Sales and Distribution Management

(Forecasting market demand; Importance, forecasting process. Planning and recruitment of sales force; Job
analysis specification, Job description, sources of recruitment, selection of sales person, Sales training,
objective, designing training programme.)

 Describe the concept of sales forecasting.

 Explain various types of sales forecasts.

 Discuss the nature of sales forecasting.

 Explain various techniques of sales forecasting.

Introduction
Sales forecasting is the systematic and scientific manner of estimating the sales in terms of
volume and value of a product for a particular period, in a specific market. Sales forecasting
supply a starting point for all business activities of a company. It is a tool of control in the
hands of marketing management and is the rational act of estimating the sales potential for
a company including the assessment of efforts of competitors and an appraisal of the trends
of industry and economic environment that have impact on demand.

As defined by American Marketing Association,

“Sales Forecasting is an estimate of sales in dollars or physical units for a specific future
period under a proposed marketing plan or a programme under an assumed set of economic
and other forces outside the unit for which forecast is made”.

Thus, sales forecasting is that branch of managerial forecasting, which projects the sales
for a future period in a specific market under certain conditions and guiding the resources
allocation and marketing efforts in attainment of the organisational objectives. The concept
of sales forecasting can explain with help of mathematical model. Sales forecasting is the
function of two variables namely market potential and market share. This relationship can be
expressed mathematically as under: -

Sales forecasting = Market Forecast × Market Share

Types of Sales Forecasting

The accurate sales forecasting is pre-requisites for the success and survival of any business.
Sales forecasting bridges the gap between present and future sales. There are two types of
sales forecasting such as; forecasting based on the level and forecasting based on time
duration. These two types of sale forecasting are illustrated as under: -

Forecasting on the Basis of Levels: While forecasting the future sales, a company has to
consider both the economic level and the industry level. Thus, the sales forecasting might be
undertaken at following three levels:

Economic forecasting: It is also known as macro forecasting. It refers to the aggregate

demand for industrial output by the nation as a whole. In this, the sales forecasting is made
at the national level by the analysis of the economic trends. The company appraises the data
and information given by the government agencies with regard to national income, gross
domestic product, gross national product, inflation, consumption pattern, employment
position and so on. In addition to this information, a company also has to analyse the fiscal
and monetary policy of government, behaviour of stock market, pattern of the trade cycle
and even the political philosophy to determine the economic activities of the nation. If all
these factors are favourable then the overall demand for the goods and services may tend to
rise or vice –versa. The accurate economic forecast requires systematic and scientific
collection of relevant data and analysis and interpretation there on.

Market forecasting: The next step in the sales forecasting is to evaluate the marketing
opportunities in terms of estimations of total market demand. Market demand for a product
is the total volume that could be bought by a target group of customers in a particular area,
in a specific time under specified marketing conditions.

 Market demand: Market demand shows the consumer demand under the expected
level of marketing efforts which can be put forward by all sellers within industry.
 Market potential: market potential is the maximum limit which could be approached
by market demand.

Sales forecasting of company: Company demand is the company’s estimated share of market
demand under the given environmental conditions for a specific company.
  Company sale forecast: – It is the estimated sales under a defined marketing
programme.
 Company sales potential: –This is the maximum sale limits approached by the
company demand as the company’s market efforts increases relative to that of
competitors.

Forecasting Based on Time: For the purpose of marketing decision making sales forecasting
can be classified into three categories; short-term, medium-term and long-term forecasting.
These three forms of forecasting are as follow: -

Short-Term Forecasting: Short-Term forecasting generally refers to a period not exceeding a

year. Short-term sales forecasting refers to the determination of the volume of current
demand for a firm’s product for a short period of time say over a month or a year. Short-term
forecast relates to the day-to-day forecast which are connected with deliberate decision
under the given resource constraint; as in the short run, the available resources, scale of
operations, etc., are fixed or unalterable. In short-term forecasting, a firm is primarily
concerned with the optimum utilizations of its existing productions capacity. The significance
of short-term forecasting reflected in the following areas of business: -

 Sales policy: – A short-term sales forecasting is helpful in developing a suitable sales

policy in view of the seasonal variation of demands, so as to avoid the problems of
short supply or oversupply of the firm’s product in the market.
 Price policy: Short-term sales forecasting will help the firm in the determination of a
suitable price policy to clear the stock during of seasons, and to take advantage in the
peak seasons.
 Purchase Policy: In view of the short-term forecasting a firm can evolve a realistic
purchase policy for buying raw materials and controlling its inventory stocks with a
great economy.
 Sales target: – Sales forecasting helps the business firm in setting sales targets and for
establishing control over the business operation. It is of no use in fixing high
sales targets, when sales forecasting reveals a decline in a quarter.
 Short-term financial planning: – A firm’s short-term financial planning can be suitably
determined on the basis of short-term demand forecasting. A firm’s prerequisite for
cash depends on its productions and sales. Without accurate sales forecasting a
rational financial planning is quite difficult.

