Sales Management Introduction

INTRODUCTION TO SALES MANAGEMENT

INDUSTRIAL MARKETING MODULE 3

Flow of PresentationMeaning and Objectives of Sales Management

Role of Sales Manager

Sales Management and Marketing Management Relationships

Sales Departments external relations

Types of Sales Organization Structure

Centralization and De- centralization of Sales Force Management


Personal SellingAccording to Philip Kotler, Personal Selling involves oral presentation in a conversation with one or more prospective purchaser for the purpose of making sales

It is the direct face- to- face communication between a seller and a potential customer

It is a form of two- way communication unlike Advertising, Sales Promotion etc.


Sales ManagementSales Management is an integral sub- system of Marketing Management

Sales Management is the administration of the personal selling activities of the organization

In a modern organization, Sales Management centers around the management of sales force and sales efforts


Definition of Sales ManagementThe American Marketing Association defines Sales Management as the planning, direction, and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the personal sales force

Sales Management refers to planning the personal selling effort, organizing the sales personnel and developing a winning sales team

Brech defined Sales Management as the overall management of sales and it refers to only a specialized application of the process of management as a whole


Sales Management V/s Sales force ManagementModern Sales Managers have broader responsibilities than just managing the sales force

Even though their primary responsibility is management of the personal sales force, that do not comprise their total responsibility

So we call the personnel- related responsibilities of Sales Managers as Sales force Management

In other words, Sales force Management is just a part of Sales Management


Objectives/ Functions/ Responsibilities / Role of Sales Management/ Sales ManagerFrom the company viewpoint, Sales Management has 3 general objectives:Sales volumeContribution to profits, and,Continuing growth

The following are the most important duties and responsibilities of a Sales Manager: Planning the personnel selling effort: Determine precisely the place of personal selling in the marketing mix of the firm and to set the personal selling objectivesMerchandising: is defined as planning to offer the right products at the right time, in the right quantities, and at the right price

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c) Marketing research: Sales Manager has to organize and manage marketing research projects

d) Developing a winning sales team: Sales Manager is responsible for recruiting, selecting and training the sales force, its compensation, supervision, motivation and controlObjectives/ Functions/ Responsibilities / Role of Sales Management/ Sales Managere) Distribution channels: The Sales Manager has to select proper channels of distribution and maintain good relations with distributors and dealers

f) Financing the sales: The Sales Manager is responsible for providing and managing funds for marketing


Objectives/ Functions/ Responsibilities / Role of Sales Management/ Sales Managerg) Building the sales organization: The Sales Managers are required to ensure that the sales organization (sales department) is maintained in trim condition and capable of effectively implementing the personal selling program of the firm

h) Sales Promotion and Advertising: The Sales Manager is responsible for advertising and sales promotion to create, maintain and extend the consumer demand


Selling V/s Marketing Selling Marketing

Emphasis is on the product 1. Emphasis is on the customers needsInternal- company (seller) 2. External- market orientation (customer) orientationEmphasis is on the sellers needs 3. Emphasis is on the buyers needs4. Narrow in scope 4. Wider in scope


Sales Management and Marketing Management RelationshipsAccording to Philip Kotler, Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value

According to William J. Stanton, Marketing Management is the marketing concept in action

Marketing Management is a wider term and it includes Sales Management also

Sales Management refers to the overall management of sales


Sales Management V/s Marketing Management

Concept: MM is a modern concept while SM is an old concept

Object: The object of MM is to satisfy the needs of the consumers and thereby maximize the profit of the concern. On the other hand, the object of SM is to maximize sales with emphasis on volume

3. Scope: MM is a broad term and includes SM. SM is a narrow term and is a part of MM

4. Performance of Activities: The activities of MM are superior while the activities of SM come under the jurisdiction of MM


Sales Departments External RelationsFinal Buyer Relations

Industry Relations

Government Relations

Educational Relations

Press Relations


Types of Sales Organization StructureThe basic types of sales organization structures are:Line Sales Organization

Line and Staff Sales Organization

Functional Sales Organization

Committee Sales Organization



Line Sales OrganizationIt is the oldest and simplest sales organizational structure.

It is often used by small firms.

It usually consists of only a few managers, who exercise authority over specific functional areas of the business, such as production, finance, or sales

Refer Diagram on Page 191 of Cundiff and Still Text



2. Line and Staff Sales OrganizationIt is often found in large and medium- sized firms, employing substantial number of sales personnel, and selling diversified product lines over wide geographic areas

It creates more functional areas

Refer Diagram on Page 194 of Cundiff and Still Text


Types of Sales Organization Structure3. Functional Sales OrganizationThe principle of specialization is utilized to the full extent in Functional Sales OrganizationThe staff specialist is given line authority to control his or her function throughout the organizationRefer Diagram on Page 196 of Cundiff and Still Text



4. Committee Sales Organization

Many firms have a sales training committee comprised of the general sales manager, his or her assistants, the sales training manager etc.

It meets periodically to draft training plans and formulate sales training policies


Centralization and Decentralization of Sales Force ManagementIn the centralized sales organization, almost all the activities including sales force management, are administered from a central headquarters

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

In the decentralized organization, all these activities are handled by field sales executives


Centralization and Decentralization of Sales Force ManagementAdvantages of centralizationLinks selling with sales promotion and advertising

2. Simplifies administrative work

3. Makes it easier to organize territories

4. Aids in the effectiveness of the sales plan

5. Reduces bias in the hiring process


Centralization and Decentralization of Sales Force ManagementDisadvantages of centralization

Assigns decision- making authority to individuals who may be hundreds or thousands of miles away from the action

2. Limits understanding of territorial conditions

3. Reduces time to work closely the salespeople in the field

4. Increases geographical differences in preferences


Centralization and Decentralization of Sales Force ManagementAdvantages of decentralizationIncreases in- depth coverage of the market, resulting in higher sales

2. Increases control of the market, resulting in increased sales

3. Improves direction of the sales force in creating greater sales

4. Improves customer services, which will lead to more sales

5. Reduces the need for territorial break- in time, as salespeople are from the area6. Improves salespeoples attitudes because of the reduction in travel time and fewer nights away from home

7. Reduces travel expenses


Centralization and Decentralization of Sales Force ManagementDisadvantages of de-centralization1.Increased costs resulting from a duplication of overhead costs at each branch

2.Attempting to follow the plans from the main office creates management problems where geographical differences are important

Refer Page 198 of Cundiff Still Text


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Sales Management Introduction