Sales management
1Sales managementThe only business function that generates
revenue.Sales and Distribution Management-Sales functionSales and
Distribution StrategySales involves delivery and transfer of
ownership of the product or service to the customerIt forms the
beginning of the latter part of the supply chain post
manufactureSales constitutes the direct and most intimate contact
of the firm makes with its customersSales is responsible for the
fulfillment of the promise made to the customer by its predecessor
function-marketingWhile marketing is responsible for creation of a
customer, sales and after sales service are responsible for
servicing and retention of the customers
3sales management Planning, direction and control of personal
selling including recruiting, selecting, training, equipping,
assigning, supervising, compensating and motivating as these tasks
apply to the personal sales force.Role of Sales Management in
MarketingThe larger concept of marketing is the creation, servicing
and retention of customers and marketsThis comprises identifying
customer wants, designing and developing products/services to meet
these wantsDesigning products, deciding initial pricing,building
awareness, persuasion-role of marketing functionSales role-Actual
delivery of products/services to the customer maximizing
convenience and ensuring satisfactionFinally fulfilling the promise
made to the customer through sincere and effective after sales
service
Role of Sales ManagementMarketing covers want identification and
development of appropriate products/servicesSales involves transfer
of ownership and possession to the customer in exchange for the
price she paysRetention of the customer takes place in the after
sales and customer service part of the larger marketing chainRole
of Sales ManagementEffective transfer of possession and ownership
to the customerThis has to be done in the right place, right time
and the right mannerChoice of channel members, deciding the terms
of engagement with channel partners, Sales promotion and
merchandising are key responsibilitiesEffective liaising with
Marketing and manufacturing are essential ingredients for
successful selling7Sales managementManagement of the personal
selling task.Is there anything like impersonal selling or
non-personal selling?Selling is an exchange transaction. Exchange
of Product or service for moneyMoney is the revenue or the earnings
of an enterprise often called turnover or top lineSales therefore
is the only revenue generating function in an enterprise.
8Objectives of sales management3 general underlying
objectives:SALES VOLUMEPROFITSGROWTHSales cost of sales = gross
margin.
Gross margin expenses =net profit.9Sales management:
evolutionIndustrial Revolution 1760Small home industries Large
scale manufacturing marketing sales and sales supportConcept of
hunters and farmersThe modern day sales manager is both an
administrator in-charge of personal selling activity and a member
of the group that makes marketing decisions of all types.Areas of
Sales Management ResponsibilitiesForecasting of aggregate and
product wise sales, using past data and incorporating current and
future trendsDesigning and managing the sales workforce to meet the
forecast and build long term relations with associatesDecide on
critical aspects of sales policy including pricing, credit terms to
customers and settlement of claimsTo closely liaise with After
Sales service to present a united customer care front to associates
and consumersNature and Importance of Sales ManagementNature of SM
can be explained by:Its integration with marketing
managementRelationship sellingVarying sales
responsibilitiesIntegration with Marketing management:It is a part
of marketing management and as such sales planning should be
integrated with marketing planningMarketing team consists of two
basic goups-field selling team/personal selling team who reside in
territories contacting the customers and head quarter marketing
team who perform support and service functions to assist and help
the sales people such as promotion, marketing research, marketing
logistics, customer service and co-ordinationThe real integration
between the marketing and sales team would take place if there is a
harmonious relationship which is built on understanding of common
goals.Relationship selling:Concentration is establishing
relationships. Buyers and sellers have some type of business
relationships which have a range or spectrum,-Transactional R
(Where customer is not contacted after selling Ex:Selling moovie
tickets-Value-addedR (Where sales person understands the current
and future needs of the customer and meeting these needs better
than the competitors Ex: Maruti Udyog Limited.-Collaborative and
