sales management and sales promotion

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  1. 1. SALES MANAGEMENT AND SALES PROMOTION
  2. 2. SALES MANAGEMENT According to American Marketing Association Sales Management is defined as the planning, direction and control of personal selling, including recruiting, selection, equipping, assigning, routing, supervising, paying and motivating as these tasks; apply to the personal sales force.
  3. 3. Job and Role of Sales Management in Organization Planning: Building a profitable customer-oriented sales team Staffing: Hiring the right people to sell and lead Training Educating sales personnel to satisfy customers Leading Guiding average people to perform at above average levels Controlling Evaluating the past to guide the future
  4. 4. Sales Organization and Its Evaluation According to Still and Cundiff: A sales organization, like any organization, is a group of individuals striving jointly to reach certain goals and bearing formal as well as informal relations to each other
  5. 5. Evaluation of Sales Organization Effectiveness of a Sales organization Sales Analysis Cost Analysis Productivity Analysis
  6. 6. Sales Analysis Methods of Sales Analysis: Total Sales Volume Sales by Region Sales by Salesperson Sales by Customer Classification Sales Analysis by product Line Sales Analysis by Distribution Channels Sales Analysis by Units Sold
  7. 7. Cost Analysis SOMETIMES CALLED AS PROFITABLE ANALYSIS OR MARKETING COST ANALYSIS Methods of Cost Analysis: Analysis of Ledger Expenses Analysis of Activity Expenses Personal Selling Expenses Advertising and Sales promotion expenses Warehousing and shipping expenses Order Processing Expenses Administration Expenses Analysis of Activity Costs by Market Segments
  8. 8. Productivity Analysis Productivity is a measure of output from a production process, per unit of input. Productivity=Outputs Inputs
  9. 9. Selling Functions Product Planning and Development Contactual Function Creation of Demand Negotiations Sales Contract
  10. 10. System Selling System selling entails selling a set of interrelated components that fulfill all or a majority of a customers needs in a product or service area. The concept of systems selling means selling a total package of related goods and services to solve a customers problems.
  11. 11. Importance of System Selling in Contemporary Environment Produces a larger Initial Sale Reduces Compatibility Problems Supplier also Retained Save Time Consultative Role Maximizes Effectiveness
  12. 12. Selling of Services as Opposed to Selling of Tangible Products A service is the non-material equipment of a good. Hotel Business Education Medical Service Transportation Insurance Service Coaching Banking Personal Care Legal Services
  13. 13. Selling Services Versus Selling Products Basic Difference Tangibility Transfer of Ownership Pricing Features and Benefits Marketing Strategies Visuals Re-selling Customer Relationship Customer Relationship
  14. 14. Sales Management Planning According to American Marketing Association; Sales planning are the work of setting up objectives for selling activities, determining and scheduling the steps necessary to achieve these objectives.
  15. 15. Components of Sales Management Planning 1) Selling Objectives: determining and achieving the objectives according to the plan. 2) Sales Policies: Guidelines made for deciding and performing various selling activities. 3) Sales Programme: Launching a new product, Sales promotion activities, entering into new market, sales force training. 4) Sales Procedure: Plans which determine sequence of different selling activities. 5) Sales Rules: What is to be done and what is not to be done in particular situation. Applicable to all sales personnel without distinction. 6) Sales Forecasts: is an estimate of sales in rupees or in units or in both for a specified future period under proposed marketing plan. 7) Sales Budgets: estimate of future sales, selling expenses and total profits from sales orientations. 8) Sales Strategy: to consider the plans and policies of competing business units and plan our strategy accordingly 9) Sales Quotas: individual sales target figure assigned to each sales units.
  16. 16. Types of Sales Management Planning a. Sales Plan on the basis of Market area b. On the basis of Selling Functions c. On the basis of Types of Customers d. On the basis of Types of Products e. On the basis of Time period
  17. 17. SALES MANAGEMENT INFORMATION SYSTEM SMIS is the system by which sales data are collected, analyzed, interpreted and distributed to a companys sales managers. It helps to spot important trends in market, changing customer needs and opportunities for market growth. Information comprising the SMIS is collected from salespersons field reports, internal sales records, historical data. Useful tool to spot problems and opportunities and to develop projections.
