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Introduction to Sales
Management
Personal selling strategies
1. Willingness to go to bat for the buyer within the
supplier firm
2. Thoroughness and follow through
3. Knowledge of the sales person’s product line
4. Market knowledge and keeping the buyer posted
5. Applying his product and services to buyer’s needs
6. Knowledge of the buyer’s product line
7. Preparation for sales calls
8. Regularity of Sales calls
9. Diplomacy in dealing with operating departments
10. Technical education
Evolution of personal selling
Partnership
Business Strategies
Consultative Management
Negotiation Selling
Persuasion
Marketing concepts
1) Production concept
2) Product concept
3) Selling concept
4) Marketing concept
5) Societal concept
Societal marketing concept
Emphasis on
(Marketing Orientation) Seller’s Needs
Emphasis on
Customer
Needs
Nature and role of sales
management
The determination of sales force objective and
goals
Sales force organization, size, territory, and quota
finalization
Sales forecasting and budgeting
Sales force selection, recruitment, and training
Motivating and leading the sales force
Designing compensation plan and control systems
Designing career growth plans and building
relationship strategies with key customers
Types of selling
Order
Takers Delivery Sales
People
Outside Order
Takers
Selling Order Missionary Sales
Function Creators People
New Business
Sales People
Selling concept
Market concept
MARKET ANTICIPATION
Marketing mix
•Product
Producer
•Price Consumer
Marketer
•Place
•Promotion
Emerging trends
Customer orientation in sales
Relationship selling
management
Technology
Maintenance selling
Developmental selling
Selling skills
Effective
Problem
communication
solving skills
skills
Selling Skills
Listening Skills
Negotiation
and bargaining
skills
Encoding Decoding
Noise
Received
Sent Message Message
Channel
Sender Receiver
Communication process
contd.
Interpretation
Remembrance
Evaluations
Response Action
Levels of listening
Feedback
Paraphrasing
Clarifications
Emphatic listening
Active Listening
Barriers to Listening !
Conflict management skills
Models of conflict
Components of conflict
The conflict resolution process:
- lumping
- avoidance
- coercion
- meditation
- conciliation
- arbitration
- adjudication
- negotiation
Conflict management process
Stage I Stage II Stage III Stage IV Stage V
Potential Cognition & Intentions Behaviour Outcomes
opposition or
Personalization
Incompatibility
Increased
group
Perceived Conflict handling performance
Conflict Intentions
Antecedent Overt Conflict
Conditions Competing Party’s
behaviour
Communication Collaboration Others
reaction
Personal Felt Conflict Compromising
Decreased
Variables Avoiding group
Structure performance
Accommodating
Negotiation skills
• Situation and timing for negotiations
• Formulation for a bargaining strategy
• The theory and strategy of principle
negotiations
- separate the people from the problem
- focus on interests, not on positions
- invent options for mutual gains
- insist on objective criteria
Problem solving skills
• Habit I: be proactive
• Habit 2: begin with an end in mind
• Habit 3: put first things first
• Habit 4: think win–win
• Habit 5: seek first to understand,
then to be understood
• Habit 6: synergize
• Habit 7: renewal
Problem solving process
Define the problem
Dunker’s
Statement diagram 4
and Present
Restatement desired state
5 analysis
3
Problem
Definition
Techniques
Evaluate
problem 6 Explore the
statement 2 problem
Find out origin of the
problem 1
Dunker’s diagram
Achieve the desired state
General Solution
Specific Solution
Solution 2 Solution 3
Solution 1
Statement restatement technique
ess
y M
u zz
F
Make an Re Statement
Opposite
Statement
Re Statement
Situation analysis
Potential problem
Problem analysis Analysis
Past Decision analysis Future
What is the fault How to prevent future
faults?
Solution implementation process
Pre-
Pre-sale approach Approach to
Prospecting before the
preparation the customer
interview
Handling
Follow up Closing the Customer Sales
action Sale Objections Presentation
Prospecting
Successful prospecting
No Yes
Successful prospecting
Process of prospecting
MDSS
Forecasting process
The forecasting process is defined as the
series of decisions and actions taken by a
business organization in:
identifying the forecasting objectives
determining the independent and
dependent variables
developing a forecasting procedure
using the available data in the
selected method to estimate the sales in
future
Forecasting process
contd.
