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INTRODUCTION
SALES MANAGEMENT
LECTURE 1
Introduction to Sales Management
• Sales Management
– is the planning, organizing, leading and controlling of an
organization’s sales force in order to create exchange to
satisfy individual and organizational objectives.
• Communication tools available to any firm are
typically classified as personal selling, advertising,
sales promotion and publicity.
Sales Management Process
• Describing the personal selling function
• Defining the strategic role of the sales function
• Developing the Salesforce
• Directing the salesforce
• Determining
performance
the
salesforce
effectiveness
and
Personal Selling in the context of
marketing mix
• Basically the nature of personal selling is derived
from the marketing mix.
• We cannot do selling without a product, price,
promotion and place.
• These ingredients are a variety called 4ps especially
when they relate to a tangible product.
Evolution of Marketing and the Marketing Concepts
• Traditionally, the roots of modern marketing have been traced to
the 1950s, when the marketing concept was first articulated.
• In the 1950s, leading firms presumably embraced the customeroriented marketing concept.
• However, recent historical analysis provides strong evidence that
marketing activities and customers orientations were commonplace
in firms much earlier than the 1950s in the United States, Germany,
and England.
Evolution of Marketing and the Marketing
Concepts (Cont.)
• The Production Concept: The production concept holds that
consumers will favor products that are available and highly
affordable. This concept is one of the oldest orientations that
guide sellers.
• The product concept: The product concept holds that
consumers will favor products that offer the most in quality,
performance, and innovative features.
Evolution of Marketing and the Marketing Concepts
(Cont.)
• The Selling Concept: holds that consumers will not buy enough of
the firm’s products unless it undertakes a large-scale selling and
promotion effort.
• The Marketing Concept: holds that achieving organizational goals
depends on knowing the needs and wants of target market and
delivering the desired satisfaction better than competitors do.
•
Evolution of Marketing and the Marketing
Concepts (Cont.)
• Holistic
Marketing
Concept:
is
based
on
the
development, design, and implementation of marketing
programs, processes, and activities that recognizes their
breadth and interdependencies.
• Relationship marketing
• Integrated marketing
• Internal marketing
• Performance marketing
Evolution of Marketing and the Marketing
Concepts (Cont.)
• The Societal Marketing Concept: The societal
marketing concept questions whether the pure
marketing concept overlooks possible conflicts
between
consumer’s
consumer’s
short-run
long-run
wants
and
welfare.
LECTURE 2
THE NATURE OF SALES MANAGEMENT
• What is the role of sales manager?
• Owing to the fact that the sales force constitutes the
interface between the organization and its markets,
the management of salespeople goes beyond
equipping them with the basic skills in salesmanship.
• It includes addressing personal issues such as dress
code, interpersonal skills, comportment, etc
The Sales Person’s Job
• Van Selling: - Deliverer
• Retail Selling: - order taking
• The staple commodity selling
• Missionary / Ambassadorial selling
• Technical Selling
• Specialty selling of tangible products
• Specialty selling of Intangible products
Pre-requisite for Sales People Success
• The will to succeed in the selling career.
• The sales person must have the will to succeed no
matter the stiff competition that may exist in the
business environment.
• Human understanding
• Interpersonal communication skills
• Salespeople must have high Ego Strength
• Habitual “wooer”
• Effective use of time
Some Sales Techniques
Though it may be denied, sales people fall into recognizable styles which
project certain characteristics. Some of these categories are as follows:
• High pressure sales techniques
• Master sales techniques
• Low pressure sales technique
• Joiner Sales Techniques
• The expense accounts sales technique
• Roast – beefing technique
• Sales Trap Technique etc.
LECTURE 3
PERSONAL SELLING: APPROACHES AND
PROCESS
There are five(5) basic approaches to personal selling;
• Stimulus response selling
• Mental States
• Need Satisfaction
• Problem Solving
• Consultative Selling
Personal Selling Approaches
Stimulus – Response Selling
• This is the simplest, and is based on that fact that various
stimuli can elicit predictable responses. Salespeople furnish
the stimuli from a collection of words and actions designed
to produce a desired response.
• For example, the salesperson design a series of questions
just to condition the prospective buyer to say ‘yes’ to the
entire sales proposition.
• This is often used by telemarketing personnel, who rely on
comprehensive sales scripts read or delivered from
memory.
• Also used by inexperienced sales people
Personal Selling CONTD
• Mental State Selling
• This assumes that the buying process for most buyers is essentially
identical and that buyers can be led through certain mental states,
or steps in the buying process.
• These steps are typically referred to as AIDA (attention, interest,
desire, and action). Appropriate sales messages provide a transition
from one mental state to the next. It relies on highly structured
sales presentation and the salesperson does most of the talking.
This forces the salesperson to plan presentation prior to calling
their customer.
• One problem is that it is difficult to determine which state the
prospect is in.
• Need Satisfaction Selling
• This is based on the notion that the customer is buying
to satisfy a particular need or set of needs.
• Salesperson’s task is to identify the need to be met,
then to help the buyer meet the need.
• Focus is on the customer rather than the salesperson
• It relies on questionnaire that would bring out
customer needs. Customers appreciate this selling
method and are often willing to spend considerable
time in preliminary meetings to define needs prior to a
sales presentation or written proposal.
• Problem Solving Selling
• This is an extension of need satisfaction selling and
goes beyond identifying needs to developing
alternative solutions for satisfying these needs.
Sometimes even competitors’ offerings are included as
alternatives in the purchase decision. Insurance
salespeople, for example, report this to be so in their
field. The problem-solving approach appears to be the
most successful in technical industrial sales situations,
in which the parties involved are usually oriented
towards scientific reasoning and processes and thus
find this approach to sales amenable
• Consultative selling
• This is the process of helping customers reach their
strategic goals by using the products, services and
expertise of the organization.
• Salespeople confirm their customers’ strategic goals,
and then work collaboratively with customers to
achieve those goals.
• This was just a recent approach that was added and
has gained popularity.
THE PERSONAL SELLING PROCESS
This may be defined as the process of assisting and persuading a prospect to buy a
good or service or to act upon an idea through person to person communication.
There are some steps in the personal selling process which are as follows;
• Prospecting and qualifying
• Pre-approach/Precall Planning
• Approach
• Presentation and Demonstration
• Objections
• Handling Objections
• Closing the sale
• Follow-up
Personal Selling Process
• Prospecting and qualifying:
• This involves searching for potential for the product in
question. The contemporary salesperson locates a pool
of potential customers and then screens them to
determine which ones are qualified prospects.
• After potential prospects are located, they must be
evaluated in terms of screening criteria to determine
whether they merit further sales attention. Some
commonly used criteria are; compatibility, accessibility,
eligibility, authority, and profitability
Personal Selling Process Contd
Preapproach/Precall planning
• The salesperson gathers information about
prospects that would be used to formulate the
sales presentation. Salesperson may determine
buyer needs, buyer motives, and details of the
buyers situation that are relevant to the
upcoming sales presentation. Self confidence is
increased by the acquisition of knowledge, and
the salesperson’s credibility with the prospect is
enhanced.
Contd
Approach
• This involves making the actual contact with
the prospect and it is in two phases.
• The first phase is securing an appointment for
the sales interview, and the second phase
covers the first few minutes of the sales call.
Each step is very critical.
• Bad impression on the customer can be
difficult or impossible to overcome.
• Presentation and Demonstration
• This stage includes the actual presentation of the
product to prospect. With any major purchases,
prospects perceive a considerable amount of risk. To be
able to reduce that perception of risks in prospects, the
salesperson must appear a credible source of
information. Personal behaviors that build credibility
are; dressing appropriately, showing common courtesy
for all personnel. The salesperson must be a good
listener and this is essential for building credibility.
• Objections
• Frequently, prospects before buying a product are
likely to raise some objections in order to
minimize post- purchase dissonance. Objections
may be classified as
• Psychological resistance ; due to sentimental
attachment to money, dislike for decision making,
reluctant to give out something
• Logical resistance; relates to delivery schedules,
price disagreement, product characteristics, etc
• Handling Objections
• To handle objections effectively, the sales person
must maintain a positive attitude towards the
prospects. That is the salesperson must be
patient and persistent. The salesperson can ask
for clarification of objection if necessary, question
the buyer in a manner that he or she answers his
or her own objection, or turn the objection into a
reason to buy.
•
• Closing the sale
• There are several techniques for closing the sale.
– The sales person may ask for the order
– The sales person may offer to write-up the order, e.g. LPO or a
pro-forma invoice
– A salesperson may ask which one the prospective buyer wants
or prefer.
– The salesperson may offer specific inducement, e.g. discounts,
extra quantity, and special price.
