Class PPTs (16.10.14)

Introduction to Sales
Management
Personal selling strategies

1. Willingness to go to bat for the buyer within the
supplier firm
2. Thoroughness and follow through
3. Knowledge of the sales persons product line
4. Market knowledge and keeping the buyer posted
5. Applying his product and services to buyers
needs
6. Knowledge of the buyers product line
7. Preparation for sales calls
8. Regularity of Sales calls
9. Diplomacy in dealing with operating
departments
10.Technical education
2
Evolution of personal selling

Business
Consultative Managemen
Negotiation Selling
t
Partnership
Strategies
Persuasion
Marketing concepts
1)
2)
3)
4)
5)
Production concept
Product concept
Selling concept
Marketing concept
Societal concept
Societal marketing concept
Sales
Production
(Sales Orientation)
Customer
Needs
Producti
on
Emphasis
on Sellers
(Marketing Orientation)
Needs
Custome
rs
Sales
Emphasis
on
Customer
Needs
Oxford University Press 2005, All

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Nature and role of sales

management
The determination of sales force
objective and goals
Sales force organization, size,
territory, and quota finalization
Sales forecasting and budgeting
Sales force selection, recruitment,
and training
Motivating and leading the sales force
Designing compensation plan and
control systems
Oxford University
Press 2005,plans
All
Designing career
growth
and
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Types of personal selling

Industrial selling
Retail selling
Services selling

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Types of selling
Order taker sales people
Order creators
Order getters

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Types of Selling
Inside Order
Taker
Order
Takers
Delivery Sales
People
Outside Order
Takers
Selling
Functio
n
Order
Creators
Missionary
Sales People
Front Line
Sales
People
Order
Getters
New
Business
Sales
People
Organization
al
Sales People
Consumer
Sales People
Sales
Support
Sales
people
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Technical
Support sales
People
Merchandisers
9
Difference between sales and marketing

Starting
point
Factory
Foc
us
Factor
y
Mean
s
End
s
Selling and
promotin
g
Profits
though
sales
volume
Selling concept
Market
Customer
needs
Coordinate
d
marketi
ng
Profits through
customer
satisfaction
Market concept

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10
MARKET ANTICIPATION
Marketing mix
Producer
Marketer
Product
Price
Consumer
Place
Promotion
Exchange offer of value
Marketing management process

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11
Sales management process

Formulation of a strategic sales programme
Implementation of the sales programme
Evaluation and control of sales force performance

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12
Technology
Customer
orientation
Emerging
trends in
sales
management
Technolo
Relationship
selling
gy
Global and
ethical
Issues
Diversity
New selling
methods
Emerging trends in sales management

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13
Selling Skills and

Strategies

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14
Selling and buying styles
Concern for the customers
9
8
7
6
5
4
3
2
(1,9) People Oriented
I am customers friend,
(9,9) Problem Solving

Oriented
I want to understand him

and respond to his
feelings and interests so
that he will like me. It is
the personal bond that
leadsSales
him to
purchase
(5,5)
technique
from me.
Oriented
I consult with the customer

so as to inform myself of all
the needs in his situation
that my products can
satisfy. We work towards a
sound purchase decision on
his part, which yield him the
benefits he expects from it.
I have tried an effective

routine for getting a
customer to buy. It
motivates through a
(1,1) Take
it or Leaveand
it
blended
personality
product
emphasis
I place the
product before
(9,1) Push the product

Oriented
the customer and it sells

itself as and when it
comes.
I take challenge of the

customer and hard sell
him, polling on all the
pressure it takes to make
him buy

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9
15
Selling situations
Sales task and function
Maintenance selling
Developmental selling

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16
Selling skills
Effective
communicatio
n skills
Problem
solving
skills
Selling Skills
Listening
Skills
Negotiation
and
bargaining
skills
Conflict
management and
resolution
skills
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17
Communication process
Intended
Message
Encoding
Feedbac
k
Noise
Sent Message
Sender
Chann
el

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Perceived
Message
Decodin
g
Received
Message
Receiver
18
Communication process
contd.
Managing body language:

Personal Appearance
Posture
Gestures
Facial Expressions
Eye Contact
Space Distancing
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19
Process of listening
Attendan
ce
Interpretat
ion
Remembra
nce
Evaluatio
ns
Response
Action
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20
Levels of listening
Feedback
Paraphrasing
Clarifications
Emphatic
listening
Active Listening
Barriers to Listening !
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21
Conflict management
skills
Models of conflict
Components of conflict
The conflict resolution process:
- lumping
- avoidance
- coercion
- meditation
- conciliation
- arbitration
- adjudication
- negotiation
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22
Conflict management process

Stage I
Stage II
Stage III
Stage IV
Stage V
Potential
opposition
or
Incompatibil
ity
Cognition &
Intentions
Behaviou
r
Outcome
s
Antecedent
Conditions
Communicati
on
Personal
Variables
Structure
Personalizat
ion
Perceive
d Conflict
Conflict
handling
Intentions
Competing
Felt
Conflict
Collaboration
Compromisin
g
Avoiding

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Accommodati
Overt
Conflict
Partys
behaviour
Others
reaction
Increased
group
performan
ce
Decreased
group
performan
ce
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Negotiation skills
Situation and timing for negotiations
Formulation for a bargaining
strategy
The theory and strategy of principle
negotiations
-
separate the people from the problem

focus on interests, not on positions
invent options for mutual gains
insist on objective criteria

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24
Problem solving skills
Habit I: be proactive
Habit 2: begin with an end in mind
Habit 3: put first things first
Habit 4: think winwin
Habit 5: seek first to understand,
then to
be understood
Habit 6: synergize
Habit 7: renewal

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25
Problem solving process

Define the
problem
Generate alternative solutions
Decide the solution
Implement the solution
Evaluate the solution
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26
Problem definition
techniques
Statement
and
Restatem
ent5
Dunkers
diagram 4
Present
desired
state
analysis
3
Problem
Definition
Techniques
Evaluate
problem
statemen6
t
Find out origin

of the
1
problem
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Explore the
2 problem
27
Dunkers diagram
Achieve the desired state
General Solution
Possible path to the desired state
Path 1
Path 2
Path 3
Functional Solution
olutions to implement & paths to desired solutions
Solution 1
Solution 2
Solution 3

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Specific Solution
28
Statement restatement technique

zz
u
F
ss
e
M
Relax
Constraints
Perceived problems
Make an
Opposite
Statement
Re Statement
Generali
ze
Re Statement
Final problem Statement

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29
Components of a decision on the

future course of action
Situation analysis
Potential problem
Problem analysis
Analysis
Past
Decision analysis
Future
What is the fault
How to prevent future
faults?

