MM 308

1 O.D.M Computer & Mgt.
Education
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SALES MANAGEMENT (MM-308)
Q:1:- Define Sales Management? What are the objectives of this area of Management? What roles do a
Sales Manager perform?
Ans:- INTRODUCTION
Nowadays the entire Sales Executives are professionals they plan & build the effective
organisation. Basically the professional approach requires thorough Analysis. Appropriate sales policies
and personal selling strategy. Sales executive are responsible towards customers and society.
RESPONSIBILITIES OF SALES EXECUTIVES TOWARDS CUSTOMER RESPONSIBILITY
Obtaining Sales Provide Profit Contributing Business

Volume Contribution Growth
The management is responsible towards the efficiency and planning of the product. So, this concept will
emerge as a concept i.e Sales Management.
SALES MANAGEMENT
Sales management is management of sales force. It basically refers to the direction of sales force
personnel in an organisation.
Definition:
“IN addition to the management of personal selling Sales Management means Management of all
activities, including advertising, Sales Promotion, Marketing Research, Pricing, Physical Distribution &
Product merchandising.
According to American Marketing Association
“Sales Management is the Planning, Direction and Control of Personal Selling including Recruiting,
Selecting, Equipping, Assigning Routing, Supervising, Paying & Motivating as these applies to personal
sales force.
Control Recruitment Selection
Motivation Sales Management Compensation
Supervision Training Orientation

OBJECTIVE OF SALES MANAGEMENT
1. Maintain Effective Communications
The main objective of sales Management is to maintain effective communication of sales
department with the other organizational units. This will ensure or help in increasing the sales of the
company.
2. Develop an effective Distribution Network
Outside the company, the sales manager serves as a key contact with customers and other
external publics and is responsible for building & marinating an effective distribution network so that
people come to know about the company.
3. Marketing Decisions
2 O.D.M Computer & Mgt. Education
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The next objective of sales management is to take various marketing decisions like:
Sales Promotion
Advertising Product Decision

Marketing Decision
Pricing Distribution Channel Policies
The sales management must care of these decisions before taking an action regarding the product.
1. Sales volume:
Generally the top management has the final responsibility because the top management is
responsible for the success & failure of an enterprise but the top management has lot of work to do so.
Delegates Delegates
Top Marketing Sales
Management Management Management
Authority to Authority to
2. Contributions to profits:
The next objective of sales manager is to make future operations in such a way that it contribute
or increase the profits of the company. The sales manager must analyze the market opportunities so that
he may be able to meet the competition.
3 Continuing growth:
The sales manager must work in the direction, which helps in increasing the market share. The
progress of the entire company depends upon the sales management, so the sales manager tries to
meet the competitive edge so as to make organisation grow continuously.
Role of Sales Manager:
In an organisation a sales manager plays a variety of roles to related to the sale of a given
product. Preparation of Sales Program.
Sales Force Mgt. Maintain Relations
Marketing Decision
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1. Sales Force Management:
The Sales Manager checks the sources of recruitment and sets the standards for selections. The
sales manager must provide training to new employees in such a manner that the high level of
performance is achieved in short possible time.
2. Maintain Relations:
The sales manager must maintain the internal and external relations of sales department with the
departments of other companies or units as well as within the organisation. The sales manager develop
& maintain effective working relations with sales, training & other key personnel as well as with the
customers to ensure that the effort is beneficial to both the parties.
3. Communication
The sales manager should establish a system of communication with other sales personnel that
keep them informed of overall department’s sales objectives, results & problems. It also keeps the sale
manager informed about their needs & problems.
4. Control
The sales manager must consult with the production manager time to time because they are
closely related with the sales needs. The sales manager reviews the revenues & expenses of the
company and checks the actual sale and compare it with the corrective action may be taken in time. So,
the sales manager maintain the proper balance of time spent on various activities and keeps a check on
the activities of the sales force.
5. Organisation
The sales manager establishes an effective plan of organisation an d methods of controlling the
activities of members, so that the work will be completed in time. The activities are identified & grouped
and hence assigned to individuals responsible for selling a given product.
Conclusion:
On the basis of above observations we can say that:
• The sales manager must keep a close watch over the market to meet the competition.
• The selection criteria should be in such a way that good employees are recruited.
• Sales management is the management of the executives responsible for the sale of the product.
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Q2: How can the sale of a product be forecasted? How does it help in determining the size of
sales force?
Ans:- Introduction:
As the name indicates Sales Forecasting is an estimate of sales in a future period under a
particular marketing program. Forecasting is also made for the economic and other factors. A sales
forecasting may be made for a single product or for an entire product line. Forecasting can be of two
types:
Forecast
Long term Sales Forecast

