SALES& DISTRIBUTION MANAGEMENT (MM-6)

UNIT - 1
Q: 1:- Define Sales Management? What are the objectives of this area of Management? What roles does a Sales Manager perform?
Ans: - INTRODUCTION Nowadays the entire Sales Executives are professionals they plan & build the effective organisation. Basically the professional approach requires thorough Analysis. Appropriate sales policies and personal selling strategy. Sales executive are responsible towards customers and society. RESPONSIBILITIES OF SALES EXECUTIVES TOWARDS CUSTOMER RESPONSIBILITY

Obtaining Sales Volume

Provide Profit Contribution

Contributing Business Growth

The management is responsible towards the efficiency and planning of the product. So, this concept will emerge as a concept i.e. Sales Management. SALES MANAGEMENT Sales management is management of sales force. It basically refers to the direction of sales force personnel in an organisation. Definition: IN addition to the management of personal selling Sales Management means Management of all activities, including advertising, Sales Promotion, Marketing Research, Pricing, Physical Distribution & Product merchandising. According to American Marketing Association Sales Management is the Planning, Direction and Control of Personal Selling including Recruiting, Selecting, Equipping, Assigning Routing, Supervising, Paying & Motivating as these applies to personal sales force. Control Motivation Recruitment Sales Management Selection Compensation

Supervision

Training

Orientation

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OBJECTIVE OF SALES MANAGEMENT 1. Maintain Effective Communications The main objective of sales Management is to maintain effective communication of sales department with the other organizational units. This will ensure or help in increasing the sales of the company. 2. Develop an effective Distribution Network Outside the company, the sales manager serves as a key contact with customers and other external publics and is responsible for building & marinating an effective distribution network so that people come to know about the company. 3. Marketing Decisions The next objective of sales management is to take various marketing decisions like:

Sales Promotion

Advertising
Marketing Decision

Product Decision

Pricing

Distribution Channel Policies

The sales management must care of these decisions before taking an action regarding the product. 1. Sales volume: Generally the top management has the final responsibility because the top management is responsible for the success & failure of an enterprise but the top management has lot of work to do so. Delegates Top Management Authority to 2. Contributions to profits: Marketing Management Authority to Delegates Sales Management

The next objective of sales manager is to make future operations in such a way that it contribute or increase the profits of the company. The sales manager must analyze the market opportunities so that he may be able to meet the competition.

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Continuing growth:

The sales manager must work in the direction, which helps in increasing the market share. The progress of the entire company depends upon the sales management, so the sales manager tries to meet the competitive edge so as to make organisation grow continuously. Role of Sales Manager: In an organisation a sales manager plays a variety of roles to related to the sale of a given Product.

Preparation of Sales Program.

Sales Force Mgt.

Role of sales Manager

Maintain Relations

Marketing Decision

1.

Sales Force Management: The Sales Manager checks the sources of recruitment and sets the standards for selections. The sales manager must provide training to new employees in such a manner that the high level of performance is achieved in short possible time. 2. Maintain Relations: The sales manager must maintain the internal and external relations of sales department with the departments of other companies or units as well as within the organisation. The sales manager develop & maintain effective working relations with sales, training & other key personnel as well as with the customers to ensure that the effort is beneficial to both the parties. 3. Communication The sales manager should establish a system of communication with other sales personnel that keep them informed of overall departments sales objectives, results & problems. It also keeps the sale manager informed about their needs & problems. 4. Control The sales manager must consult with the production manager time to time because they are closely related with the sales needs. The sales manager reviews the revenues & expenses of the company and checks the actual sale and compare it with the corrective action may be taken in time. So, the sales manager maintains the proper balance of time spent on various activities and keeps a check on the activities of the sales force. 5. Organisation The sales manager establishes an effective plan of organisation a d methods of controlling the activities of members, so that the work will be completed in time. The activities are identified & grouped and hence assigned to individuals responsible for selling a given product.