Medium-Term Forecasting: Medium-term forecasting bridges the gap between short-range

forecasting and long-range forecasting. It covers a period from 1-3 years. The planning
process of company is based on the medium-term forecasting. The medium range forecasting
helps in predicting the general pattern of trade cycles and the effects of technological and
social changes on the business processes and operations. The main purpose of medium-term
forecasting is determination of control by budgets over expenses, ascertain the cash flow,
assessing the manpower requirements, determining the divided policy, deciding the rate of
maintenance expenditures, and determining the schedule of operation.
Long-Term forecasting: Long term forecasting refers to the forecasts made for long period
during which the firm’s scale of operation or the production capacity may be expanded or
reduced. Long-term forecasts are normally for the period exceeding 3- 5 years or even a
decade or more. But this long period may differ from industry to industry and business to
business. The long-term forecasting may serve the following purpose in the organization: -

 Business planning. Long term forecasting is of great significance in the long-term

business planning. Long term sales potential will provide the required guidelines
for planning of a new business unit/product for the expansion of the existing one.
 Human Resource planning. It is essential to determinate long-term sales forecast for
an appropriate human resource planning in the organization. In the absence of proper
sales forecasting, there may arise the situation of over staffing or under staffing, which
could be serious for the business.
 Long-term financial planning. Finance is the key to the success, survival and growth
of modern business. In view of the long-term sales forecasting and the production
planning, it becomes easier for the firm to determine its long-term financial planning
and programmes for raising the fund from the capital market.
 Extrapolation method: This method is based on the assumption of the past pattern of
industrial behaviour and marketing environmental stability. It uses the projection and
trend for arriving at the figure of sales forecasting.

Example: various baby food items are now available in the market. These are also made on
the basis of the sales forecast. From an infant of few days to an adult, all food items are
available in the market. When the baby’s powder milk is concerned, the Nestle India is
manufacturing the product under Brand name Lactogen, Cerelac is also there. All these are
baby products which are manufactured by the company as per the needs and requirements
of the customers.

Nature of Sales Forecasting

It is very necessary for the sales decision maker to be aware about the relevant sales data.
The sales decision maker must be aware about the basis on which the future sales are to be
forecasted and how accurately the future can be predicted on the basis of the past
information. The future prediction of the study depends upon the base of prediction and it
should be stable. Moreover, there should be regularity in that base. The main purpose of
forecasting is to forecast and how frequently there is need of forecasting, how far it is needed
to forecast the products, how accurately the forecast can be made and how accurately the
forecast be made. All these decisions are taken while forecasting the sales. The main functions
of forecasting of sales are as follows:

 The forecast could be made for ascertainment of the changes to be made in the course
of sales. If it is desirable to make a change in sales, then new course of action is
needed.
 Then forecasting is done to make sure that each forecast is made to attain the specific
business objectives. The cost benefit analysis is the most effective method which
should be chosen at this point. Here, the choice is to be made from numerous
alternatives. So, the most beneficial method should be chosen.
The course of action might bring the change in the product line which could have occurred
due to change in demand, or it could be a large initiative i.e., to launch a new marketing
technique for more advertisement of the products, or even a combination of both could be
there.

Factors Affecting Sales Forecasting

The sales forecasting serves as the foundation for the planning and budgeting activities of
the firm. The decisions in the marketing areas both inside and outside of the firm are
influenced by the sales forecasting. Sales forecasting is a process of estimating the
future sales which are influenced by many controllable and uncontrollable variables. The
factors that need to be given the attention by the sales analysts are as under: –

1. Economic environment: The general economic conditions prevailing in the country

have considerable impact on sales forecast of the company. These conditions are
mainly price level change, change in national income, profit rates, interest
rates, rent rates, per capita income, disposable income, discretionary income,
consumption patterns, saving and investment habits, employment position,
compensation paid to working class, programmes of national building and so on. These
factors help in deciding the market potential of the company which ultimately helps in
deciding about the sales forecast.