Short term Sales Forecast
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1. Short term Sales Forecast

When a forecast is made for a manufacturer’s entire marketing area or for any sub division of it
then it is called as short term forecast. Because the market conditions are changing day by day, it is not
practical to predict & plan for very long future period.
2. Long term Sales forecast

Long-term sales forecast is that which is used for planning production capacity & for long run
financial planning. This is the future period for which the decisions are taken in the present to save the
future deficiencies. Basically between both the forecasts the short term forecast is important for Sales
Executive, because:
* Operating or short-term sales forecast is the prediction of how much of a company’s particular
products can be sold during a future period under a given marketing programme.
OBJECTIVE OF SALES FORECASTING
1 To maintain good relationships with customers by providing them good quality products in the
right quantity and at right time.
2 To check the sales of product and estimate of sales is made for future. Thereafter the actual
sales is compared with the budgeted sales and if there are any deviations then corrective
actions are taken.
3 To assist customers in choosing the product ffor maintaining the competitive edge in the
market.
4 Sales Forecasting is done to increase the market share of the company and to help the
company grow.
To collect the market information, the above are the objective of Sales Forecasting.
HOW CAN SALES OF A PRODUCT BE FORECASTED
A Sales forecasting is the procedure of estimating how much a given product can be sold if a
given marketing programme is implemented. No sales forecasting can be absolutely correct, so there are
various methods used for the sales Forecasting of a product. These are :
1. Jury of executive Opinion:
This method is basically based upon the executive opinions. It means that the executives are well
informed about the industry outlook, capabilities and marketing programmes. They express their opinion
as to what according to them is the sales expected in future.
Merits:
a) Quick and easy way to forecast.
b) Many experts poll their experience and judgement
c) Qualitative results (expert’s knowledge)
d) This method is used when the adequate information of the market is not available.
Demerits:
a) Affected by the personal views.
b) More workload of key executives
c) Only based on personal judgement and may be subjective or biased.
2: Delphi Technique:
This is basically the new version of the executive opinion. In this the people who are giving
opinion are selected for their expertise. These experts give answers to the panel of questionnaires. The
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response to one questionnaire leads to the next questionnaire. Some contend that the technique
eliminates the band wagon effect of the majority opinion. As everyone gets a chance to be heard.
3. Pool of sales Force opinion
This method is often referred to as “The Grass Roots approach”.
According to this the forecast is combined and cumulated in such a way that management may use it foir
the company. It appeals to practical sales managers because the responsibility a assigned to those who
produce results. Thus the sales force responsible to produce results give own prediction about the future
expected sales.
Merits:
a) Specialized knowledge
b) Close touch with the market conditions
c) More confidence (forecast is correct)
d) More flexible- it can be changed according to the market needs.
4. Projections of past sales
This method of sales forecasting takes a variety of forms. This is very simple. To set the sales
forecast for the coming year either we choose the same figures as the current year’s actual sales or
forecast may be made by adding a set percentage to last year’s sales or to several past years. The
formula of calculating the next year’s sale is:
Next year’s sales = This year’s sales/ Last year’s sales.
i) Time Series Analysis
It is basically based on past year sales. It helps in measuring the sales variation.
TYPES OF SALES VARIATION
Long term Cyclic Seasonal Irregular

