Sales Management is the process of current exchanges of goods - and thus sales management forms an integral part of Marketing Management. A significantly broader meaning is assigned to sales management as it also encompasses managing the sales functions and the sales force. To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html This Slideshare is the sole Property of the Welingkar School of Distance Learning – Reproduction of this material , without prior consent, either wholly or partially will be treated as a violation of copyright.

1. Sales Management & Business
NATURE AND SCOPE
Sales Management form part of Marketing
Management and not the other way round.
A significantly broader meaning is assigned
to Sales Management recently to the extent
it encompasses following two broader areas.
1. Managing the Sales Functions
2. Managing the Sales Force
Sales Management & Sales Force Management 1
Business - Chapter 1 Chapter 1

2. RESPONSIBILITIES
To the firm: Responsible to organise sales
efforts within the organisation as well as
outside
To the sales force: To be selected, organised
and deployed with attractive compensation and
freedom of action
To the customer: Sales persons are the ultimate
direct contact link of the organisation and
customers.
To the society: Sales persons are in a better position
to reflect the feelings, attitudes and sentiments of
customers and community to the management.
Sales Management & Sales Force Management 2
Business - Chapter 1 Chapter 1

3. Functions of Sales Management
Managerial functions
1. Planning: This involves, forecasting demand,
sales territory planning, personal selling, and
promotional efforts.
2. Organising: This involves, structure, resource
allocation, responsibility assignment and
delegation of authority etc.
3. Direction: This involves, leadership motivation,
communication, and promotional steps including
personal selling.
Sales Management & Sales Force Management 3
Business - Chapter 1 Chapter 1

4. Functions of Sales Management
Managerial functions
4. Control: This involves, delegation, quota
fixing, performance evaluation, incentives
and budgets.
5. Co-ordination: This involves, liaison,
integration of various elements, internally,
P.R. and goodwill by contact with
customer/general public
Sales Management & Sales Force Management 4
Business - Chapter 1 Chapter 1

5. Functions of Sales Management
Staff functions: This is related to staff
functions of sales force such as the following:
Recruitment and selection.
Deployment and evaluation of performance
Training and development.
Career development.
Compensation and incentives.
Motivation and empowerment.
Sales Management & Sales Force Management 5
Business - Chapter 1 Chapter 1

6. Functions of Sales Management
Advisory functions :
Product attributes/quality aspects.
Pricing policies.
Promotional steps and personal' selling aspects.
Distribution policies and channel selection
criteria.
Advertisement policies such as media selection
and target audience.
Transportation and warehousing aspects.
Sales Management & Sales Force Management 6
Business - Chapter 1 Chapter 1

7. Functions of Sales Management
Liaison Functions: Liaison with departments
such as the following:
Production department.
Finance department.
Marketing department.
R & D department.
Distribution network and
After Sales Service department
Sales Management & Sales Force Management 7
Business - Chapter 1 Chapter 1

8. PHASES OF EVOLUTION OF
SALES MANAGEMENT
Broadly speaking evolution of Sales
Management developed under the following
four phases:
1. Pre-industrial revolution period.
2. Production oriented period.
3. Sales oriented period.
4. Customer oriented period.
Sales Management & Sales Force Management 8
Business - Chapter 1 Chapter 1

9. Pre-Industrial Revolution Period
Small-scale industries/crafts existed prior to Industrial
Revolution period.
The owner/craftsman turned entrepreneur, looked after all
areas and functions of management. These areas are
production, finance and design and development.
Sales and marketing was never a serious problem in those
days since demand far exceeded supplies.
Selling was only a part-time job for these entrepreneurs.
This job is mostly confined to demonstration or display of
their craftsmanship.
Sales Management & Sales Force Management 9
Business - Chapter 1 Chapter 1

10. Production Oriented Period
Industrial Revolution in 1760s heralded this period.
Mass production technique introduced during this
period, increased the production level manifold.
Following were the characteristics of this period:
Prevailed in developed nations in the West till 1930s.
Focus was on manufacturer and production capacity.
Emphasis was laid on production process which yielded
volumes.
Marketing meant "sell what is produced".
Environment was that of a "sellers' market".
Sales Management & Sales Force Management 10
Business - Chapter 1 Chapter 1

