1: Personal Selling & Marketing Strategy

1. Evolution of the Sales Department,

2. Sales Management,

3. Objectives of Sales Management,

4. Sales Management and Financial Results,

5. Sales Executive as Coordinator,

6.Sales Management and Control, Sales Control—Informal and

Formal, Sales Control and Organization
 2: Sales Management, Personal Selling &
2.1 Buyer-Seller Dyads Salesmanship
2. Diversity of Personal-Selling Situations
3. Theories of Selling
AIDAS Theory of Selling
“Right Set of Circumstances” Theory of Selling
“Buying Formula” Theory of Selling
“Behavioral Equation” Theory
SPIN Selling
4. Prospecting Steps in Personal Selling (including Sales
Resistance & Closing Sales)
 3: Setting Personal-Selling Objectives
1. Types of Personal-Selling Objectives
2. Some Important Terms
3. Analyzing Market Potential
4. Market Indexes
5. Sales Potential and Sales Forecasting
6. Sales Forecasting Methods
7. Converting Industry Forecast to Company Sales Forecast
8. Derivation of a Sales Volume Objective
9. Evaluation of Forecasts
 4: Determining Sales-Related Marketing Policies
1. Product Policies—What to Sell,

2. Distribution Policies— Who to Sell, Pricing Policies

3. Pricing Policies
 5: The Effective Sales Executive
1. Nature of Sales Management Positions

2. Functions of The Sales Executive

3. Qualities of Effective Sales Executives

4.Relations with Top Management & Relations with Managers of

Other Marketing Activities

5. Compensation Patterns for Sales Executives

 6: The Sales Organization
• 6.1 Purposes of Sales Organization

• 6.2 Setting Up A Sales Organization

• 6.3 Basic Types of Sales Organizational Structures

• 6.4 Field Organization of the Sales Department

• 6.5 Centralization Versus Decentralization in Sales Force Management

• 6.6 Schemes for Dividing Line Authority in the Sales Organization

 7: Sales Personnel
1. Sales Personnel Management

2. Job Analysis
 8: Recruitment & Selection
• 8.1 Organization for Recruitment & Selection,

• 8.2 The Prerecruiting Reservoir,

• 8.3 Sources of Sales Force Recruits,

• 8.4 Recruitment Process,

• 8.5 Selection Process

 9: Sales Training
1. Building Sales Training Program

2. Defining Training Aims

3. Deciding Training Content

4. Selecting Training Methods

5. Executing the Training program

6. Evaluation of Training Program

 10: Motivating Sales Personnel
1. Meaning of Motivation

2. Motivational “Help” from Management

3. Models of Motivation

4. Motivation & Leadership

5. Unionization of Sales Personnel

1: Personal Selling & Marketing Strategy

Sales Management

Session # 1
 Change
• Exchange of goods or services for an amount of money

• No business can survive without Sales

• Thus a Critical activity

7
 Marketing & Sales
• Product
• Price 4 P’s of Marketing
• Place
• Promotion
Advertising
Sales Promotion
Public Relation
Direct Marketing
Personal Selling
 Overview
Sales Executives Professionals

What they do? What does this professional Approach require?

Plan, build, and maintain
Effective organizations
& • Thorough analysis
Design & utilize efficient • Market-efficient qualitative & quantitative
control procedures. personal-selling objectives
• Appropriate sales policies, &
Professional Approach • Personal-selling strategy.
 Overview
Sales Executives

Have Certain Responsibilities

• (1) Obtaining sales volume,

Customer Acquisition
• (2) Providing profit contributions, &

• (3) Continuing business growth Customer Retention

 Overview
What is the most important aspect in Sales?

Understanding the Consumer Behavior

 Overview
Where are these Products Sold?

Market
 What is Market?
Communication

Collection of Goods & Services Collection of

Sellers Buyers
Monetary Value
Industry Market
Feedback
1.1 Evolution of Sales Management
 1.1 Evolution of Sales Management

Before the Industrial After the Industrial

Revolution Revolution
 Before the Industrial Revolution
• Small-scale enterprises dominated the economic scene &

• Selling was no problem.

How were orders • With minimum effort

obtained • On hand before goods were produced.
Who managed Sales?
• Single individual mostly supervised all phases of the business

• Manufacturing + Selling.
 1.1 Evolution of Sales Management

What was major

Manufacturing activities.
emphasis on?

What was the major

Meeting the demand
problem?
 After the Industrial Revolution
It became increasingly necessary to find and
Began in about 1760 sell new markets

Newly factories were built Huge quantities of goods of every description.

Outcome
Continued operation demanded great expansions in the area of sales coverage

Adjacent markets could not absorb the increased quantities

Reason
being manufactured.
 Business problems took precedence over selling

What were these Hiring large numbers of workers

problems
associated with? Acquiring land, buildings, and machinery.

How did they

Large amounts of capital had to be raised.
resolve it?

More and more businesses adopted the corporate

Results form of organization—the day of large-scale
manufacturing enterprises had arrived.
• Authority was increasingly delegated to others.

• Separate functional departments were established,

but

Sales departments were set up

only after
Activation of manufacturing and financial
departments.
 Specialized Sales Departments

Helped to solve the organizational problems of market expansion

But another problem remained Solution

Communicating with customers Intermediaries

 Evolution of The Sales Concept
1. First generation
• Exchange of goods – Barter system

2. Second generation – Store concept.

• From Barter system of trade To Inventory form of
trading.

3. Third generation
• Traders searching & locating customers, rather than
waiting
28
 Evolution of The Sales Concept

4. Fourth generation – Systematic approach to selling

• Traders realized – customers purchased goods repetitively & at
regular intervals

5. Fifth generation – Need- Based selling

• To identify the customer's need and fulfill it

29
 Evolution of The Sales Concept
6. Sixth generation – Role of experts
• ‘Consultative selling’
• Assist buyers in their purchase decisions

7. Seventh generation – Role of a Moderator

• Focus on – implications of buying the product or service.
• Help the customer identify the long-term consequences of buying
the product.

30
1.2 Sales Management
 What is Sales Management
• Sales management meant the planning, direction, & control of
personal selling, including recruiting, selecting, equipping, assigning,
routing, supervising, paying, & motivating as these tasks apply to
the personal salesforce.
– American Marketing
Association
1.3 Objectives of Sales Management
• (1) Obtaining sales volume,

• (2) Providing profit contributions, &

• (3) Continuing business growth

• (4) Providing Estimates

1.4 Sales Management & Financial Results
 • Sales management and financial results are closely related.

• Financial results are stated in terms from two basic accounting

formulas:

Sales – Cost of sales = Gross Margin

Gross Margin – Expenses = Net

Profit Affected by the caliber and performance of sales

Sales management
Gross margin, &
Expenses Are the major determinants of net profit.
Sales executives at times
stress on 1. Sales volume increases
Sales volume Outcome 2. Gross margin declines
& 3. Expenses increase proportionately, &
Neglect 4. Net profits are reduced.
Gross
Margin &
Expenses Even with a lower sales volume
1. Can reduce expenses &
Benefits of Skilled Sales 2. Raise gross margin sufficiently
Management to convert
Loss Profit.
1.5 Sales Executive as a Coordinator
 Sales executives have responsibilities for coordination involving:
(1) The Organization
(2) The Planning, &
(3) Other elements in the marketing strategy.

Higher-ranking sales executives are those most concerned with

obtaining effective coordination,
But
Sales executives at all organizational levels have
some coordination responsibilities
1. Organizing & Coordination Achieved through a single
responsible, top-ranking executive
Coordination of the different
order-getting methods
(Personal Selling, Marketing Vice-President,
Advertising, etc) Director of marketing, or
Marketing manager.

• Responsible for minimizing the possibility that the

different order-getting departments will work at cross-
purposes or

• Work toward sales goals in isolation (with little knowledge

of what others are doing).
Inside the sales department, from the department head to down,

All sales executives are responsible for

Coordinating the organizational units under their control.

2. Planning & Coordination

1. Sales & Marketing Management

2. Sales & Logistics

3. Sales & HRM

4. Sales & CRM

 Coordination with the Distributive Network Sales
executives:
• Coordinate personal selling with the marketing efforts of the
intermediaries.

• Among the most important aspects are

• Gaining product distribution,
• Obtaining dealer identification,
• Reconciling business goals, &
• Sharing promotional risks.
1.6 Sales Management & Control
 Who controls the personal selling effort of organization Sales Executives

Purpose To ensure that sales department objectives are reached

Control is part of management, as are planning, organizing, and coordinating

The several phases of control are as follows:

 1. Sizing up the situation
Starts by reviewing the How are they Analyzed w.r.t present
personal-selling analyzed? Considering past &
objectives of the firm. Future trends
Example: Forecasting

1. Where are we now?

2. How did we get here?
3. Where are we going?
4. How do we get there?
 Sales Management & Control
• 2. Setting quantitative performance standards

• 3. Gathering and processing data on actual performance

• 4. Evaluating performance

• 5. Action to correct controllable variation

 SALES CONTROL—INFORMAL AND FORMAL
• Informal control

• Formal control and written sales policies

• Policy formulation and review

• Formal control over sales volume

• Budgetary control
2: Sales Management, Personal Selling &
Salesmanship
Sales Management

Session # 2
Sales Management Personal Selling Salesmanship

directs implemented
through

• In managing personal selling, the sales executive must understand the

many activities comprising:
• The salesperson’s job (including salesmanship),
• Know the problems sales personnel meet (including many
in salesmanship), and
• Suggest solutions (including ways to handle problems in
salesmanship).
6
 Sales Management Personal Selling Salesmanship

Act of managing the

activities of sales force

One-to-one personal contact

Selling + Deliver satisfaction.

