sales management for iipm b1 b2

7/31/2019 Sales Management for IIPM B1 B2

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SALES MANAGEMENT

Prepared for IIPM - B1 & B2 by Prof

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Prepared for IIPM - B1 & B2 by Prof SURAJIT

WHAT IS SALES?

Two party : Buyer & Seller.

Transfer of Goods & Services.

Transfer of Ownership. Profit to the Seller.

Benefits to the Buyer.

Monitory Value.

Satisfying the need of the Buyer.

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CONTINUED----

It may be a product

Service

IdeaConcept

Destination

person


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WHAT IS SALES MANAGEMENT

American Marketing Association

Sales management means the planning, direction

and control of personal selling, includingrecruiting , selecting, equipping, assigning,

routing, supervising, paying and motivating as

these tasks apply to the personal sales force


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NATURE AND SCOPE OF SALES

MANAGEMENT

The nature or characteristics of sales

management can be explained by

a)

Its integration with marketing managementb) Relationship selling

c) Varying sales responsibilities

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2 by Prof

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INTEGRATION WITH MARKETING

MANAGEMENTSales planning should be integrated with

marketing planning.

A companys marketing plan typically consist of

two basic groups

a) Field selling teams

Contacting existing and prospective customers

b) Head quarter marketing teamPerforms support and service functions or

activities to assist or help field salespeople in

their jobs in following manner


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CONTINUED----

Promotion

Consists of advertising, sales promotion, publicity

Marketing researchCollecting and interpreting information on

customers, competitors, products, markets and so

on

Marketing logistics

Physical distribution of finished goods including

warehousing, inventory, transportation.


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RELATIONSHIP SELLING

Buyers and salespeople, who do business together

have some type of business relationship

Transactional relationship/selling

Where after the product or service is sold, the

customer is not contacted again and hence the

relationship is not extended

Value added relationship/selling

In the case of value added exchange the focus is on


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CONTINUED----

the salesperson understanding the current and

future needs of the customer correctly and

meeting those needs better than the

competitiors

Collaborative/ Partnering relationship/selling

It means important or major customers need

continuous attention through partnering or

collaborative relationships.


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VARYING SALES RESPONSIBILITIES

Selling includes a variety of sales jobs, which aredifferent from one another.

Sales position

Delivery

Delivery of a product to household consumers orto business customers

Order taker

Acts mainly as an inside order taker, whoresponds to customer demands


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CONTINUED----

Sales support peopleExpected to build goodwill and educate thedecider, instead of the purchaser or user of theproduct

Technical sales support / sales engineer

High level of technical knowledge, professionalconsulting

Demand creator or Order getter

Actively seek orders, and use creative andproblem solving selling


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SALES MANAGEMENT OBJECTIVES

Sales Volume & Sales Growth.

Share of each product in the total volume.

Market Share.

Profits. Selling Expenses.

Key Accounts.

New Accounts.

Expansion of Channels.

Proportion of Cash & Credit Sales.


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After sales services.

Training of dealers &(Customer in some

cases).


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FUNCTIONS OF SALES MANAGER

Sales manager has to make a win-win situation fora) The owners and shareholders, through higher

sales at increased profits

b)

The consumers, by giving them a perception ofgreater satisfaction by the usage of the product

c) To the staff working along with him, to make

them feel they have delivered the best

d) To the trade, distributors, traders and sellers,

retailers by ensuring their profitability levels are

maintained


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CONTINUED----

e) Induction, training and placement of salesmen

f) Devising compensation policy. Promotionavenues and long term career plans

g) Controlling the field force

h) Direction and coordination of sales force

i) Link between top management and field

j) Advertising and sales promotion

k) Winning trust and confidence of trade andcustomers


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THEORIES OF SELLING

Is selling a Science Easily taught basic

concepts

Or an Art Learned through experience

In a survey of 173 marketing executives, 46%

perceived selling as an art, 8% as a science and

46% as and art evolving into a science


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TYPES OF THEORIES

Seller oriented theories

AIDAS

Right set of circumstances

Buyer oriented theories

Buying formula theory of selling

Behavioral equation emphasizes the buyer


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SECURING ATTENTION

Getting the attention of the prospect by making

favorable comments about the prospect

Proper dress, neatness, a genuine smile and a

cheerful expression

The objective of the first few minutes of the

meeting is to put the prospect into a receptive

state of mind.

It is always a good strategy for a salesperson to

make an appointment with the prospect


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GAINING INTEREST

Leads the prospects mind to second stage of

gaining an interest

Which aspects or factors of the product or

service appeals or attracts the prospect

Different methods are used:-

Carrying a sample of the product if it is not bulkyCarrying visual aids like CD, the product leaflet,

photographs


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CONTINUED----

Ask relevant questions to understand the buyers

needs or problems as well as to identify the

strongest appeal or interest.


