Unit-1

Introduction to Sales Management

 Introduction to Sales Management

1. Introduction
Initially the Sales Management referred exclusively to the
direction of sales force personnel but modern sales
managers have considerably broader responsibilities.
Sales managers are in charge of personal selling activity and
their primary assignment is management of the personal
sales force.

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 1. 1 Definition of Sales Management

1 .Definition of Sales Management

What is the term Sales Management?
David Jobber &Geoff Lancaster has defined as “ The planning,
direction and control of personal selling, including recruiting,
selecting, equipping, assigning, supervising, paying and
motivation as these tasks, apply to personal sales force.”

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 • Sales management meant for all marketing activities,
including advertising, sales promotion, marketing
research, physical distribution, pricing, and product
merchandising.
• Sales managers are also responsible for organizing the
sales effort, both within and out side their companies.
Within the company means product quality, price,
effective communication etc.
Out side the company means determine demand of the
product, procurement of raw materials, competition
between the industries and among the industries etc.
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• Another responsibility is also there, i.e. marketing
decisions, such as those on budgeting, quotas, and
territories.
• The Sales executives/managers, do not carry the
full burden in the effort to reach these objectives,
but they make major contributions.
• Top management has the final responsibility to all
the factors.
• Sales mangers/executives provide estimates on
market and sales potentials, the capabilities of the
sales force and the middleman and the like.
After finalizing all these things and they will
implement the selling plans.
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 1.2 Functions of Sales Management
There are THREE functions
1. Managerial Functions:- This includes
•Planning:- This involves, forecasting demand, sales
territory planning, Personal selling and promotional
efforts.

•Organizing: - This involves, structure, resource

allocation, responsibility assignment and delegation
of authority etc.

•Direction: - This involves leadership, motivation,

communication etc.
•Control: - This involves quota fixing, performance
evaluation,
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2. Staffing Functions:-

• Recruitment and selection

• Deployment and evaluation of performance

• Training and development

• Career development

• Compensation and incentives

• Motivation and empowerment

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 3. Advisory and Liaison Functions:-
3.1 Advisory Functions:- Specialized advises given to managements
like, Product attributes about quality aspects, Pricing policies,
Promotional steps, Distribution polices and channel selection,
Advertisement polices like media selection, Transportation and
warehousing aspects etc.
3.2 Liaison Functions:- This involves, integration of various elements,
Public relations and good will, contact with prospective buyers etc.
• Liaison with departments, Production Department, Finance
department, Marketing Department, Research and Development,
Distribution net work, After Sales Service department ( guarantee
or warranty).
• Co-ordination of sales department and other departments

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 1.3 Objectives of Sales Management
General objectives: - There are THREE general objectives
A. Generate sufficient sales volume: - 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 the number of sales persons.
• The sales persons are motivated by various methods like
commissions, incentive quotas etc.
• The top management fixes the economic level of
production i.e. above Break-Even Point to ensure profitable
operation.
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B. Contribute towards current profit: - Sales Management
and financial results are closely linked to each other.
• Sales revenue has been directly linked to performance
efficiency of the sales force.
• Cost of sales includes salary, commission and
travelling expenses of sales person.
• In order to minimize these, and optimum level of sales
force is determined through scientific methods.
• Sales revenue is related to sales which depend upon
its frequency and effectiveness of all.

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 C. Ensure continuous growth of the
organization:-
A number of growth strategies are available like
• Market penetration, product development and market extension
• Diversification: Concentric or conglomerate
• Integration : Vertical or horizontal
• External growth: Joint venture, mergers, acquisition, holdings etc.
• Competitive products and customer responses.
• Own products and customer response.
• New product information.
• Customer loyalty and good will.

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 How Does One Become a Sales Manager?
• The path to a career in sales management
begins with a position in sales 99 percent
the time, as shown in Figure 1.1.

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 Sales Management Skills
 Conceptual and decision making skills refer to the
cognitive ability to see the organization as a whole
and the relationships among its parts. Conceptual
skills involve the manager's thinking and planning
abilities.
 People and communication skills involve the
manager's ability to work with and through other
people and to work effectively as a group member.
 These skills are demonstrated in the way a
manager relates to other people, including the
abilities to motivate, facilitate, coordinate, lead,
communicate, and resolve conflicts.

