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SALES MANAGEMENT

INTRODUCTION

In daily life, a layman deals with different transaction in terms of selling and purchasing

of goods and services. In these transactions the seller persuades the buyer. Therefore,

selling may be defined as persuading people to satisfy the want they have. The

person, who does this act, is called a salesman, the result of this action as sales, while

these activities of the person, are supervised and controlled by sales-management.

In the present scenario sales executives are professionals. They plan,

build and maintain effective organizations and design and utilize
efficientcontrolprocedures.Theprofessionals approach

requires thorough analysis, market-efficient qualitative and quantitative personal-

selling strategy. It calls for skilful application of organizational principles to the

conduct of sales operations.

In addition, the professional approach demands the ability to install, operate, and use

control procedures appropriate to the firm’s situation and its objectives.

Executives capable of applying the professional approach to sales management are in

high demand today. The quality of selling is referred to as salesmanship. In other

words, ‘management’ is synonymous with leadership. Managers do the same thing in

industry, as ministers do in states and at the centre, i.e., they have to plan, forecast,

direct and control their personnel. Here success lies in running together, hand in hand.

Managers are the

captains of the army of their followers.

DEFINITION
Originally, the term ‘sales management’ referred to the direction of

sales force personnel. But, it has gained a significant position in
the today’s world. Now, sales management means management of

all marketing activities, including advertising, sales promotion, marketing research,

physical distribution, pricing, and product merchandising. The American marketers

association (AMA’s) definition,takesinto consideration a number of these viewpoints.

Its definitions includes: the planning, direction, and control of the personnel, selling

activities of a business unit including recruiting, selecting, training, assigning, rating,

supervising, paying, motivating, as all these tasks apply to the personnel sales-force.

Further, it may be quoted: it is a socio-scientific process, involving’ group-effort’

in the pursuit of common goals or objectives, which are pre-determined. Co-ordination is

its key, though, no doubt, it is a system of authority, but the emphasis is on harmony and

not conflict.

Sales-management differs from other fields of management,

in different aspects: the selling operation of a business firm does not exist in isolation.

Thus, simultaneous with the changes taking place in the business, as well as marketing-

orientation, a new concept of sales management has evolved. The business, is now society-

oriented, on human-welfare aspects. Therefore, sales-management works in a broader and

newer environment, in co-existence with the traditional lines. The

present emphasis is now on total development of human resources.

BENEFITS OF SELLING ACTIVITIES

There are different benefits of selling activities, which are as follows:

(1) Benefits to the society: economic growth and maximum employment are the

basics for national development. The achievement of both these goals means jobs

and incomes for

a nation’s labour-force. The number of people, who need jobs, continues to

expand, and also some jobs are being eliminated, because of the

introduction of computers and abolition of obsolete technology. If jobs are

to be made available for all those, who want and expect them, the

economy must continuously expand its production of goods and services,

which can only be done by adopting sound government-policies and

efficient use of people. Equally important here is the fact, that an economy

needs individuals, to sell what is produced. Through their persistent efforts

to create and stimulate demand, sales-people could be said to be the life

and blood of a productive economic-system. The large number of workers,

in factories, and offices, would not be needed, if someone were not selling

their products.

(2) Benefits to consumers: professional people may not know every fact of a

product, but they, at least know its major uses, limitations and benefits; so

they can easily serve their customers, quite effectively. For example, an

insurance agent can analyze the hazards and risks that confront a

client’s business or home-situation, examine existing coverage and offer

helpful advice, in order to eliminate the gaps or overlaps in coverage, in

addition to saving the client’s money. The sales-engineers are qualified to

analyze technical-problems, which may be confronting a particular

organization and they can give the right recommendations for developing

efficient operations. Like-wise, the medical-representatives may help the

busy doctor, by keeping him abreast of new drugs in the market. The list of

sales-people who can offer assistance to customers is practically without

end.

(3) Benefits to business firms; their sales-persons and customers: salespersons

are owned by their companies, while customers are the end-users of the

company’s product(s) and/or services, all these people, in the chain of

marketing, stand to benefit by sales-activities. A business firm can be

profitable only if its revenues exceed its costs.

The prime responsibility of the salespersons is to sell the goods, produced by the

organization, at a profit. The creative sales-person, tries to penetrate his

territory, and adopts suitable means and techniques of profitable-selling of

goods and/or services. Business firms, derive various other benefits from,

non-selling activities of sales-persons. The sales-person, in the field, is an

ideal person, to keep the company abreast, or ahead of competition. He,

thus, becomes an important source of field-intelligence by providing

important (and sometimes very crucial) information, about the nature of

The sales-force has the additional responsibility of serving the needs of customers that buy the film’s product(s). Flexibility must be provided by establishing a specialists production line. A customer-oriented sales-person has to perform such activities as: providing customers with ‘product-information’ and ‘demonstration(s). in a planned way like what must be done? And who will do it? The plan must be based on extensive market research. after investigating the total-market. providing customers with sales-advice. The plan should also be evaluated. This is possible only if the customers are served in a professional manner. and also about the changing needs of customers. concerned. training customers-employees. competitive-activities. with all the departmental heads. Most firms cannot survive. only on the basis of one-time sales. discussed below: (1) Planning: a business cannot be taken as a chance. and . and assisting customers in maintaining ‘inventories’. The details of the plan should be discussed. and the facts must be verified at every stage. repeat-sales are necessary. The plan should also be subject to continued review. for a particular type of product. ELEMENTS OF SALES MANAGEMENT There are the four basic elements of sales management. Every salespeople or person concerned have to see the future. in product-use. to allow for variation in production.

departmental-plans are integrated into a master. organizing starts by co-ordination wholly. Harmony. but solved through a free-exchange of ideas. Co-ordination also helps in maximum utilization of human-effort by the exercise of effective leadership. who bear responsibility for fulfilling their parts of the plan. one has to ensure free flow of information that is selective to the objectives of the business. For example. motivation. should be the guiding mantra. The sales manager has to encourage direct personal-contact. on which to develop skills. Nevertheless. to see the total picture and co-ordinate their activities. there are sound principles. ensuring adequate co-ordination. their sub-ordinates. ill planning. No personal problems. (2) Co-ordination: Co-ordination is all pervasive and permeates every function of the management-process. It has a special need to help the staff. within the organization. This is especially true in the case of the sales-force of any organization. with the rest of the team. In addition. communication etc. The control-system also needs co- ordination. . Similarly. and not discord. particularly where there is lateral-leadership. (3) Controlling: the sales manager has to check regularly. Co-ordination does not have any special techniques. supervision. Plan. guidance. arising from business-operations are to be ignored. that the sales activities are moving in the right direction or not. partially inter-departmental and inter-personnel matters.

(vi) establish a system of sales-reporting. . knowledge of human psychology is needed. (4) Motivating: Motivation is essentially a human resource concept. so as to achieve the goals planned for the business. Each salesman has a target. He guides. (ii) determine the level of sales-budget. He has to take steps to ensure that the activities of the people conform to the plans and objectives of the organization. It aims to weld together distinctive personalities into an efficient team. (ix) review of performance of the sales-force. For this. There must be procedures to bring to light the failure to attain a target. and (x) establish periodical testing programmes. and motivates the subordinates. From the weekly and monthly sales-reports. note the pitfalls and take corrective measures. that will prepare records whether a particular salesman is working efficiently or not. The control-system has to (i) prepare sales and market forecasts. In a big organization. the control system is established. as a means of understanding behaviour patterns. (vii) establish a system of statistical sales-credit. leads. (iii) determine the sales-quotas for each salesman. (iv) determine. The controller has to ensure that the set targets. set for specific ‘period. (viii) establish stock- control system(s). each salesman is assigned a territory (not so big that it cannot be adequately covered). review and select distribution-channels. budgets and schedules are attained or followed in letter and spirit. The controlling system should be such that one can study the past. (v) organize an efficient sales force. so that similar problems may not occur in the future.

and not . Only motivated sales-persons can achieve company’s goals. i. there are more than one objective. and (iii) experiencing continuing growth. in an integrated manner. the typical objectives include (i) profitability. (iii) market share. that must emanate out of its overall business or corporate objectives. market share and profitability. or they may be implicit or general. with which the sales-function is managed. as far as possible. in fact. (iv) growth.e. Although. OBJECTIVES OF SALES MANAGEMENT Every business firm has certain objectives to achieve. have. in measurable and quantitative terms. Since. are greatly affected by the effectiveness and efficiency. Generally. generally relate to the areas of (i) achieving sufficient sales-volume. down to the least important). The sales- management objectives of a business firm. they must be congruent. These objectives are to be expressed. relating to sales-volume. found that it is the most effective management objective of the firm. and they do place differing emphasis. objectives of sales-management have to cover various sales-functions. and should also be realistic and achievable. on a hierarchical manner (most-important. the objectives. These objectives may be very explicit and definitive. these should be put. on individual ones. Business firms. and (v) corporate-image. firms have different mixes of objectives. This is especially important in the case of the sales-force.. To ensure their flawless realization. While all these objectives are important to a business firm. (ii) sales-volume. (ii) providing sufficient profit. they must fit together.

they must be linked with specific time-element. and ask him to spend more time. suppose you ask a salesman to cut his travelling expenses. at the grass-roots level. only after the company has conducted benchmark studies. For example. with the involvement of the sales-force. In addition. comprising of the following steps: (i) Setting goals jointly with the salesman: In this process the goals for sales-man and sales managers are settled simultaneously in the organization so that they can built a . within a specified set of objectives and (ii) participative style of management. SMBO ( SALES MANAGEMENT BY OBJECTIVES) APPROACH It is another approach to formulate and accomplish sales-objectives is the sales management by objectives (SMBO) technique. brand and market-sales and market share trends (all in measurable terms). To make these two requirements. It aims to focus on (i) results. the process of setting of sales-objectives should begin. Process of SMBO The operationalization of SMBO is a process. to find out. Rather. more meaningful. in the field. It is formulated combined by sales manager and sales-force (representatives).be in conflict with each other. The setting of objectives should not be based only on the judgment of the top- management. it should be formulated and finalised. as to where it stands in terms of product.

The outcome of the joint exercise would be the development of a strategy that directs the salesman to his objectives. in the correct sequence. close coordination between them and lastly they achieve the main objective of the organization. with the correct timing. and must be efficient. with their markets. in the sense of the close familiarity of the salesman. following a plan. (b) Providing a better approach. from the view-point of the salesman. Management proves to be a boon to the top-management. Importance of SMBO The importance of SMBO for a business firm is as follows: (a) Directing the salesman towards the broader sales and Marketing objectives of the Company. . (ii) Planning strategy to reach the objectives: There has to be participative style of sales. in the use of resources of time and money. and (c) Motivating the salesman.

the sales organization . Setting up a sales organization Not often is a sales organization built entirely from scratch. under his direct-control and supervision. It emphasizes human-values. Most problems of sales organization are problems of reorganization. THE SALES ORGANIZATION The main objective of any business firm is to sell effectively its goods and services to the consumer at reasonable prices. to anticipate changing situations. It is a social and dynamic system. and in other business factors call for changes in the sales organization. an organization is a structured-process in which individuals interact with each other for achieving stated-objectives. They recognize that the sales organization must achieve both qualita tive and quantitative personal-selling objectives. the proprietor can handle himself. It is the job of management. in competitio n. these activities arises the need of a sales-organization. personally. The ideal sales organization has a built in adaptability allowing it to respond appropriately in fluid and diverse marketing environments. as the business grows and expands. Generally. since some structure usually exists. All in all the sales organization is the vehicle through which the personal selling strategy is implemented. the size of the target market. The sales organization is not an end in itself but rather the vehicle by which individuals a chieve given ends. to integrate and co-ordinate all its constituents. But. Therefore. to be covered to sell large quantities of goods and services becomes too large to be controlled by the owner of the business firm. So long as the business undertaking operates on a small-scale. or with the help of a few salesmen. Shifts in marketing. A sales organization is both an orienting point for cooperative endevour and a structure of human relationships. The sales organization should be adjusted to fit ideally. Effective sales executives insist upon sound organization.

(ii) To divide and fix authority among the sub-ordinates so that they may not evade work. 3. each time it arises. (iv) To locate responsibility of each and every employee so that they can complete the whole work in stipulated time. if not then the particular person must be responsible. Defining the objectives. (v) To establish the sales-routine in the business unit. 2. Assigning personnel to position. There are five main steps in setting up a sales organization. Providing for coordination and control. Need and Importance The sales organization is required for the following purposes: (i) To enable the top-management.exists and the goal is to make it more effective. 1. 5. as though a completely new organization were being built. It is appropriate never the less for the sales executive to approach the organizational problem . Delineating the necessary activities. (iii) To avoid repetition of duties and functions so that there may not be any confusion among them. Grouping activities into ‘jobs’ or ‘ positions’. 4. (vii) To enforce proper supervision of sales-force. to devote more time in policy making for the growth and expansion of business. . (vi) To stimulate sales-effort.

quite complex. . Feedback-loop. It gives output to satisfy the needs of environment. In this approach. provides control mechanism. with its own environment Organization as an open-ended social and dynamic system. including products and market research. in the present-day context. input to output through its operators. a processing-unit. the main emphasis is on human-values. (ii) Adoption of sound and defensible sales-policy. that each person is unique. which the process itself transfers. They are the key players of the production-system. Workers are not simply cogs in the machinery they are social beings first. Business organizations consist of an input. based on relevant data or information supplied by the marketing research staff. (iii) Accurate market or sales forecasting and planning the sales-campaign. and the management has to recognize this fact. Functions of Sale Organization A sales organization performs the following functions: (i) Analysis of markets thoroughly. an output and a feedback-loop. (iv) Deciding about prices of the goods and services. terms of sales and pricing policies to be implemented in the potential and existing markets. (viii) To integrate the individual in the organization. Input is drawn from the environment. This makes an organization.

and quota setting for effective Selling and to fix the responsibility to the concern person. utility. who wants a container. (vi) Branding or naming the product(s) and/or services to differentiate them from the competitors and to recognise easily by the customer. (vii) Deciding the channels of distribution for easy accessibility and timely delivery of the products and services. for the consumer. (xii) Order-preparation and office-recording to know the profitability of the business and to evaluate the performance of the employees. (x) Sales-programmes and sales-promotion-activities prepared so that every sales activity may be completed in a planned manner (xi) Arranging for advertising and publicity to inform the customer about the new products and services and their multiple uses. . which will satisfy his desire for attractive appearance. training and control of salesmen.(v) Labelling. (ix) Allocation of territory. quantity. and fixing their remuneration to run the business operations efficiently and effectively. keeping qualities. and correct price and many other factors in view. Packaging and packing. (viii) Selection.

There may be one very small and simple with only a few salesmen. (iv) Financial conditions of the firm. with many sub-organizations. The structure of the sales-organization. there may be o n e quite complex. etc. according to territory. (xv) Study of statistical-records and reports for comparative analyses in terms of sales. based upon divisions. (xiii) Preparation of customer s record-card to the customer loyalty about the products. Structure of Sales Organization The structure of sales organization differs from company to company. (xvi) Maintenance of salesman’s records to know their efficiency and to develop them. (ii) Methods of distribution. usually depends upon the following factors: (i) Nature and size of the firm. product and marketing-functions. (iii) Selling-policies of the firm. . adopted by the firm. (v) Personality of the sales manager. (xiv) Scrutiny and recording of reports to compare the other competitors and to compare with the past period. At the other extreme.

which. others where the head of the sales-operations of the company. and the extent to which. (iv) recruitment and training. establish a practical and viable sales-organizational structure: . (v) credit and collection. the sales department is divided into sub-departments. For example. who is the head or chief executive officer (CEO) of the company. to carry out the functions of the sales-organization successfully. these sub-departments could be (i) market-research. where the sales manager is the head of total marketing and sales-operations of the company. (iii) sales-promotion. and responsible for total sales-operations of the company. Further. it is found to permeate within it. is a functional director of the company’s board of directors. (vi) sales-office for receiving the orders and arranging to dispatch goods to their destinations. The other dimension of the sales-organization-structure. Steps in establishing a sales structure The following procedure may be adopted to. within the organization. These are many issues. (ii) advertising. is related To:- (i) What shall be the status of the sales manager? (ii) What functions shall his department perform? (iii) What shall be the strength of the department? etc. Each sub-department is put under an officer. in the case of a big business firm. listed in the procedure shall depend upon the state of the acceptance of the modem marketing concept. besides being based on the factors. who is responsible to the sales-manager. We have some firms in India.

state of competition. (vi) Prepare a note. and overall organization of the department. product mix. span of control. and sales-people and their ambitions. in terms of its impact on the financial. nature of customers. (v) List the various administrative-details. . (iv) Analyze the prevailing working-atmosphere and state of communications. technical.(i) Begin with a historical profile of the company’s allegiance. position in the market. (iii) Appraise the potential of the company. etc. scientific and human resources. (ii) Analyze the requirements of the company and the sales-department. particularly in terms of its: size. existing currently. overall organization and top-management philosophy of the firm. especially from the view-point of relationship and human-feelings involved in such relationships. relating to the various administrative-details including aspects like hierarchy. (vii) Describe the procedures and Processes to be followed for executing various tasks. on the sales-department. nature of activities. connected with the company.

it is important to note that various industries. All executives exercise line authority and each subordinate is responsible only to one person on the next higher level. giving job-descriptions of the whole of the department. This staff helps to conserve the top sales executives time and frees them from excessively detailed work. Line & Staff Sales Organization – the line and staff sales department is found in large and medium sized firms employing substantial numbers of sales personnel. The Chain of command runs down from the top sales executives down through subordinates. from the point of view of viability and practicality. for creating a sales structure. though being equally efficient. Line of authority runs vertically through the structure and all persons on any one organizational level are independent of all others on that level. and selling diversified product line over wide geographical areas. sales analysis. in different ways. This kind of organization provides the top sales executive with a group of specialists –n experts in dealer and distributor relations. prepare a draft-structure of the sales-department. sales training. organize their sales-departments. (ix) Examine the structure. In the light of the complexities and vastness of the above process. It is widely used in smaller firms and in firms with smaller numbers of selling personnel for instance in companies that cover a limited geographical area or a narrow product line. They make it possible for their chiefs to concentrate their efforts where they have the most skill. viii) Based on the above.this is the oldest and simplest sales organizational structure. once again. warehousing etc. and of the same category. and a who’s who of the department. sales planning. sales promotion. Staff sales executives do not have authority to issue orders or directives. BASIC TYPES OF SALES ORGANIZATIONAL STRUCTURES Line Sales Organization. . sales personnel.

The coordinating executive is the director of sales administration all executives on the next level are specialists. his or her assistants. . the sales training manager and perhaps representative divisional or regional sales managers) that meets periodically to draft training plans and formulate sales training policies.Functional Sales Organization. should have a few distinct duties as possible. The principle of specialization is utilized to the fullest extent. including implementation of plans and policies to individual executives. executive and employee. Committee Sales organization – the Committee is never the sole basis for organizing a sales department. Duty assignments and delegations of authority are made according to function.This type of sales organization is based upon the premise that each individual in an organization. It is a method or organizing the executive group for planning and policy formulation while leaving actual operations. Thus many firms have a sales training committee ( comprised of the general sales manager.

it is take it or leave. Product knowledge 2. Since people buy products for the benefits they offer. Sales presentation planning 4. SALES PROCESS AND CAREERS  preparation for sales task  Steps in the selling process  Characteristics of sales jobs  Types of sales jobs  Success in selling PREPARATION FOR SALES TASK This involves preparation for a selling task. The way to do this is look at products from the customer’s point of view. Understanding buyer behavior 1. buyers and sellers may negotiate price. This is usually termed as pure selling.3. service payment and credit terms and so on. Setting sales objectives 5. Knowledge of competitors 3. In many selling situations. timing of delivery. PREPARATION FOR PURE SELLING AND SALES NEGOTIATIONS A number of factors can be examined in order to improve the chances of sales success in both sales negotiations and pure selling. the salesperson have no scope for discussion. product features are the means by which benefits are derived. successful sales people relate product features to customer benefits. In others. These are referred to as Sales Negotiations. 1. Product knowledge and benefits Knowledge of product features is insufficient for sales success. It covers a situation where there is little or no scope for salesperson to bargain with the buyer and where selling may involve a degree of negotiation between buyer and seller. .

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Knowledge of Competitors’ Products and their benefits This offers the following benefits:- i) It allows a salesperson to offset the strength of competitors’ products which may be mentioned having many different kinds of skill or ability. 2. but these costs savings are small compared to the fuel savings you get with our re………. Thus knowledge of competitive strengths and weaknesses will be an advantage in this situation. Competitive Information can be sourced from a) Sales catalogues and price lists. ii) Industrial Selling Sales Engineers may work with buying organization in order to solve a technical problem. order specification being drawn up in which sales engineers may have an influence. to which a salesperson might reply “yes. c) Observation e. This may result in. competitor X’s produts offers cheaper maintenance costs. b) Talking with buyers. By potential buyers. against their weakness e.g prices in Supermarkets. 2 .g. It is only by analyzing the products through this way that they will be convincing in industrial selling. The sales person must not only know his product benefit but also types of situation where each would be appropriate. the sales person is called upon to be an adviser or consultant who is required to provide solutions to problem in some cases this may require a deep understanding of the nature of customer business so that the salesperson can be able to appreciate customer problems and suggest the most appropriate solutions. It is to the benefit of sales engineers that specification reflects the strengths and capabilities of their products rather than competitors. easily able to change to change from one kind of activity to another. a buyer might say.

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. To have customer visit the production site. Examples include:- .g. To determine the customer needs. lower maintenance. fry on an aircraft.g. iv) Possible objections and questions can be anticipated and persuasive counter- argument prepared. iii) It builds confidence in the salesperson. 4. higher productivity and lower offsetting life-cycles cost e. particularly the newer less experienced type that he is well equipped to do the job efficiency and professionally. many price objections can be countered by reference to higher product quality. ii) The use of visual aids and demonstrations can be explained into the presentation at the most appropriate time to reinforce the benefits the salesperson is communicating. For example. . Setting Sales Objectives This involves determining what a salesperson wants to accomplish in his visit to a potential customer. greater durability. Sales Presentation Planning Although versatility. 3. fuel or manpower costs. Advantages of presentational planning i) The salesperson is less likely to forget important consumer benefits associated with each product within the range he is planning. Joe Nyutu . flexibility and the ability to “think on one’s feet” are desirable attributes there are considerable advantages to presentational planning. This information should be kept in files for quick reference. To have the customer try the product e.

i) assessment of the balance ii) Joe Page Nyutu 4 . the name and position of each key influencer and decision maker times most suitable for interview. favorable experiences with other types of products sold by the salesperson’s co. . . his co. and threats to a successful sale or special opportunities afforded by the situation. and products positive factors include common interests. who makes the decision . who influences . how the decision is made . either when selling to new companies or when selling to existing customers where the nature of the product is different. To have the customer compare the product versus competitive products in terms of measurable performance criteria. 1) Threats include personal prejudices held by key people against the sales person. The practical implication of these facts is that careful preparation may be necessary for industrial sales people. involving many people whose evaluative criteria may differ. and that the purchasing officer may play a minor role in deciding which supplier to choose. . particularly with very expensive items. Understanding Buyer Behavior Many organizational buying decisions are complex. to close the sale. the type of competitive products previously purchased by the buying organization. 5. PREPARATION FOR SALES NEGOTIATIONS In addition to the factors outlined above. a sales negotiator will benefit by paying attention to the following additional factors during preparation. . The salesperson should take time to establish who the key influencers and decision makers are. who uses .

in turn. the stronger will be his bargaining position. . will be weak in his negotiating stance. a) The number of options available to each party. If a buyer has only one option – to buy from the seller in question – then that seller is in a powerful position. is not dependent on the buyer. If a seller knows how much a buyer is willing to pay. The greater the salesperson understands of the needs of the buyer and the more capable he is in satisfying those needs. the buyer should be able to extract a good deal. seller and buyer will each be expecting to conclude a deal which is favorable to themselves. (Knowledge is power-Machiavell) if a buyer has access to a seller’s cost structure then he is in a powerful position to negotiate a cheaper price or avoid paying too high a price. This balance will be determined by four factors. then his power position is improved. . The extent to which each is successful will depend upon their negotiating skills and the balance of power between the parties. but has many attractive potential customers for his products. If the seller. In some industrial marketing situation suppliers work with buying organization to solve technical problems. b) The Quality and Quantity of Information held by each party. when a buyer has many potential sources of supply. In this way this sellers (suppliers) increases their negotiation position. who believes that his needs can only be satisfied by one company. then again he is in a strong position conversely. Many buyers deliberately contact many supplies in order to strengthen their bargaining position.i) Assessment of the balance of power In the sales negotiation. . and a seller has few potential customers. The buyer. c) Need Recognition and Satisfaction .

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This implies that he needs information. the criteria used by the buying organization when deciding between them. any supplier who can solve it will gain immense bargaining power. Where a technical problem is of great importance to the buying organization. This process is analogous (similar) to buyer at an auction paying more than he can afford because he allows himself to be swept along by the bidding. . . 2. Additionally. if there are pressures on the salesperson because of lower sales returns. This reduces the likelihood of being swayed by the heat of negotiating battle and accepting a deal which should have been rejected. and its sole difficult. discussion of objectives helps in coordination and unity. . an accurate assessment of the power balance should be possible. Determination of negotiating objectives It is prudent for negotiators to set objectives during the preparation stage. when negotiation is conducted by a team. One the other hand. then the buyer will be able to extract extremely favorable terms during negotiations in return for purchasing from him. The implications of these determinants of the balance of power are that before negotiations (and indeed. This process lessens the chances of pricing too low or giving other concessions like favorable payments terms. the degree of pressure on key members of decision making unit and formula they might use for assessing price acceptability. If the seller knows the number of companies who are competing for order. during them) a sales person will benefit assessing the relative strength of his power base. . d) The Pressures on the Parties .

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c. on receipt. in working order. . This determines the opening positions of buyers and sellers. The price actually agreed will depend upon the balance of power between the two parties and their respective negotiating skills. ii) Would like objectives (maximum price-highest price) These are the maximum a negotiator can expect to get.g. The aim of concession analysis is to ensure that nothing which has value to the buyer is given away freely during negotiation. 3.t. the minimum price at which a seller is willing to trade. The following are issues which may be examined during concession analysis: i) Price ii) Time of delivery iii) The product – its specification [product specifications] iv) Payment –on dispatch. vi) After sales service e. This defines a bargainers minimum requirements e. it is likely that concessions will made by at least one partly during the bargaining process. e. the highest price a seller feels he can realistically obtain. This determines break even-point. Concession analysis involves determining the cost of concessions to the seller and value of these to the buyer.g. credit terms. A skillful negotiator will attempt trade concessions so that ultimately an agreement which satisfies both parties is reached. . Preparation can aid negotiators by analyzing the kinds of concessions which might be offered to the other side.Types of Negotiating Objectives i) Must have objectives (Minimum price). v) Mode of delivery. Concession Analysis –Analysis of things which either partly can concede in order to win the negotiation since negotiation implies movement in ………… order to achieve agreement. .

