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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

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

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

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

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

they must be linked with specific time-element. For example. more meaningful. Process of SMBO The operationalization of SMBO is a process. brand and market-sales and market share trends (all in measurable terms).be in conflict with each other. In addition. To make these two requirements. only after the company has conducted benchmark studies. It is formulated combined by sales manager and sales-force (representatives). 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 . it should be formulated and finalised. in the field. The setting of objectives should not be based only on the judgment of the top- 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. at the grass-roots level. It aims to focus on (i) results. the process of setting of sales-objectives should begin. with the involvement of the sales-force. within a specified set of objectives and (ii) participative style of management. suppose you ask a salesman to cut his travelling expenses. to find out. and ask him to spend more time. as to where it stands in terms of product. Rather.

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

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

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

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

and fixing their remuneration to run the business operations efficiently and effectively. (vii) Deciding the channels of distribution for easy accessibility and timely delivery of the products and services. quantity. utility. and correct price and many other factors in view. (xii) Order-preparation and office-recording to know the profitability of the business and to evaluate the performance of the employees. (viii) Selection. Packaging and packing. . training and control of salesmen. which will satisfy his desire for attractive appearance. and quota setting for effective Selling and to fix the responsibility to the concern person. keeping qualities. who wants a container.(v) Labelling. (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. for the consumer. (vi) Branding or naming the product(s) and/or services to differentiate them from the competitors and to recognise easily by the customer. (ix) Allocation of territory.

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

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

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

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

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

product features are the means by which benefits are derived. Since people buy products for the benefits they offer. service payment and credit terms and so on. Understanding buyer behavior 1. In others. timing of delivery. the salesperson have no scope for discussion. 1. In many selling situations. it is take it or leave.3. buyers and sellers may negotiate price. Setting sales objectives 5. Product knowledge and benefits Knowledge of product features is insufficient for sales success. . 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. These are referred to as Sales Negotiations. This is usually termed as pure selling. 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. Product knowledge 2. The way to do this is look at products from the customer’s point of view. successful sales people relate product features to customer benefits. Knowledge of competitors 3. 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. Sales presentation planning 4.

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Competitive Information can be sourced from a) Sales catalogues and price lists.g prices in Supermarkets. 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. against their weakness e. b) Talking with buyers. easily able to change to change from one kind of activity to another. 2. It is to the benefit of sales engineers that specification reflects the strengths and capabilities of their products rather than competitors. This may result in. ii) Industrial Selling Sales Engineers may work with buying organization in order to solve a technical problem. By potential buyers. It is only by analyzing the products through this way that they will be convincing in industrial selling. competitor X’s produts offers cheaper maintenance costs. The sales person must not only know his product benefit but also types of situation where each would be appropriate. 2 . Thus knowledge of competitive strengths and weaknesses will be an advantage in this situation. c) Observation e. to which a salesperson might reply “yes. order specification being drawn up in which sales engineers may have an influence. 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. but these costs savings are small compared to the fuel savings you get with our re……….g. a buyer might say.

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

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

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

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

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

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

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in buying an appliance one spouse decides what to be bought and the other decides on features. police officers. the individual or firm can be declared a prospect. sometimes the final decision may have to come from managing director. on the names for potential buyers. but manufacturers would alienate their retailers and wholesalers if they sold to these people. In organizations. model and where to buy it.g. NB: When the lead qualifies on all the above four criteria. . 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.g. Approaches to locating and qualifying prospects (Sources of leads and prospects) i) Centers of influence – joining various organizations (country clubs. Although the purchasing manager may have the formal authority to buy a piece of machinery. At household level the decision to buy a product may also be shared e. ii) Spotters – people who seek out leads for sales people and Sometimes paid a fee. Similarly many people would like to buy at wholesale. d) Eligibility to Buy The lead must be eligible to buy the product e. buying decisions are usually made by committees rather than a single person. iii) Endless Chain: This involves asking everyone you call. It also involves asking testimonials from satisfied customers or using referrals and recommendations from satisfied customers. 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. 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. Through this the sales representative can develop an endless chain of leads.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. They could also be current customers who provide referrals to potential prospects.

