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Sales Management

Sales ManagementSales Management is a part of Marketing Management.

Sales Management can broadly be defined as – The Planning,

Direction and Control of the Personal Selling function in an

Organization, which includes

a) Recruiting (e) Selecting

b) Equipping (f) Assigning

c) Routing (g) Supervising

d) Paying (h) Motivating ………….

the Sales Force involved directly or indirectly in the Personal Selling

function.

Sales Management can also be defined as – the planning, Organizing,

Leading and controlling of the Personal Selling function.

 

Sales ManagementSales Management can also be defined as – the planning, Organizing, Leadingand controlling of the Personal Selling function.  The fundamental objectives of Sales Management are : • Generating Sales Volume.• Contribution towards the profits of the Organization.• Ensuring continued growth in business. How Sales Management directly affects the profits of an Organization can bejudged from the following equation:  (SALES) – (COST OF SALES) = (GROSS MARGIN)  (GROSS MARGIN) – (EXPENSES) = (NET PROFIT)

Sales ManagementFrom the above it would be clear that more the SALES higher are

the chance of increased GROSS MARGIN. And since expenses do

not necessarily increase with increase in Sales, rather expenses

reduce with increase in Sales, the NET PROFIT is bound to increase.

 

The above objectives are achieved by members of Organization

Through Personal Selling activities, which makes it imperative to

understand the concept of Personal Selling very clearly and study its

bearing on the selling as well as buying process.

 

It is to be noted that Personal Selling is not the same as

Salesmanship. Rather Salesmanship is a part of Personal Selling.

  

Marketing vs Sales Marketing Approach Sales Approacha) Identify markets a) Identify customers• End use analysis - Prospecting for customers• Desk research - Who else, where else approach• Market research - Meet customer’s specific needs b) Develop products b) Meet customer’s specific needs Research & Development - Application engineeringc) Develop & maintain an effective c) Overcome the obstacles in the marketing system field of sales of the product/service.• Pricing strategy -Handling objections• Product/service promotion - Personal selling• Advertisement campaign - Developing quotations• Distribution strategy - Submitting tenders• Packaging - Combating competition• After Sales Service - Matching competitor’s moves d) Ensure profitability & adequate return-on-investment d) Ensure profitability• Costing system - Return on time invested• Inventory control - Control on Accounts(clients)• Receivables - Margin on sales• Credit control - Control on selling expenses 

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PERSONAL SELLING

Personal Selling can be defined as a means forimplementing Marketing Programs – along withother marketing elements such as Pricing,Advertising, Product Development & Researchand Physical Distribution, etc.

Personal Selling vs Impersonal Selling Personal Selling involves person to person contact. It requires :

1. To clarify to the buyer the unique benefits he can get by buying the

product/service.2. To satisfy the objections of the customer.3. To understand the consequences for the buyer; i.e. the hidden, unexpressed

reasons for not buying and to offer solutions to overcome these.4. To convert implicit needs into explicit ones.5. To give confidence and reassurance to the customer.6. To educate the customer and to effectively differentiate his company,

product/service, from those of the competitors.7. To solve problems.8. To get direct feed-back from the market and be close to the customer.9. To gain a competitive advantage. Impersonal Selling also does the above but not through person to person contact.These functions/activities are done with the help of Visual, Audio and Audio-Visual aids like – information leaflets, advertisements in the print media, advertisements inthe audio-visual media, voice-mail service etc.

HOW DIVERSE IS THE PERSONAL SELLING FUNCTION?

A. Service Selling

• Inside Order Taker – Counter salesmen inside a Departmental Store etc. e.g. Sales executive at the ‘BATA’ shoes show-room.

• Delivery salesperson – mainly engaged in delivering the product/service. E.g. the person filling oil at the Bharat Petroleum Service Station; delivering IndianOil cooking gas, person delivering you your Credit card.

• Route or Merchandising salesperson – a typical toiletries salesman who collects order and ensures proper display of his products at the shop.

• Missionary salesman – the Medical Representative detailing the Doctor about a new formulation. He does not take orders but only disseminates latest information. Door-to-door campaign for participating in the elections/voting.

• Technical Salesperson – strictly speaking he is a consultant to the client. E.g. project consultancy by an Architect.

HOW DIVERSE IS THE PERSONAL SELLING FUNCTION?

 B. Developmental Selling• Creative Salesperson of tangibles – selling a new software, selling a newly

invented gadget.• Creative salesperson of Intangibles – selling insurance policy,

Advertisement executive prospecting for accounts. C. Basically Developmental Selling, not requiring unusual creativity 

• ‘Political’, ‘Indirect’ or ‘Back–Door’ Salesperson – a salesperson selling one commodity gets orders or another commodity because of his Organizations infrastructure. E.g. an exporter of garments form India gets an order from a client in England for canned apple juice(because of his efficient and ethical dealing with the client)

• Salesperson Engaged in Multiple Sales – e.g. an Advertising Executive giving many presentations to the ‘Agency Selection Committee’ of a Company. One concept can be accepted /all can be rejected.