11. Sales Oriented Period
Economic recession of 1930s was the starting point
where demand declined.
Following are the characteristics of this period:
Prevalent in developed nations in the past. However still
prevalent in developing nations.
Focus is on sales and sales promotion with emphasis on
sales volume.
Marketing means "product does not sell by self-it has to
be pushed. Customers are to be manipulated."
Environment is highly competitive where "supplies are in
excess and production capacity is more."
Sales Management & Sales Force Management 11
Business - Chapter 1 Chapter 1

12. Customer Oriented Period
Globalisation and liberalisation have further
increased the competition manifold.
Following are the characteristics of this period:
Prevalent in developed nations after 1960s. Developing
nations are also following this approach by 1980s.
Focus is on "customer satisfaction."
Emphasis is on "problem solving" on customer "needs"
and "wants“ to achieve customer loyalty. .
Marketing means customer satisfaction before, during
and after sales.
Environment is that of “buyers' market” having severe
competition.
Sales Management & Sales Force Management 12
Business - Chapter 1 Chapter 1

13. OBJECTIVES OF SALES
MANAGEMENT
Following are the three general objectives of
sales management:
1. Generate sufficient sales volume.
2. Contribute towards current profit.
3. Ensure continuous growth of the organisation.
Top management has ultimate responsibility for
the above objectives.
However, this task by authority delegation, is
entrusted to sales department who are the
ultimate operational level managers.
Sales Management & Sales Force Management 13
Business - Chapter 1 Chapter 1

14. Sales Volume Objective
This is the sum of sales of all salesmen, put together.
By proper planning, sales territories are assigned to
salesmen based on sales potential and sales forecast
made in the planning stage.
Sales volume depends on a number of sales persons.
Techniques used by sales department are many; like
personal selling and promotional steps etc.
Sales persons are motivated by various methods so that
targets are achieved such as quotas, incentives like
commissions and sales management by objectives.
By proper O.R. techniques, optimum sales force is fixed.
Sales Management & Sales Force Management 14
Business - Chapter 1 Chapter 1

15. Current Profit Objective
Sales Management and financial results are closely
linked to each other as evident from the following
Sales - Cost of Sales Gross Margin - - - (1.1)
Gross Margin - Sales Expenses = Net Profit- - (1.2)
Cost of Production + Cost of Distribution = Cost of Sales
- - - (1.3)
Sales revenue has been directly linked to the
performance efficiency of the sales force.
All expenses are budgeted and controlled.
Sales Management & Sales Force Management 15
Business - Chapter 1 Chapter 1

16. Continued Growth Objective
Survival and success is the basic objectives of
any organisation.
A number of growth strategies are available such
as the following:
Diversification - Concentric or conglomerate
Integration - Vertical or horizontal
External Growth - JV, merger or acquisition
In all such cases, performance of sales force and
quality of their information feedback is vital to
know the "needs" and "wants" of customer.
Sales Management & Sales Force Management 16
Business - Chapter 1 Chapter 1

17. SALES ORGANISATION-
CHARACTERISTICS
Organisation forms the foundation of effective
implementation of sales strategy, policies and plans.
The characteristics of an effective organisation :
Defines lines of authority, responsibility and
accountability.
Effective lines of communication.
Control activities of sales :
Sales management functions
Sales force management functions.
Bridging the gap between market demand and
productive capacity of the firm.
Sales Management & Sales Force Management 17
Business - Chapter 1 Chapter 1

18. SALES ORGANISATION-
STRUCTURE & CLASSIFICATION
Types of Organisation Structures:
Line type organisation – Most common type of
organisation structure with parity between
authority and responsibility
Line and Staff organisation –As the organisation
grows in size, specialists are appointed as staff
managers
Functional type organisation - sales functions are
grouped and placed under the direct control of
managers who are specialists
Field Force type organisation – Geographic,
Product type, Customer Type
Sales Management & Sales Force Management 18
Business - Chapter 1 Chapter 1