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30
Solution implementation process

Decision on the best solution
Approval
Planning
Carry through
Follow up
Evaluation
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I
M
P
L
E
M
E
N
T
A
T
I
O
N
31
The Selling Process

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32
Stages in the selling process
Pre-sale
preparati
on
Follow up
action
Prospecti
ng
Closing
the Sale
Preapproach
before
the
interview
Approach
to the
customer
Handling
Customer
Objection
s
Sales
Presentat
ion

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33
Prospecting
Successful prospecting
50 potential prospects
50 potential prospects
15 Qualified prospects
25 Qualified prospects
6 Interviews
17 Interviews
1 sale
7 sales
No
Yes
Successful prospecting
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34
Process of prospecting
Identify and define prospects
Search for sources of potential

accounts
Qualify the prospects from the

suspects

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35
Methods of prospecting
Cold canvassing
Endless chain customer referral

Prospect pool
Centers of influence
Non competing sales force
Observation
Friends and acquaintances
Lists and directories
Direct mail
Telemarketing
Trade shows and demonstrations

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36
Selling process
Pre approach to selling
Approach to the customer
Sales presentation
- approach to sales
presentation
- attracting customer attention
- creating interest
- arousing desire and building conviction
Methods of sales presentation
- canned presentation
- organized presentation
- tailored presentation

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37
Handling customer objections

Suggested by SMITH
Start with your highest expectations
Avoid conceding first

BE sure the customer understands the value
of a concession
Make concessions in small amounts

Admit mistakes and make corrections
willingly
BE prepared to withdraw a concession

Do not advertise willingness to concede
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38
Methods of handling customer

objections
Superior feature method

YesBut method
Reverse English method
Indirect denial method
Pass out method
Comparison method
Direct denial method
Another angle method
Narrative method
Testimonial method
Question or WHY method
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39
Closing the sale

Methods of closing
the
sale
Follow-up action
B2B selling

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40
Sales Organization

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41
Sales organization
an organization of individuals 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 duties, roles, rights, and

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

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42
Sales organization
contd.
a structural body through which the functions of
sales management are carried out
sales organization always makes efforts to increase sales,

thereby achieving the principle of profit maximization,
which contributes to the overall growth of enterprise

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43
Factors influencing structure

Product and service related factors
Organization related actors
Marketing mix related factors
External factors:
-Sales Organisation design based on Team performance
- Trend towards elimination of sales force (bazee.com)
- Market driven strategy (customer segmentation strategy) vs.
Customer driven strategy (partnership strategy)
- The speed of market change (higher decentralisation)
- Reduction in the number of vendors per buyer
- Closer customer relationships
- Changes in regulations and international practices

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44
Organizational principles
Span of control
Centralisation vs. decentralisation
Unity of command
Hierarchy of authority
Stability and continuity
Coordination and integration (Marico & P &G for rural)
Homogeneity
Objectivity
Specialization

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45
Organizational design
- Formal and coordinated task
- Assigning territories
- Establishing flows of communication and responsibilities
of sales groups and individuals to customers effectively
Mr. Ratnakar Shetty
Line organization
President / Owner
Mr. Chandrakant
VP (Sales)
Five sales people

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46
Typical structure of a line organization

Consumer
market
National
Distribut
ors
Direct
to
Home
Regional
Distributors
Institutional
market
Direct
marketin
g
Distribut
ors
Corporate
market
Bundlin
g
Gifting
Consumer
Retaile
rs
Consumer
s
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47
Design by territory
VP Marketing
National Sales
Manager
Divisional
Manager
(East)
Divisional
Manager
(North)
Divisional
Manager
(West)
Regional Sales
Manager
Regional Sales
Manager
Regional Sales
Manager
District Sales
Manager
District Sales
Manager
District Sales
Manager
Sales Staff
(City wise)
Sales Staff
(City wise)
Sales Staff
(City wise)

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48
Design by management function

Mr. Dara singh,
VP
(Marketing)
Staff Function
Staff Function
Mrs. Chitra
Mohanty
(Advt / Sales
Promotion Mgr)
Mr. Dibya
Behera
(Sales Manager)
Mr. Chandra De
Manager
(MR)
20 Sales People

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49
Design by product
President,
Marketing
Product Manager (A)
Manager Manager Manager

(Sales) (Training) (Promotion)
Product Manager (B)
Manager Manager Manager

(Sales) (Training) (Promotion)
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50
Design by customer
President
(Marketing)
Vice President
(Marketing)
Sales Manager
Industrial
Relations
Sales Manager
Wholesalers
Sales Manager
Retail Sales
Sales People
Sales People
Sales People

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51
President
Functional
Vice
President
(Production
)
Vice
President
(Marketing)
Vice
President
(HRD)
Marketing
Combined
Manager
Sales Org. DesignInternational
GeographicMarketing
Manager
India
G.M
Consumer care
G.M
International
Sales
Divisional
Manager
Soaps
Divisional
Manager
Paper
Divisional
Manager
Food
Eastern Sales
Division
Western Sales
Division
Northern Sales
Division
Customer
Europe Division
G.M
International
Sales
America
Division
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Product
Gulf Division
52
Sales Organization
Key account sales
-
focus on CRM
customer profitability and value analysis
the few accounts give incremental returns
national accounts
Sales process automation

- EDI Electronic Data Exchange

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53
Emerging organizational design

agency and distribution selling
shared sales force
telemarketing
TQM and team-based selling
Customer
Sales
Marketing
Technical
Support
Manufacturing
Supplier selling team

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54
Number of sales people

determined by:
-
territories vary in their demand structure for prospecting

product mix demands
levels and types of prospecting
nature of the customer segments
Affordability method (based on sales budget)

Incremental method
Workload method
Number of sales
(Numbe
(Ideal
(Length
X r of X frequenc Xof a call)
Potenti
y of calls)
al
custom
Ideal sellingers)
time available for a
(Number
of existing
people
=
customers
)
Oxford
University Press 2005, All
salesperson
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55
Management of Sales Territory

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56
Sales territory
A group of present and potential customers
assigned to
an individual sales person, a group of sales
persons, a branch, a dealer, a distributor or
a marketing organization at a given period
of time.
57
Objectives of Sales Territory

To formulate sales plans, policies, strategies around
companys products/services, designed for a territory.
Analyze territory sales potential & plan marketing
programs & key potential customers for a territory.
Analyze strengths & weaknesses of competitors & work
out strategies to subvert competition for a territory.
Identification & classification of accounts according to
their potential & chalk out call plans for a territory.
Organize sales force, allocate sales efforts, implement
sales plans more effectively for a territory.
Review performance of sales force at regular intervals
for a territory
Redesign sales plans, policies, strategies in case of
changes in market trends/business environment for a
territory.
58
Sales territory
(contd.)
Advantages of designing a sales territor

It ensures better market coverage
Effective utilization of the sales force
Efficient distribution of workload among
sales people
It is convenient to evaluate the
performance of sales people
To control over the direct and indirect
costs of the sales function
Optimum utilization of sales time by sales
people
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Factors
influencing the
modifications
of a territory:
Designing sales territories
mergers
market
consolidation
split in
division
sales force
turnover
customer
relocations
product
life
cycle change
product
line
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
Assign sales force
analysis
to new territories
Modify
territorial
boundarie
s to
balance
workload
and
potential
60
Territory shapes
circle
wedge

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Clover leaf
61
Strategic Planning Matrix