2. Business circumstances: Business circumstances generally refer to the economic

conditions relating to the same industry or trade and business. These relate to the
factors such as fiscal policy, developmental strategies adopted in state and national
plans, possibilities of marketing of manufactured products, foreign trade policy, public
opinion, credit policies, and lending policies of commercial and industrial banks and
other financial institutions, trade practices and controls or regulations, extent of state
participation in business, policies of transport and warehousing agencies. These factors
help in arriving at company’s share in market and hence finally deciding the sales
forecast.

3. Sociological conditions: These conditions relate to the population size, density, change
in age groups, birth and death rates, size of family, family dependents, level of
education, family income, social awareness. The study of social conditions provides an
additional dimension to the accuracy in assessing the sales potential and sales forecast.

4. Psychological conditions: The Psychological conditions have more philosophical impact

on the market conditions than the social conditions. Every human being is not only a
social being but also a rational being. In psychological conditions basically the changes
in the mood of the markets which is reflected in changing habits, attitudes, perception,
learning, personalities, life styles, cultural and religious bents, tastes, preferences,
fashions and the likes. The changes in consumer tastes, habits, likes and dislikes have
far reached impact on demand and hence sales potential and the sales forecast.
 5. Competitive environment: As business is does not occur in isolation, it has to face
competition by the rival units in the same business line or same business activity. These
competitive conditions make every firm to improve winning his rivals for survival and
success. The competitive conditions within the industry keep on changing constantly.
Competitors may enter or exit the industry. The size of the operations, technical
superiorities, quality of managerial sophistication in the areas of production and
distribution-all decide the success. It is basically the study of market share of
competitors and how to expand the company’s share over those of competitors by
refining the plans, strategies and techniques in manufacturing and marketing.

6. Internal dynamics of organisation: Internal situation refers to the policies and

strategies adopted by the firm to preserve its interests. Internal conditions speak of
happenings in the company’s life career. These relate to the policies in production,
distribution, finance, promotion, quality, personnel and price areas. These internal
conditions are controllable and help us to bring about changes in the marketing mix.
However, changes in market mix and strategies have deep impact on volume and value
of sales of the company and, hence ultimately affect the sales forecast.

On the basis of above analysis, it can be concluded that the factors affecting sales forecasting
can be classified in two groups such as controllable factors and uncontrollable factors. The
controllable factors are those factors that can be controlled with the help of efficient
management. These factors include quality of products, price of product, sales promotions
measure and marketing research etc. Whereas the second class of factors include those
variables which are non-controllable like; government policy, competition, business cycle,
innovations, social changes, general economic and political situations etc.

Techniques of Sales Forecasting

The method of sales forecasting is generally divided into two categories, viz., qualitative
techniques and quantitative techniques. These both techniques are discussed as under:

1. Qualitative Techniques:
These are also known as subjective methods. Some of the important methods are
discussed below: -

a. Opinion of executives: This is the oldest method of sales forecasting which is a based
on a broad guess made by executive member of the business. One or more top
executives forecast future sales on the basis on personal knowledge and on market
information through customer contacts or by reading publishing data. This method has
the weakness of biased and it also lacks scientific validity.
b. Sales force opinion method: Many companies use this sales force opinion method for
estimating the sales on the basis of the estimates given by salesmen, which are then
consolidated by sales manager for a territory or region and for the company. Since they
have direct contact with customer and first -hand field information, they can estimate
future buying intentions of customers. Some salesmen may be even over-optimistic or
too pessimistic about future sales prospects.
c. Buyer’s survey intentions: Customers are requested to communicate their buying
intentions in a coming period. It is suitable only for those businesses which are selling
products to a few key customers. If costumers’ expectations are accurate, sales
forecasts could also be accurate.
d. Statistical sampling: Sampling can be used to get total sales estimates. Data can be
extended or generalized to get total sales forecast based on sample survey done in
representative sub-groups of territories.
e. The Delphi method: Delphi method is a method of avoiding the problem and biases
involved in the forecasts of demand. In this method, the participants
make forecast without disclosing their names and they state their assumptions in it.
Then, the analysts return the forecasts to each of the participants and they are made t
look and analyse the assumptions of other participants. This process continues until no
further convergence is possible.