Trends Changes Variations Fluctuations
Merits:
(i) Helpful in making long-term forecast.
(ii) Based on past year sales therefore has an authentic base.
Demerits:
(I) Difficult to “call the turns”
(ii) Exponential Smoothing
This method is most useful I short range forecasting. Exponential smoothing is type of moving
average represent a weighted sum of all past numbers in a time series, with the heaviest weight placed
on the most recent data.
5. Econometric model building and simulation
This is very attractive method of sales forecasting. This stimulation method is used for companies
marketing durable goods. In this, set of equation is used which represent the relationship between sales
and demand. By “plugging in” various for each independent variable sales are forecasted.
Econometric Model
It shows the relationship among a set of variables and parameters are estimated by statistical
analysis of past date. It is expressed in equation form.
For e.g. The sales equation of durable goods can be written as follows:
S= R + N
S= Total Sales R= Replacement Demand N= New Owner Demand
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Total sales of durable goods consists of purchase made to replace units that have been scraped
and purchases by new owners.
DETERMINE THE SIZE OF SALES FORCE
After determining the kind of sales person that best fits the company’s needs, management now
determines how many are required to meet the sales volume and profit objectives. If the company has
too few sales persons, opportunity for sales and profit go unexploited. If the no. of sales persons are
more it reduces the net profits.
Basically three approaches are used:
1. The workload method:
In this method the number of sales executives recruited are based on dividing the total actual
workload in an organization by the average work performed by an average sales staff. However, this
method is too quantitative and does not give due considerations to the qualitative activities performed by
the sales executives.
For e.g. Telecalling, Prospecting, After Sales Support.
2. Sales potential Method:
This method is modified version of the workload approach. In this approach, the workload is
calculated considering the sales expected to be achieved in any future period of time. This potential is
divided by average contribution of the executive. The resultant is the sales executives required to
perform the sales task of an organisation.
VARIOUS STEPS INVOLVED IN RECRUITING AND SELECTING
To evaluate the sources from which Sales personnel can be obtained
To tap the identified recruiting sources and build a supply of prospective

sales personnel
Selection of candidates
SOURCES OF SALES FORCE RECRUITS

Each source should be analyzed quantitatively & qualitatively. One source may provide numerous
recruits but few successful candidates and a second source may provide a few but more successful
candidates.
Sources of sale force recruitment
Inside the company Outside the company

- Direct unsolicited applications
- Company Sales Personnel
- Employment Agencies
- Company Executives
- Salespeople making calls on
- Internal Transfers
the company
- Employees of customers
- Sales executive clubs
- Sales Force of non-
Competing firms
- Sales competing institutions
- Retired persons
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Sales Force required = Sales potential/ Average contribution of a sales executive.
3. The incremental method

This is build up approach. In this method the effort of one individual is added upto another. This is
done till the time the total sales task to be performed is assigned.
Conclusion:
An organisation may use any of the methods to determine the number of sales executives at any
given point of time. However much depends upon several other factors.
Capabilities of the sales force
Demand for the product Effective supervision
Product Availability Competition & Substitutes

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Q.3: What are the commonly used methods of recruiting the sales force? Discuss advantages
and disadvantages of the same
Ans: Recruitment & Selection
Both the HR functions are an important part of implementing the selling strategy. But it is not
enough. Training is also very necessary.
The implementation of this process is not simple. It has to consider both the kind and number of
the sales personnel.
INTERNAL SOURCES OF RECRUITMENT
1. Company Sales Personnel:
Most of the people apply in the company in which they know some employee in any of the
department of the organisation, as recommendation of these people exerts influence in recruiting
process.
Advantages
A) These people are aware of the company policies so can start their work immediately.
B) This is a good method when jobs are to be filled in remote areas.
C) Sales people of a particular area know much more about that area so their recommendation
should be considered.
Disadvantages
Sales personnel may show discrimination and less potential employees may be selected.
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2. Company Sales Personnel:
Here recommendations of sales manager the president and other marketing executive are
considered.
Advantages:
a) These people understand much better the needed qualification so their recommendation yield
top caliber people.
b) These people are experienced so their judgement is quite fair.
Disadvantages:
a) The chances of discrimination occur though to a very small extent
3. Internal transfers
The other sources of recruitment are internal transfer from other departments and non-selling
section of sales department.
Advantages:
a) These people know each and everything about the company.
b) Company on the other hand also know every thing about the employees
c) These people exhibit excellent knowledge about the product.
Disadvantages:
Nothing is known about the selling aptitude of these persons.
4. Direct unsolicited applications
Every company receives uninvited, “Walk in” and “Write- in” application for sales positions, these
are Direct unsolicited applications.
Advantages:
a) This is quite a useful method because most of the managers think that these people are
imitative takers and exhibit selling aggressiveness.
b) This is economical method.
Disadvantages:
a) Some times the proportion of the qualified applicants from this source is low.
b) It does not provide a steady flow of applicants.
5. Employment agencies
Seeking and taking help of these agencies is other method of recruitment. Employment agencies
maintain a pl of qualified applicants and provide the organisation, when required for a fees.
Advantages:-
a) A lot of time of employees is saved, as recruitment and selection are very long processes.
b) Agencies often conduct a number of tests to find out the potential candidate, best suitable to
an organisation.
Disadvantages:
a) Sometimes agencies nominate wrong people just to get the placement fees.
6. Sales people making calls on the company
Here the purchasing Director is in contact with the sales personnel from other Companies and in
a position to evaluate their on –the –job performance.
Advantage:
High caliber people may be approached.
Disadvantages:
a) Salary offered to them is usually high. Thus it is more costly
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b) These people are less trust worthy.
7. Employees of Customers.
Some companies regard their customers as recruiting source and attract Sales staff from them.
Advantages:
a) Usually customer recommends top calibrated people for the job.
b) Such transfers may have favourable effect on the morale of the customer’s organisation.
8. Sales Executive Club
Many Sales Executive Club operates placement services at Club meeting exchange of useful
information jay occur by informal discussions. The platform may be used to attract a performing
executive in an organisation.
9. Sales Force of Non-competing Companies