• It must be noted that immediately after closing the sale,
the sales person must complete necessary details agreed
upon, delivery times and confirmed terms of payment or
terms of purchase.
Follow-up
• This ensures customer satisfaction and repeat
order. It also helps in dissipating post
purchase dissonance. Follow-up sales may be
necessary for other service such as proper
installation of the products, servicing, regular
servicing, detection of problems and general
advice on the use of the product.
•
LECTURE 4
ORGANIZATION OF THE SALES FORCE
• Sales structure provides a framework for sales
organization operations by indicating what
specific activities are performed by whom in
the sales organization. The sales organization
structure is the vehicle through which
strategic plans are translated into selling
operations in the marketplace.
The important role of sales organization structure for a
firm has been described as follows:
• The role of organization in sales has been compared to
that of the skeleton in the human body; it provides a
framework within which normal functions must take
place. There is however, a degree of uniformity in the
human skeleton that does not characterize the sales
organization. Each firm has its own objectives and
problems, and the structure of the sales organization
reflects its diversity.
ORGANIZATION OF THE SALES FORCE
Organization of the sales force refers to all activities involved in organizing a given sales department. To
ensure effective implementation of strategies in order to achieve set objectives, key activities
involved are:
• Division of the work load into tasks – specialization
• Grouping identified similar tasks into positions
• Assigning authority to position
• Synchronizing responsibility with volume authority, that is, responsibility must go
commensurate with volume of authority.
• Establishing channels of communications
• Establishing relationship
• Establishing chain of command
• Staff the department.
Principles of Organization
• Organize activities and not people
• Responsibility and authority should be properly
related
• Activities must be well balanced and coordinated
• Span of executive control and responsibility should
be reasonable.
• The organization should be stable and flexible.
Organizational Process
The organizational process would basically involve the
following steps:
• Setting of objectives for the sales department
• Determine sales department activities
• Group related activities locally
• Develop a structural arrangement of all activities
• Staff the structure
• Test the soundness of the structure in the light of the
above mentioned principles.
Types of Sales Organizational Structure
• Line structure
• Line and Staff structure
• Line and functional
• Regional
• Divisional
Sales Structures
Line structure
• This is the simplest structure any given sales department can
have. Here, the head of department does all the planning and
performs most of the operations. The line structure has
certain key characteristics and is hierarchical in nature. These
include;
• Authority flows fr
om top to bottom
• Orders are relayed from the top sales manager through each
successive level to the rank and file.
• There are no specialists
• There is centralization of authority
• The line and staff structure
• Relevant when the firm has expanded marketing
operations in terms of scope and complexity. In
this regard sales executives are assisted by staff
assistants who provide specialist services. In this
structure the specialist only have advisory
relationships with sales managers and sales
representatives. However, they may have line
authority over people in their specific
department. Thus there are two parallel lines of
authority; - two bosses.
• Functional Sales Organization
• This type of specialization is functional
specialization. Most selling situations require a
number of selling activities, there may be
efficiencies in having sales people specialize in
performing certain of these required activities.
Many firms are using a telemarketing salesforce
to generate leads, qualify prospects, monitor
shipments, and so forth, while the outside
salesforce concentrates on sales-generating.
These firms are specializing by function.
• Geographic Sales Organization
• Most sales forces use some type of geographic
specialization. This is the least specialized and
most generalized type of sales force. Sales people
are typically assigned a geographic area and are
responsible for all selling activities to all accounts
within the assigned area. There is no attempt to
specialize by product, market or function
• All geographic areas are served by only one sales
person
• Product sales organization
• Product specialization has been popular in
recent years, but it seems to be declining in
importance at least in certain industries.
Salesforce specializing by product assigned
sales people selling responsibility for specific
product or product lines. The objective is for
sales people to become expert in the assigned
product categories
• Thus, the structure involves the division of firm’s
product lines into groups with sales executives
responsible for each group. It’s therefore useful
when the firm’s product lines are diversified or
when the product has varied end uses. The sales
executive responsible for a given product group is
therefore an expert with expert knowledge of
that product division. Staff executive in this type
of organization are not specialized by product
lines and therefore they are of little help to
product managers in terms of provision of
product knowledge.
Market Sales Organization
• An incredibly important type of specialization
is market specialization. Sales people are
assigned specific types of customers and are
required to satisfy all needs of these
customers. The basic objective of market
specialization is to ensure that salespeople
understand how customers use and purchase
their products. Salespeople should then be
able to direct their efforts to satisfy customer
needs better.
