Sales & Distribution Management Compiled By Saud Hussain Module - 1

Module-I:
Definition, objectives, Functions and classification of Sales Management Selling
under the Marketing concept, Interdependence of Salesmanship and Advertising. T
he Sales Organization:

Purpose, principles and policies of sales organization,
Setting up of the sales organization, Typical sales organization structure, Plan
ning of the selling factors.

Definition, objectives, Functions and classification of Sales Management:

Definition: Sales management is a sub-system of marketing management, which tran
slates the marketing plan into marketing performance. Sales managers in the mode
rn organization are required to be customer oriented and profit directed and per
forms several tasks besides setting and achieving personal selling goals of the
firm. Sales management as defined by the American marketing association, The pla
nning ,direction and control of personal selling including recruiting, selecting
, equipping, assigning , routing, supervising, paying and motivating the sales f
orce.

Definition, objectives, Functions and classification of Sales Management:

It is important to differentiate sales management from personal selling and sale
smanship.
Sales management directs the personal selling efforts, which in turn i
s implemented largely through salesmanship. Personal selling is a broader concep
t than salesmanship. It is the art of successfully persuading prospects or custo
mers to buy a product or service from which they can derive suitable benefits, t
hereby
increasing their total satisfaction.

Definition, objectives, Functions and classification of Sales Management:

Sales managers have still other responsibilities
They are responsible for participating in the preparation of information critica
l to take key marketing decisions, such as those on budgeting, Quota setting and
territory management.
They also participate in product decisions, marketing cha
nnels and distribution policies, advertising and other promotion and pricing.
A
sales manager is both an administrator in charge of personal selling activity an
d a member of the executive group that makes marketing decisions of all types.

Definition, objectives, Functions and classification of Sales Management:

Sales management is a key function in many kinds of enterprises. It may be a man
ufacturing concern, a wholesaling unit, a retail outlet, a real estate broker, o
r a automobile dealer.
Even firms selling intangibles such as insurance companies, stock brokers, mutua
l funds, tours and travel have sales management problems

Why choose the sales profession?

Employment in sales is growing Sales positions offer advantages:

Good compensation Intrinsic reward from helping customers Flexible in day-to-da
activities High-visibility career track Limited supervision Travel opportunitie
s Increasing responsibilities

From company viewpoint there are three general objectives of sales management. T
hese are as follows:
Enhancement of sales volume.
Contribution to profit
Continuous growth.
Objectives of sales management:

Objectives of sales management:

Though the sales manager is responsible to make major contribution on the above
areas, yet the top management is accountable for supplying an ever-increasing vo
lume of socially responsible products that the final buyers want at satisfactory
prices. To achieve the above objectives, the following goals are set for the sa
les manager.

Objectives of sales management:

Sales executives provide estimates on market and sales potential. To guide and l
ead the sales personnel and middlemen. To develop strategy for future operations
. To provide information to the higher management for making marketing decisions
and for setting sales and profit goals. Comparing marketing opportunities with
the projected growth rate, the sales manager is responsible for achieving a part
icular sales volume, gross margin and net profit in units of products and in dol
lars. To create and maintain relationship with the channel members. To negotiate
with the customers. To provide smart service and develop the goodwill for the f
irm. To provide solutions to the problems

Functions of sales management:

The determination of sales force objective and goals
Sales force organization, s
ize, territory, and quota finalization Sales forecasting and budgeting
Sales for
ce selection, recruitment, and training
Motivating and leading the sales force D
esigning compensation plan and control systems Designing career growth plans and
building relationship strategies with key customers

Selling under the Marketing concept:

Sl. No. 1 2 3 4 5 6 7 8 MARKETING Emphasis is on customers needs and wants. Satis
faction of the customer is primary. Planning is long-term oriented. External, ma
rket segmentation. Consumer determines the price and price determines the costs.
It is an activity that converts the consumer needs into products. Marketing ove
rall a whole process. Emphasizes on innovation in every sphere; on providing bet
ter value to the customer by adopting the most innovative technology. SELLING Em
phasis is on the product, and the needs and interests of the seller. Sales are t
he primary motive. Planning is short-term oriented. Internal, company orientatio
n. Cost determines the price. It is an activity that converts the goods into cas
h. Selling is a part of marketing process. Emphasizing on staying with the exist
ing technology and reducing the cost of production.