Applying the techniques of selling

7
Personal Selling Salesmanship

Which is a broader concept??

Personal Selling is broader concept

8
 Marketing & Sales
• Product Personal selling
• Price along with other marketing elements
• Place
• Promotion is a means
Advertising for implementing marketing programs.
Sales Promotion
Public Relation
Direct Marketing
Personal Selling
 Salesmanship One aspect of personal selling
One of the skills used in personal selling

Emphasis in salesmanship was almost

Art of successfully persuading
wholly on persuasion

Today Emphasis is on the benefits attractive to prospects and customers

Salesmanship consultative selling

Creating long-term, mutually beneficial sales relationships with customers by

helping them to improve their profits through products and services.
10
2.1 Buyer – Seller Dyads
 Example:
Buyer-Seller Dyad – situation in which Salesperson &
interactions two people interact prospect

Interaction of a seller using advertising

with a particular prospect in the
reading, listening, or viewing audience.
Franklin Evans researched buyer-seller dyads in the life insurance business

Prospects who bought insurance knew more about

salespersons and their companies, and felt more positively
toward them, than did prospects who did not buy

• Sales personnel should be assigned to prospects whose characteristics

are similar to their own,

• Thus improving the chance of successful dyadic relationships

 Do Not Sound like a typical Salesperson
Rather be a Solution Provider
• There is also a mindset cultivated from childhood that sales are
all about tricking the customer into buying the product.

• This is a critical element because it affects the interaction

between the buyer and the seller in a great way.
 Do Not Sound like a typical Salesperson
Rather be a Solution Provider
Customer will listen to the seller

With a mindset of With an intention of understanding the

trickery presentation

• Sellers not to be overzealous when selling a product to customers

• As the client may interpret the obsession as a way of tricking them
into buying the particular products.
2.2 Diversity of Personal Selling Situations
 Group A (Service Selling)
• 1. Inside Order Taker—“waits on” customers;
• Example: The sales clerk behind the counter

• 2. Delivery Salesperson—mainly engages in delivering the product;

• Example: Persons delivering milk, bread, or fuel oil.

• 3. Route or Merchandising Salesperson—operates as an order taker

but works in the field—the soap or spice salesperson calling on
retailers is typical.
 Group A (Service Selling)
• 4. Missionary—aims only to build goodwill or to educate the actual
or potential user, and is not expected to take an order;
• Example: The “missionary” and the pharmaceutical company’s
“detail” person.

• 5. Technical Salesperson—emphasizes technical knowledge;

• Example: The engineering salesperson, who is primarily a
consultant
to “client” companies.
 Group B (Developmental Selling)
• 6. Creative Salesperson of Tangibles—
• Example: Salespersons selling vacuum cleaners, automobiles, water
purifiers, and encyclopedias.

• 7. Creative Salesperson of Intangibles—

• Examples: Salespersons selling insurance, advertising services, and
educational programs.
 Group C (Basically Developmental Selling, but
requiring unusual creativity)
• 8. “Political,” “Indirect,” or “Back-Door” Salesperson—
• Sells big-ticket items, particularly commodities or items with no truly
competitive features.

• Sales are consummated through rendering highly personalized

services (which have little or no connection with the product) to key
decision makers in customers’ organizations

• Example: Salesperson who lands large orders

 Group C (Basically Developmental Selling, but
requiring unusual creativity)
• 9. Salesperson Engaged in Multiple Sales—
• Involves sales of big-ticket items

• Salesperson must make presentations to several individuals in the

customer’s organization, usually a committee, only one of which can
say “yes,” but all of whom can say “no”;

• Example: The account executive of an advertising agency who makes

presentations to the “agency selection committees” of advertisers—
even after the account is obtained, the salesperson has to work to
retain it.
 2.3 Theories of Selling

1. AIDAS Theory of Selling

2. “Right Set of Circumstances” Theory of Selling
3. “Buying Formula” Theory of Selling
4. “Behavioral Equation” Theory
5. SPIN Selling
 2.3 Theories of Selling
• We examine Five theories.

• The first two, the “AIDAS” theory and the “right set of circumstances”
theory, are seller oriented.

• The third, the “buying-formula” theory of selling, is buyer oriented.

• The last two, “the behavioral equation” and the SPIN selling,
emphasizes:

Buyer’s decision process Salesperson’s influence process

1. AIDAS Theory of Selling
 Attention – Secure Attention

Interest – Gaining Interest

Desire – Kindling Desire

Action – Inducing Actions

Satisfaction – Building Satisfaction

2. “Right Set of Circumstances” Theory of Selling
 Seller Oriented Theory As Seller needs to put efforts

Also known as

“Situation-response” theory
• As per this theory, if the prospect is given the particular
circumstances prevailing in a given selling situation then he
responds in a particular way.

• After securing the attention and gaining the interest of the prospect,
the salesperson needs to present the proper stimuli or appeals in
order to sell the product to the prospect.
• He needs to act wisely and during the presentation he should strive
to make the product appealing by creating a favorable circumstance.

• A sales person needs to be well skilled to handle the set of

circumstances as it serves the basis to know how close the
response of the prospect is to the behavior predicted.
 2 Factors

Internal External

Related to thinking of the prospect controlled by the salesman himself

Salesperson - cannot manipulate Remarks during sales conversation

Different prospects Theory focuses on the external

Different internal factors factors only.

Different thought patterns &

processes.
 Salesman Mr. A (Prospect)

After securing the attention & Thinking of Mr. A

interest May not be controlled

Invites him for a coffee in a

nearby shop

To give the sales

presentation.
External & Can be Controlled
 Need or Problems of the
Buyer-Oriented buyers

Salesperson to Finding Solution

understand

Emphasizes the prospect’s responses De-emphasizes the external factors

 Behavioral Equation Theory

• Uses a stimulus-response model (a sophisticated version of the “right

set of circumstances” theory),

• Incorporates findings from behavioral research,

• J.A. Howard explains buying behavior in terms of the

purchasing decision process, viewed as phases of the learning
process.
 Behavioral Equation Theory
• Learning is the change in an individual’s behavior arising from
experience and occurs through the interplay of:

Drives Stimuli Cues

Responses Reinforcement
 Behavioral Equation Theory
• A drive is a strong internal stimulus that calls for action.

• A drive becomes a motive when it is directed toward a particular

stimulus object.
• Example: A person’s drive for self-actualization might motivate him or
her to look into buying a mobile

• Cues are minor stimuli that determine when, where, and how the
person responds
 Behavioral Equation Theory
• These are all cues that might influence a consumer’s response to his
or her interest in buying the product.

• The mobile buyer might spot several mobile phone brands in a shop
window, hear of a special sale price, or discuss mobiles with a friend.
 Behavioral Equation Theory
• Suppose the consumer buys a Samsung mobile.

• If the experience is rewarding:

• The consumer will use the mobile & his or her response will be
reinforced.

• Then the next time he or she shops for any durable product, the
probability is greater that he or she will buy a Samsung product.
 Behavioral Equation Theory
• An attitude describes a person’s relatively consistent evaluations,
feelings, and tendencies toward an object or idea.

• The South Korean make the best mobile products in the world,” and
“Creativity and self-expression are among the most important things
in life.”

• If so, the Samsung mobile would fit well into the consumer’s
existing
attitudes.
 Behavioral Equation Theory
• Howard incorporates these four elements into an equation:
• B=P×D×K×V
• B = response or the internal response tendency, that is, the act
of purchasing a brand or patronizing a supplier
• P = predisposition or the inward response tendency, that is, force of
habit
• D = present drive level (amount of motivation)
• K = “incentive potential,” that is, the value of the product or its
potential satisfaction to the buyer
• V = intensity of all cues: triggering, product, or informational
 Behavioral Equation Theory
• Buyer-seller dyad and reinforcement

• Salesperson’s influence process

• Salesperson’s role in reducing buyer dissonance:

• There are four types of cases involving the salesperson’s role.
• 1. An established product: An ongoing salesperson-client relationship.
• 2. An established product: A new salesperson–client relationship.
• 3. A new product: An ongoing salesperson–client relationship.
• 4. A new product: A new salesperson–client relationship.
 Behavioral Equation Theory
• 1. An established product: An ongoing salesperson-client
relationship.
• Unless the market is unstable, the buyer tends toward automatic
response behavior, in which no learning is involved and thus
experiences little

As Salesperson –
If any, dissonance Salesperson is effective
trusted by the buyer.
 Behavioral Equation Theory
• 2. An established product—a new salesperson–client relationship.

Salesperson - being new Less effective in reducing Dissonance

• 3. A new product—an ongoing salesperson–client relationship.

• Because of the established relationship with the buyer, the
salesperson can reduce dissonance.

