Sales_related_Marketing_policies.pptx

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Sales Related MarketingPolicies





IntroductionSales related marketing policies directl

in!uence the "obs o# sales e$ecuti%es&

These policies pro%ide the direction toorgani'e (manage and control the salese)ort &

These are generall compan go%ernedand #ormulated policies *hich areadministered b sales e$ecuti%es&



Product Policies – What toSell ? The products a compan sells determines

its basic nature&

These ser%e are guidelines #or makingproduct decisions&

The are deri%ed #rom product ob"ecti%es



Product PoliciesProduct Line Policy

+& Short line,speciali'ation or #ull line ,*ideselection policies&

.& /o%erned b *illingness to take risk&0arro*er the line greater the risk&

1. Changes in Product Oferings

-to determine the product tuning *ith market-to determine products *hich needs to be dropped oradded



Product Policies2. Reappraising the product line and line simplication

-adding or remo%al o# pro1table and non pro1table product linesand customer accounts&

3. Reappraising the product line and line diversication

-relati%e to gro*th ob"ecti%es

4. deas !or ne" products

-Internal and e$ternal sources #or ne* ideas&

#. $ppraisal o! proposed ne" products.

-criteria is pro1tabilit( nature and si'e o# likel markets(competition( price polic( sales programs and legal implications&



Product PoliciesProduct %esign Policy

+& 2re3uenc o# design change

.& 4$tent to *hich designs are to be protected #rom

coping&

. Product &uality and 'ervice Policy

+& 5igh 3ualit products re3uire less ser%ice and lo*3ualit products re3uires high ser%ice&

.& /uarantee polic – ser%es either protecti%e orpromotional purposes&



Distribution Policies – Who toSell ?Policies on (ar)eting Channels

6hannels should be chosen in order to obtainthe optimum combination o# pro1t #actors&

Time dimensions must be considered inaddition to 7

+& Sales 8olume Potential

.& 6omparati%e distribution costs

9& 0et Pro1t Possibilities



Distribution PoliciesPolicies on %istri*ution ntensity

2ollo*ing distribution strategies areimplemented b compan 7

+&Mass Distribution

.& Selecti%e Distribution

9& 4$clusi%e Agenc Distribution



Pricing PoliciesPolicy on Pricing Relative to

Competition

+& Meeting the competition

.& Pricing abo%e the competition

9& Pricing under the competition

. Policy on Pricing Relative to Costs

+& 2ull cost pricing.& Promotion pricing

9& 6ontribution pricing



Pricing PoliciesPolicy on +ni!ormity o! Prices to

%iferent ,uyers.

6ompan choose bet*een7

+& :ne-price polic ,same price

.& 8ariable price polic , price determined bindi%idual bargaining

5ere bargaining po*er o# buers %aries *ith thesi'e o# transaction&



Pricing PoliciesPolicy on List Pricing

;ist pricing takes %ariet o# #orms most common being7

Printing the price on package

Sales personnel to suggest the resale price to buers&

Policy on %iscounts

+& Trade Discounts

.& <uantit Discounts



Pricing Policies-eographical Pricing Policies+& 2ree on =oard ,2&:&= pricing – customer pas the

#reight

.& Deli%ered pricing – seller pas the #reight

9& 2reight absorption – compromise bet*een deli%eredand 2&:&= pricing&

. Policy on Price Leadership.

Price changes b Market ;eader and 2ollo*ers. Decision depends upon marketer>s relati%e market

position and the image o# leadership that it desires tobuild and maintain



Pricing PoliciesProduct Line Pricing Policy Di)erent items in product lines compete *ith each other&

Price space bet*een the indi%idual members o# the line

=ottom o# line as tra@c builders> and top o# line as

prestige builders>

Competitive ,idding Policy Industrial and go%ernment buers solicit competiti%e

bids #rom potential suppliers and a*ard the business tothe bidder o)ering the best proposal

Decision depending upon %arious #actors such as price(deli%er dates( reputation #or 3ualit etc&



6hapter

2:RMB;ATI0/P4RS:0A;-S4;;I0/ STRAT4/C



A/40DA 6ompetiti%e Settings

--Pure( Monopolistic( :ligopolistic( 0o Direct 6ompetition

Personal Selling :b"ecti%es

-- <ualitati%e <uantitati%e

Determining the kind o# sales personnel--Product Market Analsis( Salesperson>s role in securingorders( choice o# basic selling stle

