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Sales & Logistics Management

Dr. KarpagamDirector – Academics ISBR Business School

Bangalore

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Sales management

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Chapter outline

• Objectives of Sales Management • Personal selling process• Developing personal selling strategies– Pure competition– Monopolistic competition– Oligopolistic competition– No direct competition

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Chapter outline

• Types of sales organization – Line sales organization– Line and staff sales organization– Functional sales organization– Committee sales organization

Dr. Karpagam 5

Chapter outline

• Determining the kind of sales personnel– Product market analysis– Analysis of salesperson’s role in securing orders– Choice of basic selling style

• Determining the size of sales force– Work load method– Sales potential method– Incremental method

• Qualities of a sales execuitve

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Learning objectives

After reading this chapter, you will be in a position to understand

What are the objectives of sales management ?How a personal selling takes place ?How to develop personal selling strategies ?What are the ways to organize the sales force ?Identify the different types of sales organization Steps involved in determining the kind and types of

sales force qualities of sales executives

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Evoltion of sales function – pre sales era

Demand > Supply

Buyer Seek Sellers

Manufacturing had Higher Importance

No Mass Production

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Evolution of sales management (Post Industrial era)

Mass Production Commenced

New Markets to be found

Specialized Departments for Personal Selling

Competition Forced itfurther

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How marketing function got split ?

MARKETINGMARKETING

Sales

Advertising

Market Research

Sales Promotion

Credit/ Collection

Export

Traffic / Shipping

Merchandissing

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Steps in personal selling process

Prospecting &

Qualifying

Pre-Approach Approach

PresentationHandling objectionClosing

Follow-up

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Prospecting & Qualifying

• Prospecting – Customers, suppliers, dealers, internet

• Qualifying (Screening out poor one by looking at)– Financial Ability– Volume of business– Needs– Location– Growth potential

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Pre-Approach

objectives• Qualifying the prospect• Gather Information• Make an immediate sale

Approaches• Personal Visit• Phone call• Letter

Approach Involves1. Appearance2. Opening Lines3. Follow-up Remarks

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Presentation

• Need Satisfaction Approach– Buyers Want Solutions– Salespeople should listen & respond with the right products

& Services to solve customer problems• Buyers dislike salespeople that are– Pushy, late, deceitful, disorganized, unprepared

• Buyers appreciate people that are– Good listeners, Empathetic, Honest, Dependable, Through,

Follow-up types

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Handling objections

• It is the process where salesperson resolve problems that are – logical, psychological (or) Unspoken

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closing

• It is the process where salespeople should recognize signals from the buyer, including– Physical actions– Comments &– Questions to close the sale

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Closing

• Closing technique– Asking for the order– Reviewing points of agreement– Offering to help write up the order– Asking if the buyer wants this model or another one– Making note that the buyer will lose out if the order is not

placed– Offering incentives to buy, including lower price (or)

additional quantity

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Competitive strategy and personal selling strategy

• Industries differ as to maturity and the number of competitors1. Pure competition2. Monopolistic competition3. Oligopolistic competition4. No direct competition

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Pure competition• Assumptions :

1. No single buyer or seller is so large relative to the market2. All seller’s product are identical (Buyers are indifferent)3. No artificial restraints on price exist

a) Governmental price fixingb) Administering of prices by individual companies,

trade associations, labour unions4. All buyers are always informed about all seller’s price

• Important Assumptions :– Sellers and buyers are in direct contact, making it

unnecessary to worry about marketing channels or physical distribution

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2. Monopolistic competition

• It Exists when– Large numbers of sellers of a generic kind of product – But each seller’s brand is in some way differentiated from

every other brand– It is easy for additional competitors to enter the market• Private label competitors

• Sellers differentiate their market offering through– Individualizing one or several components of overall

marketing strategy

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Cont’d..

• Unique packaging may differentiate the product• Unusual distribution method (Such as house to house

selling)• Pricing gimmicks (Psychological pricing)• In Market-growth and market-maturity stages ,

seller can differentiate it through promotional strategy

• Personal selling ensures the desired distribution intensity is secured and maintained – Middlemen provide the needed push

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3. Oligopolistic competition

• Competitive Setting where– The number of competitors is small enough that they are

individually identified– Known to each other– Difficult for new competitors to enter

• Each organization is large enough with large enough market share

• Develops in – Marketing many products either during a late phase of their

market growth– An early phase of market maturity

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Cont’d..