Determine
Develop forecasting independent and Forecast objectives
procedure dependent variables
Comprehend total
forecasting procedure
Present all the
assumptions about Make and finalize
Collect, collate, data the forecast
gather and analyze
data
Popular methods in forecasting
Qualitative methods
History analogy
Quantitative methods
Exponential
Moving average Regression method smoothening
Trend forecast of Sales
Observed sales Forecasted sales
Sales e
lin
e nd
Tr
Time
Naïve method
Sales (at the period t) = Sales T+1
20
15 Series1
10
5
0
1 2 3 4 5 6 7 8 9 10
Years
Method of semi-averages
In this method available data are divided into two parts, usually with
equal number of years on both the parts
Year Sales
1993 102
1994 105
1995 114
1996 110
1997 108
1998 116
1999 112
3 3
Method of moving averages
The 3-yearly moving average can be computed with the
following formula:
a+b+c b+c+d c+d+e d+e+f
--------- , ----------- , ---------- , --------- , ………….
3 3 3 3
Sales
Sales
Population Population
Econometric techniques
Econometric techniques uses multiple independent variables
where the assumption is that of a liner equation between the
dependent variable (sales) and independent variables
Market factor indices methods
contd.
Factors affecting selection of a forecasting technique
• data availability
• cost
• variability
• consistency of the data
• the degree of detail necessary
• time horizon
• technical sophistication
• ability of the method to capture the level of risk and
variability
• the level of accuracy of the forecast
• fundamental change indicators
MAPE (Mean Absolute Percentage Error)
• level of accuracy is an explanation of the gap between
the actual and predicted sales
Sales Organization
Sales organization
• external factors:
- the speed of market change
- reduction in the number of vendors per
buyer
- closer to customer relationships
- changes in regulations and international
practices
Organizational principles
span of control
unity of command
hierarchy of authority
stability and continuity
coordination and integration
homogeneity
objectivity
specialization
Organizational design
- formal and coordinated task
- assigning territories
- establishing flows of communication and responsibilities
of sales groups and individuals to customers effectively
Line organization Mr. Ratnakar Shetty
President / Owner
Mr. Chandrakant
VP (Sales)
National
Distributors Direct to Direct
Home marketing Distributors Bundling Gifting
Regional Consumer
Distributors
Retailers
Consumers
Design by territory
VP Marketing
National Sales
Manager
Mr. Chandra De
Mrs. Chitra Mohanty Mr. Dibya Behera Manager
(Advt / Sales (Sales Manager) (MR)
Promotion Mgr)
20 Sales People
Design by product
President,
Marketing
Vice President
(Marketing)
Geographic
Marketing Manager Combined Marketing Manager
International
India
Sales Org. Design
G.M G.M G.M
Consumer care International Sales International Sales
Customer
Divisional Manager Divisional Manager Divisional Manager
Soaps Paper Food Product
Customer
Technical
Sales Marketing Manufacturing
Support
Incremental method
Workload method (Number
(Number of (Ideal (Length of
Number of sales people = existing X of
X frequency of X a call)
customers) Potential calls)
customers)
an individual
• sales person, a group of sales person, a branch, a dealer,
period of time
Sales territory (contd.)
L Opportunity Opportunity
The account offers stable opportunity since
The account offers little opportunity. Its
o the sale organization has differential
potential is small and the sales organization
advantages to serving them.
w is at a competitive disadvantage in serving
it.
Strategy Strategy
Allocate a moderate level of resources to Either commit a minimal level of
maintain current advantage. resources to the account or consider
abandoning the account altogether.
Strong Weak
Sales territories
New Territories..?
Name
Output
Year
Your territory
Results expected
Pessimistic Realistic Optimistic Results
1. Volume per month
2. Expenses per month
3. Gross margin per month
4. Market share per month
5. Key account coverage per
month
• forecast
• executive judgment
• compensation
Problems in setting sales quota
1. There is a high level of individual difference in every
organization
2. A perfect quota is a combination of selling and non-
selling activities
Selection procedure
- inviting application forms
- personal interviews
- reference checks
- physical examinations
- psychological tests
- intelligence
- personality
- aptitude and skills
- determination of terms of service
- appointment
- initial orientation
Socialization process
• process of orienting a new salesperson to the
sales organization, territory, or division in which
he or she will be working
• three stages
Anticipatory stage
Encounter stage
Settling stage
Chapter 9
Location
Presentation options
Types of training
Cross-functional training
Team training
Creativity training
Literacy training
Training methods
Didactic method
- structure the lecture
- reinforce the Message
- aid concentration
- material used for the lecture
- make it memorable for the participants
- deliver with dynamism
- use questions
Visual support
Participative
Conferences
Training methods contd..
