarter than the others
Sales manager DO
How to budget
Based on sales objectives/ selling tasks and
financial resources which should be spent for
accomplishing the objectives
Based on the past costs and intended sales
amount / sales quota this year
The sales budgeting process
The customer-product matrix
How to use the sales budget
3) To evaluate performance
What is needed: