SALES MANAGEMENT

In daily life, a layman deals with different transaction in terms of selling and purchasing
of goods and services. In these transactions the second one persuades the first person.
Therefore, selling may be defined as persuading people to satisfy the want of first one.
The person, who does this act, is called as the salesman, the result of this action as sales,
while these activities of the person, are supervised and controlled by sales-management.
Originally, the term sales management referred to the direction of sales force personnel.
But, it has gained a significant position in the todays world. Now, the sales management
meant management of all marketing activities, including advertising, sales promotion,
marketing research, physical distribution, pricing, and product merchandising. The
American marketers association (AMAs) definition, takes into consideration a number of
these viewpoints. Its definitions runs like: the planning, direction, and control of the
personnel, selling activities of a business unit including recruiting, selecting, training,
assigning, rating, supervising, paying, motivating, as all these tasks apply to the
personnel sales-force. The sales management function, as noted earlier comprises the
management of the sales personnel and activities that make up the corporate sales effort.
Sales managers are entrusted with the 'task of organising, planning and implementing
the sales effort so as to achieve corporate goals related to market share, sales volume and
return on investment. The task involves the sales manager in a set of activities both within
the organisation, and outside with other organisations. Within the organisation he has the
responsibility of structuring relationships both within his own department and with
interacting organisational entities so that the sales task can. be coordinated with other
marketing tasks and performed effectively. It also includes allocating and operationalising
the sales effort among the sales personnel. Outside the organisation, his task would include
developing and maintaining channel relationships effectively so that the flow of goods and
service, and also promotion and feedback is facilitated.
Sales management can involve any of the following activities:
(1)formulationof sales
strategy through development of account management policies, sales force compensation
policies, sales revenue forecasts, and sales plan,
(2) implementation of sales strategy through selecting, training, motivating, and
supporting the sales force, setting sales revenue targets, and
(3) sales force management through development and implementation of
sales performance,monitoring,
and evaluation methodsand analysis of associated behavioral patterns and costs.

OBJECTIVES OF SALES MANAGEMENT

Every business firm has certain objectives to achieve. Although, firms have different
mixes of objectives, and they do place differing emphasis, on individual ones, the typical
objectives include (i) profitability, (ii) sales-volume, (iii) market share, (iv) growth,
and (v) corporate-image. While all these objectives are important to a business firm, the
objectives, relating to sales-volume, market share and profitability, are greatly affected by
the effectiveness and efficiency, with which the sales-function is managed. Business firms,
have, in fact, found that it is the most effective management objective of the firm; that
must emanate out of its overall business or corporate objectives. The sales-management
objectives of a business firm, generally relate to the areas of (i) achieving sufficient salesvolume, (ii) providing sufficient profit, and (iii) experiencing continuing growth.
SMBO APPROACH
It is another approach to formulate and accomplish sales-objectives is the sales
management by objectives (SMBO) technique. It is formulated combined by sales
manager and sales-force (representatives). It aims to focus on (i) results, within a specified
set of objectives and (ii) participative style of management.
Process of SMBO
The operationalization of SMBO is a process, comprising of the following steps:
(i)

Setting goals jointly with the salesman: In this process the goals for
sales-man and sales managers are settled simultaneously in the
organisation so that they can built a close coordination between them and
lastly they achieve the main objective of the organisation.
(ii) Planning strategy to reach the objectives: His the participative style of
sales. Management proves to be a boon to the top-management, in the
sense of the close familiarity of the salesman, with their markets. The
outcome of the joint exercise would be the development of a strategy that
directs the salesman to his objectives, following a plan, in the correct
sequence, with the correct timing, and mmust be efficient, in the use of
resources of time and money.
PERSONAL SELLING PROCESS
When a sales person of Eureka Forbes contacts a house-wife and sells his vacuum cleaner,
he is actually doing personal selling. When the sales person of Hindustan Lever visits a
grocery store and sells Lux, Lifebuoy, Wheel, etc., he's also practicing the personal selling.
When a candidate wants to be selected as a Marketing Manager in a company, he sells
himself to his prospective employers and practices personal selling. Let us also try to