2. Quantitative techniques:

These techniques are also known as objective methods. Some of the important methods
are discussed below: -

 Correlation analysis: A correlation study is done when there is a close relationship

between sales volumes and a well-known indicator of demand. A high correlation
values indicated the future sales volume.
 Regression analysis: Regression analysis is the most commonly used method for
demand forecasting. The constraints of the demand function are estimated with
regression analysis. In demand regression equations, relevant variable has to be
included with practical considerations and relevant data have to be obtained. The
regression analysis is performed as, firstly the predictor variables are selected which
are considered to be the major determinants of sales. Then, time series is collected
for each predictor variable. The relation of each predictor variable is checked with the
demand to find out whether it is linear or curvilinear. Then regression analysis is run
and goodness of fit is determined. All the steps are repeated until a satisfactory model
is obtained. Satisfactory model is the one which by using the past data provides a most
acceptable degree of accuracy.
 Time series analysis: This is a common mathematical projection of future sales which
involves the projection of past sales trends into the future. In time series analysis there
are four types of projections. Trend which determines the basic long-term pattern of
growth, stability and decline. Seasonal which shows the variations in the trend due to
seasonal factor such as summers, winters, etc. Then is cycle which shows variations
over a period of time generally more than one year. For calculating seasonal
fluctuations in the demand any of these methods could be used, namely, moving
average method, exponential smoothening or statistical trend analysis.

 Moving average method: In this method, the trend is determined by selecting a

period for moving average like, 3 yearly moving averages, 4 yearly moving averages, 5
yearly moving average etc.
  Extrapolation method: This method is based on the assumption of the past pattern of
industrial behaviour and marketing environmental stability. It uses the projection and
trend for arriving at the figure of sales forecasting.

Due to the reason that no method of forecasting could be considered as the perfect method,
the marketers generally use the combination of the above stated methods for forecasting the
demands and the sales.

Example: Private insurance companies have now over one fourth of the total market share of
the business. According to the data provided by the Insurance Regulatory Development
Authority, private insurers have managed to corner as much as 25.74% of the market share
till September 2005. (Source: The Economic Times, 3 November 2005).

Sales Job Analysis

Sales Job Analysis is a crucial process in sales management. It involves a systematic approach
to identify the responsibilities, skills, and knowledge required to perform a sales job
effectively. The process helps in understanding the job’s requirements and designing effective
recruitment, selection, and training programs. In this blog, we will discuss the importance,
process, and methods used in Sales Job Analysis.

Importance of Sales Job Analysis

Sales Job Analysis is essential for effective sales management. It helps in:
 Identifying the skills and knowledge required to perform the job effectively
 Designing effective training and development programs
 Identifying key performance indicators (KPIs) for evaluating sales performance
 Developing job descriptions and job specifications for recruitment and selection
 Assessing and improving the effectiveness of the salesforce
 Providing a clear understanding of the job’s requirements to the sales team, leading
to better job performance

Process of Sales Job Analysis

The process of Sales Job Analysis involves the following steps:

Step 1: Data Collection: The first step in Sales Job Analysis is to collect data on the sales
job, such as job duties, responsibilities, and required skills. This can be done through
interviews with sales managers and sales representatives, observation, and review of
company documents.

Step 2: Job Description: The next step is to create a job description that outlines the job’s
duties, responsibilities, and required skills. The job description should be clear and concise
and should accurately reflect the sales job’s requirements.
Step 3: Job Specification: After creating the job description, the next step is to create a job
specification that outlines the qualifications, skills, and knowledge required for the job. The
job specification should be based on the job description and should provide a clear
understanding of the skills and knowledge required to perform the job effectively.

Step 4: Job Evaluation: The final step is to evaluate the job’s requirements and determine
its worth to the company. This involves comparing the job with similar jobs in the industry
and determining the appropriate compensation and benefits for the position.

Methods Used in Sales Job Analysis

There are various methods used in Sales Job Analysis, including:

Observation
Observation involves observing sales representatives as they perform their job duties. This
method provides an accurate assessment of the sales job’s requirements and can help
identify areas where additional training may be needed.

Interviews
Interviews involve speaking with sales managers and sales representatives to gain insight
into the job’s requirements. This method can provide valuable information on the skills and
knowledge required to perform the job effectively.

Questionnaires
Questionnaires involve asking sales managers and sales representatives to complete a
series of questions about the job’s requirements. This method can provide a broad
overview of the job’s requirements and can help identify areas where additional training
may be needed.

Performance Appraisals
Performance appraisals involve evaluating sales representatives’ job performance against
pre-defined KPIs. This method can help identify areas where additional training may be
needed and can provide valuable insight into the sales job’s requirements.