Opportunity
Opportunity
The account may represent a

good opportunity. The sales
organization needs to overcome
its competitive disadvantages
and strengthen its position to
capitalize on the opportunity.
Strategy
Either direct a high level of
Commit high levels of sales
sales resources to improve the
resources to take advantage of
position and to take advantage
the opportunity.
of the opportunity or shift
resources to other accounts.
H
i
g
h
The account offers a good

opportunity. It has high
potential and the sales
organization has a
differential advantage in
Strategy
serving it.
L
o
w
Opportunity
The account offers stable

opportunity since the sale
organization has differential
advantages to serving them.
Strategy
Allocate a moderate level of
resources to maintain current
advantage.
Strong
Opportunity
The account offers little

opportunity. Its potential is small
and the sales organization is at a
competitive disadvantage in
serving it.
Either commit a minimal level
of resources to the account or
consider abandoning the
account altogether. Weak
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Strategy
Sales territories
New Territories..?
Use of Information Technology
IT enabled services
computer programmes
simulation techniques
63
Decide Basic Territories: Market Build-Up

Method
Management must determine:
Desirable call pattern (call frequency per account per year)
Total calls needed in each control unit
Workload capacity
Tentatively set territorial boundary lines combining control units

until, total calls needed = total calls possible
Modify territories as needed

64
Workload approach: Example-I.

Custom
Call
er
frequen
cy/
annum
No. of
custom
ers
No. of
No. of
calls / custom
annum
ers
No. of
calls /
annum
Control Unit - 1
Control unit - 2
Major
100
800
150
1200
Moderat
e
150
900
250
1500
Total
no. of
calls /
annum
(in
both
units)
Minor
4
600
2400
700
2800
Workload= No of working
days x av. no. of calls
/ day 9600
4100
5500
240 working days x 4 calls per day = 960
Required no. of sales persons = 9600 960 = 10 (for 2 control units)
65
Workload approach: Example- II.

Customer
Type
Time / call
Calls /
annum
Hours /
annum
Total hours /
annum
Major
(250)
60 min. /
call
40
40 hrs.
10,000 (250x 40
hrs.)
Moderate
(500)
30 min. /
call
30
15 hrs.
7,500 (500 x 15
hrs.)
Minor
(800)
20 min. /
call
18
6 hrs.
4,800 (800 x 6
hrs.)
Total
22,300 hrs.
No. of working days / annum = 273 (Sundays+holidays+Training

days+ meeting days+ conference days+ sickness days)
273 x 8 hrs. per day = 2184 hrs.
Selling activities = 40% of selling hours (2184) = 873.6 hrs.
Non-selling activities = 60% of selling hours (2184) = 1310.4 hrs.
No. of sales persons needed = 22,300 874 = 25 sales persons.
66
Decide Basic Territories: Sales Break-Down

Method
Management must determine:
Company Sales Potential
Sales potential in each control unit
Sales volume expected from each sales person

Tentative territorial boundary lines by combining control units until
total sales potential = expected sales volume
Territorial modifications as needed

67
1. Company Sales Potential

S = NVP
N = No. of prospective buyers of firm
V = Estimated sales units (through sales forecasting)
P = Price per unit
2. Forecast sales potential of each control unit =
Total sales potential x Market Index of each unit (e.g., B= Buying Power
Index)
For PCs, B = f (I,E,D) where I=Income, E = Education, D = No. of
Distributors in that unit.
3. Estimate sales volume expected from each salesperson (how
much of sales potential).
Profit (20% of sales) = Sales (cost of products sold + distribution cost)
(50% of sales) direct selling cost (Rs.6,00,000).
0.20Y = Y 0.50 Y Rs.6,00,000.
Y = Rs.20,00,000 = av. volume of sales, a salesperson should achieve in a
territory.

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68
Sales Potential Method

No of salespersons needed = N
Annual Sales Forecast for company = S ( Rs.40,000,000)
Est. productivity of av. salesperson = P (Rs.20,00,000)
Est. percentage of annual salesperson turnover = T (10%)
N = S/P + T (S/P), or,
N = S/P (1+T)
Therefore,
N= 40,000,000 /20,00,000 (1+ 0.10) = 22 salespeople will be
needed for the entire company.

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69
Management of Sales Quo

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70
Sales quota
A quota is an expected performance
objective
A quota is a sales assignments or goal to
be
achieved in a specific period of time
It is routinely assigned to the sales units
(e.g.
A sales quota is the sales goal set for a
departments,
divisions,
and individuals)
product
line, company
division,
or sales
representative.
Sales units proceed
to reach
quotas in
It is primarily
a managerial
their
device for defining and stimulating the sales
respective domains
effort.. Kotler
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71
Principles of quota setting

Setting of sales quotas is a challenge to
the sales
manager and should be handled with
precision
Objectivity to be observed while fixing
and adequate skill
quotas
and should be based on facts and
figures drawn
It must be simple to understand
from the market
both to the
and
the sales
people
manager
Quotas set
above
the achievable
limit
often
demotivate and result in high turnover in
the
72
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Principles..contd.
Flexible to the prevailing and emerging
market
conditions
There
should be a level of definiteness in
the quota
set for a salesperson
It should be fixed either in terms of
geographic
territory, on money value, or on the basis of
A participatory quota setting procedure
units of
followed
product(s)
jointly by the sales manager and sales people
together
serves as a tool Oxford
of motivation
and leads to the
73
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S M A R
T
E
I
E
T
P
E
C
I
F
I
C
A
S
U
R
A
B
L
E
T
A
I
N
A
B
L
E
A
L
I
S
T
I
C
M
E
S
P
E
C
I
F
IC

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SBO
MBO in the
Sales
domain?
74
Individual Goal setting form
Organization of the sales job

Defining annual objectives
Procedure for setting sales quota

Nam
e
Year
Output
Your
territory
Results
expected
Pessimistic Realistic
Optimistic Results
1. Volume per
month
2. Expenses per
month
3. Gross margin
/month
4. Market
share/month
5. Key account
coverage/ month
Conferencing with each sales person

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75
Types of sales quota

sale volume
quota
sales
budget
quota
sale activity
quota
combination
quota

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76
Methods of setting sales quota

Quotas are based on
sales forecasts and potentials
forecast
past sales and experience
executive judgement
sales people judgement
based on compensation
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77
Problems in setting sales quota