Determining the si'e o# the sales #orce--Workload( Sales Potential( Incremental

Indi%iduali'ing selling strategies



6ompetiti%e StrategiesPure

;arge number o# buers and sellers 0o one po*er#ul enough to control or in!uence market

prices

0o buer or seller is so big *hich can impact theproduct>s total demand and suppl All products are identical( no di)erentiation All buers are a*are o# all sellers> prices

0ot a real *orld situation and hence no companconcerns itsel# *ith a particular personal sellingstrateg #or Pure 6ompetition



Monopolistic

Man competing producers sell products that are

di)erentiated #rom one another ,ie& the products aresubstitutes( but are not e$actl alike

4as #or additional competitors to enter the market

Ad%ertising di)erentiates the brand in the minds o# 1nalbuers and stimulates selecti%e demand

Ee element in marketing strateg is the abilit to

di)erentiate the product , b both Ad%ertising and PersonalSelling

Personal 'ellings role is that o! servicing thedistri*ution net"or) and stimulating promotional

eforts *y the middlemen



Oligopolistic

0umber o# competitors are small enough that the areindi%iduall identi1ed and kno*n to each other

Di@cult #or ne* competitor to enter the market

Success#ul organi'ations keep on gro*ing and less success#uldisappears

:ligopol produces most aggressi%e competition

Strategies o# one plaer has deep impact on the strategies o#other plaers

Personal 'elling 'trategy plays important role in*uilding and maintaining dealer cooperation/ in servicingdistri*ution net"or) and in gathering in!ormation oncompetitors activities



0o %irect Competition

=oth monopol or oligopol ha%e indirectcompetition

The %ie sellers in other industries #or the sameprospects> interest and buing decisions

4%en in case o# no direct competition( personalselling and ad%ertising plas an important role

,oth reuire the efective implementation

o! personal selling strategy in terms o! *oth)ind and num*er o! sales personnel even incase o! indirect competition

6hoosing pricing strateg calls #or e)ecti%e

implementation o# personal selling strateg



Personal Selling :b"ecti%es&ualitative

8ar *ith competiti%e setting

;ong Term

6arried #rom one operating period to another

When 3ualitati%e ob"ecti%es change( there are

changes in nature o# sales "obs and si'e o# thesales #orce

&uantitative

8ar *ith competiti%e setting Short Term

Ad"usted #rom operating period to operatingperiod

Since short term( the impact more upon the si'e



Determining the kind o# Sales Personnel

ach company deals "ith uniue set o! mar)eting!actors

Strengths Weakness o# productsMoti%ations and buing practices o# its customers and

prospects

Pricing Strateg

6ompetiti%e Setting

Di)erent selling "obs re3uire di)erent le%els o# selling and nonselling acti%ities( training( technical and other kno*ledge

e must understand "hat is e5pected o! salesperson Fob :b"ecti%es

Duties and Responsibilities

Per#ormance measures



Product Market AnalsisProduct 'pecialists

When product is highl technical

Re3uiring salespersons to ad%ise on uses and applications

(ar)et 'pecialists

Product is non technicalWhen di)erent kinds o# customers ha%e uni3ue buing

problems and re3uire special sales approaches or needspecial ser%ice

Com*ination o! *oth

On the *asis o! Product6(ar)et grid/ you can chose"hether the sales personnel should *e product ormar)et specialist



Tpes and Amount o# Speciali'ationin Selling :rgani'ations

Dominant

Interdependence

Dominant Expertise

Between Customers Between Products

Product Technologies Product Specialists Full-Line Salespersons(supported by ProductManagers)

Customers’ Applications Customer Specialists Full-Line Salespersons(specialied by !ind o"customer)



Analsis o# Salesperson>s role in securing orders

Salespersons ma be acti%e or passi%e insecuring orders

The role in!uences the decision o# kind o# sta)

re3uired

Salespersons ma seek order aggressi%el

The need onl take orders coming their *a

Salespersons ma act as ad%isors to

middlemen or the customer



(issionary 'elling



(issionary 'elling

Increase sales %olume b assisting customers *ith theirselling e)orts

Persuade indirect customers to b #rom the compan>sdirect customers

The also pla a role in in!uencing people *ho do notpurchase the product but *ho in!uence its purchase