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KINDLING DESIRE

The objective in this stage is to arouse a strong

feeling in the prospect of wanting to have the

product or service

Salesperson continues with presentation that

how his product/service can solve the buyers

problem

In this process, the buyer may raise some

objections, which need to be answered properly

If there is an external interruptions


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INDUCING ACTIONS

Buying action or closing the sale

Some salespeople use trial close to test whether

the prospect is ready to buy.

If no the salesperson continues with the

presentation to fully convince the prospect about

his proposal


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BUILDING SATISFACTION

After the customer has given the order, the

salesperson should reassure the customer that

the decision was correct

Thanking the customer for the order, and

attending to such matters as making certain that

the order is filled as written, and following up on

promises made


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BUYING FORMULA THEORY OF SELLING

Salespeople must understand that household

and individual as well as business or industrial)

buyers pass through certain stages or steps in

buying a product.

In consumer markets, individual and household

consumers make buying decision based on five

mental stages of buying process as follows


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PROBLEM (OR NEED) RECOGNITION

The consumer buying process starts when the

prospective consumer recognizes a problem or

need.

Salesperson must identify the buyers needs to

know what information about the product

benefits should be given so as to satisfy the

buyers needs.


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INFORMATION SEARCH (COLLECTION)

An aroused consumer will search for more

information.

For low involvement products it may be mild for

high involvement products the person may want

an active information search


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POST PURCHASE BEHAVIOR

After buying the product or service, the customer

experiences some level of satisfaction or

dissatisfaction

The salespersons job does not end when the

product is purchased

It is a known fact that the buyers satisfaction is

high, if the product perceived performance is

more than the buyers expectations.

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BUYING DECISION PROCESS OF BUSINESS

BUYERS

In business or industrial markets, the decision

making process includes three additional stages

as compared to the five stages of consumer

buying process

Determination of characteristics and quantity of

needed product or service

Development of specifications of product or

service, needed and

Obtaining and analyzing supplier proposals

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PERSONAL SELLING & SALESMANSHIP

Contents:

Meaning & Concept

Buyer-Seller dyads

Essentials of Personal Selling

Method of Personal Selling

Types of Sales PersonsPhases of Selling Process

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SOME IMPORTANT ASPECTS

It enhances customer's confidence in the seller

It promotes long-term business relations throughpersonal intimacy

It provides a human touch to businesstransactions

It helps facilitate the seller to understand each

customers needs and preferences more clearlyIt helps satisfy a customer by modifying theproduct as per the customers choice andpreference

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BUYER SELLER DYADS

Dyads describe a situation in which twoPeople interact

The Sales Person & the prospect

interacting with each other constitutesone example of Buyer Seller dyads.

In both Advertising & Personal Selling ,the Seller seeks to Motivate theProspective Buyers to behave favorablytowards the Seller.

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ESSENTIALS OF PERSONAL SELLING

Product Knowledge

Company Knowledge

Competitor Knowledge

Market Knowledge

Knowledge of Selling Process

Communication Skills & Selling Skills

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METHOD OF PERSONAL SELLING

Across the table Selling.

Counter Selling

Selling at the Door Step Auction Selling

Tender Selling

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TYPES OF SALES PERSON

Salesmanship:

It is the art of successfully persuading prospects orcustomers to buy product or services from whichthey can derive suitable benefits, therebyincreasing their total satisfactions.

Salesperson:Order Takers

Inside Order Takers

Delivery Salespeople

Outside Order Takers

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Order Creators:

Missionary salespeople

Order getters

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PROCESS OR STEPS IN EFFECTIVE SELLING


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PROCESS OR STEPS IN EFFECTIVE SELLINGSURAJIT

Prospecting &Qualifying

Preapproach

Approach

Presentation&

Demonstration

Overcoming

Objections

Closing

Follow up &

Maintenance 47


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STEPS IN PERSONAL SELLING

Successful personal selling calls for an

integrated approach devised from the experience

of the sales personnel.

Following are the steps involved in personal

selling

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PROSPECTING

Prospecting is the process to identifying

prospective buyers of the product.

The prospects are those who have a need or will

to buy and the power to pay.

Prospects may be individuals or institutions

There are different ways to identify prospects

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CONTINUED----

Satisfied customer can be a good source of

information

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CONTINUED----

This method of prospecting identifies the

customer segment to whom the sales personnel

might call upon without any reference but with

an anticipation of converting the call into a sale.

Also called random prospecting

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CONTINUED----

Using this approach, the salesmen obtain the

references for prospects from the eminent

people of society

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CONTINUED----

A salesman has ample opportunity to identify

prospects on several occasions such as

interacting with friends and acquaintances,

attending seminars, social gatherings, functions,

travelling etc.