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 Cont’d

 Technical skills are the ability to perform a

specialized task that involves a certain
method or process.
 They include mastery of the methods,
techniques, and equipment involved in
specific functions such as selling, training,
and recruiting.
 Technical skills also involve specialized
knowledge, analytical ability, the competent
use of tools such as computers, and
techniques to solve problems in that
specific discipline

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 Discussion

• What are the importance of

sales management?

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• Importance:-
Sales management and personnel employed were
just like ear and eyes of the firm. To collect right
feed back from the customer’s are very important
for success of the firm, this information only
possible for sales mangers, because they directly
involved with the customers.
• Merchandising needs a lot of co-ordination and
control.
• 11/1/2022
Times have changed. Today’s the sales men are not
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• Each and every organization can maintain both
centralization and decentralization according to their
convenient. But the sales managers should have enough
authority to make a propriate decisions.
• Structure and classification
The structure or organization of the company affects the
authority and control of the sales managers.
1. Line organization: - Here managers have line authority
and enjoy considerable freedom of the action.
• Those who are directly involved in the organization is
called line organization.
• Line managers have the power and authority for taking
decisions and also performing their duties.
• Like marketing mangers or sales mangers, these are
directly involved in the sales and give direction to the
concerned sub- ordinates like sales men for sales aspect.

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2. Staff organization:- in this case people have staff authority.
 Those who are not directly involved in the organization are
called staff. These persons give necessary directions to
the line managers.
• These persons give some advice to the concerned
persons. For example, the marketing research officers give
some directions to the marketing managers about the
product or new product.
3. Functional sales organizations: - Here managers have line
authority.
 In this function different sales functions are grouped and
placed under the direct control of managers who are
specialists in their own field.
 Salesmen are directly controlled by each of these
specialists like counter to counter sales or direct sales or
door-to-door sales(orders takers, order creators. order
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getters etc.)
Types of Selling
 TYPES OF SALES:
1. ORDER-TAKERS.
A. Inside order-takers
•Here the customer has full freedom to choose
products without the presence of a Sales person.
•The sales assistant’s task is purely transactional –
receiving payment and passing over the goods.
Another form of inside order-taker is the
telemarketing sales team who support field sales by
taking customers’ orders over the telephone.
This is applicable generally for essential
commodities or food stuffs etc.

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B. Delivery salespeople
• The salesperson’s task is primarily concerned with
delivering the product.
• Products like soft drinks, milk, magazines, and
newspapers may be delivered door to door.
• For example in UK and India, milk, newspapers and
magazines are commonly delivered to the door.
C. Outside order-takers
• These salespeople visit customers, but their primary
function is to respond to customer requests rather than
actively seek to persuade.
• Outside order-takers do not deliver and to a certain
extent they are being replaced by more cost efficient
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2. ORDER-CREATORS
Missionary salespeople:-In some industries, notably the pharmaceutical
industry, the sales task is not to close the sales but to persuade the
customer to specify the seller’s products.
For example, medical representatives calling on doctors cannot make a
direct sales since the doctor does not buy drugs personally, but prescribes
(specifies) them for patients.
3. ORDER-GETTERS
The final category, called order-getters, consists of those in selling jobs
where a major objective is to persuade customers to make a direct purchase.
These selling persons are on behalf of whole sale distributors or producers
are directly meet the retailers and get orders and then delivered the goods
to retailers on the whole sale prices or some little bit concerned the price
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These are the front-line salespeople and in many ways this type of selling
 Order-Getters
• Order-getting demands several skills on
the part of the salesperson including, for
example:-
 the ability to identify new prospects,
 persuading and negotiating, and
 ultimately building new and profitable
business in the face of often fierce
competition.
 Order-Getters

A. New business sales people: the task is to win

new business by identifying and selling to prospects
(people or organizations who haven’t previously bought
from the sales persons’ company).

B. Organizational sales people: these sales

people have the job of maintaining close long term
relationships with organizational customers.

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 Order-Getters

C. Technical Support Salespeople: The task of this

type of salesperson is to provide sales support to front-line
salespeople so they are normally considered to belong in the
order-getters group.

D. Merchandisers: These people provide sales

support in retail and wholesale selling situations.
– Give advice on display, implement sales promotions,
check stock levels and maintain
contact with store managers.
 Order-Getters
 Business to business (B2B) and business
to consumer (B2C) marketing and selling:
businesses to other businesses or
organizations (B2B) marketing.
Business to consumers (B2C)
marketing
• Self-reading about B2C and
B2B market!!!