Partnering R which are especially more important in business to
business marketingVarying sales responsibilities and sales
positions:Selling includes a variety of sales jobs which are
entirely different from one another. The six sales positions
are:Deliverer (Response selling-delivery of bread milk and
newspapersOrder-taker (Response Selling-Sales
representatives)Sales-support people (Missionary selling
people-Medical rep calling doctors)Technical sales support/sales
engineer(Technical selling-Industries like heavy machinery)Demand
creator or order getter (Creative selling-selling tangible products
like automobiles, refrigerators, televisions)Solution Vendor
(Business Selling-Computer hardware and software systems,
telecommunications)Nature of Sales ManagementIts integration with
marketing managementRelationship SellingTransactional Relationship
/ SellingValue added Relationship / SellingCollaborative /
Partnering Relationship / SellingHead-MarketingManager Customer
ServiceManager Market LogisticsManager SalesManager Market
ResearchManager-Promotion15Varying Sales Responsibilities /
Positions / JobsSales PositionBrief DescriptionExamples Delivery
salesperson Delivery of products to business customers or
households. Also takes orders. Milk, newspapers to households
Soft drinks, bread to retail stores. Order taker (Response
selling) Inside order taker
Telemarketing salesperson takes orders over telephone Outside
order taker. Also performs other tasks Behind counter in a garment
shop Pharma products orders from nursing homes Food, clothing
products orders from retailers Sales support Missionary selling
Technical selling Provide information, build goodwill, introduce
new products Technical information, assistance Medical reps. in
pharma industry
Steel, Chemical industries Order-getter (Creative,
Problem-solving, Consultative selling) Getting orders from existing
and new household consumers Getting orders from business customers,
by solving their business and technology problems Automobiles,
refrigerators, insurance policies Software and business
solutions16Importance of Personal Selling and Sales ManagementThe
only function / department in a company that generates revenue /
incomeThe financial results of a firm depend on the performance of
the sales department / managementMany salespeople are among the
best paid people in businessIt is one of the fastest and surest
routes to the top management17Roles and Skills of a Modern Sales
ManagerSome of the important roles of the modern sales manager
are:A member of the strategic management teamA member of the
corporate team to achieve objectivesA team leader, working with
salespeopleManaging multiple sales / marketing channelsUsing latest
technologies (like CRM) to build superior buyer-seller
relationshipsContinually updating information on changes in
marketing environment18Skills of a Successful Sales ManagerPeople
skills include abilities to motivate, lead, communicate,
coordinate, team-oriented relationship, and mentoringManaging
skills consist of planning, organizing, controlling and decision
makingTechnical skills include training, selling, negotiating,
problem-solving, and use of computers19Types of Sales Managers /
Levels of Sales Management PositionsFirst / Lower Level Sales
ManagersMiddle-Level Sales ManagersTop-Level Sales Managers /
Leaders20Sales Objectives, Strategies and TacticsThe main
components of planning in a company are objectives, strategies and
tactics. Their relationship is shown belowDecide / Set
ObjectivesDevelop StrategiesEvolve Tactics / Action PlansE.G. A
company wants to increase sales of electric motors by 15 percent,
as one of the sales objectives. (see next slide)21To illustrate the
relationship between sales objectives, strategies and tactics,
consider:Sales Goals /ObjectivesMarketingStrategySales and
Distribution StrategyTactics / Action plansIncrease sales volume by
15 percentEnter export marketsIdentify the countries
Decide distribution channelsMarketing / sales head to get
relevant informationNegotiate and sign agreements in 3-5 months
with intermediariesPenetrate existing domestic marketsReview and
improve salesforce training, motivation and compensationUse
effective and efficient channelsAdd channels and membersTrain
salespeople in deficient areasTrain field salesmanagers in
effective supervisionLink sales volume quotas to the incentive
scheme of the compensation plan22Three Types of Buying Situations1.
Straight rebuybuying again the same thing2. Modified rebuychange in
supplier..or product in order to reduce cost or improve quality3.
New taskplanning to buy something new..new products., suppliersGet
the details of this topic from study material.
