Module 01 -introduction to sales management pdf

Sales
Management
DEEPAK K.V. BIT-MBA 2

Stories catch people's
imagination, whereas facts send
them to sleep. That's why
professional sales people use
stories to make their point. Just
like politicians, and poets and
authors, sales people tell
stories.

 Buyers aren't really interested in
facts. They are interested in
feelings. They want to relate. They don't
want to be alone. They want to go where
others have gone before.
And sales guys don't just sell to
buyers. They have to sell to their
management, their colleagues, and their
support teams. They explain their ideas,
illustrate their point, argue their case.

5
MODULE 1
Sales Management
The only business function that
generates revenue.

Introduction:
 Sales management is a business discipline
which is focused on the practical
application of sales techniques and the
management of a firm's sales operations.
 ―Sales management‖ as the term implies
means management of sales

7
Sales management
 Is a process of Planning, directing
and controlling of personal selling
including recruiting, selecting,
training, equipping, assigning,
supervising, compensating and
motivating the sales force.

Sales management is the
application of basic
management principles to
Sales, Recruitment, Training,
Supervision,
8

 Sales management involves planning,
implementing, and controlling personal to
achieve the sales and profit objectives of
the firm.

Sales Managers
 Sales managers are individuals who are responsible for
directing the firm's sales program; in carrying out this
responsibility, a sales manager assigns territories, sets
goals, and establishes training programs.
 In addition to setting individual goals, sales managers
monitor the performance of their salespeople and
continually offer direction and leadership on ways to
improve their performance.
 Sales management involves both organizing and
motivation skills.

11
Objectives of Sales
Management
Underlying objectives:
1. SALES VOLUME
2. PROFITS
3. GROWTH

Evolution of Sales Management
 The history of salesmanship is as old as human
civilization
 Industrial revolution that took place in the 18th
century gave rise to the expansion of market
which required professional approach in selling.
 The business and trade of buying and selling
goods flourished over centuries and centered only
on some specific cities of the world.
12

Pheriwallahs:- The first sales people
 The first sales people in the US were yankee
peddlers who carried clothing, spices and
household articles from one part of the country
to another part.
 In India they are called Pheriwallahs. These
Pheriwallahs move from village to village to sell
bangles, sarees, dress materials and spices
mostly in the rural markets because rural
housewives have lesser mobility than urban
housewives.

Pack Peddlers:- the shrewd, unprincipled
tricksters:
 The pack paddlers in India traded with the tribal
Indians and exchanged knives, beads,
ornaments and handicrafts.
 They sold coloured sugar water as medicine
and cheated people for 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 displays to beat their
competitors.
 In the next phase, the drummers started visiting
customer’s place of business.
 There were fewer than 1000 travelling sales people
before 1860 in the US who were basically credit
investigators and took orders for goods.

John Henry patterson- selling
Techniques:- IBM
 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 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. –
Its the beginning of canned sales approach.

 Mr. Patterson assigned to his people
exclusive territories and quotas in order to
stretch their effort.
 He arranged meetings. He also sent
regular sales information on techniques of
selling.
 Thomas j. waterson was trained by Mr.
patterson who later founded the IBM.

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 it costs five time
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 have to manage a diverse
workforce and complex technologies.
 Sales managers have to perform duties
such as recruiting, selecting, training ,
motivating, forecasting, controlling and
administering people.

 They have to manage 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:
1. Sales force is the primary contact point, so much attention to
be given for improving the ability of selling through training
and motivation.
2. Personal selling is the most commonly used method of
promotion.
3. In most industrial markets , personal selling comprises the
majority of the promotional budget and is a significant part of
overall budget.
4. Customer consider salesperson as the company.
5. 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.
22

Personal Selling:
 Personal selling involves the two-
way flow of communication between
a buyer and seller, often in a face-to-
face encounter, designed to influence
a person’s or group’s purchase
decision.

Personal selling
 Personal selling involves a two-way flow of
 communication between a buyer and seller,
 often in a face-to-face encounter, designed to
 influence a person’s or group’s purchase
decision.
With advances in telecommunications,
 personal selling takes place over the
 telephone, through video tele confencing
 and interactive computer links between
 buyers and sellers.
24

Evolution of Personal selling
strategies:
 The personal selling strategies have evolved over a
period of last 150 years. with the beginning of peddlers
in the 19th century adopting persuasion strategy to make
sales.
 As competition grew and buyers had a choice to opt for
a particular player, it became important for the
salespeople to understand the need of the customers,
which called for the modification of products, prices and
other related services—Negotiation strategies became
more important than mere persuasion

 IN 1970s when salespeople called on the business and
industrial buyers, they were told to treat the customers
not just as account but as clients. Consultative selling
required a seller to think like the buyer(salesperson acts as an
expert consultant for his prospect, asking questions to determine the
prospect's needs and then using that information to select the best product
or service for those needs)
 In the late 1980s and early 1990s, a lot of emphasis was
put on the mgt of territories and accounts as profit
centers or as a business.
 The sales people were trained to practice business
management strategies at this phase

 The domestic and international
competition, rising costs and
recession forced attention on the
need to reduce cost of producing
and marketing goods.
 This was facilitated by a close
working relationship between the
sales people and customers.
 This called the partnership phase in
the evolution of personal selling.