19. SALES ORGANISATION-
IMPORTANCE
Sales management with proper planning,
organising, direction, delivers the goods in right
quantity at the right place at the right time. This is
called merchandising.
Today's salesmen need intrinsic motivation by
autonomy, dignity and recognition.
Sales organisation is the "ear" and "eyes" of the
firm.
Right feedback from customer's views are very
important for the very survival and success.
Sales Management & Sales Force Management 19
Business - Chapter 1 Chapter 1

20. Merchandising
Defined as "the planning to offer the right
products in the right time with right quality and
quantity at the right place with the right price."
The areas of co-ordination on the part of sales
persons given below. This highlights Field Sales
Manager as coordinator of marketing mix
Strategies Choice Planning
Marketing Programme Sales Force
Distribution Network Manufacturing Divisions
Sales Management & Sales Force Management 20
Business - Chapter 1 Chapter 1

21. Co-ordination in Strategy
In globalisation, competition is severe,
environment changes fast, opportunities and
threats appear and disappear very frequently.
Top managers/strategists engage, almost
continuously to scan the environment and
suitably amend and modify existing strategies.
Salespersons have first information about the
market conditions, competitors' strategy and
consumers' reaction.
Sales Management & Sales Force Management 21
Business - Chapter 1 Chapter 1

22. Co-ordination in Planning
Various activities are listed in terms of "time
frame" and "cost frame"
Their milestones are prepared along with PERT
so that proper sequencing of such activities, along
with quantification of resources are determined.
Information obtained based on sales forecast,
assists
Market Segmentation,
Territory Planning,
Outlay on other marketing efforts like Advertisement,
Personal Selling and Promotional steps.
Sales Management & Sales Force Management 22
Business - Chapter 1 Chapter 1

23. Co-ordination in
Marketing Programme
Many sales activities are required to be
coordinated with other activities of marketing
such as advertisement and sales promotion.
Personal Selling efforts are supplemented by
Advertisement
Promotional Displays
Appointments of Distributors
Setting up of after-sales-service stations
Timing of advertisement and personal selling
efforts are also very important.
Sales Management & Sales Force Management 23
Business - Chapter 1 Chapter 1

24. Co-ordination of
Sales Force Efforts
Efforts of sales force must be properly
coordinated to:
Avoid overlapping
Duplication
Gap between their areas of responsibility and tasks.
Depending on the market conditions,
competitors' actions and individual performance,
it may be necessary to:
Shuttle around salesmen
Re-organise territories & regions
Supplement the salesmen
Sales Management & Sales Force Management 24
Business - Chapter 1 Chapter 1

25. Co-ordination of
Distribution Network
Liaison and co-ordination between distributors
and retailers becomes very important tasks.
This will enhance timely availability and
attending to after sales service by customers.
Complaints of transit damages, non-settlement
of warranty/guaranty claims by customers etc.
needs extensive co-ordination.
Sharing advertisement/promotion expenses is
another area requiring co-ordination between
organisation and distribution.
Sales Management & Sales Force Management 25
Business - Chapter 1 Chapter 1

26. Co-ordination of Manufacturing
Very often customers complain against quality,
reliability, maintenance and operational problems.
Such matters requires prompt action by manufacturing
divisions.
They in turn solicit the services of R & D engineers, if
need be, for incorporating modification or re-drafting
"Operating and Maintenance Instructions."
Many times, distributors complain on non-availability of
spares or replacement of item returned for repair.
Salesmen efforts with manufacturing divisions to solve
many such problems will yield customer satisfaction and
goodwill.
Sales Management & Sales Force Management 26
Business - Chapter 1 Chapter 1

27. SALES MANAGEMENT CYCLE
AND CONTROL
The Objective:
Control is one of the managerial functions of sales
management.
Imaginative control is necessary to cut down costs
without demoralising the sales force.
Following are the several phases of control:
Planning phase & Setting up standards
Data collection, Analysis & Performance evaluation
Correcting controllable variables &Tackling
uncontrolled variables
Pro-active MIS.
Sales Management & Sales Force Management 27
Business - Chapter 1 Chapter 1

28. Planning Phase
Sales executive finds answers to the
following aspects:
1. The current state of business.
2. The past experience to reach the current state.
3. The targets set for a given future period.
4. The methods to meet the targets set forth.
Head of the sales executives identifies the
strengths and weaknesses of existing plans,
policies and procedures.
Sales Management & Sales Force Management 28
Business - Chapter 1 Chapter 1

