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SALES MANAGEMENT

Chapter 1

‘Job of Sales Management’

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SALES MANAGEMENTSALES MANAGEMENT

“I don’t care how many degrees you have on the wall, if you don’t know how to sell, you’re probably going to starve.”

Heavyweight boxer George Forman’s advice to his children

3Figure 1-1: Positions of Personal Selling and Sales Management in the Marketing Mix

P r o d u c t s P r i c e s

A d v e r t i s i n g P u b l i cr e l a t i o n s

P e r s o n a ls e l l i n g

S a l e sp r o m o t i o n

P r o m o t i o n D i s t r i b u t i o n

M a r k e t i n gm i x

Salesmanagement

Salesmanagement

Planning MotivatingBudgeting CompensatingRecruiting and selecting Designing territoriesTraining Evaluating performance

Planning MotivatingBudgeting CompensatingRecruiting and selecting Designing territoriesTraining Evaluating performance

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Designing the Sales

Organization

SALES MANAGEMENT SALES MANAGEMENT MODELMODEL

Describing the Personal

Selling Function

Defining theStrategic

Role of theSales

Function

Developingthe

Salesforce

Directing the

Salesforce

PlanningPlanning ImplementingImplementing ControlControl

DeterminingSalesforce

Effectivenessand

Performance

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Nature of Personal Selling

It is a major factor in generating sales volume.

It is a part of promotion which brings human element into marketing transactions

It increases customer confidence in the supplier, and simplifies the handling of individual customer problems.

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Does personal selling increases customer confidence in the supplier?

1. Since the customer is dealing directly, it builds the confidence in the product, company, personal and procedure.

2. Forms a basis of trust and confidence with the customers.

3. Basis for long-term relationship/retention

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Personal selling makes possible for the buyer to act promptly

1. Unlike other means of promotion, it can work for a desired action by the customer immediately.

2. Sales person can place an order, commit for a purchasing plan next quarter or decide on an in-store promotion for the product

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Personal Selling Simplifies the handling of individual customer problems.

1. Customize sales presentation

2. Handle buyers problems and complaints on a individual basis

3. Every customer is different, have varying needs

4. This is a value-added service provided to the customer.

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Changes in Selling(Selling is flexible and creative – not simply persuasive)

1. Today, salespeople are more of problem-solvers, able to meet customer’s needs and conditions of individual; they built and maintain good relationship with customers.

2. Adopt to new market conditions

3. Sales people are involved in other aspects also like, distribution, credit, customer’s use of promotion, pricing etc.

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Marketing Concept

1. Customer orientation – shift from internal company’s perspective to customer perspective. Understand the customer’s needs, attitude and buying behavior.

2. Coordination of all customer related activities – coordinating between all the customer service functions of the business.

3. Profit direction – control costs and maintain budgeted revenue/sales.

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Modern Sales Approach

1.Partnering – sales people share the same value as customers, mutually agreed ideas, anticipate and understand customers needs

2. Relationship selling – maintaining long-term associations with customers; stronger contact with the customer

3. Team selling – for large customers, sales people work with other company personal to provide a coordinated approach.

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contd..

4. Value-added selling – exceed customers expectation when providing service, e.g. providing after-sales service, installation facilities etc. Salespeople should go beyond selling and provide value added service.

5. Consultative selling – salesperson must adopt their products or services to address specific needs of the customers. Act as consultants

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Personal Selling in Marketing Mix

Firm’s marketing mix – product, price, promotion and distribution – is used to deliver solutions to individual customers.

Marketing mix is a strategy which a company utilizes to implement its marketing plan and pursue its marketing objectives.

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The Role of Personal Selling in Product Strategy

a) Sales person help specify desirable product features and benefits

b) Provide guidance in the product development phase

c) They participate in product testing and test marketing

d) Their input is valuable when it comes to product mix decision as they are very much familiar with the marketplace, competitors, and the customers

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The Role of Personal Selling in Pricing Strategy

a) Sales people and managers can ascertain competitive pricing strategies.

b) Gauge market reaction to alternative pricing levels and can advise senior management in pricing decisions.

c) They can be granted some discretion in adjusting prices to market conditions.