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Conclusion: On the basis of above observations we can say that: The sales manager must keep a close watch over the market to meet the competition. The selection criteria should be in such a way that good employees are recruited. Sales management is the management of the executives responsible for the sale of the product. Q2: How can the sale of a product are forecasted? How does it help in determining the size of sales force? Ans: - Introduction: As the name indicates Sales Forecasting is an estimate of sales in a future period under a particular marketing program. Forecasting is also made for the economic and other factors. A sales forecasting may be made for a single product or for an entire product line. Forecasting can be of two types:

Forecast

Short term Sales Forecast

1. Short term Sales Forecast

Long term Sales Forecast

When a forecast is made for a manufacturers entire marketing area or for any sub division of it then it is called as short term forecast. Because the market conditions are changing day by day, it is not practical to predict & plan for very long future period. 2. Long term Sales forecast

Long-term sales forecast is that which is used for planning production capacity & for long run financial planning. This is the future period for which the decisions are taken in the present to save the future deficiencies. Basically between both the forecasts the short term forecast is important for Sales Executive, because: * Operating or short-term sales forecast is the prediction of how much of a companys particular products can be sold during a future period under a given marketing programme. OBJECTIVE OF SALES FORECASTING 1 To maintain good relationships with customers by providing them good quality products in the right quantity and at right time. 2 To check the sales of product and estimate of sales is made for future. Thereafter the actual sales are compared with the budgeted sales and if there are any deviations then corrective actions are taken. 3 To assist customers in choosing the product offor maintaining the competitive edge in the market. 4 Sales Forecasting is done to increase the market share of the company and to help the company grow.

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To collect the market information, the above are the objective of Sales Forecasting. HOW CAN SALES OF A PRODUCT ARE FORECASTED A Sales forecasting is the procedure of estimating how much a given product can be sold if a given marketing programme is implemented. No sales forecasting can be absolutely correct, so there are various methods used for the sales forecasting of a product. These are: 1. Jury of executive Opinion:

This method is basically based upon the executive opinions. It means that the executives are well informed about the industry outlook, capabilities and marketing programmes. They express their opinion as to what according to them is the sale expected in future. Merits: a) Quick and easy way to forecast. b) Many experts poll their experience and judgement c) Qualitative results (experts knowledge) d) This method is used when the adequate information of the market is not available. Demerits: a) Affected by the personal views. b) More workload of key executives c) Only based on personal judgement and may be subjective or biased. 2: Delphi Technique:

This is basically the new version of the executive opinion. In this the people who are giving opinion are selected for their expertise. These experts give answers to the panel of questionnaires. The response to one questionnaire leads to the next questionnaire. Some contend that the technique eliminates the band wagon effect of the majority opinion. As everyone gets a chance to be heard. 3. Pool of sales Force opinion

This method is often referred to as The Grass Roots approach. According to this the forecast is combined and cumulated in such a way that management may use it for the company. It appeals to practical sales managers because the responsibility an assigned to those who produce results. Thus the sales force responsible to produce results gives own prediction about the future expected sales. Merits: a) Specialized knowledge b) Close touch with the market conditions c) More confidence (forecast is correct) d) More flexible- it can be changed according to the market needs. 4. Projections of past sales

This method of sales forecasting takes a variety of forms. This is very simple. To set the sales forecast for the coming year either we choose the same figures as the current years actual sales or

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forecast may be made by adding a set percentage to last years sales or to several past years. The formula of calculating the next years sale is: Next years sales = this years sales/ Last years sales. I) Time Series Analysis It is basically based on past year sales. It helps in measuring the sales variation.

TYPES OF SALES VARIATION

Long term Trends

Cyclic Changes

Seasonal Variations

Irregular Fluctuations

Merits: (i) Helpful in making long-term forecast. (ii) Based on past year sales therefore has an authentic base. Demerits: (I) Difficult to call the turns (ii) Exponential Smoothing This method is most useful I short range forecasting. Exponential smoothing is type of moving average represent a weighted sum of all past numbers in a time series, with the heaviest weight placed on the most recent data. 5. Econometric model building and simulation This is very attractive method of sales forecasting. This stimulation method is used for companies marketing durable goods. In this, set of equation is used which represent the relationship between sales and demand. By plugging in various for each independent variable sales are forecasted. Econometric Model It shows the relationship among a set of variables and parameters are estimated by statistical analysis of past date. It is expressed in equation form. For e.g. the sales equation of durable goods can be written as follows: S= R + N S= Total Sales R= Replacement Demand N= New Owner Demand

Total sales of durable goods consist of purchase made to replace units that have been scraped and purchases by new owners. DETERMINE THE SIZE OF SALES FORCE