1.There is a high level of individual difference
in every
organization
2. A perfect quota is a combination of
selling and nonselling activities
3. Often sales people do not give proper
attention to the
non-selling activities (e.g. searching for
prospects,
handling customer objections, and
Oxford
creating market
forrights
reserved.
78
persons performance index. What conclusions can you draw based on your
results?
Mr . A
Mr . B
Mr. C
Sales Quota
150,000
190,000
160,000
Actual Sales
160,000
160,000
110,000
Performance Index
107
84
69
Performance index can be calculated by dividing actual sales by quota (x 100) and
then the sales manager can draw inferences about the activity of each sales man
in this case. Mr C is under performing where as Mr A is doing well. Mr B can
improve upon as his performance index is within an acceptable limit.
Calculate the order to sales call ratio and the average size of order for the year
from the following table. Why does the salespersons performance differ?
Name No. of Calls No. Of Orders
Actual Sales
Sales/Call
Sales/Order
Mr . A
1300
350
Rs 500,000
Rs. 384.6
Rs.
1428.6
Mr. B
1400
650
Rs 560,000
Rs. 400.0
Rs.
861.5
Mr. C
1600
580
Rs. 900,000
Rs. 562.5
Rs.
1551.7
Total
4300
1580
Rs. 19,60,000
Rs.455.8
Rs.1240.5
Oxford
Press
2005,
All
The order to sales call ratio
can
be University
found out
by
dividing
the actual sales by calls
79
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reserved.
and actual sales by orders. The average size of the order can be found out by
Recruitment and selection of

the sales force

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80
The sales manager

Performs sales management +HR
management !
Recruits, selects, trains, motivates,
leads,
controls, and compensates sales
Selection and recruitment of efficient

teams
sales
people is always a process of building
competitive
advantage for an organization
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81
Strategic position
Job qualification
analysis
Establis
Decide on the
Organizatio
h hiring
Job
description
number of people
nal
objectiv
to
hiresources of
Identify
best
characteris
es
Plannin
recruitment:
tics,
g
internal and external
company
sources
image and
Recruitme Generate database
climate,
nt
of candidates
Turnover
Evaluate candidates
Select and induce
candidates to accept
positions
Socializati
Socialize
on
Selectio
n
The hiring process

rights reserved.
styles of
supervision
,
compensati
on, and
motivation
of the
company
82
Challenges in sales force

selection
Personality types matching to
job profiles
One of the measures that the
organization looks in an
employee is:
- the ability to perform by an
employee
= Ability x Motivation
rights reserved.
level of motivation
83
Planning for recruitment

1. Strategic position analysis
way sales
job to be performed and skills & abilities needed to
perform the job.
2. Turnover Just-in-time hiring / Stock piling
3. Job Analysis
Gathering and organization of information
concerning the Tasks, Duties and Responsibilities of a
specific jobs.
4. Task Inventory Analysis : Job Tasks vs. Employee

Characteristics (Knowledge, Skills & Abilities Matrix (KSA
Matrix) Job Specifications.

Job Qualification
Job Description vs. Job Specification
Critical Incident Method behavioural description of job.
rights reserved.
84
Sales force recruitment

Recruitment is an act of inducing qualified and
appropriate people to get interested in and apply for a
salespersons position within a sales organization.
Internal sources
- existing employees
- lateral and upward moves
- interns and cooperative students
- employee referral programmes
External sources
- industry sources
- educational institutions and campus

recruitments
- employment exchanges
- placement consultants
- walk in interviews Oxford rights
reserved.
85
External sources
- networking
referrals
contd...
- web consultants
- responses to direct open advertisements
Selection procedure
- inviting application forms
- personal interviews
- reference checks
- physical examinations
- psychological tests
- intelligence
- personality
- aptitude and skills
- determination of terms of service
- appointment
- initial orientation
rights reserved.
86
Socialization process
Process of orienting a new salesperson to the

sales organization, territory, or division in which
he or she will be working
Three stages
Anticipatory stage
(realistic job preview)
Encounter stage
Settling stage
(employee mentoring)
rights reserved.
87
Training the Sales Force

rights reserved.
88
Challenges in sales training

Will the training programme be effective
in solving a problem?
Will the investment in it be justified?
Will it produce the desired or intended
results?

rights reserved.
89
Role of the trainer

The success of the training programme depends on
the ability, skill, and motivation of the sales trainer

rights reserved.
90
The training process

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

rights reserved.
91
Training need assessment

phase
Organizational level analysis
Task level analysis
Individual level analysis

rights reserved.
92
Training needs
Identification of specific problems
Anticipating impending and future
problems
Management requests
Interviewing and observing the
personnel on the job
Performance appraisal
Questionnaire survey
Checklist
Attitude survey
Interpersonal skill test
rights reserved.
93
Designing and conduct

phase
Location
Job Instruction Training (JIT)
(Step-by-step training method)
Presentation options

rights reserved.
94
Types of training
Cross-functional training
Team training
Creativity training
Literacy training

rights reserved.
95
Training methods
Didactic method (lecture method)
-
structure the lecture

reinforce the Message
aid concentration
material used for the lecture
make it memorable for the participants
deliver with dynamism
use questions
Visual support
Participative
Conferences
rights reserved.
96
Training methods
contd..
Seminars
Discussions
Role play
Case study
Fishbowl (role reversal method)
Workshops (participative)
Sensitivity training (interpersonal
relationships)
Transaction analysis
In-tray exercises
Transcendental meditation
rights reserved.
97
Deciding a sales training

programme
Aim
Content
Knowledge
Proficiencies
Location
Evaluation

rights reserved.
98
Process of socialization
Anticipatory socialization
Accommodation stage
Outcome stage

rights reserved.
99
Sales Force Compensation

rights reserved.
100
Management
judgement
Fairness
Motivation
Sales Force Compensation

Plan
Flexible
Competitiveness
Cost
effective
101
Compensation Level
Firms Internal factors
Firms External factors
a) financial ability
a) prevailing compensation
policies in industry
b) Compensation policy
b) Legal conditions
c) Recruitment & selection

policy
c) Economic conditions
d) Promotion policy
d) Market competition
e) Job description
e) Trade union
f) Job evaluation
f) Global considerations
g) An employees position &

designation
h) An employees relative
contribution to the job
102
Aims of a good compensation plan

a) To increase enthusiasm & motivation of salespeople
b) To instill a sense of commitment in salespeople towards
their job
c) To inject an atmosphere of team spirit & morale within the
salespeople
d) To develop a stable sales force & reduce chances of
attrition of sales force
e) To retain efficient sales force for a long run
f) To coordinate & control sales force successfully
g) To attract efficient salespeople from the competing firms
h) To increase loyalty of sales force to the firm
i) To increase quality of interaction of salespeople with
customers
j) To improve sense of confidence of customers on sales force
& the firm
k) To create a dedicated sales force who leaves no stone
unturned to achieve firms goals
103
Steps in developing Compensation Plan
Review job
description
Implement
the plan
Establish
compensati
on
objectives
Establish
compensati
on level
Review the
entire plan for
short term/long
term
Choose
compensati
on method
Decide on
commission
or indirect
Compensati
ons &
Relate
rewards to
performanc
e&
measureme
104
nt of
Factors influencing the design

of a compensation plan
Financial stability
Size of the market
Nature of the product

rights reserved.
105
Methods of compensation
Straight salary
Straight commission
Combination plans
i. Salary and commission
ii.Salary and bonus
iii.Salary + commission and bonus
106
Combination plans
i.Salary + commission
ii.Salary + bonus
iii.Salary + commission + bonus
107
Types of compensation
plans
Financial compensation
Non-financial compensation

rights reserved.
108
Financial compensation
Straight salary plan
Straight commission plan
Bonus and incentive
Salary plus incentive (combination plan)
Drawing account and commission plan
Allied methods

rights reserved.
109
Compensation schemes : non-financial

approach
Career advancement through promotion job
enrichment
Selling expenses fix expense quota to control
undue expenses by salespersons
Fringe benefits medical benefits, insurance
cover, LTC, retirement benefits, entertainment
allowance, mob bill allowance/reimbursements,
data card
Perks company car, fuel charges, room
furnishing allowance etc.
Sales contests rewards for achieving short term
goals
110
Straight Salary
Advantages
Disadvantages
a) Provides a sense of
security
a) It has no provision to pay

