Sales Management

14MBAMM407

Subject Code: 14MBA MM407

IA Marks: 50

No. of Lecture Hours / Week: 04

Exam Hours: 03

Total Number of Lecture Hours: 56

Exam Marks: 100

Practical Component: 01 Hour / Week

Module 1: (8 hours)
Introduction to sales management: Meaning, Evaluation, Importance, Personal Selling,
Emerging Trends in Sales Management, elementary study of sales organizations, qualities and
responsibilities of sales manager. Types of sales organizations.
Module 2: (6 hours)
Selling skills & Selling strategies: Selling and business Styles, selling skills, situations, selling
process, sales presentation, Handling customer objections, Follow-u action.
Module 3: (6 hours)
Management of Sales Territory & Sales Quota: Sales territory, meaning, size, designing, sales
quota, procedure for sales quota. Types of sales quota, Methods of setting quota. Recruitment
and selection of sales force, Training of sales force.
Module 4: (8 hours)
Sales force motivation and compensation: Nature of motivation, Importance, Process and
factors in the motivation, Compensation-Meaning, Types of compensation plans and evaluation
of sales force by performance and appraisal process.
Module 5: (6 hours)
Sales management job: Standard sales management process-international sales management international market selection-market survey approach or strategy - case study in Indian context.
Module 6: (8 hours)
Sales Manager and Sales Person: Role of sales manager and sales people; functions of sales
manager, functions of sales person, types and characteristics of sales manager and sales peopleTime management for sales manager and sales person.
Module 7: (8 hours)
Selling on the internet: Selling agents for internet trading-net selling, advertising in net trading,
payment system in internet trading-smart card, credit card, debit card- payment by card:
advantages and disadvantages; How to make internet selling safe-Digital signature, biometric
method and legal or regulatory environment; Growth of internet trading in India.
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Contents

Module No.

Particulars

Page No.

Introduction to sales management

3 11

Selling skills & Selling strategies

12 19

Management of Sales Territory & Sales Quota

20 24

Sales force motivation and compensation

25 28

Sales management job

29 45

Sales Manager and Sales Person

46 56

Selling on the internet

57 - 74

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Module 1: (8 hours)
Introduction to sales management: Meaning, Evaluation, Importance, Personal Selling,
Emerging Trends in Sales Management, elementary study of sales organizations, qualities and
responsibilities of sales manager. Types of sales organizations.

Sales Management Meaning:

It is the attainment of salesforce goals in an effective and efficient manner through planning,
staffing, training, leading and controlling organizational resources.
Evaluation of Sales Management:
Industrial revolution that took place in the 18th century gave rise to the expansion of market
which required professional approach in selling. The history of salesmanship is as old as human
civilization. The business and trade of buying and selling goods flourished over centuries and
centered only on some specific cities of the world.
The first sales people
The first sales people in the US were Yankee peddlers who carried clothing, spices, and
household articles from one part to another part. These move from one village to village and sell
sarees, dress materials and spices mostly in the rural markets because rural housewives have
lessor mobility than urban housewives.
Pack Peddlers
The pack peddlers in India traded with the tribal Indians and exchanged knives, beads and
ornaments and handicrafts. They sold colored sugar water as medicine and cheated people from
smaller gains. In the beginning of the 19th century, these peddlers started using horse driven
carts and wagons and started stocking heavier goods.
Greeters and Drummers (Intermediary to buyer)
Wholesalers and manufacturers hired greeters and drummers who would seek out and invite
retailers to visit the display of the owner. The drummers would meet the passengers form
incoming train and ship with great fanfare to beat their competitors. In the next phase, the
drummers started visiting customers place of business. There were fewer than 1000 traveling
sales people before 1860 in the US who were basically credit investigators and took orders for
goods.

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Selling Techniques
The techniques of modern sales management and selling techniques were refined by John Henry
Patterson, widely known as the father of modern sales management. He ran the National Cash
Registry.
He asked his best sales people to demonstrate their sales techniques to other salespeople. The
best sales approach was printed in a sales primer and distributed to all the other sales people to
follow

Modern Sales Management

Today the process of sales management has undergone numerous changes in terms of strategy,
practice and technological adoption to achieve the desired goal. A sales person has become the
information provider. The real sales activity is now in retaining customers rather than just
closing the sale.
This relationship approach has changed the scope of sales management and research has found
that is costs five times more to register a new customer than to sell a product or service to an
existing customer.
The Domain of Sales Management
The domain of sales management has become multidisciplinary in which sales manager has to
manage a diverse workforce and complex technologies. Sales manager have to perform duties
such as recruiting, selecting, training, motivating, forecasting, controlling and administering
people. They have to manage and satisfy multiple and satisfy multiple stakeholders such as
customers, suppliers, sales representatives and top management with the objective of increasing
sales and profitability.
Importance of Sales Management

The amount spent on selling product is very high.

Salesforce is the primary contact points so much attention to be given for improving the
ability of selling through training and motivation.

Personal selling is the most commonly used method of promotion.

In most industrial markets, personal selling comprises the majority of the promotional
budget and is a significant part of overall budget.

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Customers consider salesperson as the company selling product.

With the advent of internet technology and web based platforms for interaction with
customers, personal selling has become a method of marketing communication which
fosters personalized and interactive dialogue with customers.

Personal selling
It is a personal communication of information to influence a prospective customer to buy
something- a good, service, or idea that satisfies an individuals needs.
Types of Personal Selling
Personal selling can be broadly classified into three categories.

Industrial selling

Selling to reseller

Selling to business user

Institutional selling

Selling to Government
o Retail selling
o Service selling

Emerging trends in sales management

To be successful in a changing marketing environment it is important that sales managers
understand emerging trends in the following areas:

Global perspective
Global competition is intensifying Domestic companies who never thought about foreign
competitors suddenly find them in their salesforces to meet foreign competition in their
country and improving their companys personal selling efforts in other countries. Sales
managers selling goods and services in the global market place face challenges, different
requirements for buying, and different styles of negotiation and so on. Sales managers
must also consider opportunities as many global markets are emerging and growing
rapidly. A company need not be large to sell globally. Small and medium sized
organizations can sell in global niche markets.

Revolution in Technology
Digital revolution and the management of informational have greatly increased the
capabilities of consumers and marketing organizations. Buyers today can get information

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on products, compare suppliers prices and place orders on the internet in a matter of
seconds. They can access online a great amount of information about almost anything.
Marketing organizations also have a new set of capabilities. Companies can collect more
information about capabilities. Companies can collect more information about markets,
customer, prospects and competitors by using the internet. They can establish website and
communicate information about the company, its products and services to the needs of
individual customers.
To compete effectively, salespeople and sales managers will have to adopt to the latest
technology.
Some of the technological innovations for sales management are portable and desktop
computers, mobile phones, video conferencing and videotape presentations. Technology
can make some sales activity efficient and cost effective.

Customer Relationship management

Combining relationship marketing with information technology has resulted in customer
relationship management or customer relationship marketing. Interestingly, the concept
of relationship marketing came about earlier by bringing quality, customer service, and
marketing together.
Relationship marketing aims at build long term, mutually satisfying relations with key
parties customers, distributors and suppliers in order to retain their long term preference
and business. CRM enables companies to provide excellent real time customer service by
focusing on meeting the individual needs of each valued customer by the use of CRM
software packages.

Salesforce diversity
The demographic characteristics of the salesforce are changing and are becoming more
varied. For example, more women are taking up careers in selling and sales management.
In addition, today salespeople are more educated, with college degree and some of them
holding postgraduate degrees. Sales manager will have to manage a salesforce consisting
of women, more educated and less educated salesperson, as well as senior people. The
needs or expectations of the varied salesforce will be different and consequently the
motivational tools will not be the same.

Team Selling Approach

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The practice of team selling is widely followed by most companies in recent years. Team
selling approach is used when a company wants to build a long term mutually beneficial
relationship with major customer, who have high sales and profit potential. It is also used
for selling a technically complex product or service to a prospective customer. The
composition of the team includes members from top management, technical specialist,
customer service, inside salesperson and salesperson or manufacturers representative.
Team selling requires the joint selling effort of several persons, and hence, designing an
effective compensation plan can be a challenging task.

Managing multi-channels
Multi-channel marketing system occurs when an organization uses two or more
marketing channels to reach one or more customer segments. Major benefits of a multichannel marketing system are:
Lower channel cost (ex: selling by phone instead of visits by salesperson to small sales
potential customer)
Increased market coverage.
Customized selling-selling technically complex products and services by the companys
technical salesforce.
Multi channels may also lead to conflict and control problems as two or more channels
may compete for the same customer. The successful sales manager will have to
effectively manage the conflicts between channel members by using various techniques
like co-operation, exchanging person, mediation.

Ethical and Social Issues

Sales managers have social and ethical responsibilities. Sales people face ethical issues
such as bribery, misleading, and high-pressure sales tactics. Giving payment or gift to get
an order, misleading the customer by exaggerating the benefits of a product and using
high-pressure tactics of committing wrong delivery schedules to a customer needing
urgent delivery of a raw material are example of unethical behavior of salesperson.
Today sales manager have no choice but to ensure ethical standards from the salesforce
otherwise they may be out of business or even land up in legal problems.

Sales Professionalism

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Todays top sales people are largely made, not merely born. Selling has increased in
complexity, because composition is more intense, customers are more sophisticated and
products and services have become more technical. Success mostly comes to those
salesperson who have a combination of natural ability and acquired skills. A study on
what do buyers like most in a salesperson indicated qualities like reliability, credibility,
professionalism, integrity and product knowledge as most valued. The knowledge, skills
and the right attitudes to meet complex and competitive market conditions of today are
required by the professional salesperson through intensive training and practice. Some of
the successful organizations have their own centers for training and management
development. Todays companies spend a lot of money each year to train salespeople in
the art of selling and to make them professional.
Elementary study of Sales Organization
A sales organization is an organization of individual either working together for the marketing of
products and services, manufactured by an enterprise or for products that are procured by the
firm for the purpose of reselling.
A sales organization defines the duties, roles and the rights and responsibilities of sales people
engaged in selling activities meant for the effective execution of the sales function.
Factors influencing structure

Product and service related factors

Organization related factors

Marketing mix related factors

External factors

Organizational principles
A sales manager needs to understand the various organizational principles that help in the
smooth functioning of the organization, supports the work of the team and helps the team to
respond to market opportunities.

Span of control

Number of subordinate and sales staff under the supervisor of a sales Manager is known as span
of control. When new recruits have to be handled Narrow span of control can be used or else
wider span of control is preferred.

Centralization and Decentralization

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The extent of control authority of the top management decides the level of centralization. Highly
centralized organization-Every decision will be made by the top management. Decentralization
helps organization to be competitive at the respective market level.

Integration and co-ordination

The organization across departments integrated to serve customer with effective co-ordination.
Types of sales Organization
Line sales organization
It is the simplest sales organization structure. All managers, from top sales manager to middle
level managers, have line authority. Line authority means people in management positions have
formal authority to direct and control immediate subordinate. Line managers are responsible to
achieve target.
Head marketing
Sales Manager
Area sales manager 1 Area sales manager 2 Area sales manager 3 Area sales manager 4
Salespeople Salespeople Salespeople Salespeople
Line and Staff organization
In this type of organization structure, a group of specialists are made available to the top sales or
marketing executive. These specialists, called staff are experts in certain support activities such
as marketing research, sales training, and advertising or integrated marketing research, sales
training, and advertising or integrated marketing communication and marketing logistics. Staff
manager dont have any authority to issue directives to salespeople, who report to line sales
managers.
Head marketing
Marketing service manager sales manager Marketing research manager Promotional manager
Area sales manager-1 Area sales manager-2 Area sales manager-3 Area sales manager-4
Sales People Sales People Sales People Sales People
Functional sales organization
In this sales organization, the principle of specialization is fully used. Each staff specialist
manager, such as marketing research manager and promotion manager, has line authority of
his/her function over salespeople. Example, marketing research manager can sales manager can

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directly issue instructions to all salespeople through area sales managers to obtain certain market
information.
Head Marketing
Marketing service Manager sales manager marketing research manager promotional manager
Area sales manager
Salespeople
Horizontal Organization
This organization structure removes management levels (hierarchy) and also departmental
boundaries.
The support functions like strategic planning, human resource, and finance are looked after b a
small team of senior executives. All other people in the organization are the members of cross
functional teams, which perform many core processes like product design, sales and production
or operation. These teams also work with customer teams to solve the customers problems.
Advantages are reduction in supervision, unnecessary tasks and costs and substantial
improvement in efficiency and customer responses with enthusiasm.
Research design team operation team
Customer research production
Product /service design quality assurance
Systems engineering
Planning team
Strategic Planning
Accounts, Finance
Human Resource
Chief operation officer
Customer support team customer satisfaction
Service sales and marketing
Training pricing, promotion
Information channels, logistics
Qualities and Responsibilities of sales manager
Qualities

He should be good communicator, catalyst, and planner

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He should be a prognosticator, and skillful manipulator.