29. Performance Standard
The chief of sales force, sets up quantitative
standards to measure the performance.
Eliminates inherent weaknesses to the existing
standards.
Ultimate test is to set up a standard to suit each
individual salesman/situation
Should contribute "more to personal selling
efficiency than it costs."
The standards are specified within a range of
performance (a minimum and maximum)
Sales Management & Sales Force Management 29
Business - Chapter 1 Chapter 1

30. Data Collection and Analysis
The performance is evaluated at periodic intervals.
There is an optimum frequency of such evaluation
period.
Too frequent evaluation increases costs prohibitively
high compared to its benefit.
By and large, annual performance assessment is a
popular method.
In the beginning stages performance of sales
personnel are evaluated at higher frequencies like
quarterly or half yearly etc.
Sales Management & Sales Force Management 30
Business - Chapter 1 Chapter 1

31. Performance Evaluation
Following are essential features of a good
control system:
Timely availability of information.
Advice on actions necessary to correct poor
performance.
Allowances must be made for situations beyond
the control of individuals.
Only deviations which are beyond the accepted
limits must be reported to higher levels for
intervention based on the "principles of
management by exceptions."
Sales Management & Sales Force Management 31
Business - Chapter 1 Chapter 1

32. Pro-active MIS
Control Mechanism is primarily intended to ensure
performance to meet desired standards.
Corrective actions need time. Hence, the higher
management levels must get the feedback in time so that
they have the opportunity to initiate corrective actions.
This is called proactive Management Information
System (MIS).
The first step of control is to identify factors responsible
for performance. These factors come under two
categories viz.:
Controllable variables
Uncontrollable variables
Sales Management & Sales Force Management 32
Business - Chapter 1 Chapter 1

33. Corrective Action for
Controllable Variables
Performance evaluation depends on the criteria
of measurement.
Corrective action for poor performance comes
under following controllable variables :
Direction for better methods of management.
Better guidance, training and development.
Issuing amendment to existing procedure, practices
and criteria of measurement to keep performance
within desired limits.
Sales Management & Sales Force Management 33
Business - Chapter 1 Chapter 1

34. Corrective Action for
Uncontrollable Variables
The shortfall of production can be due to any
of the reasons:
Existing sales objective is unrealistic.
Existing standard is too high to achieve.
Defective Plans and Policies.
In all such cases, management must take the
responsibility to amend editing sales
objectives, plans, policies and performance
standard to suit practical conditions.
Sales Management & Sales Force Management 34
Business - Chapter 1 Chapter 1

35. GENERAL SALES MANAGER
General Sales Manager (GSM) or G.M. (Sales), is
the functionary at corporate headquarters.
GSM usually reports to the Director or Vice
President, Marketing.
GSM is responsible for the following:
Secure maximum sales volume.
Develop and implement effective sales policies plans
and programme for all products at all territories.
Sales Management & Sales Force Management 35
Business - Chapter 1 Chapter 1

36. DUTIES AND RESPONSIBILITIES of GSM
Sales Programme:
Lay down long-term and short-term sales
objectives in terms of sales, profits, growth, market
share etc.
Design detailed sales programme to improve
competitive position to reach laid down sales
volume objective and reduce cost of sales and
distribution.
Reviews and approves sales policies, strategies and
pricing policies to ensure short-term operations are
in accordance with long-term plans.
Sales Management & Sales Force Management 36
Business - Chapter 1 Chapter 1

37. DUTIES AND RESPONSIBILITIES
of GSM
Organisation:
Set up and control effective organisation
structure, to carry out departmental
responsibilities.
Provide leadership to sales force to motivate
them by developing appropriate reward and
compensation plan which meet the
organisational objectives as well as individual
aspirations.
Sales Management & Sales Force Management 37
Business - Chapter 1 Chapter 1

38. DUTIES AND RESPONSIBILITIES
of GSM
Liaison Function:
Sales manager must develop effective liaison
with superiors, colleagues and other heads of
departments like Production, Finance,
Personnel etc.
To support the sales force efforts and customer
satisfaction.
This will ensure healthy internal and external
relations
Sales Management & Sales Force Management 38
Business - Chapter 1 Chapter 1

