UNIT-1

Sales Management:
The planning, direction and control of personal selling, including r
ecruiting, selecting, equipping, assigning, routing, supervising, paying and mot
ivating as these task, apply to the personal sales force.
Distribution (or place):
Ii is the one of the four elements of marketing mix. An organization
or set of organizations (go-betweens) involved in the process of making a produ
ct or service available for use or consumption by a consumer or business user.
Distribution Management:
The art and science of determining requirements, acquiring them, di
stributing them and finally maintaining them in an operationally ready condition
for their entire life.
Marketing Management:
It is the art and science of choosing target markets and building rep
eatable relationship with them. This involves getting keeping and growing custom
ers through creating, delivery and communicating superior customer value.
Objective of Sales Management:
Objectives

Sales volume Contribution to profits continuing

growth
Though these are broad corporate functions to be achieved by the top management
, sales contribute a great deal in achieving them. Corporate objectives are comm
unicated to the marketing department who is turn passes on the responsibility to
the sales department.
Exchange process:
It is the sale and delivery of goods/services from the manufactu
rer to the consumer can be consummated directly i.e. by the firm itself through
its own sales force or indirectly through a network of middleman such as wholesa
lers and retailers.
Essential tasks need to be performed in order to consummate successful exchange:
Ø Contact: finding and communicating with prospective buyer
Ø Prospecting: Bringing together the marketers offering and the prospective buyer
Ø Negotiation: Reaching an agreement on price and other terms of the offer so that
ownership and possession can be transferred.
Ø Promotion: Of the marketer’s offerings and his satisfaction generating potential
Ø Physical distribution: Actual transfer of possession
Ø Collection: Of relevant consumer’s information and revenue in exchange of goods or
services
Responsibilities of Sales Manager:
Ø Determining sales force objectives and goals.
Ø Finalizing sales force organization, size, territory, and quota
Ø Forecasting and budgeting sales
Ø Selecting, recruiting, and training the sales force
Ø Motivating and leading the sales force
Ø Designing compensation plan and control systems
Ø Designing career growth plans and building relationship strategies with key cust
omers.
Sales cycle:
The sales cycle is the sequence of phases that a typical customer
goes through when deciding to buy something. As a rule, the sales cycle is descr
ibed from the customer s perspective. The first phase of the sales cycle may be
either the customer s perception of a product, or a perception of a need that th
e product might satisfy. The following steps include research and evaluation; th
e last step is the customer s decision to purchase the product.
Interdependence of Sales and Distribution:
Ø All organizations use their own sales force or distribution network to reach out
to their customers. Activities of the sales organization would have to be coord
inated with channel operations if sales goals have to be effectively realized.
Ø The decision of the organization to allocate certain responsibility in the excha
nge process to its channel members would define the scope of responsibility of i
ts own sales force and thereby would determine the type of personnel and trainin
g required.

Ø Even though, an organization may decide to deal directly with its wholesaler, se
mi wholesaler, retailer or consumer, it is required to decide upon the type of h
elp it will provide to the first and subsequent level of intermediaries.
Ø The choice before an organization to have direct distribution, indirect distribu
tion or a combination of the two is of strategic importance and depends upon fac
tors such as the degree of control, flexibility, costs and financial requirement
s etc.The scope of distribution would define that of the other.
UNIT-2
Sales Strategy formulation:
Strategy formulation is vital to the well being of a company
or organization. There are two major types of strategy: (1) corporate strategy,
in which companies decide which line or lines of business to engage in; and (2)
business or competitive strategy, which sets the framework for achieving succes
s in a particular business. While business strategy often receives more attentio
n than corporate strategy, both forms of strategy involve planning, industry/mar
ket analysis, goal setting, commitment of resources, and monitoring.
The formulation of sound strategy may be seen as having six important steps:
Ø The company or organization must first choose the business or businesses in whic
h it wishes to engage—in other words, the corporate strategy.
Ø The company should then articulate a "mission statement" consistent with its bus
iness definition.
Ø The company must develop strategic objectives or goals and set performance objec
tives (e.g., at least 15 percent sales growth each year).
Ø Based on its overall objectives and an analysis of both internal and external fa
ctors, the company must create a specific business or competitive strategy that
will fulfill its corporate goals (e.g., pursuing a market niche strategy, being
a low-cost, high-volume producer).
Ø The company then implements the business strategy by taking specific steps (e.g.
, lowering prices, forging partnerships, entering new distribution channels).
Ø Finally, the company needs to review its strategy s effectiveness, measure its o
wn performance, and possibly change its strategy by repeating some or all of the
above steps.