Conclusion:
Sales Job Analysis is a crucial process in sales management. It helps in understanding the
job’s requirements and designing effective recruitment, selection, and training programs.
The process involves collecting data on the job’s requirements, creating a job description
and job specification, evaluating the job’s worth, and using various methods to analyze the
sales job’s requirements. A thorough Sales Job Analysis can lead to a better understanding
of the sales job’s requirements, leading to improved job performance and a more effective
salesforce.
RECRUITMENT & SELECTION OF SALES PERSONNEL

A sales job is very stressful by nature and the attrition rate in the sales profession is the
highest. The vertical growth of salespeople in most organizations is slow, which results in
their migrating to other organizations, including those of competitors. A mismatch
between the ability and aptitude of a salesperson and the nature of the sales job usually
makes a salesperson quit and look for better career prospects.
Salespeople are the front end of an organisation and represent the company to the
customers. Effective sales recruitment and induction into the organisation improves the
company’s image, performance and work environment. Quality manpower helps the
organisation to build strategies that can contribute to the long-term success of the
organisation.
The hiring and the recruiting of the salespeople is costly and if companies have to
frequently resort to recruitments, it will only add to the manpower retention costs.
Companies, therefore, need to be careful in selecting their sales staff and ensure that they
within the rank and file of the organisation and grow in order to take up additional
responsibilities. Only people with the right aptitude and mindset for building a career in
sales should be selected. The recruitment and selection of efficient people is always a
competitive advantage. Sales managers perform the sales force management function.
They execute the entire human resource management function in an organisation. They
recruit, select, train, motivate, lead, control and compensate the sales staff for achieving
the desired goals of the organisation. While in many companies, the recruitment and
selection process are just a vacancy filling exercise, for many successful organizations,
however, it is planned process whereby the scientific principles of management are utilized
for finding out and filling up the positions in the right territory with the right people.

The Hiring Process

The process of hiring involves four stages. The first stage involves the human resource
planning process where key decisions are made on examining a salesperson’s turnover in
an organisation, establishing the hiring objectives, conducting the strategic position
analysis, and deciding on the number of salespeople for a particular period of time. The
second stage is called the recruitment stage where decisions are made on identifying the
best source of candidates and generating a pool of candidates for selection. In the third
stage various techniques are used to identify the right candidate for the organisation. A
typical selection process is centered round decisions on the method of screening,
conducting interviews, testing, reference checks, and medical examinations. The fourth
stage involves the process of socialization where the new employees are oriented towards
the organisation as also to the units or territories in which they would be required to work.

Stage 1 – Planning
This process begins with the analysis of the annual turnover of salespeople of a company
to arrive at a sales manpower forecast. Turnover is defined as the average percentage of
the sales force that leaves a sales organisation in a given period of time. An analysis of the
sales force turnover includes the field sales force, telemarketing staff, support staff and the
account managers. The manpower forecast determines the number of salespeople
required by the organisation. A sales manager should look at the long and short-term hiring
objectives of the organisation when deciding the number of new sales staffs. A sales
organisation has two types of hiring objectives. The first objective is to plan the
replacements of people who have left or would leave in the near future, and the second is
the recruitment for expansions and for new market coverage. Hiring when there is an
opening in a territory, is known as just-in-time hiring whereas, the hiring of people before
a territory opens, on the assumption that a territory will become available in near future,
is known as stock piling. Once the hiring objectives are determined, the sales manager
conducts a strategic position analysis to determine the number and type of salespeople
required by the organisation. The strategic position analysis, which is a systematic
procedure that describes the way a sales job is to be performed and the skills and abilities
needed to perform the job, helps to identify the qualifications and experience of the
applicants required for the sales job and which are included in the job description.