incentives to salespeople.
This may restrain them
taking additional initiative &
drive in personal selling
b) Ensure stability of income
b) Selling expenses are not

related to sales volume.
Selling expenses are incurred
regardless of sales volume
c) Helps to develop a loyal

sales force
c) It gives equal treatment to

both high & low performing
salespersons
d) Prevents high turnover of

salespeople
d) The scheme may not

attract high performing
salespeople from the
competing firms
111
f) Safe to new salespeople
f) May discourage
salespeople to offer
additional efforts for slow
moving items
g) Simple to understand and is g) Hard working salespeople

economical in application
may not find this method
attractive
h) Salespeople feel more
committed to their job
i) Salespeople pay more
attention retaining customers
than generating new ones
j) Salespeople can concentrate
on customer satisfaction to
retain customer loyalty
k) Salespeople can give more
attention to non-selling
activities as well
l) Sales managers canexercise
rights reserved.
112
Straight Commission
Advantages
Disadvantages
a) Acts a s a great motivator
a) Loss of control over

salespersons
b) Differentiates high performing

salespeople from rest
b) Salespeople may not take

interest in slow selling / less
margin products of the company
c) Unlimited opportunity to earn

for efficient salespeople
c) Salespersons will concentrate

on easy selling or high margin
products
d) Management has no pressure

to incur selling costs
d) Salespersons will try to push

expensive variants of product
despite availability of
economical variants serving
same purpose to consumers
e) Salespeople can work freely
e) Salespeople may indulge in

aggressive selling that may
affect image of company
f) Easy to understand and

f) Salespersons will lack sense of
economical to operate Oxford University
belonging
to the company
Press 2005, All
rights reserved.
113
g) Salespeople cannot
complain for any
underpayment - linked to
performance
g) Salespersons can
divulge valuable
information of the
company to outside
sources
h) Salespeople will not resent

against any pressure selling
jobs.
h) Salespeople may not pay

attention to non-selling
activities
i) Salespeople may not be
interested in building long
term relationship with
customers
j) Salespeople will not be
interested in a developed
market
k) Since earnings are
uncertain, salespersons may
leave in periods of bad sales
or for better job prospects

rights reserved.
114
Combination Plan (salary+commission+bonus)

Advantages
Disadvantages
a) Stable income+ additional

financial incentives
a) Not simple to understand &

difficult to operate
b) Sense of job security +

financial incentives for
generating more sales
b) Selling costs vary across

different selling situations
implementing & comparing
this uniformly across selling
situations is difficult
c) Income varies with sales

productivity, also is a flexible
option
c) Sales managers find it

difficult to control sales
operations
d) Combination plan tackles

d) Plan require constant
differences in sales potential in recording of sales turnover
different territories, better
that may appear to be
than single plan
cumbersome to sales
managers
e) Efficient salespeople are
benefited
e) It demands high
administrative cost
f) Ideal for ambitious & self
f) Fixing composition of plan
115
g) This plan can be made

flexible by suggesting
different combinations for
different levels of
salespersons
g) Combination plans lead

to unequal income of
salespeople in different
territories. Hence
comparison of their
performance on common
standards is difficult.
h) Salespersons may
underestimate the non-selling
activities
i) When sales targets are
fixed at high levels for
salespersons to attain, this
plan will discourage them to
do their best
j) Long term deferred
payment of incentives may
frustrate salespeople
116
Application of compensation methods
Specific
Plan
Company wants to go in for extensive prospecting drive

While launching a new product in the market
Easy to evaluate proficiency among sales people
Company has well established brand names in the market
For sales trainees or newly appointed salespeople
When financial strength of company is weak
For technically complex products / products of high quality
When non-selling activities are not important
When company products have reached a maturity / declining
stage
Company wants to get into a new geographical territory
Company wants to relate selling expenses to sales volume
Company introduces a new product / product line
Company wants to do overseas selling
When products are sold through dealers & merchandising &
display are important
When company appoints part time sales people
117
Sales Force Control
Introduction
A good sales management program needs
systematic control mechanism to monitor the
sales force performance and keep the costs
under control
No sales plan is effective in the absence of a
sales control mechanism.
Sales force control mechanism keeps costs
within budgeted limits but also brings discipline
to organizational processes of implementation.
Sales force control helps in budget
modifications and additional recruitment if so
required to achieve sales objectives
Circulatory Nature of Sales

Management Function
Planning
Organizing
Sales
Manageme
nt Process
Controlling
Coordinating
Controlling Sales force PerformanceInput-Output Based Approach

Analyze market situation, competition to set performance
evaluation and control policy
Decide the criteria for salespeoples performance evaluation
Set performance standards (both qualitative & quantitative )
Compare and contrast actual performance with set standards
Review and communicate performance evaluation
Decide sales management action
Controlling Sales force PerformanceInput-Output Based Approach Cont.

Analysis of market situation and
competition to set performance
evaluation and control policy
Who will evaluate sales people?
How frequently sales people will be
evaluated
What sources of information should be used
for evaluation
What should be the degree of evaluation

Criteria for Sales Performance
Evaluation
Output based criteria (sales quota)
Behavioral criteria (efforts expended)
Combination of both

Setting Up Performance Standards
Sales quota
Call frequency ratio
Calls per day
Order call ratio (no of orders /no of calls)
Average cost per call
Average order size

Compare and contrast actual
performance with set standards
Define the information need
Determine the source of information
Collect the desired information
Call reports
Call progress report
Expense reports
Sales work plan

Review and Communicate Performance
Evaluation Reports with sales people
Open system of performance evaluation
Formal system of performance evaluation
Informal system of performance evaluation
Communicate through
Verbal channels
Formal channels
Human resource channel

Decide Sales Management Action
Positive actions
Incentives
Promotion
Higher job responsibility
Job enrichment
Negative Actions
Demotion
Withdrawal
Transfer
Termination
Sales Force Control

Sales Audit ( investigation of the impact of internal/external factors on
sales performance)
i.What decisions were taken at planning & implementation stages?
ii.How these affect the sales operations?
iii.What changes are to be brought in, to improve the situation?
Management Information System (MIS)
i.Internal reporting system
ii.Marketing intelligence system
iii.Marketing research
iv.Analytical systems
Management by exceptions
Whenever significant deviations are noticed, corrective actions are taken,
without delay.
128
Sales Audit
It comprised a systematic process of
appraising sales objectives and policies by
aggregating individual inputs into
organizational performance
Helps in evaluating overall performance of the
organization against sales goals, objectives,
methods, procedures and sales staff
motivation
It helps in focusing on overall sales strategy
rather than on individual components of
evaluation and suggests corrective actions.
It helps in unearthing opportunities for
improvement in sales force performance
Marketing Audit
This is a systematic and objective method of studying
the total marketing efficiency of an organization.
It evaluates the marketing policies and activities of
the firm and measures the directions and levels of
growth
It evaluates long term business growth in terms of
strategy, structure and policies followed by the firm
It is called control of controls as it covers both
business and market aspects of the organization.
It helps in reviewing assumptions used in developing
strategy. It serves as an indicator for future direction
that firm plans to take.
Sales Force Expense Analysis