Salesforce deployment
• Salesforce Deployment
• The important sales management decisions involved in
allocating selling effort, determining salesforce size,
and designing territories are often referred to as sales
force deployment.
• These decisions are closely related to the sales
organization structure decisions. Changes in structure
often require adjustments in all three areas of
salesforce deployment - selling effort allocation,
salesforce size determination and territory design.
• Salesforce deployment decisions can be viewed
providing answers to three interrelated questions.
• 1. How much selling effort is needed to cover
accounts and prospects adequately so that
sales and profit objectives will be achieved?
• 2. How many salespeople are required to
provide the desired amount of selling effort?
• 3. How should territories be designed to
ensure proper coverage of accounts and to
provide each salesperson with a reasonable
opportunity to success?
• Decisions in one salesforce deployment area
affects decisions in other areas. For example,
the decision on allocation of selling effort
provides input for determining salesforce size,
which provides input for territory design.
Interrelated of salesforce dev’t decision
1 Interrelationship of Salesforce Development Decision
2,000 accounts multiplied by 25 sales
Allocations of Selling
calls/accounts =
Efforts
5,000 sales calls required to cover accounts
50,000 sales calls required
Salesforce Size
divided by 1,250 sales/salesperson = 40
salespeople
needed
40 territories needed to provide each salesperson
Territory Design
with opportunity for success and to ensure
proper
coverage of accounts.
LECTURE 5
SALES TERITORIES
A sale territory is a number of present and potential
customers located within a geographical area and assigned
to a sales person, a branch, a dealer or a distributor.
• It ensures proper coverage of the potential market.
• It increases the sale person’s interest and effectiveness.
• It also increases the sales person’s ability to route, plan
calls, and identify problems which needs to be addressed.
Justification for establishing sales
territories.
• i. It ensures proper coverage of the potential market.
• ii. It increases the sale person’s interest and
effectiveness. This is because with effective and
efficient coverage and a well-defined job, the
salesperson takes either the credit or the debit so that
when there is a credit it serves as a morale booster.
Additionally there is a better definition of the
salesperson’s job. The salesperson’s interests is also
increased on the job
• iii. It also increases the sales person’s ability to route,
plan calls, and identify problems which needs to be
addressed.
iv.
It serves as a basis for control and evaluation
of the salesperson’s activities. Since the territory is
a defined and assigned territory given,
management is able to follow activities within that
territory and based on the performance of the
territory the sales person is evaluated.
v.
Sales territories facilitate the performance of
other sales and management function. For example
;
•
It enhances research and development
collection and analyses of sales and cost data.
•
Sales territories help reduce selling cost. This benefit
derives from the fact that territorial definition eliminates
overlapping of territories and waste of expenditure. This is
derived from the fact that there is better routing which
reduces travelling time and expenditure.
vi.
It improves customer relations. This is because the
salesperson assigned to a given territory is able to apply him
or herself to relationship marketing skills, thereby creating
better acquaintances, which is; through knowledge of
customer habits, preferences and motivations – buying
patterns.
Designing Territories
• The size of a salesforce determines the total amount of
selling effort that a firm has available to generate sales
from accounts and prospects. The effective use of this
selling effort often requires that sales territories be
developed and each salesperson be assigned to a specific
salesperson. The overall objective is to ensure that all
accounts are assigned salesperson responsibility and that
each salesperson can adequately cover the assigned
accounts. Although territories are often defined by
geographic area (e.g., the Oklahoma territory, the
Tennessee territory, the Adenta territory), the key
components of a territory are the accounts within the
specified geographic area
The territory can be viewed as the work unit for
a salesperson. The salesperson is largely
responsible for the selling activities performed
and the performance achieved in a territory.
Salesperson compensation and success are
normally a direct function of territory
performance; thus, the design of territories is
extremely important to the individual
salespeople of a firm as well as to management.
5 Territory Design Example
Trading Areaa
c
Effort (%)
1
Andy
2
3
4
5
Total
6
Sally
7
8
9
10
11
Total
a
b
Present Effort (%)b
10
60
15
5
10
100
18
7
5
35
5
30
100
Recommended
4
20
7
2
3
36
81
21
11
35
11
77
236
Each territory is made up of several trading areas.