discover the need of personal selling effort in organisations marketing the fast-moving
consumer goods (FMCG). In such organisations, the demand is often created through
advertising but it is met through the personal selling effort. For example, the sales person
of Hindustan Lever Limited does not go door-to door to meet the prospects to create
demand of his products. But he goes to the grocery store so as to ensure that the brands
being advertised by his company are made available at as many retail shops as possible.
Thus the objective of the personal selling effort in such a situation would be more of
meeting the demand, already created by advertising or other promotional means, rather
than to create it. as in the case of industrial goods or pharmaceutical products.
Personal selling is the process by which the representatives of the organisation
(Management Manufacturing and Marketing) come in direct contact with the prospects
(potential buyers) to convince and persuade them to purchase their products. Personal
selling, along with other components of promotion mix and marketing mix, is a means to
implement marketing plans and strategy.
Personal selling is one of the important parts of the total Marketing Mix, and an essential
component of Promotion - Mix. We know that Marketing Mix comprises of 4 P's, which
are; Product, Price, Promotion, and Place or Distribution. The promotion mix, which is an
important component of Marketing - Mix, also has four mix. Parts. These are: Personal
Selling, Advertising, Publicity, and Sales Promotions.
It may be worthwhile to distinguish between personal selling and salesmanship. While
personal selling forms an important element in total scheme of Marketing Management,
salesmanship, on the other hand, is one of the skills used in personal selling. Thus,
salesmanship is a part of personal selling in the same manner as personal selling is a part
of the promotion - mix, and promotion is a part of the Marketing Mix.
From a broad perspective, both - the personal selling as well as the advertising - are the
means to communicate with the target customers for the product or service of an
organisation. While the personal selling effort is a two-way communication process, the
advertising is a one way communication. In the personal selling situation, as we have
observed, the customer comes in direct contact with the sales person who, in turn, is
representing an organisation. The customer can ask any number of questions so as to
satisfy his/her quarries about the product, the sales person is offering. It is the sales
person's, responsibility to satisfy his customer on the benefits of his product. If he does so,
he gets the desired sales or an order. In advertising, on the other hand, the customer does
not coarse in direct contact with any representative of the organisation: Thus it is a.one
way communication. The reactions, attitudes or perceptions of the viewers can not be
immediately gauged in advertising.
The main advantages and disadvantages of personal selling can be summarised as follows:

Advantages

Disadvantages

High customer attention

High cost

Message is customised

Labour intensive

Interactivity

Expensive

Persuasive impact

Can only reach a limited number of

customers

Potential for development of relationship

Adaptable
Opportunity to close the sale
Activity 1

You are the Sales Manager of a company marketing consumer appliances.

Enumerate various sources that you can look for enlisting the potential prospects for
your products.
STEPS IN PERSONAL SELLING PROCESS
1. Pre-sale preparation: The first step in personal selling is the selection, training and
motivation of salespersons. The salespersons must be fully familiar with the product, the
firm, the market and the selling techniques. They should be well-informed about the
competitor's products and the degree of competition. They should also be acquainted with
the motives and behavior of prospective buyers.
2. Prospecting : It refers to locating or searching out prospective buyers who have the
need for the product and the ability to buy it. Potential customers may be spotted through
observation, enquiry and analysis of records of existing customers. Social contacts,
business associations and dealers can be helpful in the identification of potential buyers.
3. Approaching : Before calling on the prospects, the salesperson should fully learn their
number, needs, habits, spending capacity, motives, etc. Such knowledge helps in selecting
the right sales appeal. After such learning, the salesperson should approach the customer in
a polite and dignified way. He should introduce himself and his

