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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. .

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

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

.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. .

• Market is overcrowded. ..Category Consumer Durables.. • 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

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

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

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

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

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

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

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. Sales promotion and budgets .

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

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

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

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

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

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.

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

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

• Company sales forecast. . in a given market for a specific period of time.Forecast contd. • 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..

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

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

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

.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’. This is the example of ‘Bottom-up’ approach.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. .. • Effective co-ordination.Basic concepts contd.

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

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 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

g.Sales training methods. 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. . how to manage weak dealers and markets etc. how to manage institutional customers. how to manage big dealers. e.

Sales training methods 3) On line training: This type of training is less time consuming and less costly than the other methods. . 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.

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

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

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

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

• 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.

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

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.Demonstration and presentation • While selling. “Which means that”. salespeople should use linking phrases like. “Which results into”. .

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

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

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

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

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

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

because ultimately selling is important.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. .

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