The percentage of salesperson time spent in the trading area (100% = 1 salesperson
The current territory design does not provide
proper selling coverage of the trading areas. The
trading areas in Andy's territory should require only
36 percent of his time, yet he is spending all his
time there. Clearly, the firm is wasting expensive
selling effort in Andy's territory. The situation in
Sally's territory is just the opposite. Proper coverage
of Sally's trading areas should require more than
two salespeople, yet Sally has sole responsibility for
these trading areas. In this situation the firm is
losing sales opportunities because of a lack of
selling attention.
Sales performance in Sally's territory is much
lower than it might be if more selling attention
were given to her trading areas. Profit
performance is low in Andy's territory because
too much selling effort is being expended in his
trading areas. The firm is not achieving the level
of sales and profits that might be achieved in
the territories were design to provide more
productive market coverage.
Procedure for Establishing Territories: (Reviewing
Territories)
Sales territorial planning must be proceeded by a
comprehensive research to ensure that;
• Districts are equal in sales potential
• They are equal in work load
Steps involved include;
• Selection of the base or control unit
• Analyze sales people workload
• Determine basic territories considering the sales
potential and core patterns
• Assignment of sales people to territories are based on
some factors(farmers, or hunters)
• To establish a route plan for sales people
Procedure in Designing Territories
The procedure is illustrated manually by using
Andy's and Sally's territories as an example
application. The basic problem is to organize the 11
trading areas into three territories that provide
proper market coverage of account in each territory
and equal performance opportunities for each
salesperson. Three territories are developed
because the decision model results presented
indicate that two salespeople cannot adequately
cover these trading areas.
FIGURE 5.17 Territory Design Procedure
Select
Planning
and
Control
Unit
Analyze
Form
Assess
Planning
Initial
Territory
and Control
Territories
Workload
Unit
Opportunit
y
Designing territories requires a multi-stage approach. Although most territory design
approaches follow the stages presented in this figure, the method used at each stage
differ considerably, depending on the analytical tools used.
Finalize
Territor
y
Design
EXHIBIT 5.6 Territory Design Data
Trading Area
Market Potentials
Sales Calls
1
2
3
4
5
6
7
8
9
10
11
$ 250,000
$ 700,000
$ 350,000
$ 150,000
$ 200,000
$ 2,000,000
$ 750,000
$ 500,000
$ 1,000,000
$ 500,000
$ 1,750,000
Number of Sales of
25
100
35
15
20
175
65
50
100
50
175
Select Planning and Control UnitThe first step in
territory design is to select the planning and
control unit that will be used in the analysis-that
is, some entity that is smaller than a territory.
The total market area served by a firm is divided
into these planning and control units, then they
are analyzed and grouped together to form
territories.
Analyze Opportunity of Planning and Control Unit
First, determine the amount of opportunity
available from each planning and control unit.
Specific methods for performing these calculations
will be converted. However, the most often used
measure of opportunity market potential. The
market potentials for the11 trading areas in our
example have been provided. Everything else being
equal, the higher the market potential, the more
opportunity is available.
Form Initial Territories Once planning and control
units have been selected and opportunity evaluated,
initial territories can be designed. The objective is to
group the planning and control units into territories that
are as equal as possible in opportunity. This step may take
several iterations as there are probably a number of
feasible territory designs. It is also unlikely that any
design will achieve complete equality of opportunity. The
best approach is to design several different territory
arrangements and evaluate each alternative. Each
alternative must be feasible in that planning and control
units grouped together are contiguous.
Assess Territory Workloads The preceding step
produces territories of nearly equal opportunity. It
may, however, take more to realize this opportunity
in some territories than in others. Therefore, the
workload of each territory should be evaluated by
(1) the number of sales calls required to cover the
accounts in the territory,
(2) the amount of travel time in the territory,
(3) the total number of accounts, and
(4) any other factors that measure the amount of
work required by a salesperson assigned to
territory.
Finalize Territory Design The final step is to
adjust the initial territories to achieve equal
workloads for each salesperson. The objective is
to achieve the best possible balance between
equal opportunity and equal workload for each
territory. Typically, both of these objectives
cannot be completely achieved, so management
must decide on the best trade-offs for its
situation.