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This is analogous similar to the anticipation of objection in pure selling. other customers and competitors. Closing. To turn lead into a prospect. Prospecting and qualifying. 3. location and possibilities of growth. Follow-up. STEPS IN THE SELLING PROCESS Personal selling process consists of the following steps: 1. Where an organization does not have ability to buy there is little use in pursuing negotiations. Approach. the lead must be qualified in terms of need or want. authority to buy and eligibility to buy. a) The need: The lead must have a need or want for the product. However the sales person can stimulate unrecognized or latent needs by explaining the advantages of the product. Other basis of qualifying includes volume of business. It helps when a decision have to be made in the heat negotiation. b) Ability to buy: The lead must have the ability to buy the product. This involves estimating the proposals and demands the buyer is likely to make during the course of negotiation and seller’s reaction to them. In prospecting sales people must obtain leads on people who may have need for the company’s products or service. Proposal Analysis – Analysis of likely objections/demon. 7. 2. The information on this can be obtained from their financial statements credit rating bureaus. Prospecting and Qualifying This is concerned with identifying and qualifying potential customers. Pre-approach. Handling objections. ability to buy. Presentation and demonstration. It may be a waste of time attempting to sell a product to somebody who does not need it. 4. 1. 6. 4. . 5.

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They could also be current customers who provide referrals to potential prospects.c) Authority to Buy: Most sales people have wasted many hours talking to some person with an official sounding title that did not have authority to make purchase decision. Approaches to locating and qualifying prospects (Sources of leads and prospects) i) Centers of influence – joining various organizations (country clubs. ii) Spotters – people who seek out leads for sales people and Sometimes paid a fee. Through this the sales representative can develop an endless chain of leads. golf clubs professional organizations) or participating in activities where you can meet and interact with influential people who may become customers or refer prospects to you. In organizations. iii) Endless Chain: This involves asking everyone you call. sometimes the final decision may have to come from managing director. At household level the decision to buy a product may also be shared e. . d) Eligibility to Buy The lead must be eligible to buy the product e. Similarly many people would like to buy at wholesale. It also involves asking testimonials from satisfied customers or using referrals and recommendations from satisfied customers. A sales person often persuades ordinary working people (such tax drivers. retail clerks and secretaries to provide leads and information about prospects usually for a fee. life insurance sales people know that there are many people who want to buy life insurance policies but they are ineligible because they cannot pass a health examination test. in buying an appliance one spouse decides what to be bought and the other decides on features. model and where to buy it. police officers. Although the purchasing manager may have the formal authority to buy a piece of machinery. the individual or firm can be declared a prospect. NB: When the lead qualifies on all the above four criteria. buying decisions are usually made by committees rather than a single person. on the names for potential buyers.g. but manufacturers would alienate their retailers and wholesalers if they sold to these people.g.

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2. Directories. job offerings and promotions. new construction. It may involve making a personal visit. sales people can gather information about possible prospects e. customer lists for other products) may reveal many potential prospects. or sending a letter or E-mail.g. its x- tics. Non-competing sales people. Bankers. vi) Cold Canvassing: This involves knocking on doors in a promising neighborhood. automobile accidents. vii) Internal Records: Obtaining information from company records (e. It also involves setting call objectives which range from 1) Qualifying the prospect 2) Gathering information on prospects and 3) Making an immediate sale. since they indicate a change in people’s needs for various products or services. Pre-approach – planning a sales call This is the step in the selling process in which the salesperson learns as much as possible about a prospective customer before making a sales call (sales visits). Suppliers. and buying styles. who is involved in the buying. Also by merely driving around or talking to various people doing everyday activities. v) Advertising: Effective ads should stimulate interest in your offerings and encourage potential customers to initiate the contact. Dealers. viii) Leads can also come from. or calling people listed in the telephone book or dropping at offices unannounced or expected. if he hears that a certain company is recruiting he can conclude that they need to purchase a certain office equipment. Local newspapers contain information on deaths. These items are sources of leads. fires. Another decision is deciding the method of approaching the prospect (lead). When they respond to ads the organization should respond quickly to their inquiries. iv) Observation: Organized observation especially reading local newspapers can provide sales people with many leads.g. phone call. This may involve knowing what the buyer needs. .

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The sales person describes the product features showing how they benefit the consumer. The qualities they value most include empathy. 4. dependability and thoroughness Sales presentations can be improved with demonstration aids. I am Mr. Note: The purchasing managers dislike sales people who are pushy. Customers almost always have objections to make a sale. videotapes and product samples. flip charts. 5. This is because prospects may be busy when the sales person wants to approach them. clarifies and overcomes customer’s objection to buying. It involves the sales person’s appearance. . my company and I appreciate your willingness to see me. The opening lines should be positive such as “Mr. slides. Otieno from ABC Company. 3. opening lines and the follow-up remarks. Presentations and demonstration Presentation is the step in the selling process in which the sales person tells the products “story” to the buyer. late and unprepared or disorganized. I will do my best to make this visit profitable and worthwhile for you and your company. The problem (objection) can either be logical or psychological and unspoken. showing how the product will make or save money for the buyer.The sales person should also decide on the best time to approach the prospect. This opening might be followed by some key questions to learn more about customer needs or by showing a display or sample to attract the buyer’s attention and curiosity. This approach calls for good listening and problem solving skills. such as booklets. Handling objections This is step in the selling process in which the sales person seeks out. There is need to book an appointment. Approach This is the step in the selling process in which the sales person meets and greets the buyer to get the relationship off to a good start. If buyers can see or handle the product they will better remember its features and benefits. The sales person uses need-satisfaction approach where by he starts by identifying customer needs by allowing the latter to do most of the talking. Kariuki. honesty.

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i) Ask for an order. Sales people need training on how to handle objections. . 6. Closing This is a step in the selling process in which the sales person asks the customer for an order.e. They should know how to recognize closing signals from the buyer including physical actions. 7. such as a lower price or an extra quantity at no charge.g. This involves organizing follow-up call to ensure that there is proper installation. Follow-up This is the last step in the selling process in which the sales person follows up after the sale to ensure customer satisfaction and repeat business. iv) Ask the buyer whether he wants this model or that one. NB/ Relationship marketing The principles of personal selling discussed above are transaction-oriented. ask about prices and credit terms. However companies are not only interested in making the sale but winning and keeping customers. ask the buyers to clarify any objections. i. This visit would reveal any problems. The sales person may offer the buyer special reasons to close. The sales person can use one of the following closing techniques. instruction and servicing. ii) Review points of agreement. iii) Offer to help write up the order. the customer might nod approvingly. they should take objections as opportunities to provide more information and turn objections into reasons for buying. Their aim is to help the salesperson to close a specific sale with the customer.In handling objections the sales person should use a positive approach to seek out hidden objections. v) Note that the buyer will lose out if the order is not placed now. To close a sale effectively the sales person should know how to recognize the right moment to close the sale. assure the buyer of the sales person’s interest and reduce any buyers concern that might have arisen since the sale. This is usually after handling the prospects objections. comments and actions e.

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Thus. but in general. (ii) Advancement opportunities: As the business world continues to become more competitive the advancement opportunities for sales people will continue to be on attractive dimension of sales careers. sales people are usually the least group to be negatively affected by personnel cutbacks. Sales people working with key customers must study and understand their problems. Competent salespeople have some degree of job security based on the universality of their basic sales skills. which emphasizes on making a sale. Characteristics of sales jobs: (i) Job security: Sales people are revenue producers and thus enjoying relatively good job security compared with other occupational groups. which emphasizes maintaining profitable long-term relationships with customers by creating superior customer value and satisfaction.Thus most companies are moving away from transactional marketing. Relationship marketing is based on the premise that important accounts need focused and ongoing attention. They also receive feedback from their customers and this can be stimulating challenging and productive. In many cases sales people are able to successfully move to another employer may be even change industries because sales skills are largely transferable. immediate feedback in their job performance. Instead they are practicing relationship marketing. individuals and companies that are successful in determining and meeting customer needs will be rewarded. The sales jobs provide these opportunities and helps sales rep to advance in careers (iii) Immediate feedback: sales people received constant. . They should call or visit frequently. work with customer to help solve the customer’s problems and improve its business and take interest in customers as people. Usually the results of their efforts can be plainly observed by both salespeople and their sales manager as a source of motivation and job satisfaction. In Highly competitive markets. they aim to build satisfying relationship with customers particularly the most important ones. Companies operating in mature markets and facing stiffer competition are realizing that it is hard and costly to attract new customers than to keep present customers. Certainty individual jobs security depends on individual performance.

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(b) Technical support salespeople: they assist in design and specification process installation of equipment. The sales person is able to do all these (vi) Independence: sales jobs often allow independence of action. training of the customers’ employees and follow up service of a technical nature.(iv) Prestige: As the general public learn more about activities and qualifications of professional salespeople. They are seen as knowledgeable. the image and thus the prestige of selling is improving. Types of personal selling jobs: (i) Sales support: personnel not usually involved in the direct solicitation of purchase orders. They may include: (a) Missionary salespeople: there are similarities between religious and sales missionaries. Independence of action and freedom to make decisions are usually presented as advantages that sales positions have over tightly supervised jobs.. well-trained educated and capable of solving customers problems. Top sales people can earn hundred of thousands of shillings annually and sometimes exceed the managers pay. Once converted the customers receive reinforcing messages new information and the benefit of the missionary activities to strengthen the relationship between buyer and seller. (vii) Compensation: it is generally thought to be a strong advantage of sales career pay is closely tied to performance especially if commissions and bonuses are part of the pay package. Customer change. They spread the word with the purpose of conversion to customer status. new products and service are developed and competition introduces new demand at a rapid pace. (v) Job variety: the jobs of salespeople are multifaceted (all-round) and dynamic. Their main responsibility is dissemination of information and performance of other activities designed to stimulate sales. therefore working from their homes and making their own plans for extensive travel. . This freedom is under scrutiny from sales managers. This is frequently a by product of centralized sales operations in which salespeople hire and work away from headquarters. In sales day-to-day variations on the job is the norm.

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(ii) New business: these may include pioneers and order getters. (iii) Ego strength: the degree to which a person is able to achieve an approximation of inner drive-sales people with high levels of ego strength is likely to be self-assured and self accepting. They range from part- time Often. (vi) Combinations sales job: (type passage) Qualifications and skill of a successful sales person: (i) Empathy: the ability to see things as others would see them is extremely crucial for successful interaction between a buyer and a seller. listen effectively and confirm customer needs and concern. Their tasks require creative selling and the ability to contain the resistance to change that will likely be present in prospective customers. An empathetic salesperson is presumably in a better position to tailor the sales presentation to the customer during the planning stage. They can adopt feedback during presentation. (iii) Existing business: the majority of existing business work is done by order-takers. (v) Direct to consumer sales: they are the most numerous type. (ii) Ego drive: an indication of the degree of determination a person has to achieve goals and overcome obstacles in striving for success is manifested as an inner need to achieving personal gratification. temporary sale person in a retail store to the highly educated. Order getters actively seek orders usually in a highly competitive environment. Self efficacy (worth) also increases with ego strength. Sales people must have this drive. Pioneers are constantly involved in with new product. They are not involved in creative selling. To meet customer needs sales person must be able to solicit opinions. (iv)Interpersonal communication skills: including listening and questioning are essential for sales success. they must have . Selling of service is more challenging. (iv) Inside sales: this refers to non-retail salespeople who remain in their employers’ place of business while dealing with customers. They follow a pioneer salesperson and take over the account after the pioneer has made the initial sale. new customers or both. They may be passive or active. Their strength tends to depend in the services provided by the type of salesperson. professionally trained stockbroker. All pioneers are also order getter but not all order getters are pioneers. In both case they start by selling a single product but are followed by others in the product line.

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ability to adopt presentation according to the solution and verbal communication skills following close behind. (v) Enthusiasm: this is general enthusiasm attitude and a special enthusiasm for selling. .

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Recruitment is the procedure to obtain a good number of people with the potential capability of becoming good sales personnel. either because those hired are more capable of absorbing training or because they require less formal training. and their skilful execution result in greater overall efficiency of sales department. In addition training costs are reduced. . it becomes feasible to select the individuals. thereby increasing job satisfaction and reducing the cost of personnel turnover. Appropriate recruiting and selection policies and procedures. The steps in this process are: (a) Conducting a job analysis Before a company can search for a particular type of salesperson. a job analysis should be conducted to identify the duties. which fit the needs of the organization. Good selection fits the right person to the right job. Attracting and selecting new sales personnel is an important aspect of the sales manager's job. RECRUITMENT PROCESS To ensure the new recruits have the aptitude necessary to be successful in a particular type of sales job. After attracting a large number of people. To aid in the process. it must know something about the sales job to be filled. whereas selection is a negative process through which they screen people and finally select desired number of personnel who are offered appointment. RECRUITMENT AND SELECTION INTRODUCTION Recruitment is a positive process in which a company attracts a pool of talented people. certain procedures should be followed in the recruitment process.

A proper job analysis involves following steps: 1. responsibilities. know exactly what the duties and responsibilities of the sales position are and . Analyze the environment in which the salesperson is to work. requirements. (b) customers. Spend time making calls with several salespeople. information should be obtained from (a) salespeople. training. and potential is needed for this particular position? 2. For example: (a) what is the nature of the competition faced by the salesperson in this job? (b) what is the nature of the customers to be contacted. and credit manager. 3. This should be done for a variety of different types of customers and over a representative period of time. (b) Preparing a job description The result of a formal job analysis is a job description. skill. The written job description lets prospective job applicants. as well as current sales personnel. marketing services manager. observing and recording the various tasks of the job as they are actually performed. compensating and evaluating the sales force. selecting. In so doing. Determine the duties and responsibilities that are expected from the sales- person. including the advertising manager. distribution manager. marketing research director. (c) the sales manager. Since a job description is used in recruiting. and what kinds of problems do they have? (c) what degree of knowledge. and conditions involved in the job. the description should be in writing so that it can be referred to frequently. and (d) other marketing executives.

It is used not only in hiring but also in managing and sometimes as a basis for firing salespeople. Job descriptions are also used in developing compensation plans. Specific qualifications such as education and experience should be included in the job qualification. It provides the sales trainer with a description of the salespeople's duties and enables him or her to develop training programmes that will help salespeople perform their duties better. the type of job determines the type of compensation plan that will be used. The job description is probably the most important single tool used in managing the sales force. aggressiveness. and they are used as an official document that is part of the contract between management and a salesperson's union. (d) Attracting a pool of applicants The next major step in the recruitment process is attracting a pool of applicants for the sales position to be filled. such as self-confidence. Finally. etc. One reason is that the manager is dealing with human beings. But most firms also try to identify personality traits that presumably make better salespersons. Often. Job descriptions aid managers in supervision and motivation. a multitude of subjective and very complex characteristics are involved. a job description puts management in a position to determine whether each salesperson has a reasonable workload. (c) Developing a set of job qualifications The duties and responsibilities set forth in the job description should be converted into a set of qualifications that a recruit should have in order to perform the sales job satisfactorily. thus making good candidates easier to identify. All large companies with a . Determining these qualifications is probably the most difficult aspect of the entire recruitment process.on what basis the new employee will be evaluated. therefore.

. The candidates recruited become the reserve pool of sales staff from which new salespeople will be chosen. Good sources are hard to find. locate. (a) Persons within the company Companies often recruit salespeople from other departments. The quality of this group will predict the future successes or problems of the sales organization. SOURCES OF RECRUITMENT There are many places a sales manager can go to find recruits. and employment agencies. Sales managers should analyze each potential source to determine which ones will produce the best recruits for the sales position to be filled. Once good sources are identified. sales managers should maintain a continuing relationship with them. even during periods when no hiring is being done. most firms turn to non-sale personnel within the company as their first source of new sales recruits.sales force have a continuous need to identify. and from the non-selling section of the sales department. non-competing companies. In fact. advertisements. educational institutions. and goodwill must be established between the firm and the source to ensure good recruits in the future. The people are already familiar with company policies as well as the technical aspects of the product itself. others will use several. such as production or engineering. The chance of finding good salespeople within the company should be excellent because sales managers know the people and are aware of their sales potential. The most frequently used sources are persons within the company. competitors. and attract potentially effective salespeople. Some firms will use only one source.

who feel their personnel are being taken by the sales department. It is often hard for them to unlearn old practices. But it is unethical if the salesperson uses valuable confidential information in competing against the former employer. Hiring people from within the company can lift morale because a transfer to sales is often viewed as a promotion. But is it? Is it really any different than attempting to take a competitor's customers or market share? No. Recommendations from the present sales force and sales executive usually yield better prospects than those of other employees because the people in sales understand the needed qualifications. But transferring outstanding workers from the plant or office into the sales department does not guarantee success. have experience of selling similar products to similar markets. They may not be compatible with the new organization and management. (b) Competitors Salespeople recruited from a competitor are trained. Also. In some cases hostility can arise among plant and office supervisors. and should be ready to sell almost immediately. Recruiting competitors' salespeople may bring other problems. recruits from a competitor’s usually are expected to switch . But usually a premium must be paid in order to attract them from their present jobs. Although these people are highly trained and know the market and the product very well. Some sales managers are reluctant to hire competitors' salespeople because the practice is sometimes viewed as unethical.

Even though some recruits may be unfamiliar with the recruiting firm's product line. The potential for these problems to arise may be evaluated with one question: why is this person leaving the present employer? A satisfactory answer to this question frequently clears up many doubts and usually leads to a valuable employee. (c) Non-competing companies Non-competing firms can provide a good source of trained and experienced salespeople. Companies that are either vendors or customers of the recruiting firm can also be an excellent source of candidates. it is almost impossible to assess accurately why someone is looking for another job. Recruits from these sources already have some knowledge of the company from having sold to or purchased from it. Often. and universities are all excellent sources of sales . however. The difficulty arises. their familiarity reduces the time it will take to make them productive employees. they do have selling experience and require less training. (d) Educational institutions High schools. junior colleges. Another advantage of recruits from the sources is that they are already familiar with the industry. especially if they are selling similar products or selling to the same market. Good sales managers must be able to evaluate effectively the information they get. business colleges. adult evening classes. their new employer may be disappointed. in determining the real answer. vocational schools.Their customers to the new business. if they are unable to do so.

recruits. that it is complex and exciting. that it allows them to be creative. many students today know that a sales career is a good use of a college education. While most college graduates lack specific sales experience. In short. A major problem in recruiting from college campuses used to be the unfavourable image of sales. Selling typically was associated with job insecurity. they have the education and perspective that most employers seek in potential sales managers. and that it provides opportunity for rapid advancement. and students are afraid that people without college degrees will not understand or appreciate their needs and expectations. low status. that it rewards them well and in direct proportion to their level of achievement. College students tend to avoid small companies because these companies usually employ few college graduates. College graduates tend to adapt more easily than experienced personnel. Colleges graduates are beginning to realize that selling provides challenge and a sense of accomplishment. . but small firms tend to be more successful in recruiting from small educational institutions or from other sources. but this situation has been changing in recent years. and lack of creativity. They have not yet developed any loyalties to a firm or an industry. Large firms usually are successful in recruiting from universities. Small firms are less likely to recruit on college campuses because many graduates prefer large. well-known corporations with training programs and company benefits.

While advertisements reach a large audience. hiring qualifications. The quality of applicants recruited by advertisements can be increased by carefully selecting the type of media and describing the job qualifications specifically in the ad. are recruiting for low-level sales positions. and a good working relationship must be developed. expense plan. especially in local newspapers. The agency should be carefully selected. The following elements should be included to ensure an ad's effectiveness: company name. Most of the time it depends on the relationship between the agency and the sales manager. Sales managers should make sure that the agency clearly understands both the job description and the job qualifications for the position to be filled. the caliber of the average applicant is often second-rate. However. compensation plan. territory. a recruiting ad must attract attention and have credibility. In recent years agencies have steadily improved and expanded their services. They can provide a highly useful service to sales managers by . Many businesses use advertising only as a last resort. This places a burden on those doing the initial screening. most firms that use advertising. To be effective. product.(e) Advertisements Classified advertisements in newspapers and trade journals are another source of recruits. and fringe benefits. National newspapers and various trade journals are used in recruiting for high-caliber sales and sales management positions. (f) Employment agencies Employment agencies are among the best and the worst sources. and the way to contact the employer.

Companies typically use initial screening interviews. reference checks. As a result executive judgement is heavily relied on in selecting salespeople. (a) Initial screening interviews The steps in the selection process vary from company to company. Selection tools and techniques are only aids to sound executive judgement. . in regard to the majority or recruits who normally fall between these extremes. The selection process involves choosing the candidates who best meet the qualifications and have the greatest aptitude for the job. application forms. and tests as selection tools. physical examinations. However. Each is designed to collect different information. While successful selection of sales applicants does not necessitate the use of all the tools and techniques. depending on the size of the company. the higher the probability of selecting successful sales personnel. the current tools can only suggest which ones will be successful in sales. There are numerous tools. They can eliminate the obviously unqualified candidates and generally spot the more competent individuals. None of these should be used alone. in-depth interviews. and procedures that can be used in the selection process. the more that are used. the number of salespeople needed. techniques. SELECTION PROCESS The recruiting process furnishes the sales manager with a pool of applicants from which to choose.screening candidates so that recruiters may spend more time with those prospects who are most highly qualified for the job.

Other important questions on an application form relate directly to the sales position for which the application is made. Initial screening may start with an application form. as soon as possible. An application form is an easy means of collecting information necessary for determining an applicant's qualifications. The purpose of the initial screening interview is to eliminate. (b) Application forms Application forms are one of the two most widely used selection tools (the other is the personal interview). But it must not be so brief that it screens out good candidates. and personal references. work experience. position applied for. it should be brief. For example:  Why do you want this job?  Why do you want to change jobs?  What minimum income do you require?  Are you willing to travel?  Are you willing to be transferred?  Are you willing to use your car for business?  What do you want to be doing five years from now? Ten years from now? . participation in social organizations. outside interests and activities. educational background.and the importance of the position to be filled. physical condition. address. an interview. The shorter it is. But no matter which tool is initially used . the ore it will cut down on costs. Information requested on forms usually includes name. the undesirable recruits. or some type of test.

By looking over the application form before the interview. then more weight (importance) can be placed on them in making hiring decisions. If companies can show that items such as educational level. A salesperson is seldom hired without a personal interview. and years of selling experience tend to be more related to success than are other items. as many as three or four interviews are usually conducted with the most desirable candidates. applicants who rate higher than an established minimum number of points on these items are considered. On all forms. and those who fail to reach the cutoff point are usually rejected. (c) In-depth interviews The interview is the most used of the various tools for selecting employees. Thus. No other selection tool can take the place of getting to know the applicants personally. the sales manager can get an initial impression of the applicant and can prepare a list of questions to ask during the interview. It can bring out personal characteristics that no other selection tool is capable of revealing. it is illegal to include questions that are not related to the job. In fact. Application forms will differ from company to company. however. The personal interview is used to help determine if a person is right for the job. An important function of application forms is to help sales managers prepare for personal interviews with candidates for sales positions. The interview also serves as a . Some companies use a weighted application form that has been developed from the regular application form by analyzing the various items that help distinguish between good and poor salespeople.

In the structured interview. A structured approach is particularly useful for inexperienced interviewers. The approach used will depend on the sales manager's personality. like those on the application form. interview. The questions asked during an interview should be aimed at finding out certain things: Is the candidate qualified for the job? Does the candidate really want the job? Will this sales job help the candidate fulfill personal goals? Will the candidate find this sales position challenging enough? These questions. or guided. unstructured type. Since it helps and guide the interviewer and ensures that all factors relevant to the candidate's qualifications are covered. experiences. Interviews differ. At one end is the totally structured. which is informal and non-directed.two. which means both the company and the applicant can ask questions and learn about each other. Every sales manager will use a different approach in attempting to elicit useful information. and motivation. depending on the number of questions that are prepared in advance and the extent to which the interviewer guides the conversation. The goal of the unstructured . These are standardized questions that have been designed to help determine the applicant's fitness for the sales position. At the other end of the continuum is the unstructured interview.way channel of communication. are directed at examining the applicant's past behaviour. training. the recruiter asks each candidate the same set of questions. at the other end is the informal. and work experience. structured interviews can be used for initial screening but are not useful in probing for in-depth information.

the recruiter begins the interview by saying to the candidate. Therefore. . References usually are checked while the application form is processed and before the final interview takes place. To administer and interpret unstructured interviews. Tell me about yourself". many firms use a combination of structured and unstructured approaches. or by asking questions such as "Why did you decide to interview with out company?" Several problems are associated with unstructured interviews. (d) Reference checks A company cannot be sure it has all the information on an applicant until references have been thoroughly checked. In semi-structured interviews the interviewer has a preplanned list of major questions but allows time for interaction and discussion.interviewing approach is to get the candidate to talk freely on a variety of topics. Reference checks allows a company to secure information not available from other sources. Frequently. This approach is flexible and can be tailored to meet the needs of different candidates as well as different interviewers. However. interviewers must be well trained. One is that they do not provide answers to standard questions that can be compared with other candidates' reponses or with the company's past experiences. Also. usually referred to as a semi-structured interview. personnel experts say this technique is the best for probing an individual's personality and for gaining insight into the candidate's attitudes and opinions. considerable time may be spent on relatively unimportant topics.

the quality of reference checks as a selection tool is questionable. For reference checking to be a useful selection tool. (e) Physical examinations Many sales jobs require a degree of physical activity and stamina. In general. the sales manager must be resourceful and pursue leads that are not directly given. (f) Tests Tests are the most controversial tools used in the selection process. it usually makes the effort worthwhile. References from teachers and former employers are generally more helpful than other types of references. Therefore. . If only one significant fact is uncovered. The results from the examination should be interpreted by a doctor who is familiar with the demands of the sales job. many firms try to talk with people who know the applicant but were not listed on the application form. Teachers can usually give an indication of intelligence. work habits. physical examinations usually are not given until a recruit has passed most of the steps in the selection process. Reference checks can uncover information about an applicant that may alter a sales manager's perceptions of the person's sales ability. Former employers can be used to find out why the person left the job and how well he or she got along with others. Because of their expense. a company should insist on a thorough medical examination for all its sales recruits. and personality traits. Checking on the names supplied by a candidate is often seen as a waste of time because it is unlikely that serious problems will be uncovered. therefore. and the sales manager should be notified of the results. Poor physical condition can only hinder a salesperson's job performance.

