1

Preface

I have made this report file on the topic Sales Management; I have tried my best to elucidate all the relevant detail
to the topic to be included in the report. While in the beginning I have tried to give a general view about this topic.

My efforts and wholehearted co-corporation of each and everyone has ended on a successful note. I express my
sincere gratitude to …………..who assisting me throughout the preparation of this topic. I thank him for providing me
the reinforcement, confidence and most importantly the track for the topic whenever I needed it.
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Acknowledgement

I would like to thank respected Mr…….. and Mr. ……..for giving me such a wonderful opportunity to expand my
knowledge for my own branch and giving me guidelines to present a seminar report. It helped me a lot to realize of
what we study for.

Secondly, I would like to thank my parents who patiently helped me as i went through my work and helped to modify
and eliminate some of the irrelevant or un-necessary stuffs.

Thirdly, I would like to thank my friends who helped me to make my work more organized and well-stacked till the
end.

Next, I would thank Microsoft for developing such a wonderful tool like MS Word. It helped my work a lot to remain
error-free.

Last but clearly not the least, I would thank The Almighty for giving me strength to complete my report on time.
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Introduction
In daily life, a layman deals with different transaction in terms of selling and purchasing of goods and
services. In these transactions the second one persuades the first person. Therefore, selling may be
defined as persuading people to satisfy the want of first one. The person, who does this act, is called as the
salesman, the result of this action as sales, while these activities of the person, are supervised and
controlled by sales-management. In the present scenario sales executives are professionals. They plan,
build and maintain effective organisations and design and utilize efficient control procedures. The
professionals approach requires thorough analysis, market-efficient qualitative and quantitative personal-
selling strategy. It calls for skilful application of organisational principles to the conduct of sales operations.
In addition, the professional approach demands the ability to install, operate, and use control procedures
appropriate to the firm’s situation and its objectives. Executives capable of applying the professional
approach to sales management are in high demand today. The quality of selling is referred to as
salesmanship. In other words, ‘management’ is synonymous with leadership. Managers do the same thing
in industry, as ministers do in states and at the centre, i.e., they have to plan, forecast, direct and control
their personnel. Here success lies in running together, hand in hand. Managers are the captains of the
army of their followers.
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What is sales management?

Sales management is a business discipline which is focused on the practical application of sales techniques and the
management of a firm's sales operations. It is an important business function as net sales through the sale of
products and services and resulting profit drive most commercial business.

In short,

“Sales management is the process of developing a sales force, coordinating sales operations, and implementing
sales techniques that allow a business to consistently hit, and even surpass, its sales targets.”

OR

“The planning, direction and control of personnel selling, including recruiting, selecting, equipping, assigning,
routing, supervising, paying and motivating as these tasks apply to the personal sales force”.

When it comes to boosting sales performance for any size of operation, no matter the industry, the secret to success
is always precise sales management processes.

Besides helping your company reach its sales objectives, the sales management process allows you to stay in tune
with your industry as it grows and can be the difference between surviving and flourishing in an increasingly
competitive marketplace.

Whether you’re an experienced or new sales manager, you should be able to evaluate and gain visibility into your
current sales force with the following guide to sales management.

Once you have a clear picture of what processes to monitor and how to keep track of them, you’ll be equipped to
pinpoint issues early on, coach people before it’s too late, and have a better overview of the tasks the team should
be doing to increase its sales.

If you’re a sales rep who happened to stumble upon this guide out of curiosity, you’re already winning.

This guide will give you an understanding how your company’s sales process is managed, allowing you to become
more in sync with your team, create a better relationship with your manager, and achieve better sales results
yourself.

Overall, sales management will help businesses and their workers better understand results, predict future
performance, and develop a sense of control by covering the following three aspects.
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Sales management is the attainment of sales force goals in an effective manner through planning staffing,
training, leading and controlling organization resources.
5 functions of a sales manager
(1) Planning = Building profitable customer-oriented sales teams.
(2) Staffing = Hiring the right people to sales and lead.
(3) Training = Educating sales personae to satisfy customer.
(4) Leading = Guiding average people to perform at above average levels.
(5) Controlling = Evaluating the past to guide the future
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Objectives of Sales Management

Sales management entails numerous objectives which are executed by sales managers. There are mainly three such
objectives

1. Sales Volume

This is the sum of sales of all salesmen, put together. By proper planning, sales territories are assigned to
salesmen based on sales potential and sales forecast made in the planning stage. Sales volume depends
on a number of sales persons. Techniques used by sales department are many; like personal selling and
promotional steps etc. Sales persons are motivated by various methods so that targets are achieved such
as quotas, incentives like commissions and sales management by objectives. By proper O.R. techniques,
optimum sales force is fixed.

2. Contribution to profits
Sales Management and financial results are closely linked to each other as evident from the following
Sales - Cost of Sales Gross Margin
(1.1) Gross Margin - Sales Expenses = Net Profit
(1.2) Cost of Production + Cost of Distribution = Cost of Sales
(1.3) Sales revenue has been directly linked to the performance efficiency of the sales force. All expenses
are budgeted and controlled.