Territory Design Data
Alternative 1
Territory
1
Trading Area
Alternative 2
Market Potentials
Trading Area Market Potentials
1
2
3
4
5
$ 250
$ 700
$ 350
$ 150
$ 200
1650
1
2
3
4
5
250
700
200
500
1000
2650
2
6
7
8
$ 2,000
$ 750
$ 500
3250
6
7
8
2000
750
350
2750
3
9
10
11
$ 1,000
$ 500
$ 1,750
9
10
11
150
500
1750
3250
2750
Workload Evaluations
Territory
Trading Area
Sales Calls
1
2
5
8
9
25
100
20
50
100
295
2
6
7
175
65
240
3
3
4
10
11
35
15
50
175
275
1
EXHIBIT 5.9 Final
Final Territory Design
Territory
1
Trading Area
1
5
7
8
9
Market Potentials
250
200
750
500
1000
2700
Sales Calls
25
20
65
50
100
260
2
2
6
700
2000
2700
100
175
275
3
3
4
10
11
350
150
500
1750
35
15
50
175
2750
275
Routing of sales people
Routing is a managerial activity which
establishes a formal pattern for a sales person to
follow as he or she goes through a given
territory. The pattern is usually marked or listed.
Procedure for establishing Routing Plan.
a.
List present and potential customers.
b.
Locate these customers on a map of the territory.
c.
Determine how many times you will visit your heavy
users’ or high users / high volume / low volume. This implies
the number of calls/visit per day or week in addition, the
method of transportation should also be determined.
d.
Draw an itinerary on a map to minimize travel time and
back tracking.
e.
Establish several route plans because sales frequencies
usually differ. For example plan A would include all customers
and plan B only the profitable firms of the customers.
f.
The plan should be tentative until timed out and
proved accurate.
g.
Establish control mechanisms such as call reports
to ensure efficiency and accountability e.g. call report,
visit, and delivery.
•
Adjust/revise territories if problem are identified
or market condition change or there is a change in the
caliber of sales people.
NB: It must be noted that for effective adjustment of
sales territories, there is the need to conduct territorial
sales and cost studies on a continuing basis.
LECTURE 6
SALES FORECASTING AND BUDGETING
• This analysis involves the study and assessment of
the various environments that affect the business.
• It requires determining the market potential for the
goods and service that the firm currently produces or
considering producing.
Clarification of terms
• There is a need to clarify some terms in order to
understand market opportunities analysis.
• Market potential
• Sales potential
• Sales forecast
• Sales quotas
Market potentials
Market potential is an estimate of the possible sales
of a commodity, a group of commodities or a
service for an entire industry in a market during a
stated period under ideal conditions.
The components of this definition are;
(a) Defined for a particular market
(b) At a specified time period
(c) Refers to specific customer group
(d) Specific geographical area.
Sales potential
Sales Potential refers to the portion of the market
potentials that a particular firm can reasonably
expect to achieve .Whereas market potential equals
maximum possible sales for all sellers of the good
or services under ideal conditions, sales potential
reflects the maximum possible sales for each
individual firm. For example the sales potential for
Nokia to the cellular phone industry in the Accra
Metropolitan area in 2006 would be 5000 unite or
¢100.000
Sales Forecast
The sales forecast is the estimate of the cedi or unit sales for a
specified future period under sales marketing plan or
programme. The forecast may be for specified item
merchandised, or for an entire line. It may be for a market as a
whole or for a portion of it. Note that not only sales forecast
include specification of commodities; customer groups,
geographical location and time periods, but also includes a
specific market plan as an essential element.
If the proposed plan is changed, predicted sales are expected
to change. Furthermore forecasting sales are typically less
than the company sales potential.
Potential
350
Actual
Sales
250
Industry sales
(¢ million)
200
150

100
Firms X’ Sales
sales forecast
40
Firms X’ Sales
30
20
10
1
2
3
4
5
6
7
8
9
10
11
12
Time periods
Note that one can speak of the firm’s forecast or an industry forecast. In fact the latter
is often developed before the former is generated.
Just as the company forecast presumes a specific marketing plan, industry forecast
presumes
a
specific
level
of
marketing effort.
Like
all
the
firms
that
serve
the
industry, as the firm’s marketing plan becomes more effective, realized sales and
forecasting sales should come closer to sales potential (industry potential).
Sales Quota
This is a goal or objective that is assigned to
marketing units. Sales quotas are typically one
of the key elements to evaluate the personal
selling effort. They apply to specific period and
can be specialized in great details. For instance
sales of a particular item to a specific customer
by sales man Badu Alhasan in December.