Selling under the Marketing concept:

Selling Concept:
Starting Point Focus Means Ends
Factory
Factory
Selling & Promoting
Profit through Sales Volume
Marketing Concept:
Market
Customer Needs
Coordinated Marketing
Profits through Customer Satisfaction

Interdependence ship between salesmanship and advertising:

Salesmanship is an art of successfully persuading prospects or customers to buy
a product or services from which they can derive suitable benefits, thereby incr
easing their total satisfaction.
Salesmanship therefore is a seller initiated ef
fort that provides prospective buyers with information and other benefits, motiv
ating and persuading them to decide in favor of the sellers product or service.
P
ersonal selling effort is a two way communication process. It can be easily meas
urable Advertising is any form of non-personal form of communication between the
buyer and seller by an identified sponsor.
Advertising is a one way communicati
on. In advertising customer does not come in direct contact with any representat
ive of the organization.
So the reaction, attitude or perception of the viewers
cannot be immediately gauged in advertising.

Interdependence ship between salesmanship and advertising:

%age of Promotion al effort
Personal selling
Advertising Simple/ Inexpensive goods Complex/Expensive goods

Interdependence ship between salesmanship and advertising:

Now very interesting aspect of advertising and selling, during the three differe
nt stages i.e. pre-purchase phase, the purchase phase and the post purchase phas
e. of a products/brands market. Pre-purchase stage is a time period when the comp
anies try to generate demand for the product. In purchase stage the customer act
ually buy the product. In postpurchase stage the consumer evaluates his/her purch
ase decision. The figure shows that personal selling has an increasing role in a
ll the three stages of purchase decision and particularly a leading role in the
purchase stage. Advertising has a leading role in the pre-purchase stage and pos
t purchase stage to generate mass demand and congratulating the consumer for tak
ing the right product decision.

The Sales Organization:

Effective sales executive insist upon sound organization. Sales organization mus
t achieve both qualitative and quantitative personal selling objectives. The qua
litative objectives are instrumental for the long term growth. The quantitative
objectives in terms of sales, profit and market share are important for the shor
t term growth of the organization. Sales organization needs people striving join
tly to reach qualitative and quantitative objectives by creating a suitable stru
cture of human relationship. The sales organization should not have a rigid stru
cture. It should have build-in adaptability to respond appropriately in fluid an
d diverse marketing environments.

The Sales Organization: Purpose The sales organization must not be worried of de
signing a formal structure. How an organization works is more important than how
it suppose to function. Sales management should direct its organizational effor
ts towards a informal organization through intelligent leadership.
The followings are the purpose of setting a sales organization

Purpose:
1. To permit the development of specialists: The sales department is organized a
nd reorganized to retain the specialized workforce through proper delegation of
authority and responsibility. To perform all necessary activities: When an organ
ization grows and specialization increases, it becomes difficult to supervise al
l the activities. Therefore the change is required to restructure the system. Wh
en the company is small, its executives are in close contact with the end users
of the product. But as the company grows, as the marketing channels lengthen and
the marketing area expands geographically, the executives become farther and fa
rther from the customers. 2.

Purpose.
3.


To achieve co-ordination or balance:
Sales people are the field workers. The entire department is target oriented eit
her qualitatively or quantitatively or both. Motivating individuals to work toge
ther toward common objectives is important in achieving co-ordination. Individua
l goals are subordinated to the organizational goals. Modern sales organizations
should be divided into small, freely communicating and face to face groups to r
educe the possibility of un coordinated proliferation.
4.

To define authority:
Sales executives should know whether their authority is line, staff or functiona
l. The sales organization should be clear whether the order is unidirectional or
multi directional. The organization should be developed to promote harmony amon
g the employees.