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After determining the kind of sales person that best fits the companys needs, management now determines how many are required to meet the sales volume and profit objectives. If the company has too few sales persons, opportunity for sales and profit go unexploited. If the no. of sales persons is more it reduces the net profits. Basically three approaches are used: 1. The workload method:

In this method the number of sales executives recruited is based on dividing the total actual workload in an organization by the average work performed by an average sales staff. However, this method is too quantitative and does not give due considerations to the qualitative activities performed by the sales executives. For e.g. Telecalling, Prospecting, After Sales Support. 2. Sales potential Method: This method is modified version of the workload approach. In this approach, the workload is calculated considering the sales expected to be achieved in any future period of time. This potential is divided by average contribution of the executive. The resultant is the sales executives required to perform the sales task of an organisation. VARIOUS STEPS INVOLVED IN RECRUITING AND SELECTING

To evaluate the sources from which Sales personnel can be obtained

To tap the identified recruiting sources and build a supply of prospective sales personnel

Selection of candidates
SOURCES OF SALES FORCE RECRUITS Each source should be analyzed quantitatively & qualitatively. One source may provide numerous recruits but few successful candidates and a second source may provide a few but more successful candidates. Sources of sale force recruitment Inside the company outside the company - Direct unsolicited applications - Company Sales Personnel - Employment Agencies - Company Executives - Salespeople making calls on - Internal Transfers The company - Employees of customers - Sales executive clubs - Sales Force of nonCompeting firms Pankaj Kumar, Rai Business School, Mob 9910665814 - Sales competing institutions - Retired persons

Sales Force required = Sales potential/ Average contribution of a sales executive.

3.

The incremental method This is building up approach. In this method the effort of one individual is added upto another. This is done till the time the total sales task to be performed is assigned. Conclusion: An organisation may use any of the methods to determine the number of sales executives at any given point of time. However much depends upon several other factors.

Capabilities of the sales force

Demand for the product

Effective supervision

Product Availability

Competition & Substitutes

UNIT - 1
Q.3: What are the commonly used methods of recruiting the sales force? Discuss advantages and disadvantages of the same Ans: Recruitment & Selection Both the HR functions are an important part of implementing the selling strategy. But it is not enough. Training is also very necessary. The implementation of this process is not simple. It has to consider both the kind and number of the sales personnel. INTERNAL SOURCES OF RECRUITMENT 1. Company Sales Personnel: Most of the people apply in the company in which they know some employee in any of the department of the organisation, as recommendation of these people exerts influence in recruiting process. Advantages A) These people are aware of the company policies so can start their work immediately. B) This is a good method when jobs are to be filled in remote areas. C) Sales people of a particular area know much more about that area so their recommendation should be considered. Disadvantages

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Sales personnel may show discrimination and less potential employees may be selected. Company Sales Personnel: Here recommendations of sales manager the president and other marketing executive are considered. Advantages: a) These people understand much better the needed qualification so their recommendation yield top caliber people. b) These people are experienced so their judgement is quite fair. 2.

Disadvantages: a) The chances of discrimination occur though to a very small extent 3. Internal transfers The other sources of recruitment are internal transfer from other departments and non-selling section of sales department. Advantages: a) These people know each and everything about the company. b) Company on the other hand also know every thing about the employees c) These people exhibit excellent knowledge about the product. Disadvantages: Nothing is known about the selling aptitude of these persons. 4. Direct unsolicited applications Every company receives uninvited, Walk in and Write- in application for sales positions, these are direct unsolicited applications. Advantages: a) This is quite a useful method because most of the managers think that these people are imitative takers and exhibit selling aggressiveness. b) This is economical method. Disadvantages: a) Some times the proportion of the qualified applicants from this source is low. b) It does not provide a steady flow of applicants. 5. Employment agencies Seeking and taking help of these agencies is other method of recruitment. Employment agencies maintain a Pl of qualified applicants and provide the organisation, when required for fees. Advantages:a) A lot of time of employees is saved, as recruitment and selection are very long processes. b) Agencies often conduct a number of tests to find out the potential candidate, best suitable to an organisation. Disadvantages: a) Sometimes agencies nominate wrong people just to get the placement fees. 6. Sales people making calls on the company Here the purchasing Director is in contact with the sales personnel from other Companies and in a position to evaluate their on the job performance. Advantage: High caliber people may be approached. Disadvantages: a) Salary offered to them is usually high. Thus it is more costly