Assess economic environment
Estimate market/sales potential
Develop sales
Forecast
Redesign marketing
Program
Compare forecast
With objectives
No
In agreement
Yes
Estab
Methods for sales forecasting
Basically they are 2 broad types as shown below;
1. Subjective methods
•
•
•
•
Delphi techniques
Sales fore composite
Jury of executive opinion
User’s expectation
2. Objective method
• This method gets its name from the fact that initial
input is the opinion of each member of the field sales
staff.
BUDGETING
Factors that influence revenue
• Sales budget is dependent on sales forecast.
• Your marketing plan – your needs.
• Your projected profit
• Top management perception of the importance of
sales force in the attainment of corporate goals.
BUDGETING (Cont.)
Cost Areas
• Transportation
• Salaries
• Vehicle running cost
• Commissions and bonuses
• Entertainment cost
• Product samples
• Sales administration.
BUDGETING (Cont.)
Controls
• Involve the spending person to agree on the
expenditure.
• Monitoring must be done on quarterly basis.
• Budget must be subject to review and must be
flexible
BUDGETING (Cont.)
How do we determine the sales budget?
• The most popular or common ones are as follows;
• Percentage of sales example 10% - 15% of sales
• Executive judgment – Top management
• Estimation of running cost of each sales unit (force)
The control of the budget
All these must be from bottom up to the top, approved
and brought down again.
• This must be controlled effectively to achieve sales
revenue
• Expenditure must be monitored against the revenue
and budget.
• There is a need to break down budget into smaller
components; example, fuel samples, entertainment.
• In addition, there is a need to input and understand the
process from the sales force.
• Sales force performance must be monitored
LECTURE 7
STAFFING THE SALES FORCE
• Hiring the right caliber of recruit is very critical to the
success of the firm and it is important that actions
are taken to enhance the chances of attracting the
right salespeople for the job.
Importance of Recruitment and Selection
Recruitment and Selection is important where there
is;
• inadequate sales coverage and lack of customer
follow-up
• increased training cost to overcome deficiencies
• higher turn over rates
• more supervisory problems
• Suboptimal total salesforce performance
Recruitment and Selection Process
There are basically three (3) steps in this process;
• Planning activities
• Recruitment
• Selection
Source of qualified personnel
A sales organization has several sources of recruit
which could be considered, some of which are as
follows”
•
•
•
•
•
•
From within the company
Other Companies
Educational Institution
Voluntary applicants
Employment agencies
Part – time workers
Factors influencing the choice
• Nature of the product
• The nature of the market
• Policy on promoting from within
• Availability of recruiting sources
Processing of applicants
Major selection tools include
• personal interviews,
• applications blanks,
• Test / Mental & Intelligence Tests
• references, and
• physical examinations
LECTURE 8
SALES TRAINING
• Organizations basically look out for salespeople who
can help their businesses grow.
• To achieve this goal, salespeople must undergo
training which normally leads to a higher level of
performance
Role of Sales Training in Sales force
Socialization
• Salesforce Socialization refers to the process by
which salespeople acquire the knowledge, skills, and
values essential to perform their jobs.
• Newly hired people go through orientation where
they familiarize themselves with company’s policies,
history, facilities or procedures.
Managing the Sales Training Process
The management of the sales training process involves
six (6) steps. They are;
• Assess training needs
• Set training objectives
• Evaluate training alternatives
• Design the sales training program
• Perform sales training
• Conduct follow-up and evaluation
LECTURE 9
SALES MANAGEMENT LEADERSHIP AND
SUPERVISION
• This deals with leadership and supervisory roles of
sales managers, and to be a successful leader, one
needs to work efficiently with salespeople by
empowering them.
Contemporary Views of Sales Leadership
Sales researchers have advanced three especially
relevant views of sales leadership:
• The Leader-Member Exchange (LMX) model,
• Transformational Leadership, and
• Behavioral Self-Management.
A Leadership Model for Sales Management
In all three models, the key thought in the leadership model is;
build a strong, trust-based relationship with individual
salespeople.
Power and Leadership
Sales managers must use their leadership skills in dealing with
other personnel in the firm as well as outside parties. The power
held by an individual in an interpersonal relationship can be one
or more of the following five types as seen below;
• Expert power
• Referent power
• Legitimate power
• Reward power
• Coercive power
Situational Factors
What makes an effective leader?
• Trait approach
• Behavioral approach
• Contingency approach
Leadership Skills
• The exact personality traits or leadership behaviors
that make an effective sales management leader has
not been identified.
