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Sales Management 14MBAMM407

Dept. of MBA/SJBIT Page 1

Subject Code: 14MBA MM407 IA Marks: 50

No. of Lecture Hours / Week: 04 Exam Hours: 03

Total Number of Lecture Hours: 56 Exam Marks: 100

Practical Component: 01 Hour / Week

Module 1: (8 hours)

Introduction to sales management: Meaning, Evaluation, Importance, Personal Selling,

Emerging Trends in Sales Management, elementary study of sales organizations, qualities and

responsibilities of sales manager. Types of sales organizations.

Module 2: (6 hours)

Selling skills & Selling strategies: Selling and business Styles, selling skills, situations, selling

process, sales presentation, Handling customer objections, Follow-u action.

Module 3: (6 hours)

Management of Sales Territory & Sales Quota: Sales territory, meaning, size, designing, sales

quota, procedure for sales quota. Types of sales quota, Methods of setting quota. Recruitment

and selection of sales force, Training of sales force.

Module 4: (8 hours)

Sales force motivation and compensation: Nature of motivation, Importance, Process and

factors in the motivation, Compensation-Meaning, Types of compensation plans and evaluation

of sales force by performance and appraisal process.

Module 5: (6 hours)

Sales management job: Standard sales management process-international sales management -

international market selection-market survey approach or strategy - case study in Indian context.

Module 6: (8 hours)

Sales Manager and Sales Person: Role of sales manager and sales people; functions of sales

manager, functions of sales person, types and characteristics of sales manager and sales people-

Time management for sales manager and sales person.

Module 7: (8 hours)

Selling on the internet: Selling agents for internet trading-net selling, advertising in net trading,

payment system in internet trading-smart card, credit card, debit card- payment by card:

advantages and disadvantages; How to make internet selling safe-Digital signature, biometric

method and legal or regulatory environment; Growth of internet trading in India.



Contents

Module No. Particulars Page No.

1 Introduction to sales management 3 – 11

2 Selling skills & Selling strategies 12 – 19

3 Management of Sales Territory & Sales Quota 20 – 24

4 Sales force motivation and compensation 25 – 28

5 Sales management job 29 – 45

6 Sales Manager and Sales Person 46 – 56

7 Selling on the internet 57 - 74



Module 1: (8 hours)

Introduction to sales management: Meaning, Evaluation, Importance, Personal Selling,

Emerging Trends in Sales Management, elementary study of sales organizations, qualities and

responsibilities of sales manager. Types of sales organizations.

Sales Management Meaning:

It is the attainment of salesforce goals in an effective and efficient manner through planning,

staffing, training, leading and controlling organizational resources.

Evaluation of Sales Management:

Industrial revolution that took place in the 18th century gave rise to the expansion of market

which required professional approach in selling. The history of salesmanship is as old as human

civilization. The business and trade of buying and selling goods flourished over centuries and

centered only on some specific cities of the world.

The first sales people

The first sales people in the US were Yankee peddlers who carried clothing, spices, and

household articles from one part to another part. These move from one village to village and sell

sarees, dress materials and spices mostly in the rural markets because rural housewives have

lessor mobility than urban housewives.

Pack Peddlers

The pack peddlers in India traded with the tribal Indians and exchanged knives, beads and

ornaments and handicrafts. They sold colored sugar water as medicine and cheated people from

smaller gains. In the beginning of the 19th century, these peddlers started using horse driven

carts and wagons and started stocking heavier goods.

Greeters and Drummers (Intermediary to buyer)

Wholesalers and manufacturers hired greeters and drummers who would seek out and invite

retailers to visit the display of the owner. The drummers would meet the passengers form

incoming train and ship with great fanfare to beat their competitors. In the next phase, the

drummers started visiting customer’s place of business. There were fewer than 1000 traveling

sales people before 1860 in the US who were basically credit investigators and took orders for

goods.



Selling Techniques

The techniques of modern sales management and selling techniques were refined by John Henry

Patterson, widely known as the father of modern sales management. He ran the National Cash

Registry.

He asked his best sales people to demonstrate their sales techniques to other salespeople. The

best sales approach was printed in a sales primer and distributed to all the other sales people to

follow

Modern Sales Management

Today the process of sales management has undergone numerous changes in terms of strategy,

practice and technological adoption to achieve the desired goal. A sales person has become the

information provider. The real sales activity is now in retaining customers rather than just

closing the sale.

This relationship approach has changed the scope of sales management and research has found

that is costs five times more to register a new customer than to sell a product or service to an

existing customer.

The Domain of Sales Management

The domain of sales management has become multidisciplinary in which sales manager has to

manage a diverse workforce and complex technologies. Sales manager have to perform duties

such as recruiting, selecting, training, motivating, forecasting, controlling and administering

people. They have to manage and satisfy multiple and satisfy multiple stakeholders such as

customers, suppliers, sales representatives and top management with the objective of increasing

sales and profitability.

Importance of Sales Management

The amount spent on selling product is very high.

Salesforce is the primary contact points so much attention to be given for improving the

ability of selling through training and motivation.

Personal selling is the most commonly used method of promotion.

In most industrial markets, personal selling comprises the majority of the promotional

budget and is a significant part of overall budget.



Customers consider salesperson as the company selling product.

With the advent of internet technology and web based platforms for interaction with

customers, personal selling has become a method of marketing communication which

fosters personalized and interactive dialogue with customers.

Personal selling

It is a personal communication of information to influence a prospective customer to buy

something- a good, service, or idea that satisfies an individual’s needs.

Types of Personal Selling

Personal selling can be broadly classified into three categories.

Industrial selling

Selling to reseller

Selling to business user

Institutional selling

Selling to Government

o Retail selling

o Service selling

Emerging trends in sales management

To be successful in a changing marketing environment it is important that sales managers

understand emerging trends in the following areas:

Global perspective

Global competition is intensifying Domestic companies who never thought about foreign

competitors suddenly find them in their salesforces to meet foreign competition in their

country and improving their company’s personal selling efforts in other countries. Sales

managers selling goods and services in the global market place face challenges, different

requirements for buying, and different styles of negotiation and so on. Sales managers

must also consider opportunities as many global markets are emerging and growing

rapidly. A company need not be large to sell globally. Small and medium sized

organizations can sell in global niche markets.

Revolution in Technology

Digital revolution and the management of informational have greatly increased the

capabilities of consumers and marketing organizations. Buyers today can get information



on products, compare supplier’s prices and place orders on the internet in a matter of

seconds. They can access online a great amount of information about almost anything.

Marketing organizations also have a new set of capabilities. Companies can collect more

information about capabilities. Companies can collect more information about markets,

customer, prospects and competitors by using the internet. They can establish website and

communicate information about the company, its products and services to the needs of

individual customers.

To compete effectively, salespeople and sales managers will have to adopt to the latest

technology.

Some of the technological innovations for sales management are portable and desktop

computers, mobile phones, video conferencing and videotape presentations. Technology

can make some sales activity efficient and cost effective.

Customer Relationship management

Combining relationship marketing with information technology has resulted in customer

relationship management or customer relationship marketing. Interestingly, the concept

of relationship marketing came about earlier by bringing quality, customer service, and

marketing together.

Relationship marketing aims at build long term, mutually satisfying relations with key

parties’ customers, distributors and suppliers in order to retain their long term preference

and business. CRM enables companies to provide excellent real time customer service by

focusing on meeting the individual needs of each valued customer by the use of CRM

software packages.

Salesforce diversity

The demographic characteristics of the salesforce are changing and are becoming more

varied. For example, more women are taking up careers in selling and sales management.

In addition, today salespeople are more educated, with college degree and some of them

holding postgraduate degrees. Sales manager will have to manage a salesforce consisting

of women, more educated and less educated salesperson, as well as senior people. The

needs or expectations of the varied salesforce will be different and consequently the

motivational tools will not be the same.

Team Selling Approach



The practice of team selling is widely followed by most companies in recent years. Team

selling approach is used when a company wants to build a long term mutually beneficial

relationship with major customer, who have high sales and profit potential. It is also used

for selling a technically complex product or service to a prospective customer. The

composition of the team includes members from top management, technical specialist,

customer service, inside salesperson and salesperson or manufacturer’s representative.

Team selling requires the joint selling effort of several persons, and hence, designing an

effective compensation plan can be a challenging task.

Managing multi-channels

Multi-channel marketing system occurs when an organization uses two or more

marketing channels to reach one or more customer segments. Major benefits of a multi-

channel marketing system are:

Lower channel cost (ex: selling by phone instead of visits by salesperson to small sales

potential customer)

Increased market coverage.

Customized selling-selling technically complex products and services by the company’s

technical salesforce.

Multi channels may also lead to conflict and control problems as two or more channels

may compete for the same customer. The successful sales manager will have to

effectively manage the conflicts between channel members by using various techniques

like co-operation, exchanging person, mediation.

Ethical and Social Issues

Sales managers have social and ethical responsibilities. Sales people face ethical issues

such as bribery, misleading, and high-pressure sales tactics. Giving payment or gift to get

an order, misleading the customer by exaggerating the benefits of a product and using

high-pressure tactics of committing wrong delivery schedules to a customer needing

urgent delivery of a raw material are example of unethical behavior of salesperson.

Today sales manager have no choice but to ensure ethical standards from the salesforce

otherwise they may be out of business or even land up in legal problems.

Sales Professionalism



Today’s top sales people are largely made, not merely born. Selling has increased in

complexity, because composition is more intense, customers are more sophisticated and

products and services have become more technical. Success mostly comes to those

salesperson who have a combination of natural ability and acquired skills. A study on

what do buyers like most in a salesperson indicated qualities like reliability, credibility,

professionalism, integrity and product knowledge as most valued. The knowledge, skills

and the right attitudes to meet complex and competitive market conditions of today are

required by the professional salesperson through intensive training and practice. Some of

the successful organizations have their own centers for training and management

development. Today’s companies spend a lot of money each year to train salespeople in

the art of selling and to make them professional.

Elementary study of Sales Organization

A sales organization is an organization of individual either working together for the marketing of

products and services, manufactured by an enterprise or for products that are procured by the

firm for the purpose of reselling.

A sales organization defines the duties, roles and the rights and responsibilities of sales people

engaged in selling activities meant for the effective execution of the sales function.

Factors influencing structure

Product and service related factors

Organization related factors

Marketing mix related factors

External factors

Organizational principles

A sales manager needs to understand the various organizational principles that help in the

smooth functioning of the organization, supports the work of the team and helps the team to

respond to market opportunities.

Span of control

Number of subordinate and sales staff under the supervisor of a sales Manager is known as span

of control. When new recruits have to be handled Narrow span of control can be used or else

wider span of control is preferred.

Centralization and Decentralization



The extent of control authority of the top management decides the level of centralization. Highly

centralized organization-Every decision will be made by the top management. Decentralization

helps organization to be competitive at the respective market level.

Integration and co-ordination

The organization across departments integrated to serve customer with effective co-ordination.

Types of sales Organization

Line sales organization

It is the simplest sales organization structure. All managers, from top sales manager to middle

level managers, have line authority. Line authority means people in management positions have

formal authority to direct and control immediate subordinate. Line managers are responsible to

achieve target.

Head marketing

Sales Manager

Area sales manager 1 Area sales manager 2 Area sales manager 3 Area sales manager 4

Salespeople Salespeople Salespeople Salespeople

Line and Staff organization

In this type of organization structure, a group of specialists are made available to the top sales or

marketing executive. These specialists, called staff are experts in certain support activities such

as marketing research, sales training, and advertising or integrated marketing research, sales

training, and advertising or integrated marketing communication and marketing logistics. Staff

manager don’t have any authority to issue directives to salespeople, who report to line sales

managers.

Head marketing

Marketing service manager sales manager Marketing research manager Promotional manager

Area sales manager-1 Area sales manager-2 Area sales manager-3 Area sales manager-4

Sales People Sales People Sales People Sales People

Functional sales organization

In this sales organization, the principle of specialization is fully used. Each staff specialist

manager, such as marketing research manager and promotion manager, has line authority of

his/her function over salespeople. Example, marketing research manager can sales manager can



directly issue instructions to all salespeople through area sales managers to obtain certain market

information.

