SIDDANNA M BALAPGOL

1. Dr. Rahul Pratap Singh
Kaurav
1

2. Session I
SALES MANAGEMENT:
ITS NATURE, REWARDS, AND
RESPONSIBILITIES
2

3. WHAT IS SALES MANAGEMENT?
Sales management is the attainment of sales force
goals in an effective and efficient manner through:
• Planning
• Staffing
• Training
• Leading
• Controlling organizational resources
3

4. FIGURE: THE SALES MANAGEMENT PROCESS
Sales Management Functions
4

5. PLANNING
The conscious, systemic process of making
decisions about goals and activities that an
individual, group, work unit, or organization will
pursue in the future and the use of resources
needed to attain them.
5

6. STAFFING
Activities undertaken to attract, develop, and
maintain effective sales personnel within an
organization.
6

7. SALES TRAINING
The effort put forth by an employer to provide the
salesperson job-related culture, skills, knowledge,
and attitudes that result in improved performance
in the selling environment.
7

8. LEADING
The ability to influence other people toward
the attainment of objectives.
8

9. CONTROLLING
Monitoring sales personnel’s activities,
determining whether the organization is on target
toward its goals, and making corrections as
necessary.
9

10. Sales Management is the attainment of
sales goals in an ethical, efficient, and
effective manner.
SALES PERFORMANCE
10

11. The sales manager is the most important person in a sales organisation. All
activities are based on his functions and responsibilities. The following are
some of the principal duties of a sales manager:
1. Organising sales research, product research, etc.
2. Getting the best output from the sales force under him.
3. Setting and controlling the targets, territories, sales experiences,
distribution expenses, etc.
4. Advising the company on various media, sales promotion schemes, etc.
5. Monitoring the company’s sales policies.
Roles of Sales Manager: Duties and Responsibilities
11

12. Cont…
.
In the table, Al Reid gives the steps necessary for getting success in
selling:
To yourself To your company To your customers
Increase basic selling skills.
Develop management
abilities.
Keep pace with changes,
trends and developments in
your territory.
Study the latest products,
promotion policies and
procedures.
Be alert to new sales and
merchandising ideas.
Be proud of your association
with your company.
Maintain the company
standing and standards with
all customers.
Inform the headquarters and
your supervisors, through
established channels, about
changes and developments in
your territory.
Be prompt in handling
records, reports,
correspondence, etc.
Work closely with decision-
takers and influencers in each
account.
Point out the advantages of
an association with your
company.
Keep accounts current and
up-to-date on all company
advertising and promotional
activities.
Suggest ideas, methods,
techniques and tips that can
stimulate sales.
Territory Sales Manager’s Job Responsibilities

13. Cont…
.
Grow, so that you can assume
greater responsibilities as
opportunities permit.
Maintain the appearance and
goodwill expected of a territory
sales manager.
Analyse your weak and strong
points and then think about
them.
Cut selling costs by
economical routing, good use
of time, planning and greater
awareness of opportunity.
Check demand and movement
of products in the territory.
Report activities of the
competitors.
Strive to reach the best goals.
Ask for help, when you need it.
Cooperate with other
departments of the company.
Inform the customers about
the trends in their areas.
Handle complaints effectively
and to the complete
satisfaction of the
complainants.
Suggest the best technique for
selling your products to the
customers.
Organise presentations to
inform and save time.
Make the customers aware of
the changes in the company’s
policies or procedures.
Stimulate and maintain
enthusiasm for your products.
Build and maintain goodwill.