Key decision areas in Sales Management relevant to strategy formulation:

Ø Deciding upon type and quality of sales personnel required
Ø Determination of the size of the sales force
Ø Organization and design of the sales department
Ø Territory design
Ø Recruitment & training procedures
Ø Task allocation
Ø Compensation of sales force
Ø Performance appraisal
Ø Feedback mechanism
Ø Managing channel relationship
Ø Coordination with other Marketing department
Strategic Formulation Process:
1. Assessment of the competitive situation and the corporate goals to determine
the output that sales management is expected to give.
2. Define sales management objectives in terms of delivering these outputs both
quantitative and qualitative.
3. Design sales strategy by deciding upon: type of sales effort required, type o
f sales personnel required, and size of the sales force, territory design, chann
el support & coordination
Market analysis:
The goal of a market analysis is to determine the attractiveness of a market
add to understand its evolving opportunities and threats as they relate to the s
trength and weakness of the firm.

Dimensions of market analysis:

Ø Market size (current and future )
Ø Market growth rate
Ø Market profitability
Ø Industry cost structure
Ø Distribution channels
Ø Market trends
Ø Key success factor

Transaction cost analysis:

Ø Transaction Cost Analysis (TCA) has become an integral component of the trade pr
ocess. TCA is crucial to achieve best execution, control trading costs and bring
greater efficiencies to trading operations. Port ware Enterprise is delivered w
ith a full suite of tools to conduct real-time pre- and post-trade transaction c
ost analysis.
Ø Compare execution results by model, broker, destination, sector, trader, portfol
io manager or any other grouping criteria against pre-defined benchmarks in real
-time.
Ø Simultaneously benchmark executed and expected fills against up to three static
values such as ‘prior close, ‘price when order received,’ or ‘price when order began tra
ding,’ using any number of dynamic benchmarks (VWAP, Last Sale, etc.) in these cal
culations.
Ø Monitor slippage by providing a snapshot of the market every time an order is
sent for execution. Using this information, traders can modify the parameters of
their models or change destinations to minimize impact.
Ø Integrate broker and independent pre-trade cost estimates and post-trade analyti
cs combined with real-time benchmarking, all in a single view.
Designing Sales Force Strategy and Structure:
· Sales Force Structure
· Territorial sales force structure
· Product sales force structure
· Customer sales force structure
· Complex sales force structure
Personal selling:
Personal selling is the process of selling goods and services directly
to customers. Personal selling is far more significant than other forms of promo
tion as it allows the salesperson to describe the product in detail to the custo
mer in person. Personal selling is therefore a highly interactive tool of promot
ion and is best suited for products or services that are complex in nature.
The place of Personal Selling:
As personal selling is a component of the promotional mix, which in turn is
one of the four Ps of marketing, the marketing department in consultation with
the sales department decides the role of the personal selling. The following dia
gram illustrate where personal selling fits in the whole set up.
Process of personal selling:
The selling process is defined as a process by which a sales person identif
ies and locates the prospects, separates the prospects from the suspects, approa
ches them and makes a sales presentation, handles their objections, and closes a
sale.
Stages in the Selling Process:

Pre-sale preparation:
Pre-sale preparations help a sales person to present a much credible picture
to the customer. The trust is the foundation stone of any relationship, and this
trust built by the dependability, competence, customer orientation, and likeabi
lity of a sales person.

Prospecting:
Prospecting is the process of identifying potential buyers who have a need
for the products and services offered by the company, the ability to pay for it
, and the adequate authority to buy it. Successful salespersons always effective
ly utilize the selling time by distinguishing the prospects from the suspects.
Process of prospecting:

Pre-Approach before selling:

Before the sales person approaches the customers for a sale, it i
s necessary to develop a sales strategy by collecting customer data and combinin
g them with the product attributes as a fit for satisfying the individual and or
ganizational needs. Different personality elements may be found in customers lik
e price sensitiveness, varied level of intellect, capacity and propensity to bar
gain, and level of self-indulgence, and a sales person has to develop different-
selling strategies for each type customer.