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These people are less trust worthy. Employees of Customers. Some companies regard their customers as recruiting source and attract Sales staff from them. Advantages: a) Usually customer recommends top calibrated people for the job. b) Such transfers may have favourable effect on the morale of the customers organisation. 8. Sales Executive Club Many Sales Executive Club operates placement services at Club meeting exchange of useful information jay occur by informal discussions. The platform may be used to attract a performing executive in an organisation. 7. 9. Sales Force of Non-competing Companies In this source individuals who are working as sales personnel in other non-competing firms are attracted to fill in a vacancy in an organisation. Advantages: a) Selling experiences. b) These people can tell about product line if they are working in related companies. c) This source provides a channel for career advancement for dead-=end jobs. 10. Sales force of competing companies. In this source individuals who are working as sales personnel in other non-competing firms are attracted to fill in a vacancy in an organisation. Advantages: a) They have experience of selling similar products to similar markets. b) Require minimal training. Disadvantages: a) Costly method as attract a competitors sales force may require offering an attractive package. b) The selected person may be less trust worthy. 11. Educational Institutions: Here recruitment is done from Colleges and Universities, Community Colleges, Business Schools, High Schools and night schools. Advantages:a) These people are mature enough and have reached a certain educational level. b) These students would be in search of job and new to the industry so work with full labour and energy. Disadvantages: a) Lack of experience b) A rigorous and expensive training session is required. An appropriate and effective method should be used so Conclusion: That high potential and top caliber people are recruited and selected. *******************************************************************************************

b)

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UNIT - 2
Q.4: What are sales territories? Discuss the process involved in designated different sales territories. Ans: TERRITORY MANAGEMENT Sales people are not only responsible for individual customers (account management) but they are also responsible for a group of accounts (territory management) establishment of sales territories facilities matching selling effort with sales opportunity. Sales personal are assigned the responsibility for serving particular grouping of customers. Sales territory It is configuration of current and potential account for which responsibility has been assigned to a particular sales representative. Whether designated geographical or not, a sales territory is a grouping of customers and prospects that can be called upon conveniently and economically by an individual salesperson. Major Account: Customers whose significance to the company business requires special attention and experience Direct Account Large account involving special arrangements in terms of principle credit or product design. House Account An account not designed to an individual not to an individual salesperson but one handled by executives in the organisation head/division offices. Territory Management It is the planning, implementation and control salespersons activities with the goal of realizing the sales and profit potential their assigned territories. Reasons for establishing territories Reasons Benefits Customer related 1. Provide intensive market coverage - produce higher salary 2. Provide excellent customer service - produce greater satisfaction Supervision related 3. Foster enthusiasm and moral - leads to less turnover and high job satisfaction 4. Facilitates performance evaluation - offer reward related to efforts. Managerial 5. Enhance control and evaluation - reduce expense 6. Coordinate promotion - give more bangs for buck 7. Control selling expenses - avoids promotional wastage 8. Aids is coordinating of personnel selling and advertising Reasons for revising territories 1. Major accounts-open/close down facilities. Move into/out of an area Shift the nature of their business. 2. Major accounts become subsidiary of other company 3. Competition may have intensified in a territory that is domestic and international. 4. Sales management may have overestimated the potential in a territory. Reasons for not establishing sales territory 1. Company is small

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Social relationship; /personal friendships. 3. High technology application. Territory management problems and remedies Problems Remedies 1. Inadequate coverage 1. Split territory 2. Inadequate size 2. Enlarge territory 3. Revision 3. Prepare salespeople 4. Shifting accounts 4. Revise territory 5. Direct accounts 5. Clarify at hiring 6. Inadequate support 6. Assist salespersons 7. Territory jumping 7. Eliminate practice. 8. Overlapping territory 8. Minimize crossovers 9. Selling cost variations 9. Review cost figure 10. High turnover 10. Rectify casual factor Procedure for developing territory I. Objectives for territory formulation a) Determine optimum number of territory Lack of coverage, too fragmented, high turnover b) Selecting a basic geographical control unit. Traditional area, city, metro, village, district etc. it determines the sale potential each control unit. Combination of control unit into tentative sales territory. Shapes of sales territory in wide use. a) Circle When account and prospect are evenly distributed throughout the area