3. Continuous Growth

Survival and success is the basic objectives of any organisation. A number of growth strategies
are available such as the following: Diversification - Concentric or conglomerate Integration -
Vertical or horizontal External Growth - JV, merger or acquisition In all such cases, performance
of sales force and quality of their information feedback is vital to know the "needs" and "wants"
of customer.

 The sales executives in this case are the ones who help implement these objectives.
 However, it is the top management who are responsible to make skeleton of the organizational
operation and has guided the lower management with full proof strategy to achieve these
objectives of sales management.
 The top management should come out with the idea of new products which are socially responsible
and are marketed in a manner which meets customer’s needs and expectations.
 Thus, sales management involves a strong interaction between Sales, marketing and top
management and worked as an integrated unit under the organization as a whole.
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SMBO APPROACH
It is another approach to formulate and accomplish sales-objectives is the sales management by objectives
(SMBO) technique. It is formulated combined by sales manager and sales-force (representatives). It aims to
focus on:-
(i) results, within a specified set of objectives and
(ii) participative style of management.

Process of SMBO
The operationalisation of SMBO is a process, comprising of the following steps:

(i) Setting goals jointly with the salesman: In this process the goals for sales-man and sales managers are
settled simultaneously in the organisation so that they can built a 11-close coordination between them
and lastly, they achieve the main objective of the organisation.

(ii) Planning strategy to reach the objectives: The participative style of sales. Management proves to be a
boon to the top-management, in the sense of the close familiarity of the salesman, with their markets.
The outcome of the joint exercise would be the development of a strategy that directs the salesman to
his objectives, following a plan, in the correct sequence, with the correct timing, and must be efficient,
in the use of resources of time and money

Importance of SMBO
The importance of SMBO for a business firm is as follows:
(a) Directing the salesman towards the broader sales and marketing objectives of the Company;
(b) Providing a better approach, from the view-point of the salesman; and
(c) Motivating the salesman.
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Need and Importance of Sales Organization

The sales organisation is required for the following purposes:
(i) To enable the top-management, to devote to more time in policy making for the growth and expansion
of business.
(ii) To divide and fix authority among the sub-ordinates so that they may shirk work.
(iii) To avoid repetition of duties and functions so that there may not be any confusion among them.
(iv) To locate responsibility of each and every employee so that they can complete the whole work in
stipulated time; if not then the particular person must be responsible.
(v) To establish the sales-routine in the business unit.
(vi) To stimulate sales-effort.
(vii) To enforce proper supervision of sales-force.
(viii) To integrate the individual in the organisation

Functions of Sale Organisation

A sales organisation performs the following functions:
1. Analysis of markets thoroughly, including products and market research.
2. Adoption of sound and defensible sales-policy.
3. Accurate market or sales forecasting and planning the sales campaign, based on relevant data or
information supplied by the marketing research staff.
4. Deciding about prices of the goods and services; terms of sales and pricing policies to be
implemented in the potential and existing markets.
5. Labelling, Packaging and packing, for the consumer, who wants a container, which will satisfy his
desire for attractive appearance; keeping qualities, utility, quantity, and correct price and many
other factors in view.
6. Branding or naming the product(s) and/or services to differentiate them from the competitors and
to recognise easily by the customer.
7. Deciding the channels of distribution for easy accessibility and timely delivery of the products and
services.
8. Selection, training and control of salesmen, and fixing their remuneration to run the business
operations efficiently and effectively.
9. Allocation of territory, and quota setting for effective Selling and to fix the responsibility to the
concern person
10. Sales-programmes and sales-promotion-activities prepared so that every sales activity may be
completed in a planned manner
11. Arranging for advertising and publicity to inform the customer about the new products and services
and their multiple uses.
12. Order-preparation and office-recording to know the profitability of the business and to evaluate the
performance of the employees.
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PERSONAL SELLING
Meaning of Personal Selling:

Personal-selling or salesmanship are synonymous terms; with the only difference that the former term is of

recent origin, while the latter term has been traditionally in usage, in the commercial world.

Since a salesman, in persuading a prospect to buy a certain product, follows a personal approach;

salesmanship, in the present-day-times in often popularly called as personal selling.

Personal selling (or salesmanship) is the most traditional method, devised by manufactures, for promotion

of the sales of their products. Prior to the development of the advertising technique, personal selling used

to be the only method used by manufacturers for promotion of sales. It is, in fact, the forerunner of

advertising and other sales promotion devices.