Knowledge tests: These tests are designed to measure what the applicant knows about a certain product. the assumption being that a person is going to be more effective and stable if he or she has a strong interest in selling. service. Few standardized achievements tests are used by industry. Questions regarding the legality of testing have increased the complexity and the controversy surrounding the use of tests as a screening tool. Intelligence tests: These tests measure raw intelligence and trainability. and the like. reference checks. Thus. the intelligence test is slowly regaining status as the most effective tool for selecting salespeople.The need for application forms. . There are some basic tests used in the selection process of sales personnel. Vocational interest tests: These tests measure the applicant's vocational interest. Recent research has indicated that a salesperson's cognitive ability or intelligence is the best indicator of future job performance. although once looked down upon. Sales aptitude test: These tests measure a person's innate or acquired social skills and selling know-how as well as tact and diplomacy. because special job skills require different knowledge. but there are differences of opinion about whether tests are necessary in the hiring of salespeople. Achievement tests: These are tests that seek to determine how much individuals know about the subject. But research has shown that test profile data can be useful to management in the process of selecting and classifying sales applicants who are likely to be high performers. market. and personal interviews is seldom disputed.

Thus. . It takes a lot of years to build-up and to develop itself for efficient and effective working. As we know that the effective sales organization is the antipathy of any competitor. looking for new prospects.people to become more productive. such as assertiveness. and/or channels of distribution to impart information and knowledge. personality and interest tests. sale force in terms of manpower and womanpower is necessary for a business concern. Manpower i. place and promotion are equally sound and intact.Test of habitual characteristics: They include tests of attitude. it is imperative that entire manpower should be in place. the Sales-Force is the infantry that has to visit customers. it must be emphasized that the Sales-Force can be effective only when the other ingredients of the Marketing-Mix: product. of course. To expect sales. For attaining predetermined objectives. SALES TRAINING INTRODUCTION For effective operation of selling activities. Attitude tests are more appropriate as morale measuring techniques than as selection aids.e. in this case salesforce is one of the most precious resources of a business unit.these tests attempt to measure the behavioural traits believed necessary for success in selling. initiative. actually obtain orders from specific customers. price. it is hardly fair. Each ingredient of this Mix has to be emphasized equally so that its productivity may be improved. Personality tests. and extroversion. and ensure that existing customers are happy and satisfied with the company and its service provided to them apart from. However.

. it is expected from a successful salesman that he must be well informed/intelligent in terms of knowledge but also he must be skilled in the presentation of information/knowledge of himself. they are supposed to achieve can be known easily by reference to job specifications.e. in the case of existing Salesmen. Though. The level. Current-levels of skills. The nature and scale of both these skills should be specified. selling-skills etc. Competition. SALES FORCE TRAINING Training is very much important for salesforce to ensure that the contents related to the product are described to the potential customer and exiting customers efficiently and effectively. can be determined through observations of their actual working i. in advance.e. to improve their productivity to face the challenges created by competition. So. thus. the first task for the Sales Manager/Training Manager is to set objectives for such type of training programmes. The Training-Programme may be for the-newly recruited salesmen as well as those already in employment with the company to refresh their knowledge. A salesforce training programme. training means to train the employees i. their knowledge about Product. The art of selling lies in presenting the benefits and multi-uses of the product so that the buyer gets the feeling of satisfaction to his needs. a good Training-Programme should clearly state what . so that the programme so conceived is directed towards predetermined and definite goals. the first step is to identify the gap between the standard of skills required and Salesman’s current standard in the organization/company. Generally. For this purpose. Not only. aims at providing the required knowledge about the products and the effective ways presentation to the customers in the market.

have been explained already. the basics of theoretical- training maybe discussed the staff training room is the best location. and (iii) Reporting-System. etc. may include Knowledge- Areas. NICEM. the best location for training in basics: policies procedures and processes.. its Products. It will be here that the trainee will be able to appreciate the application of the required kills. The Skill-Areas include (i) Sales-techniques. as well as the Product/Services and their Competition. training may be integrated with demonstrations and real-life experience in in-plant- . After setting the objectives. e. after their Training and the period within which they should be able to do it. the fields and courses run by outside organisations. the Company. knowledge is the place where this type of work is being actually carried out. i. contents of the course). Moreover. the trainees should be assigned to a senior sales executive.g. For guidance. Depending on the nature of a Company. Regarding the second question of place.. viz. (ii) Work-Organization.the Trainees are expected to do. Usually. Company’s Head Office. e. where Training may also be needed. the Manager has to think about the following points: (i) What should be taught? (ii) Where should it be taught? (iii) Should who teach it? (iv) How should it be taught? and (v) What time should it be taught at? In the reply of the first question. there may be certain other exclusive. what (i. factory and Office.e.e.. To impart the basic knowledge. And. supplementary areas. Practices and Procedures.g. normally there are three alternatives: the company’s. the Training Manager.

the programme can go well into the evenings. He tries to self his department to the trainees. Usually. every instructor should avoid too much of lectures and rather should concentrate on participative-activity. Some big companies have their own training department and human resource development departments. companies also have consultants. it simply means that the training should be imparted by different senior sales-executives. there should be adequate breaks. The reply of fourth question depends upon. some basic guidelines may be laid down to serve as instructions of the training-personnel. In between sessions. It pre-supposes enough number of trainees. By delegating the authority. But this approach has the disadvantage of total lack of their knowledge of company’s objectives and needs. it may be between 6-8 weeks in medium to large companies. However. to justify specialized staff. Of course. In doing so. Similarly. a judicial mix of all the three alternatives. suitable to all companies of any size is meet the man behind you. Another teaching-approach. who are specialists in their own areas. so as to serve best the company’s needs is advised. In the response to the question ‘By Whom’. he just shares his burden. However. External courses are also mostly general in nature. the overall respol1sibility is that of the sales manager/training manager. each head of the department talks with the trainees. the last question is at ‘What Time?’ It is difficult to precisely lay down the specific duration of training. who is teaching? Every individual has his own and unique way of teaching/explaining. so that interest in the course is maintained. he makes direct contact and he befriends them. the following points are may be covered: (i) His job-what he does? (ii) Goals-what his .training. However. the sales manager does not wash-off his hands. If required. Sometimes. Here. but retains overall control. During this type of a lecture.

unless the training-methods are devised and planned well in advance. because. as we know that after a series of tests. and a post-evaluation should be made after each kind of Training.what is scheduled for future? (iv) Needs- what is needed for his more effective working? (v) Help-how salesmen can help in effective working? To sum-up. it is true. ‘M’ = Method of the Training. In fact. . there is need for ana analysis of three main factors which include. sales –related marketing policies. job specifications. It is here. if the trainee has not learnt. During the identification of initial training needs. So. before-assuming charge of his independent territory. where’ A’ = Aim of the Training.. that he applies the principles enunciated during his training.. It is absolutely necessary that the supervisor looks after each new entrant. and maybe considered to be fit to be exposed to actual field conditions. it would result in a huge waste of valuable resources of the company.e. (ii) the company and (iii) the desired level of skills in sales-techniques. the initial training-programme ends with the achievement of basic-objectives laid down for it. i. and ensures their proper seasoning. trainee’s background and experience. for a couple of weeks. and ‘E’ = Evaluation. ‘C’ = Content of the Training. ‘E’ = Execution of the training-programme. Sometimes. It is vital that training needs be identified by management before any training is done. a person of below average qualities cannot get selected for the job. a new entrant is assigned to an experienced senior salesman. then starts the on-the-job training. It is sometimes said.department does presently? (iii) Innovations. Two main factors to be considered are the initial sakles training programs and the continuing sales training programs. analysis etc. so that he gets practical training. the trainer has not taught. By this time the trainee is expected to have acquired basic grounding in (i) product-knowledge. A good training schedule may be prepared on the basis of ACMEE principle. A Training-Programme should be executed scientifically.

under his charge. (compared with the set standards) and reasons for variances are established. at the office. refresher courses and development programmes.e. need assistance. and perform better on an on-going-basis. and the salesman is educated. on how to overcome them. Development-process could be carried out in two ways: (1) Field.. the sales manager must ensure the ways for their continuous development.training aims at rendering continuous help to the salesman. during his day-to-day working. to get over his initial difficulties. the sales-executive in-charge has to follow the points: (i) Compares his charge’s field-performance regularly. where sales-executive develops each individual new-entrant salesman. The new-entrant salesman is encouraged to incorporate offered suggestions in his work. and (2) Through sales-meetings. It has been noticed that even the seniors. . SALES FORCE DEVELOPMENT It is assumed that the newly trained salesmen charge of his territory after initial- training freely. on-the-job training. The standards of performance that the salespeople have learnt during their training must be properly channelized. i. with good performance-records. (ii) Weak areas are also identified. Field. to give continued good performance. But. And it must be remembered that the development is a continuous process and is the key to make the sales-force really more and more productive/efficient. For this.

However. (1) Identifying the Perfect Customer Every time the company must do the task of personal selling’s sales-force. The salesman haste call on prospects and tries to convert them into customers. rather than on the quality of calls. The preparation 0fahit-list designating levels of attractiveness to potential- customers. in which Marketing. which are less likely to yield results i. to target one’s effort on a smaller number of better calls. That would mean that the ‘Call-rate’ can be better targeted on promising- prospects. (iii) The weak areas observed by the sales-executive in-charge. This is particularly valuable. offers promising-pickings. to act and perform in a more productive manner. they can plan their day in a more effective way. This will reveal general weaknesses of initial training. METHODS OF IMPROVING SALES-FORCE PRODUCTIVITY In the ensuing lines. and would help set objectives of the refresher course for the future. in the classification. and little time is wasted on contacts. One of the drawbacks of asking salespeople to carryout a number of calls-per-period is the danger that one tends to concentrate on the number. It will also help in improving the quality of training for future batches. some time on the C=Fair and none on the D=Poor.. be a powerful tool to spur productivity. one can use the standard industrial classifications (sics). it is more sensible. the company may adopt its own basis to . can thus. In the case of industrial goods. in the selling-effort. it is tried to explore a few important areas. However. as the basis for categorisation of customers.force. At this point. sales.e. if market research has established which group/class. should be tabulated on corporate basis. by allowing more of their time and effort upon A=Excellent or B=Good Customers. Oriented Companies can help their sales.

buyers. (iv) The personality of buying-decision-makers and/or their motivational stimuli (e. As a guide/salesperson.. users. whom you’re competitors are in a far better position of penetrating. and the respective roles of each member. (ii) Segments that serve potential-customers. as a whole. In this process of selling. Each one of them is to be . willing to purchase from . some type of selectivity is essential to run the sales. the main participants are deciders. (iii) The nature of firm’s products. techniques and production-processes.force. However. functions. Each one of these has a role to play.suit its unique aims/objectives and needs. sometimes supportive and sometimes become barrier. The situation gets further complicated in the case of large firms. as a tight and effective force. But bear in mind not to target those customers. thereof. (v) The geographical location of the customers.g. No two bases need be the same. where there are many members in this decision-making unit (DMU). for this basis of categories. sales-person deals with a number of customers. the following points must be considered: (i) Size of the firm and/or its consumption-level (sales-volume). Understanding the Customer’s Decision-Making Unit (DMU) Generally.large firms or from small firms only). A good sales-person must understand the way this unit. influencers. and gatekeepers etc.

in the most productive and cost- beneficial way. the sales-person would be addressing a customer about whom his or her knowledge-level is so high. exhibitions etc. which should include: annual reports and published accounts. direct-mailing. a scrap-book of published material about the firm. It is suggested that he may contact. it is impractical. inefficient and often positively imprudent. In case the sales-department has a fairly small number of large potential (key) accounts. Whatever selling-technique the sales-person adopts.communicated. designing and integrated communication programme’ etc. that a true relationship can easily be forged. If this database is complete and up-to-date. with that of its competitors. However. (iii) The sales manager may prepare a record about ever] one of more promising customers. for the sales-persons to contact them all. (iv) The sales manager may also prepare a comprehensive list of DMU’s members. organisational details. (ii) He has to concentrate on the most important and decisive members of this DMU of the buyer (customer). However. especially those upon whom they can have maximum impact. a comparison of the firm’s performance. the aim should be. nor too little. and ideally. a ‘‘who-is-who’’ of the personnel in the company. through company’s literature. in one form or the other. we can also prepare an integrated communication . together with the other sub-departments of marketing. company’s literature and product-specifications. it must be ensured that: (i) Every member of the DMU receives the right amount of information neither too much. the less important or less accessible members of this unit. to target each member of the DMU.

the next thirty as adequate. the former are enthusiastic. That makes it rather impossible to achieve total homogeneity of behaviour. which is so very different from that of others?” If one could identify. and sloggers at the other. Once the sales-force has been categorised into clearly defined Groups. There are the high-flyers at one extreme. plans and manages time. one would know how to develop new training-methods. in front of a “Customer”. based on their performance quality. even where the total catchments market consists of only not more than a couple of dozen companies. in some detail. by analysing the level of performance of individual sales-people. the next twenty percent as good. Thus. . how the ‘Star’ behaves. and this should help in discovering areas. but results do not come easily to them. creative and effective. attitude. ‘one can ask a simple question: “What does the ‘Star ‘do. and performances. and the remaining forty percent are treated as ‘problem children’. However. the top ten percent as the stars. (3) Learning from the Star Performers Sales-Force is a heterogenic lot of numerous personalities. the way he (or she) communicates the message. 1he latter may work hard.programme with DMU-members of these Companies. in which Productivity could be improved. uses Sales-Aids etc.. one can easily designate. for the rest of the force. It is rather surprising to note that a large number of firms do not bother to collect the most elementary information about the client-company. into the Selling and Buying-Environment. an insight would be gained.

The agenda should be made known to the participants in advance. or that of the Regional Manager. and proper and “business-like atmosphere” should be created. are usually an annual affair. should have the following in-built ingredients: (a) Location: It should be held at a place. (c) Agenda: A proper Agenda should be framed. (d) Periodicity: The sales meeting should have a definite periodicity. National-level sales-meetings/conferences. where any additional information. Adequate arrangement should be made for the seating of the participants. This will help in selecting and assigning the subjects for discussion. are ideally suitable. Company’s Headquarters. The “objectives” of such sales-meetings are: (i) training and development of individuals. to suitable hands. This ensures that the participants are well prepared. can be easily made available. (ii) to inform and get the feedback-information. (iii) to stimulate and motivate. important avenue for the development of the sales-force. keeping in view the needs. and (iv) to provide a common platform for exchange of experience.(4) Sales-Meetings (Conferences) This is another. (e) Activities: There should be proper allocation of work. A sales meeting to be successful. so that each participant knows what to expect from whom. (b) Audience: The level of intelligence of participants should be considered. Head Office of the Sales Manager. for which the Meeting is being held. The Convener should .

(iii) if the salesman fails to identify his weak areas. may in some cases be asked to rehearse these. After the call(s) is/are over the day.do well to ensure a “participative atmosphere” in the Meeting. The appraiser has to watch the salesman. This will put him in a proper frame of mind. will go a long way. and (ii) the presence of the appraiser. during the day and keep a mental note of his strong and weak areas. (5) Kerb-Side Conferences These conferences aim at a random appraisal of the performance of a sales-man. (ii) the salesman is now asked to analyse the call(s). (vi) any follow-up action is then specifically pointed out. The sequence of this appraisal. and properly recorded and graded. does not influence the sales-person’s work-pattern. where the work is systematically appraised. on his weaknesses is obtained. in very clear terms. then gives instructions. in ensuring success of the meeting. (vii) before . and is usually done on a monthly basis. on how to overcome these weaknesses. and reasons thereof. identify the problems not properly tackled. even after questioning. on an appraisal-form. to reduce the element of any doubt. (v) the appraiser. It should be ensured that (i) the salesman is not calling on his friendly customers on that day. (iv) once the deficiencies have been isolated. It is essential that the agreement of the salesman be obtained to such an appraisal-form. The salesman. and he will be receptive to suggestions. could be like this: (i) the appraiser appreciates the skills that have been employed. the appraiser tells him about these. taking a day’s work into consideration. salesman’s concurrence. A little ‘Creativity’. the appraiser and the salesman deferred to a quiet place. on his part.

but heavily depend on the ability and skills of the appraiser. (v) product-development. It is a good medium to keep the salesman educated about day-to-day matters of changes/interests. the appraiser says a few words of encouragement and concludes on a note of optimism. No time is lost in waiting for the next sales-meeting/conference. to face the challenges of competition. training and development is also continued through sales bulletins.parting. usually once a year. . with confidence.. However. generalities should be avoided. (since the last conference/meeting). Such courses make the sales-force adequately prepared. so as to arouse the salesman’s interest and is easily understood by the recipient. the refresher courses are held at the company’s headquarters. as the process is very expensive. The information reaches him through the bulletins. (iii) market-intelligence. (iv) sales- meetings/conferences etc. The course-content is usually based on the feedback-information from (i) company’s activities. periodically. (ii) sales-executives. to pinpoint deficiencies and offer remedial measures. (6) Refresher Courses Generally. while the salespeople are at work. Such kerb-side meetings are very useful for the purpose of increasing the productivity of employees. the language used in he bulletins should be crisp and to the point. (7) Sales Bulletins Lastly but not least. However. (vi) technical areas affecting the company etc. and also when it is urgently required.

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It can be defined as a dynamic process set in motion by creating or arousing internal needs that activate goal-directed efforts and determine their intensity and persistence. Motivation is derived from the Latin term ‘movere’ meaning ‘to move’. COMPENSATION AND MOTIVATION OF SALES PERSONNEL INTRODUCTION Successful sales managers have three primary concerns in managing the sales force. Among the most important tools for accomplishing these three objectives is the organization’s compensation plan. The sales force of any company needs to be compensated adequately to keep its morale high and to enable it to contribute to its maximum. administered in the way factory workers can be monitored. It is generally regarded as the process of getting people to work towards the achievement of an objective. underlying which are certain needs or desires. The salesforce is required to be self starters. Sales force cannot be controlled. and holding on to good sales people. highly ambitions. Motivation stimulates the movement of an individual. result oriented and go- . motivating them to work both effectively and efficiently. The building and maintenance of sales force is possible through proper compensation plan.attracting outstanding salespeople. In simple words motivation is goal- directed behaviour. A sales force is the representative of the company’s philosophy and business principles.

getters. Thus, the salesforce has to be kept highly motivated and committed.

REQUIREMENTS OF A GOOD SALES COMPENSATION
PLAN

A good sales compensation plan meets seven requirements. First, it provides a
living wage, preferably in the form of a secure income. Individuals worried about money
matters do not concentrate on doing their jobs well. Second, the plan fits with the rest of
the motivational program-it does not conflict with other motivational factors, such as the
intangible feeling of belonging to the sales team. Third, the plan is fair-it does not
penalize sales personnel because of factors beyond their control-within the limits of
seniority and other special circumstances, sales personnel receive equal pay for equal
performance. Fourth, it is easy for sales personnel to understand- they are able to
calculate their own earnings. Fifth, the plan adjusts pay to changes in performance. Sixth,
the plan is economical to administer. Seventh, the plan helps in attaining the objectives of
the sales organization.

DEVISING A SALES COMPENSATION PLAN

Whether contemplating major or minor changes or drafting a completely new

sales compensation plan, the sales executive approaches the project systematically. Good

compensation plans are built on solid foundations. A systematic approach assures that no

essential step is overlooked.

The first step is to re-examine the nature of the sales job. Up-to-date written job
descriptions are the logical place to start. Other aspects

of company operations are considered in relation to their impact upon the sales job. Sales

department objectives are analyzed for their effect on the salesperson’s job. The impact of

sales-related marketing policies is determined. Distribution policies, credit policies, price

policies, and other policies affect the salesperson’s job. Current and proposed advertising

and sales promotional programs assist in clarifying the nature of the salesperson’s goals,

duties, and activities.

Most large companies, and many smaller ones, use job evaluation system to

determine the relative value of individual jobs. Job evaluation procedure is not scientific;

it is an orderly approach based on judgement. It focuses on the jobs, without considering

the ability or personality of individuals who do the work. Its purpose is to arrive at fair

compensation relationships among jobs.

Traditionally, sales executives have opposed using formal job evaluations to

determine the compensation levels of sales personnel. They contend that compensation

levels for sales personnel are more closely related to external supply-and-demand factors

than to conditions inside the company.

Because compensation levels for sales personnel are related to external supply-

and-demand factors, it is important to consider prevailing compensation patterns in the

community and industry. Management needs answers to four questions- (1) What

compensation systems are being used? (2) What is the average compensation for similar

positions? (3) How are other companies doing with their plans? and (4) What are the pros

and cons of departing from industry or community patterns?

A programme for setting compensation of sales personnel is sound only if it
considers the relation of external compensation practices to those of the company.
Effective sales executives maintain constant vigilance against the possibility that the pay
of sales personnel will get out of line with that paid for similar jobs in the community or
industry.

Management must determine the amount of compensation salesperson should

receive. Although the compensation level might be set through individual bargaining, or

on an arbitrary judgement basis, neither expedient is recommended. Management should

ascertain whether the caliber of the present sales force measures up to what the company

would like to have. Management weights the worth of individual persons through

estimating the sales and profit that would be lost if particular salespeople resigned.

Another consideration is the compensation amount the company can afford to pay.

A sales compensation plan has as many as four basic elements: (1) a fixed

element, either a salary or a drawing account, to provide some stability of income; (2) a

variable element (for example, a commission, bonus, or profit-sharing arrangement), to

serve as an incentive; (3) an element covering the fringe or “plus factor”, such as paid

vacations, sickness and accident benefits, life insurance, pensions, and the like; and (4) an

element providing for reimbursement of expenses or payment of expense allowances. Not

every company includes all four elements. Management selects the combination of

elements that best fits the selling situation.

Management should consult the present sales personnel. Management should
encourage sales personnel to articulate their likes

and dislikes about the current plan and to suggest changes in it. Criticisms and

suggestions are appraised relative to the plan or plans under consideration.

For clarification and to eliminate inconsistencies the tentative plan is put in

writing. Then it is pre-tested. The amount of testing required depends upon how much the

new plan differs from the one in use. The greater the difference, the more thorough is the

testing. Pretests of compensation plans are almost always mathematical and usually

computerized.

The plan is then revised to eliminate trouble spots or deficiencies. If alternations
are extensive, the revised plan goes through further pretests and perhaps another pilot
test.

At the time the new plan is implemented, it is explained to sales personnel.

Management should convince them of its basic fairness and logic. The sales personnel are

made to understand what management hopes to accomplish through the new plan and

how this is to be done. Details of changes from the old plan, and their significance require

explanation. Provisions for follow-up are made. From periodic checkups, need for further

adjustment is detected. Periodic checks provide evidence of the plan’s accomplishments,

and they uncover weaknesses needing correction.

TYPES OF COMPENSATION PLANS

Straight-salary plan
This is the simplest compensation plan. The salespeople receive fixed sum of money at regular
intervals (usually every week or every month), representing total payments for their services.
Such plans are most common among industrial goods companies than among consumer goods
companies. The advantage of using straight-salary plan is that it provides strong

The disadvantage of using this method is the fact that there is no direct monetary incentive and therefore many sales people do only average rather than an outstanding job. and consider individual accounts privately owned. the star salesperson is paid more than he or she would be under most salary plans and low producers are not likely to be overcompensated. Here. However the straight commission weakness is that it provides little financial control over sales peoples activities. with or without advances against earned commissions. financial control over sales personnel and management can direct their activities along the most productive lines. The combination has benefits which include. Combination of Salary and incentive Plan (salary plus Commission) Most of the sales compensation plans are combinations of salary and commission. the fact that it provides maximum direct monetary incentive for the sales person to strive for high-level volume. the sales volume is believed to be the best productivity measure. The management has both financial control over sales activities and the apparatus to motivate sales efforts. Straight-Commission plan This is whereby the individual sales person is paid according to their productivity. The combination also has disadvantages which include. Straight commission with the company paying expenses. Most developed as attempts to capture the advantages and offset the disadvantages of both the salary and commission systems. Straight commission plan has two broad classifications which include: - Straight commission with sales personnel paying their own expenses. which is a questionable assumption. whereby advances may or may not be made against earned commissions. . The sales people re also careless about transmitting their reports and also neglect follow up leads. clerical costs are higher than for either salary or a commission system. they resist reduction of the size of the sales territories. The straight commission has several advantages which include. The main attrac tion of the straight-line plan to sales personnel is that stability of income provides freedom from financial uncertainties inherent in other plans. Straight commission plan is also characterized by great flexibility by revising commission rates applying to different products. sales personnel having both the security of stable incomes and the stimulus of direct financial incentive.

performing promotional activities. setting up displays or carrying out other assigned tasks. when the product is in the introductory stage the function of the salesman is to create new markets and make customers understand how to use the product as in the case of a new consumer durable product like vacuum cleaners of a new electronics products used by certain industries. They also increase with promotion of the salesman. Sometimes. the salesman has to stay overnight his boarding and lodging allowances are also provided for. obtaining new accounts. following up leads. However. industrial or electronic products may offer a high basic salary. . the basic salary of the salesman may be on the higher side. In the Maslow hierarchy fringe benefits contribute to fulfillment of safety and security needs although others contribute to the fulfillment of esteem and other higher-order needs. Bonuses never appear alone. they are not motivating factors. A commission varies in amount with sales volume or other commission base.Use of Bonuses Bonuses are different from Commissions – a bonus is an amount paid for accomplishing a specific sales task. Bonuses are paid for reaching a sales quota. they always appear with one of the main sales compensation methods. The direct compensation package of a salesperson thus consists of the basic pay plus allowances covering all travel and entertainment expenses etc. a company employing technical person as salesman for selling. Fringe benefits are given to all employees and do not vary with job performance but they prevent job dissatisfaction. say. The basic salary and other allowances are revised from time to time. The bonus in other words is an additional financial reward to the salesperson for achieving results beyond a pre -determined minimum. In case. TYPES OF COMPENSATION Direct: The direct compensation package for a salesman is more or less the same in all companies. Fringe Benefits Like monetary compensation.