14. Functions of Personal Selling
Personal selling is an oral presentation in face to face conversation with one
or more prospective customers for the purpose of making sales. The main
functions of personal selling are as follows:
1. Provide service to customers (Introduce the product, explain the right
use, Convince them etc.)
2. To sell the product
3. Maintain the sales record
4. Executive Function
5. Develop goodwill
6. Achieve sales target 14

15. Changing Face of Personal Selling
Modern sales approach is based on the following
parameters
1. Value Sharing.
2. Relation Building.
3. Role Playing.
4. Changing Approach.
15

16. Benefits of personal selling
1. Availability of expertise
2. Early access to relevant market information
3. Availability to be flexible regarding processes, timing
4. Faster, shorter contracts
5. Economies of information sharing
6. Lower cost of selling
7. Knowledge of other uses or applications 16

17. Steps in Personal Selling
Successful personal selling calls for an integrated approach
devised from the experience of the sales personnel. The
approach comprises the steps as shown in the figure here. Each
of these steps are further described in brief.
Steps in Personal Selling
17

18. Prospecting
Prospecting is the process of identifying prospective buyers of the
product. A prospect is qualified if he has the authority, need, ability
and eligibility to buy. There are different ways to identify prospects.
Some of the most frequently used methods are described below:
 Acquaintance References
 Cold Calling
 Centre of Influence Method
 Personal Observation Method
 Direct Mail or Telephone Method
 Company’s Records
 Newspapers
 Retailers
18

19. Pre-approach
It emphasises that the salesman should know, after identifying the
prospect in the prospecting stage, the prospect’s likes and dislikes,
his needs, preferences, habits, nature, behaviour, economic and
social status etc.
Significance of Pre-Approach
1. Salesman concentrates only on the prospects and not the
suspects.
2. S/He is able to give a sales presentation more efficiently,
effectively and with confidence.
3. It does not waste the prospect’s time and energy since the
salesman is already aware of the needs and preferences of the
prospect. 19

20. Cont….
Approaching
 In this stage the prospect and the salesman come in contact with
each other face to face.
 The salesman has an opportunity to understand and interact with
the prospect in a better way.
 Salesman should put forward his best efforts to make the best use
of this opportunity in getting the attention of the prospect and to
convince him to buy the product.
 Getting the attention of the prospect and persuading him to buy
are the two main objectives of a salesman. 20

21. Cont….
Key guidelines for successful approach
 Prior Appointment
 Timing
 Command
 Relaxed Atmosphere
 Open Mindedness
 Courtesies
 Effective Presentation
 Follow up
21

22. Cont….
Presentation
 Quick presentation creates a good impression.
 Attractively packaged, decorated and well-organised.
 Should explain the product with its features and price
advantage to the customer in simple and easy terms.
 Customer be shown the kind of quality that he is looking for.
 Helps the salesman to prove the features of the product and
emphasise its genuineness. 22

23. Cont….
Demonstration
 Demonstration is an exercise to prove the characteristics of the
product.
 It highlights various attributes of the product such as utility,
performance, service and quality.
 It is only during the demonstration that the customer gets an
opportunity to verify the facts about the product.
 Demonstration is imperative and essential for a prospect to make
a buying decision.
23

24. The Close
 This is the last stage of any sales presentation.
 The main aim of the close is to convince the prospect to sign
the order form or to place an order immediately rather than in
the future.
 It is also important that through proper planning, prospecting,
presentation and demonstration the salesman should try to
capture the attention of the prospect and not let the prospect
change his mind.
24

25. Cont….
Relationship of Salesmanship with Sales Management
and personal Selling
Salesmanship & Personal Selling
1. The ability to quickly develop rapport with their prospective
customers.
2. A desire to truly help their customers.
3. The habit of asking questions to gather information before making a
pitch.
4. Sticking to a consistent, proven sales process. 25

26. FORECASTING MARKET DEMAND
A marketing decision support system (MDSS) is an
ongoing, future-oriented structure designed to generate,
process, store, and later retrieve information to aid
decision making in an organization’s marketing
program.
It involves problem-solving technology composed of
people, knowledge, software, and hardware “wired”
into the sales management process.
26

27. USES OF SALES FORECASTS
A sales forecast is the estimated ` or unit sales for
a specific future time period based on
- proposed marketing plan
- assumed market environment.
27

