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Sales Management

Welcome to the world of SALES

Objectives of Sales Dept.
• • • • • • • To achieve Sales Targets To achieve Market share targets To manage dealer network To organize sales training To handle customer complaints To manage Sales promotion campaigns To effectively cover market

Sales Job Classification
• • • • • • • Delivery Salesman Order Taker Sales officer Sales Executive Sales Supervisor Sales Engineer Sales Support staff

Various Sales Classification • • • • • Deliverer: Only delivers goods Order Taker: Only takes customer orders Detailer: Details the product Technician: Engineering sales person Demand Creator: Creative sale of tangible and intangible products. .

Categories. • Every product category is getting divided further into new categories. .Market Scenario • It’s a battle of Products. Brands.

• Its NOKIA v/s MOTOROLA v/s SAMSUNG v/s SONY v/s HAIER v/s many others. • Market crowded with too many products.Category. . Cell Phones..

Category Pizza… • It’s Pizza Hut v/s Domino’s v/s Smokin Joe’s v/s Papa John’s • Market crowded with too many products. .

.Category Motorbikes… • Hero Honda v/s Bajaj v/s TVS v/s Yamaha v/s Honda v/s Suzuki • Market crowded with too many products.

.Category Consumer Durables. • Market is overcrowded.. .. • LG v/s Samsung v/s Sharp v/s Sony v/s Videocon v/s Onida v/s Godrej v/s Hitachi v/s Philips v/s Whirlpool and many more.

Category Soft Drinks…..
• Coca-Cola v/s Pepsi v/s Thumps up v/s Mountain Dew v/s 7-Up v/s Limca v/s Mirinda v/s Sprite v/s Gold Spot v/s Dukes and many more…. • What will the poor customer do?

Category 4 Wheelers….
• Maruti Suzuki v/s Hyundai v/s Tata Motors v/s General Motors v/s Ford v/s Skoda v/s Mahindra v/s Mercedes Benz v/s Volkswagen v/s Nissan v/s Fiat….. • Too much really….

What is the outcome???
• • • • • • Too many Co’s Too many categories Too many segments Too many brands Too much of choice Too much of confusion…Resulting into ‘THE ASSAULT ON THE MIND’

• Managing Sales has become a complicated function. .THEREFORE……. • Sales has become too challenging and an uphill task..

• • • • • • • Managing Sales Force Offering Sales Training Managing Channel partners Managing Direct sales Managing Sales Promotion Managing Sales Territories Managing Sales Targets .Sales Management means.

Sales Planning • • • • • • • Planning is deciding on… WHAT are we going to do? WHEN are we going to do? WHERE are we going to do? WHO is going to do? WHY will it be done? AND HOW will it be done? .

Observation • Successful companies do a lot of planning and outperform their rivals and also their own past performance. .

Strategic Planning
• These are the decisions about company’s lond term objectives and strategies. • Sales planning occurs at various levels in the company. • Multi-product, Multi-business co’s plan at 03 levels..1)Corporate plan 2) SBU plan and 3) Product functional plan.

LEVELS OF PLANNING
• Corporate Planning : Long term planning • Div./SBU Planning : Long term planning • Functional Planning : Operational, short term.

Strategic Planning Process.
• Step no 1:

• DEFINING BUSINESS MISSION

1)Current market size. . 2 • ANALYSIS OF EXTERNAL BUSINESS ENVIRONMENT. buying behavior trends. 2)Growth patterns 3)Product trends 4) Segment trends 5)Customer needs analysis.Strategic Planning Step no.

SWOT analysis and their future plans. current performance. . 7)Competitors analysis: Their strategy.Step 2 contd… 6)Current product and marketing mix.

Technological environment Cultural environment .Step 2 contd. Demographic environment.. Economic environment. Political environment. • 1) 2) 3) 4) 5) EXTERNAL ENVIRONMENT.