Established relationship with

Salesperson can reduce Dissonance
buyer
 Behavioral Equation Theory
• 4. A new product—a new salesperson–client relationship.

Salesperson - being new

Less effective in reducing Dissonance
Product also new
2.4 Steps in Personal Selling
Prospecting &
Evaluating Pre-approach Approach

Presentation

Follow Up Closing Handling Objections

48
 Prospecting & Evaluating
• Process of finding & evaluating potential customers

• Sales person to identify:

• Needs
• Willingness, ability & authority to buy

• Salesperson does not generally come into contact with

customer..

49
 Prospecting & Evaluating
• Prospecting involves:

• 1) Generating sales leads

• 2) Identifying prospects
• 3) Qualifying prospects

50
 1. Generating Sales Leads
Sales leads (Prospect)

Individual
Organization
• Sources:
• (a) People:
• Existing customers
• Suppliers
• Former customers
• Dealers
• Salesperson’s friends or relatives
• Other reference groups.. 51
 1. Generating Sales Leads
• (b) Events:
• Social event
• Seminars
• Conference
• Trade shows or exhibition

52
 1. Generating Sales Leads
• (c) Published Information:
• Newspaper
• Telephone directories
• Trade Directories (Yellow Pages)
• Business cards
• Sales records
• Computer database etc

• Helps in making cold calls..

53
 1. Generating Sales Leads
• (d) Associations:
• Salespersons members of professional bodies
• Ex: National Association of Sales Professionals
• Trade Associations
• Chambers of Commerce

• Sales leads @ various programs, meetings & seminars

conducted by such professional bodies

54
 2. Identifying Prospects
• Prospect is a person or an organization that indicates a need
for the product

55
 • Writing to Cold call:
Sales person identify him • Visits
prospect • Making phone •Call up people
call (cold call) s he doesn’t
• Telemarketing who
m
know
Without
Visit:
appointment:
• With appointment
• Costly
• Without
• Time
appointment
consuming
No
•generate a customer
promise
to

56
 3. Qualifying prospects
• Whether prospect can afford to make a purchase or not
• Not worthwhile to invest time & efforts in all prospects
• Salesperson to evaluate capacity, willingness & authority of
prospect
• On the basis of information gathered from prospect,
salesperson can qualify prospect as..

57
 Prospect qualified
as

Warm Lead
Cold Lead Hot Lead (Prospect
(Prospect having
(Prospect who willing to make
need to buy the
cannot turn into purchase)
product
customer)
58
2: Sales Management, Personal Selling &
Salesmanship

3: Setting Personal-Selling Objectives

Sales Management

Session # 4
Prospecting &
Evaluating Pre-Approach Approach

Presentation

Follow Up Closing Handling Objections

5
2. Pre-approach
Identifying Hot
Leads(Salesperson
plans & prepares for
makingsales call)

Creation of
prospect’s profile

Deciding on
Approach

Establishing
objectives of sales
call

Preparing for
6
Presentation
 Creation of Prospects Profile
• Sales person to gather information
• To develop a profile:
• Information about personal characteristics of prospect
• His specific product needs
• Brands currently used
• Prospect’s opinion of other brands
• In case of organizational buyer info abt key decision
makers..
7
 Deciding on Approach
• Cold call
• If existing customer salesperson to make unannounced visit
or with appointment

8
 Objectives of sales call
• Prospects time is valuable
• Presentation to be to the point covering necessary relevant
info
• Clear objectives essential for success of sales call

9
 Prepare for presentation
• Sales person to update his knowledge by reading relevant
literature on product

• Assembles material like visual aids – for effective

presentation

10
Prospecting &
Evaluating Pre-Approach Approach

Presentation

Follow Up Closing Handling Objections

11
 3. Approach
• Initial contact with potential customer & tries to find out the needs
• Favorable impression more important than pushing the product
(Don’t push your product)
• Lay the foundation for successful presentation
• How??
• A) Attracting prospects attention
• B) Building rapport
• C) Generating interest for product
• Well groomed, well dressed sales person..
12
 Approach
• Various methods of approach depends on:
• A) Salesperson’s choice
• B) Personal characteristics of prospect
• C) Type of product
• D) Resources available with firm

• Three methods

13
 Approach

Referrals Cold Canvassing

Repeat contact
(Salesperson
(Sales person (Existing
approaching
approaching customers)
prospect
prospect by without
giving obtaining his
reference) prior consent)
14
Prospecting &
Evaluating Pre-Approach Approach

Presentation

Follow Up Closing Handling Objections

15
 4. Presentation
• Based on AIDA concept

• Various approaches:
• Canned sales approach
• Formulated approach
• Need satisfaction approach

16
 1. Canned Sales Approach
• Memorized sales talk

• Same message repeated to all buyers/prospect

• Buyer – passive – stimulated to buy the product

• Also known as stimulus response approach

17
 1. Canned Sales Approach
• When used/preferred?
• Product not very technical
• Salesperson inexperienced
• Used in: door-to-door & telemarketing
• Disadvantage:
• Buyer not given opportunity to raise questions, which can be
frustrating..

18
 2. Formulated Approach
• Sales person identifies buyer’s needs & his buying styles & uses
one appeal after the other

19
 3. Need satisfaction approach
• Each customer has different set of needs
• Sales person – to identify customer needs – by gathering info
• Sales person to develop habit of listening
• Think from buyers point of view & plan presentation
• Customizing
• Disadvantage: time consuming, Experienced sales person

20
Prospecting &
Evaluating Pre-Approach Approach

Presentation

Follow Up Closing Handling Objections

21
 5. Handling Objections
• Clarify doubts
• Absence of objections – customer may not be interested in
buying
• Consider objection – opportunity to satisfy the customer &
restrain from switching to a competitor
• Most common type of objection??
• Price

22
 Ways to overcome objections
• Listening to prospect, responding
• Clear & straightforward in answering queries
• Yes-but method:
• Agreeing with customers objections & coming up with feasible
solution to resolve objection
• If sales person not sure of any answer to customer’s query –
get back as early with answer

23
 Ways to overcome objections
• Salesperson to anticipate likely objections
• Should counter before prospect raises it
• Risky – prospect may not have considered raising such
objection at all..

24
Prospecting &
Evaluating Pre-Approach Approach

Presentation

Follow Up Closing Handling Objections

25
 6. Closing
• Stage in which salesperson asks potential customer to make
purchase

• Salesperson can attempt to make a trial close at several

points:
• Knowing about financial terms
• Preferred mode of payment
• Customers response to such questions – helps salesperson to
know – how close the customer is to placing an order 26
 Popular techniques for closing a sale
• Silent Close:
• Salesperson makes presentation – waits quietly for the
customer to make the purchase decision

• Direct Close:
• Salesperson directly asks for close of sale
• Example: Are you ready to place an order?

27
 Popular techniques for closing a sale
• Assumptive Close:
• Salesperson assumes the customer’s consent for the close
• Example: I have completed all necessary paper work. All you need
to do is read through & sign the papers

• Alternative Close:
• Salesperson Close the sale by providing him different alternatives
• Example: would you prefer Black colour over White?

28
 Popular techniques for closing a sale
• Concession close:
• Salesperson can offer to give some concession to the customer
& tempt him to make purchase decision

• Cautious close:
• Salesperson becomes careful in inquiring about the close

29
Prospecting &
Evaluating Pre-Approach Approach

Presentation

Follow Up Closing Handling Objections

30
 7. Follow Up
• Customer satisfaction
• Long term relationship with customer
• Helps to reduce dissonance
• Sales person can call up:
• Order was delivered in time
• Customer faced any problem?
• Satisfied with product

31
SPIN Selling
3: Setting Personal-Selling Objectives

Sales Management

Session # 4
 3.1 Types of Personal Selling Objectives
• 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.
38
 3.1 Types of Personal Selling Objectives
• 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’ specifications).

39
 3.1 Types of Personal Selling Objectives
• 8. To assist with (or handle) the training of intermediaries sales
personnel.

• 9. To provide advice & assistance to intermediaries on management

problems.

• 10. To collect and report market information of interest and use to

company management

40
 3.2 Some Important Terms

1. Market Potential

2. Sales Potential

3. Sales Forecast
 3.2 Some Important Terms
• 1. Market Potential:
• An estimate of maximum possible sales opportunities present in
a particular market segment

• Open to all sellers of a good or service during a stated future

period.

• Example: An estimate of the maximum number of low-priced mobiles

that might be sold in Mumbai during the calendar year 2023 by all
sellers competing for this market would represent market potential in
Mumbai for low-priced mobiles in 2023.
42
 3.2 Some Important Terms
• Indicates
• How much of a particular product can be sold
• To a particular market segment
• Over some future period

• 2. Sales Potential:
• An estimate of the maximum possible sales opportunities present in
a particular market segment open to a specified company selling a
good or service during a stated future period.

43
 3.2 Some Important Terms
• Example: An estimate of the number of low-priced mobiles that
might be sold in Mumbai , during the calendar year 2023 by
Samsung Mobiles would be the 2023 Mumbai sales potential for
Samsung low- priced mobiles.