39. DUTIES AND RESPONSIBILITIES
of GSM
Sales Force Management :
Locate reliable sources of sales force and establish
sound selection process.
Organise effective T&D programme to improve their
performance level.
Identify competent sales personnel for promotion and
other incentives to retain them and find continuous
replacement for drop-outs.
Organise effective compensation packages and
leadership for motivation and better performance.
Introduce control for meeting targets and weed out
dead wood.
Sales Management & Sales Force Management 39
Business - Chapter 1 Chapter 1

40. DUTIES AND RESPONSIBILITIES
of GSM
Communication:
Continuous and effective communication is
established with Director (Marketing) and sales
force
Information is updated in regards to overall
departmental performance on sales against
objectives, problem areas, special
achievements, competitors' actions and
customer expectations etc.
Sales Management & Sales Force Management 40
Business - Chapter 1 Chapter 1

41. DUTIES AND RESPONSIBILITIES
of GSM
Control:
Ensures control to dovetail between
production and sales, so as to minimise
inventory level.
Introduce strict control on expenditure to
ensure expenses are within budgetary
provisions.
This will assist taking corrective action when
deviations are beyond acceptable limits.
Sales Management & Sales Force Management 41
Business - Chapter 1 Chapter 1

42. FIELD SALES MANAGER (FSM) OR
DISTRICT SALES MANAGER (DSM)
Field or District Sales Manager (DSM) reports
to General Sales Manager (GSM).
The primary objective is to secure maximum
sales in the Sales District (territory) in
accordance with laid down sales budget.
Sales Management & Sales Force Management 42
Business - Chapter 1 Chapter 1

43. DUTIES AND RESPONSIBILITIES
OF FSM OR DSM
Supervision of Sales Personnel:
Evaluate sales opportunities in the district and assign territories
to sales persons based on equitable work load and minimum
travel requirement.
Supervise the work load of sales person by proper direction,
guidance and assistance to achieve and sustain competitive
advantage.
Attend to sales persons' important personal problems to keep
them happy and contented, to devote full time to the sales work.
Rate sales persons, in their performance, and discuss with them,
at least once in a year, focusing their attention to areas of
improvement.
Sales Management & Sales Force Management 43
Business - Chapter 1 Chapter 1

44. DUTIES AND RESPONSIBILITIES
OF FSM OR DSM
Control:
Prepare short-term sales forecast of district by
collecting similar forecasts of territories from sales
persons to prepare accurate sales plans, fixing
quotas and budgets.
Prepare periodic progress review of sales against
planned targets/objectives.
Report to GSM any significant development and
information on market intelligence received.
Sales Management & Sales Force Management 44
Business - Chapter 1 Chapter 1

45. DUTIES AND RESPONSIBILITIES
OF FSM OR DSM
Cost Accounting and Administration:
Responsible for administration of direct sales
office and warehouse and stock facilities as per
laid down policies and procedures.
Effective liaison with technical specialists,
other DSMs and headquarters for team work to
enhance sales turnover, reduce costs and
implement faithfully the sales programme.
Sales Management & Sales Force Management 45
Business - Chapter 1 Chapter 1

46. DUTIES AND RESPONSIBILITIES
OF FSM OR DSM
Communication:
Interpret sales plans, policies and programmes
received from corporate headquarters and explain
to sales force.
Convey any relevant information received from
market intelligence from customers, competitors
and sales force which are of significant value to
top management in corporate office.
Promote better customer relations by participating
in the activities of social and professional bodies in
the district territories.
Sales Management & Sales Force Management 46
Business - Chapter 1 Chapter 1

47. Performance Evaluation
DSM's performance is evaluated based on the
following:
Reaching or exceeding laid down sales targets.
Limiting sales expenses within the budgeted
figures.
Maintain profit contribution of district office,
warehouses and stock facilities in line with the
plan targets.
Maintain turnover rate of sales persons at
satisfactory levels.
Sales Management & Sales Force Management 47
Business - Chapter 1 Chapter 1