He should be an amalgamator, a consolidator, and orchestrator directing efforts of many

towards the achievement of common goal.

He should be a successful mentor who understands each individuals needs, self

fulfillment and economic growth

He should be an innovator and creator of new ideas and promotion.

He should be an over achiever rising to the challenge of new forecast each year.

He should be capable of handling unanticipated difficulties and events.

He should be an opportunist and a worthy advisor.

He should be a team-mate and referee.

Responsibilities

Sales planning and budgeting

Estimating demand and forecasting of sales.

Determination of size and structure of the sales organization.

Recruiting, selecting, and training of sales people

Allocating of salesforce and setting sales quota

Compensating, motivating and leading the salesforce.

Analyzing sales volume cost and profit

Measuring and evaluating salesforce performance.

Monitoring marketing environment.

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Module 2: (6 hours)
Selling skills & Selling strategies: Selling and business Styles, selling skills, situations, selling
process, sales presentation, Handling customer objections, Follow-u action.

Selling skills and Selling Strategies

Selling skills
These are the sum total of aptitudes and skills such as communication skills, listening skills,
conflict resolution skills, problem solving skills and negotiation skills.
Selling and Business style
The entire customer doesnt buy the products in the same way. The buying styles vary depending
upon the buyers capability to pay, the quantity of purchase, the buyers ability to take risk, the
bargaining power of the buyer in the market, the competitive landscape in the industry and many
other factors.
Research has shown that the way people respond to an innovation varies in the marketplace.

Innovators and laggard

People who are adventurous and have high risk capital are the overnight buyers. These buyers
are the innovators in the marketplace, who mostly buy on impulse and consider non-functional
reasons for making a choice. This set of people is followed by another group who accept new
products and innovations after observing the innovators using it. Majority of such people take
time to make a buying decision. There is another set of people who but only after everybody has
started using the product. These laggards start buying a product when another new product is on
the doorstep.
In many organizations buying is centralized, whereas in many others buying decisions are
undertaken by a committee or a similar form of set up. Market conditions in terms of the number
of competitors in the market, the prevailing level of competition, the quantity of purchase by the
buyer the switching cost involved in buying from a competitors firm, etc, will decide the nature
of buying.
Theory of diffusion
There are also customers who are vary conservative and buy only when they see everyone using
the product. It is very easy to convince the innovators for buying the product, where as it are
difficult to close a sale in the case of laggards. This is called the theory of diffusion.
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In the theory of diffusion, the innovators do not give much importance to the salesperson and
make new purchases out of a habit of experimenting.

People oriented

Problem oriented

Sales technique oriented

Push the product oriented

Take it or leave it

Selling Situations
A typically selling situation explains what kind of customers a salesperson is going to face and
what kind of customers a salesperson is going to face and what kind of sales approach will help
him in closing a sale in that situation.

The sales Task and Function

The salesperson has to undertake various tasks during the process of selling. We have classified
the different kinds of salespeople in the introductory on the basis of sales responsibility and
functions.
When a salesperson gives a sales presentation or makes a sales call he communicates with the
customer and basically performs the communication function. But the customer may have
queries, doubts and he wishes the salesperson is involved in listening function.
By providing information about other existing products of the company and new products that
are likely to come to the market, a salesperson also performs the information dissemination
function.
In non standardized markets, where there is no list price involved in buying and selling, the
salesperson needs to negotiate with customers and bargain wherever possible for the benefit of
the
organization and thus he is involved in the negotiations and bargaining function.
Maintenance Selling
Typically, maintenance selling involves the art of servicing the existing accounts, securing
promotional cooperation, counting inventory and taking replenishment orders, and delivering the
products. In the advertising world, these kinds of salespeople are called client servicing
executives who provide service to clients and also take the orders as and when required. There is
no question of prospecting for this kind of salespeople as it is done with the exiting customers. In
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the IT sector, these sales people are posted at the client site and are responsible for solving the
clients problems. In high tech product categories also we find service and maintenance
salespeople.
Developmental selling
Salespeople engaged in developmental selling are called business developmental sales executives
as they try to contact the potential customers and build business for the firm. They are the real
salespeople who try to do prospecting from the leads either available in the organization or
collected by them and then take the prospect through the whole process of selling to realize a
sale.
Selling skills
While it is very difficult to find out a set of characteristics for guaranteed success in selling, hard
work, working smartly in business, ability to set goals, level of maturity, communicative ability,
honesty, integrity, can make a successful salesperson. In some situations these skills can be
developed through training and practice. Selling skills are a set of characteristics that are
necessary for a salesperson to posses, failing which he may not be successful in selling.
The essential skills for successful selling are
Problem solving skills Communication Skills
Selling Skills
Negotiation Skills Listening Skills
Conflict Management
Communication Skills
The ability and expertise to communicate is necessary in selling function. The salespeople should
posses a good vocabulary and express themselves intelligently to the customer. The later element
is necessary mostly in intelligent buying and selling situations, such as business to business
selling.
Research has found out that trust between a buyer and a seller largely depends on five elements
in the salespersons behavior.
1. Truth of words communicated by the salesperson
2. Predictability of action
3. Competency ( ability/knowledge/resource)

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4. Intent or empathy (placing the customers interest on par with the sellers interest, a
commitment to solving the customers problem and responsive to the customers cause)
5. Likeability (It is an emotional issue and difficult to clearly define, but can be understood as a
perception of commonality by both the parties.
Communication Process
Communication is the exchange of idea and information between two parties. The
communication process is defined as a set of activities and systems integrated for an exchange of
ideas, concepts, information and knowledge between a sender and a receiver.
Sales communication can be both personal and non-personal. Non-personal communication
means the use of mass media for providing product information to the consumers. Non-personal
communication involves newspaper, TV, and other mass media through which sponsor sends
messages about the products and services without a scope of knowing the recipients.
A typical communication process begins with a source, which in this case is the salesperson
himself, who provides the relevant product and service information. The source has thoughts and
ideas to communicate to the audience, which have to be encoded in a presentable form by the
sender. Sales presentation, sales literature sent through direct mail, telephone calls and selling
information over the internet are example of communication and information dissemination in
the selling process. For this purpose, the message has to be encoded into a presentable format
that can be transmitted to the customers.
This involves translating ideas and thoughts into symbols, words and pictures to meaningful
communication patterns. The words and symbols used by the source should communicate the
same meaning to the receiver.
Managing body language
Salespeople can take care of their verbal and non-verbal communication while making sales
presentations. The following will explain the strategy and tactics they should follow to manage
body language to show that they are confident enough to handle a sales situation.

Personal appearance

Posture

Gestures

Facial expression

Eye contact

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Space distancing

Listening skills
The sales manager has to be a very good listener and use his listening skills to lead towards sales
realization. Poor listening skills may make a sales manager miss subtle issues in customer
interaction and- this may lead to non-resolution of customers problems and thus a poor level of
sales realization.
Research suggest that people are only 25% efficient in their ability to listen. An average person
remembers only about half of what is being told to him after 10 min and forgets half of that
within 48hrs.
Process of listening
Attendance Evaluations
Interpretation Response action
Remembrance
Levels of Listening
Feedback
Paraphrasing
Clarifications
Empathetic listening
Active listening
Conflict Management Skills
Conflict exists in every organization. Conflict in sales organization is more evident than in any
other organization. This is due to the fact that there is always conflict of interest among people at
different levels as the goals are different at each level of the organization.
Models of conflict

Approach approach

Approach-Avoidance

Avoidance-Avoidance
Components of conflict

Interest

Emotional

Value

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Methods of conflict resolution

Lumping

Avoidance

Coercion

Conciliation

Mediation

Arbitration

Adjudication

Negotiation

Negotiation Skills
Negotiation occurs when someone else has what you want and you are prepared to bargain for it
and the vise versa. Wall-mart globally follows the strategy to negotiated exchange with its
suppliers and these are set for a long-term period. Indian automobile majors like TATA and
Maruthi Udyog also follow the same strategy in dealing with the auto ancillary and equipment
manufacturer.
Bargaining is a defined as a process where at least two parties are involved, the parties have
some
or one conflict of interest between them, they are atleast temporarily joined together in a special
kind of voluntary relationship and the activity in the relationship concerns the division or
exchange of one or more specific resources or resolution of one or more intangible issues among
the parties.
Negotiation Tactics

Acting crazy

Auctioning

The good guy-bad guy routine

Big pot

Budget bogey

Get a prestigious ally

Escalation

The well is dry

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Limited authority

Deadline

Get lost/stall for time

Take it or leave it

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Problem solving skills

The sales person needs problem solving skills for effective selling. The rational and consultative
selling approach suggests that a salesperson should not be a mere order taker; he should rather
act as a problem solver and a consultant to the customer. These roles are more significant for
high-tech selling and business-to-business selling.
A true solver will analyze the situation and extract the real problem from an ocean of information
and facts.
Problem solving Process

Define the problem

Generate alternative solutions

Decide the solution

Implement the solution

Evaluate the solution

Selling Process

Pre-sale preparation

Prospecting

Pre-approach before the interview

Approach to the customer

Sales presentation

Handling customer objections

Sales presentation

Sales presentation
There is need for two way communication between the salesperson and the prospect during a
sales presentation. Here, the salesperson presents his products and services before the prospect
and makes effort to create and modify their interest into sales realization for the company. While
giving sales presentations, the salesperson should always try to link the features and attributes of

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the product with the customer needs so that the gap or conflict and level of customer objection
can be reduced in the subsequent stages.
Approaches to sales presentation

Attracting customer objection

Creating interest

Arousing desire and building conviction

Methods of sales presentation

Canned presentation

Organized presentation

Tailored presentation

Handling Customer Objections

Customers make objections after or during the presentations. These objections are many times
excuses for not buying. Objections normally pause the sales process because the customer either
as not fully understood the product and its benefits, or is not fully in agreement with the
salesperson.
o Start with your highest expectations
o Avoid conceding first
o Be sure the customer understands the value of a concession
o Make concessions in small amounts
o Admit mistakes and make corrections willingly
o Be prepared to withdraw a concession
o Avoid split the difference strategy
o Do not advertise willingness to concede.
Methods of handling customer objection

Superior feature method

Yes but method

Reverse English method

Indirect denial method

Pass out method

Comparison method

Direct denial method

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Module 3: (6 hours)
Management of Sales Territory & Sales Quota: Sales territory, meaning, size, designing, sales
quota, procedure for sales quota. Types of sales quota, Methods of setting quota. Recruitment
and selection of sales force, Training of sales force.