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

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

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

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

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

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

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

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

It is used not only in hiring but also in managing and sometimes as a basis for firing salespeople. therefore. All large companies with a . (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. Specific qualifications such as education and experience should be included in the job qualification. such as self-confidence. Determining these qualifications is probably the most difficult aspect of the entire recruitment process. thus making good candidates easier to identify. Job descriptions aid managers in supervision and motivation. aggressiveness. But most firms also try to identify personality traits that presumably make better salespersons. a multitude of subjective and very complex characteristics are involved. Finally. the type of job determines the type of compensation plan that will be used. Job descriptions are also used in developing compensation plans. Often. One reason is that the manager is dealing with human beings. (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. etc. a job description puts management in a position to determine whether each salesperson has a reasonable workload. The job description is probably the most important single tool used in managing the sales force.on what basis the new employee will be evaluated. 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. and they are used as an official document that is part of the contract between management and a salesperson's union.

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

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

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

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

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

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

But it must not be so brief that it screens out good candidates. 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? . An application form is an easy means of collecting information necessary for determining an applicant's qualifications. physical condition. an interview. and personal references. address. the ore it will cut down on costs. the undesirable recruits. Initial screening may start with an application form. (b) Application forms Application forms are one of the two most widely used selection tools (the other is the personal interview). outside interests and activities. position applied for. it should be brief. But no matter which tool is initially used . work experience. Information requested on forms usually includes name. Other important questions on an application form relate directly to the sales position for which the application is made. The shorter it is. educational background. or some type of test.and the importance of the position to be filled. The purpose of the initial screening interview is to eliminate. as soon as possible. participation in social organizations.

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

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

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

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

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

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

aims at providing the required knowledge about the products and the effective ways presentation to the customers in the market. 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. Competition. Though. the first step is to identify the gap between the standard of skills required and Salesman’s current standard in the organization/company. Current-levels of skills. they are supposed to achieve can be known easily by reference to job specifications. Not only.e. the first task for the Sales Manager/Training Manager is to set objectives for such type of training programmes. For this purpose. so that the programme so conceived is directed towards predetermined and definite goals. The Training-Programme may be for the-newly recruited salesmen as well as those already in employment with the company to refresh their knowledge..e. thus. in advance. A salesforce training programme. can be determined through observations of their actual working i. to improve their productivity to face the challenges created by competition. So. in the case of existing Salesmen. The nature and scale of both these skills should be specified. selling-skills etc. training means to train the employees i. their knowledge about Product. 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. The level. a good Training-Programme should clearly state what . 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. Generally.

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

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

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

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

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

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

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

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

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

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

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

.

Motivation is derived from the Latin term ‘movere’ meaning ‘to move’. 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. motivating them to work both effectively and efficiently. It is generally regarded as the process of getting people to work towards the achievement of an objective. administered in the way factory workers can be monitored. Sales force cannot be controlled.attracting outstanding salespeople. and holding on to good sales people. In simple words motivation is goal- directed behaviour. Motivation stimulates the movement of an individual. result oriented and go- . Among the most important tools for accomplishing these three objectives is the organization’s compensation plan. The salesforce is required to be self starters. 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. COMPENSATION AND MOTIVATION OF SALES PERSONNEL INTRODUCTION Successful sales managers have three primary concerns in managing the sales force. highly ambitions. The building and maintenance of sales force is possible through proper compensation plan. underlying which are certain needs or desires. 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

Straight-Commission plan This is whereby the individual sales person is paid according to their productivity. The combination has benefits which include. However the straight commission weakness is that it provides little financial control over sales peoples activities. Straight commission plan is also characterized by great flexibility by revising commission rates applying to different products. which is a questionable assumption. sales personnel having both the security of stable incomes and the stimulus of direct financial incentive. The straight commission has several advantages which include. . whereby advances may or may not be made against earned commissions. clerical costs are higher than for either salary or a commission system. Here. The combination also has disadvantages which include. the sales volume is believed to be the best productivity measure. with or without advances against earned commissions. they resist reduction of the size of the sales territories. 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. 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. the fact that it provides maximum direct monetary incentive for the sales person to strive for high-level volume. Straight commission with the company paying expenses. Straight commission plan has two broad classifications which include: - Straight commission with sales personnel paying their own expenses. Combination of Salary and incentive Plan (salary plus Commission) Most of the sales compensation plans are combinations of salary and commission. The management has both financial control over sales activities and the apparatus to motivate sales efforts. financial control over sales personnel and management can direct their activities along the most productive lines. and consider individual accounts privately owned. 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. The sales people re also careless about transmitting their reports and also neglect follow up leads. Most developed as attempts to capture the advantages and offset the disadvantages of both the salary and commission systems.