• A sales potential represents sales opportunities available to

a particular manufacturer, such as to Samsung, while

• A market potential indicates sales opportunities available to

an entire industry

44
 3.2 Some Important Terms
• 3. Sales Forecast:
• An estimate of sales, in currency or physical units, in a future period
under a particular marketing program and an assumed set of
economic and other factors outside the unit for which the forecast
is made.

• A sales forecast may be for a single product or for an entire product

line.

45
 3.2 Some Important Terms
• It may be for a manufacturer’s entire marketing area, or for any
subdivision of it.

• Such forecasts are short-term, or operating, sales forecasts rather

than long-range sales forecasts, which are used for planning
production capacity and for long-run financial planning.

• Long-range sales forecasts, although of interest, are so tentative that

sales planners give them only passing attention.

46
3.3 Analyzing Market Potential
 3.3 Analyzing Market Potential
• Step 1: Market Identification:
• Market identification requires finding out
1. Who buys the product?
2. Who uses it?
3. Who are the prospective buyers and/or users?

• From where can this data be found:

Internal records
Field research

48
 3.3 Analyzing Market Potential
• In consumer-goods marketing:
• Buyers, users, and prospects are identified & classified according
to such characteristics as age, gender , education, income, and
social class.

• In industrial-goods marketing:
• Buyers, users, and prospects are identified & classified by size of
firm, geographical location, type of industry, and the like.

49
 3.3 Analyzing Market Potential
• Step 2: Market Motivation :
• Detect the reasons
Why customers buy the product?
Why potential customers might buy it?

• Market motivation studies answer twin questions:

Why do people buy?
Why don’t people buy?

50
 3.3 Analyzing Market Potential
• The answers help not only in estimating market potential but
assist the sales executive seeking to increase the effectiveness of
promotional programs.

• Assists in deciding:
1. How best to present the product in sales talks.
2. The relative effectiveness of different selling appeals.
3. The relative appropriateness of various promotional methods

51
 3.3 Analyzing Market Potential
• Step 3: Analysis of Market Potential
• Market potential cannot be analyzed directly so analysis makes use
of market factors (a market factor is a market feature or characteristic
related to the produces demand).

• Example: The number of males reaching shaving age each year is

one market factor influencing the demand for men’s electric shavers.

52
 3.3 Analyzing Market Potential
• But not every male reaching shaving age is a prospective buyer of
an electric shaver
Some will be late in starting to shave,
Others will adopt other shaving methods,
Some will not have the money to buy a
shaver or
Others will use borrowed shavers or,
perhaps, will grow beards.

53
 3.3 Analyzing Market Potential
• Thus, using market factors for analyzing market potential is a
two- step process:
• 1. Select the market factor(s) associated with the product’s
demand.

• 2. Eliminate those market segments that do not contain

prospective buyers of the product.

54
3.4 Market Indexes
 3.4 Market Indexes
• A market index is a numerical expression indicating the degree to
which one or more market factors associated with a given
product’s demand is present in a given market segment—usually a
given geographical market segment.

• Market indexes are expressed in relative terms, such as in

percentages, rather than in absolute numbers.

56
 3.4 Market Indexes
• Example: Furniture: A market index might contain three
factors: population, effective buying income, and number of
marriages.

• Population index is divided into subindexes

covering Different age groups

• Income index into subindexes for

Different income groups

57
3.5 Sales Potential & Sales Forecasting
 3.5 Sales Potential & Sales Forecasting
• Sales forecasting is the process of estimating future revenue by
predicting how much of a product or service will sell in the next
week, month, quarter, or year.

• At its simplest, a sales forecast is a projected measure of how

a market will respond to a company's go-to-market efforts.

59
3.6 Sales Forecasting Methods
 3: Setting Personal-Selling Objectives

4: Determining Sales-Related Marketing Policies

Sales Management

Session # 5
3.6 Sales Forecasting Methods
 3.6 Sales Forecasting Methods
• Means to predict changes

• Previously ------ Intuition

Today ------------ Systematically

• Why need Sales Forecast?

• A. Customer tastes & usage
Patterns
• B. Demand for products
 3.6 Sales Forecasting Methods
• (A) Qualitative Methods:
• 1. User expectations (Survey of Customers buying plan):
• Normally carried out for industrial products, where the number of
customers is less

• Customer’s requirements are found out directly by meeting them

 3.6 Sales Forecasting Methods
• 2. Sales force composite (Poll of Sales Force Opinion):
• Estimate of expected sales from salesperson

• Experienced salespersons required

• Expectations of those who are actually involved in the sales

activity
 3.6 Sales Forecasting Methods
• 3. Jury of Executive Opinion:
• Based on the opinions of executives at the top level of
management

• Opinions of all the executives are combined and an average

forecast is prepared
 3.6 Sales Forecasting Methods
• 4. Delphi Technique:
• Similar to the jury of executive opinion

• Experts are asked to forecast – independently.

• Once the experts give their opinion, it is compiled together and an

average figure is given to each of them
 3.6 Sales Forecasting Methods
• 5. Market test:
• Product is tested in a limited area to find out about consumer
acceptance of the product
 3.6 Sales Forecasting Methods
• (B) Quantitative Methods
• 1. Time Series analysis:
• Estimation of future trends based on the past performance of the
organization

• Four elements of sales variations are considered for forecasting

sales.
• T = Long-term variations
• C = Cyclical variations
• S = Seasonal changes
• I = Irregular or unexpected changes in the environment

• Sales = T x C x S x I
 3.6 Sales Forecasting Methods
• 2. Moving Average method (Projection of Past Sales):
• Calculating the average company sales for previous years
Ye a r A c t u a l Sales 3 year Moving 6 Ye a r M o v i n g
Av e r a g e s Av e r a g e s
2010 840
2 0 11 880
2012 864
2013 832 861
2014 862 858
2015 948 852
2016 956 880 871
2017(Forecast) 922 890
 3.6 Sales Forecasting Methods
• Formula
• Sales forecast for the next year =
Actual Sales for past 3 years
Number of years (3 or 6 years)

• Calculation of 3 year Moving

Averages
• Sales Forecast= 840+880+864 =
861.33 i.e 861
3
 3.6 Sales Forecasting Methods
• Exponential smoothing:
• Statistical technique for short-range sales forecasting

• A type of moving average that represents a weighted sum of all

past numbers in a time series
 3.6 Sales Forecasting Methods
• 3. Regression Analysis:
• Identify the factors that influence sales

• One single independent variable then it is called simple

regression analysis.

• Number of variables is two or more, it is called multiple

regression analysis.
 3.6 Sales Forecasting Methods
• There are three major steps in forecasting sales through regression
analysis:
• 1. Identify variables causally related to company sales.

• 2. Determine or estimate the values of these variables related to

sales.

• 3. Derive the sales forecast from these estimates

3.7 Converting Industry Forecast to Company
Forecast
3.7 Converting Industry Forecast to Company Forecast
• Many companies forecast both their own sales and sales of the industry.

• Of those using multimethod forecasting procedures, nearly all—at one or

more stages—provide for the making of an industry sales forecast.

• All sales forecasting methods discussed, only in two—the poll of sales

force opinion and unsophisticated forms of projecting past sales—it is
normal to skip the industry sales forecast and forecast company
sales directly.
3.7 Converting Industry Forecast to Company Forecast
• The general practice is to forecast industry sales early in the procedure
and from it derive a company sales forecast for use as a check against
forecasts arrived at through other methods.

• Deriving a company sales forecast from an industry sales forecast requires

an appraisal of company strengths and weaknesses (as well as marketing
programs) against those of competitors.

• The result is an estimate of expected market share that (when applied

to the industry sales forecast) results in a forecast of company sales.
3.7 Converting Industry Forecast to Company Forecast
• The poll of sales force opinion method leaves this appraisal up to the
sales personnel—they focus on estimating how much the company can
sell, not on how much the industry can sell.

• Unsophisticated forms of the past sales projection method implicitly

assume that no changes will occur in the company’s strengths and
weaknesses nor in its marketing programs vis-à-vis those of its
competitors.
3.8 Derivation of a Sales Volume Objective
 3.8 Derivation of a Sales Volume Objective
• A sales volume objective for the coming operating period is the hoped-for
outcome of a company’s short-range sales forecasting procedure.

• A sales forecast
• (1) Contains an estimate of sales tied to a proposed marketing plan
or program &

• (2) Assumes a particular set of economic & other forces outside the
unit for which the forecast is made.
 3.8 Derivation of a Sales Volume Objective
• The sales forecast estimate does not necessarily become the company’s
sales volume objective, but it provides an orientation point for
management’s thinking.

• Further adjustments in the sales forecast estimate are necessary

whenever management decides to alter its marketing plan or program
or changes occur in competitor’s marketing strategies
3.9 Evaluation of Forecasts
 3.9 Evaluation of Forecasts
• Before submitting forecasts to higher management, sales executives
evaluate them carefully, regardless of the extent of their personal
involvement in the preparation.

• Every forecast contains elements of uncertainty. All are based on

assumptions.

• So a first step in evaluating a sales forecast is to examine the assumptions

(including any hidden ones) on which it is based.
 3.9 Evaluation of Forecasts
• Sales executives should view each assumption critically and note
particularly any that seem unwarranted, testing each by asking:
• If this assumption was removed, or changed, what would be the effect
on the forecast?