Management of sales territory and sales quota

Sales management is defined as a group of present and potential customers assigned to an
individual sales person, a group of sales person, a branch, a dealer, a distributor or a marketing
organization at a given period of time.
Size of sales territory
There are various factors influence the size of a sales territory. Density of the population,
population spread within the territory, nature and demand of the product, mode of physical
distribution, the selling process and transport and communication facilities.
If the product is a consumer durable with a longer shelf life, the company may prefer to have a
larger territory compared to smaller territories for the perishable commodities. Territories can be
established on the basis of the nature of the product, namely consumer, industrial and durable
and non-durable.
When companies decide to go through intermediaries they prefer to have a larger territory. On
the other hand, industrial buying, where bulk order booking is done by a salesperson, or in
situations where a company also handles the retailers, the size of the territory is kept small.
Designing the Sales territory

Select the basic geographic control units

Decide on the criteria for allocation

Decide on the starting point

Combine control units adjacent to starting point

Compare territories on allocation criteria and conduct workload analysis

Assign salesforce to new territories

Sales Quota
Sales quotas are the targets that salespeople try to achieve within a specific period of time, which
contributes towards achieving the organizational goal regarding sales forecasts.
Procedure for setting quota
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A successful procedure for setting quotas in organizations is a process built on one-to-one

discussion between the sales managers with each salesperson serving a territory. This procedure
is the most democratic way of handling the targets and motivating subordinates to achieve the
organizational goal. They are

Scheduled planning

Conferencing with each salesperson

Arriving at a summarized written quota statement

Types of sales quota

Sales volume quota

Sales budget quota

Sales activity quota

Combination quota

Methods of setting sales quota

Quotas based on sales forecasts and Potentials

Quotas based on forecast

Quotas based on past sales or experience

Quotas based on executive judgment

Quotas based on salesperson judgment

Quotas based on compensation

Recruitment and Selection of salesforce

Recruitment
It is the planned process whereby the scientific principles of management is utilized for finding
out and filling up the positions in the right territory with the right people.
The section and recruitment of efficient people is always a competitive advantage for an
organization.
Hiring process
There are three stages
Manpower planning (examine labour turn over, positive equipment analysis, hiring objective,
deciding number of people required for particular time)
Recruitment stage (identifying best source for generating pool of candidates)
Selection (screening, interview)
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Planning for recruitment

Strategic position analysis
Turnover
Job Analysis
Job Qualification and Job Description
Salesforce Recruitment
Recruitment forms the first stage in the process of hiring a salesforce and is followed by
selection and ends with placement and socialization. The purpose of recruitment is to locate the
sources of manpower to meet the job recruitments and the man specifications.
Sources of recruitment
An important decision to be made at this stage is regarding the source of recruitment. The
sources of recruitment are divided into two types
Internal sources of Recruitment

Lateral and upward moves

Interns and cooperative students

Employee referral programmes

External sources of recruitment

Other industry sources
Educational institutions and campus recruitments
Advertising
Employment agencies
Walk-ins
Networking
Web sources
Selection of a sales person
Selection is the process of making a hire or no hire decision regarding each applicant for a
job. The sales manager obtains the database mechanism that determines overall quality of the
human resources in an organization.
Selection procedure
Inviting a blank application
Personal interviews
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Reference checks
Physical examinations
Intelligence
Personality
Aptitude and skills
Determination of terms of service
Appointment
Initial orientation
Training the salesforce
Sales training is a process of providing the salesforce with specific skills for performing their
task better and helping and helping them to correct deficiencies in their sales performance. When
a new product is introduced into the market, the market situation undergoes a change with the
entry of a new competitor or a new technology. In this case, the new product either moves across
the life cycle or salespeople are asked to perform the job in a new way. The salesforce needs to
be trained to meet these new kinds of situation. Training provides the necessary skill to the
salespeople to perform a job better and correct any lacunae in the salesforce while executing
their job responsibilities.
The training process
A sales manager has to design a training programme that will help in improving the skill and
efficiency levels of the salesforce. For the purpose of the optimum benefit to the organization,
the sales training programme should be designed by following a scientifically planned and
designed process. The training process consists of three phases namely, the training need
assessment and development, conduct of training programme, and the evaluation stage.
Training need assessment, Design and conduct of a training programme and Evaluation of a
training programme
Training need assessment
Organizational level analysis
Task level analysis
Individual level analysis
Designing and conduct phase

Location

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Types of training
Cross-functional training
Team training
Creativity training
Literacy training
Evaluation Phase
This is last stage in the training process where the effectiveness of the training programme is
assessed. The effectiveness of a training programme is measured either in monetary or nonmonetary terms. The criterion by which the assessment is done reflects the needs for which the
programme was designed. For example, a training programme is designed to improve selling
skills and can be measured by analyzing the increase in the all conversion ratio of a salesperson.
The training programme is also designed to increase the sales performance of salesperson in the
territory where they are working.
Training Methods
Structure the lecture
Reinforce the message
Aid concentration
Material used for the lecture
Make memorable for the participants
Deliver with dynamism
Use questions
Visual support
Participative
Conferences
Seminars
Discussions
Role play
Case study
Work shop
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Module 4: (8 hours)
Sales force motivation and compensation: Nature of motivation, Importance, Process and
factors in the motivation, Compensation-Meaning, Types of compensation plans and evaluation
of sales force by performance and appraisal process.

Salesforce motivation and compensation

Nature of motivation
The meaning of the word motivation is to move or activate. Motivation is an internal feeling
and an energetic force within salespeople that drives them to behave in a certain way. It produces
goal-directed action harnesses human energy towards the goals of the sales organization.
The higher is the level of inducement, the higher is the likelihood of an individual contributing
the organization.
Motivation has a system orientation, which means that the goal of the individual is shaped by
the forces within the individual and its interaction with the surrounding environment.
If goal-directed action always leads to a certain rewards, the individual is likely to repeat the
same action again and again. But if the goal-directed action does not lead to any expected reward
the individual is less likely to pursue this action with similar intensity.
Motivation is complete process in which needs get satisfied and generated newer and modified
needs. Motives are hypothetical constructs,, which Can be observed in some situations. Many
times, one can find out the reasons why salespeople work overtime. The reasons may be either
monetary benefits or observable financial rewards, and it may also be the intrinsic motivation
that guides the individual for over commitment.
Importance of sales motivation
Sales organization is made of human beings working at different levels and every organization
needs people in order to function.
Employees in organization posses a huge amount of information based on the experience
about structures and processes of the sales organization and market.
The success of the sales organization depends on the ability and the style of functioning of the
sales manager to motivate the sales people to achieve organizational goals.
The nature of the job itself is a strong source of demotivation and the sales manager has to
keep salespeople continuously motivated for achieving organizational goals.
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Efficient salespeople posses good knowledge about their job and can sell goods and services
to the satisfaction of the customers.
Process of Motivation

Motive

Behavior

Goal

Factors in the Motivation

Changes in marketing environment

Conflicting company objectives

Unique nature of the sales job

Separate motivational package

Compensation
It is the financial and non-financial method of rewards to the salesperson .
Financial rewards
These constitute the current spendable income, future income, profit sharing, retirement, etc.
Non-Financial benefits
There are rewards that do not directly involve money. These include promotions, recognition,
programmes, personal growth and development, security, sales contest, and expense accounts.
Types of compensation plan
Financial Compensation
Straight Salary plan
Straight commission plan
Bonus and Incentives
Salary plus incentive plan ( combination plan)
Drawing account and Commission plan
Allied method
Non-Financial Compensation
Promotions
Recognition programmes
Fringe benefits
Expense Accounts
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Perks
Sales Contests
Evaluation of sales force by performance appraisal process

Deciding on the criteria for measuring performance

Deciding on the conduct of the performance appraisal

Deciding on evaluation of individuals and teams

Comparisons of actual performance with standards

Deciding on the frequency of the performance with standards

Deciding on the frequency of performance appraisal

The external variables and their influence

Deciding on the criteria for measuring performance
Relative and absolute judgment
Trait-based
Outcome based
Behavior based
Performance Rating
Force Choice Scales
Behavioral Observation Scales
Call reports
Silent call monitoring scores
Activity Reports
Combinational methods
Deciding on the conduct of the performance appraisal
Biases
Base rate information
Availability Heuristics
Anchoring
Hindsight bias
Regression effects
Fundamental attribution error
Deciding on evaluation of individual and teams
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.88837 418Comparison of actual performance with standards

Deciding on the frequency of the performance appraisal
The external variables and their influences

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Module 5: (6 hours)
Sales management job: Standard sales management process-international sales management international market selection-market survey approach or strategy.

The Sales Process

Prospecting:
Prospecting is the process of identifying potential buyer who have a need of the product or
service offered by the company, and the ability to pay for it and authority to buy it.
Prospecting is the first step in the selling process. A prospect is a person or business that needs
the product a salesperson is selling and has the ability to buy it. Therefore, prospecting is the act
of finding people who need and can buy the product. Prospecting is the lifeblood of sales.
A salesperson must look constantly for new prospects for two reasons. One is to increase sales.
The other is to replace customers who will be lost over time. A prospect should not be confused
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with a lead. The name of a person or business that might be a prospect is referred to as a lead.
Once the lead has been qualified as needing the product and as having the ability to buy it, the
lead becomes a prospect.

Salespeople can ask themselves three questions to determine if an individual or organization is a

qualified prospect:
1.

Does the prospect have the money to buy?

2.

Does the prospect have the authority to buy?

3.

Does the prospect have the desire to buy?

A simple way to remember this qualifying process is to think of the word MAD. A true prospect
must have the financial resources, money or credit, to pay and the authority to make the buying
decision. The prospect also should desire the product. Sometimes an individual or organization
may not recognize a need for the product. It's the salesperson's job, then, to help create the need.
The actual methods by which a salesperson obtains prospects may vary. Several of the more
popular prospecting methods as mentioned below:

Popular Prospecting Methods

Cold canvassing

Direct mail

Endless chain-customer referral

Telephone & telemarketing

Orphaned customers

Observation

Prospect lists

Networking

Public exhibitions

a. Leads: people and organizations salespeople know nothing, or very little about.
b. Referrals: people or organizations salespeople frequently know very little about
other than what they learned from the referral.
c. Orphans: customers whose salesperson has left the company. Company records
provide the only information about these past customers.
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d. Customers: the most important prospects for future sales.

Most salespeople required to create customers through prospecting do not like to cold callcontacting strangers. They have the goal of using a prospect pool composed of customers,
friends, and, when available, orphans. Process of Prospecting (Identify and define the prospect
Search for source of Potential Account Qualifying prospects from the suspects)
Referrals from customers are the best way to increase the chances of selling to a stranger
(prospect). The days of the one-shot salesperson are over. The name of the game today is
relationship building." Satisfied customers will provide the salesperson with a constant supply of
prospects.

Pre-approach
Once the prospect has been identified and qualified, the next step in the selling process is the
preapproach. Prospecting and the preapproach are similar in that, for both, the salesperson is
gathering information to use in the attempt to make a sale. During the preapproach, the
salesperson investigates the prospect in greater depth and plans the sales call.
All sales trainers feel salespeople must carefully plan their sales calls. Although numerous
reasons exist for planning the sales call, four of the most frequently mentioned is that planning:

Helps build a salesperson's self-confidence.

Develops an atmosphere of goodwill and trust with the buyer.

Helps create an image of professionalism.

Increases sales because people are prepared.

The four facets for consideration when sales-call planning are mentioned below:

Determining sales call objectives;

Developing or reviewing the customer profile;

Developing a customer benefit plan; and

Developing the individual sales presentation based on the sales-call objective,

customer profile, and customer benefit plan.

Determining Sales Call Objectives

Salespeople should have at least one objective in mind when they meet with a prospect or
customer. Sales call objectives should be specific, measurable, and directly beneficial to the
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customer.
For example, a Colgate salesperson might have the objectives of checking all merchandise,
having the customer make a routine reorder on merchandise, and selling promotional quantities
of Colgate toothpaste. Industrial salespeople develop similar objectives to determine if their
present customers need to reorder and to sell new products.

Steps in Planning the Sales Call

Determination

of

Call Objectives

Development

of

Customer Profile

Determination

of

Customer Benefit

Determination

of

Sales Presentation

Developing A Customer Profile

Salespeople should review as much relevant information as possible regarding the firm, the
buyer, and the individuals who influence the buying decisions before making a sales call in order
to properly develop a customized presentation.

Developing A Customer Benefit Plan

Beginning with the sales-call objectives and what is known or has been learned about a prospect,
the salesperson is then ready to develop the customer benefit plan. The customer benefit plan
contains the nucleus of the information used in the sales presentation; thus, it should be
developed to the best of the salesperson's ability.
Developing the Sales Presentation
Finally, the sales presentation must be planned from beginning to end. This process involves
developing seven of the steps of the sales presentation described earlier. These are approach,
presentation, trial close, determine objections, meet objections, additional trial close, and close of
the sales presentation.