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CONTINUED----

A salesman can contact prospective buyers on

the telephone and inform them about the

product range, plus the benefits and price of the

products available.

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CONTINUED----

The salesman can refer to the companys records

and get in touch with several old and new

contacts.

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CONTINUED----

There are several people who advertise their

requirements through newspapers

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PREAPPROACH

Pre-approach is the second step in the selling

process

it emphasis that the salesman should have

prospects personal information, after identifying

the prospect in the prospecting stage.

Based on all this information, the salesman has

the necessary tools to plan his visit/interview

with the prospect and can give an effective sales

presentation

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SIGNIFICANCE

Concentrates only on the prospects

Gain all the possible information about the

prospect

It does not waste the prospects time and energy

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APPROACHING

In this stage the prospect and the salesman

come in contact with each other face to face

Here the salesman has an opportunity to

understand and interact with the prospect in a

better way

Since salesmen are of two types, viz, the

traveling salesmen and the counter salesmen,

the approach adopted by each of these

salesmen is obviously different59

APPROACH ADOPTED BY TRAVELINGPrepared for IIPM - B1 & B

2 by Prof

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APPROACH ADOPTED BY TRAVELING

SALESMEN

Difficult to approach prospect since the

prospects are generally a busy lot

Prospects may not be interested in buying the

product

The salesman must keep on trying to obtain an

interview with the prospect

If the prospect happens to be a high ranking

executive or a senior officer

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DIFFERENT WAYS TO GAIN ACCESS THEPrepared for IIPM - B1 & B

2 by Prof

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DIFFERENT WAYS TO GAIN ACCESS THE

PROSPECT

May directly approach the prospect

Salesman can seek an appointment with aprospect could be by sending an advance mailer

explaining his product and its benefits vis--visother products available in the market

Can secure an appointment with a prospect than

through a reference given by the friend, relativeor business associate of the prospect

Another effective way is to give away gifts to theprospects before asking for an appointment

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CONTINUED----

Sale letters have proved to be another kind of

door opener.

Such letters provide ample detail about the

product, benefits and scheme available with the

product

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METHODS OF APPROACHING

1.Cashing in on brand name or the companys

reputation

2. Customer benefit approach

3. Innovative product opens the door to the

salesman

4. The premium approach

5. The shock approach

6. The survey approach

7. Interactive approach63


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PRESENTATION AND DEMONSTRATION

A good presentation is as important as a good

product

A good presentation can be in the form of

attractive packaging and display, conspicuous

placement of the product in the display window,

etc.

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REQUIREMENTS OF GOOD PRESENTATION

Conspicuous location

Attractively package, decorated and well

organized articles create a good impression in

the mind of the prospect

The salesman should explain the product with its

features and price advantage to the customer in

simple and easy terms

It is very important that the customer be shown

the kind of quality that he is looking for65


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CONTINUED----

Demonstrating a product helps create a positive

impression in the mind of the customer and

increases his interest

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OVERCOMING OBJECTIONS

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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

The salesman should be alert and use his good

judgment to spot an opportunity when he is in a

position to close the sale

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FOLLOW UP AND MAINTENANCE

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SALES FORECASTING

Contents

Concept of Sales Forecasting

Steps in Sales Forecasting Method of Sales Forecasting

Market Potential

Sales Potential

Market Identification

Market Motivation

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SALES FORECASTING


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SALES FORECASTING

According to Cundiff and Still

An estimate of sales during a specified future

period which is tied to a proposed marketing plan

Sales forecast are used by other functions i.e.,Manufacturing or Production

Finance

PurchaseHuman Resource Management

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STEPS IN SALES FORECASTINGPrepared for IIPM - B1 & B

2 by Prof

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STEPS IN SALES FORECASTING

Defining the Objective to be Achieved.

Dividing Various Product in to homogeneousGroup.

Analyzing the importance of various factors tobe studied for Sales Forecasting.

Selecting The Method.

Collecting & Analyzing the Related Information.

Drawing Conclusion from the Analysis made.

Implementing the decision Reviewing & Revising the Sales forecasting from

time to time.

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METHOD OF SALES FORECASTING

Survey Method

Expert Opinion Method.

Market Studies Method

Sales force Opinion Method

Statistical Methods

Trend MethodGraphical Method

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M k t P t ti l


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Market Potential:

A Market Potential is an estimate of the

maximum possible Sales Opportunities present in aparticular market Segment and open to all seller ofa good or service during a stated future period.

Sales Potential:

A Sales potential is an estimate of the maximumpossible Sales opportunities present in a particularmarket segment open to a specified Company

selling a goods or services during a stated futureperiod.