• They should evaluate the forecasting methods objectively, asking such

questions as:
• Are there any variations here from what past experience would seem
to indicate?
 3.9 Evaluation of Forecasts
• Has sufficient account been taken of trends in the competitive situation
and of changes in competitor’s marketing and selling strategies?

• Has account been taken of any new competitive products that might
affect the industry’s and company sales?

• Have inventory movements at all distribution levels (including those

at wholesale and retail levels) been considered?

• Sales executives should evaluate the accuracy and economic value of

the forecast as the forecast period advances.
 3.9 Evaluation of Forecasts
• Forecasts should be checked against actual results, differences explained,
and indicated adjustments made for the remainder of the period.

• When the period’s sales results are recorded, all variations should be
explained and stored for future use in improving forecasting accuracy.

• To Conclude:
• Considerable planning & analysis precedes the setting of the company’s
sales-volume objective, i.e, the currency or unit sales volume that
management seeks to obtain during a particular future period
4: Determining Sales-Related Marketing Policies

Sales Management

Session # 5
 Overview
• Sales-related marketing policies impact upon the functions and operation
of the sales department.

• These marketing policies delineate the guidelines within which the

effort to reach personal-selling objectives is made.

• There are three major types:

• (1) Product policies (what to sell),
• (2) Distribution policies (to whom to sell), and
• (3) Pricing policies.
 Overview
• Sales executives’ roles in determining sales-related marketing policies
vary from company to company.

• At one extreme, the sales executive’s role is not to determine, but to

administer, policies laid down by higher management.

• At the other extreme, the sales executive bears sole responsibility for
determining sales-related marketing policies—subject, of course, to top
management’s approval.
 Overview
• Sales-related marketing policies directly influence the jobs of
sales executives.

• These policies provide direction as sales executives plan how the

company will reach personal-selling objectives, as they organize the sales
effort, as they manage the sales force, and as they control the sales
effort.

• Clearly, these policies constitute the company-imposed marketing

framework within which sales executives and the departments they lead
must operate.
4.1 Product Policies – What to Sell?
 4.1 Product Policies – What to Sell?
• The products a company sells determine its basic nature.

• As its organizers visualize opportunities to make and/or market certain

products, the company comes into existence.

• As it grows, management makes key decisions on products

— Whether to drop old ones or add new ones,
Whether to expand the product line or add new lines—and
on Product design & product quality as well as on
Product-related matters such as guarantees and service.
 4.1 Product Policies – What to Sell?
• Relation to Product Objectives
• Product policies serve as guides for making product decisions.

• They derive from product objectives.

• Product Line Policy:

• Policies on the width of a product line are classified as
either Short line or
Full line.
 4.1 Product Policies – What to Sell?
• Product Design Policy:
• The two main policy decisions on product design are
• (1) The frequency of design change &
• (2) The extent to which designs should be protected from copying.

• Product Quality and Service Policy

• For consumer durables, and most industrial goods, product quality
and service are related.
 4.1 Product Policies – What to Sell?
• High-quality products require less service &
• Low-quality products, more service.

• Buyers expect product performance to vary with the quality, so

manufacturers with high-quality products have liberal service policies
4.2 Distribution Policies – Who to Sell?
 4.2 Distribution Policies – Who to Sell?
• Distribution policies are important determinants of the functions of
the sales department.

• The choice of a particular marketing channel, or channels, sets the

pattern for sales force operations, both geographically and as to the
customers from whom sales personnel solicit orders.

• The decision on the number of outlets at each distribution level

affects the size and nature of the sales organization and the scope of
its activities.
 4.2 Distribution Policies – Who to Sell?
• Related decisions concerning cooperation extended to and expected from
the intermediaries influence sales operations and salespersons’ jobs

• Policies on Marketing Channels

Sales volume potential
Comparative distribution costs
Net profit possibilities
4.3 Pricing Policies
 4.3 Pricing Policies
• The sales executive’s role in formulating pricing policies is advisory, but all
sales executives are responsible for implementing pricing policies.

• Field sales personnel are the company employees whose jobs consist
most directly of persuading buyers to accept the products at the
prices asked.

• Field sales personnel do the actual implementing of pricing policies,

but
responsibility for implementation is the sales executive’s alone.
 4.3 Pricing Policies
• Because of their impacts upon the ease of making sales, then,
pricing policies are of direct interest to sales executives and sales
personnel.

• Policy on Pricing Relative to the Competition

Meeting the competition
Pricing above the competition
Pricing under the competition
 4.3 Pricing Policies
• Policy on Pricing Relative to Costs
Full-cost pricing
Promotion pricing
Contribution pricing

• Policy on Uniformity of
Prices to Diff erent
Buyers
• Policy on List Pricing
• Policy on Discounts
Trade discounts
 4.3 Pricing Policies
• Geographical Pricing Policies
F.O.B. pricing
Delivered pricing

• Policy on Price
Leadership

• Product Line Pricing

Policy

• Competitive Bidding
Policy
5: The Effective Sales Executive

Sales Management

Session # 6
 Overview
• More action oriented and less planning oriented.

Sales executives, in performing their jobs, must know:

• How to analyze information,

• How to combine its significance with their own experiential

knowledge and judgment (& their willingness to accept a certain
amount of risk),

• How to apply imagination in searching for alternative solutions

to problems,
 Overview
• How to predict the likely outcomes of different alternatives, &

• How to choose that alternative with the highest payoff.

5.1 Nature of Sales Management Positions
 5.1 Nature of Sales Management Positions
• The requirements of the sales executive’s job vary
• From company to company &
• From position to position within companies.

• Certain responsibilities are typically assigned to the same types

of executives in different companies.

• It is possible, therefore, to generalize about the activities &

responsibilities of sales managers, district sales managers,
product managers, & other sales or marketing executives.
 5.1 Nature of Sales Management Positions
• Some companies have formulated concise statements of duties
associated with various positions, known as job or position descriptions.

• Typical job descriptions for the jobs of sales manager & district
sales manager are as follows:
 5.1 Nature of Sales Management Positions
Position Guide—Sales Manager
• Reporting relationship.
• The sales manager reports to the Vice-President of Marketing.

• Job objective.
• To secure maximum volume of sales through the effective development
&
• Execution of sales programs & sales policies for all products sold by
the division.
 5.1 Nature of Sales Management Positions
Position Guide—Sales Manager
• Duties & Responsibilities
1. Sales program. 4. Internal and external
relations

2. Organization 5. Communications

3. Sales force management 6. Control.

 5.1 Nature of Sales Management Positions
Position Guide—Sales Manager
• Performance criteria.
• The sales manager’s performance is considered satisfactory when:
• The department’s currency & unit sales are equal to or exceed
the quantities budgeted.

• The profit contribution of the sales department is in line with the

plan.
 5.1 Nature of Sales Management Positions
Position Guide—Sales Manager
• The details of sales plans are in writing & are acceptable to
marketing management.

• The turnover rate of sales personnel is maintained at a level regarded

as satisfactory by marketing management
 5.1 Nature of Sales Management Positions
Position Guide—District Sales Manager
• Reporting relationship:
• The district sales manager reports to the sales manager.

• Job objectives:
• The primary objective is to secure maximum dollar sales of the
company’s products in the sales district in accordance with established
sales policies & sales programs, within the limits of the sales budget.
 5.1 Nature of Sales Management Positions
Position Guide—District Sales Manager
• Duties & Responsibilities.
• 1. Supervision of sales personnel

• 2. Control

• 3. Administration

• 4. Communications
 5.1 Nature of Sales Management Positions
Position Guide—District Sales Manager
• Performance criteria.
• The district sales manager’s performance is considered satisfactory
when:
• The district’s currency & unit sales are equal to or exceed the
quantities budgeted.

• The district’s total expenses are not higher than the amounts
budgeted.
 5.1 Nature of Sales Management Positions
Position Guide—District Sales Manager
• The profit contribution of the district office & warehouse is in line with
plan.

• The turnover rate of district sales personnel is maintained at a

level regarded as satisfactory by the (general) sales manager.
5.2 Functions of Sales Executive
 5.2 Functions of Sales Executive

Operating Functions Planning Functions

 5.2 Functions of Sales Executive
• The sales executive’s planning functions include those connected
with the:
• Sales program,
• Sales organization, &
• Control.

• The sales executive is responsible for:

• Setting personal-selling goals,
• Developing sales programs designed to achieve these goals
• Formulating sales policies & personal-selling strategies,
• Putting together plans for their implementation.
 5.2 Functions of Sales Executive
• Sales programs are put into effect through the sales organization

• The sales executive is responsible for:

• Designing & shaping the sales organization,
• Staffing it,
• Developing the skills of those who are part of it, &
• Providing leadership to it.

• Achievement of sales departmental goals requires controls over

• Selling activities
• Sales volume
• Selling expenses, and the like.
 5.2 Functions of Sales Executive
• Achievement of sales departmental goals requires controls over
• Selling activities
• Sales volume
• Selling expenses, and the like.

• The sales executive is responsible for these and related control activities
 5.2 Functions of Sales Executive
• The relative emphasis that sales executives give to the operating
& planning functions varies with
• (1) Type of products,

• (2) Size of company, &

• (3) Type of supervisory organization

 5.2 Functions of Sales Executive
• The significance attached to operating & planning functions varies with
the product.

• If the product is a consumer good, sales executives attach the greatest

importance to planning functions:
• Development of sales programs,

• Coordination of personal selling with advertising, &

• Building & maintaining relationships with dealers & customers.