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 Business to Consumer (B2C) and Business
to Business (B2B)
Marketers and salespersons often distinguish between two major
categories of types of marketing and selling based upon the
category of customers being targeted.
• Business to Consumer (B2C) markets
Consumer markets are markets at which the customer is purchasing
products and services for their own or for their family’s use.
The principal motives for purchase, therefore, are personal in nature.
However, within the consumer market there are a number of
different types or sub-markets depending on the type of product and
consumer purchase we are considering.
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These different types of consumer markets are
considered below.
1. Fast moving consumer goods (FMCG) Market:
FMCG markets are markets where customers are
purchasing products, which generally involve
relatively low financial outlays, are bought frequently
and are generally non-durable.
They include, therefore, Development and role of selling
in marketing products like toothpaste, confectionery,
cigarettes, grocery products, cosmetics, some of the
more frequently purchased electrical items such as, say,
batteries, light bulbs, and so on.
Buyers will spend relatively little time for searching the
information and evaluating between different product
offerings.
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2. Semi-durable consumer goods markt: Semi-durable
consumer goods markets include products such as
clothing and shoes, soft furnishings, and so on. As the
term suggests these are products which are bought less
frequently than FMCG products, last longer, and the
customer may spend more time choosing between
different competitive offerings.(All comforts good are this
category)

3. Durable consumer goods market: durable consumer

goods include products such as refrigerators, cars,
computers, and so on. These are purchases which are
made less frequently; often involve considerable outlays,
and commit the customer to the product purchased for
some time. The customer will often take considerable
care in choosing between different product offerings and
will be looking for lots of information and help in
purchasing.(All luxury goods are this category)
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• Business to Business (B2B) markets
• Business to Business (B2B) markets is characterized by
often large and powerful buyers, purchasing predominantly
for the furtherance of organizational objectives and in an
organizational context using skilled/professional buyers.
• Demand in B2B markets is normally derived demand;
customers are often geographically concentrated and
negotiation is the order of the day in dealings between
marketer and customer. Marketing and selling in these
markets is very different from that encountered in B2C
markets. Buyers are much more likely to negotiate on price,
and delivery and service are particularly important.
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•The salesperson is likely to be dealing with skilled
negotiators and the process of buying, and hence selling
can extend over months or even years for certain types of
capital equipment. As in consumer markets, there are
several distinct types of sub-markets within B2B markets,
the main ones being: Markets for supplies and
consumables e.g. Raw materials, semi-manufactured
goods;
•Markets for capital equipment e.g. plant, machinery;
•Markets for businesses services e.g. consultancy,
technical advice.
•One way of franchise also. Dealership, Distributor ship
etc.
•The main draw back in this transaction is that, once
gave to any body either dealership or franchise that
cannot
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be given to others on particular jurisdiction 32
 Discussion

• Is Sales Art or Science?

• There are a debatable views with respect to
the nature of selling.
• Selling is a science:- can be taught,
conceptual and theoretical
• Selling is an art:- can only be learnt through
experience.
• Selling is an art evolving into science

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 Theories of selling
Different theories of selling
1. Sellers oriented theory
2. Buyers oriented theory and
3. Both Sellers and buyers oriented theory
The “Behavioral Equation” Theory of Selling(read about it)

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 Theories
There are different types of theories of selling and
let us take the three for our case
1. AIDAS Theory.
The acronym stands for attention, interest, desire, action and
satisfaction
•According to this theory, a prospects or “potential customer”
undergo FIVE sequential mental states before he becomes an
actual customer, by buying the product.
•This theory is inducing five mental states in their proper
sequence, which leads to purchase by the customer.
 Attention: - Gaining attention is a skill and just like any skill, gaining
attention can be improved upon with practice. A common phrase
applicable over here is “First impression is last impression”. Casual
conversation is one of the best openers after which the sales person
can gain customer attention by leading him onto the sale.
Sample method:
 Introduction by known friends: In this activity the salesperson will be
introduced through known persons.
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This is applicable only for existing products or
services not for proposed products.
This is the introduction stage, here the prospect will
concentrate on attention of the product.
•Interest: - Interest is created by presenting sample
or focusing product attribute which is of special
interest to prospect. In this stage prospect
participated and asking some important questions
for the product and clarify their doubts and then go
to desire stage.
•Desire: - after completion of interest, desire must be
kept up by continuing conversation and focusing on
the product even against intentional and
discussions going on.