  18. 18. Features of SMIS Access of Information Managers can access the information they need, the way they want it from own desktop Reports Overall sales performance Detailed break-down of sales by salesperson/by period against budgetary targets Revenue projections based on contracts written Comparison of salesperson performance against sales targets Station inventory availability and yield Data Mining Tools: Extract information from invoice sales to give custom ranking and analysis broken-down by user-selected criteria; sales person, type of business, area, timeframe Real-Time Analysis: Real-time analysis of projected sales revenue gives detailed break-downs of billing by type of sale over a user selected timeframe. History Salesperson performance history Monitoring actual sales against individual monthly targets
  19. 19. Components of SMIS Sales Support: Product information Product Price Discount information Sales incentives Sales promotions Financing plans for customer Strengths and weaknesses of competitors products The histories of customer relations with the company. Sales policies and procedures established by company Product that have not yet been introduced Product inventory level
  20. 20. Sales Analysis: Product sales trends Product profitability on a product-by-product basis The performance of each sales region and sales branch Salespersons performance Customer Analysis: To establish a profile of buying habits To determine the profitability of each customer on a contribution margin basis
  21. 21. APPLICATIONS OF SMIS Business Processes: Contacting customers Selling the products and services Taking orders Following up on sales Monitor Trends: To monitor new product and sales opportunities Support planning for new products and services Monitor the performance of competitors Supports Marketing Research: Supporting market research Analyzing advertising and promotional campaigns, pricing decisions Provide Aids for Operational Management: Aids to locating and contacting prospective customers Tracking sales and processing orders Providing customer service support Tracking of Sales: Determine sales revenue Identify hot-selling items and other sales trends
  22. 22. Sales Forecasting According to American Marketing Association: Forecasting is an estimate of sales in dollars or physical units for a specified future period under a proposed marketing plan or program and under an assumed set of economic and other forces outside the unit for which the forecast is made. The forecast may be for a specified item of merchandise or for an entire line
  23. 23. Objectives of Sales Forecasting Short-Run Objectives: Formulation of suitable production policy so as to meet the demand as per the sales forecast. To make provision for the regular supply of raw material To make the best utilization of the machines To make the regular supply of the labour force To determine appropriate price policy for a given period Estimate and provide the requisite working capital To establish the sales quotas targets for different market segments To estimate stock requirements for unfinished, semi-finished and finished products for a specific period of time.
  24. 24. Long-Run Objectives: Estimating cash inflow from sales Provision for capital expenditure Planning of plant capacity so as to meet rising future demand Manpower planning Planning for acquisition of raw materials Determining the dividend policy Establishing coordination between various functions of an organization Reducing selling cost To facilitate budgeting and budgetary control To estimate future profits of the business enterprise.
  25. 25. TECHNIQUES OF SALES FORECASTING A sales forecasting technique is a procedure for estimating how much of a given product (or for product line) can be sold if a given marketing program is implemented. Well managed companies do not rely upon a single forecasting technique but use several. Sales forecasting techniques can be broadly classified as qualitative techniques:
  26. 26. Executive Opinion Trend Projection Method Delphi Method Exponential Smoothing Sales Force Composite Method Nave/Ratio Method Survey of Buyers Expectations Regression Analysis Historical Analogy Method Econometric Method FORECASTING TECHNIQUES QUALITATIVE METHODS QUANTITATIVE METHODS
  27. 27. SALES BUDGETING Budgeting is an art of presenting future plans in quantitative terms. Sales budget is an estimate of future sales-units, sales-value, selling expenses and total profit from sales operations. Sales budget generally has two parts; 1. Revenue Part: is related to estimating sale-units and sale-value for a certain future period of time. 2. Expense Part: is related to estimating selling expenses to be incurred to achieve estimated sales.
  28. 28. Purpose and Significance of Sales Budge