Stage 2 – Recruitment
Recruitment is defined as the process of generating a pool of qualified candidates for a
particular job. The purpose of recruitment is to locate the sources of manpower to meet
the job requirements and the job specifications. The recruitment process is an act of
inducing qualifies and appropriate people to get interested in and apply for a salesperson’s
position within a sales organisation. The process starts with prospecting for employees and
stimulating them to apply for jobs in the organisation. It is a process by which suitable
sources of manpower are identified to fit the organizational requirements. Its aim is to
attract qualified job candidates.
The job description helps in identifying the kind of applicant required for the job. Because
of uncertainties as
 to when new sales personnel will be needed, many companies have a pre-recruiting
reservoir, which is a file of individuals who might be recruited when the need arises. The
names of individuals added to the reservoir come from diverse sources. Some come from
volunteer walk-ins – people who come by the sales department inquiring about job
opportunities. Others come from chance remarks made by people made by people with
whom the sales executive comes into contact – at professional meetings, in conversation
with customers, seat partners on planes, and the like. Still others come from centres of
influence that have been developed by the sales executive – the centre of influence is a
person who occupies a position in which he meets many individuals who have high
potentials as sales personnel and who are seeking job opportunities. Examples of centres
of influence include the university professor of marketing and sales, the trade association
executive, the placement officer of a college, and the like. Names in the pre-recruiting
reservoir should be reviewed periodically so as to eliminate very old entries.
Sources of Recruitment
The sources of recruitment are divided into two categories: internal sources and external
sources.
Internal Sources: Internal sources of applicants are found within an organisation. The
process of recruiting internally achieves two goals – vacancies are filled up quickly and
group morale is influenced positively. This process results in lower investments in training
and the cost of recruitment is also low.
However, the internal recruitment process discourages new recruits to the organisation
which adversely affects the jobs that require thinking and creativity. The primary sources
of internal recruits are – lateral or upward moves, internal transfers, interns and
cooperative students, and employee referral programmes.
 Lateral or upward move: Salespeople can move to higher positions in an organisation after
completion of desired years of service or through lateral movements from one territory to
another. Most sales managers are hired from the internal sources through the elevation
and transfer of the existing sales force. The advantage of such movements is that the
incumbents possess the knowledge of the market, the product, and the level of
competition based on previous experience within the organisation.
 Internal transfers: Two additional internal sources are other departments and the non
selling section of the sales department. Employees desiring such transfers are already
familiar with company policies and the personnel department has considerable detailed
information about them. While little is known about their aptitude for selling, they often
possess excellent product knowledge. Aptitude for selling, of course, can be tested
formally or by trial assignments to the field.
 Interns and cooperative students: Interns include all those employees who are either paid
part-time or are non-paid and who take up jobs in order to gain work experience while
studying. Cooperative students pursue programmes that allow them to take break from
studies and work full time for organisations. In this process organisations gain access to
free or inexpensive manpower and at the same time get to monitor the performance of
the students and include the more efficient ones in the recruitment pool.
 Employee referral programmes: Many organisations value the referrals given by the
existing employees like
• Company sales personnel: Salespeople have wide circles of acquaintances. Many of their
contacts have potential as sales personnel – indeed, many now sell for other firms.
 • Salespeople are a particular valuable source of recommendations when jobs must be
filled in remote territories; sales personnel may know more about unique territorial
requirements and local sources of personnel than the head office executives.
• Company executives: Recommendations of the sales manager, the president, and other
company executives are an important source. Their personal contacts may yield top-
calibre people because of their understanding of the needed qualifications.
External Sources: The recruitment sources located outside the organisation from where
applicants are recruited are called external sources. Hiring from outside the organisation
enables the flow of fresh ideas and thoughts to the organisational environment. External
sources of recruitment include – responses to direct and open advertisements, walk-in-
interviews, direct unsolicited applications, other industry sources, educational institutions
and campus recruitments, employment agencies, networking referrals, and web
consultants.
 Advertising: Newspapers, magazines and trade journals are extensively used media for
advertisement for ensuring nation-wide competition for several openings. The
advertisement should give sufficient information about the company that is advertising the
posts. The role and functions of sales persons should be given in a broad manner. The
specific educational qualifications should be given along with personality characteristics
expected. The compensation package may be included. The advertisement should be
drafted in such a manner that it is motivating enough for suitable prospect to apply. The
main advantage of
advertising sales persons’ position is its capacity to generate a large number of applications
in a short time; and at a low cost. The major drawback is the screening involved to weed out
unsuitable applications.
 Walk-in-interviews: More and more organisations prefer the walk-in method of
recruitment over the formal recruitment advertising. Walk-ins include unsolicited
applications given by applicants, where the applicants usually desire an interview
opportunity to the positions advertised or openings arising in the organisation.
 Direct unsolicited applications: All companies receive unsolicited walk-in and write-in
applications for sales positions. The most logical policy is to treat volunteer applications
the same as solicited applications – applicants not meeting minimum requirements as set
forth in job specification should be eliminated; those meeting these requirements should
be processed together with other applicants.
 Educational institutions and campus recruitments: Corporate houses visit business schools
and engineering colleges and select candidates for their organisations. The sales
organisation, during such visits, gets a chance to test the various skills of the candidates
such as communication skills, leadership qualities, as well as levels of dedication and ability
to work in teams. This method offers the advantage of selecting people from a captive
source where the quality of manpower is assured and the cost of recruitment is low. This
also shortens the selection cycle and time.
 Other industry sources:
• Salespeople making calls on the company: Salespeople of other companies who visit an
organisation and meet purchase managers stand a good chance of being evaluated on
their on-the-job performances. The purchase managers, in turn, may serve as centres of
influence.
• The employees of customers: Industrial customers, sometimes, recommend people in
their organisations who have reached the maximum potential of their existing jobs. Such
transfers may have a favourable effect on the morale in the customer’s organisation.
• Employees of competing and non-competing organisations: These people have work
experience and established contacts within the industry, and bring good potential
business to the hiring organisation by bringing with him his customer base. Such recruits
would also require less training. Many salespeople join new organisations for better