The Approach-Opening the Sales Presentation

The sales opener, or approach, is the first major part of the sales presentation. If done correctly,
it greatly improves a salesperson's chances of making the sale. A buyer's reactions to the
salesperson in the early minutes of the sales presentation are critical to a successful sale. This
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short time period is so important it is treated as an individual step in selling, referred to as "the
approach." Part of any approach is the prospect's first impression of the salesperson.
The First Impression Is Critical To Success
When a salesperson first meets a prospect, the initial impression is based on appearances and
attitude. If this impression is favorable, the prospect is more likely to listen to the salesperson,
but if it is not favorable, the prospect may erect communication barriers that can be difficult to
overcome. Like an actor, the salesperson must learn how to project and maintain a positive,
confident, and enthusiastic first impression no matter what mood the prospect is in when first
encountering the salesperson.
Approach Techniques Are Numerous

The situation the salesperson faces will determine what approach technique should be
used to begin the sales presentation. The most common approaches used in sales training
programs follow:

Introductory approach: The salesperson states his or her name and business. This is the
most common approach and also the weakest. For example, "Hello, my name is Amy
Firestone, representing the Barnhill Estate Company."

Product approach: The salesperson places the product on the counter or hands it to the
customer, saying nothing. The salesperson then waits for the prospect to begin the
conversation. This is useful if the product is new, unique, colorful, or has been changed.
If, for example, Pepsi-Cola completely changed the shape of its bottle and label, the
salesperson should simply hand the product to the retail buyer and wait.

Customer benefit approach: The salesperson asks a question that shows the product can
benefit the prospect in some way, such as saving money. For example, "How would you
like to save Rs.5000 on the purchase of your next IBM typewriter?"

Curiosity approach: The salesperson asks a question to make the prospect curious about
the product or service. For example, a textbook salesperson might ask, "Do you know
why

200 schools are using this book in their sales management courses?"

Most salespeople vary a combination of these techniques. All but the introductory approach (the
weakest) have three important characteristics in common: They capture the attention of the
prospect; they stimulate interest; and they provide a smooth transition into the presentation.

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Presentation
The presentation itself is a continuation of the approach. What, then, should be the purpose of the
presentation? Basically, the purpose of the presentation is to provide knowledge about the
features, advantages, and benefits of the product, marketing plan, and business proposal. This
allows the buyer to develop positive personal beliefs about the product. Such beliefs result in a
desire (or need) for the product. The salesperson's job is to convert the need into a want and
finally into the belief that this specific product is the best product to fulfill a certain need.
Furthermore, the sales rep must convince the buyer that not only is this product the best but also
that this seller is the best source from which to buy it.
The Sales Presentation Mix
When developing a presentation, salespeople should consider which elements of the sales
presentation mix (as in Figure) they will use for each prospect. The proper use of persuasive
communication techniques, methods to encourage prospect participation, proof statements, visual
aids, dramatization, and demonstrations can greatly increase a salesperson's chance of showing
the prospect how the products will satisfy his or her needs. As we know, it is often not what we
say but how we say it that results in making the sale. Persuasive communication techniques
such as questioning, listening, logical reasoning, suggestion, and trial closes help to uncover
needs, communicate effectively, and pull the prospect into the conversation. Proof statements
substantiate the claims salespeople make. They are especially useful for showing prospects that
what they are saying is true and that they can be trusted. When challenged about a product
statement, salespeople should "prove it" by incorporating into their presentation facts on a
customer's past sales, guarantees the product will work or sell, testimonials, or company and
independent research results.To both show and tell, visuals should highlight a product's features,
advantages, and benefits through the use of graphics, dramatization, and demonstration. This
technique captures the prospect's attention and interest; creates two-way communication and
participation; expresses the proposition in a clearer, more complete manner; and makes more
sales. Careful attention to the development and rehearsal of the presentation is needed to ensure
that it is carried out smoothly and naturally.

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THE SALESPERSONS PRESENTATION MIX

At any time salespeople should be prepared for the unexpected a demonstration that breaks
down, interruptions, questions about the competition, or the necessity for making a presentation
in a less-than-ideal place such as the aisle of a retail store or the warehouse.
The presentation part of the overall sales presentation is the heart of the sale. It is where the
salesperson develops desire, conviction, and action. By giving an effective presentation, the
sales rep will have fewer objections to the proposition, which makes for an easier close of the
sale.

Sales Presentation Methods

The sales presentation involves a persuasive vocal and visual explanation of a business
proposition. Although many ways to make a presentation exist, only three will be discussed here.
They are the memorized or stimulus-response, formula, and need-satisfaction methods. The basic
difference among the three is the percentage of the conversation the salesperson controls. The
more-structured memorized and formula selling techniques normally give the salesperson a
monopoly on the conversation, while the less-structured methods allow a much greater degree of
buyer-seller interaction, in which both parties participate equally in the conversation.
Stimulus-Response Method
This method assumes that the prospect's needs can be stimulated by exposure to the product or
already have been stimulated because the prospect has sought out the product. The salesperson

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does most of the talking. Only occasionally does the prospect get to talk. The salesperson does
not know what the prospect needs, so all aspects of the product are first discussed, and then the
prospect is asked to buy.
If no sale occurs, the presentation is begun again, and another attempt is made to close the sale. A
"canned" presentation is an example of this approach. Everyone is told basically the same thing.
If time is short, the unit price is low, or the salesperson confronts the prospect infrequently or
only once, this approach might be considered. The salesperson goes directly to the presentation
stage of the sales process and quickly asks for the order. This method is relatively ineffective for
more-complicated selling situations. Here are some of the method's shortcomings:

Talks about product features not important to buyer.

Uses same "pitch" for different people.

Assumes salesperson is in total control.

Has little prospect participation, making it difficult to uncover needs.

Formula Method
This approach is like the stimulus-response method in that it is based on the assumption that all
prospects are alike. However, here something is known about the prospect, so the presentation is
slightly less structured than it is with the stimulus-response method. The salesperson may use a
structured series of steps such as the AIDA approach.
AIDA stands for attention, interest, desire, and action; conviction may be added to form
AIDCA, indicating the point at which the prospect feels the benefits outweigh the costs
associated with the product. The approach is not complex and easily can be adapted to various
situations.
The salesperson plans or "cans" the sales talk to quickly get attention and interest so the prospect
will listen to the presentation. For the desire step, the salesperson translates the product's
features and advantages into benefits for the prospect. Action or closing techniques are then
used to make the sale. The AIDA method can be used if time is short, if prospects are the same,
or if the salesperson lacks the ability to develop individualized sales presentations. The
shortcomings of this approach are the same as those of the stimulus-response method.
Need-Satisfaction Method
The need-satisfaction method is different from the stimulus-response and the formula
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approaches in that it is designed as an interactive sales presentation. It is the most challenging

and creative form of selling. The salesperson will typically start the presentation with a probing
question: "What are you looking for in investment property?" "What type of computer needs
does your company have?"This allows the prospect to discuss the company's needs.

As the salesperson is listening to the prospect, he or she mentally notes the product's features,
advantages, and benefits in relation to the prospect's needs. If the salesperson is not clear on
some things the prospect says, he or she should ask questions or restate what the prospect has
said to make sure the prospect's needs and desires are completely expressed and understood.
Once this stage is accomplished, the salesperson is ready to show how the products will satisfy
the prospect's needs. The presentation can be personalized or concentrate on the specific features
the salesperson's product can offer that will fulfill the prospect's needs.

Trial Close
The trial close involves checking the prospect's attitude toward the sales presentation. It may
occur anytime during the selling process. However, it is especially useful
(1) after making a strong selling point,
(2) after overcoming an objection, or
(3) once the presentation is complete

It is used to check the buyer's "pulse" or mood to determine whether he or she is paying attention
to the presentation and whether it is time to ask for a purchase.
"Some prospects are ready to buy early in the presentation, whereas others take longer. The
reason a trial close is used centers on the psychological aspect of a prospect saying no when the
salesperson attempts to close the sale. Once the prospect has said no, the salesperson may have
difficulty moving from that position.
So, to avoid this, salespeople may at any time use a trial close like one of these:

How does that sound to you?

What color do you prefer?

If you bought this, where would you use it in your business?

Are these features what you are looking for?

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If the prospect responds favorably, the salesperson can move on to the close. However, if a
negative response is received, the close can be postponed. The salesperson may need to
completely start over with the presentation.

Objections:
Theoretically, a salesperson's presentation should show the prospect that a need exists, that the
product presented can best fill that need, and that further discussion should not be necessary.
Very few presentations end that successfully, and very few prospects are that easily convinced.
Usually, the prospect will raise some objections.
Experienced salespeople welcome objections. An objection is opposition or resistance to
information or a request. It shows that the prospect is interested in the product and that if the
objections can be answered to the satisfaction of the prospect, the sale will be made. If, on the
other hand, the prospect simply sits quietly, making noncommittal sounds, and at the end of the
presentation simply says, "That's nice. I'm not interested. Good-bye," the salesperson has no
grounds for continuing, and the sale is lost.

Types Of Objections
Two types of objections occur: real or practical objections and hidden or psychological
objections. Real objections are tangible, such as about a too-high price. If this is a real objection
and the prospect says so, then the salesperson can show that the product is of high quality and
worth the price or remove some optional features and reduce the price.

As long as the prospect clearly states the real objection to purchasing the product, the salesperson
should be able to answer the objection and go into the close. However, prospects will not always
be so agreeable and clearly state their objections. Rather, they will give some excuse about why
they are not ready to make a purchase, thereby keeping their real objections hidden. Usually the
prospect will not purchase the product until those hidden objections are somehow answered.

Techniques for Meeting Questions

Once the salesperson has uncovered all objections, he or she must answer them to the prospect's
satisfaction. Naturally, different situations will require different ways to handle them. Here are a
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few methods that apply in many situations.

Postponing Objections Often the prospect may skip ahead of the sales presentation. The
salesperson then may want to postpone the objection until he or she has presented the background
that would allow it to be met completely.
Prospect "Your price is too high."
Salesperson "In just a minute I'll show you this product is reasonably priced based on the savings
you will receive compared with what you are presently doing."
Boomerang One important selling skill to teach salespeople is how they can turn an objection
into a benefit or a reason to buy. Take, for example, the wholesale drug salesperson who wants to
sell a pharmacist a new type of container for prescription medicines. The salesperson hands the
pharmacist a container.
Prospect: "They look nice, but I don't like them as well as my others. The tops seem hard to get
off."
Asking Questions Questioning the prospect is another selling skill salespeoplecan learn.
Prospect "I do like this house, but it is not as nice as the one someone else showed us yesterday."
Salesperson: "Would you please tell me why?"
Real objections must be uncovered and properly dealt with in a straightforward manner.
Objections can become a positive factor in the sales presentation if they allow the prospect to
open up and participate in the dialogue.
The salesperson should not move to close the sale before handling sales resistance. However, if
the objections appear to make the sale impossible, the salesperson has the option of not closing
and waiting until another day or going ahead and asking for the business. Before closing or
asking for the order, the salesperson may want to use another trial close.

Close
All of the effort that has gone into the prospecting, pre-approach, approach, and presentation has
as its aim a successful close. Closing is the process of helping people makes a beneficial decision.
It is the part of the selling process that ultimately brings the sale to a conclusion. If all goes well,
the conclusion will be positive; however, it can be negative.

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Difficulties with Closing

The close can be difficult for some people. For numerous reasons, some salespeople fail to make
a sale or even fail to attempt to close. First, a salesperson may not be confident in his or her
ability to close. Perhaps numerous failures to make a sale have brought about this situation.
Second, salespeople often determine on their own that the prospect does not need the quantity or
type of merchandise or that the prospect simply should not buy. Finally, the person may be a poor
salesperson. Quite often proper sales training and encouragement from management can greatly
increase a person's selling ability.

Closing Techniques
A major key to making a sale is using effective closing methods. Different techniques work for
different people. Here are several examples.
The Compliment For this technique, the salesperson may compliment the prospect by saying
something like "It is obvious you know a great deal about the grocery business. You have 'every
square foot of your store making a good profit. Our products have the profit margin you want,
and they sell like hotcakes, so you'll make an above-average profit. I suggest you buy one dozen
mops and one dozen brooms for each of your 210 stores."