2.

b)

Wedge -shaped This shape is appropriate for territory containing both urban and non-urban area. It radiate out from densely populated urban centers.

c)

Clover leaf: It is desirable when accounts are located randomly through territory.

c) d)

Equalization of territory potential Adequate challenging territory by taking into consideration Coverage difficulty

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Salespersons varying abilities Territorial sales potential. e) Effective sales territory- no significant sales opportunity lies unexploited Efficient neither money not time is wasted. Important to consider, salespersons work lad and nature of the job (a prospecting salesperson can handle a larger territory than a person who must provide full service for each account) Redistricting to adjust for coverage difficulty 1. Determine the number, location and size of customers and prospects in each tentative territory. 2. Estimate time required for each sales call. 3. Determine length of time between calls that is the amount of time required to travel from one customer to the next. 4. Decide all frequencies. 5. Calculate the number of calls possible within a given period. 6. Adjust the number of calls possible during a given period by the desired call frequencies for the different classes of customers and prospects. 7. Check out the territory with sales personnel who work or who have worked in each area, and make further adjustment as required. II. Basis for territories 1. Geography 2. Potential 3. Servicing requirement 4. Workload 5. Type of customer III. Methods of devising territories

a)

Build up method: Designing territory through combining enough pieces of a company overall market to create units that offer sufficient sales challenge. b) Breakdown method: Determining the number of territory by dividing projected average sales per salesperson into an overall sales forecast. c) Incremental method: Establishing territory as long as the marginal profit generated by the territory exceeds the cost of servicing them. d) Assigning salespersons to territory. Q.5: Write short note on: a) Sales meeting b) Sales contests c) Sales quotas Ans: a) Sales meeting Sales meeting are important for both communication and motivational purposes. They provide occasion for management to stimulate the group to raise its standards as to reasonable and acceptable performance.

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Planning Sales Meeting A C Deciding the Deciding Specific meeting Meeting aim content

M Methods - short & participative GD

E Executing - speakers - seminars - meeting site - Time -duration -Room arrangement

E Evaluation -feedback - sales meeting evaluation form - compare with aims

A)

National Sales Meetings: This Sales Meeting is more of incentive and motivations organized at a Grand National Level. In cause of an announcement of a new product or and technology or may be a new strategic planning, these are easy be made at the common get-together of the executives across the country. The sales staff from different rungs of the market share common platform and may interact to learn about the market. B) Regional Sales Meeting: Regional Sales Meetings are organized at the middle level organizational hierarchy of the Organisation. For e.g. District or state level. It facilitates discussions on regional level common issue problem & focus etc. the frequency of organizing such meetings can be high as compared to the national level meetings, as it does not in much expenditure. C) Local sales meeting: These meetings are organized at the branch level itself. The basic purpose is to give personal attention to the individual sales staff, solve their problems and motivate them for improved performance. Generally the senior may call his team daily for such a meeting. It may not be very formal affair and may just be for a few minutes. D) Traveling sales meeting The senior maybe interested in updating himself on the performance the Sales Executive. If it is not possible to meet him in person, meeting may be held even while traveling. This method is fast catching up with the intensive use of Mobiles and Internet. By telephone T home By internet/conferencing b) Sales context A sale context is a specific selling campaign offering incentives in the form of award beyond those in the compensation plan. Provide extra incentive to increase sales volume Aim to fulfill individual needs for achievement and recognition Develop team spirit, boost morale.

Objectives 1. To obtain new customers. 2. To secure larger orders per sales call 3. To push moving items 4. To overcome a seasonal sales slumps 5. To improve performance of distributors sales personnel.