product to the customer. He should greet the customer with a smile and make him feel at
home. He should introduce himself and his product to the customer. In case he is busy with
some other customer, he should assure the new customer that he would be attended very
soon. The salesperson has to be very careful in his approach as the first impression is the
last impression.
4. Presentation : For this purpose, the salesperson has to present the product and describe
its features in brief. The presentation should be matched with the attitude of the prospect
so that the salesman can continuously hold his attention and create interest in the product.
Need to attract and hold the prospects Attention to stimulate Interest and stir up Desire in
the product so the potential customer takes the appropriate Action. AIDA Try to get the
prospect to touch, hold or try the product. Must be able to change the presentation to meet
the
prospect
needs.
Three types of presentations:
Stimulus Response Format: Appropriate stimulus will initiate a buy decision,

use one appeal after another hoping to hit the right button...Counter Clerk @
McDonald's "Would you like fries with your burger?"
Formula Selling Format: (Canned Sales Presentation) memorized, repetitive,
given to all customers interested in a specific product.
Good
for
inexperienced
sales
people.
Better
with
heavily
advertised
items
that
are
presold.
Telemarketing a credit card!!
Need Satisfaction Format: Based on the principal that each customer has a
different set of needs/desires., therefore the sales presentation should be
adapted to the individual customer's needs, this is a key advantage of
personal
selling
vs.
advertising.
Sales person asks questions first, then makes the presentation accordingly.
Need to do homework, listen well and allow customers to talk etc.
Must answer two types of questions: for more information, overcome
objections.
5. Demonstration: In order to maintain customer's interest and to arouse his desire, the
sales-person must display and demonstrate the product. He has to explain the utility and
distinctive qualities of the product so that the prospect realizes the need for the product to
satisfy his wants. He should not be in a hurry to impress the customer and should avoid
controversy. He may suggest uses of the product and may create an impulsive urge to
possess the article by appealing to human instincts.
6. Handling objections: A sale cannot be achieved simply by creating interest and desire.
Every customer wants to make the best bargain for the money he is spending. Presentation

and demonstration of the product are likely to create doubts and questions in his mind. The
salesman should clear all doubts and objections without entering into
a controversy and without losing his temper. Testimonials, money-back guarantee, tact and
patience are popular means of winning over s hesitant buyers. The salesman should
convince the customer that he is making the best use of his money by purchasing the
product. For this purpose, the salesman should prove the superiority of his product over
the competitive products. He should not lose patience if the customer puts too many
queries and takes time in arriving at any decision. If the customer does not buy even after
meeting rejections, the salesman should let him go without showing temper. He must
believe in the universal rule that the customer is always right.
7. Closing the sale: This is the climax or critical point in the personal selling process.
Completing the sale seems to be an easy task but inappropriate handling of the customer
can result in loss of sale. The salesman should not force the deal but let the customer feel
that he has made the final decision. He should guide the customer in making the choice
without imposing his own view. Some adjustment in price or other concession may
sometimes be necessary for a successful closing. The salesman should show the same
interest in the customer which he exhibited during approach stage. Sales should be closed
in a cordial manner so that the customer feels inclined to visit the shop again. In closing
the sale, the article should be packed properly and handed over to the customer with speed
and accuracy. Once the customer has purchased the article, the salesman should show and
suggest an allied product. For instance, he may suggest socks, ties, handkerchiefs, vests,
etc., to a customer purchasing a shirt. This is known as additional sales and requires great
skill and tact.
8. Post-sale follow-up : It refers to the activities undertaken to ensure that the customer is
satisfied with the article and the firm. These activities include installation of the products,
checking and ensuring its smooth performance, maintenance and after-sale service. It helps
to secure repeat sales identify additional prospects and to evaluate salesman's
effectiveness. Half of cars are sold door-to-door. This is shrinking due to environmental
changes. Toyota has more than 100,000 door-to-door sales people.
Developing Long-term relationships is key, Keiretsu, do business with only those you
know and trust. Face-to-face meetings before business to establish trust, the approach
stage.
Followupiskeytorelationship:
After sales:
call inquiring on car's immediate performance