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Pricing Strategies

1. Cost Plus method – markup for profit is added to the products cost. Sales managers are responsible for keeping selling cost under control so that markup does not put the item in price disadvantage

2. Demand Oriented method – based on the demand of the product and expected price.

3. Competition oriented method – markup is based on the price the competitors will charge

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The Role of Personal Selling in Distribution Strategy

a) Channel of distribution is the route from the producer to the end user, directly (ultimate buyers acquires the product from the manufacturer) or indirectly (user of intermediaries for e.g wholesalers/ retailers)

b) A product is meaningless if it is unavailable to he customer at the right time, this is where the salespeople can facilitate

c) They establish link in between the middle man

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The Role of Personal Selling in Promotional Strategy

a) Promotion is the presentation of informative and persuasive message to a firms target market in an attempt to stimulate sales.

b) Personal selling is an important aspect of this, along with advertising, publicity, and sales promotion.

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Tasks of a Sales Manager

Analysis: review of firm’s internal sales record and sales peoples report, and keeping check of market trends. Note relevant environmental factors and conditions.

Planning: Setting objectives for the firm sales efforts and mapping out strategies and tactics for achieving these objectives. Transmit objectives, strategies, and procedures to sales staff.

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Organizing: setting up of structures and procedures for smooth efficient execution of sales programs. Create specific job descriptions for these tasks and activities. Recruit and select personal for these activities. Direction: staffing and supervision day-to-day implementation of sales, policies and programs. Oversee the operations of the sales team to improve its performance. Issue the necessary directions and guidelines.

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Control: performance comparison of actual and planned sales results, reasons for deviation. Collect and analyze information

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External factors effecting Sales Management

1. New government rulings

2. Competitor cuts prices

3. New products introduced in the market

4. New distribution options

5. Telemarketing and e-commerce

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Rewards of Sales Management

i. Sales managers get to know and work with variety of people inside and outside the company

ii. It is personally rewarded, and recognized my others (tangible)

iii. Financial rewards

iv. Training and Development

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Why is Training of Salespeople important?

a. Keep them competitive

b. Career development

c. Built various skills mentioned above

d. Adopt to change in external environment / new trends

e. Presentation and negotiation skills

f. Awareness of languages and cultural differences in international selling

g. Exchange of ideas

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Challenges for Salespeople

a. Have to satisfy varying customers needs

b. Need to be patient and polite to the customers

c. Have to meet their budgets

d. Their jobs are effected my changing market conditions, competitors activities, and economic factors.

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A Sales Quota Manager’s Skill Set

Willingness to Train/Coach Willingness to Make Joint

Sales Calls Problem-Solving Making Presentations Answering Objections

Willingness to Train/Coach Willingness to Make Joint

Sales Calls Problem-Solving Making Presentations Answering Objections

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Win-Win Relationships

Sales person

CustomersSecondary decision makers

Company support

staff

Managementpersonnel

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Win-Win Philosophy

Win-Win People Help others solve

problems Fix what caused

problems Make life a happening Learn from the past, live

in the present, and set goals for the future

Make and keep commitments

Win-Lose People See problems in

solutions Fix the blame Let life happen to them Live in the past Make promises they

never keep

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COMMUNICATION

Percent of Message

38%

7%

55%

What you see or feel Facial expression Dress and grooming Posture Eye contact Touches Gestures

What you hear Tone of voice Vocal clarity Verbal expressiveness

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Basic Rules of Etiquette

Avoid temptation to address new prospects by first name

Avoid offensive comments or stories Do not express personal views on politics or

religion At business luncheons do not discuss business

before the meal is ordered unless client initiates subject

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Relationship Building Guidelines

Be genuinely interested in other people Be a good listener Encourage others to talk about themselves Talk about other people’s interest

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APPENDIX

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STRATEGIC ACTION COMPETENCYDimensions