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Market Identification:


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Market identification Requires finding out:-

Who buys the Product?

Who uses it?

Who are the Prospective Buyers & Users?

Market Motivation:Why do people buy?

Why dont people buy?

How best to present the product in salestalk ?

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DETERMINATION OF SALES

Contents:

Sales Force Objectives

Sales Force Structure

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Sales Force Objectives


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j

Prospecting

Targeting

Selling

Servicing

Information

Gathering

Allocating

Sales ForceObjectives

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SALES ORGANISATION

Contents:

Meaning & Function of Sales Org.

Types of Sales Organization

Developing a Sales Organization

Field Sales Organization

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Organization


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Organization

Organization means the systematic coordination of thefunction essential to achieving organizational objectives.

The objective of the sales organization is theperformance of various activity necessary to promote

sales.Objectives of the Sales Organization

Define the line of Authority

Assure that all necessary activity are assigned &

Performed.

Established lines of Communication

To achieve coordination & Balance

To economize on executive time. 80

SETTING UP A SALES ORGANIZATION


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SETTING UP A SALES ORGANIZATION

Defining the Objectives

Determination of Activities

Grouping activities in to position

Assignment of Personnel to Position

Provisions for coordination & Control

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RECRUITMENT

Recruitment is the process of locating and

attracting job applicants

Recruitment and selecting a new sales force is

an important aspect of the sales managers job

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PREPARING THE JOB DESCRIPTION &

SPECIFICATION

Title of the job

Duties and responsibilities

Technical requirements

Territory to be covered

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RECRUITMENT SOURCES


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RECRUITMENT SOURCES

There are five main sources of recruitment

Advertisements

Advertisements are both a source of recruits and

a method of reaching them

Newspapers, magazines and trade journals are

the most widely used media

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FROM INSIDE THE ORGANIZATION'SPrepared for IIPM - B1 & B

2 by Prof

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FROM INSIDE THE ORGANIZATION S

STAFF

The advantage of this source is that the

candidate is familiar with the working of the

company and its product

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RECRUITMENT AGENCIES


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RECRUITMENT AGENCIES

Recruitment agencies provide bio-datas of

potential candidates for a fee

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EDUCATIONAL INSTITUTIONS

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EDUCATIONAL INSTITUTIONS

This source includes management institutes,

universities and technical institutes.

This source is used for placement at the entry

level

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COMPETITORS AND OTHER INDUSTRIES



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COMPETITORS AND OTHER INDUSTRIES

The advantage of this source is that the

salesperson knows the market and its customers

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FRIENDS AND RELATIVES



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FRIENDS AND RELATIVES

If they meet the necessary qualifications

required for the job

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PREVIOUS STAFF



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PREVIOUS STAFF

If they are willing to return

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SELECTION PROCEDURE



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SELECTION PROCEDURE

Selection, involves picking and hiring a few

people from the total number of candidates

applying for the sales job

Selection is done by comparing the requirementsof a job with the applicants qualifications

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STEPS INVOLVED IN SELECTION PROCESS



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STEPS INVOLVED IN SELECTION PROCESS

(a)Hiring profile

The aim of the recruitment process is to attract a

number of qualified candidates.

The manager should develop a hiring profile

system

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CONTINUED----

Quantitative Methods

1. Age

2. Education

3. Experience

4. Special qualifications

5. Abailability

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EXAMPLE



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EXAMPLE

Job applied for

1. May I have your name

2. Your address where you can be contacted

3. Telephone where you can be contacted

4. What kind of a job you are looking

Must be sales

5. What do you expect to earnMust be in line what is being offered

6. What are you earning now,is he being realistic !

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Quantitative factor

Age

Education

Experience

Availability

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EXAMPLEPrepared for IIPM - B1 & B2 by Prof

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Rating A- Excellent, B- Good, C- Fair, D- Poor

Traits Brief Notings Rating Background

Conversational ability

Personality

Qualifications

Experience

Overall suitability

Recommended for the position: Yes/No

Signature of the Interviewer

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(D) PSYCHOLOGICAL TESTING



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(D) PSYCHOLOGICAL TESTING

Psychological test is designed to measure such

skills and abilities in a salesperson as are found

to essential for successful job performance

Knowledge tests

Ability tests

Aptitude tests

In todays world most companies conduct

psychometric test to match job specs with

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(E) REFERENCE CHECK



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(E) REFERENCE CHECK

Reference checks allow an organization to

secure information not available from other

sources

References are usually checked while theapplication form is being processed.

It may also take place prior to issuance of Letter

of Intent or Offer letter.

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(F) PHYSICAL EXAMINATION



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(F) PHYSICAL EXAMINATION

Physical examination reveals whether or not a

candidate possesses the required stamina,

strength and tolerance needed under hard

working conditions.