Product Mix Channel Partners Suppliers Vendors .Internal Environment 1) 2) 3) 4) 5) Employees.

Designing. Selecting Strategies • CLEAR-CUT STATEMENT OF OBJECTIVES .

Description of Strategies. • • • • • • Target Market Marketing Mix Positioning Market research Network management CRM and MIS . • Strategies with respect to.

Sales promotion and budgets .ACTION PLAN • • • • • • • Identification of weak markets Identification of strong markets Identification of focus markets Identification of focus segments Identification of strong dealers Identification of strong dealers Market coverage.

Implementation and Control • • • • Weekly sales monitor. Daily collection monitor Monitoring of Target v/s Actual performance. . • Corrective Action • Controlling expenditure. Product and segment wise monitor.

finance planning.g.Sales Forecasting • Why it is needed? • To plan and achieve and forecasted sales EFFECTIVE. Production plan. • On the basis of Sales forecast other dept.. .s plan their activities. Human resource planning. without firefighting…. e.

Types of Sales Forecast 1) Product related. • • • • • National sales Industry sales Company sales Product line sales Area wise sales .

• Long Term sales. • Time specific. • Medium term sales • Short term sales .Forecast contd.

4. 3. 2. Area specific.Forecast contd. • 1. Global sales National sales( country specific) Regional sales( north/south) Territory sales( district level) ..

Terms used in Forecasting • Market Potential. It is the best possible estimated sales of a given product in a given market for a specific time. .

It is also called as ‘Market size’. in a given market. . for a specific period of time.Market forecast. • It is the expected industry sales of a given product at one specific level of industry marketing expenditure.

. • Sales potential is defined as maximum share of market potential that is expected to be achieved by a company. • Company Sales Potential...Forecast contd.

• Company sales forecast.Forecast contd. . in a given market for a specific period of time.. • It is the estimated company sales volumes in units or service under a proposed marketing plan.

It is the estimate of expected sales volume in units or revenues from company’s products and services and the selling expenses. • Sales budget. ..Forecast contd.

sales officer. territory. In this method the Sales head breaks down the company sales forecast into region. district. .Sales forecasting methods • Top-down/break-down approach.

Bottom-up/Build-up approach • This starts with the company’s area office to estimate the sales in their respective territories. • Each Area manager adds the forecast received from the sales team. . modifies the same and sends it to the Regional manager.

. • Each Regional manager totals up the forecast. head presents the proposal to the CEO for further discussions and modifications.Bottom-up approach contd.. modifies the same and sends the regional estimate to the marketing head. • The Sales/Mktg.

This is the example of ‘Bottom-up’ approach.Sales force Composite Method • In this method salespeople are involved to estimate their future sales. . • Sales force makes estimates about their sales after talking to the ‘Channel partners’.

• Detailed sales estimate broken down into product. • Forecast done by salespeople can be reliable to a large extent. dealer and territory is possible. .Advantages of Composite method • Salespeople have better insight of the market and competitors.

Category. 1) Industry details.Sales forecasting… • Important Review areas.. 4) Variance analysis of Major towns and contributing reasons.wise. 3)% growth over previous year. . 2)Target v/s Actual.

Review Areas contd.Imp. 1) Industry movement with segment % 2) Area wise .Officer wise Tgt v/s Act and variance analysis. . Town wise. 3) Sales promotional Activity review.

.Key Result Areas-Review • 1) 2) 3) 4) 5) Key Result Areas could be. Sales Training programs. Special Strategic plans( Corporate level) Business Results. CSI( Sales process/service process) Dealer Network Expansion.

• Planning or forecasting is made.Based on Review. Volumes and Market share.e. Dealer-wise projections. 1) Segment-wise . Targets. 2) Growth over previous year.Town-wise. Plan includes. Officer-wise. i. .

( Townwise.Key Result Areas-Plan • • • • CSI( Sales/service process satisfaction) Dealer Network Expansion. Sales Training programs. Promotional budget requirements.activity-wise) .