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6. To get reorders. 7. To sell a more profitable mix of product Reward/contest prizes 1. Cash 2. Travel package 3. Special Honour and privilege. 4. Merchandise. Managerial evaluation of contest a) Contest versus alternatives: If serious defects exist in key aspect of sales force management, a sales contest is not likely to provide more than a temporary improvement in the sales result. b) Short and long term effect: A sales contest accomplishes its purpose if it increase sales volume and profit both in short and the long run. No contest is a real success if it borrows sales from preceding months, succeeding months or both. c) Design: A well designed contest provides motivation to achieve the underlying specific purpose by least expenditure. d) Fairness: All sales personnel should feel that the contest format and rule give everyone a fair chance of winning the reward. e) Impact on sales force moral: Successful sales contest results in permanent higher level of sales force moral. Conclusion: Thus a judicious use of sales contests builds individual and sales force morale helps to accomplish company goal. C) Sales quotas: Quotas are quantitative objectives assigned to sales organisational until they specify desired performance level for sales volume such as: Expenses, gross margins, net profits & return on investment, selling & non-selling related activities, or some combination of these items. Some companies set sales quota for organisational units such as individual, district & sales personnel. Quotas are devices for directing & controlling sales operations. Their effectiveness depends upon the kind, amount & accuracy of marketing information used setting them & upon management skills in administering the quota system. Objectives in using quotas 1. To provide quantitative performance standard; 2. To obtain tighter sales and expense control; 3. To motivate desired performance 4. To use in connection with sales contest Types of quotas 1. Sales Volume Quota 2. Budget Quotas Expense quota Gross margin/net profit quota

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Activity Quota: The Company defines the important activities sales personnel perform, and then it set target performance frequencies. 4. Combination quota Budgeting by the objective and task method: The manage starts with the sales objectives. Then he determines the task must be accomplished in order to achieve the objectives. If the cost are too high, the manager may inclined to find different ways to achieve the objectives until the management satisfied with both the objectives and the means of achieving them. Many firms use this method with some variations. Administrative Budget for sales department activities: Budget

3.

Sales Budget

Selling expenses

Sales Budget: It is revenue or unit volume anticipated from sales of the final products. It is the key budget and is based on the sales budget forecast management estimates the sales of each product may make separate forecast each segment. Selling expense budget: It anticipates various expenditure for personal selling activities e.g. Salaries, Commissions & other expenses for the sales forecast must be closely coordinated with the sales budget. Administrative budget: There may be several assistant sales manager, sale supervisors, sales trainers, sales department secretaries and office workers etc. Budgetary provisions must be made for their salaries and their staff, administrative budget must also budget for sales office operating expenses salaries, rent, power, light, office equipment and general overhead. Q.6: What is sales budget? Why and how is it prepared? Ans: Sales Budget: A budget is simply a tool, a financial plan that an administrator uses to plan for profits by anticipating revenues and expenditure. Sales budget is a detailed blue print of who is going to sell how much of what during operating period and to which class of customers. It consists of estimates of an operating periods probable rupee and unit sales and likely selling expense. Purpose of Sales Budget:1. Planning:The company formulates marketing and sales objectives; the budget determines how these objectives will be met through a detailed breakdown of the sales budget among products, territories and customers.

2.

Co-ordination:-

The budget establishes what the cost of various heads be thereby maintaining a desired relationship between expenditure and revenues. The budget enables sales executives to coordinate

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expenses with sales. It also restricts the sales executives form spending more that their share of eth funds helping to prevent expenses from getting out of control. 3. Evaluation:Sales department budgets become tools to evaluate the departments performance. By meeting the sales & cost goals set forth in the budget, a sales manager may prove himself to be a successful executive. Sales budget can be determined on the basis of following categories: BUDGETING BY PERCENTAGE OF SALES METHOD: Using this method, the manager multiplies the sales forecast into various expense heads by percentages. The percentage used for each category may be based on the managers experience. The expense allocation follows the direction of change in sales. E.g. if sales are forecasted to decline, then the budget allocation for all expenses heads will decrease as well. However, the effectiveness of this method is dependent on the firm having accurate sales forecasts. Despite the limitations, the managers know that if expenses are kept within their percentage budgets, final operations will come out as planned. FLOW OF INFORMATION FOR BUDGETING Sales Budget

Sales dept-expense budget (advertising, selling costs)

Administrative expense budgets

Production-department budget

Cost budgets

Profit & loss Budget

Revenues

Expenses

Budget periods: Budgets may be created yearly, semiannually and quarterly. Some firms prefer annual budgets to reduce the amount of paper work and time involved. Others make shorter budgets to make it more accurate and specifically designed for each selling season. Budgetary procedures There are two basic planning styles for making a budget. Top down:Top management sets objectives and drafts the plans for all organisational units. Bottom up: Different organisational units or departments prepare their own tentative Objective and plans. These are forwarded to the top management for consideration. The sales budgeting procedure differ from company to company with most differences tracing back to differences in basic planning styles. Budgeting making procedure:-