Follow-Up
Providing service to customers is critical to successfully managing a sales territory.
Follow-up and service create goodwill between a salesperson and the customer, which in the long
run will increase sales faster than not providing such service. By contacting the customer after the
sale to see that the maximum benefit is being derived from the purchase, a salesperson lays the
foundation for a positive business relationship. Remember, it's easier to keep a customer than to
find a new

International sales management: International marketing is the process of planning and

conducting transactions across national borders to create exchanges that satisfy the objectives of
individuals and organizations (Czinkota and Ronkainen)

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International marketing focuses its resources on global market opportunities and threats
(Keegan and Green)
International marketing is the motor of the internationalization process of the firm (Usunier)
International Marketing Decisions

Deciding whether to go abroad

Deciding which markets to enter

Deciding how to enter the market

Deciding on the marketing program

Deciding on the marketing organization

Driving Forces of International Marketing

Technology

Culture

Market Needs

Costs

Free Markets

Economic Integration

Peace

Strategic Intent

Management Vision, Strategy and Action

Role of the sales manager in the international market:

Basic level functions:

o Training
o Evaluating
o Planning
o Compensation

Advanced level functions:

o Strategic account management
o Conducting negotiations
o Arranging agreements with distributors
o Developing relations and network locally

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International sales and marketing opportunities:

Diversifying market base

o Strategies of Japanese companies

Emulating the competition

o Imitating competitors

Achieve economies of scale

o Air bus 1 plane 3,40,000 man hours 87th plane 78,000 man hours

Challenges in international sales management:

Economic environment

Tariff barriers
o Specific,
o ad valorem,
o compound

Non-tariff barriers
o Regulatory,
o industry,
o cultural

Other economic factors

o Exchange rate fluctuations
o Restrictions on profit repatriation
o Credit control etc.

Legal environment
o Partnership laws
o Anti-Corruption laws
o Intellectual property rights

Cultural environment
o Language
o Religion
o Education
o Social attitudes & behavior

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Strategic issues for international sales and marketing:

Marketing mix adapts or standardize?

o Ethnocentric vs. geocentric

Home country marketing practices will succeed elsewhere without adaptation; however,
international marketing is viewed as secondary to domestic operations
Geocentric is a Global Marketing Orientation where a uniform, standardized marketing strategy
is used for several countries, countries in a region, or the entire world

Obtaining international information

o Internal company records
o Published sources

Primary sources like surveys, observation studies etc.

Entering overseas markets

Exporting: A function of international trade whereby goods produced in one country are
shipped to another country for future sale or trade. The sale of such goods adds to the producing
nation's gross output. If used for trade, exports are exchanged for other products or services.
Exports are one of the oldest forms of economic transfer, and occur on a large scale between
nations that have fewer restrictions on trade, such as tariffs or subsidies.
Licensing: A business arrangement in which one company gives another company permission to
manufacture its product for a specified payment.
Franchising is a long-term cooperative relationship between two entitiesa franchisor and one
or more franchiseesthat is based on an agreement in which the franchisor provides a licensed
privilege to the franchisee to do business. The franchisor grants the franchisee the right to use a
developed concept, including trademarks and brand names, production, service and marketing
methods and the entire business operation model, for a fee. The franchisee then provides the
time, capital, and desire to utilize the brand and services provided by the franchisor to build a
thriving business.
The product, method or service being marketed is usually identified by the franchisor's brand
name, and the holder of the privilege (franchisee) is often given exclusive access to a defined
geographical area for a defined period of time, all of which is defined in the Franchise
Agreement.
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Joint ventures: A business arrangement in which two or more parties agree to pool their
resources for the purpose of accomplishing a specific task. This task can be a new project or any
other business activity. In a joint venture (JV), each of the participants is responsible for profits,
losses and costs associated with it. However, the venture is its own entity, separate and apart
from the participants' other business interests.
Wholly owned subsidiaries: A company whose common stock is 100% owned by another
company,

called

the

parent

company.

company

can

become

wholly

owned subsidiary through acquisition by the parent company or spin off from the parent
company. In contrast, a regular subsidiary is 51 to 99% owned by the parent company. One
situation in which a parent company might find it helpful to establish a subsidiary company is if
it wants to operate in a foreign market. This arrangement is common among high-tech companies
who want to retain complete control and ownership of their technology.
International market selection
International market selection is crucial in selecting the target market.
Firm related factors

Ethnocentric: everything is centered on the domestic market.

Polycentric: several important foreign markets exist.

Regiocentric: the market is composed of several large economic regions.

Geocentric: the world is one large global market.

Market related factors

General factors
o Economic factors
o Business regulations
o Political factors

Specific factors
o Trends in domestic market
o Trends in export and import
o Nature of competition
o Supply conditions of raw materials

Other Factors
o Political restrictions

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o Special requirements
o Product specification
o Distant location
o Market accessibility
o Business community
Market Selection Process
1. International marketing objectives
2. Commercial Parameters for production selection
3. Preliminary Test marketing screening
4. Evaluation and Short listing of selection markets
International sales techniques:

Personal selling process

o Preliminary selling
Identify prospects
Approach
Advanced selling
o Sales interview
o Flexible presentation
o Product demonstrations
o Handling objections
o Close
o After sales techniques
Time and territory management
o Proper routing & scheduling
Routing is a travel plan or pattern used by a sales person for making customers calls in a
territory.
Scheduling refers to establishing a fixed time when the salesperson will be at a customers place
of business. It is planning a salespersons specific time of visits to customers.
Strict formal route designs enable the salesperson to: \

Improve territorial coverage.

Minimize wasted time.

Establish communication between management and the sales force in terms of the
location and activities of individual salespeople.

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Module 6: (8 hours)
Sales Manager and Sales Person: Role of sales manager and sales people; functions of sales
manager,

, types and characteristics of sales manager and sales people-

Time management for sales manager and sales person.

Role of Sales Manager:

In an organization a sales manager plays a variety of roles to related to the sale of a given
Preparation of Sales Program.
product.

Sales Force Mgt.

Maintain Relations

Marketing Decision

Sales Force Management:

The Sales Manager checks the sources of recruitment and sets the standards for selections. The
sales manager must provide training to new employees in such a manner that the high level of
performance is achieved in short possible time.

Maintain Relations:

The sales manager must maintain the internal and external relations of sales department with the
departments of other companies or units as well as within the organization. The sales manager
develop & maintain effective working relations with sales, training & other key personnel as
well as with the customers to ensure that the effort is beneficial to both the parties.

Communication

The sales manager should establish a system of communication with other sales personnel that
keep them informed of overall departments sales objectives, results & problems. It also keeps
the sale manager informed about their needs & problems.

Control

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The sales manager must consult with the production manager time to time because they are
closely related with the sales needs. The sales manager reviews the revenues & expenses of the
company and checks the actual sale and compare it with the corrective action may be taken in
time. So, the sales manager maintains the proper balance of time spent on various activities and
keeps a check on the activities of the sales force.

Organization

The sales manager establishes an effective plan of organization and methods of controlling the
activities of members, so that the work will be completed in time. The activities are identified &
grouped and hence assigned to individuals responsible for selling a given product.

Role of a sales manager:

Occupies middle level position and is influenced by the expectations from both the levels
externally and internally. They need to perform other functions of marketing too along with sales
management functions which includes planning, directing, controlling, organizing, recruiting,
selecting, training and motivating, allocating resources and territories, routing and scheduling
etc.

Forecasts sales in the role of a sales forecaster

Devices strategies as a strategic planner

Observes the behavior of prospective and existing customers in order to plan future
strategies as an observer of buying behavior

He is a role model for the sales personnel as a super sales person Role of a sales manager

Analyses the cost and profit involved in segments as a cost and profit analyst Plays the
role of communicator internally and externally Role of a sales manager

Functions of a sales manager:

Hiring: right people and giving careful job description

Training: Formal / Informal, techniques, simple issues to handling objections

Exhibit: Training results No longer an ROI

Coaching: observing, correcting, make sales person identify the problem ending up with a
solution,

follow up and remedial measures

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Motivating:

Setting targets and tracking the results: new accounts, amount to be generated, ratio of
sales per customer etc. .

Additional targets for the prospecting efforts .

Setting realistic and achievable targets and publicizing on achievement of targets

Recognizing & rewarding performance: tangible incentives (trophy / extra leave / paid
vacation / memberships etc.) or public appreciation at sales meeting

Providing leads and sales support: hurdles of sales people are to be cleared ( lack of
secretarial support / sales aids etc) .

Continuous development of new businesses, identify leads make the sales task easier for
his team

Organizing sales effort: ensures that sales people plan their calls in advance and follow a
systematic process of call reporting and filing expense reports . By organizing sales
efforts of sales peoples their efficiency in meeting targets can be increased.

Conducting sales meetings : prime responsibility as it works as great morale booster,

Frequency depends on the requirements.

Agenda to be sent before hand to ensure participants come prepared.

Review of organizational, individual sales performance, recognize and reward excellent

performers,

Organizing guest lectures ( motivational) .

Ensure that all the issues and problems are resolved by the end of the meeting.

Some times sales meetings become ineffective, so the sales manager needs to ensure that
such things do not happen.

Allocation of scarce resources: aid of sophisticated technology can be taken e.g. general
mills uses what if analysis Responsibilities of a sales manager

Role of a sales executive:

It is a multi faceted job with a variety of roles to be played. They are

A Persuader

A service provider

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An information gatherer and reporter

An advocate

A traveler

A coordinator & scheduler

A problem definer

A customer ego builder

A display arranger for wholesalers and retailers

A merchandiser who gives customized products to industrial customers

An ombudsman who acts as customer's representative when the former faces any
problem Interacts with several role partners from production worker to CEO Links 4
groups of people they are, own sales team, customers, other departments and other sales
persons.

Fulfilling the demands of all the above mentioned groups is needed but, often expectations of
one group may be in conflict with that of the other group. And the sales person needs to balance
all of them. With the advances in technology their role extended to business strategy too, where
establishment of mutually beneficial relationship is needed with important customers E.g. P&G
Role of a sales executive

Functions of a sales executive/Person:

Identify potential customers from currently available data bases like yellow pages

Identifying prospective accounts and deciding upon the priority and frequency of making
calls

Deciding upon the selling approach (presentation)

Administering the sales order (deliver in time)

Service provider (installation / warranty problems)

Information gathering and reporting relevant data

Skill up gradation by attending sales trainings and trade shows

Administrative responsibilities like attending sales meetings and conferences, fill in call
and expense reports etc.

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Types of sales manager

1. Administrative sales manager:
Administrative sales managers are found normally in highly integrated sales organisations selling
multiple lines of products in national and international markets. He is known by alternative titles
such as vice president, in-charge of sales, director of marketing, general sales manager and
marketing manager.
In addition to the crucial task of coordinating marketing with other company activities, he is to
coordinate the activities of his own sales organisation within and with outside advertising and
sales counsel. He is responsible for sales planning that involves integration of sales personnel,
merchandising, advertising and promotion, financing, distribution network.
Planning also includes the determination of the functions of sales organisation, delegation of
responsibilities, personnel selection, and performance evaluation. He frames the policies and
strategies on the prices, distribution, relations with dealers, service, advertising and salespromotion.
2. Field sales manager:
The field sales manager or operating sales manager is a line sales executive reporting directly to
the administrative sales manager. Operative sales manager works under the direction, guidance
and supervision of the general sales manager.
He is mainly responsible for the effective implementation of sales plans and policies developed
by the administrative sales manager.
He is known for personal direction and control of sales personnel and hence, spends major
portion of his time in the field supervision of the work of sales-force. Manpower maintenance of
the sales organisation is the basic task of this executive. He is to recruit, select, train, supervise,
stimulate, evaluate, equip, control and route the sales-force.
Field sales manager moves with salesmen on visits of importance. He assigns sales territories
and controls activities of salesmen through setting the standards of sales achievements, analysing
the sales reports, holding the sales meeting, supervising the advertising and sales-promotion
cooperation with dealers, directing sales contests, supervising warehousing inventories, dealer
relations and coordinating territorial and home office activities.