Types of personal selling:
 The approach is linked to customer
choice, behaviour & risk involved
 Industrial selling- selling to reseller
 Selling to business users ;IBM sells Intel
premium to Compaq, HCL
 Institutional selling : Xerox
 Retail selling
 Selling to Government
 Services selling

Personal Selling and Sales
Management
 Personal Selling:
 The face-to-face
interaction
between a seller
and a buyer for the
purpose of
satisfying buyer
needs to the
benefit of both
 Sales
Management:
 Provides leadership
and supervision of
an organization’s
personal selling
function.

SALES MANAGEMENT PROCESS
Formulation of Strategic Sales Management Program
Environmental Issues, Oraganising and planning company’s
overall personal selling efforts and integrating this with Marketing strategy
Implementation of a Strategic Sales Management Program
Selecting Sales personnel, Training, Motivating, Designing and
implementing
policies and procedures to achieve corporate objectives
Evaluation and control of Sales force Performance
Methods and procedures for controlling individual and group sales
performance. Taking corrective actions in formulation & implementation to
achieve corporate objectives

Emerging Trends in Sales Management:
The field of sales management is changing according to the
changes in the area of personal selling.
32
Customer
Orientation
Global and ethical
issues
New selling Methods
Diversity
Relationship selling
Technology
Emerging Trends
in Sales
Management

1. Customer Orientation:
 The most important trend in Sales Management
is the customer orientation.
 Organization Structures, systems, and
process are designed around customers to give
them high value products and services, deliver
more satisfaction and retain customers for a
longer period.
 This calls for new method of sales techniques.

2. New selling Methods:
 The traditional selling process of individual salesmen calling on individual
buyer is fast disappearing.
 It is observed that in the late 1980s and 1990s many organization started
using non-traditional selling such as telemarketing, web based e-selling
technique etc.
 In the industrial sector, software companies have turned to cross-functional
selling for the sale of enterprise wide solutions.
 A cross functional selling team comprises of people across all the
functions such as sales, marketing, finance, operations and human
resource so that a holistic picture of customer’s problem can be snapped
and solutions can be developed for them.
 A company such as priceline.com in the USA uses a web based sales
model and practices reverse auctioning as a successful method of selling.

3. Technology
 Organisations are adopting technology and integrating their
business across departments.
 New technology has made it possible to automate the sales
force. Orgnaisations have integrated their requirements
with vendors and vendors have adopted systems which are
compatible to the enterprise-wide solutions of their
customers.
 Ex: Maruthi has a sales automation process whereby all the dealer networks are
linked to its production process at the Gurgaon plant and the production of
different types of cars are linked to the demand patterns in the market place.
 EX: Companies such as Archies and Hallmark use data derived from bar codes
scanned at the check-out counters of retailers to supply information to their
sales people.

4.Globalisation:
 The global legislations such as GATT and WTO and the emergence of
legislation on environment make it binding for a sales force to look at the
emerging issues in the business world and take corrective action for the
business success.
 The growth in consumption in the emerging markets such as India, china and
Malaysia demands special attention to be given for structure, approach and
nature of sales force and selling techniques.
 Maintaining ethical norms is a part of responsible commercial success. There
are ample cases of bribery and cheating in the world of sales in Indian Market
and organisation are being blamed for the misconduct of business.
 Ex: Modi Xerox as a company was found bribing people for selling its
office equipments and photocopiers in the Indian Market.

5. Diversity
 Diversity marketing recognizes the influence of cultural
programming and acknowledges that different consumer
groups have life experiences in different cultural and
social settings.
 Because of this different cultural programming, the
tastes, values, expectations, beliefs, ways of interaction,
ways of entertainment, and lifestyle preferences of these
groups tend to be different from others.
 These differences require the creation of customized
marketing strategies.

6. Relationship selling:
 This non personal form of intermediation is found in
many sectors.
 The basic objective of reorienting the selling strategies is
to build relationship with customers.
 This has changed the selling process from transactional
selling to relationship selling.
 The long term association between buyers and sellers
become the focus of business with the customers.
 Ex:1. HCL technologies has full time employees at the client’s place for
solving any problems relating to computer hardware.
 Ex:2 GE and other leading players have opened back office operations in
India to attend customer complaints.
 EX:3 Jet Airways program on Extra Miles for the frequently flying
customers.