 hand written greeting cards

written invitations for low cost oil changes
Prospecting includes:
Driving schools for people to obtain licenses = prospects
Also referrals from existing customers is very important
Curtesy calls to clients who referred new customers.
Timing of presentation:
To housewife in the middle of the day
Just before 3 year "Shaken", following 2 years
Activity 2
Look for various brands of colour TV's in your area and list their attributes. Convert
these attributes into potential benefits for the prospects as if you are the Sales
Manager for these brands.
Point-of-sale merchandising is a specialist form of personal selling. Merchandising
involves face-to-face contact between sales representatives of producers and the retail
trade. A merchandiser will visit a range of suitable retail premises in his/her area and
encourage the retailer to stock products from a range. The visit also provides the
opportunity for the merchandiser to check on stock levels and to check whether the
product is being displayed optimally.
Before categorizing sales persons into basic selling styles, one convenient way to classify
the many different types of sales job is to array them on the basis of the creative skill
required in the job, from simple service-or repeat order selling to the complex
developmental selling. Let us now discuss the different kinds of selling positions prevalent
in Indian companies.
Delivery sales person: The primary job of the delivery sales person is to deliver the
product e.g. soft drink, bread, milk etc. The selling responsibilities are secondary. Good
service and a pleasant personality
may lead to more sales.
Inside order taker: The retail sales person standing behind a counter is an inside order
taker. The customer comes to the sales person with the intention to buy a product or
service, the sales person only
serves him or her. The sales person may use suggestion selling but ordinarily cannot do
much more.

Outside order taker: The soap or spices sales person calling on retailer is an outside order
taker. They do little creative selling. In contract with store personnel these representatives
actually may be discouraged from doing any hard selling. That task is left to executives
higher in the hierarchy.
Missionary sales people: These sales persons are not expected or permitted to solicit an
order. Their job is to build goodwill or to educate actual or potential user or provide
services for the customers, as in the
case of Medical representatives, working for the pharmaceutical company.
Consultative sales person: Consultative sales are characterized by the product or service
that is sold at the higher level of an organization e.g. computer system or management
consultancy service. The decision to purchase such products involves higher capital outlay
thus sales job requires a low key, low pressure approach by the sales person. It would also
require a very strong knowledge about product, patience to discuss product with several
people of organization and potential benefits to the user. Even at times when the progress
of sales slows down representative has to make creative and sensitive efforts to resume
interest but without appearing to exert pressure on the prospect.
Technical sales personnel: The most distinctive characteristic of technical sales is the
product knowledge required by its sales person, unlike the consultative sales, where
sophistication in organization
relationship and persuasive ability are sales persons most valuable assets. Even time
required to sell the product is relatively less than consultative sales. Most of the technical
purchasing requires approval of several people but only one or two people with technical
knowledge influence decision. If the sales representative is able to satisfy these people
with product characteristics, application, installation process, approval from higher
management is usually forthcoming. The technical sales persons though not strangers to
the process of making a sale, are trained to utilize the rational approach, by going into
details of product utility and features.
Commercial sales person: This field generally includes nontechnical sales to business,
industry, government and non-profit organization e.g. office equipment, wholesale goods,
building products, business services and others. Unlike the previous two types, it is
customary for the commercial sales person to make sales on first or second call. The
process stresses approach to right person (decision maker), making a smooth presentation
and closing the sales. The field is composed of order takers, to follow up and maintenance
of accounts and order getter, to develop new accounts. Since these require different
approaches, they normally require different personality traits e.g. the order getter are more
aggressive and more highly motivated.
Direct sales people: Direct sales are primarily concerned with the sales of products and
services to ultimate consumers e.g. restaurants, door to door sales, insurance,