28. 1. A sales forecast becomes a basis for setting and maintaining a
production schedule – manufacturing.
2. It determines the quantity and timing of needs for labor, equipment,
tools, parts, and raw materials – purchasing, personnel.
3. It influences the amount of borrowed capital needed to finance the
production and the necessary cash flow to operate the business –
controller.
4. It provides a basis for sales quota assignments to various segments of
the sales force – sales management.
5. It is the overall base that determines the company’s business and
marketing plans, which are further broken down into specific goals –
marketing officer.
A sales forecast is important for at least five reasons:
28

29. Marketing Plan
Sales Forecasts Sales Force Budget
FIGURE: PLANNING/FORECASTING/BUDGETING SEQUENCE
29

30. THE FORECASTING PROCESS
The forecasting process refers to a series of
procedures used to forecast.
30

31. Forecast
Objective
Determine Dependent and
Independent Variables
DevelopForecast
Procedure
SelectForecast
AnalysisMethod
TotalForecast
Procedure
GatherandAnalyze
Data
PresentAssumptions
aboutData
MakeandFinalize
Forecast
EvaluateResults
versusForecast
FIGURE: THE FORECASTING PROCESS
31

32. FIGURE 5.3 BASIC STEPS IN BREAKDOWN METHOD OF FORECASTING SALES
General Environment Forecast
Industry Sales Forecast
Company Sales Potential
Company Sales Forecast
Product Lines
Individual Products for
Customers-Territories-Regions-Devisions-
India-World
32

33. Industry sales forecast, or market potential, is
the estimated sales for all sellers.
Company sales potential is the maximum
estimated or potential sales the company may
reach in a defined time period under given
conditions.
The company’s share of the estimated sales for
an entire industry is referred to as market
share.
33

34. SALES FORECASTING METHODS
• Survey methods are qualitative and include
executive opinion, sales force composite, and
customer’s intention surveys.
• Mathematical methods are test markets,
market factors, trend analysis, and
correlation analysis.
Two categories of sales forecasting methods exist:
34

35. SurveyMethods
Executive
Opinion
User’s
Expectation
Sales Force
Composite
Build-to-
Order
MathematicalMethods
Test Market Regression
Naive Trend
Moving
Average
Exponential
Smoothing
FIGURE: THE MORE POPULAR OF MANY FORECASTING METHODS
35

36. SURVEY FORECASTING METHODS
Four basic survey methods are
• Executive Opinion
• Sales Force Composite
• User’s Expectations
• Build-to-Order
36

37. Executive Opinion
1. By one seasoned individual (usually
in a small company).
2. By a group of individuals, sometimes
called a “jury of executive opinion.”
Executive forecasting is done in two
ways:
37

38. Delphi Method
Administering a series of
questionnaires to panels of experts.
38
Sales Force Composite
Obtaining the opinions of sales
personnel concerning future sales.

39. User’s Expectations
Consumer and industrial
companies often poll their actual or
potential customers.
39
Build-to-Order
Companies build final products only after
firm orders are placed.

40. MATHEMATICAL FORECASTING
METHODS
Test markets are a popular method of
measuring consumer acceptance of new
products.
40

41. Time Series Projections
Time series methods use chronologically
ordered raw data.
41
Naïve Method
Next Year’s Sales = This Year’s Sales X This Year’s
Sales
Last Year’s
Sales

42. Moving Average
Moving averages are used to allow
for marketplace factors changing at
different rates and at different times.
42
Regression Analysis
Regression analysis is a statistical
method used to incorporate independent
factors that are thought to influence
sales into the forecasting procedure.

43. Linear Relationship
Population
(A)
Sales
0
Curvilinear Relationship
Population
(B)
Sales
0
FIGURE: REGRESSION ANALYSIS
43

44. Have You Developed
a Good
Sales Forecasting
Process?
Market Decision Support System
Breakdown
Use Multiple
Forecasting
Methods
Buildup
FIGURE: QUESTIONS TO ANSWER TO IMPROVE CHANCES OF HITTING THE
FORECASTING BULL’S-EYE
H
ave
You
Considered
the
Basicsto
Increasing
Accuracy
and
Selecting
Your
Forecasting
M
ethod?
W
hich
Forecast(s)
M
ethod
Should
You
U
se?
Could
O
utside
Sources H
elp? Could
theCom
puter
and
SoftwareH
elp?
90%
80%
70%
60%
140%
130%
120%
110%
F
O
R
E
C
A
S
T
44