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(G) JOB OFFER


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(G) JOB OFFER

When all other steps have been completed in the

selection process, the company must decide

whether or not to hire such an applicant

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SALES TRAINING PROGRAMM


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SALES TRAINING PROGRAMM

The purpose of sales training is to achieveimproved job performance

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AIM OF TRAINING


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AIM OF TRAINING

Represent the company better in the market

Higher turnover

Make salesperson aware of new product

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IDENTIFYING INITIAL TRAINING NEEDS


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IDENTIFYING INITIAL TRAINING NEEDS

Job Specifications

The qualifications needed to perform jobs are

detailed in job specifications

Trainees background and experience

Sales related marketing policies

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TRAINING ON COMPETITORS


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TRAINING ON COMPETITORS

The sales force should have sufficient knowledgeabout the competition.

Checklist

Competitor's Name

Product Name

What is the current % market share

Trend

Promotion strategies

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TRAINING IN HANDLING THE


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COMPETITION

Create new needs

Present the product differently

Wait for the right opportunity

Be prepared

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TRAINING METHODS


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TRAINING METHODS

Lectures

Trainees mainly watch and listen

Personal conferences

Trainer and trainee jointly analyze the problems

Demonstration

Appropriate for conveying such topics as newproducts and selling techniques

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ATTITUDES TOWARDS A COMPENSATION

PLAN


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PLAN

Salespeople look for companys attitude

1. Adequate income for adequate performance

2. Superior income for superior performance

3. A base of fixed income for security purposes

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DESIGNING COMPENSATION PLAN


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DESIGNING COMPENSATION PLAN

Designing a new compensation plan consists ofa number of steps as follows

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SET UP SPECIFIC OBJECTIVES


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S U S C C O J C S

An effective compensation plan should havespecific objectives for the sales people and these

objectives should be derived from the company's

sales and marketing objectives

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DECIDE LEVELS OF PAY OR

COMPENSATION


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COMPENSATION

A level of pay means the average pay or moneyearned by the salespeople per year (or permonth).

The level of compensation or pay should becompetitive to attract and retain good qualitysalespeople

Firms divide the levels of pay based on the

following factors

The levels of pay for similar sales positions in theindustry

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The levels of pay for comparable jobs in thecompany

Education, experience and skills required to do

the sales job

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DEVELOPING THE COMPENSATION MIX


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One of the key tasks in designing an effectivesales compensation plan is to develop the

compensation mix or the method by which the

salespeople will be paidWidely used elements of compensation mix are:

Salaries, Commissions/PLIs,Bonuses

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TYPES OF COMPENSATION MIX


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TYPES OF COMPENSATION MIX

1. Straight Salary

A salary is a direct monetary reward paid for

carrying out certain duties over a period of time.

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2. Straight Commission PlanPresent strong financial incentives in order toensure superior performance

A commission is a payment for the performance

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3. Combination plan ( fixed & variable pay)

68% of all companies use a combination plan to

pay their salespeople

Typically most companies follow below methods:

80:20

Or

70:30

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DECIDE INDIRECT PAYMENT PLAN


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Indirect payment plan, which is also called fringebenefits, perquisites, or perks, range from 25 to

40% of the total sales compensation package

Fringe benefits help satisfy safety needs andsecurity needs, although some contribute to

fulfillment of higher order needs

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Evaluating

After the new plan is established, it should be

evaluated on quarterly, half-yearly or yearly basis.

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Intensity refers to the amount of physical andmental effort the salesperson spends on a given

task

Persistence describes how long the salespersoncontinues to put forth effort

Direction suggests the salespersons choice of

direction of effort among various tasks

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IMPORTANCE OF MOTIVATION


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It has been observed that about 10-15 percentof salespeople are self motivated, while the

majority of salespeople are not adequately

motivatedThe company management recognizes the

importance of sales management and sales

force, because the financial performance of thecompany depends upon the achievement of

sales volume objective

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Sales managers find the task of motivatingsalespeople difficult and important due to thefollowing factors:

Changes in marketing environmentMarketing environmental factors, such asdemographic, economic, technological, political-legal, and social-cultural, change continuously

It is difficult to develop an effective mix of salesforce motivational methods in the changingmarketing environment

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Salespeople are required to achieve the

company objectives and goals, such as sales

volume, profits, and customer satisfaction.

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Unique nature of the sales job

Salespeople usually work alone and their

working hours are irregular.

Salespeople often face hostile and competingsalesperson

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Separate motivational package

Salespeople have individual characteristics that

influence their motivations.