In this source individual’s who are working as sales personnel in other non-competing firms are attracted
to fill in a vacancy in an organisation.
Advantages:
a) Selling experiences.
b) These people can tell about product line if they are working in related companies.
c) This source provides a channel for career advancement for dead-=end jobs.
10. Sales force of competing companies.
In this source individual’s who are working as sales personnel in other non-competing firms are
attracted to fill in a vacancy in an organisation.
Advantages:
a) They have experience of selling similar products to similar markets.
b) Require minimal training.
Disadvantages:
a) Costly method as attract a competitor’s sales force may require offering an attractive
package.
b) The selected person may be less trust worthy.
11. Educational Institutions:
Here recruitment is done from Colleges and Universities, Community Colleges, Business
Schools, High Schools and night schools.
Advantages:-
a) These people are mature enough and have reached a certain educational level.
b) These students would be in search of job and new to the industry so work with full labour and
energy.
Disadvantages:
a) Lack of experience
b) A rigorous and expensive training session is required.
An appropriate and effective method should be used so
Conclusion:
That high potential and top caliber people are recruited and selected.
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Q.4: Design a Training Programme for a Sales Executive in an Insurance Policy selling agency.
Ans:- Training:
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Training is the method of imparting the skills required to perform a given task effectively and
efficiently to an employee. Training is a very important aspect of the job as it improves job performance
by filling up the gap between no experiences to some experience as in the absence of training job
performance increases by experience.
Sales Training Programme.
- Most intensive for newly recruited persons.
- Less intensive for already employed personnel.
VARIOUS STEPS FOR DECISIONS IN TRAINING PROGRAMME.
DECIDING TRAINING CONTENTS
DEFINING TRAINING AIMS
SELECTING TRAINING METHODS
EXECUTING THE METHODS
EVALUATING THE RESULTS
So, it is stepwise procedure and all the steps are discussed as follows:
1. Defining training aims
First of all a general aim is specified and then a specific aims is drawn from it. it includes the
following things:
(i) The general aim of training.
(ii) What should be done to achieve the aim?
(iii) What is currently being done to achieve the aim?
(iv) Identifying training needs.

Factors affecting Training Needs:
I Initial Training Needs:
- Job specification
- Trainee’s background and experience.
- Sales related marketing policies
II Continual Training Needs:-
- To update the knowledge of eth employee
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- Provide refresher’s training.
I. Initial Training Needs:-
a) Job Specification:
The qualifications needed to perform the job are detailed in job specification period. At the time of
hiring only a few persons possess all these qualifications. So to bridge the gap training is necessary.
b) Trainees’ background & experience.
Each & every individual who enters an initial sales training Programme has got unique
educational background and experience record. The gap between job specification and what trainee
already possesses represents the nature and amount of training.
c) Sales related marketing policies
Different products need training on the information about the product and the selling techniques.
Information about the product:- It considers

# Various types of plans
# Premium calculation
# Tax rebate schemes
# Various riders and additional benefits.
Selling techniques:
Insurance is a product which no one wants to purchase. So it is very hard to sell and requires
hard core selling techniques.
II. Continual Training needs:
It is experienced employees, required due to change in market or company policies.