45. TABLE: GUIDE TO SELECT BEST FORECASTING METHOD
FORCASTING
METHOD TIME SPAN
MATHEMATICAL
SOPHISTICATION
COMPUTER
NEED ACCURACY
Executive Opinion Short to medium Minimal Not essential Limited
Delphi Method Medium to long Minimal Not essential Limited; good in dynamic
conditions
Sales Force Composite Short to medium Minimal Not essential Accurate under dynamic conditions
User’s Expectations Short to medium Minimal Not essential Limited
Test Markets Medium Needed Needed Accurate
Naïve Method Present to medium Minimal Not essential Limited
Moving Average Short to long Minimal Helpful Accurate under stable conditions
Exponential Smoothing Short to medium Minimal Helpful Accurate under stable conditions
Least Squares Short to long Needed Desirable Varies widely
Regression Analysis Short to Medium Needed Essential Accurate if variable relationships
stable
45

46. THE SALES MANGAGER’S BUDGET
The sales force budget is the
amount of money available or
assigned for a definite period,
usually one year.
46
• Planning
• Coordination
• Control
BUDGET
PURPOSES

47. TABLE: SALES FORCE OPERATING COSTS
1. Base salaries 4. Special incentives
a. Management 5. Office expenses
b. Salespeople 6. Product samples
2. Commissions 7. Selling aids
3. Other compensation 8. Transportation expenses
a. Social Security 9. Entertainment
b. Retirement plan 10. Travel
c. Stock options
d. Hospitalization
47

48. BUDGETS SHOULD BE FLEXIBLE
Sales, costs, prices, or the competition’s
marketing efforts are some factors that may
be higher or lower than expected.
48

49. WHAT IS A SALES TERRITORY?
A sales territory is composed of
a group of customers or a
geographic area assigned to a
salesperson.

50. WHO IS RESPONSIBLE FOR
TERRITORIAL DEVELOPMENT?
Development of sales territories
is usually the responsibility of
the sales manager overseeing
the larger sales units within the
organization.

51. WHY ESTABLISH SALES
TERRITORIES?
• To obtain thorough coverage of the market.
• To establish a salesperson’s responsibility.
• To evaluate performance.
• To improve customer relations.
• To reduce sales expense.
• To allow better matching of salesperson to customer.
• To benefit salespeople and the company.

52. Why sales territories may not be developed?
• Salespeople may be more motivated if they
are not restricted.
• The company may be too small.
• Management may not want to take the time,
or have the know-how.
• Personal friendship may be the basis for
attracting customers.

53. FACTORS TO CONSIDER WHEN DESIGNING SALES
TERRITORIES
Sales force objectives may be based on
factors such as
- contribution to profits,
- return on assets,
- sales/cost ratios,
- market share, or
- customer satisfaction.

54. FIGURE: FACTORS TO CONSIDER WHEN DESIGNING TERRITORIES
SelectBasic
ControlUnit
Analyze
Workload
DetermineBasic
Territories
Assignto
Territories
Customer
ContactPlan
Evaluate,Revise
ifNeeded

55. SELECT BASIC CONTROL UNITS
• States
• Counties
• Cities and zip-code areas
• Metropolitan statistical areas
• Trading areas
• Major/ Key accounts
• A combination of two or more factors

56. ANALYZE SALESPEOPLE’S WORKLOADS
Workload is the quantity of work expected
from sales personnel. Three of the main
influences on workload involve
- the nature of the job,
- intensity of market coverage, and
- type of products sold.