Purpose..
5. To economize on the executive time:
Sales departments operations and activities increase in complexity and number, ad
ditional subordinates are added. This permits the higher ranking sales executive
s to delegate more authority towards planning decisions and less time on operati
onal activities. This change will definitely initiate structural reforms in the
organizational set-up. It is all important for time and man management

Principle and Policies of organizational structuring:

There must be clear lines of authority running from the top to the bottom of
organization. Responsibility should always be coupled with corresponding author
ity. Authority should be delegated as far down the line possible. The work of ev
ery person should be confined as far as possible to the performance of a single
leading function. There should a limit to the number of positions that can cocoo
rdinated by a single objective. The number of levels of authority should be kept
as a minimum. The organization should be flexible so that it can be adjusted to
changing conditions. The organization should be kept as simple as possible. The
responsibility and authority of each level should be clearly defined, if necess
ary in writing.

Setting of a Sales Organization:

Define the Objectives:
Sales, Profits & Growth
Determination of activities and their volume of performance:
Volume of performance Duties and Responsibilities
Grouping activities into the position:
Allocation of Job, Objectives, duties & responsibilities and performance measure
s It has implication on organization design

Setting of a Sales Organization:

Assignment of personnel to positions: To assign personnel to positions. This is
the fitment study. It is a very controversial debate whether the unique talents
and abilities those are prudent and profitable will be having the same positions
or the positions need to be modified

Provision for co-ordination and control:

Co-ordination and control is obtainable through both informal and formal means.
Strong leaders control and co-ordinate the efforts of their subordinates largely
on an informal basis through their personality. These leaders make minimal use
of formal instruments of control and co-ordination. Written job description wher
e the reporting relationship, job objectives, duties and responsibilities, perfo
rmance measurements etc are clearly mentioned.

Sales Organization Structure:

There are basically four types of sales organizations from the standpoint of pos
ition and relationship.
These are as follows: Line organization Line and staff organization Functional o
rganization Committee organization

Line Organization
It is the oldest and the simplest form of sales organizational structure. It is
widely used in smaller firms with small number of selling personnel. Companies t
hat cover limited geographic location or sell narrow product line. There is no c
ross communication between persons at the same level. This is purely indirect an
d effected through the next higher level. The greatest weakness of this structur
e is the excessive dependency on the department head and therefore inappropriate
for the growing concerns having large sales staffs.

Line Organization
Gen. Manager Sales manager
Asst. S. Mgr Div- 1
Asst. S. Mgr Div-2
Asst. S. Mgr Div-3
Asst. S. Mgr Div-3
Sales people
Sales people
Sales people
Sales people

Line and staff organization:

The line and staff sales department is often found in large and medium sized fir
ms, employing substantial number of sales personnel, and selling diversified pro
duct lines over wide geographic areas. In contrast to the line organization, the
line and staff organization provides the top sales executives with a group of s
pecialists- experts in dealer and distributor relations, sales promotions, sales
analysis, sales training, sales planning, service, traffic and warehousing and
similar fields. These staffs helps the top sales executives by providing the nec
essary informations and saves the time of the top executives

Line and staff organization:

President
V.P- Marketing
Advertising Mgr
Gen. Sales Mgr
Mgr- Marketing Research
Dic. Sales Training
Dic. Sales Personnel
Asst. Gen. Sales Mgr
Mgr- Sales Promotion
Dic. Dealer &Distributor Relations
District Sales Mgrs (6)
Branch Sales Mgrs (32) Sales Personnel (450)

Line and staff organization:

The greatest weakness of the line and staff model is the role ambiguity and conf
lict. The success of this model depends upon the co-coordinated effort between t
he line and staffs which is very much costlier. Sufficient time should be devote
d for problem recognition and corrective action which may hamper the decision ma
king process.

Functional Sales Organization:

Few sales departments use functional organization . This structure has been dev
loped as the brainchild of Frederic W Taylor which is based upon the principle o
f specialization. The outstanding advantage of the functional sales department i
s improved performance. Specialized activities are assigned to the experts whose
guidance should help in increasing the effectiveness of the sales force. The sa
les operations are highly centralized and therefore becomes ineffective for many
large firms. It is not financially possible to adopt high degree of division of
labor. It is suitable for large companies with stable operation , but the large
companies with stable selling operations is an exception

Functional Sales Organization:

Director of Sales Administration
MgrInstallation & service
Mgr- Sales Training
Mgr- Sales Promotion
Mgr- Dealer & Distributor Relation
Salesperson
Salesperson
Salesperson
Salesperson

Committee sales organization:

It is not the sole basis for organizing a sales department. It is a method of pl
anning and policy formulation while leaving the actual operation including imple
mentation of plans and policies to the individual executives. The organization m
ay have many committees such as sales training committees, customer relation com
mittees, human resource committees and new product committees. The sales trainin
g committee may consist of sales training manager, his/her assistants, the gener
al sales manager and the regional sales manager. All the members sit together to
draft training plans and formulate sales training policies but its implementati
on sole responsibility of the sales training manager. The use of committees in t
he sales department has many advantages. Before policies are made and action is
taken, important problems are deliberated by committee members and are measured
against varied viewpoints. It also promotes co-ordination among members of the e
xecutive team. But the committee meetings consume more time. Therefore the agend
a of the meeting should be properly framed to avoid wastage of time.

Committee sales organization:

The marketing organization can be organized on any of the following basis:
Function-oriented Sales Organization. Product-oriented Sales Organization. Custo
mer-oriented Sales Organization. Geography-oriented Sales Organization. Combined
-based Sales Organization.

a.
Function-oriented Sales Organization
When departmentation of sales organization is done on the basis of sales activit
ies, it is called departmentation on function basis.

a.
Function-oriented Sales Organization
MARKETING MANAGER
Advertising Deptt.
Sales Promotion Deptt
Marketing Research Deptt.
Sales Planning Deptt.
Sales Manager
Sales Supervisor
Sales Supervisor
Salesman
Salesman

b. Production Oriented Sales Organization:

Product type of departmentation is done when the enterprise produces or manufact
urers or markets different types of products. In this case separate sales execut
ives are appointed for each product or group of products in the product line. Ea
ch will have its own organization to perform the various sales tasks.

b. Production Oriented Sales Organization:

GENERAL MANAGER MARKETING
Marketing Officer Product - 1
Marketing Officer Product 2
Marketing Officer Product - 3
Sales Supervisor
Sales Supervisor
Sales Supervisor
Salesmen
Salesmen
Salesmen

c. Customer-oriented Marketing
Organization:
When the departmentation sales organization is done on customer basis, it is cal
led customer oriented Marketing Organization. We may also call it as departmental
ization on the basis of distribution channels.

c. Customer-oriented Marketing
Organization:
MANAGER MARKETING
Sales Officer Direct Marketing
Sales Officer Channel Mktg.
Sales Officer Industrial Products
Sales Officer Foreign Customers
Sales Officer Consumer Products
Salesmen
Salesmen
Salesmen
Salesmen
Salesmen

d. Geography/Territory Oriented Marketing Organization:

Here for the selling of a particular product types, the total marketing area is
divided into territories. Each territory is under the control of a separate sale
s executive. He is assisted by a separate sales force.

d. Geography/Territory Oriented Marketing Organization:

COUNTRY MARKETING MANAGER
Regional Sales Manager NORTH
Regional Sales Manager SOUTH
Regional Sales Manager EAST
Regional Sales Manager WEST
Sales Supervisor
Sales Supervisor
Sales Supervisor
Sales Supervisor
Sales man
Sales man
Sales man
Sales man

e. Combined-base Marketing Organization:

The combination of two more basis of departmentation such as territorial, produc
t and customers basis etc. is called combined basis of departmentation of sales o
rganization.

Planning of the selling factors:

Examine customers in each market. Determine the types of sales jobs needed to se
rve a market. Note the job activities salespeople must do. Design sales jobs aro
und customers. Set up the sales force organizational structure, which includes t
he various sales jobs and geographic territories. Product and service related fa
ctors Organization related factors Marketing mix related factors

Planning of the selling factors:

External factors:
The speed of market change Reduction in the number of vendors per buyer Closer t
o customer relationships Changes in regulations and international practices
Other Factors like:

The product The customers Territory Techniques of selling Promotional materials
His/Her own organization Targets

Stages in the selling process:

Pre-sale preparation
Prospecting
Pre- approach before the interview
Approach to the customer
Follow up action
Closing the Sale
Handling Customer Objections
Sales Presentation

Desirable Salesperson Traits

Empathetic
Self-motivated
Competitive
Organized
Salesperson
Goal-oriented
Enthusiastic Customeroriented
Adaptive