5)To identify weak salespeople. (promotions) 4)To identify training needs. . 3)To identify future Managers. • Why it is needed? 1)To identify salesperson’s weak areas and improve.Performance Measurement. 2)To decide increment in pay based on performance.

MIS( Reports) . Sales revenue generated. 1) 2) 3) 4) 5) 6) Target v/s Achieved performance. Market Coverage Channel coverage and management.Measures of Performance. Growth achieved over last FY.

2)Presentation skills. 6) Ability to close sales. . 1)Developing rapport. 5)Ability to implement company plans.Qualitative Measurement. 4)Ability to overcome objections. 3)Use of Sales tools. • Selling Skills.

Sales/Service advise. Salespersons acceptability. . Keeping customer records updated.Qualitative Perf.. contd. Keeping customer information updated. Efficient customer service. • 1) 2) 3) 4) 5) Customer Relationships.

• Sales targets can be set on volumes. market share . profits. .customer satisfaction or combination of all.‘Sales Goals or Target settings’ • Sales targets are sales goals set by a company for its sales force for a specific time period.

• Motivating sales people. . • Controlling performance.Why Sales targets? • Performance standards. • Identification of strengths and weaknesses of sales team.

Considerations for Setting targets. . • Territory potential. • Company’s plans for that market. • Past sales experience/performance. • Salespeople’s estimates.

• Flexibility. Involvement of sales team in target setting. • Continuous feedback. Understand problems.Considerations… • • • • Set realistic targets. Ensure sales team understands targets. .

Sales Organization. 3) Makes people perform with clarity. 2) Defines reporting pattern. efficiency and effectiveness. • What is it and why it is needed? 1) Defines job relationships among people. .

. It means that in a centralized structure authority and responsibility is with higher management levels.Basic concepts in Sales orgn. • Degree of Centralization.

Basic concepts contd. . customers etc. Therefore. lines. • Degree of specialization. areas. It means that in today’s competitive scenario a general sales approach may not be effective. salespeople are asked to handle special products. segments.

.Basic concepts contd. • Market orientation. It means that when markets are complex and varied in nature co’s must respond by designing a structure as per client’s need and requirement.

It means that Sales and marketing must have co-ordination between themselves for achieving ultimate organizational objectives..Basic concepts contd. . • Effective co-ordination.

Basic concepts contd.. • It means that how many sales people are controlled by a sales manager and how much should he be controlling? . • Span of control.

Line Sales Organization VP (SALES) Zonal Manager Zonal Manager Zonal Manager Zonal Manager Area Manager Area Manager Area Manager Area Manager Sales Officer Sales Officer Sales Officer Sales Officer .

• Line organizations have clear authority and responsibility. • Subordinates may lack knowledge and skills of specialized areas. • Too much depends on the Sales head. • Decision making is quick.Line Sales Organization • It is simplest structure. .

Line and Staff organization VP (Sales) Manager Sales Training Manager Logistics Manager Advt.and Publicity Manager Mkt .Research General Manager (Sls) Zonal Managers Area Managers .

• Better co-ordination and planning can be done.Line and Staff Organization • Provides experts in areas like mkt. sales training. • Salespeople can focus on their work and targets. • Better decisions can be taken in this structure. . research. logistics etc.

And Design •Product design. •Channel management . •Service design •Customer research Customer Support Team •Service •Training •Information Operations Team •Production •Quality assurance •Systems engineering Customer Satisfaction Team •Sales and Mktg. •Logistics.Horizontal Sales Organization Res.

• This structure reduces supervising costs and efforts. • Co’s which are customer focused adopt this structure. • It also improves efficiency and customer response. . • Cross functional teams are formed.Horizontal Sales Organization • This structure is cross functional in nature.

. Services Manager GM (Sales) Market research Manager ZSM/ASM Sales Officer.P.Functional Sales organization. (Sales) Mktg. V.