career opportunity, higher salaries and higher responsibilities.
 Employment agencies: Employment agencies include the government established
employment exchanges as well as the private employment agencies and placement
consultants. These agencies develop databases of and provide interview opportunities to
suitable candidates. Organisations collect the names as per job descriptions and job
specifications from these agencies. The advantage of using employment agencies is that
they have a captive database of the employees and sales organisations can substantially
reduce the time of inviting applications and scrutinizing them for identifying qualified
applicants. Employment agencies, these days, have become human resource consultants.
They invite applications, carry out preliminary screening and also conduct interviews on
behalf of the sales organisations.
 Networking: Many aspiring candidates build up a network among family members, friends
and acquaintances so that they can get a call for recruitment. If the resume goes through
the network, chances of getting a call for selection improve. Organisations also take
advantage of these networks for collecting information about potential candidates.
 Web sources: After the advent of the internet, companies today are using web-based
service providers who provide access to their database on payment of a fee. Potential
candidates can submit and post their CV-s on these sites so that companies can call them
for interviews. Web-based resources have increased accessibility to applicants, saved the
time of hiring organisations, and enhanced the recruitment procedure.
Stage 3 – Selection
Selection systems for sales personnel range from simple one-step systems, consisting of
nothing more than an informal personal interview, to complex multiple-step systems
incorporating diverse mechanisms designed to gather information about applicants for
sales jobs. A selection system is a set of successive screens, at any of which an applicant
may be dropped from further consideration. Companies using multiple-step selection
systems differ as to the number of steps and their order of inclusion. Each company designs
its selection system to fit its own information needs and to meet its own budgetary
limitations. A selection system fulfils its mission if it improves management’s ability to
estimate success and failure probabilities. Management makes more accurate estimates of
the chances that a particular applicant will succeed in a company sales position. As
applicants survive through successive steps in the system, the additional increments of
information enable increasingly accurate estimates of success and failure probabilities.
Employment offers are extended to applicants surviving all the steps. It has to be
remembered however; no selection system is infallible; all eliminate some who would have
succeeded and recommend hiring some who fail subsequently.
TIME
Pre-Interview Screening and Preliminary Interview:
Pre-interview screening is for the purpose of eliminating obviously unqualified applicants,
thus saving the time of interviewers and applicants. Almost all companies ask applicants to
complete interview application forms, which obtain information on the applicant’s basic
qualifications, education, experience, health and the like. The interview application form
enables management to detect the presence or absence of predetermined minimum
qualifications. Applicants not possessing these minimum qualifications do not receive
appointments for interviews. The applicants, on the other hand, are provided information
about the company and general details about selling positions in it through a well prepared
recruitment brochure. Interested applicants may stay back for the preliminary interview.
The preliminary interview can be handled by a clerk or secretary. This is generally the
lowest cost selection step. The preliminary interview is short. Questions about the
company and the job are answered while the company employee determines whether the
applicant meets minimum qualifications. If this hurdle is passed and the applicant
expresses interest, he is asked to fill out a formal application form, and an appointment is
made for one or more formal interviews.
Formal Application Form:
The formal application form serves as a central record for all pertinent information
collected during the selection process. The completed formal application amounts to a
standardized written interview. Sometimes, sections are reserved for later recording of the
results of such selection steps as reference and credit checks, testing and physical
examination. Ideally, each company should prepare its own formal application form, since
no two companies have the same information requirements. But, smaller companies may
go for a standard form. They ignore items inappropriate for them and obtain through
interviewing needed additional information. Certain items of information relevant to
selection decision which are included in the formal application form are – present job,
dependants, education, employment status, time with last employer, membership in
organizations, previous positions, records of earnings, reasons for leaving last job, net
worth, living expenses, and length of job-hunting period. Final decisions as to the items to
include on the form should be based upon analysis of the existing sales force. The names,
arranged along a continuum - best performer at one end and the worst at the other, is then
divided into more parts, for example, good, average and poor.
The Interview:
The interview is the most widely used selection step and, in some companies, it comprises
the entire selection system. No other method is quite so satisfactory in judging an individual
as to ability in oral communication, personal appearance and manners, attitude towards
selling and life in general, reactions to obstacles presented face to face, and personal
impact upon others. A good interviewer reviews the completed application form before
the interview and refrains from asking questions already answered. Perusal of the
completed application form indicates areas that require further questioning. The usual
practice is for several persons to interview and evaluate each applicant. In large
organizations, applicants surviving initial formal interviews handled by district or branch
sales managers, or their assistants, are invited to the head office for subsequent interviews.
Interviewing Techniques:
Patterned interview: The interviewer uses prepared outline of questions designed to elicit
basic information. Nondirective interview: The applicant is encouraged to speak freely
about his experience, training, and future plans. The interviewer asks few direct questions
to keep the interviewee talking. Expert interpretation reveals much about the applicant
and yields maximum insight into an individual’s attitudes and interests.
Interaction (stress) interview: This form of interview simulates the stresses the applicant
would meet in actual selling and provides a way to observe the applicant’s reaction to
them. Because of their subtlety, the delicacy involved in their application, and the
importance of expert interpretation, the newer kinds of interaction interviews should be
planned, administered, and interpreted by a trained psychologist.
Rating scale: One shortcoming of the personal interview – its tendency to lack objectivity
– is reduced through rating scales. The scales are so constructed that interviewer’s ratings
are channelled into a limited choice of responses. E.g. in evaluating an applicant’s general
appearance, an interviewer chooses one of five descriptive phrases: very neat, nicely
dressed, presentable, untidy, and sloppy.
References:
References provide information on the applicant not available from other sources. Personal
contact is the best way to obtain information from references; however, a telephone call
may substitute for personal contact. Applicants tend to name as references those on whom
they can rely to speak in their favour. In addition, there is a tendency for references to be
biased in favour of an applicant. These tendencies are partially offset by contacting persons
not listed as references but who know the applicant. These people often are excellent
sources for candid appraisals and fall into four classifications: Present or formal employers,
Former customers, Reputable citizens, and Mutual acquaintances.