Qualities of Sales Manager:-
1. He should be a good communicator, catalyst, & planner.
2. He should be a prognosticator, & skillful manipulator.
3. He should be an amalgamator, a consolidator and orchestrator
directing efforts of many towards the achievement of common
goal.
4. He should be a successful mentor who understands each
individual’s needs, self fulfillment, & economic growth.
5. He should be an innovator and creator of new ideas and
promotion.
6. He should be an over achiever rising to the challenge of new
forecast each year.
7. He should be capable of handling unanticipated difficulties and
events.
8. He should be an opportunist and a worthy advisor.
9. He should be a team-mate, umpire, and referee.
39

Responsibilities Sales Manager :-
1.Sales planning and budgeting.
2.Estimating demand and forecasting of sales.
3.Determination of size and structure of the sales
organization.
4.Recruiting, selecting and training of sale’s people.
5.Allocating of sales force and setting sales quotas.
6.Compensating, motivating and leading the sales force.
7. Analyzing sales volume cost and profit.
8. Measuring and evaluating sales force performance.
9. Monitoring marketing environment.

Selling skills
and
selling strategies

Introduction:
 Selling skills are the most important
requirement for the sales people as to
meet Organization goal, increase
organization image and to retain existing
customers.
 Selling skills helps sales people to
establish and maintain long term
relationship with customers.

 The selling skills can be acquired by sales
person through proper training and
exposures.
 As the sales job is more stressful in
nature,(because most of the times he is
away from his family, meeting different
types of customers), the salesperson
should posses right kind of skill to cope up
with it.

Selling & Buying Styles :
 Buying styles vary depending on the
buyers capability to pay, quantity of
purchase, the buyers ability to take
risk, bargaining power, the
competitive landscape in the industry.
 Buying styles of different buyer

Consumers buying styles:
Innovators
 -Adventurous and have high risk capital are the over night buyers.
 -mostly buy on impulse and consider non functional reasons for making a
choice
laggards
 accept new products after observing the innovators using it.
Rogues theory of diffusion
Innovators : -doesn’t give much important sales person
Risk averters : Always take multiple variables into consideration before they make
final decision
Business 2Business buying styles
Different Groups of business has different pattern of buying:
1. Government organ- looks for lowest bid;
2. Some organisation considers quality as the important criteria,
3. Others has centralized decision making/ decision making committee.
45

Robert Blake and Mouton Model
C
U
S
T
O
M
E
R
S
SALES

Blake and Mouton model
 Blake and Mouton model distinguish various selling
styles by analyzing a salesperson’s concern for the sale
and the customer.
 How much concern the sales person has for selling
his product, and what level of importance he gives to
the customer are the two dimensions used for
developing this matrix of selling styles.
 Typically a sales person, who only pushes his product
without considering the buyer needs has more concern
for sale.
 On the other hand, a salesperson who always responds
to customer’s needs and present his product as the
optimum solution to the customer’s problem has higher
concern for the customer.

48
(1, 9) People oriented – I am the customer friend; I want to
understand him & respond to is feelings and interest so that he’ll like
me. It’s the personal bind that leads him to purchase.
(9, 9) Problem solving oriented – I consult with customer so as to
inform myself of all the needs in his situation that my products can
satisfy we work towards a secured decision on his part, which yield
him the benefits he experts from it
(5, 5) sales technique oriented – I’ve tried an effective routine for
getting a customer to buy. It motivates there a blended personality
and products emphasis.
(1, 1) Takes it or leave – I plane the product before the customer and
it sells itself as and when it can.
(9, 1) Push the product oriented – I take changes of the customer and
hard sell him, pilling on all the pressure if takes to make him buy.

SELLING SITUATION:
 A typical selling situation explains 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.
 When a person makes a sales call to an individual
customer for an insurance product or a mobile
connection, he a faces a situation where the customer
either explains his status and intention of buying or
addresses his needs to the salesperson.

 In organizational buying the customer
represents a group interest such as the
purchase department of an organisation, and
buying pattern is based on the basis of set
parameters.
 In service and solutions selling, the customer
does not come with a specific parameters, and
during the sales presentation the customer may
unravel his problems, identify his interests, and
develop his criteria of choice.

 In a retail selling situation, the customer walks into the
counter with an intention to buy a product, whereas in
cold calling and door to door selling, the salesperson
looks for potential customer.
 In the case of pharmaceutical selling the sales person
makes a sales presentation to a doctor who is not the
original customer but customer’s decision making largely
depends on what the doctor prescribes.
 In creative selling, the salesperson tries to sell an
abstract thought to the customer, eg., an advertising
campaign presentation.

Step 1. Prospecting and Qualifying
Step 2. Preapproach
Step 3. Approach
Step 4. Presentation/ Demonstration
Identifying and Screening For
Qualified Potential Customers.
Learning As Much As Possible
About a Prospective Customer
Before Making a Sales Call.
Knowing How to Meet the
Buyer to Get the Relationship
Off to a Good Start.
Telling the Product “Story” to
the Buyer, and Showing the
Product Benefits.
Steps in the Selling Process

Step 5. Handling Objections
Step 6. Closing
Step 7. Follow-Up
Seeking Out, Clarifying, and
Overcoming Customer
Objections to Buying.
Asking the Customer for the
Order.
Following Up After the Sale to
Ensure Customer Satisfaction
and Repeat Business.
Steps in the Selling Process

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