THEORIES OF PERSONAL SELLING

a) STIMULUS RESPONSE SELLING – “Buy One Get one Offer” – a stimulus to the ‘prospect’ strongly influences the decision making process and converts him into a buyer.

b) MENTAL STATE SELLING {A.I.D.A.S. Model} – Attention of the customer is drawn through unique product/service feature; Interest of the prospect is developed; prospect develops Desire and converts to a potential customer; Action takes place (customer buys the product/service); Customer derives Satisfaction from the product/service.

c) NEED SATISFACTION SELLING – There was a ‘need’ for a T.V. that will adjust its brightness according to the room luminosity – L.G. Television being sold with ‘Golden Eye’ feature.

d) PROBLEM SOLVING SELLING – Pollution was a serious problem, CNG concept was sold to the Government.

e) CONTINGENCY SELLING – Distress Sale.

A TYPICAL PERSONAL SELLING PROCESS There are five stages in a typical Personal Selling process:

1. Preparation:• Planning the itinerary – Time & Territory Management• Planning each sales call.• Prospecting and evaluating new customers.2. Opening a sales call:• With new customers(under prospecting)• With existing customers - Inventory Check - What is new to offer.3. Presentation of the Product/service:• Features, Advantages and Benefits of the offering/s.• Demonstration, if possible, of the offering• Handling objections - Obstacles to sales {customer is convinced but sale is not effected because customer is short of cash/customer cannot carry the product today solution could be credit card/finance option and home delivery next day} - Sales Objections{customer is dissatisfied because of some attribute of the product detailed by the salesperson but not available. E.g. a ‘ceiling fan’ salesperson details that there are ‘double ball’ bearings present but the customer finds only one ‘ball’ bearing and the other is a ‘bush’ bearing.• Negotiations.

A TYPICAL PERSONAL SELLING PROCESS

3. Closing of the sales call:• Timing of the sales call.• Methods of closing.

4. Service:• Problem solving.• Marketing Intelligence.• Merchandising.

A TYPICAL PROSPECTING PROCESS To economize on scarce Productive Selling time, planning work is done to

eliminate calls on non-buyers. This ‘Planning work’ is called prospecting. Thesteps involved are: 1. Formulating Prospect Definition: Persons/Organizations who have the

willingness, the financial capacity and authority to buy the product or service being offered by the personal selling functionary is a PROSPECT.

2. Searching out potential accounts: The sources can be directories of all kind; news and notes in trade magazines/journals; membership list of Associations; friends and acquaintances; etc.

3. Qualifying prospects & determining probable requirements: Prospects above a certain level of requirement are considered as ‘Qualified’ and are pursued unless otherwise future growth/other factors are of significance.

4. Relating company products/service to each prospect’s requirements: Final step is to approach the prospect and convince him that his requirement will be satisfied by your Company’s product/service.

SALES RELATED MARKETING POLICIESSales related Marketing Policies directly influencethe jobs of the sales executives. There are threemajor types of such policies: 1. Product Policies – what to sell. 2. Distribution policies – whom to sell. 3. Pricing policies – at what consideration. 

PRODUCT POLICIES1. Marketing Policy related to Product objectives: The Personal Selling style would alter

if a Company changes its ‘Product Objective’ from ‘providing the customer best value for money products’ to ‘providing the customer the most economical product’.

2. Marketing Policy related to Product Line: Only ‘Cornflakes’ is a Short Product Line –

e.g. Mohan’s Cornflakes ; Whereas ‘Kellogg’s’ has a Long Product Line of ‘Breakfast Cereals’. The Personal Selling activity would vary in both cases. The Management keeps reviewing the market scenario and the following decisions follow :

a) Changes in product offerings: Reappraisal of the existing product lines is

done at regular intervals. Reappraisals serve two purposes :- i) to determine whether individual items are still in tune with market demand. ii) To identify those that should be dropped from, or added to, the line. e.g.: ‘Fiat’ dropped their old model to come up with ‘Sienna’ and then further brought ‘Palio’. ‘Hindustan Lever’ appraised the situation of ‘Lifebuoy’ and launched ‘Lifebuoy Personal’.

PRODUCT POLICIESb. Re-appraising the product line and line simplification: The

Product Lines are reviewed and appraisal is done in terms of – strengths & weaknesses as compared to competitors; whether product features are in line with consumers desirability; profitability for the Company.

E.g. Scooters India Limited, which was earlier into the manufacturing and marketing of Two-Wheeler (Vijay Super scooter) and Three Wheeler (Vikram), re-appraised their product lines and took a conscious decision to discontinue the Two Wheeler line and continue with the Three Wheeler line. (Line Simplification)

c.   Re-appraising the product line and line diversification:e.g.: Tata Engineering & Locomotive Company(TELCO) diversified from Trucks to Passenger Cars.

d.  Ideas for new products: e.g. : ‘India Today’ weekly launches a ‘Daily Newspaper’.

PRODUCT POLICIES 3. Product Design Policy : The two main policy decisions on product design

are : a) The frequency of design change. b) The extent to which design should be protected from copying. This policy is very relevant in certain industries – like garments,

automobiles, mobile phones, home appliances etc.

Design Protection is done through various Legal procedures – Trade Mark registration, Design Registration, Design/Process Patent, Copyright etc. Regular design changes, in line with the current consumer preferences, goes a long way in helping effective personal selling.

4. Product Quality and Service Policy : ‘Khaitan’ fans come with a seven year warranty. ‘Crompton’ fans come with a two-year motor guarantee.