industrial or electronic products may offer a high basic salary. setting up displays or carrying out other assigned tasks. However. Sometimes. the basic salary of the salesman may be on the higher side. The direct compensation package of a salesperson thus consists of the basic pay plus allowances covering all travel and entertainment expenses etc. TYPES OF COMPENSATION Direct: The direct compensation package for a salesman is more or less the same in all companies. performing promotional activities. The basic salary and other allowances are revised from time to time. In case. 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. Bonuses never appear alone. . say. Bonuses are paid for reaching a sales quota. Fringe Benefits Like monetary compensation. A commission varies in amount with sales volume or other commission base. obtaining new accounts. a company employing technical person as salesman for selling.Use of Bonuses Bonuses are different from Commissions – a bonus is an amount paid for accomplishing a specific sales task. The bonus in other words is an additional financial reward to the salesperson for achieving results beyond a pre -determined minimum. they always appear with one of the main sales compensation methods. they are not motivating factors. following up leads. 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. Fringe benefits are given to all employees and do not vary with job performance but they prevent job dissatisfaction. the salesman has to stay overnight his boarding and lodging allowances are also provided for.

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

willing to travel. some factors do predominantly shape the structure of the company’s compensation plan. To keep such a sales force motivated. have tremendous stamina to work. The compensation structure is a function of selling effort. Other indirect benefits like training . When the product is in the introductory stage the company needs a dynamic sales force which can establish the product in the desired market. The sales force must be enterprising. 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. (b) Awards. In the growth stage. the motivation of the sales force has to be sustained to exploit all the opportunities available in the market. the sales force also needs a break from the monotony.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. have a good knowledge of the product. When the product has firmly established itself. take criticism easily. They have to approach the market with renewed vigour. have good communication skills and last but not the least. recognitions and prizes. thus providing the salesman with the much needed recognition. adequate compensation is the basic need. At this point indirect compensation schemes which are incentive linked play an important role. FACTORS INFLUENCING COMPENSATION Although the basic structure of a compensation plan may be similar across the companies.

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

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

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

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. The following Exhibit presents the order of priority of the needs individuals seek to fulfill and the needs sales managers must consider. 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.their individual needs and goals. Maslow’s Need Theory Maslow’s well-known theory contends that people are motivated by a “hierarchy” of psychological growth needs. Relative gratification of the needs at one level activates the next-higher order of needs. some individuals will behave differently and will be more successful because of different motivational patterns. Many people feel that individual motivation is dependent upon whether or not salespersons find something in the job that is personally motivating for them. with greater emphasis placed upon understanding and accepting the idea of how motivation works. Thus. . Therefore. the job of the sales manager must be redefined.

d memoranda. 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. s Freedom from worry about Provide a balanced package of security of jobs. fringe benefits medical expenses. etc. etc. incomes. Social needs Food. living conditions of sales force Safety needs Physiological needs . etc. shelter. promotion s opportunities. overall Be aware of general health and health. 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. self- Creativity development workshop Self-fulfillment Recognition Status Provide greater job E responsibilities.

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

and are willing to take risks doing asks that may serve as stepping stones to future rewards. training new salespeople on “how to close a sale”).. 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. selling a new product category. or being assigned a large national account).g.. opening new accounts. Assign salespeople specific or specialized tasks enabling them to become experts (e. Grant greater authority and job freedom to the salespeople in accomplishing assignments (e. seek challenging tasks. Achievement-oriented people readily accept individual responsibility. Send periodic reports and communications directly to the salesperson instead of forwarding everything via the sales supervisor. Introduce salespeople to new and more difficult tasks and to challenges not previously handled (e. Any achievement- related step on the .g. Here are some examples of job enrichment: Give salespeople a complete natural unit of work responsibility and accountability (e. Achievement Theory: Research by McClelland and his associates confirmed that some people have higher achievement needs than others. the supervisor must be informed about what information the salespeople are receiving).. 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).while providing motivators (job enrichment) for the sales force. (Of course. they labeled such persons “achievement oriented”.g.g.

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

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

These meetings allow the sales manager to understand the personality. Meeting between manager and sales force. needs and problems of each salesperson. 1. The objectives when duly .want and need more information about what is expected of them and how they will be evaluated.Clarity of job and what is expected from the salesperson is a great motivator. 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. But this seems to be one of the least complicated. Some of the factors that make a special mark on sales force motivation are discussed below. This provides a number of opportunities for improving motivation. This provides opportunity to managers to meet their salesforce in the field. and surest ways of obtaining higher sales force productivity. least expensive. Clarity of job.These are highly regarded by sales managers in the motivation of their sales teams. 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. become an important component of motivation. 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. The non-financial incentives. 2. at head office and at the sales meetings/conventions.