On an average a salesman has to undergo a training course every one or two years. These programmes enable interaction between salesmen of different territories as well as provide them with latest developments in the field. A fixed percentage of sales achieved over and above the target is also set. (ii) Salary plus share in profits. . Indirect: It consists of financial as well as non-financial incentives. Every salesman is assigned a fixed quota. Non-financial incentives (a) Training programme. Also salespeople working to obtain contracts are generally given a share in profits rather than awarded on direct sales. The selling expenses to sell a product may also be large and this is incorporated in the profit sharing scheme as it acts as a control mechanism. the salesman receives direct salary and a commission in addition to it. The commission is awarded on achievement of the targeted quota. This type of compensation scheme ensures a direct salary as well as an in-built motivation system through incentives. It is generally suggested for a company selling high value items with high profit margins. Financial incentives (i) Salary plus commission on sales above a certain amount- Herein. These training programmes are viewed as an indirect benefit by the salesmen. The incentive here is based on profits earned.Most companies offer training programmes for their salesmen.This is not a very prevalent method.

The sales force must be enterprising.In addition to training programmes the award ceremonies for outstanding achievements in sales are held in exotic locations like hill stations or five-star hotels. The awards are presented through foreign dignitaries or important people in the field. They have to approach the market with renewed vigour. have good communication skills and last but not the least. the sales force also needs a break from the monotony. some factors do predominantly shape the structure of the company’s compensation plan. When the product has firmly established itself. The relation with product life cycle The amount of selling effort is directly related with the stage at which a product is in its life cycle. Other indirect benefits like training . In the growth stage. have a good knowledge of the product. have tremendous stamina to work. willing to travel. The compensation structure is a function of selling effort. the motivation of the sales force has to be sustained to exploit all the opportunities available in the market. take criticism easily. thus providing the salesman with the much needed recognition. To keep such a sales force motivated. When the product is in the introductory stage the company needs a dynamic sales force which can establish the product in the desired market. At this point indirect compensation schemes which are incentive linked play an important role. (b) Awards. FACTORS INFLUENCING COMPENSATION Although the basic structure of a compensation plan may be similar across the companies. recognitions and prizes. adequate compensation is the basic need.

persistence. DIMENSIONS OF SALES MOTIVATION Motivational effort is generally thought to include three dimensions. and choice refers to the salesperson’s choice of specific actions to accomplish job- related tasks. Intensity refers to the amount of effort the salesperson expends on a given task. and choice. persistence refers to how long the salesperson will continue to put forth effort. this cannot be generalized and depends largely on the individual. foreign trips for training and understanding markets. The number of people involved with the product has also to increase marginally. However. and competitor’s practices are other important factors influencing compensation. When the product is in the decline stage some fresh incentive schemes may be introduced in the compensation scheme to generate fresh interest in the product. For example. . Likewise.programmes in good environmental locations. He may increase the number of calls he makes on this customer (intensity) until he gets the first order (persistence). Role of selling in marketing strategy of the company. Their age and size of family or number of dependents play an important part in the preference for a basic salary and/or incentives. a salesperson may decide to focus on a particular customer (choice). Compensation related with demographic characteristic The compensation package preferred by the salespeople depends upon their demographic characteristics also.intensity. intensity and persistence may affect the choice of specific actions. promotions to much responsible positions are the requirements at this stage. The choice of a specific action may affect the intensity and persistence.

and they often feel isolated and detached from their companies. and weaknesses.Salespeople experience a wonderful sense of exhilaration when they make a sale. problems. the individuality of salespeople. Salespeople spend a large amount of time by themselves calling on customers and travelling between accounts. But they must also frequently deal with the frustration and rejection of not making the sale. The sales job consists of a large variety of complex and diverse tasks. the company should develop a separate motivational package for each sales person. IMPORTANCE OF MOTIVATION The nature of the sales job. they usually require more motivation than is needed for other jobs to reach the performance level management desires. strengths. the direction of the salesperson’s effort is as important as the intensity and persistence of that effort. and the continuing changes in the marketplace make motivating sales persons a particularly difficult and important task. and even threatening. . the diversity of company goals. Ideally. Individuality of salespeople. while many customers are gracious. Unique nature of the sales job. Each sales person may respond differently to a given motivating force.Sales people have their own personal goals. Consequently. This means that most of the time they are away from any kind of support from their peers or leaders. Because of this. some are rude. and thoughtful in their dealings with salespeople. Even very good sales person does not make every sale. Therefore. demanding. it is important that the sales person’s efforts be channeled in a direction consistent with the company’s strategic plan. Also. courteous.

management must develop a motivational mix that appeals to a whole group but also has the flexibility to appeal to the varying individual needs.but a totally tailor-made approach poses major practical problems. Changes in market environment. rather than admit this. developing an effective combination of motivators is difficult. With diverse goals such as these.Changes in the market environment can make it difficult for management to develop the right mix of sales force motivational methods. In this situation. What motivates sales people today may not work next month because of changes in market conditions. How sales-people behave on the job is directly related to . Diversity in company goals. sales executives can face motivational problems when market conditions remain stable for an extended period of time. A related point is that the sales people themselves may not know why they react as they do to a given motivator. and these goals may even conflict with each other. For example. he will say that he is motivated by a desire to serve his customers.A company usually has many diverse sales goals. however. In reality. a salesperson may engage in a certain selling task because it satisfies his ego. the same motivators may lose their effectiveness. One goal may be to correct an imbalanced inventory and another may be to have the sales force to missionary selling to strengthen long-term customer relations. Conversely. or they may be unwilling to admit what these reasons are. MOTIVATION THEORIES Researchers in the behavioral sciences have shown that all human activity is directed toward satisfying certain needs and reaching certain goals. These two goals conflict somewhat and require different motivating forces.

The sales manager is responsible not only for motivating the sales force per se but also for counseling each salesperson individually to find the source of that person’s self-motivation. Therefore. Relative gratification of the needs at one level activates the next-higher order of needs. with greater emphasis placed upon understanding and accepting the idea of how motivation works.their individual needs and goals. The hierarchy-of-needs theory implies that salespeople come to their jobs already motivated and that they only need the opportunity to respond to the challenges of higher-order needs. Many people feel that individual motivation is dependent upon whether or not salespersons find something in the job that is personally motivating for them. Maslow’s Need Theory Maslow’s well-known theory contends that people are motivated by a “hierarchy” of psychological growth needs. . the job of the sales manager must be redefined. The following Exhibit presents the order of priority of the needs individuals seek to fulfill and the needs sales managers must consider. some individuals will behave differently and will be more successful because of different motivational patterns. Thus.

fringe benefits medical expenses. etc. etc. incomes. shelter. living conditions of sales force Safety needs Physiological needs . Social needs Food. promotion s opportunities. self- Creativity development workshop Self-fulfillment Recognition Status Provide greater job E responsibilities. s Freedom from worry about Provide a balanced package of security of jobs. EXHIBIT: HIERARCHY OF HUMAN NEEDS AND THEIR IMPLICATIONS FOR SALES MANAGERS Maslow’s Hierarchy Salesperson’s Needs Sales Manager’s Task Self-actualization needs Self-development Provide greater freedom. etc. public t recognition for achievements e e m Social interaction Maintain close relationships Friendship with sales force n Acceptance among peers e and superiors e Sales meetings Newsletters. d memoranda. overall Be aware of general health and health.

They comprise the environment. and working conditions. Gratification of needs at one level in the hierarchy activates needs at the next-higher level. Since various salespeople are at different need levels at any one time. they must be given opportunities to activate and satisfy higher-level needs if they are to be successfully motivated toward superior performances. supervision. Sources of dissatisfaction are called hygiene factors because they are necessary to keep employee performance from dropping or becoming unhealthy. the greater its importance and strength. Sales managers must keep track of the level of needs most important to each salesperson. sales managers must maintain hygiene factors (pleasant work environment) . They relate to the nature or content of the job itself and include responsibility. Motivator-Hygiene Theory: Herzberg’s classic research studies found two types of factors associated with the satisfaction or dissatisfaction of employees. to improve productivity. sales managers have to retain their sensitivity to the evolving needs of individual sales person through close personal contact with each member of the sales force. Before salespeople become stagnated at one level. According to Herzberg’s theories. include salary. Sources of satisfaction are called motivators because they are necessary to stimulate individuals to superior efforts. company policies and administration. from the beginning trainee to the senior sales representative. Sales managers applying need theory should keep in mind its two major premises: The greater the deprivation of a given need. and opportunities for growth and advancement. recognition. achievement.

Assign salespeople specific or specialized tasks enabling them to become experts (e.g. Achievement Theory: Research by McClelland and his associates confirmed that some people have higher achievement needs than others. and are willing to take risks doing asks that may serve as stepping stones to future rewards. they labeled such persons “achievement oriented”.. Children who are given greater responsibilities and trusted from youth to do things on their own are more likely to have achievement-oriented profiles. These individuals receive more satisfaction from accomplishing goals and more frustration from failure or unfinished tasks than the average person.g. seek challenging tasks. training new salespeople on “how to close a sale”). Here are some examples of job enrichment: Give salespeople a complete natural unit of work responsibility and accountability (e. Grant greater authority and job freedom to the salespeople in accomplishing assignments (e.. specific customer category assignments in a designated area). let salespeople schedule their time in their own unique way as long as organizational goals are met). Any achievement- related step on the . (Of course. selling a new product category.g.g. Introduce salespeople to new and more difficult tasks and to challenges not previously handled (e. Send periodic reports and communications directly to the salesperson instead of forwarding everything via the sales supervisor..while providing motivators (job enrichment) for the sales force. opening new accounts. or being assigned a large national account). Achievement-oriented people readily accept individual responsibility. the supervisor must be informed about what information the salespeople are receiving).

Although salespeople generally exhibit traits of both task achievement and group affiliation. They are less self-centered. usually help bind the group together. the path is noncontingent. it is up to the sales manager to learn the dominant needs of individual salespeople in order to devise specific strategies for motivating them. specific feedback is also essential so that these sales-people can know whether they are successful or not. affiliative people are not as competitive nor are they as anxious about uncompleted tasks. Managers may have to temper negative feedback because achievement-motivated people may resign if they feel that they are going to be unsuccessful. A path is contingent if the individual feels that immediate success is required in order to have the opportunity to continue toward further successes and that immediate failure causes loss of the opportunity to continue on the path. Finally. If immediate success or failure has no effect on the opportunity to continue on the path toward future success or failure. Frequent. they require only general feedback regarding goal achievement. competition among such salespeople can become cut-throat and damaging to the organization unless carefully monitored and controlled. and are less able to tolerate traveling jobs involving long periods of solitude. people compare their relative work contributions and rewards with those . Inequity theory: According to the inequity theory of motivation.“success path” may include rewards (positive incentives) or threats (negative incentives). Affiliative types like to work in groups and want to be accepted by others. Sales managers need to identify the achievement-motivated salespeople and then give them personal responsibility for solving definable problems or achieving certain goals. Contrasted with these achievement-oriented individuals.

or a concept of exactly what their job entails. more job satisfaction. Because salespeople often lack sufficient job knowledge. Finally. Inequity is experienced when a person feels either under rewarded or over rewarded for his or her contribution relative to that of others. tend to decrease their work efforts: people who feel overpaid tend to increase their efforts. and a lower propensity to leave. As “positive-thinking” minister and author Robert Schuller says: “Many people hear through their peers. must deal across departmental boundaries. relative to others making similar contributions. Although individuals may respond in unique ways to inequity. If inequity is perceived by some of the salespeople. less work tension. more opportunity for job innovation. it is important that sales managers learn how individual sales representatives feel about the equity of their contributions and rewards compared with those of others. Salespeople usually . most people who feel underpaid or under rewarded. precisely defined goals and clear role expectations can be motivational. and are challenged by complex problems requiring innovative solutions. Role clarity: Donnelly and Ivancevich contend that one of the most important needs of salespeople is role clarity. The stronger the feeling of inequity. According to inequity theory. Empirical research with salespeople correlates increased role clarity with greater job interest. the sales manager needs to correct the situation if inequity really does exist or help the salespeople reduce tensions by altering their perceptions of the comparison group’s relative contributions and rewards. the stronger the drive to reduce tension. People may also reduce their inequity tensions by distorting their perceptions of their rewards and contributions versus those of others. individuals may leave a perceived inequitable situation by quitting the job or changing the comparison group.of other individuals in similar situations. not their ears”.

These meetings allow the sales manager to understand the personality. Clearly written job descriptions and management-by-objectives (MBO) conferences that set precise goals (mutually agreed upon by the salesperson and sales manager) can have important motivational effects and stimulate job satisfaction. at head office and at the sales meetings/conventions.want and need more information about what is expected of them and how they will be evaluated. The objectives when duly .These are highly regarded by sales managers in the motivation of their sales teams. MOTIVATIONAL TOOLS The simple motivational tools of early years such as only financial benefits prove to be a poor method of motivation beyond physiological and safety needs satisfaction on account of the unique aspects of a salesperson’s job. Some of the factors that make a special mark on sales force motivation are discussed below. Clarifying the role expectations for salespeople by individualizing achievement plants and providing a continuous flow of helpful information will consume significant amounts of sales management time.Clarity of job and what is expected from the salesperson is a great motivator. But this seems to be one of the least complicated. and surest ways of obtaining higher sales force productivity. Meeting between manager and sales force. least expensive. needs and problems of each salesperson. This provides a number of opportunities for improving motivation. Clarity of job. 1. The non-financial incentives. 2. This provides opportunity to managers to meet their salesforce in the field. become an important component of motivation.

positive feedback. Because the salesperson should regard the quota as fair. gain social satisfaction and express their views on matters directly affecting their work. it must be regarded as fair and attainable and yet offer a challenge to him. properly connected and linked with the reward and recognition serve as source of motivation to the salesperson. Positive affect. 6. Most of the companies in India are now-a-days adopting this method to motivate their salesforce. it is usually sensible to allow him to participate in the setting of the quota. They promote team work. 3. It may encourage a higher level of sales in general. The purpose of the sales contest varies widely. dissolve social barriers. to increase the sales of a slow- moving product or to reward the generation of new customers. quantified and well defined.The sales contest is an important tool to motivate salesperson. 4.These are the devices of group motivation.If a sales target or quota is to be effective in motivating a salesperson. Sales conventions and conferences. and human warmth and understanding can impel others to . They provide opportunities for salesperson to participate. It provides an incentive to show better performance and secure more satisfactory results. inspire and raise salesperson’s morale. 5. Sales targets or quotas. The proper application of praise.The positive affect method is also an important techniques for motivating the salesforce to their best. Sales contest.

9.Although sales quotas. perform up to their capabilities. Freedom to work. 7. Some of the ways to extend recognition and honour to salesperson include . sales contests. making the job of salesperson more important in the organization. Leadership style of the manager. conventions and conferences have positive carry over effects.In order to perform the onerous duties and responsibilities. Freedom or autonomy satisfies the psychological needs and is like power pay (which is a reward). Reward and recognition. which refers to influence through referent power. more control over the types of promotional packages that are offered to their customers etc.Leadership style of the manager plays an important role in motivating the salesperson. Inspirational leadership. these are short lived techniques of motivating salesmen. On the other hand reward and recognition on salesperson accomplishments are more enduring and relatively economic methods of motivation. Identification or charismatic charm is an important tool in the motivational strategy of the management. 8. the salesperson must be given a reasonable amount of freedom and discretion in performing their job. This must be done in a genuine way and not be perceived as overtly-self serving. Discretion and freedom may be accomplished by allowing salesperson to develop their own call patterns.

Persuasion has the advantage of getting people to conclude that their actions were performed out of their own free will. sales trophies. In this situation. 10. . Congratulation telegrams from members of top management. managers use rational arguments to convince salesperson that it is in their own best interests to act in preferred way.One of the more common and recommended forms of inducing high levels of motivation is through persuasion. conferment upon the title of “salesman of the month/year”. mention in company newsletter. certificate etc. offering membership of social clubs. Persuasion. This leads to higher levels of self direction than reward or coercive modes of influence where one perceives he or she acts more as a function or external compulsion than internal volition.

personal selling may be assigned such qualitative objectives as:- 1. Depending upon company objectives and the promotional mix. 8. To keep customers informed on changes in the product line and other aspects of marketing strategy. These objectives generally are carried over from one period’s promotional program to the next. To assist customers in selling the product line (as through ‘missionary selling” ). 1 . To assist with (or handle) the training of middlemen’s sales personnel. 7. 6. 2. To search out and obtain new customers. 5. To provide advice and assistance to middlemen on management problems. To provide technical advice and assistance to customers (as with complicated products and where products are especially designed to fit buyers’ specifications). To do the entire selling job (as when there are no other elements in the promotional mix). To ‘service’ existing accounts (that is. 9. take orders. PERSONAL SELLING Setting Personal-Selling Objectives Types of personal selling objectives The qualitative personal selling objectives are long term and concern the contributions management expects personal selling to make in achieving long-term company objectives. to maintain contacts with present customers. 3. and so forth). To secure and maintain customers’ cooperation in stocking and promoting the product line. 4.

by selling the ‘optimum’ mix of company products) 3. In turn. All other quantitative personal-selling objectives derive from or are related to the sales volume objective. The sales volume objective-the dollar or unit sales volume management sets as the target for the promotional period-is the key quantitative objective. qualitative long-term personal-selling objectives are set. To obtain some number of new accounts of given types 4. To capture and retain a certain market share 2. Thus. Setting the sales volume objectives influences the setting of other quantitative personal selling objectives. The basic considerations in setting qualitative personal selling objectives are decisions on sales policies and personal selling strategies and their role in the total promotional program. To keep personal-selling expenses within set limits 5. To secure targeted percentages of certain ‘accounts’ business. After this role is defined. 10. The quantitative objectives assigned to personal selling are short term and are adjusted from one promotional period to another. the qualitative personal selling objectives become the major determinants of the qualitative personal-selling objectives. SOME IMPORTANT TERMS Market potential A market potential is an estimate of the maximum possible sales opportunities present in a particular market segment and open to all sellers 2 .To collect and report market information of interest and use to company management. To obtain sales volume in ways that contribute to profitability (for example. discussion here focuses upon the setting of sales volume objectives. among them the following: 1.

It maybe for a manufacturer’s entire marketing area or for any subdivision of it. Sales forecast A sales forecast is an estimate of sales. an estimate of the maximum number of low-priced pocket cameras that might be sold in San Mateo County. assuming the application of appropriate marketing periods. during the calendar year 1987 by the Eastman Kodak company would be the 1987 San Mateo county sales potential for Eastman Kodak low-price pocket cameras. such as to Eastman Kodak company. an estimate of the number of low-priced pocket cameras that might be sold in San Mateo County. or operating. Sales potential A sales potential is the estimate of the maximum sales opportunities present in a particular market segment open to a specified company selling a good or service during a stated future period. Such forecasts are short-term. California. while a market potential indicates sales opportunities available to an entire industry. sales forecasts rather than long-range sales forecasts.of a good or service during a stated future period. Thus. A market potential indicates how much a particular product can be sold to a particular market segment over some future period. in dollars or physical units. A sales forecast may be for a single product or an entire product line. Long-range sales forecasts. which are used for planning production capacity and for long-run financial planning. California. A sales potential represents sales opportunities available to a particular manufacturer. To illustrate. although of 3 . during the calendar year 1987 by all sellers competing for this market would represent the 1987 San Mateo County market potential for low-priced pocket cameras. in a future period under a particular marketing program and an assumed set of economic and other factors outside the unit for which the forecast is made.

Who are the prospective buyers and/or users Some companies find answers to these questions in their internal records. Who buys the product? 2. but most companies especially those that use long marketing channels must use field research to obtain meaningful answers. Marketing identification studies reveal the characteristics that differentiate the market segments making up the products market potential. buyers. Frequently they undercover the unexploited market segment whose patronage might be obtained through redirecting personal-selling effort or changing 4 . are so tentative that sales planners give them only passing attention. that an operating sales forecast is a prediction of how much of a company’s particular product (or product line) can be sold during a future period under a given marketing program and an assumed set of outside factors. sex. income. sales forecast that is important to the sales executive. It is the short-term or operating.interest. geographical location. education. Who uses it? 3. In industrial-goods marketing. and social class. In consumer-goods marketing. users and prospects are identified and classified according to such characteristics as age. ANALYSING MARKET POTENTIAL Market identification The first step in analyzing a product’s market potential is to identify its market. Market identification requires finding out 1. users and prospects are identified and classified by size of firm. buyers. type of industry and the like. Keep in mind then.

promotional strategy. Sometimes, market identification studies provide, as
a side result, customer data on such factors as purchase frequency,
searching time expanded, unit of purchase, and seasonal buying habits.
When assembled and analyzed, these data help in estimating market
potential.

SALES POTENTIAL AND SALES FORECASTING

Sales potential as defined earlier, are quantitative estimates of the
maximum possible sales opportunities present in particular market
segments open to a specified company selling a good or service during a
stated future period. They are derived from market potentials after analyses
of historical market share relationships and adjustment for changes in
competitors’ selling strategies and practices.

A firm’s sales potential and its sales forecasts are not usually identical-in
most instances; the sales potential is larger than the sales forecast. There are
several reasons for this: some companies do not have sufficient production
capacity to capitalize on the full sales potential; other firms have not yet
developed distributive networks capable of reaching every potential
customer; others do not attempt to realize their total sales potential because
of limited financial resources; and still others, being more profit oriented
than sales oriented, seek to maximize profitable sales and not possible
sales. The estimates for sales potential indicates how much a company
could sell if it had all the necessary resources and desired to use them. The
sales forecast is a related but different estimate-it indicates how much a
company with a given amount of resources can sell if it implements a
particular marketing program.

SALES FORECASTING METHODS

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A sales forecasting method is a procedure for estimating how much of a
given product (or product line) can be sold if a given marketing program is
implemented. No sales forecasting method is foolproof-each is subject to
some error. Some methods are unsophisticated, such as the jury of
executive opinion or the poll of sales force opinion. Others involve the
application of sophisticated statistical techniques, as regression analysis or
econometric model building and simulation. Two sales forecasting methods
may be either sophisticated or unsophisticated, depending upon how they
are used –the projection of past sales and the survey of customer’s buying
plan.

Well-managed companies do not rely upon a single sales forecasting
method but use several. If different methods produce roughly the same
sales forecasts, then more confidence is placed in the results. But if different
methods produce greatly different sales forecasts, then the sales situation
merits further study.

Jury of executive opinion

There are two steps in this method; (1) high-ranking executives estimate
probable sales, and (2) an average estimate is calculated. The assumption is
that the executives are well informed about the industry outlook and the
company’s market position, capabilities, and explain their rationales.
Companies using the jury of executive opinion method do so for one or
more of reasons;

1. This is a quick and easy way to turn out a forecast.
2. This is a way to pool the experience and judgment of well-
informed people.
3. This may be the only feasible approach if the company is so young
that it has not yet accumulated the experience to use other
forecasting methods.
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4. This method may be used when adequate sales and market
statistics missing, or when these figures have not yet been put into
the form required for more sophisticated forecasting methods.

The jury of executive opinion method has weaknesses. Their
findings are based primarily on opinion, and factual evidence to
support the forecast is often sketchy. This approach adds to the
work load of key executive, requiring them to spend time that they
would otherwise devote to their areas of main responsibility, and a
forecast made by this method is difficult to break down into
estimates of probable sales by products, by time intervals, by
markets, by customers, and so on.

The Delphi technique

Several years ago researchers at the rand corporation developed a
technique for predicting the future that is called the Delphi technique. This
is a version of the jury of executive’s opinion method in which those giving
opinions are selected for their “expertise”. The panel of experts responds to
a sequence of questionnaires in which the responses to one questionnaire
are used to produce the next questionnaire. Thus, information available to
some and not to other experts is disseminated to all, enabling all to base
their final forecast on “all available “information. Some contend that “this
technique eliminates the bandwagon effect of majority opinion”.

INDIVIDUALIZING SELLING STRATEGIES TO CUSTOMERS.

The acid test of the appropriateess of personal-selling strategy comes when
particular salespeople interact with particular customers. From the
composite off all such interaction evolves the company’s achievement of its
personal-selling objectives. Management makes its first key decision on
personal-selling strategy when it determines the size of the company sales

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force. But after this decisions are implemented-after the desired number of
the desired kind of sales personnel have been recruited, and assigned to the
field-each sales person must individualize his or her own dealings with
each customer. The job, when boiled down to its essential, is to influence
customer behavior in ways that both benefit the customer and contribute to
the achievement of the company’s personal-selling objectives.

Regardless of whether the salesperson’s major role is that of order getter
or order taker and regardless of the ‘’basic selling style,’’ the extent of the
sales person’s success depends on the outcome of interactions with the
customers. Each time the sales person comes into contact with a customer,
the sales person says certain things, does certain things, and behaves and
reacts to the customers’ behavior should, and generally does, vary from one
sales call to the next.

The nature of the variation in the sales person’s approach to each
customer,Of course, is a matter of selling skill. This skill is a function of
both how good the sales parson’s preplanning of each sales call has been
and performance on the call itself. In doing the preplanning, the skilled
salesperson analyzes a great deal of information about the customer and
the nature of its business. What are its key objectives and problems? Who
in the customer’s organization makes and influences buying decisions, and
the like? What rival sales personnel from what companies compete for the
accounts order, and what are they like?
After analyzing this and similar items of information, the skilled
salesperson set definite goals to accomplish on each call. Next, the skilled
salesperson plots the selling strategy to use on each successive call in an
effort to achieve these definite goals, that is, what the salesperson plans to
do and when. Then the salesperson makes the scheduled sales calls. If all
goes according to plan, the salesperson achieves the goal set for each call,

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they are relied upon as individuals to plan and control their own activities. Whether personnel management focuses upon sales. or office workers. in other words. sales personnel work away from their coworkers and immediate superiors. to exercise close and constant supervision over sales personnel-at least not in the sense that one can supervise production and office workers. Furthermore. production. so sales personnel often are referred to as “account administrators” or “territory managers. Sales personnel of necessity are giving freer rein than are production or office workers. sales management has the important responsibility for helping them develop and improve their selling skills. How effectively salespeople perform their assignment tasks. so it difficult to develop a spirit of identity with and loyalty to the company and to weld them into a unified team. The salesperson’s job provides limited opportunity for face-to-face contact and supervision.’’ 9 . SALES FORCE MANAGEMENT Sales force management is a specialized type of personnel management. While the individual member of the sales force ultimately determine the success or failure of the company’s overall personal-selling strategy. is closely related to sales management’s effectiveness in providing them with instruction on sales techniques. the same set of problems needs considering. but each problem varies in nature and importance.and thus the salesperson contributes to the achievement of the company’s overall personal-selling objectives. for instance. and centralized direction of their activities is mainly by phone and mail. Most sales personnel visit the home office only infrequently. To a considerable degree. It is impractical.