. • Salespeople can receive instructions from staff managers.Functional Sales Organization • In this type of organization staff manager has a line authority of his function over sales people.

Combination structure. Market oriented structure. . Product structure. • • • • • Geographical structure. Functional Structure.Specializations within structures.

M. V.P.(Sales) Manager Market Research G. .(Sales) Regional Manager North Regional Manager South Regional Manager West Area Managers State Heads.Geographical Structure. Regional Manager East Sales officers Territory Heads.

• Better sales force control is possible. . • Quick response and customer service can be possible as the salespeople are in the field/market. • Sales people can be held accountable as they are responsible for a specific territory.Geographic Structure • This structure helps in better market coverage.

Sets) General Manager (Water pumps) General Manager (Dairy Equipment) Regional Manager ( Gen.Product Specialized Structure Vice President (Sales) General Manager (Gen. Sets) Regional Manager (Water pumps) Regional Manager (Dairy Equipment) .

Product Spl. . • Product heads can design a better marketing strategy and can react to market needs quickly. • This structure offers focused attention on each product group/division. • Overall growth can be possible in this structure.

/Govt.Sales) Regional Manager (Rural Sales) ./Govt.Market specialized structure Vice President (Sales) General Manager (Dealer Sales) General Manager (Inst.Sales) General Manager (Rural sales) Regional Manager ( Dealer sales) Regional Manager (Inst.

. • Selling costs can be on the higher side in this structure.Market specialized structure • This structure provides specific market and customer needs. • May create overlap and confusion. • Customer satisfaction can be achieved.

Hiring. Selecting.Sales Force staffing • 1) 2) 3) 4) 5) 6) Steps involved in Sales force staffing are as follows. Planning. Socialization Assimilation . Recruiting.

1) Planning • Is establishing responsibilities.. . and HRD is absolutely necessary. • Is deciding on roles and responsibilities. • Who will do what in the various stages and activities of staffing. • During the entire process co-ordination between Sales dept.

Decide on optimum sales force size. . Consider the no.Planning • 1) 2) 3) Number of Salespeople needed. 4) Consider terminations. of transfers and retirements. of promotions. Consider the no.

What type of customers is he going to meet? Level of competition.Planning. 1) Conduct job analysis: Analysis of environment in which salespeople are going to work. . • Type of Salespeople required. Knowledge and skills required for the job.

supervisor. GM. • Technical requirements. • Types of customers he would be meeting.) • Reporting relationship.( sales officer. • Posting location and area to be covered. • Job demands and expectations.Planning 2) Prepare job description: • Title of the job. . • Products salesperson is going to sell.

Employment agencies. Internet.2) Recruiting • Identification of sources for recruitment. Internal sources: Thru employee referral programs. External sources: Advertisements. Campus interviews. Competitors. . Vacancies created by promotions and transfers.

exam.Intw.3) Selecting Ref. Appl.Check Med. In.intw.Bank. Screening . Testing Int.

4) Hiring • After the candidate is short listed co. . makes a job offer to him. • After the acceptance of job offer by the candidate a letter of appointment is given to him.

5) Socialization and assimilation • Socialization: Salesperson understands and learns values. rules and regulations and company culture. norms. where the recruit is introduced to various departments. • Assimilation: After the orientation program gets over the recruit formally mixes with the team and his/her boss. This is done through an orientation program. .

Training of Salespeople. • WHY IS SALES TRAINING NEEDED? .

• To improve the salesperson’s product knowledge.Sales training. • To improve his selling skills. • To introduce him to new selling techniques. . • Special training programs for higher managers like stress management. strategic thinking etc. crisis management.

Routine/refreshers programs. . Performance testing.Sales Training • How are training needs identified? • • • • Thru Sales manager’s observations. Sales-force audit.

Technical features.Various Training Areas • 1) 2) 3) PRODUCT KNOWLEDGE. Technical knowledge/Technology change. . 4) FAB analysis. Product comparisons.