Approach to the customer:

The next step is the sales approach to the customer. When the prospe
ct is classified and the selling strategy’s developed to satisfy the customer’s need
s, the salesperson comes in contact with the potential customer and makes effort
s to influence them for a favorable decision. This step is crucial because in th
is step sales person tries to get the customer’s attention and generate interest i
n him for the sales presentation. It is necessary on the part of the salesperson
to fix an appointment with the customers as their desired place and time and pl
ace himself for the presentation.
Sales presentation:
The presentation should always be made by keeping in mind the level
of customer interest, nature of the product, and time available for the presenta
tion and for leading the prospect to the next stage. In a typical presentation,
the salesperson presents the benefits and the customer accepts, objects, doubts
the potential of the product to deliver the stated level of benefit, or gives no
clear reactions.
Closing the sale:
Closing the sale is the goal in any selling process for a salesperson
, which comes after the objections are effectively handled, and the customer is
satisfied with the presentation and is ready to place an order. Many sales peopl
e are scared to ask a question like “Will you buy?” because there is a fear that the
deal will be rejected. Similarly, customers do not come out positively to offer
ing a buying. In this situation it important to use closing techniques other tha
n the direct is closing techniques.

Follow-up action:
The objective of follow-up action is manifold. This helps the salesperson to eva
luate the competitive sales moves, generate additional leads from satisfied cust
omers, and also help the company in the idea of cross selling and upselling. A f
ollow-up normally designs by thanking the customer after the sale and, in case o
f a failure in sale, it helps in building up of customer interest and in generat
ing repeat sales after a deal.
Theories of Personal Selling:
· AIDAS Theory
· Buying Formula Theory of Selling
· Behavioral Equation Theory
· Right Set of circumstances theory
1. AIDAS (attention, interest, desire, action, and satisfaction) Theory:
AIDAS theory, the buying formula theory of selling, the behavioral
equation theory and the right set of circumstances theory. AIDAS is an acronym
for Attention, Interest, Desire, Action and Satisfaction.
Attraction Attention:
In order to attract the attention of the prospect and to open up t
he presentation, several approaches are tried. The most common approach is to gr
eet the prospects, and inform him who are and what you are selling. While dealin
g with the new products, a sales person may just allow the customer to ‘feel’ the pr
oduct by placing it in his hands. The sales presentation might being while prosp
ect is inspecting the product.
Sustain interest and create Desire:
Once the attention of the prospect is attracted, a salesperson tries to
sustain his interest and creates a desire for the product in the interaction it
self. No readymade formula can be given for this step. Perhaps, a product may be
demonstrated. The emphasis is always on what benefits will flow to the prospect
if he uses the product.
Inducting Action:
If the presentation has been perfect, the prospect is ready to bu
y. However, buying must be induced; experienced sales personnel do not close unt
il the prospect is fully convinced of the merits of the proposition. The trail c
lose, the close on a minor point, and the trick close are used to the prospects
free action. For fear of getting ‘No’ from which they think there is no retreat some
sales personnel never ask for definite ‘Yes’ or ‘No’. But it is better to ask for the o
rder straight forwardly.
Building Satisfaction:
The person should reassure the customer that his buying decision is
correct and that sales person merely helped in deciding. The order is the clima
x of the selling situation. Building satisfaction means thanking the customer fo
r the order, that the order is filled as written and following upon promises mad
e.
Buying formula Theory:
This theory emphasize on the buyer. This theory emphasizes on t
he needs or problems of the buyer. The sales person assists the buyer in finding
an appropriate solution to the problem. This solution may be in terms of a prod
uct or service. This theory is based on the analysis of the sequence of events t
hat goes in the buyer’s mind during the sales presentation. The theory is based on
the presumption that the sales person will take care of the external factors.
Right Set of circumstances theory:
 The advocates of this theory define that all the circumstances, w
hich led to the sales were appropriate for the sales to have taken place. In oth
er words, if the sales person is successful in securing the prospect’s attention,
maintaining his interest and inducing his desire to buy the product, the sales w
ill result. Moreover, if the sales person is highly skilled, he will take contro
l of the presentation, which would lead to sales.
Behavioral Equation Theory:

Sales organization:
Sales organization is used, to attain the qualitative and quantitative objective
s of personal selling. These objectives are related to sales volume, profitabili
ty and market share. Sales organization is used nit only to achieve the present
objectives, but also to attain a particular future position.
Organization Structure:
The organizational structure should fulfill the purpose for which it has been de
signed. The role of a sales organization is to achieve company objectives, strea
mline reporting relationships, facilitate effective coordination and control and
develop an efficient sales force structure to ensure effective selling strategy
. Designing the sales organization plays a crucial role in a company s overall s
uccess.
Types of organization structure:
Mostly sales is a line function. There is a chain of command runn
ing from the top sales executives down to the level of sales representatives. Th
e executive here enjoys line authority over subordinates. The subordinates are a
ccountable their immediate superiors. There is a vertical line of command. All f
unctionaries are therefore autonomous in respect of their work on the same level
. The following Is an example:
1. Line sales organization
2. Line and staff organization
3. Functional sales organization
1. Line sales organization:
Vice-president (Pharma)

Marketing manager (West) Marketing m

anager (North)
Regional / Area sales manager

Sales executives marketing executives

Field sales officer
MR

2. Line and staff Organization:

The line executive needs staff/advisory assistance. The advisors ar
e competent experts in their own field, e.g., sales training, sales analysis/pla
nning, sales promotion, marketing research, etc. These experts do not have line
authority or command the subordinates. They just provide competent advice to the
door of staff specialist unburdened to some extent. The line executive leave co
mplicated problems at the door of staff specialist for solution. Even planning a
ctivity can be shared.
Marketing Manager

In the above diagram, the sales manager is given assistance by two staff functio
naries, a training manager and a promotion manager. There is a problem of coordi
nation in this type of structure. There are some times problems of interpersonal
conflict between line and staff.
3. Functional Sales Organization:
Here, all sales representatives receive directions from and are accountable to
the different executives with respect to different parts of their work. It viola
tes the principles of unity of command; while giving functional executives a dir
ect authority to command and issue orders. A sales representative is thus under
command at one and the same time from several executives. The top sales executiv
e has coordinating responsibilities. This structure is found suitable for a sale
s organization. The operation becomes inefficient in larger firms. Small and med
ium firms find it costlier to operate. The coordinate function is very complicat
ed.
General Manager

Manager Manager Manager Manager Manager

Manager
Sales Training Territory SP Distrib
ution Institutional
Planning Development
Relation

Types of field force structure:

There are several ways to organize the sales representatives-on the b
asis of the product, on the basis of customers and products, on basis of geograp
hical territories.
Geographic Organization:
It is the most extensively used method. Here, MRs are assigned to spec
ific geographic areas. Their activities are kept that limited that area. The fol
lowing diagram illustrates this:

Marketing manager (All-India)

Sales manager (All-India)

Area sales manager Area sales manager Area sales manager Area sal
es manager North:Delhi South: Chennai West: Mumbai East
: Kolkata

Area sales officer

 SRs
Product organization:
In case of those companies, which handle divers product-line making it
necessary to employ specialists, this type structure is adopted. Generally, pro
duct organization and geographic organization are combined at the top level. At
lower levels, SRs/salesmen who are specialized can work.
Sales manager (All-India)

Regional manager (South)

Area manager

SRs for SRs for SRs for SRs for SRs f

or SRs for
Medical diagnostic pharmaceuticals Home bulk drugs Inse
cticides Instruments equipment remedies
The diversity of product line makes it necessary to do categorization of SRs. Th
e respective lines can then be well-handled. Customers can be better served. Eac
h team of SR, however, serves the same market intensively leading to more time a
nd costs.
Customer organization:
Here, the products are identical but the requirements of different
categories of customers are so varied, that a separate may have to be assigned t
o them. Xerox is the pioneer in this type of organization.
Sales manager (All-India)

Regional manager

Sales manager: Sales manager: Sales manager: Sal

es manager:
Medical / Clinical Hospital / Hospital
Agro
Institutional instituti
onal
Account Manager
The unique problems of each customer grouping are taken into
account. It is a customer – oriented approach. The major draw back is the overlapp
ing geographic territories. In one and the same territory, a company may have di
fferent people serving different customers.