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Sales Management

1
Session 1 & 2
 Sales Management
• Objectives
• Theories of Selling
• Sales Function

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Sales
Finished goods in
inventory

Distributo
r
Retailer

Customer

Consumer

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Management
Sales Management is defined as ” The
 Planning
 Direction and
 Control of personal selling

Including
1. Recruiting,
2. Selecting
3. Equipping
4. Assigning
5. Routing
6. Supervising
7. Paying and motivating
as these tasks apply to personal sales force” -AMA

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Management
Objectives
 Sale of Products/Services
 Add profits to Business operations
 Fulfill social obligations

Organizing planning and implementing the


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

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

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

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

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Management
. Buying Formula Theory

 .This Theory was given by late E.K.


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

Need Solution Purchase Satisfactio


n
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Management
Behavior Equation Theory
 B=P*D*K*V
where
 B= Response or the internal response
tendency, i.e. The act of Purchasing a Brand
 P = Predisposition
 D = Present Drive (Motivation Level)
 K = “Incentive Potential”, i.e. The Value of
Product or its Potential Satisfaction to buyer.
 V = Intensity Of all cues

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Knowledge about the
Product / Customers / Technology

 Contextual knowledge to close the sale

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Steps In Selling

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Explanation:- I
 Prospecting: In sales, the process of identifying
likely customers by searching lists of previous
customers, lists of trade associations,
government publications, and a variety of
other sources. Systematically collecting names
of the prospects (called leads).
 Steps in Prospecting:-
 Formulating Prospect Definition

 Searching out Potential Account

 Qualifying Prospects

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II
 Presentation & Demonstration:- The crucial
task of Selling is communicating about Product
to buyer. A typical sales presentation follow
AIDA approach.
Usually in sales Presentation there is
demonstration.

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III
 Sales Resistance / Handling Objection :- During
sales presentation or at the time of closing
sale, a salesman can encounter objection from
the prospects

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IV
 Closing the sale: It result for order into Product
& Services. It is climax of whole game of
selling

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5 E’s
1. Effective
2. Efficient
3. Enjoyable
4. Enthusiastic
5. Ethical…

Write an article on : An Effective Sales Manager

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

 Building the business on deals


 Keeping all customers and clients
 Getting new customers  Relationship focused for results

 Selling focused  Incentive for long term relationships


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

Rewards incentives for doing


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

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Session 3
 Sales planning

 Strategic role of sales


management

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

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


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

 Sales Potential represent sales opportunity available to a


particular manufacturer/ Seller such as while a market
opportunity indicate sales opportunity available to an entire
industry

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Sales planning-
Steps
1. Objective setting
2. Designing sales force-Structure & Size
3. Deciding sales force compensation
4. Recruiting and Selecting sales force
5. Training to sales people
6. Guiding and Motivating the sales force
7. Performance rating of the sales force

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Management
Planning sales call
Looking ahead on the basis of present and immediate past.
1. Objectives
2. Scope of business

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


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

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Management
Strategic Role of Sales
Management
Key Decision areas
 Determine the size of sales force

 Decision regarding type and quality of sales force required

 Designing the sales organization

 Territory designing

 Recruitment and training procedures

 Task Allocation

 Compensation of Sales force

 Performance appraisal and control system

 Feedback Mechanism to be adopted

 Managing channel relationships

 Co-ordination with Marketing Deptt.

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Management
Sales Strategy-1
Relationship Strategy

Establishing and maintaining a partnership type


relationship internally as well as with the customer is
a vital aspect of selling.

The sales force that builds a effective relationship


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

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

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Management
Sales
Strategy-3
Instant Service

 Q-Highest Quality
 C-Lowest cost
 D-Least delivery times

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

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Management
Session 4
 Sales Quota
 Sales Territory

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Sales Quotas/targets
Refers to
 an expected routine assignment to sales

units,such as territory,districts and branches


etc.
 Also assigned to sales people (individual

/groups) over a particular time period


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

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

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Management
. Types of Quotas
Basic types
.

Sales Quota
Expense Activity
Volum combinations
Quotas Quotas
e
Quota
s

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Management
. Sales Volume Quotas
Sales
Volume
. Quotas

Product Product Sales Sales Sales Sales Sales


Line Range Division Territories Districts Offices Force

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

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

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Management
WHAT IS A SALES TERRITORY?

 A sales territory is composed of a


group of customers or a
geographic area assigned to a
salesperson.

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WHO IS RESPONSIBLE FOR
TERRITORIAL DEVELOPMENT ?

 Development of sales territories is


usually the responsibility of the
sales manager overseeing the
larger sales units within the
organization.

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WHY ESTABLISH SALES
TERRITORIES?

• To obtain Proper market coverage.


• To establish a salesperson’s
responsibility.
• To evaluate performance.
• To reduce sales expense.

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Why sales territories may not be
developed:

• Salespeople may be more motivated


if they are not restricted.
• The company may be too small.

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Session 5
 Sales Control

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Sales Control
 Is a function of every
management to ensure the
operations are being carried out as
per the plan to achieve the
objectives.

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

Profitability Sales Controller To Examine where the Customer attitude


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

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Management
Steps in designing a sales control system
.
 .
Objective setting
 Designing different control levels
 Designing a report system and
feedback system
 Deciding tools and techniques of
control
 Variance analysis and reasons
thereof Sales and Distribution
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Management
. Sales Audit
Sales audit is a
.
 Comprehensive

 periodic

 Systematic

 Independent examination

of a company’s
 environment

 objectives

 strategies and

 activities

To determine problem areas an opportunities to


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

planning and over the results of a


company
 To analyze the past performance and

learn from the mistakes made


 To bring alertness to the organization

 To award increments promotions and

give extra rewards


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

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Management
. Recruitment
Process of locating and attracting job
.
applicants.
Finding potential job applicants Identifying future good employees

Getting them to apply for the job Provide information about company

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

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

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

 Job analysis – result of formal job analysis-


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

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

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Management
Training
 Give a man fish he will eat it , Train a man how
to catch a fish he will feed his Family.

This statement shows the importance of


Training

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Training Process

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

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

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

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Management
Session 8
• Compensation
• Evaluation of Sales Force

(**Assignment)

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Management
Compensation
Compensation plans for the sales force
are designed to achieve several
objectives
 Assist the company to meet sales

projections
 To reward individual sales persons

 To bring earnings to desired level

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

Appraisal and recycling Implement long and


short range progammes

Measure individual, group and Communicate compensation policy


Organizational performance

Relate rewards to
performance

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

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Management
Evaluation of Sales Force
Major steps
 Establishing sales goals and objectives

 Developing the sales plan

 Setting performance standards

 Allocating resources and sales efforts in

implementing the sales plan


 Evaluating sales force performance

 Implementing corrective actions

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

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Management
Stages in effective performance evaluation
.
. Performance Planning

Performance Appraisal

Performance Review

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

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

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Management
Thank You

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