. Consumer buying behavior. Customer segmentation.Various training areas. Customer relationship management. • 1) 2) 3) 4) CUSTOMER KNOWLEDGE: Types of customers.

Competition promotion schemes.Various training areas • 1) 2) 3) 4) 5) 6) 7) COMPETITION KNOWLEDGE: SWOT analysis. . Competition products. Competition network. Competition strong and weak markets. Competition policies. Competition sales force.

Through Role plays. .Sales Training Methods 1) Classroom training: Through lectures. Through group discussions. Through case studies. Through demonstrations.

how to manage big dealers.Sales training methods. .g. how to manage institutional customers. 2) On the Job training: New sales recruit can accompany his senior on the field to observe how things are actually managed on the field. e. how to manage weak dealers and markets etc.

This method is also becoming very popular. • Electronic performance support system: This is a computer based training where info. is made available to the salesperson. .Sales training methods 3) On line training: This type of training is less time consuming and less costly than the other methods.

cheaper and more effective and informative. cd-roms.Sales Training methods • Interactive multimedia training: This method is faster. audio cd’s etc. books. • Self Study: Thru product manuals. . Sales force can ask questions and get answers from experts. articles. • Distance learning: It is an interactive system thru a television network.

where a salesperson sells his product or service directly to a customer. • One must realize that there is no magical formula to make a sale. .Personal Selling Process • Personal selling is one-to-one persuasive selling. however if selling process is adopted the probability of making a sale increases.

Idn. Pre/ Demo Obj. Opening Follow Up. Closing Sales Nego.Personal selling process Need. Hand. .

• Self introduction. I am just looking. • Opening remarks Common mistake. ADOPT TO THE SITUATION.1) Opening • Important points: • Personal Appearance. How can I help you? Customer: No. .

• Salespeople should avoid the temptation of making a sales presentation without finding out the customers needs and wants.2) Need Identification • QUESTION AND LISTEN POSTURE. .

• Make sure you detail the product in a sequence. . • Demonstration should not go wrong. • Know the product USP’s well.3) Demonstration and Presentation • Make your demonstration and its process as simple as possible. • Rehearse the approach to the likely objections.

Demonstration and presentation • It provides an opportunity for a salesperson to convince the buyer. • Salesperson should remember that “Customers buy benefits and not features” .

“Which helps you in” Presentation should not mislead the sales person into believing that he/she should do the talking” alone” He should ask questions and pause. “Which means that”. . “Which results into”. salespeople should use linking phrases like.Demonstration and presentation • While selling.

• SHOW ME AND I MAY REMEMBER. • INVOLVE ME AND I WILL UNDERSTAND. . • TELL ME AND I WILL FORGET.Demonstration and presentation • Some important tips.

• Start the demonstration with a concise statement. • Do not leave demo halfway. summarize all the main points. • Finally. . • Make demo interesting and satisfying. • Involve the customer into the demo. • Sell benefits.Demonstration and presentation • Some important tips.

• Customer objections can be overcome easily. which might help in relationship development. .Advantages of a demonstration. • It is a useful ancillary in selling. • Selling becomes more realistic. • Salesperson gets a chance to interact and know the customer.

• Objection highlight issues important to customers. .4) Dealing with objections • What are objections? • Objections are expressions of interest in the product or service.

How to handle objections? • Listen to the customer carefully and do not interrupt him. • Question the objection itself. • Straight denial. • Agree and then counter. .

. Delivery time. Credit facility.5) Negotiations. Schemes and offers. • Where can customers negotiate? • • • • Price.

6) Closing of sale • The most important part of selling process is “asking for an order from the customer” • The entire selling effort will otherwise go waste. because ultimately selling is important. .

service reminders and more importantly customer refferals. . • Salesperson can ask about the product performance. service offered to him.7) Follow. his buying experience.up • This is an important step because it can help in building a long term relationship with the customer.