7echnical 'elling

Deals primaril *ith compan>s established accounts

Increase their %olume o# purchase b pro%iding technicalad%ice and assistance

Per#orms ad%isor #unctions similar to the missionarsalesperson

In addition( sells direct to industrial users and other buers

In this stle( abilit to identi#( anal'e and sol%ecustomers> problem is important



0e"6*usiness 'elling

2ind and obtain ne* customers

6on%ert prospects into customers

Bsuall salespersons are creati%e and ingenious andposses high degree o# resource#ulness

Sometimes salesperson doing trade selling engagesthemsel%es in ne*-business selling also



Determining the si'e o# the sales #orce

or)load (ethod

+& 6lassi# customers( both present and prospecti%e into sales%olume potential categories

.& Decide on the length o# time per sales call and desired call

#re3uencies on each class

9& 6alculate the total *ork load in%ol%ed in co%ering the entiremarket

G& Determining the total *ork time a%ailable per salesperson

& Di%ide the total *ork time a%ailable per salesperson b task

H& 6alculate the total number o# salespeople needed

'ales Potential (ethod



'ales Potential (ethod

6oncept o# Sales Personnel Bnit

A salesperson ma represent more or less than onesales personnel unit depending upon hisher skillsand e$pertise

Sales "ob descriptions are constructed onmanagement assumption that the describe *hatthe a%erage salesperson *ith a%erage per#ormance*ill accomplish

With abo%e in#ormation( *e can deri%e amount o#sales %olume each salesperson should produce

Di%iding the abo%e amount into #orecasted sales



Sales Potential Method

0 8 '9P :1 ; 7<

here 0 J 0umber o# sales personnel unit

S J 2orecasted sales %olume

P J 4stimated sales producti%it o# onesales personnel unit

T J allo*ance #or rate o# sales #orceturno%er



ncremental (odel

6ompan de%elops a sales response #unction ,a

3uantitati%e #unction that>s describes the relationshipbet*een the amount o# personal selling e)ort and theresulting sales %olume

=ased on the proposition7 0et pro1ts *ill increase*hen additional sales personnel are added i# theincremental sales re%enue e$ceed the incrementalcosts incurred

In#ormation re3uired7 Incremental costs andIncremental re%enue

6alculate the net pro1t contribution resulting #rom the

addition o# each salesperson



Incremental Model

Although conceptuall correct( it is di@cult toappl

0ot suited *here personal selling is not the

primar means o# making sales ,*heread%ertising and other promotions pla animportant role

2ails to account #or possible competiti%e reactions



Indi%iduali'ing Selling Strategies to customers 4ach salesperson must indi%iduali'e his or her dealings

*ith the customer

Regardless o# the basic selling stle or the role o# ordergetter or order taker( the salespersons> success dependsupon the outcome o# interaction *ith the customers

=eha%ior and sales pitch o# the salesperson %aries #romcustomer to customer

Selling skills is a #unction o# bothpreplanning o# each sales callper#ormance on the call itsel#

Indi%idual salesperson>s per#ormance ultimatel determinethe success or #ailure o# compan>s o%erall personal-selling strateg( sales management has a %er importantrole in helping them de%elop and impro%e selling skills



The 4)ecti%e Sales 4$ecuti%e



Agenda• ature o" Sales Management Positions

• Position *uide + Sales Manager

• Position *uide + #istrict Sales Manager

• Functions o" Sales ,ecuti$e

• .ualities o" ,""ecti$e Sales ,ecuti$e

• &elations %ith Top Management

•

&elations %ith Managers o" /ther Mar!eting Acti$ities

• Compensation Pattern

• Conclusion



4)ecti%e Sales 4$ecuti%e

The 'ob o" the sales eecuti$e is more action oriented and

less planning oriented

Main concern o" sales management is the 0present1 + the

0here and no%1

Their decisions not only a""ect the sales department2 but

may ha$e signi"icant implications else%here in the

organiation



0ature o# Sales ManagementPositions

• &e3uirements o" the sales eecuti$e’s 'ob position $ary "rom

company to company and "rom position to position in a company

• 4t is possible to generalie about acti$ities and responsibilities o"

sales managers2 district sales managers2 product managers and

other sales or mar!eting eecuti$es

• Some companies ha$e "ormulated concise statements o" duties

associated %ith $arious positions2 !no%n as 'ob or position

descriptions



Position /uide – Sales Manager• &eports to the $ice president o" mar!eting

• The primary ob'ecti$e is to secure maimum $olume o" dollar sales through

the e""ecti$e de$elopment and eecution o" sales programs and sales

policies "or all products sold by di$ision

• #uties and responsibilities5

– Sales Program

– /rganiation

– Sales Force Management

– 4nternal and ,ternal &elations

– Communications

– Control



Per"ormance is satis"actory %hen2

#epartment’s dollar or unit sales are e3ual to or eceed the

3uantities budgeted

Pro"it contribution o" the sales department is in line %ith

plan

#etails o" sales plan are in %riting and are acceptable to

mar!eting management

Turno$er o" sales personnel is maintained at a le$el regardedas satis"actory by mar!eting management