encyclopaedias, magazines etc. There is normally some emotional appeal associated with
this type of selling, thus sales persons are required to possess strong persuasive ability.
Often length of time to close sales is shortest in the case of above product categories. In
fact, sales person are trained to close the sales on the first visit because it is felt if
consumers are given time, they will either cool off from buying or will buy from
competitor.
DEVELOPING PERSONAL SELLING STRATEGIES
Personal selling strategies should be derived from the marketing strategy and should be
consistent with other elements of marketing mix. The following variables should be
considered while formulating sales strategy.
Call Rates
If the intensity of competitive rivalry is high in the industry, salespersons involved in
personal selling should be calling on their customers more frequently. If the rate of
technological changes in the industry is high, the customer is more likely to change
equipment frequently and may require the services of the sales team more often to evaluate
options. Also when the buyer is expanding his facilities or is venturing into a new
business, salespersons should be calling on the buyer more often.
Percentage of Calls on Existing and Potential Accounts
A salesperson has to divide his time between existing and potential customers in a way
that maximizes sales or profits of the company. Some salespeople fix some formula for
themselves so that they do not spend excess time with either type of the customers i.e. he
will spend 40 % of his time with existing customers and the rest with prospective
customers. But this may not be a good strategy all the time. Division of time between the
existing and potential accounts should depend upon the type of industry and the state of
business in the industry. If the industry has big buyers and the salespersons company has a
sufficient number of those big accounts, focus should be on retaining those accounts. But
if the salespersons company has only a few of these accounts, the salesperson should
divide his time between serving existing accounts and acquiring new ones. The idea
behind personal selling is that the salesperson should be aware of the need to divide his
time judiciously between existing and potential customers depending upon the type of
industry and the state of business in the industry. But he should be flexible because a
formula will become irrelevant when the state of business changes.
Discount Policy
Sales people are prone to announcing discounts at every hurdle in the personal selling
process. It is important to provide flexibility in prices that salespersons can offer to

customers because many deals can be clinched by offering small discounts. Many a time
discounts have to be given to demonstrate to customers that they are important. But there
should be guidelines prescribing the amount of discounts that can be offered to customers
under exceptional circumstances. When discounts become pervasive, customers start
expecting discounts as a routine part of their buying process and the list price loses its
sanctity. The company should reduce its list price under such circumstances to restore its
sanctity. The company will be in a better position to know the realized price. Salespeople
should be able to sell on the merits of the product and on the strength of the relationship
that they have with the customers. Discounts should be provided in exceptional
circumstances only.
Percentage of Resources Targeted at New and Existing Products
New products will require a push from salespeople and it should be ingrained in
salespeople that at the time of launch of a new product they have to travel those extra
miles and give those extra hours to make the launch successful. If the launch is very
important for the future of the company, salespeople can afford to spend less time in
selling the old products for some time. But eventually the customers response towards the
product will decide the amount of attention that the new product will get. If the new
product is liked by customers, salespersons will pay more attention to it but if customer
response is lukewarm their attention will shift back to their old products.
Percentage of Resources Targeted at Different Types of Customers
Some companies are competent to serve big accounts, i.e. they can afford to charge lower
prices and give lot of services to their customers. These companies dedicate
multifunctional sales teams to such accounts. Retaining the existing customers is the major
responsibility of the sales force. Some other companies prefer to serve small accounts
which pay full price and do not expect much service from their suppliers. These companies
expect their salespeople to spend more time in looking for prospective customers than in
serving existing customers.
Improving Customer and Market Feedback from Sales Force
Some companies compete by launching innovative products. Salespeople of such
companies have to be adept at sensing customer response to the new launches of the
company. Detailed and early feedback is important for improving the product. They also
have to be alert to latent and emerging needs of customers that they can feed to their
development team. But even in companies which are only moderately focused on bringing
new solutions to customers needs, collecting feedback and information from customers is

important, if the new product has to be suitable for the customers. In mature industries,
where customers needs and enabling technologies are not changing perceptibly, the sales
force can almost exclusively concentrate on selling what its company makes.
Improving Customer Relationships
Developing and maintaining relationships with customers is expensive and a company
need not incur this expenditure on every customer it does business with. There are
customers who will always buy from the supplier who offers the lowest price. Some of
them buy too little. And more importantly there are industries in which relationships with
customers are not important at all. A company competing on the basis of technological
sophistication of its products will buy from a supplier who has the latest technology. The
supplier would be better off putting money in R&D than investing in relationship with the