Head Marketing

Marketing service Manager sales manager marketing research manager promotional manager

Area sales manager

Salespeople

Horizontal Organization

This organization structure removes management levels (hierarchy) and also departmental

boundaries.

The support functions like strategic planning, human resource, and finance are looked after b a

small team of senior executives. All other people in the organization are the members of cross

functional teams, which perform many core processes like product design, sales and production

or operation. These teams also work with customer teams to solve the customer’s problems.

Advantages are reduction in supervision, unnecessary tasks and costs and substantial

improvement in efficiency and customer responses with enthusiasm.

Research design team operation team

Customer research production

Product /service design quality assurance

Systems engineering

Planning team

Strategic Planning

Accounts, Finance

Human Resource

Chief operation officer

Customer support team customer satisfaction

Service sales and marketing

Training pricing, promotion

Information channels, logistics

Qualities and Responsibilities of sales manager

Qualities

He should be good communicator, catalyst, and planner



He should be a prognosticator, and skillful manipulator.

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

towards the achievement of common goal.

He should be a successful mentor who understands each individual’s needs, self

fulfillment and economic growth

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

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

He should be capable of handling unanticipated difficulties and events.

He should be an opportunist and a worthy advisor.

He should be a team-mate and referee.

Responsibilities

Sales planning and budgeting

Estimating demand and forecasting of sales.

Determination of size and structure of the sales organization.

Recruiting, selecting, and training of sale’s people

Allocating of salesforce and setting sales quota

Compensating, motivating and leading the salesforce.

Analyzing sales volume cost and profit

Measuring and evaluating salesforce performance.

Monitoring marketing environment.



Module 2: (6 hours)

Selling skills & Selling strategies: Selling and business Styles, selling skills, situations, selling

process, sales presentation, Handling customer objections, Follow-u action.

Selling skills and Selling Strategies

Selling skills

These are the sum total of aptitudes and skills such as communication skills, listening skills,

conflict resolution skills, problem solving skills and negotiation skills.

Selling and Business style

The entire customer doesn’t buy the products in the same way. The buying styles vary depending

upon the buyer’s capability to pay, the quantity of purchase, the buyer’s ability to take risk, the

bargaining power of the buyer in the market, the competitive landscape in the industry and many

other factors.

Research has shown that the way people respond to an innovation varies in the marketplace.

Innovators and laggard

People who are adventurous and have high risk capital are the overnight buyers. These buyers

are the innovators in the marketplace, who mostly buy on impulse and consider non-functional

reasons for making a choice. This set of people is followed by another group who accept new

products and innovations after observing the innovators using it. Majority of such people take

time to make a buying decision. There is another set of people who but only after everybody has

started using the product. These laggards start buying a product when another new product is on

the doorstep.

In many organizations buying is centralized, whereas in many others buying decisions are

undertaken by a committee or a similar form of set up. Market conditions in terms of the number

of competitors in the market, the prevailing level of competition, the quantity of purchase by the

buyer the switching cost involved in buying from a competitor’s firm, etc, will decide the nature

of buying.

Theory of diffusion

There are also customers who are vary conservative and buy only when they see everyone using

the product. It is very easy to convince the innovators for buying the product, where as it are

difficult to close a sale in the case of laggards. This is called the theory of diffusion.



In the theory of diffusion, the innovators do not give much importance to the salesperson and

make new purchases out of a habit of experimenting.

People oriented

Problem oriented

Sales technique oriented

Push the product oriented

Take it or leave it

Selling Situations

A typically selling situation explains what kind of customers a salesperson is going to face and

what kind of customers a salesperson is going to face and what kind of sales approach will help

him in closing a sale in that situation.

The sales Task and Function

The salesperson has to undertake various tasks during the process of selling. We have classified

the different kinds of salespeople in the introductory on the basis of sales responsibility and

functions.

When a salesperson gives a sales presentation or makes a sales call he communicates with the

customer and basically performs the communication function. But the customer may have

queries, doubts and he wishes the salesperson is involved in listening function.

By providing information about other existing products of the company and new products that

are likely to come to the market, a salesperson also performs the information dissemination

function.

In non standardized markets, where there is no list price involved in buying and selling, the

salesperson needs to negotiate with customers and bargain wherever possible for the benefit of

the

organization and thus he is involved in the negotiations and bargaining function.

� Maintenance Selling

Typically, maintenance selling involves the art of servicing the existing accounts, securing

promotional cooperation, counting inventory and taking replenishment orders, and delivering the

products. In the advertising world, these kinds of salespeople are called client servicing

executives who provide service to clients and also take the orders as and when required. There is

no question of prospecting for this kind of salespeople as it is done with the exiting customers. In



the IT sector, these sales people are posted at the client site and are responsible for solving the

client’s problems. In high tech product categories also we find service and maintenance

salespeople.

� Developmental selling

Salespeople engaged in developmental selling are called business developmental sales executives

as they try to contact the potential customers and build business for the firm. They are the real

salespeople who try to do prospecting from the leads either available in the organization or

collected by them and then take the prospect through the whole process of selling to realize a

sale.

Selling skills

While it is very difficult to find out a set of characteristics for guaranteed success in selling, hard

work, working smartly in business, ability to set goals, level of maturity, communicative ability,

honesty, integrity, can make a successful salesperson. In some situations these skills can be

developed through training and practice. Selling skills are a set of characteristics that are

necessary for a salesperson to posses, failing which he may not be successful in selling.

The essential skills for successful selling are

Problem solving skills Communication Skills

Selling Skills

Negotiation Skills Listening Skills

Conflict Management

Communication Skills

The ability and expertise to communicate is necessary in selling function. The salespeople should

posses a good vocabulary and express themselves intelligently to the customer. The later element

is necessary mostly in intelligent buying and selling situations, such as business to business

selling.

Research has found out that trust between a buyer and a seller largely depends on five elements

in the salesperson’s behavior.

1. Truth of words communicated by the salesperson

2. Predictability of action

3. Competency ( ability/knowledge/resource)



4. Intent or empathy (placing the customer’s interest on par with the seller’s interest, a

commitment to solving the customer’s problem and responsive to the customer’s cause)

5. Likeability (It is an emotional issue and difficult to clearly define, but can be understood as a

perception of commonality by both the parties.

Communication Process

Communication is the exchange of idea and information between two parties. The

communication process is defined as a set of activities and systems integrated for an exchange of

ideas, concepts, information and knowledge between a sender and a receiver.

Sales communication can be both personal and non-personal. Non-personal communication

means the use of mass media for providing product information to the consumers. Non-personal

communication involves newspaper, TV, and other mass media through which sponsor sends

messages about the products and services without a scope of knowing the recipients.

A typical communication process begins with a source, which in this case is the salesperson

himself, who provides the relevant product and service information. The source has thoughts and

ideas to communicate to the audience, which have to be encoded in a presentable form by the

sender. Sales presentation, sales literature sent through direct mail, telephone calls and selling

information over the internet are example of communication and information dissemination in

the selling process. For this purpose, the message has to be encoded into a presentable format

that can be transmitted to the customers.

This involves translating ideas and thoughts into symbols, words and pictures to meaningful

communication patterns. The words and symbols used by the source should communicate the

same meaning to the receiver.

� Managing body language

Salespeople can take care of their verbal and non-verbal communication while making sales

presentations. The following will explain the strategy and tactics they should follow to manage

body language to show that they are confident enough to handle a sales situation.

Personal appearance

Posture

Gestures

Facial expression

Eye contact



Space distancing

Listening skills

The sales manager has to be a very good listener and use his listening skills to lead towards sales

realization. Poor listening skills may make a sales manager miss subtle issues in customer

interaction and- this may lead to non-resolution of customers problems and thus a poor level of

sales realization.

Research suggest that people are only 25% efficient in their ability to listen. An average person

remembers only about half of what is being told to him after 10 min and forgets half of that

within 48hrs.

Process of listening

Attendance Evaluations

Interpretation Response action

Remembrance

Levels of Listening

Feedback

Paraphrasing

Clarifications

Empathetic listening

Active listening

Conflict Management Skills

Conflict exists in every organization. Conflict in sales organization is more evident than in any

other organization. This is due to the fact that there is always conflict of interest among people at

different levels as the goals are different at each level of the organization.

Models of conflict

Approach –approach

Approach-Avoidance

Avoidance-Avoidance

Components of conflict

Interest

Emotional

Value



Methods of conflict resolution

Lumping

Avoidance

Coercion

Conciliation

Mediation

Arbitration

Adjudication

Negotiation

Negotiation Skills

Negotiation occurs when someone else has what you want and you are prepared to bargain for it

and the vise versa. Wall-mart globally follows the strategy to negotiated exchange with its

suppliers and these are set for a long-term period. Indian automobile majors like TATA and

Maruthi Udyog also follow the same strategy in dealing with the auto ancillary and equipment

manufacturer.

Bargaining is a defined as a process where at least two parties are involved, the parties have

some

or one conflict of interest between them, they are atleast temporarily joined together in a special

kind of voluntary relationship and the activity in the relationship concerns the division or

exchange of one or more specific resources or resolution of one or more intangible issues among

the parties.

Negotiation Tactics

Acting crazy

Auctioning

The good guy-bad guy routine

Big pot

Budget bogey

Get a prestigious ally

Escalation

The well is dry



Limited authority

Deadline

Get lost/stall for time

Take it or leave it

Problem solving skills

The sales person needs problem solving skills for effective selling. The rational and consultative

selling approach suggests that a salesperson should not be a mere order taker; he should rather

act as a problem solver and a consultant to the customer. These roles are more significant for

high-tech selling and business-to-business selling.

A true solver will analyze the situation and extract the real problem from an ocean of information

and facts.

Problem solving Process

Define the problem

Generate alternative solutions

Decide the solution

Implement the solution

Evaluate the solution

Selling Process

Pre-sale preparation

Prospecting

Pre-approach before the interview

Approach to the customer

Sales presentation

Handling customer objections

Sales presentation

Sales presentation

There is need for two way communication between the salesperson and the prospect during a

sales presentation. Here, the salesperson presents his products and services before the prospect

and makes effort to create and modify their interest into sales realization for the company. While

giving sales presentations, the salesperson should always try to link the features and attributes of



the product with the customer needs so that the gap or conflict and level of customer objection

can be reduced in the subsequent stages.

Approaches to sales presentation

Attracting customer objection

Creating interest

Arousing desire and building conviction

Methods of sales presentation

Canned presentation

Organized presentation

Tailored presentation

Handling Customer Objections

Customers make objections after or during the presentations. These objections are many times

excuses for not buying. Objections normally pause the sales process because the customer either

as not fully understood the product and its benefits, or is not fully in agreement with the

salesperson.

o Start with your highest expectations

o Avoid conceding first

o Be sure the customer understands the value of a concession

o Make concessions in small amounts

o Admit mistakes and make corrections willingly

o Be prepared to withdraw a concession

o Avoid split the difference strategy

o Do not advertise willingness to concede.

Methods of handling customer objection

Superior feature method

Yes… but method

Reverse English method

Indirect denial method

Pass out method

Comparison method

Direct denial method



Module 3: (6 hours)

Management of Sales Territory & Sales Quota: Sales territory, meaning, size, designing, sales

quota, procedure for sales quota. Types of sales quota, Methods of setting quota. Recruitment

and selection of sales force, Training of sales force.

Management of sales territory and sales quota

Sales management is defined as a group of present and potential customers assigned to an

individual sales person, a group of sales person, a branch, a dealer, a distributor or a marketing

organization at a given period of time.

Size of sales territory

There are various factors influence the size of a sales territory. Density of the population,

population spread within the territory, nature and demand of the product, mode of physical

distribution, the selling process and transport and communication facilities.