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Thus, a field sales manager provides the administrative sales manager with the latest information
relating to the viewpoints of dealers and consumers on company, company products, policies,
and practices with facts on market trends, competitors, distributors and individual salesman.
3. Administrative-cum-field sales manager:
In case of smaller organisations, we come across such sales manager who combines the functions
of administrative and executive sales officer. Generally speaking, administration and field
operations cannot go together. However, size and economy points force many units to combine
the distinct roles of administration and field operation.
As an administrator, he plans, organizes, directs and coordinates. As a field operator, he guides
and supervises and controls the activities within the sales organisation. Thus, thinking and doing
are done by the same person that goes against the very idea of specialisation for an administrator
is a thinker and a line officer as doer.
4. Assistant sales manager:
Generally, the administrative sales manager is assisted by Assistant sales manager in the
administrative functions of planning, analysis, direction and coordination. He coordinates the
work of sales staff that is specialized in advertising, sales-promotion, research, merchandising
and dealer relations.
He may also handle sales office personnel, records and routine. He acts as the link between the
head-quarters and the field-sales-manager at distance. It is not a surprise if he discharges the
functions of field sales manager. Thus, he acts as both line and staff officer in the sales
organisation.
5. Product-line sales manager:
A company that markets variety of products has such product-line sales manager responsible for
one or group of products in the product- line. He is also known as product or brand manager.
He is responsible not only for sales but also for production, research, product- development,
planning, advertising and profit for the product or the group of products in question. He is to
report to the Marketing manager who coordinates the work of several product sales managers.
6. Marketing staff manager:
As the title suggests, the Marketing staff manager is not a line-officer. He is one of the staff
specialists who are delegated some of the responsibilities of administrative sales manager. These
are the specialists in the areas of marketing research, sales-promotion, merchandising,
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advertising, sales planning, sales personnel, distributor/dealer relations, sales costs, budget sales
finances, traffic, sales office administration and service and the like. These staff managers being
non-line officers have no field tasks.
These managers are accountable for analysing the needs of the marketing organisation in respect
of their specific areas of specialisation, developing plans and recommending solutions to the
problems encountered or thrown open.
7. Divisional/regional sales managers:
In all the national organisations, one comes across these Divisional or Regional sales managers.
These are also known as District sales managers who are responsible for the delegated sales
operational duties on a territorial basis.
They report to Assistant sales managers or the field sales managers who act as the liaison officers
with headquarters. The functions of Divisional or Regional sales manager are similar to those of
field sales manager who is in charge of several divisions or regions and hence divisional or
regional managers.
They are mainly responsible for maintaining the man-power in the concerned areas by recruiting,
selecting, and training, supervising, motivating and controlling the sales-force.
They are also responsible for directing branch or local office sales managers. The divisional sales
managers assist branch managers in solving their sales personnel problems, dealer relations,
warehousing and inventory, advertising and sales promotion, sales campaigns and sales
meetings.
8. Branch sales mangers:
In case of sales organisations that operate branches or local sales offices in major cities of the
country, one is to come across such Branch sales managers. Branch sales manager is a line
executive responsible for the direction of a small group of salesmen calling on consumers or
dealers in the branch area.
He recruits, selects and trains, sales people with the guidance of Divisional or Regional sales
manager to whom he reports. He works along with salesmen in the field, supervises their sales
activities, holds periodic sales meetings, evaluates sales performance and helps in key accounts.
If warehouse is attached to branch, he supervises warehousing activities too.

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9. Sales supervisor:
A sales supervisor is a line sales manager who supervises normally eight to fourteen salesmen.
He is seen in branch sales office of a national sales organization having branches all over the
nation.

Characteristics of sales manager

Passion

Integrity

Positive attitude

Loyalty

Leadership skills

Motivation

Continuous learning

Listening and communication

Types of sales people

Salespeople come in all shapes and sizes. Some salespeople are more successful than others
because they understand what type of salesperson they are and how to utilize their key
characteristics or personality traits.

Transactional

Relational

Closers

Consultants

Transactional
Transactional salespeople are those that simply wait for the transaction to make their sale. These
are the salespeople that you might refer to as the order-takers because they passively sit by
waiting for the sale to come to them. They may still be quite successful in what they do, despite
their passive attitude, because they may become adept at positioning themselves in the right
place at the right time to get the sale. However, most of these salespeople are better off working
in a retail environment where the primary job of the salesperson is to help the buyer find the
product she is already looking for and then ring it up.
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Relational
The relational salesperson thrives off of the customer-salesperson relationship. This type of
salesperson is good at quickly building rapport with the customer and often gets sales because
the buyer likes her enough that she becomes the deciding factor in the sales process. These
salespeople also establish the long-term relationship with a customer that brings the customer
back around for repeat business. These types of salespeople tend to excel in industries like
advertising or any type of sales where established accounts selling is important.
Closers
A large portion of the sales force in many different industries is made up of closers or those who
are always trying to close the deal on a sale. These are what many people think of when they
think of the used car salesman. This type of salesperson is constantly inching the customer
toward the goal of closing the deal. While relationships with customers may still be important for
future sales with this type of salesperson, they are usually secondary to the immediate goal of
going for the close.
Consultants
Consultants are probably the most well-rounded of the different types of salespeople. These are
people persons who know how to close a deal and build relationships at the same time.
Consultants genuinely thrive off of the problem-solving aspect of their job, listening to customer
needs and helping them find a solution to their problem. Consultants have superior listening
skills and tend to be patient with customers when necessary, but aggressive when necessary also.

Characteristics of sales people

Empathy
Empathy is the ability to identify with customers, to feel what they are feeling and make
customers feel respected. Empathy is NOT sympathy, which involves a feeling of loyalty with
another individual. It is more than understanding their concerns from an objective standpoint. A
salesperson showing empathy can gain trust and establish rapport with customers by being on
their side and not appearing judgmental. Empathy allows the salesperson to read the customers,
show concern, and clearly demonstrate his or her interest in providing a proper solution.
Focus

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A person with focus is internally driven to accomplish goals and can stay attentive to one
topic. Focused individuals are more demanding of themselves than other people and they are
self-motivated. They are able to organize themselves and recognize what needs to be done in
order to achieve their goals.
Responsibility
A person with a strong sense of responsibility does not place blame on other people when placed
in a difficult situation. This type of person, referred to as an agent, gets things done and when
obstacles arise, accepts any errors or omissions that have occurred. He or she does not get
defensive nor do they try to blame the situation on circumstances or on other people by making
statements such as, Its not my fault boss that consumer confidence has declined due to
terrorism and the war in Afganistan.

Sales managers should strive to hire agent-type

representatives.
Optimism
A salesperson with a healthy amount of optimism can be described as someone who is slow to
learn helplessness. This person has persistencea trait that is critical in the sales world because
of the frequency of rejections salespeople experience. In the face of failure, some people throw
their hands up in the air and resign themselves to the disappointment because they feel helpless
to change the situation. Others, however, see themselves as being more resilient and that a
customers refusal is NOT a rejection of themselves personally, but of the opportunity being
offered. Salespeople who possess a large amount of optimism like themselves and when they
encounter failure, although disappointed, it does not destroy their positive view of
themselves. They consider themselves still in the running and able to turn the situation
around. They believe that they can make things better by using a different approach, or by trying
again.
Ego-drive
Ego-drive is similar to optimism in that both traits require persistence. But ego-drive is
persistence for the purpose of succeeding and above all winning.

Its all about

competitiveness. When a person hangs in there with fists clenched and a teeth gritting appetite
to succeed at his or her goal, you see a powerful ego-drive. This person is self-motivated and a
self-starter with clear ideas of what he or she wants to achieve.

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Time management for sales manager and sales person.

Time Management is the process of deciding What to do and When. For Managers and
Supervisors it usually consists of the following 3 phases:
Phase 1: - Identifying what you want/need to accomplish based on the roles and expectations
of your position, and your own personal goals.
- Identifying and prioritizing the major tasks and needed time commitments to accomplish these
goals.
Phase 2: - Analyzing how youre currently spending your time versus the needs you identified
above.
Phase 3: - Developing a schedule that better allows you to focus your daily efforts on
accomplishing your goals.

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Module 7: (8 hours)
Selling on the internet: Selling agents for internet trading-net selling, advertising in net trading,
payment system in internet trading-smart card, credit card, debit card- payment by card:
advantages and disadvantages; How to make internet selling safe-Digital signature, biometric
method and legal or regulatory environment; Growth of internet trading in India.

Investing online, also known as online trading or trading online, is the process by which
individual investors and traders buy and sell securities over an electronic network, typically with
a brokerage firm. This type of trading and investing has become the norm for individual
investors and traders since late 1990s with many brokers offering services via a wide variety
of online trading platforms.
The act of placing buy/sell orders for financial securities and/or currencies with the use of a
brokerage's internet-based proprietary trading platforms. The use of online trading increased
dramatically in the mid- to late-'90s with the introduction of affordable high-speed computers
and internet connections.
'Net Sales' The amount of sales generated by a company after the deduction of returns,
allowances for damaged or missing goods and any discounts allowed. The sales number reported
on a company's financial statements is a netsales number, reflecting these deductions.
Electronic Payment systems
Electronic Payment is a financial exchange that takes place online between buyers and sellers.
The content of this exchange is usually some form of digital financial instrument (such as
encrypted credit card numbers, electronic Cheques or digital cash) that is backed by a bank or an
intermediary, or by a legal tender.
Electronic payment system is a system which helps the customer or user to make online payment
for their shopping.
The various factors that have lead the financial institutions to make use of electronic payments
are:

Decreasing technology cost:

The technology used in the networks is decreasing day by day.

Reduced operational and processing cost:

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Due to reduced technology cost the processing cost of various commerce activities becomes very
less. A very simple reason to prove this is the fact that in electronic transactions we save both
paper and time. Increasing online commerce:

Some Examples of EPS

a. Online Reservation
b. Online Bill Payment
c. Online Order Placing (Nirulas)
d. Online Ticket Booking ( Movie)

Two Storage Methods

On-line

Individual does not have possession personally of electronic cash

Trusted third party, e.g. online bank, holds customers cash accounts

Off-line

Customer holds cash on smart card or software wallet

Fraud and double spending require tamper-proof encryption

Types of EPS
1. E-cash: A system that allows a person to pay for goods or services by transmitting a number
from one computer to another. Like the serial numbers on real currency notes, the E-cash
numbers are unique. This is issued by a bank and represents a specified sum of real money.
2. E-wallets: The E-wallet is another payment scheme that operates like a carrier of e-cash and
other information. The aim is to give shoppers a single, simple, and secure way of carrying
currency electronically. Trust is the basis of the e-wallet as a form of electronic payment.
3. smart cards
4. credit cards

Smart card
The smart card looks exactly like any other plastic card or an ATM card with an integrated
circuit (IC Chip) installed. The IC chip contains memory, may contain a processor, and
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communicates with the external world through contacts on the surface of the card. The size,
position and utility of the contacts are specified by an international standard, so that cards can
interact with a variety of equipment.

Debit card
A payment card that deducts money directly from a consumers checking account to pay for a
purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases. In
addition, debit cards, also called check cards, offer the convenience of credit cards and many of
the same consumer protections when issued by major payment processors like Visa or
MasterCard. Unlike credit cards, they do not allow the user to go into debt, except perhaps for
small negative balances that might be incurred if the account holder has signed up for overdraft
coverage. However, debit cards usually have daily purchase limits, meaning it may not be
possible

to

make

an

especially

large

purchase

with

debit

card.

A bank-issued card that allows its user to access their funds for the purpose of paying for
merchandise. A debit card acts like a credit card, the difference being that funds are immediately
taken from the cardholders accounts.
Credit card
Pre-approved credit which can be used for the purchase of items now and payment of them later.
Standard-size plastic token, with a magnetic stripe that holds a machine readable code. Credit
cards are a convenient substitute for cash or check, and an essential component of electronic
commerce and internet commerce.
Credit card holders (who may pay annual service charges) draw on a credit limit approved by the
card-issuer such as a bank, store, or service provider (an airline, for example). Cardholders
normally

must

pay

for

credit

card purchases within

30 days of

purchase

to

avoid interest and/or penalties.