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• Action: - This is buying. When customer reaches the
right level of mental state. In this process the
customer almost all decided to purchase the
product and some times buy also.
• Satisfaction: - After the bought the product or
services what about satisfaction. This information
given by the customer, this is last stage of the
AIDAS theory, according this step, the producer or
seller will assume their position etc. In case of this
stage, the prospects are not satisfied then the
producer will loose the product and it leads to loss,
sometimes the producer change the product
according to consumers perception or opinion. This
is the crucial stage for the producer.
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 2. Right set of circumstances Theory
It is also called the “situation-response” theory. It has its
psychological origin in experiments with animals.
In this theory, the salesman induces the right type of stimuli in the
prospect which leads to the right type of response. The set of
circumstances can be both internal and external to the prospect. This
is essentially a seller-oriented theory and it stresses that the
salesman must control the situation in such a way as to produce a
sale ultimately.
For example, the salesperson says to the prospect. Let’s go out for a
cup of Bunna”.
“The salesperson and the remark are external factors.
But at least four factors are internal to the prospect affect the
response., i.e. 1. To have a cup of Bunna 2.To have it now 3. To go
out and 4. To go out with the sales person.
One major limitation is there, the psychological frame of mind of
the buyer is different, and hence response may not be positive. In this
theory always concentration on the psychology of the prospect,
according to prospect psychology the sales person will be decided
to sell the product. This is nothing but prospect psychology theory.

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3. Buying formula Theory
• This theory is focuses on buyers. Buyers needs and
problems are being solved. Here the sales man act
as catalyst in satisfying the customer.
• Here everything decision taken by the buyer, where
as the seller only show the product and tell the price
after that the buyer will decide to buy or not.
• This is applicable only branded goods or services.
Here the salesman should not take any risk,
because only show the product and everything is
avails on the product like all contents are there in
the product or services. This method is maximum
applicable for all pharmaceutical products, where39
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information available on the product like date of
manufacture , date of expiry, what contents are in
the product and batch no. and price of the product
including local tax or excluding tax etc. Here the
main drawback is there no question of bargaining. If
any prospect is willing to buy simply go and
purchase. This theory is applicable for majority of
the factory out lets. In addition to that here some
specified goods are available.
NEED (Problem) ---------- SOLUTION-------------PURCHASE

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 Discussion
• What is the image of selling?
Image of Selling
 There are many misconceptions about selling. Some
of them are:
1. Selling is not a worthwhile career
2. Good products will sell themselves and thus the
selling process adds unnecessarily to costs
3. There is something immoral about selling, and one
should be suspicious about those who earn their living
from this activity

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 Mistakes in Sales
1. Not listening and talking too much
Instead, listen and ask more open-ended questions.
In fact, your listening-talking ratio should be 60/40.
2. Offering too much for nothing
Being helpful is, of course, good. But there should
be limits. Prospects love to milk sales reps for
information and advice, even when they don’t
intend to actually buy anything

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 Mistakes in sales
3. Not focusing on the solution
4. Focusing on price not value
People buy value, not price.
If you believe that the price will sell the product, you’re
trapped in an illusion. And it’s time to snap out of it
5. Making promises you can’t keep
• Overpromising and underdelivering equals to mere lying
in business.
• No matter how much you want to sell, lying is a bad way
to start any relationship. Exaggerating your product or
service capabilities, or even worse – hiding limitations or
special conditions, will not take you far
6. Not having an intention to close a sale
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7. Not being ready to overcome objections
• Nobody likes to get “No” for an answer.
8. Arguing with a potential customer
• When a prospect’s objections become unreasonable or even
contradict logic, it’s easy to lose temper and start defending
your truth. But don’t. Simply don’t.
• Arguing with potential customers will result in you losing the
sale. Almost every single time.
• If you disagree with what they have to say, keep silent or say
that you hear them, something like “I can see where you’re
coming from.” Again, ask questions to clarify their position,
paraphrase their statements, but never ever argue.
9. Not doing your homework
• “If you fail to prepare, prepare to fail.”
10. Not getting access to decision-makers
• To close a deal, you need to deal with the people who are
qualified to make a purchasing decision. Otherwise, you will
simply waste your time.

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 !! !
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