If the product is a consumer durable with a longer shelf life, the company may prefer to have a

larger territory compared to smaller territories for the perishable commodities. Territories can be

established on the basis of the nature of the product, namely consumer, industrial and durable

and non-durable.

When companies decide to go through intermediaries they prefer to have a larger territory. On

the other hand, industrial buying, where bulk order booking is done by a salesperson, or in

situations where a company also handles the retailers, the size of the territory is kept small.

Designing the Sales territory

Select the basic geographic control units

Decide on the criteria for allocation

Decide on the starting point

Combine control units adjacent to starting point

Compare territories on allocation criteria and conduct workload analysis

Assign salesforce to new territories

Sales Quota

Sales quotas are the targets that salespeople try to achieve within a specific period of time, which

contributes towards achieving the organizational goal regarding sales forecasts.

Procedure for setting quota



A successful procedure for setting quotas in organizations is a process built on one-to-one

discussion between the sales managers with each salesperson serving a territory. This procedure

is the most democratic way of handling the targets and motivating subordinates to achieve the

organizational goal. They are

Scheduled planning

Conferencing with each salesperson

Arriving at a summarized written quota statement

Types of sales quota

Sales volume quota

Sales budget quota

Sales activity quota

Combination quota

Methods of setting sales quota

Quotas based on sales forecasts and Potentials

Quotas based on forecast

Quotas based on past sales or experience

Quotas based on executive judgment

Quotas based on salesperson judgment

Quotas based on compensation

Recruitment and Selection of salesforce

Recruitment

It is the planned process whereby the scientific principles of management is utilized for finding

out and filling up the positions in the right territory with the right people.

The section and recruitment of efficient people is always a competitive advantage for an

organization.

Hiring process

There are three stages

� Manpower planning (examine labour turn over, positive equipment analysis, hiring objective,

deciding number of people required for particular time)

� Recruitment stage (identifying best source for generating pool of candidates)

� Selection (screening, interview)



Planning for recruitment

Strategic position analysis

Turnover

Job Analysis

Job Qualification and Job Description

Salesforce Recruitment

Recruitment forms the first stage in the process of hiring a salesforce and is followed by

selection and ends with placement and socialization. The purpose of recruitment is to locate the

sources of manpower to meet the job recruitments and the man specifications.

Sources of recruitment

An important decision to be made at this stage is regarding the source of recruitment. The

sources of recruitment are divided into two types

Internal sources of Recruitment

Lateral and upward moves

Interns and cooperative students

Employee referral programmes

External sources of recruitment

Other industry sources

Educational institutions and campus recruitments

Advertising

Employment agencies

Walk-ins

Networking

Web sources

Selection of a sales person

Selection is the process of making a ‘hire’ or ‘no hire’ decision regarding each applicant for a

job. The sales manager obtains the database mechanism that determines overall quality of the

human resources in an organization.

Selection procedure

Inviting a blank application

Personal interviews



Reference checks

Physical examinations

Intelligence

Personality

Aptitude and skills

Determination of terms of service

Appointment

Initial orientation

Training the salesforce

Sales training is a process of providing the salesforce with specific skills for performing their

task better and helping and helping them to correct deficiencies in their sales performance. When

a new product is introduced into the market, the market situation undergoes a change with the

entry of a new competitor or a new technology. In this case, the new product either moves across

the life cycle or salespeople are asked to perform the job in a new way. The salesforce needs to

be trained to meet these new kinds of situation. Training provides the necessary skill to the

salespeople to perform a job better and correct any lacunae in the salesforce while executing

their job responsibilities.

The training process

A sales manager has to design a training programme that will help in improving the skill and

efficiency levels of the salesforce. For the purpose of the optimum benefit to the organization,

the sales training programme should be designed by following a scientifically planned and

designed process. The training process consists of three phases namely, the training need

assessment and development, conduct of training programme, and the evaluation stage.

Training need assessment, Design and conduct of a training programme and Evaluation of a

training programme

Training need assessment

Organizational level analysis

Task level analysis

Individual level analysis

Designing and conduct phase

Location



Job instruction training

Presentation options

Types of training

Cross-functional training

Team training

Creativity training

Literacy training

Evaluation Phase

This is last stage in the training process where the effectiveness of the training programme is

assessed. The effectiveness of a training programme is measured either in monetary or non-

monetary terms. The criterion by which the assessment is done reflects the needs for which the

programme was designed. For example, a training programme is designed to improve selling

skills and can be measured by analyzing the increase in the all conversion ratio of a salesperson.

The training programme is also designed to increase the sales performance of salesperson in the

territory where they are working.

Training Methods

� Structure the lecture

� Reinforce the message

� Aid concentration

� Material used for the lecture

� Make memorable for the participants

� Deliver with dynamism

� Use questions

� Visual support

� Participative

� Conferences

� Seminars

� Discussions

� Role play

� Case study

� Work shop



Module 4: (8 hours)

Sales force motivation and compensation: Nature of motivation, Importance, Process and

factors in the motivation, Compensation-Meaning, Types of compensation plans and evaluation

of sales force by performance and appraisal process.

Salesforce motivation and compensation

Nature of motivation

• The meaning of the word motivation is to move or activate. Motivation is an internal feeling

and an energetic force within salespeople that drives them to behave in a certain way. It produces

goal-directed action harnesses human energy towards the goals of the sales organization.

• The higher is the level of inducement, the higher is the likelihood of an individual contributing

the organization.

• Motivation has a system orientation, which means that the goal of the individual is shaped by

the forces within the individual and its interaction with the surrounding environment.

• If goal-directed action always leads to a certain rewards, the individual is likely to repeat the

same action again and again. But if the goal-directed action does not lead to any expected reward

the individual is less likely to pursue this action with similar intensity.

• Motivation is complete process in which needs get satisfied and generated newer and modified

needs. Motives are hypothetical constructs,, which Can be observed in some situations. Many

times, one can find out the reasons why salespeople work overtime. The reasons may be either

monetary benefits or observable financial rewards, and it may also be the intrinsic motivation

that guides the individual for over commitment.

Importance of sales motivation

� Sales organization is made of human beings working at different levels and every organization

needs people in order to function.

� Employees in organization posses a huge amount of information based on the experience

about structures and processes of the sales organization and market.

� The success of the sales organization depends on the ability and the style of functioning of the

sales manager to motivate the sales people to achieve organizational goals.

� The nature of the job itself is a strong source of demotivation and the sales manager has to

keep salespeople continuously motivated for achieving organizational goals.



� Efficient salespeople posses good knowledge about their job and can sell goods and services

to the satisfaction of the customers.

Process of Motivation

Motive

Behavior

Goal

Factors in the Motivation

• Changes in marketing environment

• Conflicting company objectives

• Unique nature of the sales job

• Separate motivational package

Compensation

It is the financial and non-financial method of rewards to the salesperson .

Financial rewards

These constitute the current spendable income, future income, profit sharing, retirement, etc.

Non-Financial benefits

There are rewards that do not directly involve money. These include promotions, recognition,

programmes, personal growth and development, security, sales contest, and expense accounts.

Types of compensation plan

• Financial Compensation

– Straight Salary plan

– Straight commission plan

– Bonus and Incentives

– Salary plus incentive plan ( combination plan)

– Drawing account and Commission plan

– Allied method

• Non-Financial Compensation

– Promotions

– Recognition programmes

– Fringe benefits

– Expense Accounts



– Perks

– Sales Contests

Evaluation of sales force by performance appraisal process

• Deciding on the criteria for measuring performance

• Deciding on the conduct of the performance appraisal

• Deciding on evaluation of individuals and teams

• Comparisons of actual performance with standards

• Deciding on the frequency of the performance with standards

• Deciding on the frequency of performance appraisal

The external variables and their influence

Deciding on the criteria for measuring performance

• Relative and absolute judgment

• Trait-based

• Outcome based

• Behavior based

• Performance Rating

• Force Choice Scales

• Behavioral Observation Scales

• Call reports

• Silent call monitoring scores

• Activity Reports

• Combinational methods

Deciding on the conduct of the performance appraisal

• Biases

• Base rate information

• Availability Heuristics

• Anchoring

• Hindsight bias

• Regression effects

• Fundamental attribution error

• Deciding on evaluation of individual and teams



• .88837 418Comparison of actual performance with standards

• Deciding on the frequency of the performance appraisal

• The external variables and their influences



Module 5: (6 hours)

Sales management job: Standard sales management process-international sales management -

international market selection-market survey approach or strategy.

The Sales Process

Prospecting:

Prospecting is the process of identifying potential buyer who have a need of the product or

service offered by the company, and the ability to pay for it and authority to buy it.

Prospecting is the first step in the selling process. A prospect is a person or business that needs

the product a salesperson is selling and has the ability to buy it. Therefore, prospecting is the act

of finding people who need and can buy the product. Prospecting is the lifeblood of sales.

A salesperson must look constantly for new prospects for two reasons. One is to increase sales.

The other is to replace customers who will be lost over time. A prospect should not be confused



with a lead. The name of a person or business that might be a prospect is referred to as a lead.

Once the lead has been qualified as needing the product and as having the ability to buy it, the

lead becomes a prospect.

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

qualified prospect:

1. Does the prospect have the money to buy?

2. Does the prospect have the authority to buy?

3. Does the prospect have the desire to buy?

A simple way to remember this qualifying process is to think of the word MAD. A true prospect

must have the financial resources, money or credit, to pay and the authority to make the buying

decision. The prospect also should desire the product. Sometimes an individual or organization

may not recognize a need for the product. It's the salesperson's job, then, to help create the need.

The actual methods by which a salesperson obtains prospects may vary. Several of the more

popular prospecting methods as mentioned below:

Popular Prospecting Methods

Cold canvassing Direct mail

Endless chain-customer referral Telephone & telemarketing

Orphaned customers Observation

Prospect lists Networking

Public exhibitions

a. Leads: people and organizations salespeople know nothing, or very little about.

b. Referrals: people or organizations salespeople frequently know very little about

other than what they learned from the referral.

c. Orphans: customers whose salesperson has left the company. Company records

provide the only information about these past customers.



d. Customers: the most important prospects for future sales.

Most salespeople required to create customers through prospecting do not like to cold call-

contacting strangers. They have the goal of using a prospect pool composed of customers,

friends, and, when available, orphans. Process of Prospecting (Identify and define the prospect –

Search for source of Potential Account – Qualifying prospects from the suspects)

Referrals from customers are the best way to increase the chances of selling to a stranger

(prospect). The days of the one-shot salesperson are over. The name of the game today is

relationship building." Satisfied customers will provide the salesperson with a constant supply of

prospects.

Pre-approach

Once the prospect has been identified and qualified, the next step in the selling process is the

preapproach. Prospecting and the preapproach are similar in that, for both, the salesperson is

gathering information to use in the attempt to make a sale. During the preapproach, the

salesperson investigates the prospect in greater depth and plans the sales call.

All sales trainers feel salespeople must carefully plan their sales calls. Although numerous

reasons exist for planning the sales call, four of the most frequently mentioned is that planning:

Helps build a salesperson's self-confidence.

Develops an atmosphere of goodwill and trust with the buyer.

Helps create an image of professionalism.

Increases sales because people are prepared.

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

Determining sales call objectives;

Developing or reviewing the customer profile;

Developing a customer benefit plan; and

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

customer profile, and customer benefit plan.

Determining Sales Call Objectives

Salespeople should have at least one objective in mind when they meet with a prospect or

customer. Sales call objectives should be specific, measurable, and directly beneficial to the



customer.

For example, a Colgate salesperson might have the objectives of checking all merchandise,

having the customer make a routine reorder on merchandise, and selling promotional quantities

of Colgate toothpaste. Industrial salespeople develop similar objectives to determine if their

present customers need to reorder and to sell new products.

Steps in Planning the Sales Call

Determination of

Call Objectives

Development of

Customer Profile

Determination of

Customer Benefit

Determination of

Sales Presentation

Developing A Customer Profile

Salespeople should review as much relevant information as possible regarding the firm, the

buyer, and the individuals who influence the buying decisions before making a sales call in order

to properly develop a customized presentation.