Seminars
Discussions
Role play
Case study
Fishbowl
Workshops
Sensitivity training
Transaction analysis
In-tray exercises
Transcendental meditation
Deciding a sales training
programme
Aim
Content
Contents
Knowledge
Proficiencies
Location
Evaluation
Process of socialization
Anticipatory socialization
Accommodation stage
Outcome stage
Chapter 10
Motive
Behaviour Tension
reduction
Goal
Motives
Primary
General
Secondary
Motivational drives
Principles
Security
Achievement
Approval
Loyalty
Advancement
Leadership
Human behaviour
Theories of motivation
Content
Process
Reinforcement
Content theories
Need hierarchy theory
Esteem need
Social need
Security need
Physiological need
Process theories
Equity theories
Expectancy theories
Reinforcement theories
Environmental conditions
Organizational policies
Designing a motivational
programme
Programme objective
Motivational tools
Individual methods
Group methods
Communication
Auxiliary environment
Feedback
Chapter 11
Financial stability
Financial compensation
Non-financial compensation
Financial compensation
Straight salary plan
Straight commission plan
Bonus and incentive
Salary plus incentive (combination plan)
Drawing account and commission plan
Allied methods
Non-financial
compensation
Promotions
Recognitions programmes
Fringe benefits
Expense accounts
Perks
Sales contests
Steps in designing a
compensation plan
Determine sales force and compensation
objectives
Determine major compensation issues
Implement long-term and short-term
compensation plans
Relate rewards to performance
Measurement of performance
Appraise the compensation plan
Chapter 12
Evaluation of the Sales Force
Deciding on the criteria for
measuring performance
Comparison of actual
performance with standards
Distribution channel
management - an
introduction
Role of distribution
channels
• To adjust the discrepancy of assortment through the
process of sorting, accumulation, allocation, and
assorting
• To minimize the distribution costs through
routinising and standardizing transactions to make
exchange more efficient and effective
• To facilitate the searching process of both buyers
and sellers by structuring the information essential
to both the parties
• To provide a place for both parties to meet each
other and reducing uncertainty
How do distribution channels
contribute
• Intermediaries can improve the efficiency of the
exchange process
Temporal discrepancy
Need to provide assortment
The cost and control aspects of
intermediation
Cost
efficiency
Control
Designing customer-
oriented
marketing channels
Channel Design
The channel design is normally meant to give a
clear idea about:
The number of channel entities in the channel
network,
The way in which they are linked,
network
The rewards for participating in the activities and
also
Clear cut guidelines for the major activities to be
Spatial convenience
Assortment
Distribution channel design
To consume
a product Channels
Activities have
to be performed
Thus performs activities
Example of a service output
delivered template
Sl.No. Service dimension Service output delivered
1. Bulk-Breaking Units are delivered in ones
2. Spatial convenience There is at least one outlet for almost every
3 km radius excluding of course thinly
populated areas
3. Waiting time Not more than 2 days for any model
4. Assortment Other consumer goods items including that
of other competitors are available at all the
outlets where the products are otherwise
Available
5. Installation support Available
6. After sales support Free for first two years, but available on
payment afterwards. Also available at every
city from where the product was bought.
7. Consumer financing Available
ChannelDirect
Flow flows and contribution
Indirect to
Other
service contribution
outputs contribution contribution
Physical Spatial convenience, Assortment
Possession bulk breaking, waiting
time
Ownership Spatial convenience
Promotion Spatial convenience Is a service output in
itself
Negotiation Spatial convenience, Assortment
bulk breaking
Risk taking Waiting time, bulk
breaking, spatial
convenience
Financing Spatial convenience, Assortment
waiting time, bulk
breaking
Ordering Bulk breaking, spatial
convenience, waiting
time
Payment Bulk breaking, spatial
convenience, waiting
time
Channel design effort
decisions
The service output levels
The flows or activities that are
associated with the achievement of the
service output levels
The type of entity who would be
entrusted with the performance of each
of these flows
Parameters for comparing
channel designs
Efficiency
Effectiveness
Equity
Scalability
Flexibility
(contd.)