Ideally, the firm should develop a separatemotivational package for each salesperson, but it

is difficult to meet each individual needs

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SELECTING AN EFFECTIVE MIX


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Motivational tools are usually divided into twobroad categories

1) Financial rewards/compensation

Includes salary, commission, bonus,and fringebenefits or perquisites

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B) Sales contests

Sales contests are short term incentive programmes

that can be an effective motivational tool

A sales contest should have a specific purposeThe design of the sales contest should consider the

following points

Each salesperson has an equal opportunity to winSales person do not use undesirable methods

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b) Certificate of accomplishment

An awareness that something has been achieved

successfully

It is an intrinsic motivation and a firm can onlyfacilitate

c) Personal growth opportunities

Many salespeople rank opportunities for

personal growth high in the list of sales force

rewards140


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d) Recognition

Most sales managers realize that they must pay

more attention to the individual salespersons

higher order needs, such as recognition,appreciation, and admiration.

Formal and Informal recognition

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e) Job Security

It is valued highly by older salespeople who are

nearing retirement age, but is least valued

reward among younger salespeople.

f) Sales meetings and Conventions

Companies use sales meetings and conventions

as an additional motivating tool to stimulate

sales force effort142


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g) Sales Training Programmes

A good sales training programme increases the

performance of salespeople and in turn improves

their sense of self esteemh) Supervision

Through supervision salesperson understand the

personal needs and aspirations of eachsalesperson

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SALES MEETINGS AND CONTESTS


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Sales meetings are important both forcommunication and motivational purposes.

When sales personal are on the road without the

day to day opportunity for employercommunication and supervision, periodic group

meetings are valuable

They also provide occasions for motivatingindividual sales personnel through group

pressures

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PLANNING SALES MEETINGS


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Planning a sales meeting requires five majordecisions A-C-M-E-E Approach

1) Defining the specific training aims

In planning any sales meeting it is importantto have clearly defined objectives.

A new product may be about ready for

introduction or research may have uncoverednew insights on customer attitudes and

behavior145


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In setting a meetings specific aims, the effectiveexecutive answers three important questions

Are these aims clear and attainable?

Are they realistic in terms of time, audience, andother conditions?

Will the probable results justify the estimated

costs

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2) Content

Determining a meetings content is a matter of

planning its agenda

An agenda, by definition, is a list or an outline ofthings to be considered or done during a meeting

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3) Method

The methods(M) used in conducting a sales

meeting, of course, depend upon the aim and

content as well as upon the time available andmeeting place

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4) Execution

Execution decisions, outwardly trivial, contribute

significantly to a meetings success or failure

Among these seemingly trivial decisions is room

management

Herringbone,

Workshop,

Inverted U-Shape

Seminar or the British Square

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5) Evaluation

It is important , especially if management desires

to improve meeting effectiveness

The basis for evaluation should be whether themeeting accomplished its aims

To determine this, participant feedback is

necessary

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NATIONAL SALES MEETINGS


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The cost of bringing the entire sales force to acentral site are substantial, but national sales

meetings are sometimes appropriate

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REGIONAL SALES MEETINGS


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The trend is away from national and toward

regional sales meetingsReduce total travel costs and lowering lost sellingtime

Headquarter executives brought into directcontact with field personnel, learn about currentproblems at firsthand.

May have a program designed to emphasizeunique problems of that region

Increase participation time per person attending

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LOCAL SALES MEETINGS


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Local sales meetings are conducted weekly orbiweekly by district sales managers and last from

fifteen minutes to several hours

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REMOTE CONTROL AND TRAVELLING

SALES MEETINGS


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Certain forms of sales meetings retain the nationalsales meetings advantages while reducing its cost

and time expenditure disadvantages.

Among these forms are meetings conducted byClosed Circuit Television

The program is live at one meeting site and is

telecast to others, thus retaining much of the

inspirational value of the live show without incurring

costs and inordinate losses of selling time

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Sales meetings by telephoneTelephone conference calls are used for small

group meetings and discussions

Users say the group should be no larger thantwenty

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Sales meetings at homeSeeking to reduce the time and costs of sales

meetings, some companies mail recordings or

printed materials to sales personnel at theirhomes.

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SALES CONTESTS


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A sales contest is a special selling campaignoffering incentives in the form of prizes orawards beyond those in the compensation plan

The underlying purpose of all sales contests is toprovide extra incentives to increase salesvolume, to bring in more profitable sales volume,or to do both

Sales contests develop team spirit, boost moraleand make personal selling efforts moreproductive

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SPECIFIC OBJECTIVES


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Sales contests are aimed to accomplish specificobjectives, generally one per contest, within

limited periods of time.