PERSONAL SELLING OBJECTIVES

Qualitative personal selling objectives are long term and concern the contribution management expects
personal selling to make in achieving long-term company objectives. These objectives generally are carried
over from one period’s promotional program to the next. Depending upon company objectives and the
promotional mix, personal selling may be assigned such qualitative objectives as

1. To do the entire selling job (as when there are no other elements in the promotional mix).
2. To “service” existing accounts (that is, to maintain contacts with present customers, take orders,
and so forth).
3. To search out and obtain new customers.
4. To secure and maintain customers’ cooperation in stocking and promoting the product line.
5. To keep customers informed on changes in the product line and other aspects of marketing
strategy.
6. To assist customers in selling the product line (as through “missionary selling”).
7. To provide technical advice and assistance to customers (as with complicated products and where
products are especially designed to fit buyers’ specializations).
8. To assist (or handle) the training of middlemen’s sales personnel.
9. To provide advice and assistance to middlemen on management problems.
10. To collect and report market information of interest and use to company management.
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The quantitative objectives assigned to personal selling are short term and are adjusted from one
promotional period to another. The sales volume objective-the rupee or unit sales volume management
sets as the target for the promotional period-is the key quantitative objective. All other quantitative
personal selling objectives are derived from or are related to the sales volume objective. Thus, discussion
here focuses upon the setting of sales volume objectives. Setting the sales volume objective influences the
setting of other quantitative personal selling objectives, among them the following:

1. To capture and retain a certain market share.

2. To obtain sales volume in ways that contribute to profitability (for example, by selling the “optimum”
mix of company products).
3. To obtain some number of new accounts of given types.
4. To keep personal selling expenses within set limits.
5. To secure targeted percentages of certain accounts’ business.

RELEVANT SITUATION FOR PERSONAL SELLING

Let us discuss some of the situations when personal selling in a company becomes more relevant.
1. Product situation: Personal selling is relatively more effective and economical in case:
a When a product is of a high unit value like Xeroxing machine, computers etc.
b When a product is in the introductory state of its life cycle and require creation of core demand.
c A product requires personal attention to match specific consumer needs e.g. insurance policy.
d Product requires demonstration e.g. most of the industrial products.
e Product requires after-sales service.
f Product has no brand loyalty or very poor brand loyalty.
2. Market situation: Personal selling situation can be best utilized when:
a A company is selling to a small number of large-size buyers.
b A company sells in a small-local market or in government or institutional market.
c Desired middle men or agents are not available.
d An indirect channel or distribution is used for selling to merchant-middlemen only.
3. Company situation: Personal selling is relatively more effective and economical when:
a The company is not in a position to identify and make use of suitable non-personal communication
media.
b A company cannot afford to have a large and regular advertising outlay.
4. Consumer behaviour situation: Personal selling is more effective when:
a Purchases are valuable but infrequent.
b Consumer needs instant answers to his questions.
c Consumer requires persuasion and follow-up in the face of competitive pressure.
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SELLING PROCESS
1. Prospecting
The selling process begins with prospecting or finding qualified potential customers.
Except in retail selling, it is unlikely that customers will come to the sales person. In
order to sell the product, the sales person must seek out potential customers,
prospecting involves two major activities
(a) identifying potential customers also known as prospects;
i. Present customers: The best source of prospects is usually the sales person’s existing
satisfied customers. It is much easier to sell additional goods and services to existing
customers than to attract new customers
ii. Endless chain: This is also an effective prospecting tactics. In this method companies use
satisfied customers as source of referrals. Sales representatives ask current customers for
names of friends or business associates who might need similar products or services.
Then, as the sales person contacts and sells to these prospects, more referrals are
solicited. In this way the process continues further.
iii. Centre of Influence: A centre of influence is a person with information about other
people or influence over them that can help a sales person identify good prospects. Some
frequently used centres of influences are housewives, bankers, local politicians etc.
iv. Spotters: Some companies use spotters as a source for prospecting potential customers.
Spotters are usually ‘sales trainees’ who help sales person identifying prospects, thus
saving time and qualifying sales lead.
v. Cold call: Cold call is also known as unsolicited sales calls. This prospecting technique
involves knocking on doors. The sales person makes contact with a potential customer,
introduces himself or herself, and asks if there is a use for the product or service.
vi. Directories: A wide variety of directories are full of prospect. The classified telephone
directory is the most obvious one. A sales person may also find that membership
directories of trade associations, professional societies, and civic and social organizations
are good sources for prospects.
vii. Mailing lists: In India, specialized companies compile lists of individuals and organizations
for direct mail advertisers. These lists may also be used to identify sales prospects. The
major advantages of mailing list are that they are often more current and more selective
than directories.
viii. Trade shows and exhibitions: A cost effective way to make personal contacts and locate
prospective buyer is to participate in trade shows and exhibitions. Now a days more and
more companies are increasing their participation in these shows and exhibitions to
company’s booth by mailing invitations or promising a gift. Advance announcements sent
to trade publications may also help to attract prospects. In view of the rising costs of
personal selling trade shows have become an increasingly important source of
prospecting. India International Trade Fair organized by Trade Fair Authority of India
every year provides a good example of usage of trade shows for prospecting.
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(b) qualifying them in order to determine if they are valid prospects.

Once the sales person has identified potential customers, he or she must qualify them
to determine, if they are valid prospects.
There are several factors to consider while qualifying a prospect. One approach to qualifying often
called MAN (Money, Authority and Need) approach is given below:
i. Money: Ability to pay is very critical factor in qualifying a prospect. The sales people must be
familiar with financial resources of a prospect
ii. Authority: This is a particular concern when dealing with corporation, government agencies
or other large organizations. Even while selling to a married couple, it may be difficult to
identify who actually makes the purchase decision. A sales person must identify the key
decision maker early to economise on selling time more effectively.
iii. Need: Does the prospect need the product or service? If a sales person cannot establish that
the customer will benefit from purchasing a product or service, there is no reason to waste a
sales call. The prospect either will refuse the offer or will end up dissatisfied with the
purchase. Before proceeding further, the sales person should first appraise whether money,
authority and need exist with the prospect.