Developing A Customer Benefit Plan

Beginning with the sales-call objectives and what is known or has been learned about a prospect,

the salesperson is then ready to develop the customer benefit plan. The customer benefit plan

contains the nucleus of the information used in the sales presentation; thus, it should be

developed to the best of the salesperson's ability.

Developing the Sales Presentation

Finally, the sales presentation must be planned from beginning to end. This process involves

developing seven of the steps of the sales presentation described earlier. These are approach,

presentation, trial close, determine objections, meet objections, additional trial close, and close of

the sales presentation.

The Approach-Opening the Sales Presentation

The sales opener, or approach, is the first major part of the sales presentation. If done correctly,

it greatly improves a salesperson's chances of making the sale. A buyer's reactions to the

salesperson in the early minutes of the sales presentation are critical to a successful sale. This



short time period is so important it is treated as an individual step in selling, referred to as "the

approach." Part of any approach is the prospect's first impression of the salesperson.

The First Impression Is Critical To Success

When a salesperson first meets a prospect, the initial impression is based on appearances and

attitude. If this impression is favorable, the prospect is more likely to listen to the salesperson,

but if it is not favorable, the prospect may erect communication barriers that can be difficult to

overcome. Like an actor, the salesperson must learn how to project and maintain a positive,

confident, and enthusiastic first impression no matter what mood the prospect is in when first

encountering the salesperson.

Approach Techniques Are Numerous

The situation the salesperson faces will determine what approach technique should be

used to begin the sales presentation. The most common approaches used in sales training

programs follow:

Introductory approach: The salesperson states his or her name and business. This is the

most common approach and also the weakest. For example, "Hello, my name is Amy

Firestone, representing the Barnhill Estate Company."

Product approach: The salesperson places the product on the counter or hands it to the

customer, saying nothing. The salesperson then waits for the prospect to begin the

conversation. This is useful if the product is new, unique, colorful, or has been changed.

If, for example, Pepsi-Cola completely changed the shape of its bottle and label, the

salesperson should simply hand the product to the retail buyer and wait.

Customer benefit approach: The salesperson asks a question that shows the product can

benefit the prospect in some way, such as saving money. For example, "How would you

like to save Rs.5000 on the purchase of your next IBM typewriter?"

Curiosity approach: The salesperson asks a question to make the prospect curious about

the product or service. For example, a textbook salesperson might ask, "Do you know

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

Most salespeople vary a combination of these techniques. All but the introductory approach (the

weakest) have three important characteristics in common: They capture the attention of the

prospect; they stimulate interest; and they provide a smooth transition into the presentation.



Presentation

The presentation itself is a continuation of the approach. What, then, should be the purpose of the

presentation? Basically, the purpose of the presentation is to provide knowledge about the

features, advantages, and benefits of the product, marketing plan, and business proposal. This

allows the buyer to develop positive personal beliefs about the product. Such beliefs result in a

desire (or need) for the product. The salesperson's job is to convert the need into a want and

finally into the belief that this specific product is the best product to fulfill a certain need.

Furthermore, the sales rep must convince the buyer that not only is this product the best but also

that this seller is the best source from which to buy it.

The Sales Presentation Mix

When developing a presentation, salespeople should consider which elements of the sales

presentation mix (as in Figure) they will use for each prospect. The proper use of persuasive

communication techniques, methods to encourage prospect participation, proof statements, visual

aids, dramatization, and demonstrations can greatly increase a salesperson's chance of showing

the prospect how the products will satisfy his or her needs. As we know, it is often not what we

say but how we say it that results in making the sale. Persuasive communication techniques

such as questioning, listening, logical reasoning, suggestion, and trial closes help to uncover

needs, communicate effectively, and pull the prospect into the conversation. Proof statements

substantiate the claims salespeople make. They are especially useful for showing prospects that

what they are saying is true and that they can be trusted. When challenged about a product

statement, salespeople should "prove it" by incorporating into their presentation facts on a

customer's past sales, guarantees the product will work or sell, testimonials, or company and

independent research results.To both show and tell, visuals should highlight a product's features,

advantages, and benefits through the use of graphics, dramatization, and demonstration. This

technique captures the prospect's attention and interest; creates two-way communication and

participation; expresses the proposition in a clearer, more complete manner; and makes more

sales. Careful attention to the development and rehearsal of the presentation is needed to ensure

that it is carried out smoothly and naturally.



At any time salespeople should be prepared for the unexpected a demonstration that breaks

down, interruptions, questions about the competition, or the necessity for making a presentation

in a less-than-ideal place such as the aisle of a retail store or the warehouse.

The presentation part of the overall sales presentation is the heart of the sale. It is where the

salesperson develops desire, conviction, and action. By giving an effective presentation, the

sales rep will have fewer objections to the proposition, which makes for an easier close of the

sale.

Sales Presentation Methods

The sales presentation involves a persuasive vocal and visual explanation of a business

proposition. Although many ways to make a presentation exist, only three will be discussed here.

They are the memorized or stimulus-response, formula, and need-satisfaction methods. The basic

difference among the three is the percentage of the conversation the salesperson controls. The

more-structured memorized and formula selling techniques normally give the salesperson a

monopoly on the conversation, while the less-structured methods allow a much greater degree of

buyer-seller interaction, in which both parties participate equally in the conversation.

Stimulus-Response Method

This method assumes that the prospect's needs can be stimulated by exposure to the product or

already have been stimulated because the prospect has sought out the product. The salesperson

THE SALESPERSON’S PRESENTATION MIX



does most of the talking. Only occasionally does the prospect get to talk. The salesperson does

not know what the prospect needs, so all aspects of the product are first discussed, and then the

prospect is asked to buy.

If no sale occurs, the presentation is begun again, and another attempt is made to close the sale. A

"canned" presentation is an example of this approach. Everyone is told basically the same thing.

If time is short, the unit price is low, or the salesperson confronts the prospect infrequently or

only once, this approach might be considered. The salesperson goes directly to the presentation

stage of the sales process and quickly asks for the order. This method is relatively ineffective for

more-complicated selling situations. Here are some of the method's shortcomings:

Talks about product features not important to buyer.

Uses same "pitch" for different people.

Assumes salesperson is in total control.

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

Formula Method

This approach is like the stimulus-response method in that it is based on the assumption that all

prospects are alike. However, here something is known about the prospect, so the presentation is

slightly less structured than it is with the stimulus-response method. The salesperson may use a

structured series of steps such as the AIDA approach.

AIDA stands for attention, interest, desire, and action; conviction may be added to form

AIDCA, indicating the point at which the prospect feels the benefits outweigh the costs

associated with the product. The approach is not complex and easily can be adapted to various

situations.

The salesperson plans or "cans" the sales talk to quickly get attention and interest so the prospect

will listen to the presentation. For the desire step, the salesperson translates the product's

features and advantages into benefits for the prospect. Action or closing techniques are then

used to make the sale. The AIDA method can be used if time is short, if prospects are the same,

or if the salesperson lacks the ability to develop individualized sales presentations. The

shortcomings of this approach are the same as those of the stimulus-response method.

Need-Satisfaction Method

The need-satisfaction method is different from the stimulus-response and the formula



approaches in that it is designed as an interactive sales presentation. It is the most challenging

and creative form of selling. The salesperson will typically start the presentation with a probing

question: "What are you looking for in investment property?" "What type of computer needs

does your company have?"This allows the prospect to discuss the company's needs.

As the salesperson is listening to the prospect, he or she mentally notes the product's features,

advantages, and benefits in relation to the prospect's needs. If the salesperson is not clear on

some things the prospect says, he or she should ask questions or restate what the prospect has

said to make sure the prospect's needs and desires are completely expressed and understood.

Once this stage is accomplished, the salesperson is ready to show how the products will satisfy

the prospect's needs. The presentation can be personalized or concentrate on the specific features

the salesperson's product can offer that will fulfill the prospect's needs.

Trial Close

The trial close involves checking the prospect's attitude toward the sales presentation. It may

occur anytime during the selling process. However, it is especially useful

(1) after making a strong selling point,

(2) after overcoming an objection, or

(3) once the presentation is complete

It is used to check the buyer's "pulse" or mood to determine whether he or she is paying attention

to the presentation and whether it is time to ask for a purchase.

"Some prospects are ready to buy early in the presentation, whereas others take longer. The

reason a trial close is used centers on the psychological aspect of a prospect saying no when the

salesperson attempts to close the sale. Once the prospect has said no, the salesperson may have

difficulty moving from that position.

So, to avoid this, salespeople may at any time use a trial close like one of these:

How does that sound to you?

What color do you prefer?

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

Are these features what you are looking for?



If the prospect responds favorably, the salesperson can move on to the close. However, if a

negative response is received, the close can be postponed. The salesperson may need to

completely start over with the presentation.

Objections:

Theoretically, a salesperson's presentation should show the prospect that a need exists, that the

product presented can best fill that need, and that further discussion should not be necessary.

Very few presentations end that successfully, and very few prospects are that easily convinced.

Usually, the prospect will raise some objections.

Experienced salespeople welcome objections. An objection is opposition or resistance to

information or a request. It shows that the prospect is interested in the product and that if the

objections can be answered to the satisfaction of the prospect, the sale will be made. If, on the

other hand, the prospect simply sits quietly, making noncommittal sounds, and at the end of the

presentation simply says, "That's nice. I'm not interested. Good-bye," the salesperson has no

grounds for continuing, and the sale is lost.

Types Of Objections

Two types of objections occur: real or practical objections and hidden or psychological

objections. Real objections are tangible, such as about a too-high price. If this is a real objection

and the prospect says so, then the salesperson can show that the product is of high quality and

worth the price or remove some optional features and reduce the price.

As long as the prospect clearly states the real objection to purchasing the product, the salesperson

should be able to answer the objection and go into the close. However, prospects will not always

be so agreeable and clearly state their objections. Rather, they will give some excuse about why

they are not ready to make a purchase, thereby keeping their real objections hidden. Usually the

prospect will not purchase the product until those hidden objections are somehow answered.

Techniques for Meeting Questions

Once the salesperson has uncovered all objections, he or she must answer them to the prospect's

satisfaction. Naturally, different situations will require different ways to handle them. Here are a



few methods that apply in many situations.

Postponing Objections Often the prospect may skip ahead of the sales presentation. The

salesperson then may want to postpone the objection until he or she has presented the background

that would allow it to be met completely.

Prospect "Your price is too high."

Salesperson "In just a minute I'll show you this product is reasonably priced based on the savings

you will receive compared with what you are presently doing."

Boomerang One important selling skill to teach salespeople is how they can turn an objection

into a benefit or a reason to buy. Take, for example, the wholesale drug salesperson who wants to

sell a pharmacist a new type of container for prescription medicines. The salesperson hands the

pharmacist a container.

Prospect: "They look nice, but I don't like them as well as my others. The tops seem hard to get

off."

Asking Questions Questioning the prospect is another selling skill salespeoplecan learn.

Prospect "I do like this house, but it is not as nice as the one someone else showed us yesterday."

Salesperson: "Would you please tell me why?"

Real objections must be uncovered and properly dealt with in a straightforward manner.

Objections can become a positive factor in the sales presentation if they allow the prospect to

open up and participate in the dialogue.

The salesperson should not move to close the sale before handling sales resistance. However, if

the objections appear to make the sale impossible, the salesperson has the option of not closing

and waiting until another day or going ahead and asking for the business. Before closing or

asking for the order, the salesperson may want to use another trial close.

Close

All of the effort that has gone into the prospecting, pre-approach, approach, and presentation has

as its aim a successful close. Closing is the process of helping people makes a beneficial decision.

It is the part of the selling process that ultimately brings the sale to a conclusion. If all goes well,

the conclusion will be positive; however, it can be negative.



Difficulties with Closing

The close can be difficult for some people. For numerous reasons, some salespeople fail to make

a sale or even fail to attempt to close. First, a salesperson may not be confident in his or her

ability to close. Perhaps numerous failures to make a sale have brought about this situation.