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1. Translate the Sales forecast into the work that must be done to achieve the forecast. 2. Each administrative unit must determine how much money it will need to meet the performance goals for it. a) Surveying each of the activities, the unit must perform. b) Determining the materials and supplies required to accomplish the jobs. c) Determining the materials and supplies required to accomplish the jobs. 3. Sales department budgets are complied into one man budget and it is forwarded to the financial executive who disseminates the information to the other department. Administrative heads tend to be overly generous in their estimates of funds they need for the coming year. Few work under tight budgets. Generally in with managed organisation all budgets are tight. Stages involved in Actual sales budget preparation:a) Each district sales manager estimates district sales volume and expenses for coming period and the districts contribution to the overhead. b) The top sales executive must argue effectively for an equitable share funds from the marketing division. The amount of money finally allocated the sales department depends upon value of individual budgetary propose to company as a whole. c) The top management appraises the proposal by looking at intrinsic men and probable value to the whole organization. Starting point is a carrel assessment of wants and needs of the prospects. d) The top management divides the available funds among the department and the share each receives depends on the ability of the department to accrue for the plan. ********************************************************************************************

UNIT - 4
Q.7:- What is sales control? How can it be effectively implemented? Ans: - SALES CONTROL Control is knowing what you want to do and being able to do. This definition applies whether it refers to a driver driving an automobile, to a captain commanding his ships, to a quarterback leading his team, or to a sales manager supervising his men. However, a more precise definition of control for the sales manager might know what you want your sales manager to do & bring able to get them to do it. When troops panic under fire and scatter in all directions, their commander has lost control he knows what he want his met to do, but he is unable to make them do it. Similarly, when one of salesman fails to meet a reasonable quota, or only makes half the calls he is expected to make, or neglect an important customer to the point where he loses the account, the manger lost control. Control is the essence of supervision; indeed, it is the purpose of supervision. A sales managers job is to multiply his selling effectiveness through these salesmen. But unless he can control the activities of his men, unless he can lead to do the right things at the right time, such multiplication of effectiveness is almost impossible. What is being control? a) General Behaviour The Sales Manager might view his job as if there were three separate areas in which he must exercise control over his salesmen. CONTROLLING: First, he must control their general behaviour i.e. he must discipline them making certain they conform to the companys standards of conduct & appearance. Controlling salesmens personal conduct is seldom a problem with good managers. Their leadership is firm, & the salesman knows that they are expected to conform to the companys standards of decorum & appearance. Horseplay at meeting or in the office is generally not

Pankaj Kumar, Rai Business School, Mob 9910665814

tailored or even attempted. The men come to work on time, they dress in keeping with their job and the area in which they work, they perform the minor duties expected of them, such as keeping their equipment serviced & clean. When breaches of discipline do occur, reprimands a firm, just & immediate. ATTITUDES: Then he must control the attitudes. He must see to it that they have genuine respect for their company, for their job, and their customers prospects. By the same token, the control of attitude in seldom a problem with good managers. Good attitudes are the natural result of good leadership. When a manager shows respect for companys rules & procedure when he exhibits pride in the selling profession, and when he takes the sales groups tasks seriously, he is shaping his salesmens attitude well. WORK PATTERNS Finally, the sales manager must control his salesmans work pattern must set goals, assigns tasks, and redirect efforts. STEPS IN OBTAINING WORK CONTROL A good system for controlling salesmens work involves these four basic steps: Deciding what goals your group should strive to attain; and deciding what activities your salesmen should undertake in order to reach these goals. Communicating the groups objectives- in terms of specific activities so that each salesman knows what he is expected to do and how he is expected to do it. Checking to see if the salesmen have done what was expected of them. Redirecting efforts when salesmen go astray & rewarding performance that meets expectations. Controlling daily activity Control through day to day contact Follow-up on given directions. Method of sales control Expenses to sales Miles-traveled to sales Actual day s worked to working days available Active prospects to active account. New customers sold to repeat customer sold. Rupee volume of new business to repeat business. Total expenses to total calls. Miles traveled of days worked Productive call to total calls. THE ICEBERG EFFECT It may be explained with the help of an e.g.: Take a salesman of a wide line of sporting goods. His job is to sell to sporting goods shops, hardware stores, and department stores. His experience, prior to taking this present job, has been in hardware merchandising, and, as a consequence, he favors selling to this group. This mans selling record was good. However, his manager noticed that a preponderance of his orders came from hardware stores, although this, he felt was not the pattern of the other salesmen in his orders came from hardware stores, although this, he felt, was not ht pattern of the other salesman in his group. So he decided to analyze the mans sales by types of account- something he had never bothered to do before. He also made a similar study of the five other salesmen in his group. The six-month record looked like this.