Understanding the Industry: • Understands the history and general trends in the industry and their

implications for the future• Stays informed of and anticipating the actions of competitors and

strategic partners• Identifies attractive market segments and their buying needs

Understanding the Organization: • Understands the vision, overall strategy, and goals of the organization• Appreciates the distinctive competencies of the organization with

respect to market opportunities and limitations• Understands how to marshal organizational resources to meet the

needs of the customers

Taking Strategic Actions: • Assigns priorities and making decisions that are consistent with the

firm's mission and strategic goals• Implements specific account selection, retention, and dominance

strategies• Develops an appropriate portfolio of account relationships• Considers the long-term implications of actions in order to sustain and

further develop the organization• Establishes tactical and operational goals that facilitate the firm's

strategy implementation

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COACHING COMPETENCYDimensions

Providing Verbal Feedback: • Provides specific and continuous performance and selling skills

feedback.• Builds a feeling of appreciation and recognition by taking the time to

acknowledge a job well done, an effort beyond the call of duty or animportant victory

• Reinforces successes and nice tries to support desirable behaviors.

Role Modeling: • Leads by example, rather than decree• Provides role models, either themselves or others, and sharing best

practices• Models professional attitudes and behaviors

Trust Building: • Maintains good rapport with the sales team and fostering open

communications, collaboration, creativity, initiative, and appropriaterisk taking

• Adds value through communicating relevant selling experiences• Helps salespeople to "look good" through two-way communications

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TEAM BUILDING COMPETENCY Dimensions

Designing Teams: • Implements an organizational architecture that will support teams • Creates a reward system that is fair within the context of a team effort • Coordinates team goals with the overall goals of the organization • Coordinates team activities with the requirements of functional areas within the

organization

Creating A Supportive Environment: • Hires people that will be successful in a team environment • Trains programs that encourage teamwork • Integrates the individual members of the sales team together to form a

functioning and supportive team

Managing Team Dynamics: • Understands the strengths and weaknesses of team members and using their

strengths to accomplish tasks as a team • Facilitates cooperative behavior and keeping the team moving towards its goals

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SELF-MANAGEMENT COMPETENCYDimensions

Fostering Integrity and Ethical Conduct: • Has clear personal standards that serve as a foundation for a sense of integrity

and ethical conduct by the sales team• Projects self-assurance and doesn't just tell people what they want to hear• Willing to admit mistakes and accepts responsibility for own actions

Managing and Balancing Personal Drive: • Seeks responsibility, works hard and is willing to take risks• Shows perseverance in the face of obstacles and bounces back from failure• Ambitious and motivated to achieve objectives, but doesn't put personal

ambition ahead of the organization's goals• Understands that goals are achieved through the success and development of the

salespeople

Developing Self-Awareness and Management Skills: • Has clear personal and career goals and knows own values, feelings and areas of

strengths and weaknesses• Analyzes and learns from work and life experiences• Willing to continually unlearn and relearn as changed situations call for new

skills and perspectives

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GLOBAL PERSPECTIVE COMPETENCYDimensions

Cultural Knowledge and Sensitivity: • Stays informed of political, social, and economic trends and events around the

world• Recognizes the impact of global events on the market and the organization• Sensitivity to cultural cues and ability to adapt quickly in novel situations• Travels regularly and has a basic business vocabulary in languages relevant to

the position

Adapting Global Selling Program: • Adopts an appropriate sales force architecture for global accounts• Appropriately adjusts sales force measurement, competency creation and

motivation systems to the local culture• Appropriate adjusts own behavior when interacting and managing people from

various national, ethnic and cultural backgrounds

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TECHNOLOGY COMPETENCYDimensions

Understanding of New Technology: • Awareness of the potential for technology to increase sales force efficiency and

effectiveness• Experience in using new technology• Attitude towards adopting new technology

Implementing Sales Force Automation: • Knows what is to be accomplish and the benefits that are possible• Adapts personal management style and procedures• Fosters sales force acceptance and use of selling technology