Second, salespeople often determine on their own that the prospect does not need the quantity or

type of merchandise or that the prospect simply should not buy. Finally, the person may be a poor

salesperson. Quite often proper sales training and encouragement from management can greatly

increase a person's selling ability.

Closing Techniques

A major key to making a sale is using effective closing methods. Different techniques work for

different people. Here are several examples.

The Compliment For this technique, the salesperson may compliment the prospect by saying

something like "It is obvious you know a great deal about the grocery business. You have 'every

square foot of your store making a good profit. Our products have the profit margin you want,

and they sell like hotcakes, so you'll make an above-average profit. I suggest you buy one dozen

mops and one dozen brooms for each of your 210 stores."

Follow-Up

Providing service to customers is critical to successfully managing a sales territory.

Follow-up and service create goodwill between a salesperson and the customer, which in the long

run will increase sales faster than not providing such service. By contacting the customer after the

sale to see that the maximum benefit is being derived from the purchase, a salesperson lays the

foundation for a positive business relationship. Remember, it's easier to keep a customer than to

find a new

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

conducting transactions across national borders to create exchanges that satisfy the objectives of

individuals and organizations” (Czinkota and Ronkainen)



“International marketing focuses its resources on global market opportunities and threats”

(Keegan and Green)

“International marketing is the motor of the internationalization process of the firm” (Usunier)

International Marketing Decisions

Deciding whether to go abroad

Deciding which markets to enter

Deciding how to enter the market

Deciding on the marketing program

Deciding on the marketing organization

Driving Forces of International Marketing

Technology

Culture

Market Needs

Costs

Free Markets

Economic Integration

Peace

Strategic Intent

Management Vision, Strategy and Action

Role of the sales manager in the international market:

Basic level functions:

o Training

o Evaluating

o Planning

o Compensation

Advanced level functions:

o Strategic account management

o Conducting negotiations

o Arranging agreements with distributors

o Developing relations and network locally



International sales and marketing opportunities:

Diversifying market base

o Strategies of Japanese companies

Emulating the competition

o Imitating competitors

Achieve economies of scale

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

plane – 78,000 man hours

Challenges in international sales management:

Economic environment

Tariff barriers

o Specific,

o ad – valorem,

o compound

Non-tariff barriers

o Regulatory,

o industry,

o cultural

Other economic factors

o Exchange rate fluctuations

o Restrictions on profit repatriation

o Credit control etc.

Legal environment

o Partnership laws

o Anti-Corruption laws

o Intellectual property rights

Cultural environment

o Language

o Religion

o Education

o Social attitudes & behavior



Strategic issues for international sales and marketing:

Marketing mix – adapts or standardize?

o Ethnocentric vs. geocentric

Home country marketing practices will succeed elsewhere without adaptation; however,

international marketing is viewed as secondary to domestic operations

Geocentric is a Global Marketing Orientation where a uniform, standardized marketing strategy

is used for several countries, countries in a region, or the entire world

Obtaining international information

o Internal company records

o Published sources

Primary sources like surveys, observation studies etc.

Entering overseas markets

Exporting: A function of international trade whereby goods produced in one country are

shipped to another country for future sale or trade. The sale of such goods adds to the producing

nation's gross output. If used for trade, exports are exchanged for other products or services.

Exports are one of the oldest forms of economic transfer, and occur on a large scale between

nations that have fewer restrictions on trade, such as tariffs or subsidies.

Licensing: A business arrangement in which one company gives another company permission to

manufacture its product for a specified payment.

Franchising is a long-term cooperative relationship between two entities—a franchisor and one

or more franchisees—that is based on an agreement in which the franchisor provides a licensed

privilege to the franchisee to do business. The franchisor grants the franchisee the right to use a

developed concept, including trademarks and brand names, production, service and marketing

methods and the entire business operation model, for a fee. The franchisee then provides the

time, capital, and desire to utilize the brand and services provided by the franchisor to build a

thriving business.

The product, method or service being marketed is usually identified by the franchisor's brand

name, and the holder of the privilege (franchisee) is often given exclusive access to a defined

geographical area for a defined period of time, all of which is defined in the Franchise

Agreement.



Joint ventures: A business arrangement in which two or more parties agree to pool their

resources for the purpose of accomplishing a specific task. This task can be a new project or any

other business activity. In a joint venture (JV), each of the participants is responsible for profits,

losses and costs associated with it. However, the venture is its own entity, separate and apart

from the participants' other business interests.

Wholly owned subsidiaries: A company whose common stock is 100% owned by another

company, called the parent company. A company can become a wholly

owned subsidiary through acquisition by the parent company or spin off from the parent

company. In contrast, a regular subsidiary is 51 to 99% owned by the parent company. One

situation in which a parent company might find it helpful to establish a subsidiary company is if

it wants to operate in a foreign market. This arrangement is common among high-tech companies

who want to retain complete control and ownership of their technology.

International market selection

International market selection is crucial in selecting the target market.

Firm related factors

Ethnocentric: everything is centered on the domestic market.

Polycentric: several important foreign markets exist.

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

Geocentric: the world is one large global market.

Market related factors

General factors

o Economic factors

o Business regulations

o Political factors

Specific factors

o Trends in domestic market

o Trends in export and import

o Nature of competition

o Supply conditions of raw materials

Other Factors

o Political restrictions



o Special requirements

o Product specification

o Distant location

o Market accessibility

o Business community

Market Selection Process

1. International marketing objectives

2. Commercial Parameters for production selection

3. Preliminary Test marketing screening

4. Evaluation and Short listing of selection markets

International sales techniques:

Personal selling process

o Preliminary selling

Identify prospects

Approach

Advanced selling

o Sales interview

o Flexible presentation

o Product demonstrations

o Handling objections

o Close

o After sales techniques

Time and territory management

o Proper routing & scheduling

Routing is a travel plan or pattern used by a sales person for making customers calls in a

territory.

Scheduling refers to establishing a fixed time when the salesperson will be at a customer’s place

of business. It is planning a salesperson’s specific time of visits to customers.

Strict formal route designs enable the salesperson to: \

Improve territorial coverage.

Minimize wasted time.

Establish communication between management and the sales force in terms of the

location and activities of individual salespeople.



Module 6: (8 hours)

Sales Manager and Sales Person: Role of sales manager and sales people; functions of sales

manager, , types and characteristics of sales manager and sales people-


Role of Sales Manager:

In an organization a sales manager plays a variety of roles to related to the sale of a given

product.

Sales Force Management:

The Sales Manager checks the sources of recruitment and sets the standards for selections. The

sales manager must provide training to new employees in such a manner that the high level of

performance is achieved in short possible time.

Maintain Relations:

The sales manager must maintain the internal and external relations of sales department with the

departments of other companies or units as well as within the organization. The sales manager

develop & maintain effective working relations with sales, training & other key personnel as

well as with the customers to ensure that the effort is beneficial to both the parties.

Communication

The sales manager should establish a system of communication with other sales personnel that

keep them informed of overall department’s sales objectives, results & problems. It also keeps

the sale manager informed about their needs & problems.

Control

Sales Force Mgt.

Marketing Decision

Maintain Relations

Preparation of Sales Program.



The sales manager must consult with the production manager time to time because they are

closely related with the sales needs. The sales manager reviews the revenues & expenses of the

company and checks the actual sale and compare it with the corrective action may be taken in

time. So, the sales manager maintains the proper balance of time spent on various activities and

keeps a check on the activities of the sales force.

Organization

The sales manager establishes an effective plan of organization and methods of controlling the

activities of members, so that the work will be completed in time. The activities are identified &

grouped and hence assigned to individuals responsible for selling a given product.

Role of a sales manager:

Occupies middle level position and is influenced by the expectations from both the levels

externally and internally. They need to perform other functions of marketing too along with sales

management functions which includes planning, directing, controlling, organizing, recruiting,

selecting, training and motivating, allocating resources and territories, routing and scheduling

etc.

Forecasts sales in the role of a sales forecaster

Devices strategies as a strategic planner

Observes the behavior of prospective and existing customers in order to plan future

strategies as an observer of buying behavior

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

Analyses the cost and profit involved in segments as a cost and profit analyst Plays the

role of communicator internally and externally Role of a sales manager

Functions of a sales manager:

Hiring: right people and giving careful job description

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

Exhibit: Training results – No longer an ROI

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

solution,

follow up and remedial measures



Motivating:

Setting targets and tracking the results: new accounts, amount to be generated, ratio of

sales per customer etc. .

Additional targets for the prospecting efforts .

Setting realistic and achievable targets and publicizing on achievement of targets

Recognizing & rewarding performance: tangible incentives (trophy / extra leave / paid

vacation / memberships etc.) or public appreciation at sales meeting

Providing leads and sales support: hurdles of sales people are to be cleared ( lack of

secretarial support / sales aids etc) .

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

his team

Organizing sales effort: ensures that sales people plan their calls in advance and follow a

systematic process of call reporting and filing expense reports . By organizing sales

efforts of sales peoples their efficiency in meeting targets can be increased.

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

Frequency depends on the requirements.

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

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

performers,

Organizing guest lectures ( motivational) .

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

Some times sales meetings become ineffective, so the sales manager needs to ensure that

such things do not happen.

Allocation of scarce resources: aid of sophisticated technology can be taken e.g. general

mills uses “what – if” analysis Responsibilities of a sales manager

Role of a sales executive:

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

A Persuader

A service provider



An information gatherer and reporter

An advocate

A traveler

A coordinator & scheduler

A problem definer

A customer ego builder

A display arranger for wholesalers and retailers

A merchandiser who gives customized products to industrial customers

An ombudsman who acts as customer's representative when the former faces any

problem Interacts with several role partners from production worker to CEO Links 4

groups of people they are, own sales team, customers, other departments and other sales

persons.

Fulfilling the demands of all the above mentioned groups is needed but, often expectations of

one group may be in conflict with that of the other group. And the sales person needs to balance

all of them. With the advances in technology their role extended to business strategy too, where

establishment of mutually beneficial relationship is needed with important customers E.g. P&G

Role of a sales executive

Functions of a sales executive/Person:

Identify potential customers from currently available data bases like yellow pages

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

calls

Deciding upon the selling approach (presentation)

Administering the sales order (deliver in time)

Service provider (installation / warranty problems)

Information gathering and reporting relevant data

Skill up gradation by attending sales trainings and trade shows

Administrative responsibilities like attending sales meetings and conferences, fill in call

and expense reports etc.



Types of sales manager

1. Administrative sales manager:

Administrative sales managers are found normally in highly integrated sales organisations selling

multiple lines of products in national and international markets. He is known by alternative titles

such as ‘vice president’, ‘in-charge of sales’, ‘director of marketing’, ‘general sales manager’ and

‘marketing manager’.

In addition to the crucial task of coordinating marketing with other company activities, he is to

coordinate the activities of his own sales organisation within and with outside advertising and

sales counsel. He is responsible for sales planning that involves integration of sales personnel,

merchandising, advertising and promotion, financing, distribution network.

Planning also includes the determination of the functions of sales organisation, delegation of

responsibilities, personnel selection, and performance evaluation. He frames the policies and

strategies on the prices, distribution, relations with dealers, service, advertising and sales-

promotion.

2. Field sales manager:

The field sales manager or operating sales manager is a line sales executive reporting directly to

the administrative sales manager. Operative sales manager works under the direction, guidance

and supervision of the general sales manager.

He is mainly responsible for the effective implementation of sales plans and policies developed

by the administrative sales manager.

He is known for personal direction and control of sales personnel and hence, spends major

portion of his time in the field supervision of the work of sales-force. Manpower maintenance of

the sales organisation is the basic task of this executive. He is to recruit, select, train, supervise,

stimulate, evaluate, equip, control and route the sales-force.