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

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

.One of the more common and recommended forms of inducing high levels of motivation is through persuasion. managers use rational arguments to convince salesperson that it is in their own best interests to act in preferred way. offering membership of social clubs. In this situation. conferment upon the title of “salesman of the month/year”. 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. certificate etc. sales trophies. Persuasion has the advantage of getting people to conclude that their actions were performed out of their own free will. Persuasion. 10. Congratulation telegrams from members of top management. mention in company newsletter.

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

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

in dollars or physical units. or operating. an estimate of the number of low-priced pocket cameras that might be sold in San Mateo County. 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. although of 3 . A sales forecast may be for a single product or an entire product line. California. 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 forecasts are short-term. California. which are used for planning production capacity and for long-run financial planning. 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. an estimate of the maximum number of low-priced pocket cameras that might be sold in San Mateo County. Long-range sales forecasts. A sales potential represents sales opportunities available to a particular manufacturer. A market potential indicates how much a particular product can be sold to a particular market segment over some future period.of a good or service during a stated future period. assuming the application of appropriate marketing periods. 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. while a market potential indicates sales opportunities available to an entire industry. such as to Eastman Kodak company. Sales forecast A sales forecast is an estimate of sales. Thus. It maybe for a manufacturer’s entire marketing area or for any subdivision of it. sales forecasts rather than long-range sales forecasts. To illustrate.

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

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

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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In order wards. and in some companies this excess is higher because it takes longer for a salesperson to get fully into stride. and thirty people are considered for each vacancy. If an interview by an executive takes two hours. an executive’s time is worth $25 per hour. Some expenses are not readily calculated. This is the ratio of separations per 100 salespeople. fees to employment agencies and so forth often run to more than $500 per recruit. when a company incurs variable expenses for maintaining its sales force. . motivating. because interview several applicants for each selection. total interviewing costs amount to $1. supervising. Total expenses per unit of product sold vary inversely with the productivity of the salesperson.000 per person. For example. and the ratio of selling expenses to sales for a new person is likely to be excessive for at least the first year. Rate of sales personnel turnover The rate of sales personnel turnover is a measure of the quality of sales force management. Interviewing coasts are high. it receives its highest return from the most productive sales personnel. A conservative estimate of the excess is $3. advertising. The costs of travel and time used for preparatory and follow –up training easily run $10. The turnover rate influences the total expenses of sales force management. For example. and controlling – these expenses are lower per unit of product sold for productive salespersons than for unproductive salespersons. new recruits do not produce as much as experienced sales personnel. accompany employing a sales force of 250 persons and having twenty separations during the year has a rate of turnover of 8 percent. training. Coasts of recruiting.sales commissions.500 per new salesperson during the first year.500 per person hired.

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

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

sale executive. 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. . The job description once prepared will act as the blueprint for the personnel specification which outlines the type of applicant the company is seeking. iv) Interviewing. iv) Technical requirements e.g. The technical requirements 2 . It is as a result of this problem that Sales Manager is advised to approach recruitment and selection in professional manner. ii) Identification of sources of recruitment and methods of communication. i) Preparation of the job description and personnel specification. v) Location and geographical area to be covered. ii) Duties and responsibilities – the tasks that will be expected of the new recruit e. Job Description. after-sales service. An understanding of each stage and correct procedures to be followed will maximize the chances of selecting the right applicant. vi) Degree of autonomy-the degree to which the salesperson will be able to control his own work programme. 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. iii) Designing an effective application form and preparing a short-list. Generally Covers the Following Factors i) The title of the job e. the degree to which the salesperson needs to understand the technical aspects of the products he is to sell.. iii) To whom he will report. information feedback and the range of products/market/type of customer the salesperson will serve. sales representative. selling.g.g. There are a number of stages in the recruitment and selection process.  Studies have found out that fewer than seven out of ten of salespeople the Sales Managers recruits are unsatisfactory.