Classification of Credit card
Based on mode of credit recovery
Charge Card-A card that charges no interest but requires the user to pay his/her balance in full
upon receipt of the statement, usually on a monthly basis. While it is similar to a credit card, the

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major benefit offered by a charge card is that it has much higher, often unlimited, spending
limits.
Revolving credit card-A line of credit where the customer pays a commitment fee and is then
allowed to use the funds when they are needed. It is usually used for operating purposes,
fluctuating each month depending on the customer's current cash flow needs

Based on status of credit card

Standard Card- it is a generally issued credit card
Business Card- (Executive cards) it is issued to small partnership firms, solicitors, taxconsultants, for use by executives on their business trips.
Gold Card-a credit card issued by credit-card companies to favoured clients, entitling them to
high unsecured overdrafts, some insurance cover, etc

Based on geographical validity

Domestic card- Cards that are valid only in India and Nepal are called domestic cards.
International Card- credit Cards that are valid internationally are called international cards.

Based on franchise/ Tie-up

Proprietary card- A bank issues such cards under its own brands. E.g. SBI card Cancard of
Canara bank
Master Card- this card is issued under the umbrella of MasterCard International
VISA Card it is issued by any bank having tie up with VISA international
Domestic Tie-up Card- it is issued by any bank having tie up with domestic credit card brands
such as CanCard and IndCard.

Based on issuer Category

Individual Cards- Non-corporate cards that are issued to individuals
Corporate Cards- Issued to corporate and business firms.

Advantages and disadvantages;

Advantages of a Debit Card
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Easy to obtain. Once you open an account most institutions will issue you a debit
card upon request.

Convenience. Purchases can be made using a chip-enabled terminal or by swiping

the card rather than filling out a paper check.

Safety. You don't have to carry cash or a checkbook.

Readily accepted. When out of town (or out of the country), debit cards are
usually widely accepted (make sure to tell your financial institution youre leaving
your city; to not have an interruption in service).

Disadvantages of a Debit Card

No grace period. Unlike a credit card, a debit card uses funds directly from your
checking account. A credit card allows you to borrow funds on credit, leaving
disposable cash in your account.

Check book balancing. Balancing your account may be difficult unless you
record every debit card transaction.

Less protection. Most financial institutions will try and protect their customer
from debit card fraud. However, a customer could potentially be liable for up to
$500 on fraudulent debit card transactions compared with only $0 on credit cards.
Be sure to check with your financial institution to learn the details.

Fees. Using your debit card for ATM transactions may be costly if the ATM is not
affiliated with your institution.

The advantages of credit cards

Credit cards are convenient and are safer to carry around than cash. They are widely accepted
online, in most stores, and are virtually indispensable for travel.
They frequently provide insurance cover for goods and services that are purchased with them.
Consumer law in countries like the UK provides a broad spectrum of protection for consumers
who purchase goods or services with credit cards.
When credit card users pay off their monthly balance in full, they pay no interest. This often
means that up to 42 days free credit is available.
On top of that, many credit card companies offer bonuses to their customers. These come in
many forms. A popular one is cash back on payment of the balance, while another common one
is air miles.
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The disadvantages of credit cards

There is an unfortunate tendency for people to treat credit cards like they are extra cash. This
makes people drop their guard against impulse spending.
The reality is that a credit card does not increase anybodys available spending money. Interest
rates are very high, and people can quickly find themselves in a serious debt situation if they
allow their credit card balance to grow month by month.

How to make internet selling safe

Advertising items for sale on internet classified sites is a great way to spread the word to likely
buyers, but there are risks you take when you do. Your first line of defense is to use reputable
services and follow closely any advice the site gives about buying and selling safely.
How to create a safe ad

Stick to the facts of the item being sold. Do not put any information that identifies you
personally if its not strictly necessary. Keep in mind that every piece of information you
post may be used for other purposes than you intended. Limit your information to limit
your risk.

Look hard at any photo you post, you dont want it to include house numbers in the
background, or license plate numbers, include family members, etc. Show just the item
being sold.

If you want the convenience of allowing people to call you (as opposed to emailing you),
use a free disposable phone number. You can get one easily by searching on disposable
phone number and selecting from one of several companies that provide this service.
Dont put your personal phone number in the ad you dont want people to be able to
harass you later, and there are several reverse look-up directories may provide a wealth of
information about you that can be used in ways you would not appreciate.

If the service does not have their own email service, create a disposable email account
that does not show any personal information like your name, location, or age. Again,
you do not want people to have your primary account information to harass you through.

Communicating with a prospective buyer

Communicate only through the anonymous email account, or your disposable phone
number.

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Understand that virtually every out-of-area buyer is a fraud.

If anything feels "off," stop contact.

When youre comfortable that the buyer seems legitimate, ask the buyer to give you his
or her phone number. (Sometimes, the area code may indicate if they are in your area.)
Try the phone number to find out if its valid. If the person responds, chat on the phone
for a bit about the item for sale and decide if the person still feels legitimate.

Make it clear that you will only accept cash for the item. Any other form of payment is
highly likely to be fraudulent.

Show transportable items in safe, public places

Agree to meet during daylight hours in a public place and bring a friend to accompany
you. Turn down any request to meet at your house, in an unfamiliar place, or by yourself
no matter how big and tough you are.

Do not hand over the item until you have cash in hand. Dont accept partial payment or
anything other than cash for the transaction. If the method of payment changes from your
previous agreement, walk away from the deal.

If the potential buyer wants time to consider and comes back later, follow the same
procedures. Dont get careless the second time around.

If the item being sold has significant value, meet inside a bank where you can deposit the
money before leaving this way the buyer cant turn around and rob you. It is hard to be
safer than in a bank where there is plenty of security monitoring.

Show non-transportable item at home with plenty of precautions

The less you show, the less they know. Your house provides many clues about you, your
income level, your family, and so on. All of this may be useful information to crooks and
predators, so its smart to show as little as possible.

Move the item into the garage or entryway, if possible. The goal is for potential buyers to
see as little as necessary of your house ideally they wont come inside your home at all.

Remove from view any items that could be stolen at the time of the visit, or that would be
of interest for the potential buyer to steal later. If you have family photos on display, you
may choose to put these away as well. (The less someone knows about you the better
for example, you might not want a stranger buying a couch to learn that you had young
children and to be able to identify them.)

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Make your meeting a two-step process. Arrange to meet during daylight hours and have a
friend be there with you.
o

First, meet in a public place close to your house. Ask for proof of identity such as
a drivers license. (That way you know who youre dealing with if theres is a
problem.) Note the license plate number, color, and model of the buyers vehicle
so you have it in the event there is trouble.

If youre comfortable that the buyer seems legitimate, have them follow you and
your friend to your house.

If more than one person arrives, keep them together. A common ploy is for one person to
engage you with questions while another asks to use the restroom. Decline. This splits
your ability to supervise and increases their ability to scope out more of your house and
any items worth stealing. It may seem rude to refuse to let someone use your bathroom,
but it isnt. Let them know where the closest public bathroom is located.

Dont hand over the item until you have cash in hand. Dont accept partial payment, or
anything other than cash for the transaction. If the method of payment changes from your
previous agreement, decline the deal.

If the potential buyer wants time to consider and comes back later, follow the same
procedures. Dont get careless the second time around.

1. Digital signature: a digital code (generated and authenticated by public key encryption) which
is attached to an electronically transmitted document to verify its contents and the sender's
identity.

The digital equivalent of a handwritten signature or stamped seal, but offering far
more inherent security, a digital signature is intended to solve the problem of
tampering and impersonation in digital communications. Digital signatures can
provide the added assurances of evidence to origin, identity and status of an electronic
document, transaction or message, as well as acknowledging informed consent by the
signer.

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Biometric method and legal or regulatory environment:

Biometrics is the automated method of recognizing a person based on a physiological or
behavioral characteristic. Biometric technologies are becoming the foundation of an extensive
array of highly secure identification and personal verification solutions.
Biometric technologies should be considered and evaluated giving full consideration to the
following characteristics:

Universality: Every person should have the characteristic. People who are mute or without a
fingerprint will need to be accommodated in some way.

Uniqueness: Generally, no two people have identical characteristics. However, identical twins
are hard to distinguish.

Permanence: The characteristics should not vary with time. A person's face, for example, may
change with age.

Collectibility: The characteristics must be easily collectible and measurable.

Performance: The method must deliver accurate results under varied environmental
circumstances.

Acceptability: The general public must accept the sample collection routines. Nonintrusive
methods are more acceptable.

Circumvention: The technology should be difficult to deceive.

Biometrics is expected to be incorporated in solutions to provide for Homeland Security
including applications for improving airport security, strengthening the United States' national
borders, in travel documents, visas and in preventing ID theft. Now, more than ever, there is a
wide range of interest in biometrics across federal, state, and local governments. Congressional
offices and a large number of organizations involved in many markets are addressing the
important role that biometrics will play in identifying and verifying the identity of individuals
and protecting national assets.
There are many needs for biometrics beyond Homeland Security. Enterprise-wide network
security infrastructures, secure electronic banking, investing and other financial transactions,
retail sales, law enforcement, and health and social services are already benefiting from these
technologies. A range of new applications can been found in such diverse environments as
amusement parks, banks, credit unions, and other financial organizations, Enterprise and
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Government networks, passport programs and driver licenses, colleges, physical access to
multiple facilities (e.g., nightclubs) and school lunch programs.
Biometric-based authentication applications include workstation, network, and domain access,
single sign-on, application logon, data protection, remote access to resources, transaction
security and Web security. Trust in these electronic transactions is essential to the healthy
growth of the global economy. Utilized alone or integrated with other technologies such as
smart cards, encryption keys and digital signatures, biometrics are set to pervade nearly all
aspects of the economy and our daily lives. Utilizing biometrics for personal authentication is
becoming convenient and considerably more accurate than current methods (such as the
utilization of passwords or PINs). This is because biometrics links the event to a particular
individual (a password or token may be used by someone other than the authorized user), is
convenient (nothing to carry or remember), accurate (it provides for positive authentication),
can provide an audit trail and is becoming socially acceptable and inexpensive.
Biometric authentication requires comparing a registered or enrolled biometric sample
(biometric template or identifier) against a newly captured biometric sample (for example, a
fingerprint captured during a login). During Enrollment a sample of the biometric trait is
captured, processed by a computer, and stored for later comparison.
Biometric recognition can be used in Identification mode, where the biometric system
identifies a person from the entire enrolled population by searching a database for a match
based solely on the biometric. For example, an entire database can be searched to verify a
person has not applied for entitlement benefits under two different names. This is sometimes
called "one-to-many" matching. A system can also be used in Verification mode, where the
biometric system authenticates a person's claimed identity from their previously enrolled
pattern. This is also called "one-to-one" matching. In most computer access or network access
environments, verification mode would be used. A user enters an account, user name, or
inserts a token such as a smart card, but instead of entering a password, a simple touch with a
finger or a glance at a camera is enough to authenticate the user.