• A particular skill is no more important than the
others, but the time and use of skill is what is
important
Selected Leadership Function
The three important leadership functions of sales
management are;
• Coaching
• Planning and conducting integrative sales meeting
• Meeting ethical and moral responsibility
Problems associated in leadership
Some problems sales managers are likely to face are;
• Conflict of interest
• Chemical abuse and dependencies
• Sales people who will not conform to guidelines
• Termination of employment
• Sexual harassment
Conflicts of interest
• Sales people assume a boundary-role position so they
sometimes encounter conflict of interest.
• In some cases, meeting customer demands can violate
company policy.
• Many companies require that employees periodically
sign an agreement not to engage in specified situations
that may represent conflicting interest
Problematic salespeople
• There are salespeople who are problematic
• if behavior or attitude can be identified, it can be
corrected through motivation, supervision and
further training and development.
• Some of the sales people can be ruler breakers
Termination of Employment
• Where problems cannot be solved and performance
consistently fails to meet standards, and coaching,
training, and retraining are unsuccessful, termination or
reassignment may be the only remaining alternative.
• Because of legal issues, sales managers must be careful
how some of these are done before firing the
salesperson.
Sexual Harassment
• Company should have guidelines for dealing with this
offense especially with women being the target of
harassment.
• Policies for dealing with sexual harassment should be
developed for the entire company
LECTURE 10
MOTIVATION AND REWARD SYSTEMS
• Motivation and Reward Systems varies from one company
to the other because some organizations are bigger than
others.
• Records have proved that Rewards and Motivation lead to
increase in the number of accounts or sales.
• Sometimes there is a need to even motivate on a tight
budget, meaning that it is important to motivate.
MOTIVATION
Most
commonly
used
dimensions• Intensity
• Persistence and
• Direction
definition
include
three
Optimal Sales force Reward System
This is a system that balances the needs of the organization, its
salespeople, and its customers against one another. The reward
system should help accomplish the following:
• Provide acceptable ratio of costs and sales force output in
volume, profit, or other objectives
• Encourage specific activities consistent with the firm’s overall,
marketing, and sales force objectives and strategies.
• Attract and retain competent salespeople, thereby enhancing
long-term customer relationships
• Allow the kind of adjustments that facilitate administration of
the reward system.
Types of Sales force Rewards
Rewards can be classified into six categories• pay,
• promotion, and
• sense of accomplishment,
• personal growth opportunities,
• recognition, and
• job security,
But these falls under two main categories. That is,
financial and nonfinancial compensation.
COMPENSATION
Compensation is a motivational tool which combines
financial remuneration and/ or nonfinancial rewards
to
ensure
desired
performance:
Some
basic
requirements of a sound compensation plan are;
• It must provide for two types of income –
• Flexibility
• It must be simple and easy to understand
• Fairness
Financial Compensation
This is composed of current spendable income,
deferred income or retirement pay, and various
insurance plans that may provide income when
needed.
Types of Financial Compensation
• Straight Salary
• Straight Commission
• A combination(salary plus incentive)
LECTURE 11
EVALUATING THE PERFORMANCE OF THE
SALESPEOPLE
• The competency model serves as a measure against
which to evaluate salespeople’s performance.
• Using a 360-degree feedback process, salespeople are
evaluated on model competencies by their managers,
their colleagues, and their customers.
• Results are then reviewed with their manager, and
methods for improving competencies are determined.
Purposes of Salesperson Performance
Evaluations
• To ensure that compensation and other reward disbursements are
consistent with actual salesperson performance
• To identify salespeople who are due for promotion
• To identify salespeople whose employment should be terminated
• Through evaluation the specific training needs of the salespeople
can be determined
• It gives information that helps in the effective planning of the
human resources
Salesperson Performance Evaluation
Approaches
• Some organizations evaluate their salesforce annually
• Most firms also use combinations of input and output criteria
that are evaluated by quantitative and qualitative measures
• Sales organization that set performance standards or quotas
• Some sales organizations assign weights to different
performance objectives and incorporate territory data when
establishing these objectives
• Most salespersons’ performance evaluations are conducted by
the field manager who supervises the salesperson.
• Most sales organizations provide salespeople with a written
copy of their performance review and have sales managers
discuss the performance evaluation with each salesperson.
Criteria for Performance Evaluations
• Behavior
• Professional development
• Results
• Profitability