2. Deciding training contents
The training contents differ from product to product, company to company, size of organisation
and other criterion.
Product data
Sales Technique Training Contents Company

Include Information
Market
(A) Product Data:

Trainee must be taught about the various aspect of the product like product features,
Competitive features, raw material used and applications.
(B) Sales Technique:

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How to convince the customer specially an insurance product which constitutes a large part and
thus is very important.
C) Market:
The sales personnel must be told about the customers nature location, interest, buying habits and
motives so that they can interact easily.
D) Company Information:
The sales Personnel must be told about the various policies of eth company especially pricing
policy so that the Sales Personnel can interact with customers well.
2. SELECTING TRAINING METHODS.
Selecting the appropriate training method is another important task. There are various training methods
namely.
Lecture
Games
Demonstration
TRAINING Role Plays

On- the- job training METHODS
Case Discussions
Programmed Learning
Correspondence Courses Seminars
Personal Conferences
IN CASE OF INSURANCE PRODUCTS, THE METHODS APPLICABLE ARE:

a) Lecture:
Lecture is just like teaching. Training mainly watches and listens and may ask questions. It is
considered as a passive method. In insurance it is important, as information regarding product and
premium is important.
B) Personal Conference
In this the trainer and trainee jointly analyze the problem like, time of collection of premium etc. it
may occur in offices, hotels, restaurants etc. so it is a kind of participative learning.
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c) Role Play:
In this trainer describes a situation and different members enact the role of that situation given.
Trainer then evaluates and suggests how the performance of each can be improved. Here one individual
plays the role of a seller and two may act as customers.
d) Case Discussion
in this various sales cases are assigned to sales a personnel and then discussion are made to
increase the analytical skills.
e) Seminars
A kind of participative learning in which trainer begins the discussion. Group members gain
understating of many problems that otherwise is acquired through personal experience.
f) Gaming
IN this also like role plays, highly structured situations based on reality are assumed in which
players make decisions through roles. Participants learn easily because they are involved.
g) Programmed learning
In this subject matter is broken in a number of steps, which are incorporated in a book or
microfilm or software for easy understanding of training.
In insurance companies various brochures about the plans are available.
4. EXECUTING THE METHODS & EVALUATING THE RESULTS.

If performance is increased it is good but I vice versa, then again a training programme has to be
designed to make the sales executives equipped with the required knowledge and skill, to sell an
insurance plan.
Conclusion:
An effective training programme given by an experienced person must be implemented so as to
increase the job understating, thereby increasing the job performance.
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Q5: What can be different compensation plans for sales force? What are their respective
advantages and disadvantages?
Ans: Sales Force Compensation
A sales compensation plan is an essential plan of total program for motivating sales personnel. A
sales compensation plan, properly designed have three motivational roles.
3. Provide a living roles
4. Adjust pay level to performance
5. Provide a mechanism for demonstrating and congruency between attainment of
company goals and individual goals.
Requirements of a good sales compensation plan
1. It provides a living wage in e form of a secure income.
2. A good compensation plan must fit with the rest of the motivational program.
3. The plan should be fair, sales personnel should receive equal pay for equal performance.
4. The plan should be easy for sales personnel to understand so that they may calculate their own
earnings.
5. The plan should adjust pay to changes in performance.
6. The plan should be economical to administered.
7. The plan should help in attaining the objectives of the sales organisation.
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STEPS IN ACHIEVING AN OVERALL SALES COMPENSATION PLAN IN AN ORGANISATION

• Defining the sales job
• Consider the company general compensation structure
• Consider compensation patterns in community and industry.
• Determine compensation level.
The Sales force compensation structure
1. Financial compensation
(a) Direct payment of money
2. Non-financial compensation
(a) Opportunity to advances in the job
(b) Recognition in the firm
(c) Enjoyment
We restrict our discussion to the direct payment of financial compensation.
1. Level of earning (total amount to be paid for a given period of time)
2. Method of payment (plan by which the workers reach the intended level)
Objective of compensation plan
Company perspective
1. Motivate sales people
2. Correlate efforts and result with rewards
3. To control sales people’s activities.
4. To ensure proper treatment of customers
5. To attract and keep competent sales people
6. Be economical yet competitive
7. To be flexible and stable
Employee’s perspective
1. Secure income
2. Simple
3. Fair
Steps in designing a Sales Compensation Plan
Review job Include job Establish level of