Field sales manager moves with salesmen on visits of importance. He assigns sales territories

and controls activities of salesmen through setting the standards of sales achievements, analysing

the sales reports, holding the sales meeting, supervising the advertising and sales-promotion

cooperation with dealers, directing sales contests, supervising warehousing inventories, dealer

relations and coordinating territorial and home office activities.



Thus, a field sales manager provides the administrative sales manager with the latest information

relating to the viewpoints of dealers and consumers on company, company products, policies,

and practices with facts on market trends, competitors, distributors and individual salesman.

3. Administrative-cum-field sales manager:

In case of smaller organisations, we come across such sales manager who combines the functions

of administrative and executive sales officer. Generally speaking, administration and field

operations cannot go together. However, size and economy points force many units to combine

the distinct roles of administration and field operation.

As an administrator, he plans, organizes, directs and coordinates. As a field operator, he guides

and supervises and controls the activities within the sales organisation. Thus, thinking and doing

are done by the same person that goes against the very idea of specialisation for an administrator

is a ‘thinker’ and a line officer as ‘doer’.

4. Assistant sales manager:

Generally, the administrative sales manager is assisted by Assistant sales manager in the

administrative functions of planning, analysis, direction and coordination. He coordinates the

work of sales staff that is specialized in advertising, sales-promotion, research, merchandising

and dealer relations.

He may also handle sales office personnel, records and routine. He acts as the link between the

head-quarters and the field-sales-manager at distance. It is not a surprise if he discharges the

functions of field sales manager. Thus, he acts as both line and staff officer in the sales

organisation.

5. Product-line sales manager:

A company that markets variety of products has such product-line sales manager responsible for

one or group of products in the product- line. He is also known as product or brand manager.

He is responsible not only for sales but also for production, research, product- development,

planning, advertising and profit for the product or the group of products in question. He is to

report to the Marketing manager who coordinates the work of several product sales managers.

6. Marketing staff manager:

As the title suggests, the Marketing staff manager is not a line-officer. He is one of the staff

specialists who are delegated some of the responsibilities of administrative sales manager. These

are the specialists in the areas of marketing research, sales-promotion, merchandising,



advertising, sales planning, sales personnel, distributor/dealer relations, sales costs, budget sales

finances, traffic, sales office administration and service and the like. These staff managers being

non-line officers have no field tasks.

These managers are accountable for analysing the needs of the marketing organisation in respect

of their specific areas of specialisation, developing plans and recommending solutions to the

problems encountered or thrown open.

7. Divisional/regional sales managers:

In all the national organisations, one comes across these Divisional or Regional sales managers.

These are also known as District sales managers who are responsible for the delegated sales

operational duties on a territorial basis.

They report to Assistant sales managers or the field sales managers who act as the liaison officers

with headquarters. The functions of Divisional or Regional sales manager are similar to those of

field sales manager who is in charge of several divisions or regions and hence divisional or

regional managers.

They are mainly responsible for maintaining the man-power in the concerned areas by recruiting,

selecting, and training, supervising, motivating and controlling the sales-force.

They are also responsible for directing branch or local office sales managers. The divisional sales

managers assist branch managers in solving their sales personnel problems, dealer relations,

warehousing and inventory, advertising and sales promotion, sales campaigns and sales

meetings.

8. Branch sales mangers:

In case of sales organisations that operate branches or local sales offices in major cities of the

country, one is to come across such Branch sales managers. Branch sales manager is a line

executive responsible for the direction of a small group of salesmen calling on consumers or

dealers in the branch area.

He recruits, selects and trains, sales people with the guidance of Divisional or Regional sales

manager to whom he reports. He works along with salesmen in the field, supervises their sales

activities, holds periodic sales meetings, evaluates sales performance and helps in key accounts.

If warehouse is attached to branch, he supervises warehousing activities too.



9. Sales supervisor:

A sales supervisor is a line sales manager who supervises normally eight to fourteen salesmen.

He is seen in branch sales office of a national sales organization having branches all over the

nation.

Characteristics of sales manager

Passion

Integrity

Positive attitude

Loyalty

Leadership skills

Motivation

Continuous learning

Listening and communication

Types of sales people

Salespeople come in all shapes and sizes. Some salespeople are more successful than others

because they understand what type of salesperson they are and how to utilize their key

characteristics or personality traits.

Transactional

Relational

Closers

Consultants

Transactional

Transactional salespeople are those that simply wait for the transaction to make their sale. These

are the salespeople that you might refer to as the order-takers because they passively sit by

waiting for the sale to come to them. They may still be quite successful in what they do, despite

their passive attitude, because they may become adept at positioning themselves in the right

place at the right time to get the sale. However, most of these salespeople are better off working

in a retail environment where the primary job of the salesperson is to help the buyer find the

product she is already looking for and then ring it up.



Relational

The relational salesperson thrives off of the customer-salesperson relationship. This type of

salesperson is good at quickly building rapport with the customer and often gets sales because

the buyer likes her enough that she becomes the deciding factor in the sales process. These

salespeople also establish the long-term relationship with a customer that brings the customer

back around for repeat business. These types of salespeople tend to excel in industries like

advertising or any type of sales where established accounts selling is important.

Closers

A large portion of the sales force in many different industries is made up of closers or those who

are always trying to close the deal on a sale. These are what many people think of when they

think of the used car salesman. This type of salesperson is constantly inching the customer

toward the goal of closing the deal. While relationships with customers may still be important for

future sales with this type of salesperson, they are usually secondary to the immediate goal of

going for the close.

Consultants

Consultants are probably the most well-rounded of the different types of salespeople. These are

people persons who know how to close a deal and build relationships at the same time.

Consultants genuinely thrive off of the problem-solving aspect of their job, listening to customer

needs and helping them find a solution to their problem. Consultants have superior listening

skills and tend to be patient with customers when necessary, but aggressive when necessary also.

Characteristics of sales people

Empathy

Empathy is the ability to identify with customers, to feel what they are feeling and make

customers feel respected. Empathy is NOT sympathy, which involves a feeling of loyalty with

another individual. It is more than understanding their concerns from an objective standpoint. A

salesperson showing empathy can gain trust and establish rapport with customers by being on

their side and not appearing judgmental. Empathy allows the salesperson to read the customers,

show concern, and clearly demonstrate his or her interest in providing a proper solution.

Focus



A person with focus is internally driven to accomplish goals and can stay attentive to one

topic. Focused individuals are more demanding of themselves than other people and they are

self-motivated. They are able to organize themselves and recognize what needs to be done in

order to achieve their goals.

Responsibility

A person with a strong sense of responsibility does not place blame on other people when placed

in a difficult situation. This type of person, referred to as an “agent”, gets things done and when

obstacles arise, accepts any errors or omissions that have occurred. He or she does not get

defensive nor do they try to blame the situation on circumstances or on other people by making

statements such as, “It’s not my fault boss that consumer confidence has declined due to

terrorism and the war in Afganistan.” Sales managers should strive to hire agent-type

representatives.

Optimism

A salesperson with a healthy amount of optimism can be described as someone who is slow to

learn helplessness. This person has persistence—a trait that is critical in the sales world because

of the frequency of rejections salespeople experience. In the face of failure, some people throw

their hands up in the air and resign themselves to the disappointment because they feel helpless

to change the situation. Others, however, see themselves as being more resilient and that a

customer’s refusal is NOT a rejection of themselves personally, but of the opportunity being

offered. Salespeople who possess a large amount of optimism like themselves and when they

encounter failure, although disappointed, it does not destroy their positive view of

themselves. They consider themselves still in the running and able to turn the situation

around. They believe that they can make things better by using a different approach, or by trying

again.

Ego-drive

Ego-drive is similar to optimism in that both traits require persistence. But ego-drive is

persistence for the purpose of succeeding and above all winning. It’s all about

competitiveness. When a person hangs in there with fists clenched and a teeth gritting appetite

to succeed at his or her goal, you see a powerful ego-drive. This person is self-motivated and a

self-starter with clear ideas of what he or she wants to achieve.




Time Management is the process of deciding What to do and When. For Managers and

Supervisors it usually consists of the following 3 phases:

Phase 1: - Identifying what you want/need to accomplish based on the roles and expectations

of your position, and your own personal goals.

- Identifying and prioritizing the major tasks and needed time commitments to accomplish these

goals.

Phase 2: - Analyzing how you’re currently spending your time versus the needs you identified

above.

Phase 3: - Developing a schedule that better allows you to focus your daily efforts on

accomplishing your goals.



Module 7: (8 hours)

Selling on the internet: Selling agents for internet trading-net selling, advertising in net trading,

payment system in internet trading-smart card, credit card, debit card- payment by card:

advantages and disadvantages; How to make internet selling safe-Digital signature, biometric

method and legal or regulatory environment; Growth of internet trading in India.

Investing online, also known as online trading or trading online, is the process by which

individual investors and traders buy and sell securities over an electronic network, typically with

a brokerage firm. This type of trading and investing has become the norm for individual

investors and traders since late 1990s with many brokers offering services via a wide variety

of online trading platforms.

The act of placing buy/sell orders for financial securities and/or currencies with the use of a

brokerage's internet-based proprietary trading platforms. The use of online trading increased

dramatically in the mid- to late-'90s with the introduction of affordable high-speed computers

and internet connections.

'Net Sales' The amount of sales generated by a company after the deduction of returns,

allowances for damaged or missing goods and any discounts allowed. The sales number reported

on a company's financial statements is a netsales number, reflecting these deductions.

Electronic Payment systems

Electronic Payment is a financial exchange that takes place online between buyers and sellers.

The content of this exchange is usually some form of digital financial instrument (such as

encrypted credit card numbers, electronic Cheques or digital cash) that is backed by a bank or an

intermediary, or by a legal tender.

Electronic payment system is a system which helps the customer or user to make online payment

for their shopping.

The various factors that have lead the financial institutions to make use of electronic payments

are:

Decreasing technology cost:

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

Reduced operational and processing cost:



Due to reduced technology cost the processing cost of various commerce activities becomes very

less. A very simple reason to prove this is the fact that in electronic transactions we save both

paper and time. Increasing online commerce:

Some Examples of EPS

a. Online Reservation

b. Online Bill Payment

c. Online Order Placing (Nirulas)

d. Online Ticket Booking ( Movie)

Two Storage Methods

On-line

Individual does not have possession personally of electronic cash

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

Off-line

Customer holds cash on smart card or software wallet

Fraud and double spending require tamper-proof encryption

Types of EPS

1. E-cash: A system that allows a person to pay for goods or services by transmitting a number

from one computer to another. Like the serial numbers on real currency notes, the E-cash

numbers are unique. This is issued by a bank and represents a specified sum of real money.

2. E-wallets: The E-wallet is another payment scheme that operates like a carrier of e-cash and

other information. The aim is to give shoppers a single, simple, and secure way of carrying

currency electronically. Trust is the basis of the e-wallet as a form of electronic payment.

3. smart cards

4. credit cards

Smart card

The smart card looks exactly like any other plastic card or an ATM card with an integrated

circuit (IC Chip) installed. The IC chip contains memory, may contain a processor, and



communicates with the external world through contacts on the surface of the card. The size,

position and utility of the contacts are specified by an international standard, so that cards can

interact with a variety of equipment.

Debit card

A payment card that deducts money directly from a consumer’s checking account to pay for a

purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases. In

addition, debit cards, also called check cards, offer the convenience of credit cards and many of

the same consumer protections when issued by major payment processors like Visa or

MasterCard. Unlike credit cards, they do not allow the user to go into debt, except perhaps for

small negative balances that might be incurred if the account holder has signed up for overdraft

coverage. However, debit cards usually have daily purchase limits, meaning it may not be

possible to make an especially large purchase with a debit card.

A bank-issued card that allows its user to access their funds for the purpose of paying for

merchandise. A debit card acts like a credit card, the difference being that funds are immediately

taken from the cardholders accounts.

Credit card

Pre-approved credit which can be used for the purchase of items now and payment of them later.

Standard-size plastic token, with a magnetic stripe that holds a machine readable code. Credit

cards are a convenient substitute for cash or check, and an essential component of electronic

commerce and internet commerce.