Other unique conditions surround the selling job. Often the salesperson
is away from home and family for extended periods. Selling success [or
failure] depends upon prospects’ and customers actions and reactions;
disheartening order turndowns and rebuffs from customers require the
salesperson to repress normal responses and to suppress a natural
tendency to become discouraged. The psychological effects of these
conditions accentuate the need for sales management to pay continual
attention to motivational factors.

The steps in sales force management are the same as those in general
personnel management. Sales force management work, as shown in figure
10.1, starts with job analysis-determining the job objectives, the component
duties and responsibilities, performance criteria, and reporting
relationships. The output of job analysis is the written job description that
is used in deriving the necessary qualifications [job specifications] of the
employee. Qualified job applicants must be found, and this requires
decision on recruiting sources and methods. From the supply of applicants,
those meeting the job specifications are selected. After hiring, applicants
undergo initial training and throughout their entire careers with the
company- receive continuing training through diverse delivery systems.
Compensation plan are designed to provide appropriate levels and
methods of compensation.

PART THREE SALES FORCE MANAGEMENT

When the salesperson is assigned to the field, other personnel activities
come into play. The salesperson is motivated to plan and make productive
use of working time. To improve the effectiveness of sales calls,
salespersons are counseled on working habits and methods. Controlling
sales personnel requires analysis of selling records and evaluations of sales
performance.

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Sales force management activities mesh into a system. Faulty execution
of any activity results in complications for other activities. If recruiting and
selecting are sloppy, training tasks are magnified, supervision problems
become greater, motivating and controlling salespersons is more difficult,
and the turnover of sales personnel is accelerated. If training is inadequate,
potentially good people fail to reach high productivity, the compensation
system does not work as planned, supervision is ineffective, and there is
excessive personnel turnover. Similar “bundles’’ of difficulty arise in cases
of ineffective performance of other activities in the sales force management
system.

Economies of effective sales force management

There are economies in effective sales force management. Assume that
company X has ten salespersons, each making five calls out of five result in
sales and that the average sale amount to $500. If through more effective
management, each salesperson increases the number of calls to six per day,
the company’s daily total becomes sixty [an increase of ten], and eight more
sales per day are made {8 x $500= $4,000}. This is equivalent to adding two
new salespeople at the old call rate. If sales personnel are paid wholly, or
partially, on a commission basic, their incomes are now higher and morale
should be improved. Furthermore, because some selling cost per call
should be reduced.

There are two types of expenses of maintaining a sales force: fixed
and variable. The fixed expenses are identical for all sales personnel
regardless of their productivity, while the variable expenses are highest for
the least productive sales personnel. Fixed expenses include sales salaries,
travelling, equipment {autos, sales folios, sales manuals, and so forth), and
advertising used to assist the sales force. Variable expenses include

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training.000 per person. total interviewing costs amount to $1.500 per new salesperson during the first year. If an interview by an executive takes two hours. Total expenses per unit of product sold vary inversely with the productivity of the salesperson. motivating. A conservative estimate of the excess is $3. The costs of travel and time used for preparatory and follow –up training easily run $10. and thirty people are considered for each vacancy. In order wards. and controlling – these expenses are lower per unit of product sold for productive salespersons than for unproductive salespersons. Interviewing coasts are high. . and in some companies this excess is higher because it takes longer for a salesperson to get fully into stride. accompany employing a sales force of 250 persons and having twenty separations during the year has a rate of turnover of 8 percent. This is the ratio of separations per 100 salespeople. The turnover rate influences the total expenses of sales force management. advertising. fees to employment agencies and so forth often run to more than $500 per recruit. because interview several applicants for each selection.sales commissions. new recruits do not produce as much as experienced sales personnel. Rate of sales personnel turnover The rate of sales personnel turnover is a measure of the quality of sales force management. when a company incurs variable expenses for maintaining its sales force. it receives its highest return from the most productive sales personnel. Some expenses are not readily calculated. Coasts of recruiting. For example.500 per person hired. and the ratio of selling expenses to sales for a new person is likely to be excessive for at least the first year. an executive’s time is worth $25 per hour. supervising. For example.

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000. the annual costs of turnover total $1 million _and this is only out-of-pocket cost. lost business. Few accounting systems measure the impact on profit of . In a company with a sales force of 400 and an annual turnover rate of 25 percent. and miscellaneous expenses associated with taking on people who do not succeed. The expenses of sales personnel turnover can account for a significant drain on profits. Other costs are increased expenses for supervision and motivation. decline in customer goodwill from mistakes of inexperienced salespersons. if the costs of replacing a single salesperson come to $10.

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It is important that this role be carried out effectively because future success of the sales force depends upon the infusion of high caliber sales personnel. for once. can have a substantial effect on sales turnover. soccer and athletics the ultimate achievement in selling is highly associated with personal x-tics. Therefore there is need to recruit and select effective salespeople. like training and motivation.  Training. such as cricket. Although sales effectiveness can be improved by training it is limited by innate ability. which sales managers recruit. iii) Other important determinants of success. Motivational techniques may stimulate the salesperson to achieve higher sales only to some extent. RECRUITMENT AND SELECTION IMPORTANCE OF SELECTION In attempting to recruit and select a new sales representative. 1 .DEVELOPING SALES TEAM  Recruitment and selection. Similarly. ii) Sales people are very costly The cost of employing salespeople is not just salary and commission. Like other activities where skills are required. are heavily dependent on the nature character and qualities of the recruit. the Sales Manager finds himself in an unaccustomed (unfamiliar) role. No company will want to incur all of these costs in order to employ a poor performer. According to Lancaster and Jobber (1991) there are a number of factors (facts) that emphasize the importance of effective selection. A lot will be dependent on inborn motivation of the salesperson himself to complete a difficult sale or visit another prospect instead of returning home. Most companies provide cars if travel is required and travel expenses are paid by the company. Training is also another part of expenses incurred by companies in order to import special skills on sales people.  Orientation. (i) There is wide variability in the sales effectiveness of Salespeople The quality of the sales representatives. Instead of being a seller he. takes on the role of the buyer.

vi) Degree of autonomy-the degree to which the salesperson will be able to control his own work programme. It is as a result of this problem that Sales Manager is advised to approach recruitment and selection in professional manner. after-sales service. There are a number of stages in the recruitment and selection process. ii) Duties and responsibilities – the tasks that will be expected of the new recruit e. iii) To whom he will report. the degree to which the salesperson needs to understand the technical aspects of the products he is to sell.  Studies have found out that fewer than seven out of ten of salespeople the Sales Managers recruits are unsatisfactory. The job description once prepared will act as the blueprint for the personnel specification which outlines the type of applicant the company is seeking.g. v) Location and geographical area to be covered. v) Placement and inductions i) PREPARATION OF JOB DESCRIPTION AND SPECIFICATION The preparation of an accurate job description should not be difficult for a Sales Manager. Generally Covers the Following Factors i) The title of the job e. iv) Technical requirements e. Job Description. iii) Designing an effective application form and preparing a short-list. . iv) Interviewing. selling. sales representative. i) Preparation of the job description and personnel specification.. An understanding of each stage and correct procedures to be followed will maximize the chances of selecting the right applicant.g. sale executive. This is because he/she has intimate knowledge of what is required having been a sales person himself or herself and having been out in the field with salespeople during training and evaluation exercises.g. ii) Identification of sources of recruitment and methods of communication. information feedback and the range of products/market/type of customer the salesperson will serve. The technical requirements 2 .

i) Must the recruit have selling experience? ii) Should such experience be within the markets that the company serves? iii) Should he be within a certain age range? iv) Is it essential that the salesperson hold certain technical qualification? These conditions reduce the number of possible applicants who qualify. (E. 3 . This is much more vague concept than the level of technical qualifications. iii) Aptitudes and qualities e.g. appearance. experience and successes.g. the personal prejudices of the Sales Manager (golden rule of thumb “Is that many Managers favor people who are like themselves”) or be based on more objective research which has been collected on attributes associated with successful salesperson. single etc. ability to communicate.g. will be factors. common Skills. vi) Personal circumstances e. The following questions must be answered. or previous experience.g. self-… iv) Disposition e. maturity. motivation etc). determination. age. for example. In summary. ii) Attainments e. standard of education and qualifications. Another aspect of the personnel specification is the determination of qualities looked for in the new salesperson. inactive interests. The qualities themselves may depend on the nature of the job. which influence the level of education and possibly.g.g. a personnel specification may contain all or some of the following factors: i) Physical requirements e. degree to which interests are social. v) Interests e. sense of responsibility. married. the age of the required recruit. active. and the nature of the customers which the salesperson will meet.g. intelligence. personality. The factors chosen to define the personnel specification will be used as criteria of selection in the interview itself. The preparation of the personnel specification is more difficult for Sales Manager than that of the job description.of the job. speech.

The candidate will know the company and its products. Recruitment Agencies The Sales Manager can also recruit straight from the higher education institutions. It is in the long-term interests of the agencies to provide only strong candidates. . ii) From outside – Recruitment agencies e. .ii). 4 . 2. i) From inside – the company’s own staff. The advantages of recruiting from Universities and polytechnics are that the candidate is likely to be intelligent and may possess the required technical qualifications. IDENTIFICATION OF SOURCES OF RECRUITMENT AND METHODS OF COMMUNICATION A. SOURCES There are six main sources of recruitment. iv) From outside – Competitors. 1. The company will also know the candidate much more intimately than an outsider. 3. Recruitment agencies Recruitment agencies provide lists of potential recruits for a fee. iii) From outside – Educational establishments. It limits infusion of fresh culture and ability. v) From outside – Other industries (which are not competitors) vi) From outside – Unemployed. Company’s Own Staff Advantages . employment bureaus. Examples – Employment bureaus. There is no guarantee that the candidate has selling ability. consultant organizations (Price water house coppers). Disadvantages .g.

. where it does not attract attention then it is very unlikely that it will be read. of which the headline is the most important ingredient. . the bulk of recruitment uses advertisement as the major communication tool. It is advisable to be aware of a number of principles. . Where the imagination is low and funds are high. which can improve the communication effectiveness of advertisements. . COMMUNICATION: (Personal Contact. . It is important to ensure that all of the major attractions (not just features) of the job are included in the advertisement. 4. . Obviously careful screening will need to take place in order to assess sales ability. and the ability of the salesperson may be known to the recruiting company. it is worth considering employing a recruitment-advertising specialist who will produce the advertisement (advise media). advertisement) Although some sales positions are filled as a result of personal contact. b. The advertiser should consider selecting a large size that will have impact. which is the objective of the exercise. Competitors The advantage of this source is that the salesperson knows the market and its customers. 5 . This is necessary to attract applicants. thus reducing the risk. The sales Manager should put himself in the hands of prospective employees (think of what would attract him if he were potential recruit. One method of achieving impact is size. A position should be selected that has impact. The other component of impact is the content of the advertisement. Another thing to consider is the position of advert in the newspaper. 5Other Industries and Unemployed Both of these categories may provide applicants with sales experience.

. Military service. iv) Other Interests . . . Specialized training e. . apprenticeships.g. 6 . . Address or telephone number. . Marital status. The application form is a quick and inexpensive method of screening out application in order to produce a short-list of candidates for interview. sales training. Date of birth and age. Membership of professional bodies e. MSK. The questions on the form should enable the sales manager to check if the applicant is qualified vis-à-vis the personnel qualification. . Further and higher education: Institutions. duties and responsibilities held.g. Name. . . Companies worked for. Sports. Positions. Children number. . . iii) DESIGNING AN EFFECTIVE APPLICATION FORM AND PREPARING A SHORT-LIST . . Courses taken. Dates of employment. the application form also reveals defects such as the inability to spell. Besides giving factual information. Sex. iii) Employment History . . Schools: Primary/Secondary/High School. Qualifications. ii) Education . Four categories of information are usual on application forms: i) Personal . . poor grammar or carelessness in following instructions.

which the sales manager is unable or unwilling to state at the personnel specification stage. . . The overall objective of interviewing is to enable the interviewers to form a clear and valid impression of the strengths and weaknesses of the candidates in terms of the selection criteria. 7 . ii) To provide a foundation of knowledge which can be used as starting point for the interview. Hobbies. (Personnel specification) In order to do this each applicant should be encouraged to talk freely and openly about himself. visitors and telephone calls should be barred. Therefore. a candidate that the sales manager believes would be difficult to work with or might be a troublemaker is unlikely to be employed. Membership of societies/clubs. Such an application form will achieve a number of purposes: i) To give a common basis for drawing up a short-list. iii) To aid in the post-interview decision-making stage. If such a room has to be used. . However. The following are some of the settings that are not good: i) A room where the sales manager is likely to be interrupted by colleagues or telephone calls. more personal considerations will also play a part in the decision e. In reality other. the decision will be based upon a combination of formal criteria and more personal factors. iv) THE INTERVIEW . The job specification will be used as a tool of evaluating each of the short listed candidates. at the same time the interviewer(s) must exercise a degree of control so that the candidates does not talk too much about one or two issues leaving insufficient time for equally important factors (possibly where the candidate is weaker) to be adequately discussed. The interviewing setting Interviewing setting will have a direct bearing on the outcome of the interview.g. .

This can have psychological effect of distancing the two parties involved creating too formal an atmosphere and inhibiting rapport. ii) A very large room with just two or three people occupying it may not have intimacy required to obtain a free. May feel inadequately and lack confidence or may be worried about rejection. The objective at this stage is to set the candidate at ease. ii) Open the conversation with few-to-answer questions. the interviewers themselves can do much to establish rapport. . she may feel embarrassed or worried about exposing her weaknesses. The Sales Manager should reduce anxiety and establish rapport through the following ways: i) One of the interviewers (preferably the sales Manager) should bring the candidate into the room. which although not directly pertinent to the job. For example. . rather than the candidate being sent through a secretary or junior employee. informal setting away from the manager’s work desk is likely to enable the interviewee to relax more easily. allow the candidate to talk to the interviewers and gain confidence. natural discussion. A mere relaxed. Conducting the interview . The anxiety may be compounded by the fact that she has never seen the interviewers before and thus may be uncertain about how aggressive. Besides creating the right atmosphere through proper selection of the interviewing setting. What happens at the beginning of the interview is crucial to subsequent events. open-ended rather than close-ended-open ended questions allow the applicant scope for talking at 8 . iii) The questions early in the interview should be if possible. This is because candidates are usually anxious because of several reasons. particularly if littered with filling trays and desk calendars. degree or pressure that will be applied and type of questions they are likely to ask. iii) A large desk situated between candidate and interviewer. This reduces status differential and hence encourages rapport.

does not truly answer but fakes the test in order to give “correct Picture”. (His questions do not invite much talking). ii) Many tests measure interests rather than sales ability The Sales Manager knows the interests of his successful salespeople and uses tests to discover potential new recruits who exhibit similar interests patterns. Weaknesses of Psychological Tests: i) It is easy to cheat The applicant. .g. After establishing rapport and reducing anxiety. some length on the topic e. The assumption here is that sales success can be predicted by the type of interests. 9 . which a person has. Psychological tests is one of the supplementary aids used when using these tests. behavior and expectations. can you tell me how long you worked for bechams? Closed-ended may imply that the applicant is uncommunicative. [easy manner]. Supplementary selection aids i) Psychological Tests Although success at the interview is always a determinant of selection. having an idea of the type of person who is likely to be successful at selling. v) They should be courteous and appear interested in what the applicant says. care should be taken and trained psychologist is usually needed to administer and interpret the results. his experiences. can you tell me about your experiences selling pharmaceuticals. some firms employ supplementary techniques to provide a valid measure of potential. attitudes. the interviewer will wish to encourage the candidate to talk about himself. For example. .g. In order to do this interviewer not only needs to develop the art of being a good listener but also needs to develop skills in Making People talk. when really the problem lies with the interviewer. Close-ended questions invite a short answers e. in response to a question such as “who is of more value to society – the practical man or the thinker” he answers “the practical man” no matter his true convictions may be. iv) Interviewers should appear relaxed and [adopt a] be friendly.

10 . have been measured in order to predict sales success. ii) Proficiency tests: To test skills and talent e.This is unlikely as discovering a new Mara Dona by measuring the interests of young footballers. Factors such as how sociable. lecturers etc. iii) Tests have been used to identify individual personality traits which may not be associated with sales success. he has to appear for medical examination. skills and ability of candidate’s different types of tests are used. college authorities. Checking of references Candidates are generally asked to mention the names of two or three persons who can be contacted to give additional information about the candidates. 5. 4. The standards of physical fitness will depend on the nature of the job. they have failed to distinguish between high and low performing sales personnel. It is used in order to gauge the selling potential of candidates. 2. The following are various kinds of employment tests given to candidates. 1. general knowledge etc. speeding. Role playing This is another aid in the selection of the salespeople. EmploymentTests: To test the knowledge. While some of these factors may be useful attributes for a salesperson to possess. Line supervisors give these tests.g. iii) Psychological tests: Objective is to test mental alertness. dominant friendly and loyal a person is. i) General written tests: Candidate intelligence can be tested by giving tests in Language. Medical Examination To ensure that the person be appointed enjoys good health in order to perform the job effectively. Referees may be previous employers. On-job-test and selection Under this process. 3. interest and Aptitude. the applicant is placed on the job and his skill and capability tested. maturity.

Company distributors. PLACEMENTS AND INDUCTION (ORIENTATION) Induction – Introducing the employee to the organization. How the company products are produced. At the end of this session. dealers and so on. wages or salaries. 3. Company markets. grievance settling procedure. Induction programme should be well planned and have timetabled i. rules and regulation.e. Company top management and other staff. This is concerned with making the selected employee to familiarize with the organization and the work he was recruited to perform. safety. clients. 4. escorted to the door. major operations. For example by saying ok. promotional prospects. functions of various departments. auditors etc. hours of work. 7. Basically the candidate should be given all the information that is necessary for efficient and effective performance of his work. discipline. Usually the candidate is [forewarned] [or] advised of this by the interviewer. This is the final stage when the candidate gets appointment letter and joins the organization. the interviewer explains when the decision will be made and how it will be communicated to the candidate and then thanks him for attending the interview. Company activities and clubs. Bankers. overtime. Specifically the recruited employee should be introduced to 1. Competitors and their products. recreational facilities company products. general policies. we’ve asked you about yourself. 6. are there any questions you would like to ask me (us). Code of Conduct. time and activities to be performed. 5. v). The candidate is introduced to the environment and social set up of the organization.e. Lawyers. structure of the organization.Closing the Interview: Interviewer needs to close the interview when sufficient information has been obtained. They both stand and shake hands and the candidate is [shown the door] i. 11 . 2. He is given information about company history.

otherwise he is unlikely to attempt to solve the problem i. They must invest also appreciate and accept that benefits for training may not be immediate. iv) Selling procedures and techniques. If companies are to survive they must attach the utmost importance to training their employee’s sales force. v) Work organization and report preparation for sales people. how it has grown and where it intends to go in future.e. The first three components are essentially communicating the required level of knowledge to the salesperson. Top management must be totally committed to training by (through) sufficient resources for this exercise. Five components can be identified:- i) The company – objectives. both new and old. they take time to show. The way in which the company is organized will be described and the relationship between sales and marketing function (including advertising. Performance: Training builds a reference frame within which learning can occur and provides opportunity to practice skills with feedback. Producing the best available product or service is not enough. iii) Its competitors and their products. which is necessary to identify the strengths and weaknesses of performance. appreciate the role of training in improving work performance.e. it has to be sold. For training to succeed the employee must accept there is a problem with his performance. i) The first component will probably include brief history of the company. and ME) will be described so that the salesperson has an appreciation of the support he is receiving from 12 . policies and organization structure ii) Its products – description of the product is made. This is concerned with improving of skills or employees i. TRAINING Training is the process of acquiring knowledge and skills through formal or informal ways. COMPONENTS OF TRAINING PROGRAMME [AREAS OF TRAINING] A training programme will attempt to cover a combination of knowledge and skill development.

Some training programs particularly within the industrial selling area is essential here. Dealing with objections. The Lecture: . TRAINING METHODS 1. 13 . Trainees should be encouraged to participate so that communication is not just one-way.g.e. The importance of these activities on a salesperson’s performance and hence earnings will be stressed. Negotiation and Closing the Sale) and will include Practical Sessions where trainees develop skills through role-playing exercises. ii) The second component. FILMS [audio-visual training] . Presentation and Demonstration. This method is useful in giving information and providing a frame of reference to aid the learning process. Need Problem Identification. v) The final component of the programme i. This is because discussions stimulates interests and allows misunderstanding to be identified and dealt with. because of day-to-day pressures may be neglected. work organization and report writing – will endeavor to establish good habits among the trainees areas which. product knowledge will include a description of how products are made and implications for product quality and reliability the features of the product and the benefits they [provide] confer on the consumer. . 2. These are a useful supplement to the lecture in giving information and showing how a skill should be performed. . iv) Selling procedures and techniques. professionally produced overhead transparencies. charts etc. The lecture should be supported by the use of visual aids e. iii) Competitors and their competitor’s products will be identified and analyzed in order to spotlights differences between them and company’s products. This component involves an examination of personal selling skills (skills required in Opening.

a history of buyer-seller relationship is given and the trainee is asked to develop a set of sensible objectives for his next visit. CASE STUDIES . . 14 . the sales trainer and by audio- visual means. iii) Seeing oneself perform is an enlightening and rewarding experience and can demonstrate to the trainee points raised by other members. In terms of the stages of learning skills. This learning method moves the trainee into the stage of being consciously able to perform a skill. ii) Feedback is provided by other group members. Disadvantages (CRITICISM) i) Trainees may not take it seriously because by its nature it is not realistic.g. Role playing can be used to develop each set of skills required in the selling process in a series of exercises which gradually build up to a full sales interview. CONCLUSION: The degree of success achieved by role-playing is heavily dependent upon the skills of the sales trainer. ii) It assists in teaching inexperienced employee the basic skills of doing the work in a less threatening environment than real situation. Trainees are asked to analyze situations. lecture and films show the trainee what he is required to do but he will lack the experience to put theory into practice successfully. ROLE PLAYING [Dramatize the Selling Process] . 3. Advantages i) It allows the trainee to learn by his own successes and failures in a buyer- seller situation. . 4. They add an extra dimension to a lecture by demonstrating how the principles can be applied in a selling situation. Case studies for example can be used in setting call objectives e. identify problems and opportunities and make recommendations for dealing with them. These are appropriate for developing analytical skills. It allows the trainee to recognize his problems and accept them. .

e. ii) Identify strengths and weaknesses. .e. iii) Gain an agreement with the salesperson that a weakness exist. iv) Teach the sales person how to overcome the weaknesses i. ix) Coverage of the territory – 42%. In order to do this the Sales Manager needs to: i) Analyze each salesperson’s performance. iv) Change in sales value per call – 30%. The experience gained by real-life selling situations plus the evaluation and feedback given by his Sales Manager makes the salesperson move to the final stage of learning skills-process i. In-the-Field-Training [on-the-job] . Field training is designed to improve the performance of the experienced as well as the new salesperson. vi) Number of old account lost – 18%. just like a driver can co- ordinate a set of skills necessary to drive a car without consciously thinking. . iii) Change in sales volume per call – 30%.E. vii) Order/call rate – 30%. training. ii) Change in sales value (Ksh/=) – 43%. 15 . The salesperson does the right things automatically. Criteria Used To Evaluate Training Course i) Change in sales volume (units) – 57%. Methods of Evaluating Effectiveness Training Course I. viii) Order taken/target – 38%. v) Number of new account gained – 42%. x) Length of time representatives spends with customer –15%.5. v) Monitor progress to check that an improvement has been realized. . It is essential that initial training given to trainees is reinforced by the on-the-job training. unconsciously able.

design appropriate compensation schemes. Ability in performing the task. iv) Communication skills. . films. xii) Ability shown during field visits (by sales manager). iii) Ability to motivate others.78%. It is therefore not surprising that top salespeople do not always make the best sales managers. CONCLUSION: . . Questionnaire at the end of the course or sometime in future. TRAINING SALES MANAGERS The Sales Managers require the following skills in order to perform their jobs effectively. ii) Analytical skills. a mixture of lectures discussion. However it is possible to train sales managers to analyze and evaluate salespeople. . xi) Length of time representatives stays with company – 18%. xiv) Questionnaire at sometime in future – 33%. . xiii) Questionnaire at end of course – 50%. The above results of a study conducted by Standord-Bewley and Jobber (1989) on methods used to evaluate training among a sample of companies in service. v) Ability to organize and plan. suggest remedies. role-playing and case studies is often used to develop managerial skills. . Change in performance. Not all these skills are required to sell successfully. 16 . i) Teaching skills. Length of time the employee stay with the company. In training salespeople. and training others in selling techniques. consumer and industrial sectors. Evaluation of effectiveness of training courses . identify motivational problems.e. Questionnaire method i.