Customer-oriented
logistics management
Logistics strategy
Cost reduction
Capital reduction
Service improvement
Logistics Planning
Inventory Management Transportation decisions
•Inventory levels •Modes of transport
•Deployment of inventories •Carrier routing/scheduling
•Control methods •Shipment size /consolidation
Customer
Service
goals
Location decisions
•Number, size and location of facilities
•Assignments of stocking points to sourcing points
•Assignment of demand to stocking points
Generic types of outbound logistics strategies
Direct shipment
Warehousing
Cross-docking
Functions of warehousing operations
Movement •Receiving
•Transferring
•Order picking/selection
Storage •Shipping
Information transfer
Warehousing
cost
Number of warehouses
Why Inventories?
To improve customer service
To smoothen the operations of the
logistics system
To reduces costs
Inventory procurement costs
Inventory carrying costs
Stock out costs
Cost associated with inventory
Components of inventory carrying cost
Capital cost Inventory
Investments
Inventory Obsolescence
carrying cost Damage&
Pilferage
Shrinkage
Relocation
costs
Echelon inventory
Stockist
Stockist echelon
echelon Supplier Inventory
lead time
Stockist
Distributor’s Tolerance
Function
profit earned
Pay–Off
Function
Coercion
Promotional
Responsiveness
support
systems Training
Financial returns
Quality products Distributor
Technical
assistance Reliable delivery sales force
Competitive price Market incentives
Company National reputation research
policies
Distributor firm
Incentive incentives
Capability
programme Channel core building
elements programmes
Influence Types of Influence Explanation
Strategy strategy
group
Indirect • Information exchange Where information on general business
influence • Information control issues and the channel program is
• Modeling merely exchanged with channel
strategies member personnel.
Direct • Recommendation In this type of strategy the
Unmediated • Warning consequences of the acceptance or
Strategies • Positive normative rejection of the channel programme or
• Negative normative. its implementation are stressed, but
these consequences are based on a
response from the market environment,
not on the mediation of the channel
Principal.
Influence strategy
types (contd.)
Reward and • Economic reward In this type of strategy rewards
Punishment • Non-economic reward and punishments are directly
• Economic punishment given to channel members
Strategies • Non-economic punishment
Influence strategy
(contd.)
types
Influence situations in channel
relationship
+ ve
Reinforcement process Moderate Radical
Behavioural rationalization rationalization
Behaviour
reinforcement Attitude change Attitude change
towards the - ve
channel
programme Inducement process Moderate Radical
Behavioural change confrontation confrontation
Behavioural and Behavioural and
attitudinal change attitudinal change
Stages in channel conflict
Attitudinal
sources Cognitive/
of conflict Manifest Conflict
Affective
conflict outcomes
conflict
Structural
Conflict
sources of
resolution
conflict
CAUSES OF CONFLICTS
Attitudinal Causes
Structural causes
Conflict management methods at different
stages of conflict
Institutional approaches
Joint membership of associations
Exchange of executives
Latent conflict
Cooptation
Dealer councils
Concern Compromise
for the
others
interest
Retail Management
Retail marketing mix
Merchandise characteristic
Trading format
Customer communication
Retail marketing mix (contd.)
+20%
Percentage of availability
80% 90% 100%
Financial method of
merchandising
Cost method
Retail method
Merchandise planning process
Plan reductions
Product services
Service products
Support activities
Customer performance measuring
techniques
Items purchased
Range purchased
Managing the
International Channels of
Distribution
Factors affecting
international trade
trade practices
Differences in governmental policies
and regulations
Differences in the quality of physical
infrastructure
Market entry strategy
Indirect exporting
C Direct exporting
O Licensing
R
N
Franchising I
T
S
R Contract manufacturing
K
O Strategic alliance
L
Joint venture
International suppliers
Offshore manufacturing
4 2
9
Manufacturing Customs
8
9
6 Transportation and
7
Documentation Ship Customs
formalities secured broker
Freight
forwarder Contd.
Contd.
State Process
1 The Sale
•Importer makes enquiry from potential supplier
•Exporter sends catalogue and price list
•Importer requests samples
•Exporter sends Proforma invoice
•Importer sends purchase order