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Sales Management

Sales Management
Sales 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 Management
Sales Management can also be defined as the planning, Organizing, Leading and 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 be judged from the following equation: (SALES) (COST OF SALES) = (GROSS MARGIN) (GROSS MARGIN) (EXPENSES) = (NET PROFIT)

Sales Management
From 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 a) Identify markets End use analysis Desk research Market research b) Develop products Research & Development c) Develop & maintain an effective marketing system Pricing strategy Product/service promotion Advertisement campaign Distribution strategy Packaging After Sales Service d) Ensure profitability & adequate return-on-investment Costing system Inventory control Receivables Credit control

Sales Approach a) Identify customers - Prospecting for customers - Who else, where else approach - Meet customers specific needs b) Meet customers specific needs - Application engineering c) Overcome the obstacles in the field of sales of the product/service. -Handling objections - Personal selling - Developing quotations - Submitting tenders - Combating competition - Matching competitors moves d) Ensure profitability - Return on time invested - Control on Accounts(clients) - Margin on sales - Control on selling expenses

PERSONAL SELLING
Personal Selling can be defined as a means for implementing Marketing Programs along with other marketing elements such as Pricing, Advertising, Product Development & Research and 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 in the 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 BackDoor 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. The steps 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 prospects requirements: Final step is to approach the prospect and convince him that his requirement will be satisfied by your Companys product/service.

SALES RELATED MARKETING POLICIES

Sales related Marketing Policies directly influence the jobs of the sales executives. There are three major types of such policies: 1. Product Policies what to sell. 2. Distribution policies whom to sell. 3. Pricing policies at what consideration.

PRODUCT POLICIES
1. 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. Mohans Cornflakes ; Whereas Kelloggs 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.

b. 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

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.