This is the most rudimentary form of sales force
control.
Companies do this analysis by looking into sales
expenses reimbursement policy of the
organization
It should be seen as a fair and equitable justice
done to all the people across the territories
While deciding on a compensation policy for sales
people, expense planning constitutes a major
decision and it should take into account the size
of the territory, sales quota and efforts expended
by sales person to achieve sales goals.
Measurement of Sales Organization

Effectiveness
Sales Analysis
Across Organizations
At national level
At regional level
At division level
At state level
At district level
At branch level
By Types of sales
Cash
Credit
Shipment
Order size
Product category
Market
Type of distribution channel
Size of customer order
By types of Analysis
Comparing with Sales quota
Comparing with Previous Time Period
Comparing with industry average
Comparing with Strategic Competitors
Comparing with Sales Forecast

Effectiveness Cont.
Marketing Cost Analysis
Classify Marketing
Expenses
Transform accounting
expenses data to activity
expense groups
Develop Bases for
allocating Common
Expenses
Calculate Contribution
Margin
Finalize the Corrective
Actions Required for The
Situation

Effectiveness
Credit Control
Companies sale both in terms of cash and credit
Cash sales are vital to organizations liquidity
Credit control is important as it restricts flow of
cash back to the system
How much and how often credits are given to
customers should be criteria
Credit scoring is done to find out the customer
who are cash/credit deal oriented and so also for
the sales people who sell on cash/ credit as a
percentage to their total sales

Effectiveness
Market Share Analysis
Budgetary Control
It involves sales planning, sales forecasting, sales budgeting and profit planning
Ratio Analysis
Market share is farm sales divided by industry sales

It tests how the organization is doing in relation to the rest
Sales to Capital Employed ratio

Inventory Turnover Ratio
Gross Profit to Sales ratio
Net Profit to Sales Ratio
Return on Marketing Investments
Return of Assets
Return on Capital Employed
Working Capital Turnover Ratio
Distribution Cost Turnover Ratio
Management by Objectives (MBO)
Determine the objectives in each significant area of business

Measuring performance against predetermined objectives
Managing the business with boundary of set of objectives
Conclusion
A good sales management program demands
systematic control mechanisms to monitor she
sales force performance and keep cost under
control
With increased competition and fragmented
market share it is imperative to control costs
and manage performance in time bound
manner
Management and control mechanisms should
be integrated with planning process for
improving overall organization performance.
Evaluation of the Sales Force

Performance
137
Evaluation stands on two

important factors:
1.Setting predetermined standards
2.Comparing actual performance
with the set standards
138
Criteria for Performance Evaluation

Systematic
Periodic
Result Oriented
Flexible
Provide directions
Encouraging
Understandable
Strategic Fitness
Realistic
Fair
Vision for
improvement
Aim for max.

accuracy
139
Steps in Sales Force Evaluation

Process
Set sales goals & objectives
Design implementation mechanisms
Establish performance standards
Measure actual results
Compare results against standards
Take controlling measures

140
Setting sales goals & objectives
Attainable
Realistic
Quantifiable / Measurable
Comparable / analysable
141
Designing implementation
mechanisms
How salespersons achieve targets? (by
way of meeting customer satisfaction &
companys economic interests):
How quickly & accurately they apprise
the potential customers
How quickly they procure orders & fulfils
them
How precisely they can convert sales
orders to monetary benefits to the
company
142
Establishing Performance
Standards
Quantitative Performance
Standards
Qualitative Performance
Standards
143
1. Measure actual results (sales

analysis)
Cost Analysis
Sales Analysis
(an integrated
process)
Profitability
Analysis
Productivity Analysis
(Effectiveness & Efficiency)
2. Compare results against

standards
3. Take corrective actions
144
Quantitative Performance Standards

(a) Sales Volume (Rupees/ Units)
i. By Products
ii. By Customer Groups
iii.By Territories
(b) Profits
i) Gross or net profit margins required
By Products
By Customer Groups
By Territories
ii) Gross Margin Ratio gross margin to total
sales
iii) Net Profit Ratio net profit to total sales
145
Quantitative Performance Standards (contd.)

(c) Sales Orders
i. Call : Order Ratio
ii.No. of orders procured (customers
developed vs. volume of orders acquired)
iii.Order Value (sales volume vs. expected
target)
(d) Accounts
i. No. of old accounts held
ii.No. of new accounts added
iii.No. of existing accounts lost
146
Quantitative Performance Standards (contd.)

(e) Selling Expense Ratios
i. Selling expenses : Total Sales
ii. Field selling expenses : total selling expenses
iii.Average selling expenses / call
(f) No. of calls / day
(g) Cost / call
(h) Call frequency ratio (no. of actual calls to no.
of accounts held)
(i) Market share analysis (% of companys sales
to total industry sale in a particular
territory/region etc.)
(j) Sales coverage effectiveness index (no. of
customers to no. of prospects in a territory)147
Qualitative Performance Standards

(a)Knowledge on:
i. Products/services dealt with
ii. Company policies
iii. Competition
iv. Distribution channels
v. Customer behaviours
(b) Individual skills:
i.Selling skill
ii.Customer relationship skill
iii.Communication/presentation
skill
iv.Problem solving skill
v.Analytical skill
vi.Managerial skill
vii.Interpersonal skill
(c) Personal & personality

factors:
i.Personal appearance
ii.Cooperation
iii.Industriousness
iv.Stability of mind
v.Tact
vi.Assertiveness
vii.Ego drive
viii.Agreeableness
ix.Empathy
x.Achievement motivation
xi.Conscientiousness
xii.Punctuality, etc.
148
Performance Appraisal Methods

Traditional Methods
Modern Methods
a) Ranking method
a) Management by objectives (MBO)
b) Paired Comparison
method
b) Behaviourally anchored rating scale

(BARS) job analysis
c) Graphic Rating scale
c ) 360 degree appraisal
d) Checklist method
(weighted / un-weighted)
* MBO long term goal setting / joint

short term goal setting / preparation of
action plans / periodic performance
review / formal appraisal.
e) Critical Incidents method

f) Forced Distribution method
(on various performance
criteria based)
149
Traditional Methods
Ranking Method:
Ranked on the level of their performance,
regardless of the type of work they perform.
Ranking arranges salespeople in terms of
best performance, next best performance
till the least performing salerperson is
reached.
Actual degree of difference in the
performance of the salespersons cannot be
ascertained.
150
Traditional Methods (contd.)