 5.2 Functions of Sales Executive
• If the product is an industrial good, sales executives attach the greatest
importance to the operating functions:
• Managing & directing the sales force,

• Making calls with salespeople, &

• Selling personal accounts.

5.3 Qualities of Sales Executive
 5.3 Qualities of Sales Executive
• 1. Ability to define the position’s exact functions and duties in relation to
the goals the company should expect to attain

• 2. Ability to select and train capable subordinates and willingness to

delegate sufficient authority to enable them to carry out assigned tasks
with minimum supervision.
 5.3 Qualities of Sales Executive
• 3. Ability to utilize time efficiently

• 4. Ability to allocate sufficient time for thinking and planning

• 5. Ability to exercise skilled leadership

 5.4 Relationship with Top Management &
Relations with Managers of Other Marketing
Activities
 5.4 Relations with Top Management
• Effective sales executives – well above average in initiative & personal
drive.

• Realizing the sales executive’s potential, however, depends largely upon

relations with top management.

• Sales executives should want to get ahead, for personal goals are as vital
to them as the objectives they set for the sales department, but if they
are to achieve these goals, not only must they know where they are
going, but top management must be kept abreast of their progress
 5.4 Relations with Managers of Other Marketing
Activities
• Relation with Product Management

• Relations with Promotion Management

• Relations with Pricing Management

• Relations with Distribution Management

5.5 Compensation Patterns for Sales Executives
 Conclusion
• Sales executives’ jobs vary from company to company and from position
to position within companies,

• All are responsible for making decisions and seeing to it that others carry
them out.

• All sales executives, from the top sales executive down, spend most
of their time managing personal-selling activities
5: The Sales Organization

Sales Management

Session # 6
6.1 Purpose of Sales Organization
 6.1 Purpose of School Organization
• To Permit the Development of Specialists

• To Assure that All Necessary Activities Are Performed

• To Achieve Coordination or Balance

• To Define Authority

• To Economize on Executive Time

6.2 Setting up a Sales Organization
 6.2 Setting up a Sales Organization
There are five major steps in setting up a sales organization:
• 1. Defining the objectives.

• 2. Delineating the necessary activities.

• 3. Grouping activities into “jobs” or “positions.”

• 4. Assigning personnel to positions.

• 5. Providing for coordination and control

6.3 Basic Types of Sales Organizational Structures
 6.3 Basic Types of Sales Organizational Structures
• If sound practices are followed in setting up the sales department,

• The resulting structure takes on features of one or more of four

basic types:
• 1. Line,

• 2. Line & staff, and

• 3. Functional, &

• 4. Committee.
 6.3 Basic Types of Sales Organizational Structures
• Line Sales Organization:
• Oldest & simplest sales organizational structure.

• It is widely used in smaller firms &

• In firms with small numbers of selling personnel

• Example: Companies that cover a limited geographic area or sell

a narrow product line
 6.3 Basic Types of Sales Organizational Structures
• Line and Staff Sales Organization:
• Often found in large and medium-sized firms, employing
substantial numbers of sales personnel, &

• Selling diversified product lines over wide geographic areas

 6.3 Basic Types of Sales Organizational Structures
• Functional Sales Organization:
• Some few sales departments use functional organization.

• This type – derived from the management theory developed by Frederick

W. Taylor

• Based upon the premise that each individual in an organization, executive

and employee, should have as few distinct duties as possible.
 6.3 Basic Types of Sales Organizational Structures
• The principle of specialization is utilized to the fullest extent.

• Duty assignments and delegations of authority are made according

to function
6.4 Field Organization of the Sales Department
 6.4 Field Organization of the Sales Department
• The field organization consists of all employees of the sales department
who work away from the home office.

• All outside salespeople are included, as are traveling sales supervisors,

branch and district managers, and clerical employees in branch and
district offices.
 6.4 Field Organization of the Sales Department
• Also included are service, repair, and sales promotion personnel.

• Although not all are concerned directly with increasing the effectiveness
of field selling operations, each makes contributions to that end.

• The two main purposes of a field organization are:

• (1) To facilitate the selling task &

• (2) To improve the chances that salespeople will achieve their goals.
6.5 Centralization Vs Decentralization in Sales
Force Management
 6.5 Centralization Vs Decentralization in Sales Force
Management
• In the centralized sales organization almost all activities, including sales
force management, are administered from a central headquarters.

• The central sales office has full responsibility for recruiting, selecting,
training, compensating, supervising, motivating, controlling, & evaluating
the sales force.

• In the decentralized organization, in theory at least, all these activities are

handled by field sales executives.
 6.5 Centralization Vs Decentralization in Sales Force
Management
• Is decentralization in management of various selling tasks & in
performance of certain important personnel management activities.

• Example:
• Branch/district sales offices may do: Recruiting, selecting, motivating, &
supervising;
• Central HQ may handle training, compensating, & evaluating; &
• Branches & the Central HQ may share responsibility, in proportions
varying with the marketing situation & management philosophy, for other
aspects of sales force management.
 6.5 Centralization Vs Decentralization in Sales Force
Management
• It is rare, in other words, for sales force management to be either
100 percent centralized or 100 percent decentralized.

• Management’s appraisal of relative costs & effectiveness results in some

aspects being centralized & others decentralized.
6.6 Schemes for Dividing Line Authority
 6.6 Schemes for Dividing Line Authority
• As marketing operations expand, line authority & responsibility eventually
become excessively burdensome for the top sales executive.

• There is an increasing number of people to supervise

• Tasks of line administration are subdivided among these new assistants in

one of three ways:
• (1) By Geographic area,
• (2) By Products, or
• (3) By Customers or Marketing Channels.
 6.5 Schemes for Dividing Line Authority
• Geographic Division of Line Authority:
• The large firms with far-flung selling operations is likely to subdivide line
authority geographically.

• This system calls for multiple offices, so administrative expenses increase.

• Top sales executive faces coordinating several regional operations.

• Unless this coordination is effective, conflicting policies may develop

in different regions.
 6.6 Schemes for Dividing Line Authority
• Product Division of Line Authority:
• A second scheme for dividing line authority is
• To split the sales task among subordinate line executives

• Each of whom directs sales operations for part of the product line.

• When authority is so divided, more than one sales force may

be required.
 6.6 Schemes for Dividing Line Authority
• Some companies’ product lines are too wide to be
distributed economically by a single sales force.

• Others sell both highly technical & nontechnical products; thus

some salespeople need specialized training and some do not.
 6.6 Schemes for Dividing Line Authority
• Customer (or Marketing Channel) Division of Line Authority:
• The third scheme for subdividing line authority is by type of
customer
(Figure 6.7) or marketing channel (Figure 6.8).

• Appropriate when nearly identical products are marketed to

several types of customers & the problems of selling to each type are
different.

• When the same, or similar, products are sold to a number of industries,

they often find different applications in each industry
 6.5 Schemes for Dividing Line Authority
• Dividing Line Authority on More than One Basis:
• Few companies use a single basis for subdividing line authority.

• Most use a combination, subdividing the selling task more than once, to
permit greater specialization.

• Nearly every large sales department subdivides authority on the

geographic basis at some level of organization, but this is done usually in
combination with either the product or type-of-customer system
 Conclusion
• There is growing recognition of the need to apply sound principles of
organization to the sales department.

• Organizational planning is a continuing activity, and the sales department

structure is adjusted to changing marketing needs.

• This has evolved as less emphasis has been placed on securing orders and
more attention has been paid to control of costs and expenses and the
realization of net profits
7: Sales Personnel

Sales Management

Session # 7
 Overview
• More action oriented and less planning oriented.

Sales executives, in performing their jobs, must know:

• How to analyze information,

• How to combine its significance with their own experiential

knowledge and judgment (& their willingness to accept a certain
amount of risk),

• How to apply imagination in searching for alternative solutions

to problems,
7.1 Sales Personnel Management
 7.1 Sales Personnel Management
• Economies of Effective Sales Force Management :
• There are economies in effective sales force management.
Example:
• Assume that company X has 10 salespersons
• Each making 5 calls per day (10*5=50 calls per day)

• Assume further that 4/5 calls result in sales & that the average sale
amounts to ₹ 500.

• With more effective management, number of calls increases to 6 per day,

the company’s daily total becomes 60
 7.1 Sales Personnel Management
• 8 more sales per day are made (8 × ₹ 500 = ₹ 4,000).

• This is equivalent to adding two new salespeople at the old call rate.

• If sales personnel are paid wholly, or partially, on a commission basis,

• Their incomes are now higher & morale should be improved.

 7.1 Sales Personnel Management
• Some selling costs are related to the number of salespeople

• Hence company’s average cost per call should be reduced.

• There are two types of expenses of maintaining a sales

force: Fixed &
Variable
 7.1 Sales Personnel Management
• Rate of Sales Personnel Turnover:
• It is a measure of the quality of sales force management.

• This is the ratio of separations per 100 salespeople.