Credit Checks:
Many companies run credit checks on applicants for sales positions. Credit files are
compiled by local credit bureaus. A heavy burden of personal debt may indicate financial
worries interfering with productivity, or a motivating factor serving to stimulate
productivity – to determine which requires further investigation.
Psychological Tests:
When used, psychological tests are one of the last steps in the selection system, because
of their relatively high cost. The difficulty in validating psychological tests and securing the
empirical data to prove that results are predictive of successful job performance, have
made more and more companies to either abandon or rely less upon psychological tests in
recent years. Results of certain tests may underestimate the true abilities of disadvantaged
applicants and cause tests that are valid for the advantaged. Nevertheless, useful and
reliable tests are available and it is advisable for test users to employ a psychological testing
specialist for purposes of selecting, administering, and interpreting tests.
Three types of psychological tests are, generally, used in selection systems for sales
personnel. Tests of ability measure how well a person can perform particular tasks with
maximum motivation. Tests of habitual characteristics gauge how prospective employees
act in their daily work normally. Achievement tests measure how much individuals have
learned from experience, training, or education.
Physical Examination:
Since good health is important to a sales person’s success, most companies require physical
examinations. Because of the relatively high cost, physical examination generally is one of
the last steps. However, if physical condition is critical to job performance, it may be
positioned earlier in the selection system.
Stage 4 – Socialization
It is defined as the process of orienting a new salesperson to the sales organisation or the
territory or division in which he or she will be working. Socialization is the process by which
new employees are introduced to their work environment, territory, and to the job.
Without a proper socialization programme, the new employee may misunderstand the
sales goals, the organisation mission, and chain of command in the organisation.
The process of socialisation is divided into three broad stages – anticipatory, encounter,
and settling in. In the anticipatory stage, the new employees, who have certain pre-
determined expectations about the organisation and the job, are subjected to an exercise
called realistic job preview (RJP). In this method, a sales manager provides a realistic picture
of the job demand, the organisation’s expectations of the salesperson, and the work
environment in the organisation. RJP can be presented orally, in a written format, or in a
videotape, either to the applicants or to the final list of candidates. In the encounter stage,
the new employee has started working on the job and may, while facing reality, need
additional information about company policies, procedures, rules of the job, reporting
relationships, and other details. Such an attempt to provide new information helps in
forming a better image of the company. In the settling in stage, the new employees start
feeling that they are part of the organisation. If this stage is successful, the worker will feel
comfortable with the job and his role in the sales territory. A program called ‘employee
mentoring’ performed under the supervision of an experienced employee helps the new
employee to settle down with the job and in the organisation with success.