A. promote and distribute the products or services. Marketing is an organizational function and a set of processes for creating. and freely exchanging products and services of value with others. (1964) Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers or users. . Kotler Philip (1997) Marketing is a social and a managerial process by which individuals and groups obtain what they need and want through creating. th 4. A social definition of marketing shows the role marketing plays in the society. communicating. offering. Stanton William J. offering and exchanging products of value with others. (2004) 3.A. It involves:  Finding out what consumers want.  Marketing forms the vital link between people’s needs and means of satisfying them. price. SALES MANAGEMENT AND PERSONAL SELLING The process of marketing and selling Meaning of marketing The word marketing has been defined in different ways by several authors and scholars. promote and distribute want-satisfying goods and services to present and potential customers. Other meanings  Marketing is the bridge between production and consumption.M.  And then determining the best way to price. 1. (7 Edition 1984) i) Marketing is the creation and the delivery of a standard of living. American Marketing Association – A. ii) That marketing is a total system of business activities designed to plan. and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. 2. Hence Marketing is defined as “ A societal process by which individuals and groups obtain what they need and want through creating. 2.  Then planning and developing a product or service that will satisfy these wants. A.M. The following are some of the definitions which have been given.

as the definitions suggests.a system’s definition. i) Needs. ideas and disciplined thinking. Marketing. to a large extent. Whenever you are trying to:  Persuade somebody to do something. Marketing is not limited to business. 2. 4. vi) Marketing and marketers. iv) Exchange. values and satisfaction. 5. Customers must be satisfied in order for a company to make repeat business. it is the result of the interaction of many activities. This implies that the success of a firm is not profitability parse but profitability through customer satisfaction.  Donate to the Red Cross  Save energy  Vote for your candidate  Reform from littering the streets of Nairobi.  Marketing is an activity that satisfies human needs through exchange processes. 3. ii) Products iii) Utility. . Modern business marketing activities are. Customers’ needs and wants must be recognized and satisfied effectively. wants and demands. it is evident that the definition of marketing rests on the following important aspects of the market place and Consumer needs. The above definitions have several implications. Marketing is a managerial process . Marketing is not any one activity. This may be some time after the sales are made. is a dynamic process – a total integrated process rather than a fragmented assortment of institutions or functions. The marketing program starts with the product idea and does not end until the customers’ needs and wants are completely satisfied.  Marketing is merely a civilized form of welfare in which battles are won with words. nor is it exactly the sum of several. The entire systems of business activities must be market oriented or customer oriented. rather. 1. v) Markets. a consequence of societal marketing. transactions and relationships. You are engaging in business. THE CORE CONCEPTS OF MARKETING From the foregoing definitions. 6. Marketing has a broad societal meaning.

belonging. .  These needs are not created by the society for marketers. e. The study of marketing begins with the understanding of human needs and wants. Wants Are desires for specific satisfiers of these deeper needs. shelter. Wants and demands. for survival. Needs Products Utility. transactions and Marketing and relationships Marketers Markets Needs. Needs A human need is a state of felt deprivation of some basic satisfaction.c. clothing.t. Value wants and and demands Satisfaction Exchange. safety. People acquire food.  They exist in their very texture of human biology and conditions.

. While people’s needs are fewer. their wants are many.

Utility answers the question – “How do consumers choose among alternative products (Product choice set) in order to satisfy his/her needs and wants?” Utility is the overall estimate of a product’s capacity to satisfy a consumer’s needs or wants. This is the basis on which consumers choose particular products from product choice sets. Product 1. A product is anything that can be offered to someone to satisfy a need or want. People satisfy their needs and wants with products. Value and Satisfaction Utility. A product is said to be of better value if it is more in terms of its price. Products may take different forms.  Wants become demands when backed up by the purchasing power.g. Value. affordable and easily available. e. Marketers should provide value to customers. Value is equated with price. .Demands Are wants for specific products that are backed up by an ability and willingness to buy them.  Marketers influence demands.  Physical products  Persons – as service providers  Places – vacation places  Activities – Physical exercise.  They try to influence demand by making the product attractive.  Organizations  Ideas Utility.

7. 6. 5.  Each party believes it is appropriate or desirable to deal with the other party. Two parties are seen to be engaging in exchange if they are negotiating and moving towards an agreement Transaction If an agreement is reached. depends upon whether the two parties can agree on the terms of exchange that will leave them both better off than before the exchange. Exchange is the defining concept underlying the discipline of marketing. If these conditions exist. Exchange. we say that a transaction has taken place. Exchange must be seen as a continuous process rather than an event.  There has to be at least two parties to the exchange  Each party has something that might be of value to the other party  Each party is capable of communication and delivery  Each party is free to accept or reject the offer.Satisfaction. 4. Marketing emerges when people decide to satisfy their needs and wants through exchange. Whether exchange actually takes place. 3. five conditions must be satisfactory. Exchange. there is a potential for exchange. Exchange is one of the four ways that people can acquire products they need. Exchange is the act of obtaining a desired product from someone by offering something in return. 2. For exchange to take place. Meaning 1. A transaction consists of a trade of values between two parties. Occurs when a product conforms to a consumer’s needs. It involves several dimensions:-  At least two things of value . Other ways include:  Self production  Inheritance  Begging  Stealing. Transactions and Relationships.

A marketer is someone seeking a resource from someone else and is willing to offer something of value for exchange. The marketer can therefore be the buyer or the seller. . Marketing consists of human activities taking place in relation to markets. have resources that interest others and are willing to offer these resources in exchange for what they want. Marketing refers to managing markets to bring about exchanges and relationships for the purpose of creating value and satisfying needs and wants.  Agreed upon conditions  A time of agreement  A place of agreement  Usually a legal system arises to support or enforce compliance on the part of the transactions. Marketing means working with marketers to actualize potential exchanges for the purpose of satisfying human needs.  The size of the market therefore depends on the number of persons who exhibit the need. Marketing and Marketers. The concept of exchange leads to the concept of markets.  Sellers constitute the industry and  Buyers constitute the market. A market is a set of all actual and potential buyers of a product or a service. A market consists of all the potential customers sharing a particular need or want who might be willing and be able to engage in exchange to satisfy that need or want. Markets.

The marketing concept and 5. they in turn capture value from consumers in the form of sales. MARKETING MANAGEMENT PHILOSOPHIES Introduction Marketers need guidance regarding their conduct in the market place. include. customers and the company. There are five competing concepts that govern the operations of companies/ organizations. 1. and long term customer equity.THE MARKETING PROCESS In the first four steps. The selling concept 4. companies reap the rewards of creating superior customer value. This is because conflicts are bound to arise between the needs of the society. In the final step. companies work to understand consumers. The production concept 2. rules. profits. 1. create customer value and build strong customer relationships. By creating value for customers. These guidance are known as the marketing principles. The societal marketing concept. concepts or philosophies. THE PRODUCTION CONCEPT . The product concept 3.

Unilever. product quality is compromised. When the market is not price sensitive ii. i. When demand for the product exceeds the supply and some other means have to be used to allocate the products to the customers. performance. The concept thus leads to marketing myopia [short-sightedness].  A company may end up producing goods that may not have demand. Examples of companies guided by this concept include.  There is undue concentration on the product rather than the needs of the consumer. This concept may apply under the following conditions. . When the market is highly price sensitive. City Council primary schools ii. 1. Marketers assume that consumers will buy those Products of high quality and shun those products of inferior quality. When the production costs are high and have to be brought down through high production efficiency 4.” Management focuses on high production efficiency and wider distribution coverage. and features. However. The concept has been criticized on the following grounds:  The idea of a good product is defined from the company’s end but not the consumer’s. 5. This concept makes sense under the following circumstances.for its basic foodstuff iii.” Management focuses on producing high quality products and improves on them over time. THE PRODUCT CONCEPT The product concept holds that “consumers favor those products that offer the most quality.  The concept ignores the needs of the society Examples of firms practicing this concept are. The customers are low income earners 3. Where the customers are well-off financially. In the case of conspicuous goods iii. 2. City Council health services.This concept holds that “consumers will favor those products that are widely available and low in cost. This concept ensures product availability to the consumers. i. When the product is a basic necessity 2.

Consumers may be forced to buy products that they do not have real need for ii.  Your problem is our business  Have it Your way  You are the Boss. a company must focus on hard selling.c. Where the company is operating under excess capacity and wishes to fully utilize its resources with no regard to the product’s demand ii.t. Where the product is new in the market iii.  Private schools and  Private hospitals 3. THE SELLING CONCEPT This concept holds that consumers.  Those selling jewelry. e. 4. consumers are not willing to buy such products easily. Under hard selling. . Where the firm has adequate machinery for effective promotion iv.  Life insurance policies  Political campaigns  Fund raisings  New products  Encyclopedias  Funeral plots  Coffins. i.  Find needs and meet them  The customer is always right  The customer is the king  At Your service. That is. The concept may work under the following circumstances. The organization must therefore undertake aggressive selling and promotion effort. where the products are obsolete or are slow moving The selling concept has some limitations. It is an expensive concept as it requires a lot of resources. This concept has been expressed in many colorful ways. will ordinarily not buy a lot of a company’s products. Namely: i. Examples of products sold under this concept are. both human and financial. THE MARKETING CONCEPT The marketing concept holds that “the key to achieving organizational goals lies in determining the needs and wants of the target market and delivering the desired satisfaction more effectively and efficiently than competitors. if left alone.

Competition The concept recognizes the existence of competition. However. It should know those customers that are members of their market. Market focus The company must define the boundaries of its market. they should aim for profits through customer satisfaction. training and motivating employees to serve customers well. Circumstances under which the marketing concept may be practiced by companies Most companies do not embrace the marketing concept until driven to it by circumstances Various events forcing companies to adopt the marketing concept includes:- 1. This can be done through a process known as segmentation. It should serve customers better than competitors. Sales decline: . Customer focus The company should determine the needs and wants of the customers from the customers’ point of view but not the company’s. They must be well coordinated from the customers’ point of view. Integrated or coordinated marketing When all company Departments work together to achieve the consumers’ interest.c. Teamwork must be fostered among all departments.The concept rests on five main pillars. Customers’ needs must be identified and satisfied as this result into customer loyalty which is a source of Co goodwill. The Marketing function: The various marketing functions – advertising. Whereas the latter is directed at people outside the firm. Managers must consider customers as the true profit centers hence adopt a modern organizational chart. This requires the practice of internal as well as external marketing. the result is integrated marketing It takes place at two levels. 5. Marketing is not a department but much of a company-wide orientation. must work together. However a Co should offer superior customer value. e. Profitability The ultimate purpose of the marketing concept is to help organizations achieve their objectives. 2. . marketing research. 3. companies panic and look for ways of increasing sales. sales. branding. 1. In the case of private firms. Company-wide orientation: Marketing must be embraced by other departments. 1. 4. 2. the former is the task of hiring. the major one is profit.t. They must think customer.when sales fall.

2. Slow growth in sales forces some companies to search for new markets. They realize
they need marketing skills to identify new opportunities.
Changing buying patterns –
3. Most companies operate in markets characterized by rapidly customer ways such
companies need more marketing know-how if they are to track buyers’ changing
values.
4. Increasing competition.
Complacent companies may suddenly be attacked by powerful competitors, e.g.
Kenya Breweries
5. Increased market expenditures.

Reasons to embrace the marketing concept
Marketers’ arguments:
1. The company assets have little value without the existence of customers.
2. The key company task therefore is to attract and retain customers.
3. Customers are attracted through competitive superior offerings and retained
through satisfaction.
4. Marketing’s task is to develop a superior offering and deliver customer satisfaction.

Societal Marketing Concept
Some people have questioned whether the marketing concept is an appropriate philosophy
in the age of:
 Environmental deterioration
 Resource shortages
 Explosive population growth.
 World hunger and poverty
 Neglected social services. i.e. are companies that do the excellent job of satisfying
customer needs necessarily getting in the best long-run interest of consumers and
society?

The marketing concept sidesteps the potential conflicts among consumers’
1. Wants
2. Interests and
3. Long-run societal welfare

The societal marketing concept holds that
“Organization’s task is to determine the needs, wants and interests of the target markets
and to deliver the desired satisfactions, more effectively and efficiently than competitors in
a way that preserves or enhances the consumers’ and the society’s well being.”

The societal marketing concept calls upon marketers to build Social and Ethical
considerations into their marketing practices. They must balance the conflict criteria of
Company profits Consumer needs and Public interests.

ROLE OF MARKETING IN SOCIETY

a) Creating value for customers

The marketing department starts by researching consumer needs, wants and managing

marketing information to gain a full understanding of the market place.

Good marketing companies know they cannot serve all customers in every way and need

to focus their resources on the customers they can serve best and most profitably.

b) Championing More Ethics and Social Responsibility

Marketers are reasoning their relationships with social values and responsibilities. With the

worldwide consumerism and environmentalism movements, today’s markets are being

called upon to take greater responsibility for social and environmental impact of their

actions. More forward looking companies are readily accepting their responsibilities to the

world around them .They take socially responsible actions as opportunities to do well by

doing well.

c) Growth of not for-- Profit Marketing

In recent years, marketing has become a major part of the strategies of many not-for-profit

organizations such as colleges, hospitals, museums and even churches. Churches facing

competition and shrinking numbers, have increasingly borrowed marketing tools and

tactics from companies selling worldlier goods. Many are tailoring their core product-

religion-to needs of specific demographic groups.

Similarly private colleges facing declining enrollment and rising costs are using marketing

to compete for students and funds.

d) Creation of new Lifestyles in the New Digital Age

Using today’s vastly more powerful computers, marketers are able to create detailed

database and use them to target customers with offer designed to meet in their specific

needs and buying patterns. Technology together with marketing has brought a new

communication and advertising tools-ranging from cell phones, CD ROMS and interactive

TV to video kiosks at airports and shopping malls. Through e-commerce, customers can

learn about, design, order and pay for products and services-without leaving home. This

has brought about a culture of convenience, express delivery and home deliveries.

THE SELLING PROCESS

Prospecting Pre- Approach
and approach
qualifying

Closing Presentation
Handling And
objections demonstration

Follow-up

Prospecting and Qualifying
• This is the first step in the selling process which involves, identifying qualified potential
customers, identify good ones and screen out poor ones. Approaching the right potential

customers is crucial for selling success.

Pre-approach and Approach
• Pre-approach
– To learn as much as possible about a prospective customer or business/
organization before making a sales call.
– Set call objectives, decide on the best approach and timing.

Approach

• Approach is the step in which a salesperson meets and greets the buyer to get
the relationship off to a good start. This step involves the salesperson’s
appearance, opening lines, and the follow up remarks.

Presentation and Demonstration
• Prepared sales presentation
– A memorized presentation.
– Not adapted to each individual customer.
During presentation, the salesperson tells the product ‘story’ to the buyer, presenting
customer benefits and showing how the product solves the customer’s problems.

Handling Objections
 Customers always have objections during the presentation or when asked to place an
order. The problem can be logical or psychological, and objections are often
unspoken. In handling objections, the sales person should use a positive approach,
seek out hidden objections and ask the buyer to clarify them and take the objections
as opportunities to provide more information and turn the objections into reasons
for buying.

Closing
After handling the prospects objections, the salesperson tries to close the sale. Some sales
people do not handle closing well. They may lack confidence, feel guilty about asking for
the order or fail to recognize the right moment of closing the sale. One of the closing
techniques a salesperson can use is to ask for the orders, review points of agreement, help
to write up the order, and ask for instance which model the buyer wants. The salesperson
may offer the buyer special reasons to close such as lower prices, or an extra quantity at no

.charge. purchase terms and other matters. Follow up This is the last step in the selling process which is necessary if the sales person wants to ensure customer satisfaction and repeat business. instruction and servicing. The sales person should then schedule a follow up call when the initial order is received. Right after closing the salesperson should complete any details on the delivery time. so as to make sure there is proper installation.

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It aims at bringing the right products to the right customers. depend more heavily on personal selling than do grocery or toiletry products manufacturers. Salesmanship is one of the aspects of personal selling. to apprise them of products technicalities and usage. It takes several forms including calls by company’s sales representative. In fact sales person act as catalyst in the market place. However. an informal invitation from one company executive to another. which in turn. there are vital differences between two terms. Sales management directs the personal selling effort. Consumers want all sorts of goods and services but inertia may keep them from buying. Sales efforts stimulate the consumption process by reducing people’s inherent reluctance to make purchase decision. It is employed for the purpose of creating product awareness. In case of industrial . The term personal selling and salesmanship are often used without distinction. Sales person also work out the details of manner and timing of given physical possession. ‘Personal Selling’ is a highly distinctive form of promotion. microwave kitchen appliances. stimulating interest. Personal selling is a broader concept than salesmanship. The increase in complexity of products has increased the importance of personal selling. In personal selling. company’s sales persons are often referred to as sales representative. remote control equipments etc. assistance by a sales clerk. developing brand preference. Salesmanship is seller initiated effort that provides prospective buyers with information. sales representative acts as a consultant to consumer. and motivates them to make favourable decisions concerning the seller’s products or services. It is basically a two way communication involving not only individual but social behaviour also. they remain on the company’s payroll or work on commission basis or both to push the product in the market by positively motivating the prospective customer through oral presentation or demonstrating the product in question. Salesmanship is one of the skills used in personal selling. Ever growing competition from domestic and foreign sources have also increased the importance of sales persons in the marketing effort of a firm. Manufacturers of highly technical products such as computers. thereby increasing their total satisfaction’. digital phones. PERSONAL SELLING INTRODUCTION Sales management. personal selling and salesmanship are all related. it is not all of it. is implemented largely through salesmanship. salesman or sales girl. When the nature of the product is such that the buyer needs special information in order to use it properly. negotiating price etc. electronic typewriters. ‘Salesmanship is the art of successfully persuading prospects or customers to buy products or services from which they can derive suitable benefits.

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it can only be used tactically to intensify marketing effort. qualitative long-term personal selling objectives are set. 6. and so forth). 10. 3. to maintain contacts with present customers. Being high value and complex product. The quantitative objectives assigned to personal selling are short term and are adjusted from one promotional period to another. 7. On the other hand. To provide advice and assistance to middlemen on management problems. To provide technical advice and assistance to customers (as with complicated products and where products are especially designed to fit buyers’ specializations). The sales volume objective-the rupee or unit sales volume management sets as the target for the promotional period-is the key quantitative objective.products. take orders. 8. personal contact with the customer is essential to convince him of the product’s quality and utility. To “service” existing accounts (that is. To collect and report market information of interest and use to company management. To secure and maintain customers’ cooperation in stocking and promoting the product line. To assist customers in selling the product line (as through “missionary selling”). To search out and obtain new customers. mainly because it is expensive. the promotion mix mostly consist of personal selling rather than advertising. But personal selling in this case cannot substitute for advertising. the qualitative personal selling objectives become the major determinants of the quantitative personal selling objectives. To keep customers informed on changes in the product line and other aspects of marketing strategy. In turn. To assist (or handle) the training of middlemen’s sales personnel. The basic considerations in setting qualitative personal selling objectives are decisions on sales policies and personal selling strategies and their role in the total promotional program. to influence prospect to try their brand. All other quantitative personal selling objectives are derived from or are related to the sales . 9. 4. 5. These objectives generally are carried over from one period’s promotional program to the next. Depending upon company objectives and the promotional mix. consumer product companies use personal selling together with advertising. PERSONAL SELLING OBJECTIVES The qualitative personal selling objectives are long term and concern the contribution management expects personal selling to make in achieving long-term company objectives. 2. To do the entire selling job (as when there are no other elements in the promotional mix). personal selling may be assigned such qualitative objectives as- 1. After this role is defined.

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(d) An indirect channel or distribution is used for selling to merchant-middlemen only. 4. insurance policy. by selling the “optimum” mix of company products). Product situation: Personal selling is relatively more effective and economical in case: (a) When a product is of a high unit value like Xeroxing machine.volume objective. To obtain sales volume in ways that contribute to profitability (for example.g. (c) A product requires personal attention to match specific consumer needs e. 2. computers etc. Setting the sales volume objective influences the setting of other quantitative personal selling objectives. (d) Product requires demonstration e. 3. (b) When a product is in the introductory state of its life cycle and require creation of core demand. most of the industrial products. 5. 1. RELEVANT SITUATION FOR PERSONAL SELLING Let us discuss some of the situations when personal selling in a company becomes more relevant. (e) Product requires after-sales service. To secure targeted percentages of certain accounts’ business. To keep personal selling expenses within set limits. Consumer behaviour situation: Personal selling is more effective when: . discussion here focuses upon the setting of sales volume objectives. Thus. 4. (b) A company cannot afford to have a large and regular advertising outlay. (b) A company sells in a small-local market or in government or institutional market. To capture and retain a certain market share. (c) Desired middle men or agents are not available. 3. Company situation: Personal selling is relatively more effective and economical when: (a) The company is not in a position to identify and make use of suitable non-personal communication media. 2. (f) Product has no brand loyalty or very poor brand loyalty. among them the following: 1.g. Market situation: Personal selling situation can be best utilized when: (a) A company is selling to a small number of large-size buyers. To obtain some number of new accounts of given types.

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(c) Consumer requires persuasion and follow-up in the face of competitive pressure. In contract with store personnel these representatives actually may be discouraged from doing any hard selling. That task is left to executives higher in the hierarchy. Let us now discuss the different kinds of selling positions prevalent in Indian companies. Good service and a pleasant personality may lead to more sales. Consultative sales person: Consultative sales are characterized by the product or service that is sold at the higher level of an organization e. The selling responsibilities are secondary. Missionary sales people: These sales persons are not expected or permitted to solicit an order. The customer comes to the sales person with the intention to buy a product or service.g. Each different type of selling job requires the sales person to perform a variety of different tasks and activities under different circumstances. (b) Consumer needs instant answers to his questions. It would also require a very strong knowledge about product. Before categorizing sales persons into basic selling styles. one convenient way to classify the many different types of sales job is to array them on the basis of the creative skill required in the job. Inside order taker: The retail sales person standing behind a counter is an inside order taker. the sales person only serves him or her. Differences in marketing factors cause each company to have individualized selling styles.(a) Purchases are valuable but infrequent. The job of a soft drink driver salesperson who calls in routine fashion on a number of retail stores is different from that of a computer sales person who sells a system for managing information to executive of a consultancy firm. Even at times when the progress of sales slows down representative has to make . from simple service-or repeat order selling to the complex developmental selling. working for the pharmaceutical company. soft drink. The sales person may use suggestion selling but ordinarily cannot do much more. DIVERSITY OF SELLING SITUATIONS All of us being consumers often come across variety of selling situations. low pressure approach by the sales person. as in the case of Medical representatives. computer system or management consultancy service. Their job is to build goodwill or to educate actual or potential user or provide services for the customers. Delivery sales person: The primary job of the delivery sales person is to deliver the product e. milk etc. They do little creative selling.g. bread. The decision to purchase such products involves higher capital outlay thus sales job requires a low key. patience to discuss product with several people of organization and potential benefits to the user. Outside order taker: The soap or spices sales person calling on retailer is an outside order taker.

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g. SELLING PROCESS All selling process contain the same basic steps. wholesale goods.g. unlike the consultative sales. for getting an order. by going into details of product utility and features. thus sales persons are required to possess strong persuasive ability. Direct sales people: Direct sales are primarily concerned with the sales of products and services to ultimate consumers e. In fact. magazines etc. Most of the technical purchasing requires approval of several people but only one or two people with technical knowledge influence decision. restaurants. to follow up and maintenance of accounts and order getter. There is normally some emotional appeal associated with this type of selling. the order getter are more aggressive and more highly motivated. making a smooth presentation and closing the sales. government and non-profit organization e. to develop new accounts. Since these require different approaches.g. they will either cool off from buying or will buy from competitor. it is customary for the commercial sales person to make sales on first or second call. are trained to utilize the rational approach. business services and others. the selling process for computer or electronic typewriter may take several visits. For example: a door to door sales representative may go through all the steps from prospecting to closing of sale in a matter of ten to fifteen minutes in contrast. door to door sales. where sophistication in organization relationship and persuasive ability are sales persons’ most valuable assets. application. . The process stresses approach to right person (decision maker). Even time required to sell the product is relatively less than consultative sales. they normally require different personality traits e. approval from higher management is usually forthcoming. industry.creative and sensitive efforts to resume interest but without appearing to exert pressure on the prospect. Unlike the previous two types. If the sales representative is able to satisfy these people with product characteristics. though the detail of each step and time required to complete it will vary according to the product that is being sold. even years. Often length of time to close sales is shortest in the case of above product categories. sales person are trained to close the sales on the first visit because it is felt if consumers are given time. building products. The technical sales persons though not strangers to the process of making a sale. The field is composed of order takers. encyclopaedias. office equipment. insurance. Commercial sales person: This field generally includes nontechnical sales to business. installation process. Technical sales personnel: The most distinctive characteristic of technical sales is the product knowledge required by its sales person.

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Indian companies are using this method of selling successfully. Then. other sales people. Endless chain: This is also an effective prospecting tactics. For example person or an organization who has purchased a portable typewriter from an office automation product company and is pleased with it is usually more receptive to purchase a bigger typewriter and similar product from the same company than someone else. Rejection rate is quite high and immediate payoffs are usually minimal. Centre of Influence: Another effective prospecting technique based on referrals is the center of influence approach. especially for a new sales person. prospecting involves two major activities- (a) identifying potential customers also known as prospects. In this way the process continues further. A center of influence is a person with information about other people or influence over them that can help a sales person identify good prospects. Some frequently used centers of influences are housewives. Spotters are usually ‘sales trainees’ who help sales person identifying prospects. It is much easier to sell additional goods and services to existing customers than to attract new customers.Prospecting The selling process begins with prospecting or finding qualified potential customers. Sales representatives ask current customers for names of friends or business associates who might need similar products or services. (a) Identifying prospects The identification of potential customers is not an easy job. former customers. and (b) qualifying them in order to determine if they are valid prospects. Except in retail selling. it is unlikely that customers will come to the sales person. In some consumer goods businesses. Spotters: Some companies use spotters as a source for prospecting potential customers. In this method companies use satisfied customers as source of referrals. the sales person must seek out potential customers. bankers. thus saving time and qualifying sales lead. local politicians etc. present customers should get first priority by the company when new products and services are introduced. present customers etc. This is the main reason. This prospecting techniques involves knocking on doors. Cold call: Cold call is also known as unsolicited sales calls. The sales person makes contact with a potential . identification of prospects usually come from friends and acquaintances. In order to sell the product. Few of the best sources and techniques for finding prospects are discussed below. as the sales person contacts and sells to these prospects. more referrals are solicited. Present customers: The best source of prospects is usually the sales person’s existing satisfied customers.

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it may be difficult to identify who actually makes the purchase decision. Need: Does the prospect need the product or service? If a sales person cannot establish that the customer will benefit from purchasing a product or service. and asks if there is a use for the product or service. there is no reason 7 . The classified telephone directory is the most obvious one. (b) Qualifying prospects Once the sales person has identified potential customers. Directories: A wide variety of directories are full of prospect. specialized companies compile lists of individuals and organizations for direct mail advertisers. A sales person must identify the key decision maker early to economize on selling time more effectively. The sales people must be familiar with financial resources of a prospect. Mailing lists: In India. A sales person may also find that membership directories of trade associations. Unless this is done. Authority: Does the prospect have the authority to make commitment? This is a particular concern when dealing with corporation. One approach to qualifying often called MAN (Money. introduces himself or herself. time and energy is wasted in trying to sell to people who cannot or will not purchase the product or service. professional societies. India International Trade Fair organized by Trade Fair Authority of India every year provides a good example of usage of trade shows for prospecting. There are several factors to consider while qualifying a prospect. Even while selling to a married couple. Now a days more and more companies are increasing their participation in these shows and exhibitions to company’s booth by mailing invitations or promising a gift.customers. Advance announcements sent to trade publications may also help to attract prospects. government agencies or other large organizations. The major advantages of mailing list are that they are often more current and more selective than directories. In view of the rising costs of personal selling trade shows have become an increasingly important source of prospecting. Trade shows and exhibitions: A cost effective way to make personal contacts and locate prospective buyer is to participate in trade shows and exhibitions. he or she must qualify them to determine. if they are valid prospects. This technique is utilized by the sales person when they have time available between scheduled appointments. and civic and social organizations are good sources for prospects. These lists may also be used to identify sales prospects. Authority and Need) approach is given below: Money: Does the prospect have the money or resources to purchase a product or service? Ability to pay is very critical factor in qualifying a prospect.