2. Preparation
After a prospect has been identified and qualified, the sales person prepares for the sale of product or
service. The preparation stage involves the two key activities i.e. Pre-approach and Call Planning.

(a) Pre-approach

The pre-approach step includes all the information gathering activities necessary to learn relevant
facts about the prospect and his or her needs and situations.

Four necessary steps of pre-approach are:

 It should disclose the party need and ability to buy.

 It should provide information that will enable the seller to tailor the presentation to the prospect.
 It should provide information that may keep the sales person from making serious tactical errors
during the presentation.
 Finally, a good pre-approached increases the sales person confidence and makes him confident to
handle whatever may arise during the sales.

(b) Call planning

Call planning involves a specific planning sequence. The sales person defines the objective of the
call, devise a selling strategy to achieve this objective, and makes the appointments. The primary
objective of any sales effort is to get an order. For some sales call intermediate objectives may be
needed. Some examples of intermediate objectives are:

 To obtain more information about the prospect.

 To relate the prospects needs and concerns to features and benefits of the product or service.
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 To obtain permission for demonstration of the product.

 To introduce a new distributor.
3. Presentation
After establishing rapport with the prospects through calls, the sales person proceeds to the formal sales
presentation. The objective of the presentation is to explain how the product meets the special needs of
the consumer. The job of the sales person is to inform the prospect about the characteristics, capabilities
and availability of goods and services that are for sale. Presentation should also be interesting enough to
keep the attention of the prospect focused on the proposal. Sales presentations are classified into the
different categories:

Fully automated, Semi-automated, Memorized, Organized, and Unstructured.

 Fully automated: The fully automated presentation is the most highly structured approach, based
on film or slide presentations. The sales person simply answers questions or clear up doubts
 Semi-automated: In this approach, the sales person reads from brochures or literatures, adding
comments to the prepared materials when necessary
 Memorized: In memorized presentation, company message is presented, with few changes
initiated by the sales person.
 Organised presentation: The most popular and often the most effective sales presentation method
is the organized presentation. With this method the sales person has complete flexibility in oral
communication but follows a company prepared outline or checklist.
 Unstructured presentations: (Also referred to as problem solving) In this approach, the buyer and
seller together explore the problems that are the real sources of the company’s needs. Although
unstructured presentations are often effective and widely used, they have a number of limitations.
Such presentations tend to be not too well-focused. As a result, points are often missed and time is
wasted. Further, sales person does not usually anticipate objections but may have to face surprise
complaint from the prospects. Because it is difficult to teach sales person how to use the
unstructured method, the problem solving presentation seems best suited to experienced, sales
person who are selling to established customers.

Sales presentation comprises of two distinct activities, approach and demonstration.

(a) Approach

When the sales person has the name of the prospect and adequate pre-approach information, the
next step is the actual approach. It frequently makes or breaks the entire presentation. If the
approach fails, the sales person often does not get a chance to give a presentation or
demonstration. It gets the prospect attention, it immediately inspires interest in hearing more
about the proposition, and it makes easy transition into the demonstration phase.

Four basic approaches are in common use:

i. The introductory approach, the sales person introduces himself to the prospect and states what
company he represents.
ii. The product consists of handling the product to prospect with little conversation. It can be most
effective when the product is unique and creates interest on sight.
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iii. The sales person starts the sale in a consumer-benefit approach by informing the prospect of what
the firm can provide in benefits. In other words, directs the prospects attention toward the benefits
the firm has to deliver.
iv. Lastly, referral approach successful in getting an audience with prospect who is difficult to see
directly. It consists of obtaining the permission of a past or present customer to use his or her name
as a reference in meeting a new prospect.

(b) Demonstration

The demonstration is the core of the selling process. The sales person actually transmits the
information and attempts to persuade the prospect through product demonstration to make a customer.
Two factors should be taken into consideration in preparing an effective product demonstration:

i) The demonstration should be carefully rehearsed to reduce the possibility of even a minor malfunction.

ii) The demonstration should be designed to give customers ‘hand on’ experience with the product
wherever possible. For example, an industrial sales representative might arrange a demonstration before
the purchaser’s technical personnel.