Paired comparison method:
Two salespersons are compared at a
time & compared on a common criteria.
If there are 10 persons, the no of paired
comparisons will be 45 : n (n-1)/2
Thus while it is better than ranking
method but the procedure is very
tedious, time consuming & subject to
human error which will multiply with
more sets of performance criteria.
151

Graphic Rating Scale
1. Continuous scale: factors are
evaluated continuously, marking
somewhere in the continuum, on a
specific factor.
1
Very high
3
High
5
Moderate
7
Low
9
Very
Low
Subjective judgment bias cannot be ruled out

152

Discreet Scale:
Very Good
5
Good
4
Average
3
Bad
2
Very Bad
1
based on subjective judgment can lead to bias
153

Weighted Checklist Method (range= 5 to 1):
Attribut Relati
es
ve
weigh
t
Excelle
nt (5)
Goo
d
(4)
Fair
(3)
Bad
(2)
Very
Bad (1)
Scor
e
Product
knowled
ge
0.3
1.2
Co.
knowled
ge
0.2
0.8
Selling
Skill
0.1
CRM
Skills
0.1
0.2
Motivati
on
0.1
0.2
0.3
154

Critical Incident Method (5-point scale):
The rater should record significant events, called
critical incidents that happen when salespeople are
involved in sales activities ( for individual
salespersons).
The essence- to ascertain critical events that make
the difference between performance & no
performance.
a. Bright in prospecting
b.Not smart in customer handling
c. Writes call reports well
d.Demo skill is exceptional, etc.
155

Forced Distribution Method:
Observations of the rater
Communication skill = 25%
Selling skill = 40%
Persuasive skill = 50%
Personality = 30%
Emotional maturity = 30%
Overall rating = 35% =
Average.
Performance Standards
Very Good = > 60%
Good = 40 60%
Average = 20 - 40%
Bad = < 20%
Very bad = < 10%
It is simple to implement
and can avoid bias to a
large extent.
156

Field Review Method:
The rater interviews field sales managers
and
supervisors
to
know
how
salespersons perform in the field on both
quantitative as well as qualitative
parameters.
However
validity
&
reliability
of
information so collected from the field
should be checked.
157
Modern Methods
Management by Objectives (MBO):

Organisational goals as guidelines long term goals
Joint goal setting Sales managers & salespeople
establish short-term performance targets & how
managers can help them achieving such targets.
Preparation of action plans resource requirements
& methods of selling are developed. Job
responsibilities are clearly defined/modified.
Performance review tracking progress of sales
performance on a periodic basis.
Formal appraisal performance results compared
with targets & corrective actions taken/ goals
redefined.
158
Modern Methods (contd.)

Behaviourally Anchored Rating Scale (BARS):
a)Analyse characteristics & behavioural areas of the job.
b)Identify critical behavioural areas & categorize them
as most-effective to least-effective factors.
c)These critical incident areas are reviewed & refined to
a small group of performance dimensions & each is
given right definition.
d)Another group of salespeople/supervisors with
experience are asked to review & rate on 1 (low
effectiveness of behaviour) -10 (high effectiveness of
behaviour) scale.
e)Finally, few performance dimensions with individual
rating scales define the BARS.
159
Modern Methods (contd.)

360 degree appraisal
Distributors
Sales
Managers
Salespeo
ple
Themselves
Peers
160
Distribution channel
management - an
introduction

rights reserved.
161
Role of distribution channels

To adjust the discrepancy of assortment through the
performance of the accumulation, allocation
(smaller lots) & assorting process.
To minimize the distribution costs through
routinizing and standardizing transactions to make
exchange more efficient and effective.
To facilitate the searching process of both buyers
and sellers by structuring the information essential
to both the parties.
To provide a place for both parties to meet each
other at a place convenient to the customer and

reducing uncertainty
Channels facilitate
after-sales-service.
Oxford
rights reserved.
162
Discrepancies in the
process of exchange
Spatial discrepancy (physical distance)
Temporal discrepancy (difference

between time of manufacturing vs. time
of consumption)
Need to break the bulk (consumed in

smaller quantities)
Need to provide assortment

(heterogeneous mix.)
rights reserved.
163
The cost and control aspects of

intermediation
Cost
efficiency
Control
Direct Distribution
rights reserved.
Indirect distribution
164
strategy
Setting distribution objectives in terms of the

customer requirements (service output demands)
Finalizing the set of activities that are required to

be performed to achieve the channel objectives
Organizing the activities so that the responsibility

of performing the activities is shared among the
entities who are meant to perform these activities
Developing policy guidelines for the smooth

functioning of the channel on a day to day basis

rights reserved.
165
management
(contd.)
Distribution
channel
management
encompasses all activities dealing with the
distribution function of the firm
The distribution strategy provides guidelines
for decision making.
The distribution management function can be
viewed as happening in two phases:
a. Distribution process mapping & establishment
b.Day-to-day management of channels.
rights reserved.
166
management
(contd.)
The ex ante phase involves all the activities

that are associated with the design and
establishment of the distribution channel.
These activities actually take place before the
distribution channel actually starts functioning.
The ex poste phase involves managing the day
to day activities of the channel wherein the
behavior of the individual channel members
are coordinated
rights reserved.
167
Channel Management
tasks
Design of the
channel
structure
Establishing
the channel
Distribution Channel
Strategy
Channel
Objective
Activity Finalization
Organizing the
activities
Developing Policy
Guidelines
Motivating
Channel
Members
Resolving
Conflicts
among
channel
members

rights reserved.
Ex ante
Phase
Ex
Poste
Phase
168
Channels of drug distribution

Manufacturer
C&F /Depot /
Super Stockist
(4-10%)
Stockist / Wholesaler
(8-16%)
Institution
Hospital
Retailer/ Chemist
(16-20%)
Patient
rights reserved.
169
Rural Distribution Channels Major

Issues
Economic Issues (ITC s E-Choupal, HULs
Project Shakti).
Physical Infrastructure mostly
inadequate.
Service Output Issues after-salesservice is difficult.
Diversity related issues multiple
languages, traditions, different cropping
patterns / cash flows.
rights reserved.
170
Designing customeroriented
marketing channels

rights reserved.
171
Channel Design Process

Commercial Network :
agents / wholesalers / retailers.
Logistical Network:
transporters / installation &
maintenance staff .

rights reserved.
172
Channel Design
1)
2)
3)
4)
The channel design is normally meant to

give a clear idea about:
The number of channel entities in the
channel network .
The way in which they are linked.
The roles and responsibilities of the entities
in the network & clear cut guidelines for the
major activities to be performed during the
normal functioning of the channel.
The rewards for participating in the
activities.
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173
What are the service

outputs
Convenience (availability vs.
inventory cost)
Breaking the bulk (consumption of
one unit at a time, at retail point)
Spatial convenience ( channel
intensity vs. cost)
Waiting time (days / off-the shelf)
Assortment (products that are bought
together)
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174
1. List down all service outputs that the channel needs

2. Develop levels at which each of the service outputs have to be offered
(benchmark with competitors)
3. Activities to be performed to fulfil service output objectives
4. Calculate cost incurred for performing these activities, at each level
5. Design ideal channel structure, network of members, performing
certain functions at a minimum cost
6. Compare ideal channel structure with the structure existing in reality
for any modification
7. Assess ideal channel design effectiveness, equity, scalability,
flexibility
8. Develop the channel establishment / modification plan
rights reserved.
175
Example of a service output

delivered template
Sl.No. Service dimension
Service output delivered
1.
Bulk-Breaking
Units are delivered in ones
2.
Spatial convenience
There is at least one outlet for almost every