The sales person defines the objective of the call. devise a selling strategy to achieve this objective. Finally. 2. Preparation After a prospect has been identified and qualified. calls without specific appointment may be appropriate for introducing the sales person or dropping . 4. It should disclose the party need and ability to buy. Cold calls i. a good pre-approached increases the sales person confidence and makes him confident to handle whatever may arise during the sales. Before proceeding further the sales person should first appraise whether money. • To obtain permission for demonstration of the product. Since sales calls are costly. The primary objective of any sales effort is to get an order. It should provide information that may keep the sales person from making serious tactical errors during the presentation. • To introduce a new distributor. they should be arranged in advance. authority and need exist with the prospect. 3. (a) Pre-approach The pre-approach step includes all the information gathering activities necessary to learn relevant facts about the prospect and his or her needs and situations. or course of action to achieve his or her objective. The prospect either will refuse the offer or will end up dissatisfied with the purchase.to waste a sales call. Pre- approach and Call Planning.e. • To relate the prospects needs and concerns to features and benefits of the product or service. Careful consideration of the prospect’s background and needs is required in order to able to formulate a tailor made strategy appropriate for the prospect.e. and makes the appointments. It should provide information that will enable the seller to tailor the presentation to the prospect. the sales person prepares for the sale of product or service. Four necessary steps of pre-approach are: 1. For some sales call intermediate objectives may be needed. The sales person must develop a strategy. Some examples of intermediate objectives are: • To obtain more information about the prospect. (b) Call planning Call planning involves a specific planning sequence. The preparation stage involves the two key activities i.

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Organized. As a result. with few changes initiated by the sales person. interest. sales person do not usually anticipate objections but may have to face surprise complaint from the prospects. The sales person simply answer questions or clear up doubts. e.g. Because it is difficult to teach sales person how to use the unstructured method. capabilities and availability of goods and services that are for sale. Semi-automated: In this approach.off information. the problem solving presentation seems best suited to experienced. the buyer and seller together explore the problems that are the real sources of the company’s needs.e. Presentation should also be interesting enough to keep the attention of the prospect focused on the proposal. Organized presentation: The most popular and often the most effective sales presentation method is the organized presentation. i. Such presentations tend to be not too well- focused. The objective of the presentation is to explain how the product meets the special needs of the consumer. Sales presentations are classified into the different categories: Fully automated. adding comments to the prepared materials when necessary. A common example is selling of pharmaceutical products by medical representatives. The job of the sales person is to inform the prospect about the characteristics. Semi-automated. Although unstructured presentations are often effective and widely used. Presentation After establishing rapport with the prospects through calls. attention. With this method the sales person has complete flexibility in oral communication but follows a company prepared outline or checklist. desire and action (AIDA). Memorized. company message is presented. In order to ensure that the presentation is understood by the prospect. the sales person reads from brochures or literatures. the sales person should be clear in his/her communication. This method is generally inefficient for selling most products and services and is not consistent with modern professional selling. and Unstructured. Unstructured presentations: (Also referred to as problem solving) In this approach. Memorized: In memorized presentation. Fully automated: The fully automated presentation is the most highly structured approach. sales 9 . Further. based on film or slide presentations. selling life insurance to the rural or semi-urban prospects. points are often missed and time is wasted. they have a number of limitations. The organized approach best exemplifies the selling process in which customers are moved through four stages to a purchase decision. the sales person proceeds to the formal sales presentation.

The introductory approach. 3. The sales person actually transmits the information and attempts to persuade the prospect through product demonstration to make a customer. Four basic approaches are in common use: 1. In other words. If the approach fails. (b) Demonstration The demonstration is the core of the selling process. Normally sales resistance takes the form of an objection which can be classified as stated or hidden. approach and demonstration. a) Approach When the sales person has the name of the prospect and adequate pre-approach information.e. directs the prospects attention toward the benefits the firm has to deliver. and it makes easy transition into the demonstration phase. 4. Lastly. It gets the prospect attention. the next step is the actual approach. actions or statements by a prospects that postpone. The sales person starts the sale in a consumer-benefit approach by informing the prospect of what the firm can provide in benefits. It can be most effective when the product is unique and creates interest on sight. it immediately inspires interest in hearing more about the proposition. Prospects may state . Sales presentation comprises of two distinct activities. The product consists of handling the product to prospect with little conversation.person who are selling to established customers. 2. It consists of obtaining the permission of a past or present customer to use his or her name as a reference in meeting a new prospect. It frequently makes or breaks the entire presentation. ii) The demonstration should be designed to give customers ‘hand on’ experience with the product wherever possible. the sales person introduces himself to the prospect and states what company he represents. referral approach successful in getting an audience with prospect who is difficult to see directly. Two factors should be taken into consideration in preparing an effective product demonstration: i) The demonstration should be carefully rehearsed to reduce the possibility of even a minor malfunction. the sales person often does not get a chance to give a presentation or demonstration. For example an industrial sales representative might arrange a demonstration before the purchaser’s technical personnel. Handling objections All sales person confront sales resistance i. hinder or prevent the completion of the sale.

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the sales persons restates the benefits of the products in a series of questions that will result in positive responses by the prospects. If they are not successful.their objections to a proposition openly and give the sales person a chance to answer them. Often objection to price and product are also faced by sales person either in a form of unaffordable or too high price. The entire effort is wasted unless the sales person can get the prospect to agree to buy the product. This is an ideal situation because everything is out in the open and the sales person does not need to read the prospect’s mind. in case of high priced products like Motorcar. One is to keep the prospect talking by asking probing questions.g. in many instances prospects hide their real reasons for not buying. many sales persons feel that this is the best approach for closing. There are several closing techniques which are being used by sales person in India. There are two major techniques for discovering hidden objections. The other is to use insights gained through experience in selling the product. Now we would discuss few effective closing techniques. their stated objection may be phoney. In action close technique the sales person take an action that will complete the sale e. The direct close is clear and simple technique. the sales person will summarize the major points that were made during presentation to the prospects prior to asking for the sale. photocopier or industrial product the sales person may negotiate with the financial institution for financial assistance for the prospects. it is the stage for sales person to ask for the order from the prospects. combined with a knowledge of the prospects situation. Product objections can be answered best when sales people have extensive product knowledge of both their own products and competitors. Unless one can determine the real barrier to the sale one shall not be able to overcome it. Sales person should select among these technique one that fits the specific prospect and selling situation. Closing After having answered and overcome objections. In most cases this simply means switching to a . to perceive the hidden objection. In one more yes close techniques. In this case. especially if there are strong positive buying motives. then the prospect is worth an extra effort at closing. The gift close technique provides the prospect with an added incentive for taking immediate buying action. The process may result in an order. Unfortunately. Beside having hidden objections. they continue the presentation and then try a different closing technique. Many times prospects may be misinformed or may not understand some of the technical aspects of the proposition. Good sales person know that if they have successfully completed all of the earlier steps. the sales person should provide additional information. Experienced sales people always try to close early. Even the prospects objections can be met simply and effectively by altering the product to suit the customer.

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(b) Audience: The level of intelligence of participants should be considered. For important customers. In addition to post-sale activities. The complaint should be taken seriously and handled with concern. notes. The customer must know that the company cares about maintaining good customer relations. Head Office of the Sales Manager. are usually an annual affair. Successful sales person never stop serving customers. Reasonably frequent contacts with the present customers are. or that of the Regional Manager. This will help in selecting and assigning the subjects for discussion. Closing is the most important aspect of the sales process. In addition to handling complaints. The agenda should be made known to the participants in advance. A Sales person should analyse every call to determine what factors influenced its eventual outcome. information. After sales activities are important part of the whole selling process. Letters. can be easily made available. Effective sales-follow-up reduces the buyer’s doubt about the product or services and improves the chance that the person will buy again in the future. they keep customer informed about the latest products or services. Many good business house also offer customer newsletter. Adequate arrangement should be made for the seating of the participants. are ideally suitable. (c) Agenda: A proper Agenda should be framed. . to suitable hands. sales person are also required to maintain good customer relations. Small gifts can be given after the sale and at appropriate times during the year. phone calls. greetings are also good ways to keep in touch with customers. National-level sales-meetings/conferences. personal visit are appropriate. No matter how efficient a company is. and proper and “business-like atmosphere” should be created. This ensures that the participants are well prepared. the other steps in the sales process are meaningless. keeping in view the needs. Self-analysis is a very useful toolin improving overall sales effectiveness. Company’s Headquarters. an expected part of the sales person’s job. The sales people should also appreciate the customer by thanking customers for their business.different type of close. (d) Periodicity: The sales meeting should have a definite periodicity. fulfil reasonable request. Unless the sales person can close the sale. for which the Meeting is being held. and provide other forms of assistance. as generally assumed by many sales person. Now-a-days many companies are evolving specific policies and practices to ensure that customer’s needs are not neglected. there are always some customer complaints. Follow-up The selling process is not completed by merely making the sale. Sales person should try to make self-analysis for evaluating their own selling performance and methods.

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identify the problems not properly tackled. could be like this: (i) the appraiser appreciates the skills that have been employed. It should be ensured that (i) the salesman is not calling on his friendly customers on that day.and reasons thereof. so that each participant knows what to expect from whom. (7) Sales Bulletins . in very clear terms. The salesman. on an appraisal-form. (5) Kerb-Side Conferences These conferences aim at a random appraisal of the performance of a sales-man. where the work is systematically appraised. It is essential that the agreement of the salesman be obtained to such an appraisal-form. This will put him in a proper frame of mind. (v) the appraiser. may in some cases be asked to rehearse these. on his part. the appraiser says a few words of encouragement and concludes on a note of optimism. even after questioning. with confidence. during the day and keep a mental note of his strong and weak areas.. the appraiser tells him about these. (iv) once the deficiencies have been isolated. then gives instructions. in ensuring success of the meeting. Such courses make the sales-force adequately prepared. and is usually done on a monthly basis. A little ‘Creativity’. generalities should be avoided. and he will be receptive to suggestions. as the process is very expensive. (iii) if the salesman fails to identify his weak areas. will go a long way. After the call(s) is/are over the day. The sequence of this appraisal. the refresher courses are held at the company’s headquarters. The appraiser has to watch the salesman. to pinpoint deficiencies and offer remedial measures. Such kerb-side meetings are very useful for the purpose of increasing the productivity of employees. taking a day’s work into consideration. (vi) any follow-up action is then specifically pointed out. (vi) technical areas affecting the company etc. (iii) market-intelligence. to reduce the element of any doubt. on how to overcome these weaknesses. (6) Refresher Courses Generally. and properly recorded and graded. (iv) sales- meetings/conferences etc. the appraiser and the salesman deferred to a quiet place.(e) Activities: There should be proper allocation of work. salesman’s concurrence. (vii) before parting. does not influence the sales-person’s work-pattern. but heavily depend on the ability and skills of the appraiser. (ii) salesexecutives. on his weaknesses is obtained. periodically. However. (since the last conference/meeting). to face the challenges of competition. (v) product-development. (ii) the salesman is now asked to analyse the call(s). usually once a year. The course-content is usually based on the feedback-information from (i) company’s activities. and (ii) the presence of the appraiser. The Convener should do well to ensure a “participative atmosphere” in the Meeting.

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However. The information reaches him through the bulletins. No time is lost in waiting for the next sales-meeting/conference. the language used in he bulletins should be crisp and to the point. while the salespeople are at work. . It is a good medium to keep the salesman educated about day-to-day matters of changes/interests.Lastly but not least. training and development is also continued through sales bulletins. and also when it is urgently required. so as to arouse the salesman’s interest and is easily understood by the recipient.

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However. they have reaped substantial rewards by way of decreased selling cost and increased sales. control them. There are still some sales organizations that believe that planning and organization of sales territories would be too difficult to attempt. however. so territories are . the sensible thing to do is to guide the salesman’s field activities properly. and there is nothing wrong if salesmen just go out and make calls”. Assigning sales territories helps the sales manager achieve a match between sales efforts and sales opportunities. The total market of most companies is usually too large to manage efficiently. In this way. SALES TERRITORRIES INTRODUCTION No sales manager can afford to ignore the planning and organization of the territorial coverage. and plan them so as to achieve the sales objectives. The territory may or may not have geographical boundaries. but wherever sales manager have paid attention to its organization and planning. No doubt. A sales territory comprises a group of customers or a geographical area assigned to a salesperson. a salesperson is assigned to a geographical area containing present and potential customers. Typically. Although much has been done to improve the efficiency of individual salesman. there is still much room left for the improvement in territorial management. the establishment and maintenance of the sales territories involves a substantial expenditure of time and effort. they have also helped individual salesman to achieve greater earnings for himself and greater profits for the company.

evaluating. When sales personnel sell mainly to personal acquaintances. or if they do. Customers and prospects are grouped in such a way that the salesperson serving these accounts can call on them as conveniently and economically as possible. there is no reason to assign territories. and investment securities. and companies introducing new products requiring the use of different marketing channels. regardless of their locations. Well-designed sales . Operationally defined. in some companies particularly in which technical selling style is predominant. little logical base exists for dividing the market geographically. REASONS FOR ESTABLISHING TERRITORIES The primary reason for establishing sales territories is to facilitate the planning and controlling of the selling function. Small companies. But. insurance. geographical considerations are ignored and sales personnel are assigned entire classes of customers. Many sales executives refer to sales territories as geographical areas. The emphasis in sales territory concept is upon customers and prospects rather than only upon the area in which an individual salesperson works. a sales territory is a grouping of customers and prospects assigned to an individual salesperson. and controlling the sales force. often do not use geographically defined territories at all. since existing sales coverage capabilities are inadequate relative to sales potentials. as in selling property. use rough divisions such as entire states or census regions: In these instances. in contrast.established to facilitate the sales manager’s task of directing.

A salesperson’s calling time is planned as efficiently as possible in order to ensure proper coverage of present as well as potential customers. An equitable workload assignment creates greater interest and enthusiasm among the salesmen. and interest of the sales force. Once all call frequencies are calculated and assigned. Coverage is likely to be more thorough when each sales person is assigned to a properly designed sales territory rather than when all sales personnel are allowed to sell anywhere. it is easier to determine the total wor1doad and then to break it down into equal assignments among salesmen. may result in increased motivation. morale. analyzed. however. (i) To obtain thorough coverage of the market: Sales territories help in proper market coverage. the company can more closely reach the sales potential of its markets. But sales managers typically have more specific reasons for establishing territories. Even present sales figures can be compared with past figures to . They have the responsibility of maintaining and generating sales volume in their territories.territories. Salespeople have to act as business managers for their territories. better results are obtained. improving the total sales performance. With proper coverage of the territories. Actual performance data can be collected. (ii) To Establish Salesperson’s Job and Responsibilities: Sales territories help in setting the tasks and responsibilities for the sales force. and compared with expected performance goals. When an equitable workload is assigned on the basis of call frequencies. (iii) To evaluate sales performance: Sales territories help in the evaluation of sales performance of a company.

sell accounts. routes and schedules are determined. he comes in contract with his customers on the basis of a regular schedule. routes and . Such regular contacts enable both the salesman and the customer to understand each other well and get their difficulties solved in respect of the supply of. Since the salesman’s visits are decided under a call frequency schedule programme. Over and above this. becomes difficult for a salesman to neglect a “hard” territory and only go ahead with the easiest-to. goods. district performance compared to regional performance. When all frequencies. (v) To Reduce Sales Expenses: Sales territories are designed to avoid duplication of effort so that two or more salespersons are not travelling in the same geographical area. (vi) To Improve control of the sales forces: When customer calls frequencies. Individual territory performance can also be compared to district performance. This lowers selling cost and increases company profits. and also raises the general reputation of the company which the salesman represent. the performance of salesmen can be measured. and demand for. and regional performance compared to the performance of the entire sales force. It. Customer goodwill and increased sales can be expected when customers receive regular calls. (iv) To Improve Customer Relations: Properly designed sales territories allow sales people to spend more time with present and potential customers and less time on the road. no salesman can devote more time and get himself “lost” in one territory when he is supposed to follow a pre-established schedules and route.judge the performance over the years. Sales territories also result in such benefits as fewer travel miles and fewer overnight trips. then.

are improved.schedules are predetermined. If salespeople are to aid customers in launching advertising campaigns. The major advantage of the geographic approach is the ready availability of secondary data from different sources. the work habits of salesmen. (vii) To co-ordinate selling with other marketing. in general. The three important bases are. Sales and cost analyses can be done more easily on a territory basis than for the entire market. or cities. This base is simple. functions: A well-designed sales territory can aid management in performing other marketing functions. or performing work related to sales promotions. the results are usually more satisfactory when the work is assigned and managed on a territory-by-territory basis rather than for the market as a whole. as it tends to adopt existing geopolitical boundaries such as states. & work load. geographical considerations are the most frequently used base. (a) Geography: For the establishment of territories. The actual division of a firm’s customer base into individual territory can be achieved by means of several methods. countries. potential and servicing requirements.geography. resulting in better control of the sales force. . depending on which of the three alternative types of bases used. distributing point of purchase displays. BASES FOR TERRITORY DEVELOPMENT The objectives & criteria for sales territory formation are directly related to the bases used in creating the territories. Marketing research on a territory basis can be used more effectively for setting quotas and establishing sales and expense budgets.

000 each. Some companies try to attain equity by assigning finite number of accounts and establishing average call frequencies. The building up approach of designing territories involves combining enough pieces of a company’s overall market to create units . For instance. This would mean that twenty territories would be formed. a firm may give every territory manager two hundred accounts to service and prescribe an average frequency often calls per day. The procedure is relatively simple. It would seem to provide equality of opportunity and thus bring out the best in sales people. This would mean that all accounts visited once during a month’s twenty working days.000. It not only considers individual account potential & servicing requirements in creating territories. 10 million for a given year. APPROACHES OF DESIGNING TERRITORIES Three approaches may be used to design the sales territories. (b) Potential and servicing requirements: The potential approach refers to splitting up a firm’s customer base according to sales potential. all of which would have identical sales potential of Rs. account locations. but also reflects differences in coverage difficulty caused by topographical features. (c) Workload: The third sales territory base. 500. competitive activity & so forth. Sales manager has further determined that each sales person can handle a personal sales potential of Rs. Assume that a firm has estimated its total sales potential at Rs. workload. goes one step further. First management has to estimate the sales potential for the entire company and then try to divide this potential equally among salespersons. 500.

suffers from a severe conceptual paradox: Instead of viewing sales as a result of sales force effort and then forecasting sales accordingly. It starts with the overall sales forecast for the entire company. The method then sets an average sales figure per salesperson to reach at the number of territories to be formed using this as divisor to total market potential.presenting sufficient sales challenges. and profits associated with various levels of input. account mixes can be created to satisfy the dual goals of adequate consumer coverage. Administrative difficulties. however. The incremental approach is conceptually the most appealing. The method. additional territories are created as long as the marginal profit generated exceeds the cost of servicing them. Such an approach may prove satisfactory for industrial goods producer that desire selective distribution. This method is favored by many consumer goods manufacturers looking for intensive distribution. The breakdown approach proceeds in the opposite direction. profits can be maximized by increasing the number of territories up to the point of negative returns. however. After classifying them according to desirable call frequencies & determining how many calls a salesperson can reasonably be expected to make. With this approach. the number of members in the sales organization is determined by the expected overall sales. If a company can determine this kind of information. To use this approach. . hamper the method’s applicability since it requires a cost accounting system capable of determining sales. which is in turn derived from a projection of the total market potential and an estimate of the company’s likely share of it. costs. actual & potential customers have to be identified and their individual sales volumes assessed. This can lead to a self- fulfilling prophecy.

precise geographical identification of sales potential. One reason is to realize an important benefit of using territories. 1. Whether a company is setting up sales territories for the first time or revising ones that are already in existence. (3) develop a salesperson workload analysis. Sales territories are put together as consolidations of basic geographical control units. a sales territory should not be so small that a sales person is calling on customers too often. (2) make an account analysis. pin code numbers. PROCEDURE FOR SETTING UP SALES TERRITORIES A sales territory should not be so large that the sales person either spends an extreme amount of time travelling or has time to call on only a few of the scattered customers. The sales territory should be big enough to represent a reasonable workload for the sales force but small enough to ensure that all potential customers can be visited as often as needed. On the other hand. There are two reasons for selecting a small control unit. and (5) assign sales personnel to territories. trading areas. (4) combine geographic control units in to territories. The most commonly used control units are districts. cities. and states. areas with low sales potential are hidden by inclusion with areas having high sales 135 . Selecting a basic geographical control unit The starting point in territorial planning is the selection of a basic geographical control unit. Management should strive for as small a control unit as possible. If the control unit is too large. the same general procedure applies: (1) select a geographic control unit.

and areas with high sales potentials are obscured by inclusion with those having low sales potentials.sized control units. the city is used as the control unit. making it possible to redraw territorial boundaries easily by redistributing control units among territories. Typical Zip code area is smaller than the typical county. or city) are presently used quite often as geographic control units. suburbs adjacent to cities possess sales potentials at least as great as those in the cities them-selves and. a company wants to add to Ram ‘s territory and reduce Sham’s territory. the county is the most widely used geographical control unit. for example. Political units (state. If.K. it is easier to transfer city-sized rather than state. Districts may be used on: similar lines in India. in these countries. district. County. typically is the smallest unit for which government sources report statistical data. These are commonly used because they are the basis of a great deal of government census data and other market information. . The second reason is that these units remain relatively stable and unchanging. Counties: In the United States and U. in addition. In India Pin code areas may be used on similar lines.potentials. The city rarely is fully satisfactory as a control unit. in urbanized areas. they can often be covered by the same sales personnel at little additional cost. Cities: When a company’s sales potential is located entirely or almost entirely.. Zip code areas: It is also used in USA.

in these situations salespeople may be assigned to territories that consist of more than one state. This may be done on a temporary basis until the market develops. A state may be an adequate control unit if used by a company with a small sales force that is covering the market selectively rather than intensively. State sales territories are simple. nor Will a customer from outside enter the trading area to purchase a product. Trading areas: Another control unit used for establishing sales territories is the trading area. Firms that sell through Wholesalers or retailers often use the trading area as a control unit. The trading area is perhaps the most logic’ al control unit. since it is based mainly on the natural flow of goods and services rather thin on political or economic boundaries. In fact. Making an Account Analysis . States: Many companies have used state boundaries in establishing territory boundaries. The use of states as territory boundaries may also work well for a company that is seeking nationwide distribution for the first time. convenient. The trading area is a geographical region that consists of a city and the surrounding areas that serve as the dominant retail or wholesale center for the region. Also. customers in one trading area will not go outside its boundaries to buy merchandise. 2. they are representative of customer buying habits and patterns of trade. The trading area as a geographic control unit has several advantages. Usually. the use of trading areas aids management in planning and control. and fairly inexpensive. at which time a change can be made to a smaller control unit. Since trading areas are based on economic considerations.

state. For example. trade books and periodicals. and personal observation by the salesperson. One . Once the sales potential estimates have been made. chambers of commerce. the level of competition. and they represent one of the most effective sources for identifying customers quickly. First. the next step is to conduct an audit of each geographic unit. accounts must be identified by name. trade directories. The PC can also calculate the estimated sales potential based on the pre-determined criteria much faster than the sales manager can. The estimated sales potential for a company in a particular territory is often a judgmental decision. The purpose of this audit is to identify customers and prospects and determine how much sales potential exists for each account. directories of corporations. the yellow Pages have become computerized. Many sources containing this information are available. the PC can classify each account according to it’ s annual buying potential. central. After a company selects the geographic control unit. and local governments. the next step is to estimate the total sales potential for all accounts in each geographic control unit. publishers of mailing lists. Other sources include company records of past sales. After potential accounts are identified. professional association membership lists. The sales manager estimates the total market potential and then determine how much of this total the company can expect to get. It is based on the company’s existing sales in that territory. The Personal Computer has become a tremendous management aid in analyzing the sales potential in a territory. any differential advantages enjoyed by the company and the relationships with the existing accounts.

Next. conditions of highways. Developing a Salesperson Workload Analysis A salesperson workload analysis is an estimate of the time and effort required to cover each geographic control unit. and classifies them as an account. This is influenced by the number of people to he seen during each call.commonly used approach is to employ an ABC classification. the accounts that are considered to be of average potential are classify as C accounts. 3. accounts whose potential is less than a certain amounts are classified as C accounts. the frequency of the calls. and the length of the waiting time. The computer identifies all those accounts whose sales potential is greater than a predetermined amount. Travel time will vary considerably from one region to another. This estimate is based on an analysis of the number of accounts to be called on. Information about these factors can be determined by examining company records or by talking with sales people. The most basic factor is the length of time required to call on each account. and the weather. Several factors affect the number of accounts that can be called on in each geographic control unit. The result of the workload analysis estimate is the establishment of a sales call pattern for each geographic control unit. and the non-setting time. Finally. the amount of account servicing needed. depending on factors such as available transportation. the travel time required. The sales . One factor that affects the number of accounts that can be called on is the travel time between accounts. the length of each call.