4. Handling objections
 All sales person confronts sales resistance i.e. actions or statements by a prospect that postpone,
hinder or prevent the completion of the sale.
 Normally sales resistance takes the form of an objection which can be classified as stated or hidden.
Prospects may state their objections to a proposition openly and give the sales person a chance to
answer them.
 This is an ideal situation because everything is out in the open and the sales person does not need
to read the prospect’s mind. Unfortunately, in many instances prospects hide their real reasons for
not buying.
 Besides having hidden objections, their stated objection may be phoney. Unless one can determine
the real barrier to the sale one shall not be able to overcome it. There are two major techniques for
discovering hidden objections. One is to keep the prospect talking by asking probing questions. The
other is to use insights gained through experience in selling the product, combined with a
knowledge of the prospects situation, to perceive the hidden objection

5. Closing

 After having answered and overcome objections, it is the stage for sales person to ask for the
order from the prospects. T
 he entire effort is wasted unless the sales person can get the prospect to agree to buy the
product.
 There are several closing techniques which are being used by sales person in India. Sales person
should select among these techniques one that fits the specific prospect and selling situation.
e.g. in case of high priced products like Motorcar, photocopier or industrial product the sales
person may negotiate with the financial institution for financial assistance for the prospects. The
gift close technique provides the prospect with an added incentive for taking immediate buying
action
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6. Follow-up

 The selling process is not completed by merely making the sale, as generally assumed by many sales
persons.
 After sales activities are important part of the whole selling process.
 Effective sales-follow-up reduces the buyer’s doubt about the product or services and improves the
chance that the person will buy again in the future.
 In addition to post-sale activities, sales person is also required to maintain good customer relations.
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Importance of Sales Management

Even if you have a knack for closing deals or have effective brochures, advertising and website pages for
generating individual sales, that’s often not enough to maximize your profits. Using a variety of sales
management techniques to reach that extra 5 percent to 10 percent of your potential can mean the
difference between keeping your head above water and generating profits that fund your continued
growth and expansion.
Sales Management
Sales management includes more than tracking the business you book and providing support for your sales
team. It starts with helping develop the right products, setting the right prices and distributing in the right
places, and continues with marketing messaging, customer service and other selling efforts. All of these
efforts must be coordinated so one doesn’t interfere any of the others. Setting plans, monitoring them and
tracking results lets you continue to adapt, eliminate weaknesses and take advantage of opportunities.
Improves Product Development
A sales management program includes having your sales staff keep in close touch with customers and
watching the competition to determine if your product line is as relevant as it can be. Adding a new
product to your line, changing or eliminating features or dropping items from your product mix can all help
you maximize your sales and profits. Conduct regular reviews of what you sell to make sure you offer the
optimal product or service to generate high sales volumes and profit margins.
Optimizes Distribution
Sales reports not only provide you with information about what’s selling and how much you’re selling, but
where you are making your sales. A sales management program evaluates your distribution methods and
maximizes their use. For example, if your online sales are strong but your retail volumes are lagging, you
might find this is because customers get more information when they shop online, helping them buy with
confidence. To improve retail sales, you might provide better retailer training, more in-store promotions
and change your product packaging.
Better Financial Decisions
Some of your best-selling products, in terms of volume, might provide your lowest profit margins, causing a
burden on your production and administration departments. Detailed sales reports provide you with
information on your overhead and production costs, cost-of-sales expenses and profit margins. A low-
margin item with high sales volumes might provide a nice profit margin, making it a no-brainer item to
keep in your line. If you can eliminate this item, causing a corresponding increase in higher-margin item
sales, you might want to discontinue selling it. Sales management looks at the profit contribution,
opportunity cost and impact of carrying each product on your operations.
Improves Staff Quality
A sales plan is only as good as the people who use it, and a key part of any sales management program is
recruiting, training and managing sales staff. This includes developing their product knowledge, coaching
them on calls, improving writing and presentation skills and helping them work their territories effectively.
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Policies that impact sales management:

 Sales management policies vary depending on product, distribution and pricing policies.
 Sales related policies laid down by a company influence the operations and functions of the sales
executives. They are
i. Sales related policies pertaining to the product
ii. Sales related policies pertaining to distribution
iii. Sales related policies pertaining to pricing

Sales related policies pertaining to the product:

Sales related policies pertaining to the product Includes product add / drop, design and quality, after sales
service, product recall, warranties and repair. Exhibit: product recall by Fire stone (ATX), J&J Tylenol, Coke
(Belgium) Product related policies that impact sales management are

 Product line policy

Product line policy Narrow lines, advantages & disadvantages E.g. computer firms trimming lines
Broader lines, advantages & disadvantages E.g. HLL Amount of risk that the company can take
(narrow / full line) Ability of sales force to deal with new products and extended lines Note: when
sales person works with extended lines parameters of his performance measurement changes

 Product design policy

Product design policy Frequency of changes and extent of protection needed for design from
imitations.
Sales related policies pertaining to distribution:
Sales related policies pertaining to distribution determines sales and it must be effectively coordinated
with product quality, its positioning, marketer’s reputation and marketing efforts etc. Importance of
consistency in supply, frequency and regularity of distribution Need of ethical relationship and effect on
promotion Impact of commission on channel members E.g. Lufthansa reduced travel trade commission
from 7% to 5% followed by British Air ways, and Air France etc.