Credit card holders (who may pay annual service charges) draw on a credit limit approved by the

card-issuer such as a bank, store, or service provider (an airline, for example). Cardholders

normally must pay for credit card purchases within 30 days of purchase to

avoid interest and/or penalties.

Classification of Credit card

Based on mode of credit recovery

• Charge Card-A card that charges no interest but requires the user to pay his/her balance in full

upon receipt of the statement, usually on a monthly basis. While it is similar to a credit card, the



major benefit offered by a charge card is that it has much higher, often unlimited, spending

limits.

• Revolving credit card-A line of credit where the customer pays a commitment fee and is then

allowed to use the funds when they are needed. It is usually used for operating purposes,

fluctuating each month depending on the customer's current cash flow needs

Based on status of credit card

• Standard Card- it is a generally issued credit card

• Business Card- (Executive cards) it is issued to small partnership firms, solicitors, tax-

consultants, for use by executives on their business trips.

• Gold Card-a credit card issued by credit-card companies to favoured clients, entitling them to

high unsecured overdrafts, some insurance cover, etc

Based on geographical validity

• Domestic card- Cards that are valid only in India and Nepal are called domestic cards.

• International Card- credit Cards that are valid internationally are called international cards.

Based on franchise/ Tie-up

• Proprietary card- A bank issues such cards under its own brands. E.g. SBI card Cancard of

Canara bank

• Master Card- this card is issued under the umbrella of “MasterCard International”

• VISA Card – it is issued by any bank having tie up with “VISA international”

• Domestic Tie-up Card- it is issued by any bank having tie up with domestic credit card brands

such as CanCard and IndCard.

Based on issuer Category

• Individual Cards- Non-corporate cards that are issued to individuals

• Corporate Cards- Issued to corporate and business firms.

Advantages and disadvantages;

Advantages of a Debit Card



Easy to obtain. Once you open an account most institutions will issue you a debit

card upon request.

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

the card rather than filling out a paper check.

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

Readily accepted. When out of town (or out of the country), debit cards are

usually widely accepted (make sure to tell your financial institution you’re leaving

your city; to not have an interruption in service).

Disadvantages of a Debit Card

No grace period. Unlike a credit card, a debit card uses funds directly from your

checking account. A credit card allows you to borrow funds on credit, leaving

disposable cash in your account.

Check book balancing. Balancing your account may be difficult unless you

record every debit card transaction.

Less protection. Most financial institutions will try and protect their customer

from debit card fraud. However, a customer could potentially be liable for up to

$500 on fraudulent debit card transactions compared with only $0 on credit cards.

Be sure to check with your financial institution to learn the details.

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

affiliated with your institution.

The advantages of credit cards

Credit cards are convenient and are safer to carry around than cash. They are widely accepted

online, in most stores, and are virtually indispensable for travel.

They frequently provide insurance cover for goods and services that are purchased with them.

Consumer law in countries like the UK provides a broad spectrum of protection for consumers

who purchase goods or services with credit cards.

When credit card users pay off their monthly balance in full, they pay no interest. This often

means that up to 42 days free credit is available.

On top of that, many credit card companies offer bonuses to their customers. These come in

many forms. A popular one is cash back on payment of the balance, while another common one

is air miles.



The disadvantages of credit cards

There is an unfortunate tendency for people to treat credit cards like they are extra cash. This

makes people drop their guard against impulse spending.

The reality is that a credit card does not increase anybody’s available spending money. Interest

rates are very high, and people can quickly find themselves in a serious debt situation if they

allow their credit card balance to grow month by month.

How to make internet selling safe

Advertising items for sale on internet classified sites is a great way to spread the word to likely

buyers, but there are risks you take when you do. Your first line of defense is to use reputable

services and follow closely any advice the site gives about buying and selling safely.

How to create a safe ad

Stick to the facts of the item being sold. Do not put any information that identifies you

personally if it’s not strictly necessary. Keep in mind that every piece of information you

post may be used for other purposes than you intended. Limit your information to limit

your risk.

Look hard at any photo you post, you don’t want it to include house numbers in the

background, or license plate numbers, include family members, etc. Show just the item

being sold.

If you want the convenience of allowing people to call you (as opposed to emailing you),

use a free disposable phone number. You can get one easily by searching on ‘disposable

phone number’ and selecting from one of several companies that provide this service.

Don’t put your personal phone number in the ad – you don’t want people to be able to

harass you later, and there are several reverse look-up directories may provide a wealth of

information about you that can be used in ways you would not appreciate.

If the service does not have their own email service, create a disposable email account

that does not show any personal information – like your name, location, or age. Again,

you do not want people to have your primary account information to harass you through.

Communicating with a prospective buyer

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

number.



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

If anything feels "off," stop contact.

When you’re comfortable that the buyer seems legitimate, ask the buyer to give you his

or her phone number. (Sometimes, the area code may indicate if they are in your area.)

Try the phone number to find out if it’s valid. If the person responds, chat on the phone

for a bit about the item for sale and decide if the person still feels legitimate.

Make it clear that you will only accept cash for the item. Any other form of payment is

highly likely to be fraudulent.

Show transportable items in safe, public places

Agree to meet during daylight hours in a public place and bring a friend to accompany

you. Turn down any request to meet at your house, in an unfamiliar place, or by yourself

no matter how big and tough you are.

Do not hand over the item until you have cash in hand. Don’t accept partial payment or

anything other than cash for the transaction. If the method of payment changes from your

previous agreement, walk away from the deal.

If the potential buyer wants time to consider and comes back later, follow the same

procedures. Don’t get careless the second time around.

If the item being sold has significant value, meet inside a bank where you can deposit the

money before leaving – this way the buyer can’t turn around and rob you. It is hard to be

safer than in a bank where there is plenty of security monitoring.

Show non-transportable item at home with plenty of precautions

The less you show, the less they know. Your house provides many clues about you, your

income level, your family, and so on. All of this may be useful information to crooks and

predators, so it’s smart to show as little as possible.

Move the item into the garage or entryway, if possible. The goal is for potential buyers to

see as little as necessary of your house – ideally they won’t come inside your home at all.

Remove from view any items that could be stolen at the time of the visit, or that would be

of interest for the potential buyer to steal later. If you have family photos on display, you

may choose to put these away as well. (The less someone knows about you the better—

for example, you might not want a stranger buying a couch to learn that you had young

children and to be able to identify them.)



Make your meeting a two-step process. Arrange to meet during daylight hours and have a

friend be there with you.

o First, meet in a public place close to your house. Ask for proof of identity such as

a driver’s license. (That way you know who you’re dealing with if there’s is a

problem.) Note the license plate number, color, and model of the buyer’s vehicle

so you have it in the event there is trouble.

o If you’re comfortable that the buyer seems legitimate, have them follow you and

your friend to your house.

If more than one person arrives, keep them together. A common ploy is for one person to

engage you with questions while another asks to use the restroom. Decline. This splits

your ability to supervise and increases their ability to scope out more of your house and

any items worth stealing. It may seem rude to refuse to let someone use your bathroom,

but it isn’t. Let them know where the closest public bathroom is located.

Don’t hand over the item until you have cash in hand. Don’t accept partial payment, or

anything other than cash for the transaction. If the method of payment changes from your

previous agreement, decline the deal.

If the potential buyer wants time to consider and comes back later, follow the same

procedures. Don’t get careless the second time around.

1. Digital signature: a digital code (generated and authenticated by public key encryption) which

is attached to an electronically transmitted document to verify its contents and the sender's

identity.

The digital equivalent of a handwritten signature or stamped seal, but offering far

more inherent security, a digital signature is intended to solve the problem of

tampering and impersonation in digital communications. Digital signatures can

provide the added assurances of evidence to origin, identity and status of an electronic

document, transaction or message, as well as acknowledging informed consent by the

signer.



Biometric method and legal or regulatory environment:

Biometrics is the automated method of recognizing a person based on a physiological or

behavioral characteristic. Biometric technologies are becoming the foundation of an extensive

array of highly secure identification and personal verification solutions.

Biometric technologies should be considered and evaluated giving full consideration to the

following characteristics:

Universality: Every person should have the characteristic. People who are mute or without a

fingerprint will need to be accommodated in some way.

Uniqueness: Generally, no two people have identical characteristics. However, identical twins

are hard to distinguish.

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

change with age.

Collectibility: The characteristics must be easily collectible and measurable.

Performance: The method must deliver accurate results under varied environmental

circumstances.

Acceptability: The general public must accept the sample collection routines. Nonintrusive

methods are more acceptable.

Circumvention: The technology should be difficult to deceive.

Biometrics is expected to be incorporated in solutions to provide for Homeland Security

including applications for improving airport security, strengthening the United States' national

borders, in travel documents, visas and in preventing ID theft. Now, more than ever, there is a

wide range of interest in biometrics across federal, state, and local governments. Congressional

offices and a large number of organizations involved in many markets are addressing the

important role that biometrics will play in identifying and verifying the identity of individuals

and protecting national assets.

There are many needs for biometrics beyond Homeland Security. Enterprise-wide network

security infrastructures, secure electronic banking, investing and other financial transactions,

retail sales, law enforcement, and health and social services are already benefiting from these

technologies. A range of new applications can been found in such diverse environments as

amusement parks, banks, credit unions, and other financial organizations, Enterprise and



Government networks, passport programs and driver licenses, colleges, physical access to

multiple facilities (e.g., nightclubs) and school lunch programs.

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

single sign-on, application logon, data protection, remote access to resources, transaction

security and Web security. Trust in these electronic transactions is essential to the healthy

growth of the global economy. Utilized alone or integrated with other technologies such as

smart cards, encryption keys and digital signatures, biometrics are set to pervade nearly all

aspects of the economy and our daily lives. Utilizing biometrics for personal authentication is

becoming convenient and considerably more accurate than current methods (such as the

utilization of passwords or PINs). This is because biometrics links the event to a particular

individual (a password or token may be used by someone other than the authorized user), is

convenient (nothing to carry or remember), accurate (it provides for positive authentication),

can provide an audit trail and is becoming socially acceptable and inexpensive.

Biometric authentication requires comparing a registered or enrolled biometric sample

(biometric template or identifier) against a newly captured biometric sample (for example, a

fingerprint captured during a login). During Enrollment a sample of the biometric trait is

captured, processed by a computer, and stored for later comparison.

Biometric recognition can be used in Identification mode, where the biometric system

identifies a person from the entire enrolled population by searching a database for a match

based solely on the biometric. For example, an entire database can be searched to verify a

person has not applied for entitlement benefits under two different names. This is sometimes

called "one-to-many" matching. A system can also be used in Verification mode, where the

biometric system authenticates a person's claimed identity from their previously enrolled

pattern. This is also called "one-to-one" matching. In most computer access or network access

environments, verification mode would be used. A user enters an account, user name, or

inserts a token such as a smart card, but instead of entering a password, a simple touch with a

finger or a glance at a camera is enough to authenticate the user.



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

sign-on, application logon, data protection, remote access to resources, transaction security,

and Web security. The promises of e-commerce and e-government can be achieved through

the utilization of strong personal authentication procedures. Secure electronic banking,

investing and other financial transactions, retail sales, law enforcement, and health and social

services are already benefiting from these technologies. Biometric technologies are expected to

play a key role in personal authentication for large-scale enterprise network authentication

environments, Point-of-Sale and for the protection of all types of digital content such as in

Digital Rights Management and Health Care applications. Utilized alone or integrated with

other technologies such as smart cards, encryption keys and digital signatures, biometrics are

anticipated to pervade nearly all aspects of the economy and our daily lives. For example,

biometrics is used in various schools such as in lunch programs in Pennsylvania, and a school

library in Minnesota. Examples of other current applications include verification of annual

pass holders in an amusement park, speaker verification for television home shopping, Internet

banking, and users' authentication in a variety of social services.