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Biometric-based authentication applications include workstation and network access, single

sign-on, application logon, data protection, remote access to resources, transaction security,
and Web security. The promises of e-commerce and e-government can be achieved through
the utilization of strong personal authentication procedures. Secure electronic banking,
investing and other financial transactions, retail sales, law enforcement, and health and social
services are already benefiting from these technologies. Biometric technologies are expected to
play a key role in personal authentication for large-scale enterprise network authentication
environments, Point-of-Sale and for the protection of all types of digital content such as in
Digital Rights Management and Health Care applications. Utilized alone or integrated with
other technologies such as smart cards, encryption keys and digital signatures, biometrics are
anticipated to pervade nearly all aspects of the economy and our daily lives. For example,
biometrics is used in various schools such as in lunch programs in Pennsylvania, and a school
library in Minnesota. Examples of other current applications include verification of annual
pass holders in an amusement park, speaker verification for television home shopping, Internet
banking, and users' authentication in a variety of social services.
Using biometrics for identifying human beings offers some unique advantages. Biometrics can
be used to identify you as you. Tokens, such as smart cards, magnetic stripe cards, photo ID
cards, physical keys and so forth, can be lost, stolen, duplicated, or left at home. Passwords can
be forgotten, shared, or observed. Moreover, today's fast-paced electronic world means people
are asked to remember a multitude of passwords and personal identification numbers (PINs)
for computer accounts, bank ATMs, e-mail accounts, wireless phones, web sites and so forth.
Biometrics hold the promise of fast, easy-to-use, accurate, reliable, and less expensive
authentication for a variety of applications.
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There is no one "perfect" biometric that fits all needs. All biometric systems have their own
advantages and disadvantages. There are, however, some common characteristics needed to
make a biometric system usable. First, the biometric must be based upon a distinguishable
trait. For example, for nearly a century, law enforcement has used fingerprints to identify
people. There is a great deal of scientific data supporting the idea that "no two fingerprints are
alike." Technologies such as hand geometry have been used for many years and technologies
such as face or iris recognition have come into widespread use. Some newer biometric
methods may be just as accurate, but may require more research to establish their uniqueness.
Another key aspect is how "user-friendly" a system is. The process should be quick and easy,
such as having a picture taken by a video camera, speaking into a microphone, or touching a
fingerprint scanner. Low cost is important, but most implementers understand that it is not
only the initial cost of the sensor or the matching software that is involved. Often, the lifecycle support cost of providing system administration and an enrollment operator can overtake
the initial cost of the biometric hardware.
The advantage biometric authentication provides is the ability to require more instances of
authentication in such a quick and easy manner that users are not bothered by the additional
requirements. As biometric technologies mature and come into wide-scale commercial use,
dealing with multiple levels of authentication or multiple instances of authentication will
become less of a burden for users. An indication of the biometric activities.
Fingerprints: The patterns of friction ridges and valleys on an individual's fingertips are
unique to that individual. For decades, law enforcement has been classifying and determining
identity by matching key points of ridge endings and bifurcations. Fingerprints are unique for
each finger of a person including identical twins. One of the most commercially available
biometric technologies, fingerprint recognition devices for desktop and laptop access are now
widely available from many different vendors at a low cost. With these devices, users no
longer need to type passwords - instead, only a touch provides instant access. Fingerprint
systems can also be used in identification mode. Several states check fingerprints for new
applicants to social services benefits to ensure recipients do not fraudulently obtain benefits
under fake names. New York State has over 900,000 people enrolled in such a system.
Face Recognition: The identification of a person by their facial image can be done in a
number of different ways such as by capturing an image of the face in the visible spectrum
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using an inexpensive camera or by using the infrared patterns of facial heat emission. Facial
recognition in visible light typically model key features from the central portion of a facial
image. Using a wide assortment of cameras, the visible light systems extract features from the
captured image(s) that do not change over time while avoiding superficial features such as
facial expressions or hair. Several approaches to modeling facial images in the visible
spectrum are Principal Component Analysis, Local Feature Analysis, neural networks, elastic
graph theory, and multi-resolution analysis.
Some of the challenges of facial recognition in the visual spectrum include reducing the impact
of variable lighting and detecting a mask or photograph. Some facial recognition systems may
require a stationary or posed user in order to capture the image, though many systems use a
real-time process to detect a person's head and locate the face automatically. Major benefits of
facial recognition are that it is non-intrusive, hands-free, continuous and accepted by most
users.
Speaker Recognition: Speaker recognition has a history dating back some four decades,
where the output of several analog filters were averaged over time for matching. Speaker
recognition uses the acoustic features of speech that have been found to differ between
individuals. These acoustic patterns reflect both anatomy (e.g., size and shape of the throat and
mouth) and learned behavioral patterns (e.g., voice pitch, speaking style). This incorporation
of learned patterns into the voice templates (the latter called "voiceprints") has earned speaker
recognition its classification as a "behavioral biometric." Speaker recognition systems employ
three styles of spoken input: text-dependent, text-prompted and text independent. Most speaker
verification applications use text-dependent input, which involves selection and enrollment of
one or more voice passwords. Text-prompted input is used whenever there is concern of
imposters. The various technologies used to process and store voiceprints includes hidden
Markov models, pattern matching algorithms, neural networks, matrix representation and
decision trees. Some systems also use "anti-speaker" techniques, such as cohort models, and
world models.
Ambient noise levels can impede both collection of the initial and subsequent voice samples.
Performance degradation can result from changes in behavioral attributes of the voice and
from enrollment using one telephone and verification on another telephone. Voice changes due
to aging also need to be addressed by recognition systems. Many companies market speaker
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recognition engines, often as part of large voice processing, control and switching systems.
Capture of the biometric is seen as non-invasive. The technology needs little additional
hardware by using existing microphones and voice-transmission technology allowing
recognition over long distances via ordinary telephones (wire line or wireless).
Iris Recognition: This recognition method uses the iris of the eye which is the colored area
that surrounds the pupil. Iris patterns are thought unique. The iris patterns are obtained through
a video-based image acquisition system. Iris scanning devices have been used in personal
authentication applications for several years. Systems based on iris recognition have
substantially decreased in price and this trend is expected to continue. The technology works
well in both verification and identification modes (in systems performing one-to-many
searches in a database). Current systems can be used even in the presence of eyeglasses and
contact lenses. The technology is not intrusive. It does not require physical contact with a
scanner. Iris recognition has been demonstrated to work with individuals from different ethnic
groups and nationalities.
Hand and Finger Geometry: These methods of personal authentication are well established.
Hand recognition has been available for over twenty years. To achieve personal authentication,
a system may measure either physical characteristics of the fingers or the hands. These include
length, width, thickness and surface area of the hand. One interesting characteristic is that
some systems require a small biometric sample (a few bytes). Hand geometry has gained
acceptance in a range of applications. It can frequently be found in physical access control in
commercial and residential applications, in time and attendance systems and in general
personal authentication applications.
Signature Verification: This technology uses the dynamic analysis of a signature to
authenticate a person. The technology is based on measuring speed, pressure and angle used by
the person when a signature is produced. One focus for this technology has been e-business
applications and other applications where signature is an accepted method of personal
authentication.
Legal significance of biometric data, including raw biometric images and biometric templates,
has been discussed by many legal and non legal professionals. Although there were different
views about whether a biometric template should be regarded as personal data, or personal
related data (Grijpink, J. 2001), or anonymous data (Prins, C.1998), there is no denying that raw
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biometric data is personal data in the sense of the EU directive. In the report to the European
Commission, Paul de Hert (2005) had given a clear clarification as to why a biometric template
should also be regarded a personal data. It will be tedious to repeat it here as basically we have
similar arguments. Hence the starting point of our discussion is biometric data including raw
image and templates, should be regarded as personal data covered by the Data Protection
Directive.
Growth of internet trading in India
ADVANTAGES OF ONLINE TRADING
1. Provides with the Freedom of Information
The Internet provides a new sense of controlling our financial future as the amount of investment
information available online is truly outstanding. An investor can

Know the price of any stock he desires at any point time on the internet.

An investor can review the price history of any stock in chart format online

An investor can follow in-depth the events happening in the market

Helps an investor in receiving a wealth of free commentary and analysis about stock
markets in the global economy

Helps an investor to conduct an extensive financial research of any company he desires

He may also consult with other investors online present around the world

Some online stock broking companies provide real-time stock quotes, daily roundups of the
stock market, expert commentary, and a deep community of fellow investors.
2. Provides Control to Investors Money
When an investor wants to buy or sell stock he no longer need to call his broker on the phone
thus helping in the execution of the order instantly on the internet.
3. Provides access to the market
Through the sophisticated information streams, dedicated trading platforms and sophisticated
tools the investor can access the markets which provides more agility in buying and selling
stocks.
4. Ensures the best price for investors
Some companies like Investsmart (IL&FS)specialize in the techniques which offers the best
price deals for the buy and sell orders of the investors and traders providing the high level of

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transparency by displaying of information relating to the specific stocks and company profiles
which helps in getting the best quote for the orders
5. Online trading offers greater transparency
Online trading offers the investors with greater transparency by providing with an audit trail. The
process involves a complete integrated electronic chain starting from order placement, to
clearing and settlement and finally ending with a credit into the depository account of the
investor. All these stages are inspected which brings the transparency into the system.
6. Provides hassle free trading
Online trading provides an integration of the bank account, trading account and demat accounts,
which leads to easy and paperless trading for the client.
7. Online trading allows instant trade execution
Online transactions helps in the quick execution of the entire trading transaction right from
logging to the traders site and to the settlement of the bank account in a very short period of time.
8. It provides a level playing field
Trading online gives even the smallest retail investor access to information which was earlier
available only to the big traders. It has provided with a level playing field for all investors in the
securities market.
9. Online trading reduces the settlement risk
This method of trading reduces the settlement risk for the investor as when a short sell order is
played the orders are squared off at the specified cut-off time and are not allowed to be carried
forward.
10. Provides live financial news & analysis
The online sites also provide live terminals which provide streaming news to give investor the
latest financial information as it occurs.
11. Online help desk
Some companies provide online help desk an investor cancan contact the Tele Trading
Executives from the Tele Trading team during and after market hours and can clarify questions.
12. Instant order trade confirmations
Through online trading every trade is confirmed immediately and investor receives an on-screen
confirmation following every trade with full details for the investors records which avoids costly
errors that would have been discovered when it is too late.
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13. Keeps Information Secure

As per the guideline provided by SEBI every effort has to be made to keep the investors account
and personal information secure by use of encryption technology and updated security
technology to advanced fraud prevention measures.

DISADVANTAGES OF ONLINE TRADING

1. In online terminal, investor cant get customized expert advice, whereas in offline the broker
gives suggestions according to investors strategy (i.e. short term or long-term)
2. Brokerage is high compared to offline.
3. Privacy is less due to hacking scandals
4 .Transactional errors due to technical problems
According to an article by Krishnamoorthy B in 2005 after inception of online trading in India in
the year 2000 online trading is gained momentum with trading volumes growing by 150 per cent
per annum in the years 2003-2005.The volume of all trades executed through the Internet on the
National Stock Exchange had grown from less than Rs 100 crore (Rs 1 billion) in June 2003 to
over Rs 700 crore (Rs 7 billion) in July 2005 which was a handsome growth.
This also provided a massive rise in the number of Internet traders. At the end of July 2005, there
were 108 registered brokers on the NSE and the number of Internet trading subscribers to about
1.054 million. And the top three players ICICIdirect.com, Indiabulls and Kotak Securities had
nearly 85 per cent of the total customer base. Today the ICICIDirect has nearly 36% market
share.
In March 2003 ICICIDirect had about 234,000 customers trading through its portal which rose to
over 675,000 customers in the year 2005.According to Anup Bagchi the MD and CEO of
ICICIdirect.com as their company was the first player to enter the online trading segment,
ICICIdirect has made broking more structured and transparent which further reduced the
operational hassles.
At the same time the number of subscribers trading through the portal of Kotak Securities had
gone up significantly by 150 per cent and the number of online trading customers had grown
from 30,000 to 75,000. And the company expected to have at least 130,000 customers by the end
of that fiscal.
Indiabulls which was a late entrant in the game had its online customers growing from 35,000 in
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June 2003 to over 140,000 in the mid 2005. Out of total customer base of 180,000 majority were
online customers. Indiabulls appointed 2,000 relationship managers to handle online clients.
In the recent past years of 2005 ICICIDirect and Indiabulls recorded an annual volume growth of
100 per cent and IndiaBulls had about 30 per cent of India's online trading volumes.
In the year 2005 the online revenues grew faster for Indiabulls than offline revenues (online
revenues increased from 40 per cent to 60 per cent of the total year 2004 and clients wanted a
backup while trading online.
ICICI Direct had 7.5 lakh registered users online in the tear 2005 more than five times what
Indiabulls had. In 2005 number of demat accounts doubled to 7.1 million with the facility of
online trade since 2002. From the years 2000-2005 the online broking grew to account for a tenth
of the total trading volumes. If the numbers are considered for only the retail segments, the
growth is starker. Almost half of the Rs 5,000 crore-6,000 crore daily market volume on the NSE
accounted for by non-retail

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