Sales related policies pertaining to pricing:

Sales related policies pertaining to pricing Product categories (substitute, complimentary and neutral) and
how its price changes influences sales policies. Impact of price change in same product line where products
are competing Impact of price changes in case of substitute products.
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Sales management strategies:

 Identify goals and objectives of the sales team. Be clear on your sales targets. Make sure the
targets are realistic and achievable. Also assign a fixed timeline to achieve the targets.
 Know your product well. Understand what benefits end-users would get from your brand. The
marketers must interact with customers to find out more about their expectations from the
product as well as the organization. One would not be able to convince the customers unless and
until he himself is clear with the benefits of the products.
 Identify your target market. Selling techniques and strategies can’t be same for all individuals. Each
audience has different needs, interests and requirements.
 Hire the right individual for the sales team. Remember the sales professionals have a major role in
the success and failure of organizations. Recruit individuals who are aggressive, out of the box
thinkers and nurture the dream of making it big in the corporate world. Make the sales
representatives very clear about their roles and responsibilities in the team. Develop a lucrative
incentive plan for them. Incentives and monetary benefits go a long way in motivating the sales
team.
 Don’t lie to your customers. It is important to maintain transparency. Communicate what all your
product actually offers. It is unethical to make false promises. Only commit to what you actually can
deliver to customers.
 Know what your competitors are offering. It is essential to do a SWOT analysis of your organization
to know its strengths, weaknesses, threats and opportunities. A marketer must know how his
product is better than his competitors.
 Sales representatives must do their homework before going for a sales call. One should never go
unprepared. Remember the customer can ask you anything and you have to be ready with your
answers. The management must promote training sessions at the workplace to upgrade the skills of
the sales professionals and expect them to deliver their level best.
 Devise strategies as per the target audience. Know your market well. The individuals must be able
to relate to your products. The strategies must be formulated in the presence of all. Each one
should have a say in the same. Let everyone come out with his suggestions. Be ready with alternate
plans if one plan fails.
 The management must conduct frequent meetings with the sales team to review their
performances. Keep a track on their daily activities. The sales team must prepare Daily Sales
Reports (DSR) for the superiors to know what they are up to.
 One must assess his own performance. Recall your interactions with the clients and analyze where
you went wrong and where things could have been a little better.
 Treat your customers well for higher customer satisfaction and retention. Don’t oversell. Once
you are through with your sales presentation, don’t be after your client’s life. Give him time to think
and decide.
 The sales pitch must be impressive for the desired impact.
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Managing the Sales Force

The face of any organization is the sales force. Companies spend a considerable amount of time and money
on sales force rather than on any other promotional activity. However, sales force is expensive and
companies are looking forward to managing them in an efficient and effective manner.

Designing of the Sales Force

Sales force is linking between companies and customer. Therefore, companies have to be careful in
designing and structuring sales force.

1. The first step is setting out an objective for sales force. Earlier companies had a single objective
increasing sale making it objective also for sales people. Sales people are asked to perform a search
for prospective clients or lead. Sales people are asked to balance time between a prospective
customer and current customer. Effective communication of product and services is essential to
close the deal. Sales people also play an important role in after sales service and can make a
difference for the company. Sales people are eyes and ears of the company in the market gathering
information about competition and customer changing demands.
2. The second step is use sales people strategically. Sales people have to combine efforts with other
team members to achieve the objective. Sales people should be aware how to analyse market data
been provided and convert them into marketing strategies.
3. The third step is deciding the structure of the sales force. The structure of the sales is dependent
on the strategy followed by the company.
Common sales force structures are as follows: -
 Territorial structure is used where every sales representative is assigned specific
geographical area. This structure is preferred for building relationships with locals.
 Product structure is used for complex and un- related product portfolio. Here the sales
people are directly associated with research and development of the products.
 Market structure is used if the companies are operating different industry or market
segments. Every sales force specializes in a definite market and helps push a product
efficiently across the given market. However, the disadvantage would arise if customers are
located over a wide geographical area.
 Complex structure is used when companies are in business of selling complex product to
different customer across a large geographical area. Here sales force structure is a
combination of other structures discussed.
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Once the structure is designed companies need to make a decision with respect to the size of the sales
force. The size of the sales force is dependent on the market size and number of customers.

4. The next step is to design compensation for the sales force. Compensation plays a big motivational
factor for sales people. Companies follow a structure of a fixed amount plus a variable amount
depending of success achieved in the market. Allowances play an important factor in the salary
owing to continuous travel and market visits.

Integral part for success of marketing strategy is management of the sales force. The management of
sales consists of following: -

 Recruitment is at the centre of an effective sales force. One approach in the selection is asking a
customer what characteristics they look for in a sales representative. Companies develop selection
procedure where behavioural and management skills are tested.
 Training is essential to remain ahead of the competition. Sales force needs training before entering
the market as well as training at different stage of the product life cycle.
 Supervision on sales force is decided on the profile of product portfolio. A general supervision is
maintained with respect to sales people dealing with potential clients. Another supervision is
related to efficient time management from preparation of client call to closing of the deal.
 Motivation is a key aspect for management of the sales force. Here compensation plays an
important in driving up the motivational level. Compensation can be assigned based on sales quota.
Other motivational tools are social gathering and family outing.
 Evaluation is essential to management of a sales force. Sales reports sent by the sales force serve a
good starting point of evaluation.
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Sales Territory
A sales territory is composed of a group of customers or a geographic area assigned to a salesperson. The
territory may or may not have geographic boundaries. Typically, however, a salesperson is assigned to a
geographic area containing present and potential customers. Companies analyse their total markets by
looking at the various market segments, estimating their sales potential, selecting their target markets, and
developing a marketing mix based on the needs and desires of the marketplace. Many of these practices
also can be applied to a sales territory. In fact, the single sales territory should be considered as an
individual market or segment of the company's total market.
WHO IS RESPONSIBLE FOR TERRITORIAL DEVELOPMENT?

