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MS-62 SALES MANAGEMENT SESSION-1 BLOCK-I SALES MANAGEMENT FUNCTIONS UNIT-1 INTRODUCTION TO SALES MANAGEMENT UNIT-2 PERSONAL SELLING UNIT-3 SALES PROCESS

UNIT-1 INTRODUCTION TO SALES MANAGEMENT SALES MANAGEMENT: It has been defined as the management of a firm’s personal selling function while distribution is the management of the indirect selling effort i.e.selling through extra corporate organizations which form the distribution network of the firm. The sales management task thus includes analysis, planning, organizing, directing and controlling of the company’s sales effort.

DISTRIBUTION MANAGEMENT Distribution (or place ) is one of the four elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user. Distribution Management comprises management of channel institutions as well as physical distribution functions.

EXCHANGE PROCESS It is the sale and delivery of goods/services from the manufacturer to the consumer can be consummated directly i.e. by the firm itself through its own sales force or indirectly through a network of middleman such as wholesalers and retailers.

Essential tasks need to be performed in order to consummate successful exchange Contact- finding and communicating with prospective buyer Prospecting- Bringing together the marketers offering and the prospective buyer Negotiation- Reaching an agreement on price and other terms of the offer so that ownership and possession can be transferred. Promotion- Of the marketers offerings, and his satisfaction generating potential Physical distribution- Actual transfer of possession Collection- Of relevant consumers information and revenue in exchange of goods or services

Interdependence of Sales and Distribution All organizations use their own sales force or distribution network to reach out to their customers.Activities of the sales organization would have to be coordinated with channel operations if sales goals have to be effectively realized. The decision of the organization to allocate certain responsibility in the exchange process to its channel members would define the scope of responsibility of its own sales force and thereby would determine the type of personnel and training required.

Interdependence of Sales and Distribution Even though, an organization may decide to deal directly with its wholesaler, semi wholesaler, retailer or consumer,it is required to decide upon the type of help it will provide to the first and subsequent level of intermediaries. The choice before an organization to have direct distribution, indirect distribution or a combination of the two is of strategic importance and depends upon factors such as the degree of control, flexibility, costs and financial requirements etc.The scope of distribution would define that of the other.

Interdependence of Sales and Distribution To implement overall marketing strategy, the manufacturers need the cooperation of distribution outlets in terms of adequate stock maintenance, in-store displays, local advertising, point of purchase promotion.Within the corporation, the sales organization is the initiator as well as the implementer of these dealer support operations.This would mean that the sales management has the responsibility of structuring organizational relationship within their own department and with interacting organizational entities.

Key decision areas in Sales Management relevant to strategy formulation Deciding upon type and quality of sales personnel required Determination of the size of the sales force Organization and design of the sales department Territory design Recruitment & training procedures Task allocation Compensation of sales force Performance appraisal Feedback mechanism Managing channel relationship Coordination with other Marketing department

Strategic Formulation Process Step1- Assessment of the competitive situation and the corporate goals to determine the output that sales management is expected to give. Step2- Define sales management objectives in terms of delivering these outputs both quantitative and qualitative. Step3- Design sales strategy by deciding upon: type of sales effort required, type of sales personnel required, size of the sales force, territory design, channel support & coordination

Framework for joint decision making in sales and distribution management Distribution channels Achievement of sales Goals through Company’s sales force Distribution channels Distribution channels Personal & Prospecting through Personal & Non-personal Promotion through Company’s sales force Company’s sales force

Framework for joint decision making in sales and distribution management Distribution channels Maintaining Inventory through Corporate organization Distribution channels Corporate sales organization Distribution channels Company’s own sales force Accounts Receivables through Information feedback through

BLOCK-1 SALES MANAGEMENT:BASIC FUNCTIONS UNIT-2 PERSONAL SELLING & UNIT-3 SALES PROCESS

Examples of Personal Selling 12 million people are engaged in personal selling in the United States Represents about 10% of the work force Telemarketing Inside selling Retail selling Field selling

Post-transaction: Reminder and reassurance Transaction: Persuasion Pre-transaction : Create recognition and info understanding Relative Importance of Advertising and Personal Selling Advertising Personal selling Advertising Personal selling Advertising Personal selling

Characteristics of Personal Selling Flexibility Adapt to situations Engage in dialog Builds Relationships Long term Assure buyers receive appropriate services Solves customer’s problems Can not reach mass audience Expensive per contact Numerous calls needed to generate sale Labor intensive Con Pro

ORDER GETTERS Current customers New customers Types of Salespersons ORDER TAKERS Inside Order Takers (via mail, telephone, internet) Outside Field Sales SUPPORT PERSONNEL Missionary Salespersons Trade Salespersons Technical Salespersons