Territories with unequal sales potential are not necessarily bad. county. The sales manager is now ready to group adjacent control units into territories of roughly equal sales potential. and group C accounts the least of all. In the past the sales manager used to develop a list of tentative territories by manually combining adjacent control units. However. resulted in split control units and territories with uneven sales potential. and some can be assigned heavier workloads than others. Salespeople vary in ability and experience as well as initiative. Accounts are generally grouped into several categories according to sales potential. Group A accounts are called on most frequently. The frequency of sales calls is influenced by a number of factors.manager seeks ways to minimize travel time and thereby to increase the number of accounts that can be called on. Today. this was a long procedure that. 4. city or some other geographical area. The unit may be a state. Other factors that influence the call frequency are the nature of the product and the level of competition. Combining Geographical Control Units into Sales Territories Up to this point the sales manager has been working with the geographic control unit selected in the first phase of the procedure for setting up sales territories. The sales manager should assigns the best salespeople to territories with a high sales . in most cases. The level of non-selling activities influences the time and effort required to cover a geographic control unit. group B accounts less frequently. computers are handling this task in a much shorter time period.

can be in many sizes. of course. It radiates out from densely populated urban centre. making for greater uniformity in frequency of calls on customers and prospects. The wedge is appropriate for territories containing both urban and non-urban areas. This also makes the salesperson nearer to more of the customers than is possible with a wedge. depending on the relative sales potential of a specific area and the types of selling or non- selling tasks assigned to the sales representatives.potential and newer less effective salespeople to the second and third-rate territories.shaped territory. Wedges. if the shape of a territory permits the salesperson to minimize time on the road. Circular territory involves starting at the office and moving in a circle of stops until the salesperson ends up back at the office. the circle. hopscotch. the wedge. shape contributes to sales force morale. Of course. The shape of a territory affects both selling expenses and ease of sales coverage. The salesperson assigned to the circular M shaped territory is based at some point near the center. Travel time among adjoining wedges can be equalized by balancing urban and non-urban calls. some adjustment in sales quotas and commission levels may be necessary. Careful planning of call schedules results in each . The circle is appropriate when accounts and prospects are evenly distributed throughout the area. In addition. Three shapes are in wide use. and the cloverleaf. Territory Shape The planner now considers territory shape. The cloverleaf is desirable when accounts are located randomly through a territory.

the salesperson starts at the farthest point from the office and makes calls on the way back to the 0ffice. When assessing a salesperson relative ability. initiative and effectiveness. the sales manager must first rank the salespeople according to relative ability. the sales manager should look at such factors as product and industry knowledge. persuasiveness and verbal ability. Assigning Sales Personnel to Territories When an optimal territory alignment has been devised the sales manager is ready to assign salespeople to territories. On the next trip the salesperson will go in the next direction. as well as ability. Cloverleaf territories are more common among industrial marketers than they are among consumer marketers and among companies cultivating the market extensively rather than intensively. making it possible for the salesperson to be home weekends. In assigning sales personnel to territories. 5. For instance. social and cultural characteristics and compare them to those of the territory. The salesperson would typically go non-stop to the farthest point in one direction and on the way back stops at many places. A reasonable and desirable workload for one salesperson may overload another and cause frustration. the salesperson born and brought up in a village is likely to be . In order to judge a salesperson’s effectiveness within a territory. In the case of hopscotch territory. the sales manager must look at the salesperson’s physical. Home base for the salesperson assigned to the territory is near the centre. Salespeople vary in physical condition.cloverleaf being a week’s work.

more effective with rural clients than with urban customers because he or she speaks the same language and shares the same value as the rural clients. Before embarking on the revision.designed territory structure may become outdated because of changing market conditions or other factors beyond the control of management. REVISING SALES TERRITORIES Two major factors may cause a firm to consider revising established territories. Often. With the aid of a PC. The goal of the sales manager in matching salespeople to territories in this manner is to maximize the territory’s sales potential by making the salesperson comfortable with the territory and the customer comfortable with the salesperson. the sales manager can produce several revised territory alignments in minutes. the sales manager recognizes that some territory revision is needed. or faulty management in other areas. a firm just starting in business usually does not design territories very carefully. In other situations. the sales manager should determine whether the problems with the original alignment are due to poor territory design. But as the company grows and gains in experience. Without a computer this task would consume days. a well. it would be a serious mistake for management to revise sales territories if the problems are really due to a poor compensation plan. it is unaware of the problems inherent in covering a certain territory. market changes. For example. and sometimes it overestimates or under-estimates the territory’s sales potential and required workload. . First.

and it will cause problems withi n the sales force. Territory revisions may be necessary when one salesperson jump into another salesperson’s territory in search of business. The mere thought that another salesperson is reaping the benefits of their hard work can lead to much bitterness. If the company does not hire additional sales personnel. it usually needs a larger sales force to cover the market adequately. there should be no need for jumping. This is an unethical practice. the performance of the sales force may be very misleading. Sales people are very reluctant to have their territories divided because that means handing over accounts they have built up and nurtured. a territory may be too small for a good salesperson to earn an adequate income.Signs that justify territory revision As a company grows. Territories may also need revision because of an overestimation of sales potential. Territory jumping is usually a sign that a salesperson is not . The organization should immediately correct this problem in a way that will benefit the existing representatives. If sales potential have been estimated in an inadequate manner. the sales force will probably only skim the territory instead of covering it intensely. and the company. This problem usually occurs when territories are split. and it can cause a tremendous amount of friction in the sales force. If territories have been designed properly. Overlapping territories are another reason for revision. For instance. Certain environment changes could also warrant the revision of a sales territory. the new representatives.

must make. a decision either to avoid territory revisions for fear of damaging sales force morale or to revise the territories in order to eliminate problems. thereby Offering a higher volume for the same travel time. it can also indicate that the sales potential due territory is greater than that in another. The salesperson whose territory is being reduced should be taken into confidence and told that a smaller territory can be covered more intensively. dislike change.developing his or her territory satisfactorily. Management. One approach to compensating the salesperson is to guarantee the previous level of income. However. therefore. Compensation adjustments sometimes must be made to avoid low morale. there are disadvantages to developing sales territories:  Sales people may be more motivated if they are not restricted by a particular territory and can develop customers wherever .like most others. before revisions are made. The effects of territory revision Salespersons. sales manager should ask the sales force for ideas and suggestions that might alleviate such problems. a salesperson might face a reduction in potential income and the loss of key accounts that he or she has developed over years. Both of these can result in low morale. If a salesperson is doing a good job covering his or her market but the contiguous market has more potential. . When a territory is reduced. Therefore. the representative may be forced to enter the adjacent market. WHY SALES TERRITORIES MAY NOT BE DEVELOPED In spite of the stated advantages.

Life insurance salespeople may first sell policies to their family and friends and then use their contacts. and whenever they find them. or may not have the know- how for territory development. For Example. in the case of industrial products. organizations/customers are scattered geographically and not concentrated at one place. may be allowed to sell to any potential customer. therefore.  The company may be too small to be concerned with segmenting the market into sales areas. For example.  Personal friendship may be the basis for attracting customers.  Management may not want to take the time. Territory Management problems & Remedies The table given below summarizes some of the problems of territory management and also the remedial actions that may be taken to overcome these problems: Problems Remedies Inadequate coverage Split territories Inadequate size Enlarge territories Revision Prepare salespeople Shifting accounts Revise territories Inadequate support Assist sales persons Territory jumping Eliminate practice Overlapping territories Minimize crossovers Selling cost variations Review cost figures . sales people.

Problems Remedies High turnover Rectify casual factor .

depends largely on the performance of individual salesperson. Executives supervise the sales personnel under them. either directly or indirectly. The executive with supervisory responsibilities establishes working relations with sales personnel for purposes of . the objective is to improve the job performances of sales personnel. Primary job of every sales manager is to help every sales person achieve his or her full potential. affects sales. however. SUPERVISION AND EVALUATION OF SALES-FORCE INTRODUCTION Every member of an organization. Adoption and successful operation of appropriate control procedures results in greater effectiveness which ultimately shows up in greater sales volume at more profit and less cost. Regardless of who does the supervising. SUPERVISION OF SALES FORCE Management controls sales personnel through supervision. become very important. therefore. The ultimate success. They are concerned with monitoring the performance and striking balance between the standards and actual performance. Effective supervision and evaluation assure the attainment of objectives with minimum efforts. Sales force supervision and evaluation. Supervision and evaluation of sales force are instruments of achieving sales control.

therefore.  Total number of calls very low or very high. The type of supervision.  Increased complaints from customers. When the type of person changes.  High turnover of clients/accounts. However.observing. How much supervision? It is difficult to prescribe how much supervision is enough as too much is as bad as too little. there are some conditions under which supervision is needed:  Excessive sales turnover rate. correcting deficiencies.action aimed at enhancing personnel contributions to the achievement of objectives. providing motivation. . and the attitude that underlines it.  Low ratio of orders to sales calls. should be adjusted to the type of person in the selling job. informing sales personnel of changes in company policies. sales supervision is concerned mainly with the action phase of control.  Increase in mail orders or orders over phone without any particular reason. When management brings in highly trained and self reliant people to meet the new selling challenge. traditional supervision. the type of supervision must also change. clarifying duties and responsibilities. and helping to solve business and personal problems. These conditions may point towards wrong kind of supervision as well as to too much or too little supervision. Clearly. and reporting on performance. evaluating. stifles those whom management seeks to encourage.  Increasing ratio of selling expenses to total sales.

Beyond these supervisory duties. they must recognize training needs. They must be good teachers. sales supervision may be either through executives as one of their job responsibilities. Sales supervisors generally are selected from among the sales force. Put another way. sales supervision is generally through the top sales executive. and be tactful in pointing out better ways of doing things. Th ey must be good teachers. this being one way to motivate them to keep up to date on field selling techniques. sales force may be supervised by branch or district managers. Qualification of Sales Supervisors Sales supervisors generally are selected from among the sales force. know how to train. Supervisors must be skilled in handling people and be equipped to deal with many complex situations. . If the sales force is small and experienced. be patient with those who have less skill. or field sales supervisors. but besides having the qualifications required for selling success. They must be skilled to handle people and be equipped to deal with many complex situations. know how to train. or through specialists whose jobs are mainly supervising.Who should supervise? Depending upon the company and its organization. field sales executives. Companies having decentralized sales structure normally assign supervision responsibility to branch or district managers. they need other qualifications. but besides having the qualifications required for selling success. they need other qualifications. be patient with those who have less skills. They must recognise training needs. and be tactful in pointing out better ways of doing things. some companies expect sales supervisors to sell certain accounts personally.

by the discovery of deviations in a favourable direction. the evaluation process aims at both prognosis and diagnosis and is considered to be a preventive and curative marketing device. When strengths are indicated. .In this. Thus. This may take the form of revising performance standards and generally reappraising present policies. When weaknesses are identified. TIME HORIZON FOR EVALUATION Sales evaluation normally is of three types: 1. Short run evaluation. the firm will devise and implement corrective methods through supervision and other control devices. Evaluation system should do three essential things for the sale manager and sales- people:  Provide feedback to each salesperson on individual job performance. Evaluation implies a process of systematically uncovering deviations between goals and accomplishments. and potential opportunities for the firm. performance is evaluated over one year and the focus is on the achievement of targets in terms of sales.  Provide information to sales managers on which to base decisions on promotion. procedures. marketing communication methods. transfer and salespeople. management will use this information as a valuable aid in the anticipating and dealing with problems in future periods.  Help salespeople modify or change their behavior toward effective work habits. EVALUATION OF SALES FORCE In general sense. the evaluation process consists of comparing actual performance with planned performance.

and the like. Setting sales performance standards requires considerable market knowledge.This is on long-term basis and focus on evaluation in terms of surviving in an uncertain and increasingly competitive world. Setting performance standards for new-business sales personnel requires different measures from those for trade-selling sales personnel. STANDARDS OF PERFORMANCE Performance standards are designed to measure the performance of activities that the company considers most important. practices and policies. Marketing intelligence must provide evaluations of competitions’ strengths.The performance is judged over 2 to 4 years time period and focus is on evaluation in terms of creating and identifying new opportunities while adapting to competitive and environmental threats. Quantitative Performance Standards Most companies use quantitative performance standards. In other words. Long run evaluation. Setting standards of performance requires consideration of the nature of the selling job. The particular combination of standards chosen varies with the company and . It is important to know the total sales potential and the portion that each sales territory is capable of producing. in turn. These items all bear on the setting of performance standards. sales job analysis is necessary to determine job objectives. depend upon selling strategy. weaknesses. especially quantitative standards. 2. These. Management needs evaluations of customers and prospects from the standpoint of potential profitability for each class and size of account. 3. duties and responsibilities. Intermediate run evaluation.

for example. In the past the performances of individual sales personnel were measured solely in terms of sales volume. sales result only after extended periods of preliminary work. in effect. define both the nature and desired levels of performance. . it develops its own unique standards designed best to serve its objectives. If necessary. Each person on the sales force should have definitions of the performance aspects being measured and the measurement units. They should not be held accountable for “uncontrollable” such as differences in the strength of competition. and it is not only unfair but misleading to appraise performance over short intervals solely on the basis of sales volume. such as one for sales volume attainment. and to make sales at the expense of future sales. Each company selects the combination of quantitative performance standards that fits its marketing situation and selling objectives. the amount of promotional support given to the sales force. industrial goods of high unit price.its marketing situation. The standards discussed here are representative of the many types in use. the relative importance of sales to national or home accounts. Quantitative standards provide descriptions of what management expects. A single quantitative standard. the potential territorial sales volume. These definitions help sales personnel make their activities more purposeful. In some fields. Quantitative standards. Today’s sales managers realize that it is possible to make unprofitable sales. Sales personnel have little control over many factors affecting sales volume. provides an inadequate basis for appraising an individual’s total performance. Sales personnel with well-defined objectives waste little time or effort in pursuing activities that was not contribute to reaching those objectives.

(ii) Selling expense ratio Sales manager uses this standard to control the relation of selling expenses to sales volume. management is answering the important question: How much and for what period? The assumption is that management knows which objectives. or when they have been chosen chiefly for inspirational effect. in which the probable strength of demand has been fully considered. expenses. When sales volume quotas are based upon sound sales forecasts. performance of non-selling activities. the marketing unit may be a salesperson or a territory. cause selling expenses to vary with the territory. quotas specify desired levels of accomplishment for sales volume. they are valuable performance standards. both general and specific. As the most widely used quantitative standards. some controllable by sales personnel and some not. “When sales personnel are assigned quotas.(i) Sales Quotas A quota is a quantitative objective expressed in absolute terms and assigned to a specific marketing unit. The terms may be rupees or units of product. are realistic and attainable. Many factors. so target selling expense ratios should be set individually for each person . their value as control device is dissipated. or a combination of these and similar items. net profit. The validity of this assumption depends upon the market knowledge management has and utilizes in setting quotas. But when sales volume quotas represent little more than guesses. gross margin.

An attractive feature of the selling expense ratio is that the salesperson can affect it both by controlling expenses and by making sales. Industrial product firms place the greater emphasis on personal selling and entertainment of customers. (iii) Territorial net profit or gross margin ratio Target ratios of net profit or gross margin to sales for each territory focus sales personnel’s attention on the needs for selling a balanced line and for considering relative profitability. regard each sales territory as a separate organizational unit that should make a profit contribution. Finally. It does not take into account variations in the profitability of different products. The selling expense ratio has several shortcomings. in effect. in times of declining general business. The explanation traces to differences in the selling job. this performance standard may cause the salesperson to over-economize on selling expenses to the point where sales volume suffers. Then. Selling expense ratios are determined after analysis of expense conditions and sales volume potentials in each territory. too. so a salesperson who has a favorable selling expenses ration may be responsible for disproportionately low profits. Sales personnel influence the net profit rations by selling . selling expense rations inhibit sales personnel from exerting efforts to bolster sales volume. Managements using either ratio as a quantitative performance standard. Selling expense ratio standards are used more by industrial product companies than by consumer product companies. consequently their sales personnel incur higher costs for travel and subsistence.on the sales force.

more volume and by reducing selling expenses. The index consists of the ratio of the number of customers to the total prospects in a territory. Management sets target market share percentages for each territory. The gross margin ratio controls sales volume and the relative profitability of the sales mixture. (v) Sales coverage effectiveness index This standard controls the thoroughness with which a sales person works in the assigned territory. and over-emphasize sales of high profit or high margin products while under-emphasizing new products that may be more profitable in the long run. Closer control over the individual salesperoJ1 ‘s sales mixture is obtained by setting target market share percentages for each product and each class if customer or even for individual customers. The net profit ratio controls sales volume and expenses as well as net profit. (iv) Territorial market share This standard controls market share on a territory by territory basis. When either is performance standard. but it does not control the expenses of obtaining and filling orders. They may emphasize more profitable products and devote more time and effort to the accounts and prospects that are potentially the most profitable. sales personnel maYJ1eglect new accounts. To apportion . Net profit and gross margin ratios have shortcomings. Management later compares company sales to industry sales in each territory and measures the effectiveness of sales personnel in obtaining market share.

individual standards for sales coverage effectiveness are set up for each class and size of customer. Standards for calls per day are set individually for different territories taking into account territorial difference as to customer density. Sales personnel who plan their own route and call schedules find target call frequencies helpful. (vii) Calls per day In consumer product fields. . neither so short that unprofitably small orders are secured. management directs selling effort to those accounts most likely to produce profitable orders. some sales personnel make too few calls per day and need help in planning their routes. By establishing different call frequency ratios for different classes of customers. it is desirable to set a standard for the number of calls per day. (vi) Call frequency ratio A call frequency ratio is calculated by dividing the number of sales calls on a particular class of customers by the number of customers in that class. Otherwise. in setting up appointments before making calls or simply in starting their calls early enough in the morning and staying on the job late enough in the day.the sales person’s efforts more among different classifications of prospects. Other sales personnel make too many calls per day and need training in how to service accounts. nor so long that sales are lost to competitors. where sales personnel contact large numbers of customers. Management should assure that the interval between calls is proper. road and traffic conditions and competitors’ practices. in as much as these standards provide information essential to this type of planning.

(viii) Order call ratio This ratio measures the effectiveness of sales personnel in securing orders. it is calculated by dividing the number of orders secured by the number of calls made. and goodwill calls . a target for average cost per call is set. Sometimes called a “batting average”. When a salesperson’s order-call-ratio for particular class of account varies from the standard then the salespersons need helping in working with that class of accounts. (x) Average order size Average order size standards control the frequency of calls on different accounts. Using average order size standards along with average cost per call standards. Order call ratio standards are set for each class of account. The usual practice is to set different standards for different sizes and classes of customers. (ix) Average cost per call To emphasize the importance of making profitable calls. standards are set for each category of account. (xi) Non-selling activities Some companies establish quantitative performances standards for such non- selling activities as obtaining dealer displays and cooperative advertising contracts. training distributor’s personnel. management controls the salesperson’s allocation of effort among different accounts and increases order size obtained. When considerable variation exists in cost of calling on different sizes or classes of accounts.

they are. in reality.l1el against a detailed checklist of subjective factors such as given below: Job Factors  Product knowledge  Customers’ knowledge  Competitor’s knowledge  Handling sales presentations  Customer satisfaction  Time management Personal Factors  Punctuality  General Attitude  Dress and Appearance . instead they arrive at informal conclusion regarding the extend to which each sales person possesses them. appropriate standards should be set. Since quantitative standards for non-selling activities are expressed in absolute terms. Many sales executives do not define the desired qualitative characteristics with any exactitude. but whose degree of excellence can be evaluated only subjectively.on distributor’s customers. especially over the long run. Qualitative criteria defy exact definition. Other executives consider the qualitative factors fom1al1y. Whenever. Qualitative performance criteria Qualitative criteria are used for appraising performance characteristics that affect sales results. non-selling activities are critical features of sales job. quotas. one method being to rate sales persoIl.

 Co-operation  Adaptability  Reliability  Communication skills  Decision-making ability  Initiative Executive judgement plays the major role in the qualitative performance appraisal. up to date and accurate. The sales executive uses field sales reports to determine whether sales personnel are calling on and selling to the right people. They also indicate the matters on which sales personnel need assistance. Similarly. based upon the job description. MEASURING ACTUAL PERFORMANCE Sales management’s next task is to measure actual performance. Field sales . Written job description. field sales reports assist in determining how to secure more and larger orders. but the manner in which these criteria are applied depends upon the needs of management. but this purpose. Field sales reports The fundamental purpose of field sales reports is to provide control information. and whether they are making the proper number of calls. are the logical points of departure. They provide a basis for discussion with sales personnel. Each firm develops its own set qualitative criteria. There are two basic sources of performance information: sales and expense records and reports of various sorts. Almost every company has a wealth of data in its internal sales and expense records.

Recording accomplishments in written form forces individuals to check their own work. To help the sales person plan the work. days worked. miles travelled. and so forth. A good field sales reporting system assists sales personnel in their self- improvement programs.for example. price changes. 2. number of calls made. advertising campaigns. details concerning accounts and prospects called upon. 3. provide additional information. many reports. cooperative advertising arrangements made. . sales approaches to use with specific accounts and prospects. training of distributor’s personnel.reports provide the raw materials that sales management processes to gain insights on giving needed direction to field sales personnel. Consider the following list of purposes served by field sales reports: 1. however. orders obtained. and calls made with distributors sales personnel. missionary work. selling expenses. To record customers’ suggestions and complaints and their reactions to new products. planning itineraries. displays erected. They become their own critics and self-criticism often is more valuable and more effective than that from headquarters. Purposes of field sales reports The general purpose of all field sales reports is to provide information for measuring performance. To provide data for evaluating performance.for example. service policies.

changes in promotion. This report also helps the salesperson exercise self-control over expenses. data on dealers’ sales and inventories of company and competitive products. Progress or call report: Most companies have a progress or call report. To provide information requested by marketing research. and record information that assists the sales person on revisits. but more detailed data. 7. Usually the call report form records not only calls and sales. To report changes in local business and economic conditions. 2. new products. the strength and activities of competitors. To keep the mailing list updated for promotional and catalogue materials. and “future promises”. Expense report: The purpose is to control the nature and amount of salesperson expenses. competitive brands handled. and changes in pricing and credit policy. market tests. The expense report reminds salesperson that they are under moral obligation to keep expenses in line .for example. covering all calls made daily or weekly. Progress reports keep management informed of the salesperson’s activities. 4. 6. To gather information on competitors’ activities. 5. best time to call. provide source data on the company’s relative standing with individual accounts and in different territories. such as the class of customer or prospect. Types of sales force reports Reports from sales personnel fall into six principle groups. It is prepared individually for each call or cumulatively.for example. 1.

This assists management in detecting needed product improvements and changes in merchandising ‘and service . products and other matters to be discussed. It provides data for evaluating the extent and effectiveness of development work by sales personnel. 3. and product improvements. and cost of complaint adjustment. Sales work plan: The salesperson submits a work plan (giving such details as accounts and prospects to be called upon. usually a week or a month. and hotels or motels) for a future period. changes in customer service policies. The details of the report form vary with the plan for reimbursing expenses. routes to be travelled.with reported sales-some expense report forms require sales persons to correlate expenses with sales. The work plan provides a basis for evaluating the salesperson’s ability ‘to plan the work and to work the plan’. The purposes are to assist the salesperson in planning and scheduling activities and to inform management of the salesperson’s whereabouts. 5. 4. Report of complaint and/or adjustment: This report provides information for analysing complaints arising from a salesperson’s work. but receipt of a lost-sales report also causes management to consider further investigation. A subsidiary purpose is to remind sales personnel that management expects them to get sales reports point the way to needed sales training. The salesperson reports the reasons for the loss of the business. complaints by class of customer. New-business or potential new-business report: This report informs management of accounts recently obtained and prospects who may become sources of new business.

Report preparation places demands on free time. The more freedom that sales personnel have to plan and schedule their activities. This is more than a mechanical comparison. selective selling. The optimum number of reports is the minimum necessary to produce the desired information. Holding down the number of reports is important. and.COMPARING ACTUAL PERFORMANCES WITH STANDARDS The most difficult step in sales force control is the evaluation step-the comparing of actual performances with standards.practices and policies. since they are generally made out after the selling day. These data also are helpful for decisions on sales training programs. unfortunately. EVALUATION. their sales potentials. the best people often have the least time. The same standards cannot be applied to all sales personnel-there are differences in individual territories. The amount of detail required in sales reports varies from firm to firm. and product changes. Information obtainable through other means at no higher cost should not be gathered through field sales reports. the greater should be the detail required in their reports. the burden of proof of its need is upon its advocates. When a new report is proposed. A company with many sales personnel covering a wide geographical area needs more detailed reports than does a company with a few salespeople covering a compact area. All reports are reviewed from time to time to determine whether the information is worthwhile. the impact of competition and the personalities of sales . this step is difficult because evaluation requires judgement.

In comparing actual results with projected results. It is possible to take territorial differences into account by setting individual performance standards for each territory. when two or more sales persons work on the same account or when an account deals both with the salesperson and the home office. Evaluating performance of sales personnel requires judgement and deep understanding of market factors and conditions. are relevant. Evaluating sales personnel requires both a comparison of performance with quantitative standards and an appraisal against qualitative performance criteria. but it is not possible to adjust fully for differences in the personalities of the salesperson and the clientele. management should investigate whether the standard has been set too high. the general procedure in scientific work is to set up tests that measure the variable . that something is wrong with a standard-when an individual continually fails to reach a standard. Judgement enters into the evaluation of sales personnel in still other ways. Individual who do not reach sales quotas or keep to prescribed call schedules. may be making offsetting qualitative contributions.personnel and their costumers. too. as well as the current record. There is always the chance. Furthermore. Sales personnel with poor performances. for example. Performance trends.an individual showing improvement but with still substandard performance needs encouragement. as gauged by quantitative standards. for instance. may be building for the future by cementing relations with distributors and dealers. complications often develop in relating individual performances to standards.

TAKING ACTION. 3. thus increasing the degree of attainment of objectives. In the evaluation of sales personnel it is not possible to set up such tests. may be anticipated: . or comparisons of actual performances with standards.under observations while taking account of the effects of other variables. Lower or raise the objectives or the standards and/criteria used in measuring degree of attainment to make them more realistic. competitors’ activities and other variables. Similarly actions to be taken depend on the performance in terms of quantitative as well as quantitative evaluation. If performance and standards are in alignment may no action needed.THE DYNAMIC PHASE OF EVALUATION The evaluations. The time element changes and so do the sales personnel. Each salesperson’s performance results from complex interactions of many variables. and adjusted by executive judgement. some beyond the control of either the salesperson or of management. or the strategies used for their implementation to better for the achievement of objects. the customers. point the way to needed action. Otherwise the three alternatives are: 1. as discussed below. Adjust performance to the standards. some companies measure the impact of particular variable on personnel performance through careful design of experimental and control groups. Four such situations. 2. Revise the policy and/or plan. general business conditions. However.

The specific causes need to be identified and training and guidance should be provided. Poor performance in quantitative but good in qualitative evaluation. Good performance in quantitative but poor in qualitative evaluation. 1.Good qualitative input is failing to be reflected in quantitative success. 4. 3. 2.Critical and thorough discussion is required on problem areas.The appropriate response would be praise. In some situations. punishment including dismissal is required. However. Poor performance in both quantitative and qualitative evaluation.The good quantitative result suggest performance in terms of sales/profits and in front of customers is good. Training may be provided to improve the performance. . monetary rewards and may be promotion. Good performance in both qualitative and quantitative evaluation. poor performance on qualitative criteria warrant advice and training on qualitative aspects.