• Example: A company employing a sales force of 250 persons and

having 20 separations during the year has a rate of turnover of 8
percent.
 7.1 Sales Personnel Management
• The turnover rate influences total expenses of sales force management.

• Costs of recruiting, advertising, fees to employment agencies – lots

of expenses
Causes of Turnover of Sales Personnel
7.2 Job Analysis
 7.2 Job Analysis
• Assembling & analyzing factual information

• On specific jobs

• Is the basis for professional personnel management.

 7.2 Job Analysis
• Job objectives

• What a salesperson currently does on the job?

• How the salesperson should ideally spend his or her

time?

• Reporting structure
 7.2 Job Analysis
Procedure for Sales Job Analysis & Preparation of Written Job
Descriptions:
(1) Assembly of factual information about the job,

(2) Analysis of the information,

(3) Writing of the job description, &

(4) As required, repeat the process

 7.2 Job Analysis
Job Description:
• Types of products and customers
• Frequency of calling the customers
• Performance criteria
• Specific tasks and responsibilities
• Reporting structure
• Environmental factors like amount of travel
• Compensation method and allowances
 Conclusion
• Sales force management is personnel administration applied to the sales
department.

• In its application, it requires adaptation to the special circumstances

that
surround the salesperson’s job
8: Recruitment & Selection

Sales Management

Session # 7
 8.1 Organization for Recruitment & Selection
• Varies from company to company.

• What influences?
• Company size

• Executives’ personalities, &

• Departmental structure
 8.2 The Prerecruiting Reservoir
• Why do many companies have a pre-recruiting reservoir?
• Because of uncertainties as to when new sales personnel will be
needed

• This is a file of individuals who might be recruited when the need arises.
 8.2 The Prerecruiting Reservoir
• The names of individuals added to the reservoir come from
diverse sources like:
Resumes submitted online

List of candidates from earlier selection process.

• Others come from chance remarks made by people with whom the
sales executive comes into contact
 8.3 Sources of Sales Force Recruits
• Recommendations by own salespeople
• Educational institutions
• Sales personnel of non-competing firms
• Placement consultants
• Personal acquaintances of sales executives
• Customers’ employees
• Unsolicited applications
• Competitors’ salespeople
 8.3 Sources of Sales Force Recruits
Internal Transfers
Pros
–Company is aware of internal applicants like—Past performance,
personality, work habits, & ability to assume different responsibility.

Cons
– Candidates rarely have past sales experience.
– Vacancies in other areas to replace employees who move to sales.
 8.4 Recruitment Process
Personal Recruiting
• Company’s website
• Campus placements
• Recruiting direct-to-consumer sales personnel
• Recruiting consultants
• Advertisements
 8.5 Selection Process
• Selection systems for sales personnel range from simple one-step systems

• A selection system is a set of successive ‘‘screens,’’ at any of which an

applicant may be dropped from further consideration
 Pre-Interview Screening & Preliminary Interview
• Pre-interview screening
• Purpose: Eliminating unqualified applicants, thus saving time
of interviewers & applicants

• Specifications: Interview application form should not be longer than

two pages

• Applicants not possessing these minimum qualifications do not

receive appointments for interviews
 Pre-Interview Screening & Preliminary Interview
• Preliminary interview
• Short not more than twenty minutes.

• 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 or she

is asked to fill out a formal application form, and an appointment is
made for one or more formal interviews
 Formal Application
• Most of the companies ask candidates to fill the application form.

• Can be an online application available on the company’s website.

• Serves as a central record for all pertinent information collected during

the selection process.

• The completed formal application amounts to a standardized written

interview, since most of the information that it contains could be
obtained through personal interviews.
 The Interview
• Interview is the most widely used selection step &

• In some companies it comprises the entire selection system

• Who should do the interviewing?

• How many interviews?

 The Interview
• Interviewing techniques
1. Patterned interview:
• Here the interviewer uses a prepared outline of questions designed
to elicit a basic core

2. Non-directive interview:
• Applicant is encouraged to speak freely about his or her
experience, training, and future plans.

• The interviewer asks few direct questions and says only enough to
keep the interviewee talking
 The Interview
3. Interaction (stress) interview:
• Simulates the stresses the applicant would meet in actual selling
and
provides a way to observe the applicant’s reactions to them

4. Rating scales
 References
• References provide information on the applicant not available from other
sources.

• Some employers deny the value of references, saying that references

hesitate to criticize personal friends, or ex-employees.

• But the experienced employer reads between the lines, and sees
where, for example, the weak candidate is not praised
 References
References
• Present or former employers

• Former customers

• Reputable citizens

• Mutual acquaintances
 References
• Many companies run credit checks on applicants for sales positions.

• Credit files are compiled by local credit bureaus, & special credit
reports are provided by such organizations as Dun & Bradstreet.
 Psychological Test
• Evaluating psychological tests for selection purposes require considerable
sophistication.

• There is a possibility that a test has differential validity, & the objectivity
of tests leads many users to expect more validity & reliability in
predicting selling success than the tests can offer
 Psychological tests
Tests of ability:
• Tests of ability include tests of mental ability ( intelligence tests) and tests
of special abilities (aptitude tests).

Tests of habitual characteristics

• These include attitude, personality, and interest tests.

• Attitude tests are more appropriate as morale measuring techniques than

as selection aids
 Psychological tests
Interest tests:
• A basic assumption implicit in the use of interest tests is that
a relationship exists between interest & motivation.

• Hence, if two persons have equal ability, the one with the greater interest
in a particular job should be more successful in that job

Achievement tests
• Achievement tests seek to determine how much individuals know about
a subject
 Psychological tests
• Must ensure test is valid in case challenged

• Tests should be confirming factor, not eliminating

 Medical Examination
• Since good health is important to a salesperson’s success, most
companies require medical examination
9: Sales Training

Sales Management

Session # 8
9.1 Building Sales Training Program
 9.1 Building Sales Training Program
• There are several types of sales training programs.

• Most comprehensive & longest is the training program for

newly recruited sales personnel.

• More intensive & shorter programs on specialized topics, as well

as periodic refresher courses (collectively known as continuing
sales training), are presented for experienced sales personnel
9.2 Defining Training Aims
 9.2 Defining Training Aims
• Regardless of the type of sales training program,

• Defining its specific aims is the first step in its planning.

• Defining the general aim is not sufficient.

• Example: Company may want to increase the sales force’s productivity

through training, thus Sales team must identify what must be done to
achieve increased productivity.
 9.2 Defining Training Aims
• General aims are translated into specific aims phrased in
operational terms.

• Specific aim definition begins with a review of general aims & the
means currently employed to attain them

• Management considers as it seeks to identify training needs for:

(1) Initial sales training programs &

(2) Continuing sales training programs

 9.2 Defining Training Aims
(1) Identifying Initial Training Needs:”
• Determining the need for, & specific aims of, an initial sales training
program requires analysis of three main factors:
A. Job Specifications

B. Individual trainee’s background & experience, &

C. Sales-related marketing policies.

 9.2 Defining Training Aims
A. Job specifications:
• The qualifications needed to perform the job are detailed in the
job specifications.
 9.2 Defining Training Aims
B. Trainee’s background and experience:
• Each individual enters an initial sales training program with a
unique educational background & experience record.

• The gap between the qualifications in the job specifications & those a
trainee already has represents the nature & amount of needed
training
 9.2 Defining Training Aims
C. Sales-related marketing policies:
• To determine initial sales training needs, sales-related marketing policies
must be analyzed.

• Differences in products & markets mean differences in selling practices &

policies, which in turn, point to needed differences
 9.2 Defining Training Aims
(2) Identifying Continuing Training Needs:
• Determining the specific aims for a continuing sales training program
requires identification of specific training needs of experienced sales
personnel.
9.3 Deciding Training Content
 9.3 Deciding Training Content
• The content of a sales training program, whether an initial or continuing
program, derives from the specific aims that management, after analyzing
its training needs, formulates.

• For an initial sales training program to contribute maximally

toward preparing new sales personnel, it must cover all key
aspects of the salesperson’s job.
 9.3 Deciding Training Content
• Content varies from company to company, because of differences in
products, markets, company policies, trainees’ ability & experience,
organizational size, & training philosophies.

• Every initial sales training program should devote some time to each
of four main areas:
• 1. Product knowledge,
• 2. Selling skills
• 3. Markets &
• 4. Company information.
9.4 Selecting Training Methods
 9.4 Selecting Training Methods
• There is a wide variety of methods, but the program content often
limits those that are appropriate.
• Methods:
• The lecture
• Demonstrations
• Role playing
• Case discussion
• Impromptu discussion (Sometimes called a sales seminar or buzz
session)
• Gaming (Simulation)
• On-the-job training
• Online courses
9.5 Executing the Training Program
 9.5 Executing the Training Program
• The execution step requires four key organizational decisions:
• (1) Who will be the trainees?:
• Four criteria are in common use:
a. Reward for good performance

b. Punishment for poor performance

c. Convenience (of trainee & trainer), &

d.Seniority (the greater the seniority, the greater the opportunity

for added training).
 9.5 Executing the Training Program
• (2) Who will do the training?:
• Sales training is a never-ending process, & , regardless of who is
responsible for training, the senior executive has continuing
responsibility:
a. Sales training staff,

b. Training the sales trainers &

c. Outside experts
 9.5 Executing the Training Program
• (3) When will the training take place?:
a. Timing Group Vs. Individual training,

b. Timing initial-sales training programs,

c. Timing continuing-sales training programs

• (4) Where will the training site be?