Buying SituationsNew TaskModified RebuyStraight RebuyMonitor
changes in customer needs; respond quickly when problems and new
needs arise; provide technical information.Act immediately when
problems arise.Reinforce relationship with customers; make sure all
of the customers needs are satisfied.Suggest new approach for
solving problems; provide technical advice.Respond more quickly
than present supplier when problems arise; encourage customer to
consider an alternative; present information on how new alternative
will increase efficiency.Convince customer of potential benefits
from reexamining choice of supplier; secure recognition and
approval as alternative supplier.Selling StrategyEmerging Trends in
Sales ManagementGlobal perspectiveRevolution in technologyCustomer
relationship management (CRM)Salesforce diversityTeam selling
approachManaging multi-channelsEthical and social issuesSales
professionalismGet the notes below:Emerging Trends in Sales
Management To be successful in a changing market environment, it is
important that sales managers understand the importance of emerging
trends in the following areas Global PerspectiveGlobal competition
is intensifying. Domestic companies who never thought about foreign
competitors are suddenly finding them in their backyard. This is a
challenge which sales managers and salesperson must take on, they
have to improve their personal selling efforts not only in their
countries but also in foreign countries. Selling goods and services
in global markets presents a challenge due to differences in
culture, language, needs and requirements.Technological
RevolutionDigital revolution and management information system have
greatly increased the capabilities of consumers and marketing
organizations. Consumer today can get information about products,
compare it with other brand, place an order and place an order
instantly over the internet. This has led to a different kind of
sales force who collects information about internet users, markets
and prospects of internet buyers. It is mandatory for all companies
to have their website now.To compete effectively, sales person and
managers will have to adopt the latest technology.Customer
Relationship Management [CRM]Combining information technology with
relationship marketing has resulted in customer relationship
management. Interestingly, the concept of relationship marketing
came about earlier by bringing quality, customer service and
marketing together.Relationship marketing aims in building long
term satisfying relations with key customers distributors and
suppliers in order to earn and retain their long term preference
and business. CRM enable companies to provide excellent real-time
service by focusing on meeting the individual needs of each valued
customer, through the use of CRM software packages.Sales Force
DiversityThe demographic characteristics of sales force is changing
and becoming more varied. For example, more and more women are
taking up careers in sales management and selling. Also the
education level of sales people is going up most of them holding a
college degree or a post graduate degree. Sales managers now have
to handle a sales force of these varied demographic, expectations
of each and every individual is different and sales manager needs
to use different motivational tools against each one of them.Team
Selling ApproachThe practice of team selling is more widely
followed by most companies in recent years. Team selling approach
is used when company wants to build a long term mutually beneficial
relationship with major customers, who have high sales and
profitable potential. It is used for selling a technically complex
product or a service to a potential customer. The composition of
team may vary depending upon the customer from top management,
technical specialist, customer service, etcManaging
Multi-ChannelsMulti-channel marketing system occurs when
organization uses two or more marketing channels to target one or
more customer segments. Major benefits of multi-channel marketing
system are:Lower channel costIncreased market coverageCustomized
sellingMulti-channel may also lead to conflicts and control
problems, as two or more channels may compete for same customer. A
successful sales manager will have to effectively manage conflict
between the channels.Ethical and Social IssuesSales managers have
ethical and social responsibilities. Sales people face ethical
issues such as bribery, deception (or misleading) and high pressure
sales tactics. Todays sales managers have no choice but to ensure
ethical standards from sales force otherwise they may be out of
business or even land up in legal problems.
25Changing trends in SMthrough a diagram
Linking Sales and Distribution ManagementEither sales management
or distribution management cannot exist, operate or perform without
each otherTo achieve the sales goals of sales revenue and growth,
the sales management plans the strategy and action plans (tactics),
and the distribution management has the role to execute these
plansThis will be illustrated by considering some sales management
actions and corresponding role of distribution management (in the
next slide), as well as by discussing a few integrated cases given
at the end of the book27Role of Distribution Management for some of
the Sales Management Actions / TasksSales Management Actions /
TasksDistribution Management RoleStrategy for effective coverage of
markets and outletsFollow call plan / beat planMake customer call
productiveUse multi-channel approachStrategy for handling customer
complaintsPrompt action at the customer interface levelIf the
problem persists, involve senior sales and service peoplePlanning
of local advertising and sales promotionCo-ordination with
distribution channelsResponsibility of execution with distribution
channelsExpenses are shared between the company and
intermediaries28