Pankaj Kumar, Rai Business School, Mob 9910665814

Percent of sales to Hardware Sporting Department Stores Good shops Stores Salesman A 46 16 38 Salesman B, C, D, E, F 21 22 57 The iceberg (total sales) showed that salesman A was actually over quota, but the detailed analysis indicated that the man might not be realizing the potential his territory as far as supporting goods stores and department stores well organized. It may be that, having got a complete view of the iceberg, the manager will want to make some of his effort to get this man to sell to the other outlets with the same enthusiasm he shows for hardware outlets. At least, he is a position to exercise more precise control over the salesmans activities than was before he made his analysis. In addition, he may have at the same time discovered that his other five salesmen could generate sales from hardware outlet if they reallocated their efforts somewhat. Getting reliable reports from salesmen Here are three questions to be asked to determine just how necessary a report a request for information might be: 1. Is this information necessary to maintain control of the salesmans activity for routing purposes, one company insisted that its salesmen file daily mileage reports. And yet, it was unable to demonstrate any way in which this information was ever used for routing control. Salesmen had complied freedom to route themselves. The only mileage figure actually needed available from the monthly expense report. 2. If there information is useful, is it being used? As already mentioned, reports that are not read and acted upon worthless even if they contain much potentially valuable information. The better to eliminate reports that you do not have time to use, because salesmen quickly discover whether or not they are performing worthwhile paperwork, ands they resent filling out reports that are of no practical value. 3. Is, there some other way to get this information? One manager was interested in the average number of calls his men had make on a customer before that prospect signed an order. He designed special form that showed the date of each call prior to the one in which the sale was made. The form was in use for 2 months before one of the salesmen suggested that they simply jot down the number of the order-getting call at the bottom of the order blank. This has the manager all the information he needed, and saved the salesman the trouble of completing the extra form. Dont base discipline on what salesmen report. Show that the reported data is read & used. Check reported information personally from time to time. Other control mechanism, which may be used to evaluate the effectiveness of the personal selling effort. Sales Audit A sale audit is a systematic & comprehensive critical & unbiased review and appraisal of the basic objectives and the policies of the selling function and of the organization, methods, procedures & personnel employed to implement those policies & achieve those objectives. Fundamentally, it answers the following questions: Who is buying what & how? Who is selling what & how? How is the competition doing?

Pankaj Kumar, Rai Business School, Mob 9910665814

How are we doing? Sales Analysis It is detailed study of sales volume Performa to gains insights on strong and weak territories, high-volumes & low-volume products and the types of customers providing satisfactory & unsatisfactory sales volume. Analysis of sales answers the following questions: Analysis of sales territories answers how much is being sold. Analysis of sales by customers answers who is buying how much. It reveals salespersons with good or below average sales performance What is being sold in the market? Cost Analysis The third tool available to control the sales effects in the organization is Market Cost Analysis. It analyses sales volume & selling expenses to determine relative profitability of particular aspects of sales operations. It determines the relative profitability of particular aspects of sales operations steps in Marketing Cost Analysis are:

Sales Analysis By territories By Sales Personnel By product etc.

Assign Selling Expenses By territories By Sales Personnel By product etc.

ANALYSIS OF RELATIVE Profitability

Exposing of relative
Conclusion: Thus an appropriately chosen control technique contributes to the effectiveness sales management. Periodic sales audits provide comprehensive appraisals of total personal-selling operations. It helps in identifying areas of strength potential for further exploitation & areas of weaknesses with potential improvement. Marketing cost analysis goes beyond analysis of sales volume probes selling expenses to determine relative profitability of particular aspect sales operations. Hence

Strengths & Weaknesses

Pankaj Kumar, Rai Business School, Mob 9910665814

control of the sales executives last from the general to the scientific methods available to improve the effectiveness of the person selling operations. *******************************************************************************************

Pankaj Kumar, Rai Business School, Mob 9910665814