(E. active. 3 . 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.g.g. motivation etc). self-… iv) Disposition e. In summary. v) Interests e. The following questions must be answered. which influence the level of education and possibly. The preparation of the personnel specification is more difficult for Sales Manager than that of the job description. ii) Attainments e. The factors chosen to define the personnel specification will be used as criteria of selection in the interview itself. personality. married. age. standard of education and qualifications. inactive interests. Another aspect of the personnel specification is the determination of qualities looked for in the new salesperson. appearance. will be factors. single etc. vi) Personal circumstances e. experience and successes. common Skills. a personnel specification may contain all or some of the following factors: i) Physical requirements e.g. ability to communicate. degree to which interests are social. 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. sense of responsibility.g. and the nature of the customers which the salesperson will meet. the age of the required recruit. maturity.g. for example. The qualities themselves may depend on the nature of the job. speech. iii) Aptitudes and qualities e. determination. intelligence.g. or previous experience.g.of the job. This is much more vague concept than the level of technical qualifications.

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

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

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

ii) To provide a foundation of knowledge which can be used as starting point for the interview. Hobbies. . However. The job specification will be used as a tool of evaluating each of the short listed candidates. the decision will be based upon a combination of formal criteria and more personal factors. . iii) To aid in the post-interview decision-making stage. Therefore. In reality other. Such an application form will achieve a number of purposes: i) To give a common basis for drawing up a short-list. 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. The interviewing setting Interviewing setting will have a direct bearing on the outcome of the interview. 7 . visitors and telephone calls should be barred. 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 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. a candidate that the sales manager believes would be difficult to work with or might be a troublemaker is unlikely to be employed. . (Personnel specification) In order to do this each applicant should be encouraged to talk freely and openly about himself. more personal considerations will also play a part in the decision e. iv) THE INTERVIEW . Membership of societies/clubs. If such a room has to be used. . which the sales manager is unable or unwilling to state at the personnel specification stage.g.

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

[easy manner]. The assumption here is that sales success can be predicted by the type of interests. 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. Weaknesses of Psychological Tests: i) It is easy to cheat The applicant. . iv) Interviewers should appear relaxed and [adopt a] be friendly. the interviewer will wish to encourage the candidate to talk about himself.g. behavior and expectations. Close-ended questions invite a short answers e. some length on the topic e. For example. . does not truly answer but fakes the test in order to give “correct Picture”. v) They should be courteous and appear interested in what the applicant says. which a person has. (His questions do not invite much talking). Supplementary selection aids i) Psychological Tests Although success at the interview is always a determinant of selection. some firms employ supplementary techniques to provide a valid measure of potential. 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. his experiences. After establishing rapport and reducing anxiety. can you tell me about your experiences selling pharmaceuticals. attitudes. 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.g. Psychological tests is one of the supplementary aids used when using these tests. having an idea of the type of person who is likely to be successful at selling. 9 . care should be taken and trained psychologist is usually needed to administer and interpret the results. can you tell me how long you worked for bechams? Closed-ended may imply that the applicant is uncommunicative. when really the problem lies with the interviewer.

3. they have failed to distinguish between high and low performing sales personnel. It is used in order to gauge the selling potential of candidates. i) General written tests: Candidate intelligence can be tested by giving tests in Language. EmploymentTests: To test the knowledge. interest and Aptitude. Role playing This is another aid in the selection of the salespeople. lecturers etc.g. college authorities.This is unlikely as discovering a new Mara Dona by measuring the interests of young footballers. While some of these factors may be useful attributes for a salesperson to possess. 5. the applicant is placed on the job and his skill and capability tested. On-job-test and selection Under this process. 1. skills and ability of candidate’s different types of tests are used. The standards of physical fitness will depend on the nature of the job. maturity. Line supervisors give these tests. have been measured in order to predict sales success. Referees may be previous employers. Medical Examination To ensure that the person be appointed enjoys good health in order to perform the job effectively. The following are various kinds of employment tests given to candidates. ii) Proficiency tests: To test skills and talent e. 10 . speeding. Factors such as how sociable. dominant friendly and loyal a person is. 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. 2. 4. iii) Psychological tests: Objective is to test mental alertness. general knowledge etc. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. . purchase terms and other matters. instruction and servicing. The sales person should then schedule a follow up call when the initial order is received. so as to make sure there is proper installation. Right after closing the salesperson should complete any details on the delivery time.charge.