Most sales contests aim to motivate salespersonnel:

1) To obtain new customers

2) To secure larger orders per sales call3) To push slow moving items, high margin

goods, or new products158


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4) To overcome a seasonal sales slump5) To sell a more profitable mix of products

6) To get reorders

7) To obtain more product displays by dealers

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CONTEST FORMATS


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Contest formats are classified as direct ornovelty

A direct format has a contest theme describing

the specific objectiveA novelty format uses a theme which focuses

upon a current event, sport, or the like

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CONTEST PRIZES


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There are four kinds of contest prizesCash

Merchandise

Travel

Special honors or privileges

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CONTEST DURATION


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Contest duration is important in maintaining theinterest of sales personnel

Contests run for periods as short as a week and

as long as a year, but most run from one to fourmonths

There are no set guides

Contest duration should be decided afterconsidering the length of time interest and

enthusiasm can be maintained162


DESIGNING TERRITORIES


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A sales territory consists of existing and potentialcustomers assigned to a salesperson.

The territory may or may not have geographic

boundaries. However, generally a salesperson isassigned to a geographic area.

The basic concept of a sale territory is that a

territory or a market is made up of present andpotential customers

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REASONS FOR SETTING UP SALES

TERRITORIES


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The reasons for setting up and subsequentlyreviewing sales territories are as follows

1) Increase market or customer coverage

A well designed sales territory allowssalespeople to spend sufficient time with

present and potential customers, which

improves the market coverage

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2) Control selling expensesBy setting up well designed sales territories

salespeople spend less time on the road, fewer

nights away from home, resulting in less cost oftraveling and less expenses on lodging and food.

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3) Better evaluation of sales force performanceThe sales manager can evaluate the

performance of each salesperson in a better way,

when the salesperson is assigned to a specificsales territory

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4) Improve customer relationsWhen the salesperson spends adequate time

with present and potential customers, to

understand their problems and to find solutions ,their relationship improve.

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5) Increase sales force effectivenessWhen the sales territory is properly designed, the

salespersons workload is reasonable and the

conflicts are minimum as specific customers areassigned to them

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6) Improve co-ordinationThe company sales performance improves

substantially if the salesperson is involved in

coordinating various elements of marketingcommunication.

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7) Benefits salespeople and the companyProper territory design and allocation of

salespeople to territories will result in improved

sales force performance, which in turn benefitsthe company

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PROCEDURE FOR DESIGNING SALES

TERRITORIES


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The ideal objective in territory design is to haveequal opportunity and equal sales force workload

for all sales territories

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STEPS INVOLVED IN DESIGNING THE

SALES TERRITORIES


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1) Select a control unitThe first step in territory design is to select a

geographical territorial base, called control unit

that will be used in the territory analysisIn general the sales manager should select the

smallest control unit

Control units can be States, Metros, Cities, Towns

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2) Find location and potential of customersThe next step is to find the location and sales

potential of present and prospective customers

in each control unit.Information of present customers

Information on potential customers

Classify the customers based on their sales andor profits potential

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3) Decide basic territoriesThe third step in designing sales territories is to

decide basic or fundamental territories

This can be done by using either build up methodor breakdown method

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BUILD UP METHOD


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The basic territories are set up by building upfrom the control units. The objective to beachieved is to equalize the workload ofsalespeople.

The procedure is as follows

1) Decide call frequencies

It means how many times a customer should be

visited by the companys salesperson peryear

Various factors influence call frequency175


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2) Calculate the total number of calls in eachcontrol unit

This is done by multiplying call frequencies per

month by number of customers and 12 months3) Estimate workload capacity of a salesperson

A salespersons normal workload capacity is

estimated by multiplying average number of callsa salesperson can make in a working day by

number of working days in a year.176


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4) Make tentative territoriesIn this step, the company should group adjoining

control units (which share their borders) until

yearly number of calls needed in those controlunits equals the total number of calls a

salesperson can make.

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BREAKDOWN METHOD


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This is another method of territory design that isused by companies who have decided to have

intensive distribution strategy, mostly for selling

consumer productsThe objective is to equalize the sales potential of

territories

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The procedure is as follows1) Estimate the company sales potential for total

market

Estimate the company sales potential orcompany sales forecast for its total market by

using the sales forecasting methods

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2) Forecast sales potential of each control unitFor estimate the sales potential of each control

unit, the sales manager multiplies the total sales

potential of the company by a multiple factorbuying index of each control unit.

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3) Estimate the sales volume expected fromeach salesperson

Here the sales manager must estimate how

much each salesperson must sell, in order toensure profitable operation

For this, the sales manager studies the past

sales as well as the cost and profitability analysis

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4) Make tentative sales territoriesThe sales manager makes tentative territories by

combining adjoining control units until the sales

potential of each territory is equal to or greaterthan the expected sales volume from each

salesperson

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5) Develop Final TerritoriesThe tentative territories need to be adjusted due

to special considerations such as geographical

locations of customers, or unequal salespotential of some territories

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ASSIGNING SALESPEOPLE TO

TERRITORIES


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Once the sales territories are designed, the salesmanager is ready to assign or allocate individual

salespeople to each territory.