48. FUNCTIONS OF SALES MANAGER
Planning Functions:
Lays down sales objectives, policies and strategies.
Prepare a sales plans and programme to implement
sales strategies.
Design and administer suitable sales organisation.
Designing sales territories & Deciding the size of
sales force.
Formulation of personal selling objectives.
Organising sales forces selection, recruitment
socialising (orientation) and placement.
Training and development, career planning, transfers
and promotion.
Sales Management & Sales Force Management 48
Business - Chapter 1 Chapter 1

49. QUALITIES/ABILITIES/CHARACTERISTIC
OF A SALES MANAGER
There are two opinions on the success of
sales managers.
1. Sales abilities are inborn qualities
2. Sales abilities are developed.
Some of the sales abilities like gift of gap,
pleasing manner, extrovert nature are inborn.
However, others like analytical ability,
negotiation skills, leadership, etc. are
developed.
Sales Management & Sales Force Management 49
Business - Chapter 1 Chapter 1

50. QUALITIES/ABILITIES/CHARACTERISTICS
OF A SALES MANAGER
Following five abilities are identified:
1. Leadership and Supervision-
2. Planning and Conceptual Skill
3. Self direction and Self control
4. Organising abilities
5. Time-management
Sales Management & Sales Force Management 50
Business - Chapter 1 Chapter 1

51. Leadership and Supervision
Motivating salesmen in competitive environment
need, more than anything else, the leadership
qualities.
Leadership means the ability to influence
subordinate willingly doing their work
meticulously.
This involves proper delegation of authority,
effective supervision through direction and
control, better communication skills etc.
By effective supervision, work is distributed
based on capabilities and aptitudes of each.
Sales Management & Sales Force Management 51
Business - Chapter 1 Chapter 1

52. Leadership and Supervision
By proper training, individual skills and
knowledge are improved. This will improve
interest and competence in them.
Better human relations skill and team spirit
inculcate "espirit-de-corps" in them.
All these enhance "empowerment" which is
manifested by a sense of belongingness and
commitment by developing positive attitude.
Sales Management & Sales Force Management 52
Business - Chapter 1 Chapter 1

53. Planning and Conceptual Skill
Planning is a sine qua non for success in sales and
the essential ability for a manager is his capability
to foresee far in to the future which is called
"conceptual skill".
The rapid changes in life style, affect market
conditions.
Technological changes affect products. Effective
communication improve abilities of competitors
to bring in new products in market.
Consumer force, and political patronage of
consumers can make matters worse.
Sales Management & Sales Force Management 53
Business - Chapter 1 Chapter 1

54. Planning and Conceptual Skill
Market manager must be able to foresee
these changes in advance and alert his
management to take corrective actions in
time to attain and sustain competitive
advantage in market.
Further more, such changes must be
incorporated in the planning by updating
or amending plans.
Sales Management & Sales Force Management 54
Business - Chapter 1 Chapter 1

55. Self Direction and Self Control
Sales executives are the "live wire" in an
organisation and are the revenue earners.
Being at the centre stage of activities, sales manager
must know what company expect from him.
Whether defined or not, he must assign his own
duties and responsibilities and act accordingly.
Being a specialist in his field, he does not look up to
anyone in his organisation to guide and control him.
As and when market conditions change, he rewrites
his own agenda and assumes responsibility of new
tasks, self-assigned by himself.
Sales Management & Sales Force Management 55
Business - Chapter 1 Chapter 1

56. Organising Ability
Sales manager must be a good organiser and real
“GO-GETTER".
He must organise an effective team, make a structure
suitable for a given situation, recruit and select
proper salespersons to manage different territories &
products, delegate authority, co-ordinate and control
their activities, motivate and compensate their work,
recognise their efforts and acknowledge good work.
He is to develop his team giving them adequate
monopoly and freedom of action and at the same
time maintain strict control on their activities
keeping in mind, that the organisational objectives
are not lost sight of.
Sales Management & Sales Force Management 56
Business - Chapter 1 Chapter 1

57. Time-Management
Time is the scarcest of all resources.
One has to balance his time between planning
functions, and operating functions properly.
SM must also find time for meeting his salesmen,
customers and distributors.
Also find time to meet his superiors at corporate
headquarters, as well as do liaison functions with
other departments.
Sales Management & Sales Force Management 57
Business - Chapter 1 Chapter 1