57. DETERMINE BASIC TERRITORIES
The breakdown approach uses
factors such as sales, population, or
number of customers.
Forecasted Sales
Average Sales per SalespersonSales Force Size =

58. 1. Forecast sales and
determine sales potentials.
4. Tentatively establish
territories.
2. Determine the sales
volume needed for each
territory.
5. Determine the number of
accounts for each territory.
3. Determine the number of
territories.
6. Finalize the territories,
and draw the boundary
lines.
TABLE: SIX STEPS TO CONSIDER WHEN
DETERMINING A FIRM’S BASIC TERRITORIES

59. CUSTOMER CONTACT PLAN
The customer contact plan involves
scheduling sales calls and routing a
salesperson’s movement around the
territory.

60. Scheduling refers to establishing a fixed time when
the salesperson will be at a customer’s place of
business.
In theory, strict formal route designs enable the salesperson to:
1. Improve territorial coverage.
2. Minimize wasted time.
3. Establish communication between management and
the sales force in terms of the location and activities
of individual salespeople.

61. FIGURE: THREE BASIC ROUTING PATTERNS
Base cc
cccc
Straight-Line Pattern
First Call
Work Back
Basec
c
c c
c
c
c c
c
c
cc
cc
cc
cc
c
c
cc
c
Cloverleaf Pattern
Each Leaf Out and
Back Same Day
Major-City Pattern
1 - Downtown
1
2 3
5 4

62. OPEN SALES TERRITORIES
Open sales territories are those left vacant until
new salespeople are assigned to them. Vacant
territories experience the following:
• Lost sales due to the vacancy.
• Lost sales due to the time needed for the
new salesperson to build sales productivity.
THE SALES TERRITORY IS A BUSINESS
THE RIGHT SALESPERSON PAYS OFF

63. Sales leakage refers to the lost sales
due to both the vacancy and the time
required for the new salesperson to
produce at average.

64. WHAT IS A QUOTA?
A quota refers to an expected performance
objective.
Quotas are tactical in nature and thus derived
from the sales force’s strategic objectives.

65. WHY ARE QUOTAS IMPORTANT?
• Quotas provide performance targets.
• Quotas provide standards.
• Quotas provide control.
• Quotas provide change of direction.
• Quotas are motivational.

66. TYPES OF QUOTAS
• Sales volume quotas.
• Breakdown total sales volume.
• Profit quotas.
• Expense quotas.
• Activity quotas.
• Quota combinations.

67. Sales volume quotas includes ` or
product unit objectives for a
specific period of time.

68. • Individual established and new products.
• Geographic areas based on how the sales
organization is designed, which would
include:
• Sales division.
• Sales regions.
• Sales districts.
• Individual sales territories.
• Product lines.

69. • Gross margin quota determined by
subtracting cost of goods sold from sales
volume.
• Net profit quota determined by subtracting
cost of goods sold and salespeople’s direct
selling expense from sales volume.
The two types of profit quotas:

70. Expense quotas are aimed at controlling
costs of sales units. Often expenses are
related to sales volume or to the
compensation plan.

71. Activity quotas set objectives for job-
related duties useful toward reaching
salespeople’s performance targets.
Customer satisfaction refers to feelings
about any differences between what is
expected and actual experiences with the
purchase.

72. METHODS FOR SETTING SALES QUOTAS
• Quotas based on forecasts and potentials.
• Quotas based on forecasts only.
• Quotas based on past experience.
• Quotas based on executive judgments.
• Quotas salespeople set.
• Quotas related to compensation.

73. TABLE: LEVELS OF ORGANIZATIONAL SALES PLANNING
LEVEL PURPOSE: WHAT IS
PLANNED
WHO (USUALLY) IS
INVOLVED
1. Marketing •Organizational goals (increase in
market share or penetration,
increase in customers, increase in
sales dollars and units sold)
Upper management and sales and
marketing executives
2. Regional plan •Priorities (which regions, markets,
and products to emphasize)
Regional and district sales managers
(which input from sales reps)
3. District plan •Dollar allotment (for promotion,
advertising, new employees, sales
incentives, and so on)
District managers and sales
representatives
4. Territorial plan •Goals for number of new
customers and for increased
business with old customers in each
region and territory
Sales representatives

74. AGOOD OBJECTIVE AND QUOTA PLAN IS
SMART
Specific
Measurable
Attainable
Realistic
Time specific