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

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

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

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

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

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

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

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

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

referral approach successful in getting an audience with prospect who is difficult to see directly. It frequently makes or breaks the entire presentation. the sales person introduces himself to the prospect and states what company he represents. The sales person starts the sale in a consumer-benefit approach by informing the prospect of what the firm can provide in benefits. 3. (b) Demonstration The demonstration is the core of the selling process. the next step is the actual approach. The product consists of handling the product to prospect with little conversation. and it makes easy transition into the demonstration phase.e. Handling objections All sales person confront sales resistance i. If the approach fails. ii) The demonstration should be designed to give customers ‘hand on’ experience with the product wherever possible. The introductory approach. Normally sales resistance takes the form of an objection which can be classified as stated or hidden. actions or statements by a prospects that postpone. 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. In other words. Four basic approaches are in common use: 1. directs the prospects attention toward the benefits the firm has to deliver. 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. approach and demonstration. a) Approach When the sales person has the name of the prospect and adequate pre-approach information. It can be most effective when the product is unique and creates interest on sight. hinder or prevent the completion of the sale. The sales person actually transmits the information and attempts to persuade the prospect through product demonstration to make a customer. Sales presentation comprises of two distinct activities. 2.person who are selling to established customers. It gets the prospect attention. 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. it immediately inspires interest in hearing more about the proposition. 4. Prospects may state . Lastly.

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

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

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

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

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

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

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

and demand for. Since the salesman’s visits are decided under a call frequency schedule programme. (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. Sales territories also result in such benefits as fewer travel miles and fewer overnight trips. routes and . (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. goods. This lowers selling cost and increases company profits. Individual territory performance can also be compared to district performance. then. 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. the performance of salesmen can be measured. district performance compared to regional performance. becomes difficult for a salesman to neglect a “hard” territory and only go ahead with the easiest-to. and also raises the general reputation of the company which the salesman represent. (vi) To Improve control of the sales forces: When customer calls frequencies. he comes in contract with his customers on the basis of a regular schedule. routes and schedules are determined. 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. When all frequencies.judge the performance over the years. Customer goodwill and increased sales can be expected when customers receive regular calls. and regional performance compared to the performance of the entire sales force.sell accounts. Over and above this. It.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For example. organizations/customers are scattered geographically and not concentrated at one place. therefore.  The company may be too small to be concerned with segmenting the market into sales areas. sales people.  Management may not want to take the time.  Personal friendship may be the basis for attracting customers. or may not have the know- how for territory development. and whenever they find them. 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 . in the case of industrial products. Life insurance salespeople may first sell policies to their family and friends and then use their contacts. For Example. may be allowed to sell to any potential customer.

Problems Remedies High turnover Rectify casual factor .

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

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

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

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

These items all bear on the setting of performance standards. In other words. Quantitative Performance Standards Most companies use quantitative performance standards. Marketing intelligence must provide evaluations of competitions’ strengths. especially quantitative standards. The particular combination of standards chosen varies with the company and .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. Management needs evaluations of customers and prospects from the standpoint of potential profitability for each class and size of account. Setting standards of performance requires consideration of the nature of the selling job.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. and the like. depend upon selling strategy. weaknesses. in turn. 2. duties and responsibilities. It is important to know the total sales potential and the portion that each sales territory is capable of producing. Setting sales performance standards requires considerable market knowledge. Long run evaluation. practices and policies. sales job analysis is necessary to determine job objectives. These. 3. Intermediate run evaluation. STANDARDS OF PERFORMANCE Performance standards are designed to measure the performance of activities that the company considers most important.

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

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

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

They may emphasize more profitable products and devote more time and effort to the accounts and prospects that are potentially the most profitable. 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. To apportion . (iv) Territorial market share This standard controls market share on a territory by territory basis. The net profit ratio controls sales volume and expenses as well as net profit. 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. The index consists of the ratio of the number of customers to the total prospects in a 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. When either is performance standard. Management later compares company sales to industry sales in each territory and measures the effectiveness of sales personnel in obtaining market share.more volume and by reducing selling expenses. Net profit and gross margin ratios have shortcomings. but it does not control the expenses of obtaining and filling orders. sales personnel maYJ1eglect new accounts. Management sets target market share percentages for each territory.

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

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

non-selling activities are critical features of sales job. appropriate standards should be set. Other executives consider the qualitative factors fom1al1y.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 . Qualitative criteria defy exact definition. Whenever. they are. one method being to rate sales persoIl. Qualitative performance criteria Qualitative criteria are used for appraising performance characteristics that affect sales results.on distributor’s customers. especially over the long run. Since quantitative standards for non-selling activities are expressed in absolute terms. instead they arrive at informal conclusion regarding the extend to which each sales person possesses them. but whose degree of excellence can be evaluated only subjectively. quotas. in reality. Many sales executives do not define the desired qualitative characteristics with any exactitude.

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

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

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

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

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

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

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

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