• Competitive moves of one affects the entire market• Changes in– Competitor’s product– In its distribution– In its promotion

• Encountered by competitors and launch counter offensives

• Personal Selling Strategy :– Building and maintaining dealer cooperation– Servicing the distribution network

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No direct competition

• Neither the monopolist nor Innovative marketer• Both have indirect competitors

Monopolist – on a long term basis Innovative Marketer – limited period

Initiate and stimulate primary demandThrough personal selling and advertising

Distribution strategies Pricing strategies

Monopolist – charging what the traffic will bear Innovative marketer – Price Skimming or a penetration pricing

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Determining the kind of sales personnel

• Understand what is expected of them1. The Job objectives2. The duties and responsibilities3. The performance measures

• Qualitative personal selling objectives have some degree of distinctiveness– What it sells ?– Whom it sells to ?– Its pricing strategy and competitive setting

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Cont’d….

• It is common for different salesperson in the same company to have quite different jobs

• This can be done by1. Product Market Analysis2. Choice of Basic Selling Style

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Product Market Analysis

• All kinds of products can’t be sold to all kinds of customer

• Salesperson sells1. Single products to many kinds of customers2. Wide line products to a single kind of customers3. Sell some products to some kinds of customers

• One way of categorizing selling jobs1. Product Specialist2. Market Specialist3. Combination of product and market specialization

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Dominant

InterdependenceDominant Expertise

Product Technologies

Customers Applications

Customer Specialist (Supported by Market Managers)

Full Line Salespersons (Supported by Product Managers

Full Line salespersons specialized by kind of customers

Between Customers

Between Products

Product Specialist

Types and amount of specialization in selling organizations

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Choice of basic selling style

1. Trade Selling2. Missionary Selling3. Technical selling4. Non-Business Selling

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Role of advertising and personal selling

Advertising• Relating market

messages to final buyers

Personal Selling• Servicing the distribution

network• Stimulating promotional

efforts by the middlemen

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Setting up a sales organization

1. Defining the objectives2. Delineating the necessary activities3. Grouping activities into “jobs” or “positions”4. Assigning personnel to positions5. Providing for coordination and control

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Basic types of organizational structures

1. Line sales organization2. Line and staff organization3. Functional sales organization4. Committee sales organization

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1. Line sales organization

• Widely used in smaller firms • Chain of command runs from top sales executive

down through subordinates• All executives exercise authority • Each subordinate is responsible only to one person• Authority is definitely fixed• Sees its greatest use – sales executives- directly

reports to CEO• Preoccupied with active supervision • More than two layers are present –occassionaly

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Cont’d..• Advantages1. Reports to only one

person2. Problem of discipline

and control are small3. Lines of authority and

responsibility are clear4. Simplicity5. Frequently strong leaders6. Administrative expenses

are low

• Disadvantages1. Much depends upon the

department head2. Head should be a all-

rounder3. Insufficient time for policy

making and planning 4. Often make decisions and

take action without benefit of planning

5. Results are often disappointing

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2. Line and staff sales organization

• Often found in large and medium based enterprise• Selling diversified product lines• Provides the top sales executives with a group of

specialist expert– Dealers, distributor relations, sales analysis, traffic and

warehousing• Conserves top executives and frees them from

excessively detailed work• Delegating problems to staff executives – Top exe-

higher priority matters.

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Line and staff sales organizationAdvantages1. Pool of experts provide advice2. Apparently unrelated

problems are brought into focus

3. Concentrate on control and coordination of subordinates

4. Staff assume much of the burden of solving problems in their areas

5. Top sales executive focus more on human aspects of administration

Disadvantages1. Close control over staff-

line relations is essential2. Time between problem

recognition and corrective action tends to widen

3. Confusion may happen especially if experts overstep their authority

4. Administrative expenses may increase

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Qualities of sales executive

Ability to 1. To define the position’s exact function and duties in

relation to the company’s goals.2. To select and train capable subordinates 3. Willingness to delegate sufficient authority to carry

out the task with minimum supervision4. To utilize time efficiently5. To allocate sufficient time for thinking and planning6. Exercise skilled leadership