Using biometrics for identifying human beings offers some unique advantages. Biometrics can

be used to identify you as you. Tokens, such as smart cards, magnetic stripe cards, photo ID

cards, physical keys and so forth, can be lost, stolen, duplicated, or left at home. Passwords can

be forgotten, shared, or observed. Moreover, today's fast-paced electronic world means people

are asked to remember a multitude of passwords and personal identification numbers (PINs)

for computer accounts, bank ATMs, e-mail accounts, wireless phones, web sites and so forth.

Biometrics hold the promise of fast, easy-to-use, accurate, reliable, and less expensive

authentication for a variety of applications.

http://www.globalsecurity.org/security/systems/images/biometric-intro.gif



There is no one "perfect" biometric that fits all needs. All biometric systems have their own

advantages and disadvantages. There are, however, some common characteristics needed to

make a biometric system usable. First, the biometric must be based upon a distinguishable

trait. For example, for nearly a century, law enforcement has used fingerprints to identify

people. There is a great deal of scientific data supporting the idea that "no two fingerprints are

alike." Technologies such as hand geometry have been used for many years and technologies

such as face or iris recognition have come into widespread use. Some newer biometric

methods may be just as accurate, but may require more research to establish their uniqueness.

Another key aspect is how "user-friendly" a system is. The process should be quick and easy,

such as having a picture taken by a video camera, speaking into a microphone, or touching a

fingerprint scanner. Low cost is important, but most implementers understand that it is not

only the initial cost of the sensor or the matching software that is involved. Often, the life-

cycle support cost of providing system administration and an enrollment operator can overtake

the initial cost of the biometric hardware.

The advantage biometric authentication provides is the ability to require more instances of

authentication in such a quick and easy manner that users are not bothered by the additional

requirements. As biometric technologies mature and come into wide-scale commercial use,

dealing with multiple levels of authentication or multiple instances of authentication will

become less of a burden for users. An indication of the biometric activities.

Fingerprints: The patterns of friction ridges and valleys on an individual's fingertips are

unique to that individual. For decades, law enforcement has been classifying and determining

identity by matching key points of ridge endings and bifurcations. Fingerprints are unique for

each finger of a person including identical twins. One of the most commercially available

biometric technologies, fingerprint recognition devices for desktop and laptop access are now

widely available from many different vendors at a low cost. With these devices, users no

longer need to type passwords - instead, only a touch provides instant access. Fingerprint

systems can also be used in identification mode. Several states check fingerprints for new

applicants to social services benefits to ensure recipients do not fraudulently obtain benefits

under fake names. New York State has over 900,000 people enrolled in such a system.

Face Recognition: The identification of a person by their facial image can be done in a

number of different ways such as by capturing an image of the face in the visible spectrum



using an inexpensive camera or by using the infrared patterns of facial heat emission. Facial

recognition in visible light typically model key features from the central portion of a facial

image. Using a wide assortment of cameras, the visible light systems extract features from the

captured image(s) that do not change over time while avoiding superficial features such as

facial expressions or hair. Several approaches to modeling facial images in the visible

spectrum are Principal Component Analysis, Local Feature Analysis, neural networks, elastic

graph theory, and multi-resolution analysis.

Some of the challenges of facial recognition in the visual spectrum include reducing the impact

of variable lighting and detecting a mask or photograph. Some facial recognition systems may

require a stationary or posed user in order to capture the image, though many systems use a

real-time process to detect a person's head and locate the face automatically. Major benefits of

facial recognition are that it is non-intrusive, hands-free, continuous and accepted by most

users.

Speaker Recognition: Speaker recognition has a history dating back some four decades,

where the output of several analog filters were averaged over time for matching. Speaker

recognition uses the acoustic features of speech that have been found to differ between

individuals. These acoustic patterns reflect both anatomy (e.g., size and shape of the throat and

mouth) and learned behavioral patterns (e.g., voice pitch, speaking style). This incorporation

of learned patterns into the voice templates (the latter called "voiceprints") has earned speaker

recognition its classification as a "behavioral biometric." Speaker recognition systems employ

three styles of spoken input: text-dependent, text-prompted and text independent. Most speaker

verification applications use text-dependent input, which involves selection and enrollment of

one or more voice passwords. Text-prompted input is used whenever there is concern of

imposters. The various technologies used to process and store voiceprints includes hidden

Markov models, pattern matching algorithms, neural networks, matrix representation and

decision trees. Some systems also use "anti-speaker" techniques, such as cohort models, and

world models.

Ambient noise levels can impede both collection of the initial and subsequent voice samples.

Performance degradation can result from changes in behavioral attributes of the voice and

from enrollment using one telephone and verification on another telephone. Voice changes due

to aging also need to be addressed by recognition systems. Many companies market speaker



recognition engines, often as part of large voice processing, control and switching systems.

Capture of the biometric is seen as non-invasive. The technology needs little additional

hardware by using existing microphones and voice-transmission technology allowing

recognition over long distances via ordinary telephones (wire line or wireless).

Iris Recognition: This recognition method uses the iris of the eye which is the colored area

that surrounds the pupil. Iris patterns are thought unique. The iris patterns are obtained through

a video-based image acquisition system. Iris scanning devices have been used in personal

authentication applications for several years. Systems based on iris recognition have

substantially decreased in price and this trend is expected to continue. The technology works

well in both verification and identification modes (in systems performing one-to-many

searches in a database). Current systems can be used even in the presence of eyeglasses and

contact lenses. The technology is not intrusive. It does not require physical contact with a

scanner. Iris recognition has been demonstrated to work with individuals from different ethnic

groups and nationalities.

Hand and Finger Geometry: These methods of personal authentication are well established.

Hand recognition has been available for over twenty years. To achieve personal authentication,

a system may measure either physical characteristics of the fingers or the hands. These include

length, width, thickness and surface area of the hand. One interesting characteristic is that

some systems require a small biometric sample (a few bytes). Hand geometry has gained

acceptance in a range of applications. It can frequently be found in physical access control in

commercial and residential applications, in time and attendance systems and in general

personal authentication applications.

Signature Verification: This technology uses the dynamic analysis of a signature to

authenticate a person. The technology is based on measuring speed, pressure and angle used by

the person when a signature is produced. One focus for this technology has been e-business

applications and other applications where signature is an accepted method of personal

authentication.

Legal significance of biometric data, including raw biometric images and biometric templates,

has been discussed by many legal and non legal professionals. Although there were different

views about whether a biometric template should be regarded as personal data, or personal

related data (Grijpink, J. 2001), or anonymous data (Prins, C.1998), there is no denying that raw



biometric data is personal data in the sense of the EU directive. In the report to the European

Commission, Paul de Hert (2005) had given a clear clarification as to why a biometric template

should also be regarded a personal data. It will be tedious to repeat it here as basically we have

similar arguments. Hence the starting point of our discussion is biometric data including raw

image and templates, should be regarded as personal data covered by the Data Protection

Directive.

Growth of internet trading in India

ADVANTAGES OF ONLINE TRADING

1. Provides with the Freedom of Information

The Internet provides a new sense of controlling our financial future as the amount of investment

information available online is truly outstanding. An investor can-

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

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

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

Helps an investor in receiving a wealth of free commentary and analysis about stock

markets in the global economy

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

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

Some online stock broking companies provide real-time stock quotes, daily roundups of the

stock market, expert commentary, and a deep community of fellow investors.

2. Provides Control to Investors Money

When an investor wants to buy or sell stock he no longer need to call his broker on the phone

thus helping in the execution of the order instantly on the internet.

3. Provides access to the market

Through the sophisticated information streams, dedicated trading platforms and sophisticated

tools the investor can access the markets which provides more agility in buying and selling

stocks.

4. Ensures the best price for investors

Some companies like Investsmart (IL&FS)specialize in the techniques which offers the best

price deals for the buy and sell orders of the investors and traders providing the high level of



transparency by displaying of information relating to the specific stocks and company profiles

which helps in getting the best quote for the orders

5. Online trading offers greater transparency

Online trading offers the investors with greater transparency by providing with an audit trail. The

process involves a complete integrated electronic chain starting from order placement, to

clearing and settlement and finally ending with a credit into the depository account of the

investor. All these stages are inspected which brings the transparency into the system.

6. Provides hassle free trading

Online trading provides an integration of the bank account, trading account and demat accounts,

which leads to easy and paperless trading for the client.

7. Online trading allows instant trade execution

Online transactions helps in the quick execution of the entire trading transaction right from

logging to the traders site and to the settlement of the bank account in a very short period of time.

8. It provides a level playing field

Trading online gives even the smallest retail investor access to information which was earlier

available only to the big traders. It has provided with a level playing field for all investors in the

securities market.

9. Online trading reduces the settlement risk

This method of trading reduces the settlement risk for the investor as when a short sell order is

played the orders are squared off at the specified cut-off time and are not allowed to be carried

forward.

10. Provides live financial news & analysis

The online sites also provide live terminals which provide streaming news to give investor the

latest financial information as it occurs.

11. Online help desk

Some companies provide online help desk an investor cancan contact the Tele Trading

Executives from the Tele Trading team during and after market hours and can clarify questions.

12. Instant order trade confirmations

Through online trading every trade is confirmed immediately and investor receives an on-screen

confirmation following every trade with full details for the investors records which avoids costly

errors that would have been discovered when it is too late.



13. Keeps Information Secure

As per the guideline provided by SEBI every effort has to be made to keep the investors account

and personal information secure by use of encryption technology and updated security

technology to advanced fraud prevention measures.

DISADVANTAGES OF ONLINE TRADING

1. In online terminal, investor can’t get customized expert advice, whereas in offline the broker

gives suggestions according to investors strategy (i.e. short term or long-term)

2. Brokerage is high compared to offline.

3. Privacy is less due to hacking scandals

4 .Transactional errors due to technical problems

According to an article by Krishnamoorthy B in 2005 after inception of online trading in India in

the year 2000 online trading is gained momentum with trading volumes growing by 150 per cent

per annum in the years 2003-2005.The volume of all trades executed through the Internet on the

National Stock Exchange had grown from less than Rs 100 crore (Rs 1 billion) in June 2003 to

over Rs 700 crore (Rs 7 billion) in July 2005 which was a handsome growth.

This also provided a massive rise in the number of Internet traders. At the end of July 2005, there

were 108 registered brokers on the NSE and the number of Internet trading subscribers to about

1.054 million. And the top three players ICICIdirect.com, Indiabulls and Kotak Securities had

nearly 85 per cent of the total customer base. Today the ICICIDirect has nearly 36% market

share.

In March 2003 ICICIDirect had about 234,000 customers trading through its portal which rose to

over 675,000 customers in the year 2005.According to Anup Bagchi the MD and CEO of

ICICIdirect.com as their company was the first player to enter the online trading segment,

ICICIdirect has made broking more structured and transparent which further reduced the

operational hassles.

At the same time the number of subscribers trading through the portal of Kotak Securities had

gone up significantly by 150 per cent and the number of online trading customers had grown

from 30,000 to 75,000. And the company expected to have at least 130,000 customers by the end

of that fiscal.

Indiabulls which was a late entrant in the game had its online customers growing from 35,000 in



June 2003 to over 140,000 in the mid 2005. Out of total customer base of 180,000 majority were

online customers. Indiabulls appointed 2,000 relationship managers to handle online clients.

In the recent past years of 2005 ICICIDirect and Indiabulls recorded an annual volume growth of

100 per cent and IndiaBulls had about 30 per cent of India's online trading volumes.

In the year 2005 the online revenues grew faster for Indiabulls than offline revenues (online

revenues increased from 40 per cent to 60 per cent of the total year 2004 and clients wanted a

backup while trading online.

ICICI Direct had 7.5 lakh registered users online in the tear 2005 more than five times what

Indiabulls had. In 2005 number of demat accounts doubled to 7.1 million with the facility of

online trade since 2002. From the years 2000-2005 the online broking grew to account for a tenth

of the total trading volumes. If the numbers are considered for only the retail segments, the

growth is starker. Almost half of the Rs 5,000 crore-6,000 crore daily market volume on the NSE

accounted for by non-retail

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