3 km radius excluding of course thinly
populated areas
3.
Waiting time
Not more than 2 days for any model
4.
Assortment
Other consumer goods items including that

of other competitors are available at all the
outlets where the products are otherwise
Available
5.
Installation support
Available
6.
After sales support
Free for first two years, but available on

payment afterwards. Also available at every
city from where the product was bought.
7.
Consumer financing
Available

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176
Channel Flows
Flow Name
Explanation
Physical
Possession
Transportation & Storage
Ownership
Taking title to the product
Promotion
Promoting product in various ways
Negotiation
Terms of trade with upstream/downstream
Financing
Cash flow / working capital requirements of

channel partners
Risk taking
Underwriting risks while possessing/owning,

warranties etc.
Ordering
Processing of orders & passing on to upstream
Payment
Flow of payments at each channel level

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177
Channel design effort decisions

consumer durables
The service output levels

The flows or activities that are
associated with the achievement of
the service output levels
The type of entity who would be
entrusted with the performance of
each of these flows
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178
Parameters for comparing

channel designs
Efficiency (inputs vs. desired output levels)
Effectiveness (zero waiting time)
Equity (remuneration should reflect
activities & their criticality)
Scalability (channels should take higher
load, as and when required)
Flexibility ( should handle fluctuating
demand)
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179
The channel establishment plan
The main purpose of the channel to be set-up. (contd.)
The profile of the customers who are the target market

for the channel .
The needs and requirements of the target market with

regard to the identified service outputs provided by
the proposed/ existing channel.
Analysis of the operations of the existing channels that

deal in similar product/service lines ideas for
differentiation.
Detailed activity chart for achieving the service output

objectives - linking service objectives to specific
activities.
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180
Plan..
Contd.
Details about the various channel constituents

who will be performing these tasks
The cost of performing the activities
The designated roles and responsibilities of the
channel constituents
The proposed remuneration for performing these
roles and responsibilities
Standards
for measuring the performance
(targets, customer satisfaction etc.)
Procedures for reporting and information sharing
(ERP)
Monitoring
mechanisms
(reports,
personal
inspection)
Criteria for appointing the channel members
(investment, experience, past history etc.)
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181
Managing Channel Member

Behaviour

rights reserved.
182
Channel relationships
Perceptions of organizational power
Dependence
Control
Trust
Commitment
Co-operation

rights reserved.
183
Discrete relational exchange

continuum
Arms length relationship
Relational exchange relationship

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184
Channel control
Tolerance
Function
profit
earned by
channel
member
(lost
opportunitie
s)
PayOff
Function
Zoneof
acceptancerights reserved.
Supplier
authority
185
Role of persuasion, authority, and

coercion in channel control
Channel
members profit
Tolerance
function
C
Pay off
function
Coercion
persuasion
Authority

rights reserved.
control 186
Channel Power
Reward Power (e.g. DSA of car
finance sector)
Coercive power
Expert power
Reference power (brand power)
Legitimate power (contractual)

rights reserved.
187
Components of channel offering

Manufacturer
sales force
incentives
Promotional
Responsivene
support
ss systems
Trainin
g
Financial returns
Quality
Technical
Reliable delivery
assistanc
Competitive
products price Market
e
National
Company
policies reputation
3.
Incentive
Program
researc
h
Distributor firm
incentives
1.Channel
Core
rights reserved.
Distributo
sales force
incentives
2. Capability
Building
188
Programs
Influence
Strategy
group
Types of Influence
Strategy
Indirect
influence
strategies
Information exchange
Information control
Modelling
Where information on general business

issues and the channel program is
merely exchanged with channel
member personnel.
Direct
Unmediated
Strategies
In this type of strategy the

consequences of the acceptance or
rejection of the channel programme or
its implementation are stressed, but
these consequences are based on a
response from the market
environment,
not on the mediation of the channel
Principal.
Recommendation
Warning
Positive normative
Negative normative.
Explanation
Channel Managers
Influence strategy types
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189
Reward and
Punishment
Strategies
Economic reward
Non-economic reward
Economic punishment
Non-economic punishment
In this type of strategy rewards

and punishments are directly
given to channel members
Direct request
This strategy involves making a

direct request to the channel
member where the Principal
mainly communicates desires or
wishes concerning the channel
members acceptance of the
channel program.
Personal plea
Promise
Threat and
Legalistic reference.
Direct
unweighted
strategy
Direct
Mediated
strategies
(contd.)
In this type of strategy specific

action is requested;
consequences of acceptance or
rejection are stressed and are
based on the mediation of the
channel principal.
Influence strategy
types
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190
Influence situations in channel

relationship
Attitude towards the channel program
Positi
ve
Behaviou
r
towards
the
channel
program
+
ve
- ve
Neutr
al
Negat
ive
Reinforcement
process
Behavioural
Reinforcement
(non-economic
reward)
Moderate
rationalization
Attitude change
(Recommendation
)
Radical
rationalization
Attitude change
(Recomm./warning
/inf. exchange)
Inducement process
Behavioural change
Moderate
confrontation
Behavioural and
attitudinal change
Radical
confrontation
Behavioural and
attitudinal change
(economic reward)

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191
Stages in channel conflict

Attitudinal
sources
of conflict
Cognitive/
Felt
conflict
Structural
sources of
conflict
Manifest
conflict
Conflict
outcomes
Conflict
resolution
CAUSES OF CONFLICTS
1. Attitudinal Causes disagreement about roles, expectations,

perceptions,
communications
. divergence in goals, drives for autonomy,
2. Structural Causes
fights over scarce resources.
192
rights reserved.
Conflict management methods at different

stages of conflict
Institutional approaches
Latent conflict
Felt conflict
Joint membership of associations

Exchange of executives
Cooptation jointly designing marke
programs
Dealer Councils
Third party mechanisms
Mediation
Arbitration
Negotiation
Manifest conflict
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193
Negotiation Strategies
HIGH
Accommodativ
e
Concer
n for
the
Other
s
interes
t LOW
Collaborative/proble
m solving
Compromise
Avoidance
LOW
Competitive
/aggressive
Concern for own interest

rights reserved.
HIGH
194

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Introduction to Sales

Personal selling strategies

Evolution of personal selling

Societal marketing concept

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Nature and role of sales

Types of personal selling

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Difference between sales and marketing

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Exchange offer of value

Marketing management process

Sales management process

Implementation of the sales programme

Evaluation and control of sales force performance

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Emerging trends in sales management

Selling Skills and

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Selling and buying styles

Concern for the customers

(1,9) People Oriented

(9,9) Problem Solving

I want to understand him

I consult with the customer

I have tried an effective

(9,1) Push the product

the customer and it sells

I take challenge of the

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Managing body language:

Conflict management process

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separate the people from the problem

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Problem solving skills

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Problem solving process

Find out origin

olutions to implement & paths to desired solutions

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Statement restatement technique

Final problem Statement

Components of a decision on the

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Solution implementation process

The Selling Process

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Stages in the selling process

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Search for sources of potential

Qualify the prospects from the

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Endless chain customer referral

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Methods of sales presentation

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Handling customer objections

Avoid conceding first

Make concessions in small amounts

BE prepared to withdraw a concession