9.6 Evaluation of Training Programs
 9.6 Evaluation of Training Programs
• Trainee feedback

• Assessing the amount of information participants mastered during the

program

• Measuring the execution of training in the field

• Achievement of organization’s objectives like:

Additional sales
Fewer complaints
Higher
satisfaction rating
10: Motivating Sales Personnel

Sales Management

Session # 8
10.1 Meaning of Motivation
10.1 Meaning of Motivation
10.2 Motivational “Help” from Management
 10.2 Motivation “Help” from Management
• Inherent nature of the sales job

• Salesperson’s boundary position & role conflicts

Conflict of identification arises out of multi-group membership
Advocacy conflict
Salesperson’s dual role

• Tendency towards apathy

• Maintaining a feeling of group identity

10.3 Models of Motivation
10.4 Motivation & Leadership
 10.4 Motivation & Leadership
• Effective sales executives are leaders, rather than drivers, of sales
personnel

• Earn the voluntary cooperation of members of the sales

organization

• Motivate salespersons to reach the sales department’s goals

• Understand the motivations, desires, & ambitions of those they

lead

• Lead by example
10.5 Unionization of Sales Personnel
 10.5 Unionization of Sales Personnel
• Reasons why unions have made little progress in organizing
sales personnel:
• 1. Difficult to develop strong group identification in most sales
departments because each person works alone & sees other members
of the sales force infrequently.

• Little opportunity exists for mutual exchange of grievances.

• 2. In contrast to most employee groups, salespersons think of themselves

as independent operators
 10.5 Unionization of Sales Personnel
• 3. Sales personnel have some control over their workday & workweek.

• If they work excessive hours, it is often to add to their compensation, &

there are no time clocks.

• 4. The prospect of higher wages has never-served as a strong organizing

incentive for sales personnel, as sales personnel have been made to
feel that low earnings are the result of personal ineffectiveness, not of
the
employer’s niggardliness.
11: Compensating Sales Personnel

Sales Management

Session # 9
11.1 Requirements of a Good Sales Compensation Plan
11.1 Requirements of a Good Sales Compensation Plan
• A good sales compensation plan meets seven requirements:
• 1. Provides a living wage, preferably in the form of a secure income.

• 2. The plan fits with the rest of the motivational program.

• 3. The plan is fair.

• 4. Easy to understand.

• 5. The plan adjusts pay to changes in performance.

11.1 Requirements of a Good Sales Compensation Plan
• 6. The plan is economical to administer.

• 7. The plan helps in attaining the objectives of the sales organization…

11.2 Devising a Sales Compensation Plan
 11.2 Devising a Sales Compensation Plan
• Define the sales job

• Consider the company’s general compensation structure

There are four job evaluation methods

Two are non-quantitative: simple ranking & classification or grading.

The other two are quantitative: the point system & the factor-
comparison method.

• Compensation patterns in community and industry

 11.2 Devising a Sales Compensation Plan
• Average compensation level

• Provide for the various compensation elements

• Special company needs and problems

• Consult the present sales force

• Reduce tentative plan to writing and pretest it

 11.2 Devising a Sales Compensation Plan
• Revise the plan

• Implement the plan and provide for follow-up

11.3 Types of Compensation Plan
 11.3 Types of Compensation Plan
• Straight-salary plan

• Straight-commission plan
Determining commission base
Drawing accounts

• Combination salary-and-incentive plan

Salary plus commission
Strengths & weaknesses of
combination plans
11.4 Use of Bonuses
 11.4 Use of Bonuses
• Why are Bonuses paid??
• Bonuses are paid for reaching a sales quota, performing promotional
activities, obtaining new accounts, following up leads, setting up displays,
or carrying out other assigned tasks.

• The bonus is an additional financial reward to the salesperson

for achieving results beyond a predetermined minimum.
11.5 Fringe Benefits
 Conclusion
• The sales compensation plan is an essential part of the total program
for motivating sales personnel.

• Sales compensation plans play three motivational roles:

• (1) To provide a “living wage” (in line with Herzberg’s motivation-hygiene
theory—to the lack of job dissatisfaction if not to job satisfaction),
• (2) To relate pay to job performance (in line with the expectancy theory
of motivation), &
• (3) To demonstrate the congruency between attainment of company
goals and goals of individual sales personnel (also in line with
expectancy theory).
12: The Sales Budget

Sales Management

Session # 9
12.1 Purpose of Sales Budget
 12.1 Purpose of Sales Budget
• Mechanism of control

• Instrument of planning
12.2 Sales Budget – Form & Content
 12.2 Sales Budget – Form & Content
• Estimating budgeted selling expenses
Using standard costs

Other estimating methods

12.3 Budgetary Procedure
 12.3 Budgetary Procedure
• Planning styles and budgetary procedures
• There are two basic planning styles —top-down & bottom-up.

• In top-down planning, top management sets the objectives and

drafts the plans for all organizational units.

• Top-down planning goes along with the Theory X philosophy of

management dislike work and responsibility and prefer to be told what
to do and when
 12.3 Budgetary Procedure
• Bottom-up planning goes along with the Theory Y philosophy of
management, whose key assumptions are that people like work and
responsibility and commit themselves more strongly to objectives
and plans that they have participated in formulating.

• Actual budgetary procedure

• Handling competition for available funds within the marketing

division

• ‘Selling’ the sales budget to top management

 12.3 Budgetary Procedure
• Using the budget for control purposes

• Effect of errors in budgetary estimates

• Flexibility in budgeting
13: Targets & Sales Management

Sales Management

Session # 9
 Overview
• Targets or quotas are quantitative objectives assigned to sales
organizational units—individual sales personnel

• As standards for appraising selling effectiveness, targets specify desired

performance levels for sales volume; such budgeted items as
expenses, gross margin, net profit, and return on investment; selling-
and non- selling-related activities; or some combination of these items
13.1 Objectives in using Sales Targets
 13.1 Objectives in using Sales Targets
• To provide quantitative performance standards

• To obtain tighter sales and expense control

• To motivate desired performance

• To use in connection with sales contests

13.2 Sales Target, Sales Forecast & Sales Budget
 13.2 Sales Target, Sales Forecast & Sales Budget
• Relationships among sales target, the sales forecast, & the sales budget
vary from company to company.

• Relationships depend not only upon the procedures used in forecasting,

budgeting, & target setting but upon how the planners integrate these
three procedures.

• The greater the integration, the more effective targets are as mechanisms
for controlling sales efforts
13.3 Types of Targets & Target Setting Procedures
 13.3 Types of Targets & Target Setting Procedures
• Targets fall into four categories:
• (1) Sales volume,

• (2) Budget,

• (3) Activity, &

• (4) Combination.

• Differences in procedures show up mainly in the setting of sales volume

and budget targets
 13.3 Types of Targets & Target Setting Procedures
• Sales Volume Targets:
• Oldest & most common type.

• Important standard for appraising the performances of individual

sales personnel, other units of the sales organization, & distributive
outlets.

• Sales volume targets communicate managements’ expectations as to

“how much for what period.”

• Dollar sales volume targets

• Unit sales volume targets
 13.3 Types of Targets & Target Setting Procedures
• Procedures for Setting Sales Volume Targets:
• Sales volume targets derived from territorial sales potentials

• Sales volume targets derived from total market estimates

• Sales volume targets based on past sales experience

• Sales-volume targets based on executive judgment

• Sales volume targets related only to compensation plan

 13.3 Types of Targets & Target Setting Procedures
• Letting sales personnel set their own sales volume target

• Budget Targets:
• Budget targets are set for various units in the sales organization to
control expenses, gross margin, or net profit.

• The intention in setting budget targets is to make it clear to sales

personnel that their jobs consist of something more than obtaining
sales volume.
 13.3 Types of Targets & Target Setting Procedures
• Budget targets make personnel more conscious that the company is
in business to make a profit.

• Expense targets: emphasize keeping expenses in alignment with

sales volume, thus indirectly controlling gross margin and net profit
contributions.

• Gross margin or net profit targets: emphasize margin & profit

contributions, thus indirectly controlling sales expenses
 13.3 Types of Targets & Target Setting Procedures
• Activity Targets:
• The desire to control how sales personnel allocate their time and
efforts among different activities explains the use of activity targets.

• A company using activity targets starts by defining the important

activities sales personnel perform; then it sets target performance
frequencies.

• Activity targets are set for total sales calls, calls on particular classes of
customers, calls on prospects, number of new accounts, missionary
calls, product demonstrations, placement or erection of displays, making
of collections and the like.
 13.3 Types of Targets & Target Setting Procedures
• Combination and Other Point System Targets:
• Combination targets control performance of both selling and non-
selling activities.

• These targets overcome the difficulty of using different measurement

units to appraise different aspects of performance
13.4 Admistering the Target System
 13.4 Admistering the Target System
• Accurate, fair, and attainable targets

• Securing and maintaining sales personnel’s acceptance of targets

Participation by sales personnel in target setting

Keeping sales personnel informed

Need for continuous managerial control