In any given sales force, salesperson differ inselling abilities and effectiveness. A sales person

may succeed in one territory and fail in another

territory, even though sales potential and

workload are the same in the two territories

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While assigning salespeople to territories, thesales manager should consider two criteria:

A) Relative ability of salespeople

B) Salespersons effectiveness in a territory

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RELATIVE ABILITY OF SALESPEOPLE


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A sales manager should evaluate the relativeabilities of a salesperson based on key factors

It should be understood that the weightage of

evaluation factors may vary from company tocompany and evaluation factors may also differ

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187

Product knowledge .15 .9 .135

Market Knowledge .10 .8 .080

Past Sales

Performance.40 1 .400

Communication .15 .8 .120

Selling Skills .20 .9 .180

Total 1.00 .915

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SALESPERSONS EFFECTIVENESS IN A

TERRITORY


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The sales manager should judge theeffectiveness of a salesperson by comparing the

salespersons social, cultural, and physical

characteristics with those of the territory

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SALES QUOTA


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Sales quotas are sales goals (or quantitativeobjectives) set by a company for its marketing

units for a certain period of time

A marketing unit includes a region, a territory, abranch, a salesperson, a distributor, or a dealer

Sales quotas can be set on sales volume,

expense, profit margin, customer satisfaction,and combination

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Annual sales quotas for each marketing unit arebroken down to quarterly and monthly quotas

Sales quotas are developed from the annual

marketing plan of the companyAfter preparing the sales forecast, the company

decides its sales budget, which includes the

companys sales volume and selling expenses.The company sales budget is then broken down

to sales quotas for regions and sales territories.190


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Each territory manager divides the territorysquota among the sales persons, distributors, and

dealers, who are attached to the territory.

191


MAKING AVAILABLE PERFORMANCE

STANDARDS


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A sales quota makes available to the salesmanager a tool to measure the performance of

the salesperson.

A quota also provides a goal to the salespersonHence, a quota is a performance standard,

against which the actual performance is

compared

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CONTROLLING PERFORMANCE


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By setting quotas for salespersons activities,sales volume, and selling expenses, the sales

manager is controlling the performance of

salespeople.Similarly, to check wasteful expenditure on

customer entertainment, lodging, and meals,

expenses quotas are set as a percentage of

sales

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MOTIVATING PEOPLE


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Sales force compensation is often tied to theextent or degree of achievement of sales quotas

Sales manager should not set sales quotas that

are too high and non attainable.

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IDENTIFYING STRENGTHS AND

WEAKNESS


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When actual sales performance is comparedwith respective quotas of different territories and

salespersons, the sales manager can identify

successful and unsuccessful performers

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SALES VOLUME QUOTAS


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Most companies have sales volume quotas forindividual salespersons, distributors, retailers,

geographical areas, or products, for a specific

period of time.For effective control, it is proper to set sales

volume quotas for the smallest marketing unit

Companies set sales volume quotas in Rupees orDollars sales volume, unit sales volume and or

point sales volume

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RUPEES/DOLLARS SALES VOLUME


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When salespeople are required to sell manyproducts, it is easier to manage if quotas are set

in rupees or dollars

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UNIT SALES VOLUME


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Companies set sales volume quotas in units ofproducts in three situations

When salespeople are selling a few products

When prices of the product fluctuate rapidlyWhen the price of each product or service is very

high

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POINT SALES VOLUME


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It is used in a situation when the company wantsto improve its profitability, by asking salespeople

to sell more those products that relatively

contribute more to the profits

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FINANCIAL QUOTAS


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Financial quotas are the goals set to controlgross margin or profit contribution, and expenses

of various marketing or sales units

Can be of two types

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GROSS MARGIN OR PROFIT

CONTRIBUTION QUOTAS


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Gross margin quota is decided by subtractingcost of goods sold from sales volume.

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EXPENSE QUOTAS


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The objective of setting expenses quotas is tocontrol the costs of marketing or sales units,

such as sales territories and salespeople.

Often expense quotas are used along with salesvolume quotas, so that selling expenses are kept

in line with sales volume

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ACTIVITY QUOTAS


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Many companies set activity quotas so as todirect salespeople to carry out important job

related activities.

These activities are useful for achievingperformance targets of salespeople.

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COMBINATION QUOTAS


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Companies set combination quotas or goalswhen they want to control sales force

performance on both key selling and non selling

activities

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sales management for iipm b1 b2

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