Development of sales territories is usually the responsibility of the sales manager overseeing the larger
sales units within the organization-for example, the divisional, regional, or zone sales manager. This person
knows the markets, customers, and sales personnel needed to service these accounts. The manager makes
recommendations to corporate management on whether to increase or decrease the number of sales
territories. Often, however, the manager has the authority to change geographic boundaries without
corporate approval. It is important that all field managers (for example, district, regional, divisional)
affected by territorial change have a part in seeing that the needs of the company, customers, and sales
personnel are served.
WHY ESTABLISH SALES TERRITORIES?

Companies develop and use sales territories for numerous reasons. Seven of the more important reasons
are discussed here.
 To Obtain Thorough Coverage of the Market

With proper coverage of its territories, the company can better achieve the sales potential of its markets.
The salesperson can analyse the territory and identify and classify customers. At the individual territorial
level, the salesperson can better meet customers' needs.
 To Establish a Salesperson's Responsibility

Salespeople act as business managers for their territories. They are responsible for maintaining and
generating sales volume. Salespeople’s job tasks are clearly defined. They know where customers are
located and how often they should be called upon. They also know what performance goals they are
expected to meet. This can have a positive effect on their performance and morale.
 To Evaluate Performance

Performance can be monitored for each territory. Actual performance data can be collected, analysed, and
compared with expected performance goals. Individual territorial performance can be compared with
district performance, district compared with regional performance, and regional compared with company
performance. With computerized reporting systems, the firm can monitor individual territorial or area
performance on a weekly, monthly, or quarterly basis to ascertain the success of its marketing efforts.
 To Improve Customer Relations

Customer goodwill and increased sales can be expected when customers receive regular calls. From the
customer's viewpoint, the salesperson is the company-for example, Procter & Gamble. The customer looks
to the salesperson, not to Procter & Gamble's corporate office, when making purchases. Over the years,
some salespeople build up such goodwill relations with their customers that customers will delay placing
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their orders because they know the salesperson will be at their business on a certain day or at a specific
time of the month. Some salespeople even earn the right to order merchandise for certain customers.
 To Reduce Sales Expense

Sales territories should be designed to avoid duplication of effort so lower selling costs can be realized and
company profits improved. Fewer travel miles, fewer overnight trips, and contacting productive customers
regularly can improve the firm's sales/cost ratio. In addition, by using the data collected, management can
make decisions about the profitability of territories and determine whether to maintain, expand, or merge
sales territories.
 To Allow Better Matching of Salesperson to Customer

Salespeople can be hired and trained to meet the requirements of the customers in a specific territory.
Indications are that the greater the similarity between customer and salesperson, the more likely the sales
effort will be successful.
 To Benefit Salespeople and the Company

Proper territorial design must aid salespeople in carrying out the firm's sales strategies. Thus the company
can maximize its sales effort, while the salespeople can work in territories that afford them the
opportunity to satisfy their personal needs (for example, good salary).

BASES FOR TERRITORY DEVELOPMENT

The objectives & criteria for sales territory formation are directly related to the bases used in creating the
territories. The actual division of a firm’s customer base into individual territory can be achieved by means
of several methods, depending on which of the three alternative types of bases used. The three important
bases are- geography, potential and servicing requirements, & work load.
(a) Geography:
For the establishment of territories, geographical considerations are the most frequently used
base. This base is simple, as it tends to adopt existing geopolitical boundaries such as states,
countries, or cities. The major advantage of the geographic approach is the ready availability of
secondary data from different sources.

(b) Potential and servicing requirements:

The potential approach refers to splitting up a firm’s customer base according to sales potential. It
would seem to provide equality of opportunity and thus bring out the best in sales people. The
procedure is relatively simple. First management has to estimate the sales potential for the entire
company and then try to divide this potential equally among salespersons.

(c) Workload:
The third sales territory base, workload, goes one step further. It not only considers individual
account potential &servicing requirements in creating territories, but also reflects differences in
coverage difficulty caused by topographical features, account locations, competitive activity & so
forth. Some companies try to attain equity by assigning finite number of accounts and establishing
average call frequencies. For instance, a firm may give every territory manager two hundred
accounts to service and prescribe an average frequency often calls per day; This would mean that
all accounts visited once during a month’s twenty working days.
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Performance evaluation:
Performance evaluation Important process which enhances the way organization is managed & provides

recommendations for further improvement. Comparing objectives with results Provides feedback,
management expectations are made known.

Sales force evaluation process:

 Sales force evaluation process determine the factors that influence sales force performance.

 Select criteria for sales force evaluation.

 Establish performance standards.

 Compare sales force performance.

 Performance review & feedback.

 Evaluation process.

Purpose of evaluation:

 To monitor the performance & ensure that it is in alignment with corporate goals & objectives.