Position /uide – District Sales Manager

• &eports to the sales manager

• The primary ob'ecti$e is to secure maimum dollar sales o" the

company’s products in the sales district in accordance %ith

established sales policies and sales programs2 %ithin the limits

o" sales budget

• #uties and &esponsibilities5

–

Super$ision o" Sales Personnel – Control

– Administration

– Communications



• Per"ormance is satis"actory %hen2

– #istrict’s dollar and unit sales are e3ual to or eceed the

3uantities budgeted

– #istrict’s total epenses are no higher than the amounts

budgeted

– Pro"it contribution o" the district o""ice and %arehouse and

stoc! "acilities is in line %ith plan

–

Turno$er rate o" district sales personnel is maintained at a

le$el regarded as satis"actory by the (general) sales manager



2unctions o# sales 4$ecuti%e• 6asically has t%o sets o" "unctions

- /perating

- Sales Force Management

- andling relationships %ith personnel in other company

departments and %ith trade

- Communicating and coordinating %ith other mar!eting

eecuti$es

- &eporting to some superior eecuti$e



- Planning

- Setting personal-selling goals

- #e$eloping sales program designed to achie$e these

goals

- Formulating sales strategies and personal-selling

strategies

- Putting together plans "or their implementation

These "unctions $aries %ith

. The type o" products

. The sie o" the company

. The type o" super$isory organiation



<ualities o# 4)ecti%e Sales 4$ecuti%e

e should ha$e

• Ability to de"ine the position’s eact "unctions and duties in

relation to the goals the company should epect to attain

• Ability to select and train capable subordinates and %illingness to

delegate su""icient authority to enable them to carry out assigned

tas!s %ith minimum super$ision

• Ability to utilie time e""iciently

• Ability to allocate su""icient time "or thin!ing and planning

• Ability to eercise s!illed leadership

Relations *ith Top



Relations *ith TopManagement

,""ecti$e sales eecuti$es need to !eep the top management

abreast o" their progress as their personal goals are

intert%ined %ith company’s goals

They should not be dispensable to the company and should

be able to delegate tas!s e""ecti$ely

They update the top management o" all the latest acti$ities

through periodic reports and presentations



Relations *ith Product management

Product planning and "ormulation o" product policies

re3uires numerous decisions

Sales eecuti$es pro$ide input "or these decisions

Their contact %ith the mar!et through subordinates and

sales personnel pro$ide them %ith "eedbac! about product

per"ormance and acceptance generally not a$ailable "rom

other sources



Relations *ith PromotionManagement

Sales eecuti$es play a $ery important role in promotional

acti$ities as they are the one %ho actually implement them

They must be in$ol$ed in "ormulating policies as they are

$ery close to the customers

The sales "orce must be !ept updated about all the latest

promotional acti$ities



Relations *ith Pricing Management

Sales eecuti$es ha$e much clearer ideas o" the prices the

buyers are %illing to pay2 because o" the close and

continuing contacts %ith the mar!et

Pricing policies need to be "ormulated by a committee

comprising o" members "rom di""erent departments

/nce the policy is established2 its implementation is the

responsibility o" the sales eecuti$e



Relations *ith DistributionManagement

#istribution policies are ma'or determinants o" the breadth

and compleity o" sales department’s organiation and

"unctions

4t has an impact on the sales organiation and its acti$ities

Sales eecuti$es play !ey roles in pro$iding in"ormation

needed "or their "ormulation



6ompensation Pattern 2or Sales4$ecuti%es

• Compensation pattern di""ers on the basis o" position o" the

sales eecuti$e in the hierarchy and the sie o" the company

• Sales eecuti$e recei$e some o" their pay as bonuses2

commissions and other 0incenti$e1 payments

• These payments are based upon relati$e pro"it per"ormances

at higher eecuti$e le$els and upon sales $olume achie$ed

relati$e to sales potentials at lo%er eecuti$e le$el

• More than hal" o" the sales eecuti$es ha$e stoc! options



Thank Cou K

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