Personal Selling Agents Sales consultants Sales Representatives Account Executives Sales Engineers District Managers Marketing representatives Account Development Representatives 16- Salespeople have many names

Personal Selling Tasks Order getting Seeking out customers Creative selling Pioneering Account management Order taking Routine writing up orders checking invoices assuring prompt order processing Suggestive selling

Personal Selling Tasks Missionary Detailer Goodwill “ Closers” Cross-functional Account service rep

You are part of the total product

The Personal Selling Process PROSPECTING: IDENTIFYING POTENTIAL CUSTOMERS Pre approach: QUALIFYING PROSPECTS APPROACHING THE PROSPECT FOLLOWING UP CLOSING THE SALE HANDLING OBJECTIONS MAKING THE SALES PRESENTATION

Prospecting: Identifying likely new customers Leads Developing lists of Potential Customers Pre-approach (Qualifying) Finding and analyzing information about prospects Evaluating a prospect’s potential Creative Selling Process

Approaching The Prospect HOW DO WE MAKE THE INITIAL CONTACT & BUILD RAPPORT There is only one time to make a first impression

Making The Sales Presentation Using Persuasive communication Hold Attention Stimulate Interest Desire “Tell the product’s story” Creative Selling Process

Handling Objections Questions Reservations Understand Concern Counterarguments Acknowledge concern Clues to process Creative Selling Process

Overcoming Objections IF HE HADN’T TOLD ME WHAT HIS OBJECTION WAS, I NEVER WOULD HAVE BEEN ABLE TO HELP!

Closing the Sale Closing signals Trial close Asking the prospect to buy Creative Selling Process

Following Up Commitments met Shipment Performance Reinforce L-R relationship Satisfied customers rebuy & recommend Creative Selling Process

Designing Sales Force Strategy and Structure Sales Force Structure Territorial sales force structure Product sales force structure Customer sales force structure Complex sales force structure Managing the Sales Force

Managing the Sales Force Sales Force Strategy and Structure Sales Force Size Many companies use the workload approach to set sales force size Other Issues Outside and inside sales forces Team selling

Managing the Sales Force Recruiting and Selecting Salespeople Careful recruiting can: Increase overall sales force performance Reduce turnover Reduce recruiting and training costs Traits of Successful Salespeople Intrinsic motivation Disciplined work style The ability to close a sale Ability to build relationships with customers

Managing the Sales Force Training Salespeople Training period can be anywhere from a few weeks to a year or more Training is expensive, but yields strong returns Many companies are adding Web-based sales training programs

Managing the Sales Force Training Salespeople Training programs have many goals Identify with the company and its products Know about customers and competitors The basics of the selling process

Managing the Sales Force Compensating Salespeople Compensation elements: salary, bonuses, commissions, expenses, and fringe benefits Basic compensation plans: Straight salary Straight commission Salary plus bonus Salary plus commission Compensation plans should direct the sales force toward activities that are consistent with overall marketing objectives.

Managing the Sales Force Supervising Salespeople Supervision is used to direct and motivate salespeople Companies will vary in how closely they supervise their salespeople; will vary depending on the skill level and maturity of the sales force, and type of selling Tools used: Annual call plans and time-and-duty analysis can help provide direction Sales force automation systems assist in creating more efficient sales force operations The Internet is the fastest-growing sales technology tool

Managing the Sales Force Evaluating Salespeople Several tools can be used Sales reports Call reports Expense reports

After-sales Service Ratings Job quality: do it right the first time Prompt warranty work 0 1 2 3 4 5 6 7 8 Speed .37 Reputation 3.38 Cost 4.39 Service Quality 7.87 10 (SCALE: Degree of Importance) (JMR/Vol. 78) Low High Service Award

A Key to Success Stay Close to Your Customer and LISTEN!

THEORIES OF SELLING AIDAS Theory: ATTENTION INTEREST DESIRE ACTION SATISFACTION

RIGHT SET OF CIRCUMSTANCES THEORY The advocates of this theory define that all the circumstances, which led to the sales were appropriate for the sales to have taken place. In other words, if the sales person is successful in securing the prospect’s attention, maintaining his interest and inducing his desire to buy the product, the sales will result. Moreover, if the sales person is highly skilled, he will take control of the presentation, which would lead to sales.

Buying Formula Theory This theory emphasize on the buyer. This theory emphasizes on the needs or problems of the buyer.The sales person assist the buyer in finding an appropriate solution to the problem.This solution may be in terms of a product or service.This theory is based on the analysis of the sequence of events that goes in the buyer’s mind during the sales presentation.The theory is based on the presumption that the sales person will take care of the external factors.

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