 To keep track of progress.

 To take decisions regarding compensation, promotion & transfer.

Objectives to be fulfilled:

 Appreciate good performance.

 Discuss & suggest ways to overcome short comings.
 Review & update standards of performance.
 Enhance superior – sub ordinate relationship

Reasons for evaluation:

 To be aware of company objectives.

 Increasing the focus on new products.

 Reducing time spent on non-selling activities.

 Retaining the existing customer base.

 Providing training facilitates.

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 Providing focus on value added activities.

 To improve motivation & skills.

 To appraise past performance.

 To develop a sales plan to increase future sales

Who should evaluate?

 Immediate supervisor

 Sales manager

 Territory manager
 Regional manager

When to evaluate?

Weekly, monthly, quarterly, half-yearly or annual basis

 Systematic & formal procedures only comes under evaluation.

 Depends on complexity & duration of sales plan.

 Time to take corrective actions also to be considered.

 As frequently as possible depending on job profile.

Information sources for evaluation:

 Source of information influences the criteria that the manager selects to measure sales force

performance.

 Sales manager should be aware of strengths & weaknesses of the sources of information.
 Formal process for the collection of information helps in efficient & accurate evaluation system.

Major sources of information:

 Company records

 Sales volumes, sales order to call ratio, profitability, selling expenses etc.

 Reports from sales persons Activity, expenses, call reports.

 Customers Inadequacy of sales persons reports can be removed.

 Manager’s field visit.

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 Communication skills, interpersonal skills, technical product knowledge, personality traits.

 Manager’s personal insights.

 Other sources.

 Distributors, personal contacts, published & electronic sources etc.

 Information from peers & subordinates (360-degree feedback)

Criteria for the evaluation of sales force performance:

 Performance can be considered & evaluated in terms of behaviour & outcome-based components.
 Criteria for measurement should be derived from job description of the sales personnel.

Qualitative criteria:

 Personal competencies.

 Planning skills, team work, aptitude & attitude, product knowledge.

 Measurability leads to ambiguity.

 Shift from planning skills, knowledge of company policies, time management to communication
skills, ethical behaviour & team orientation.

Major qualitative criterions:

 Sales skills

 Technical skills

 Interpersonal skills

 Salesmanship skills

 Territory management

 Personality traits

 Adaptability

 Locus of control
 Ego drive
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Quantitative criteria:

 Mostly used & easier to standardize & implement.

 Quantitative measures can be segregated into input & output measures Input measures.

 Avg. no. of sales

 calls per day

 Ratio of sales

 cost to sales

 No. of reports submitted by sales persons

 Output measures

 Sales volume

 Sales orders

 No. of new accounts

 No. of advertising displays

 Gross profit obtained from new accounts

Establishing of performance standards:

 Based on the criteria standards are to be formulated

 Standards act as a bench mark & helps in evaluating performance

 Can be prepared by a sales manager singly or in consultation with other sales personnel

 No. of standards to be used is one of major decisions & difficulty involved in the weight to be given

to each factor

 Large companies will have common set of performance standards

 Relationship between input & output measures to be kept in mind while setting standards

Areas of performance standards:

 Quantity standards

 Quality standards

 Time based standards

 Cost based standards
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Quantity standards – Quality standards:

 Sales calls per day

 Number of orders

 No. of sales presentations

 No. of lunches hosted for a customer

 Team work

 Adaptability

 Ethical behaviour
 Ability to gather information etc.

Time based standards:

 Time taken between identifying customer need & preparing sales proposal

 Time gap between a customer enquiry & the sales call

 Time between complaint & solving problem

 Time between getting order & collecting sales amount etc.

Cost based standards:

 Ratio of selling costs to sales

 Gross profit obtained from new customers

 Expenses incurred per order

 No. of gifts & entertainment expenses

Most widely used quantitative performance standards:

 Sales volume based on quota

 Sales volume in comparison to previous year’s sales & net profits

Methods of sales force evaluation:

 Several methods were developed in this regard Cotham & Cravens gave a model using standard
deviation in 1969 Cravens, Woodruff & Stamper developed a model in 1972, using total sales

volume Jackson & Aldag propounded MBO method for sales force in 1974 Cocanaugher &
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Ivancevich developed BARS in 1978 Few of them are behaviour based, few of them are results
based and few of them are personality trait based

Some of the methods for evaluation:

 Rating scales: based on standardized performance measures

 Forced choice method: where the sales manager is asked to go through groups of statements &

select those that best explain the individual

 Ranking: useful when entire sales force has to be evaluated.

 Techniques used are alternative ranking, paired comparison ranking & multiple ranking

New methods of evaluation:

 Critical incident approach Work – standards method Management by objectives (MBO)

 Behaviourally Anchored Rating Scale (BARS)

 Family of Measures (FOM) as a method of sales force performance evaluation (continuous &
compares past performance with present performance)

Monitoring & reviewing of sales force performance:

 Sales reports, invoices, order forms, accounting records & direct interaction

 Review is the final stage in evaluation

 An evaluation interview can be conducted in regard to this periodically where the aspects of
improvements can be discussed along with clarifying doubts.
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