Identify plans
description element controlled compensation
objectives
by sales force and
measurable
Pretest and Decide on indirect Develop the

install the monetary methods of
plan compensation compensations
Introduce plan to sales force

Evaluate it periodically
No single plan fits all situations
It is important to achieves external parity is salespeople’s earnings
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Management should solicit suggestion from the sales force regarding the compensation plan.
Methods of compensation Straight Salary
Some Combination Straight Commission
a) Straight Salary Plan

It is simplest compensation plan the sales person receive fixed sums at regular intervals, which
represent the total payment for their services.
It is very frequently used when the selling job require extensive missionary or educational work.
b) Straight Commission Plan
This plan is based on the assumption that the compensation should be based on the productivity
thus the amount hat an executive draws at the end of regular interval is entirely based on the
predetermined commission on the sales per unit.
Some provide for progressive or regressive changes in commission rate as sales volume rise to
different level. Other provide for differential commission rate for sales of different product to different
categories of customers or during given selling season.
c) Combination salary and incentive plan:
Most sales compensation plans are the combination of salary and commission plans.
Where the straight salary method is used the sales executive lacks a financial means for
stimulating the sales force to greater efforts.
Where the straight commission system is used the executive has weak financial control over non-
selling activities, by a judicious blending of the two basic plans, management seeks both control and
motivation.
Conclusion:
Actual usefulness of any compensation plans in motivating the sales executive depend upon the
management skill in designing and administering the compensation plan effectively. Appropriately chosen
and skillfully administered sales compensation policies facilities sales force management. They affect is
relative ease of building and maintaining an effective sales force. The y attract promising recruit and
encourage sales factory performance thorough the effective implementation of appropriate sales
compensation policies.
Q.6: What are sales territories? Discuss the process involved in designated different sales
territories.
Ans: TERRITORY MANAGEMENT
Sales people are not only responsible for individual customers (account management) but they
are also responsible for a group of accounts (territory management) establishment of sales territories
facilities matching selling effort with sales opportunity. Sales personal are assigned the responsibility for
serving particular grouping of customers.
Sales territory
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It is configuration of current and potential account for which responsibility has been assigned to a
particular sales representative. Whether designated geographical or not, a sales territory is a grouping of
customers and prospects that can be called upon conveniently and economically by an individual
salesperson.
Major Account:
Customers whose significance to the company business require special attention and experience
Direct Account
Large account involving special arrangements in terms of principle credit or product design.
House Account
An account not designed to an individual not to an individual salesperson but one handled by
executives in the organisation head/division offices.
Territory Management
It is the planning, implementation and control salespersons activities with the goal of realizing the
sales and profit potential their assigned territories.
Reasons for establishing territories
Reasons Benefits
Customer related
1. Provide intensive market coverage - produce higher salary
2. Provide excellent customer service - produce greater satisfaction
Supervision related
3. Foster enthusiasm and moral - leads to less turnover and high job satisfaction
4. Facilitates performance evaluation - offer reward related to efforts.
Managerial
5. Enhance control and evaluation - reduce expense
6. Coordinate promotion - give more bang for buck
7. Control selling expenses - avoids promotional wastage
8. Aids is coordinating of personnel selling and advertising
Reasons for revising territories
1. Major accounts-open/close down facilities.
- Move into/out of an area
- Shift the nature of their business.
2. Major accounts become subsidiary of other company
3. Competition may have intensified in a territory that is domestic and international.
4. Sales management may have overestimated the potential in a territory.
Reasons for not establishing sales territory
1. Company is small
2. Social relationship;/personal friendships.
3. High technology application.
Territory management problems and remedies
Problems Remedies
1. Inadequate coverage 1. Split territory
2. Inadequate size 2. Enlarge territory
3. Revision 3. Prepare salespeople
4. Shifting accounts 4. Revise territory
5. Direct accounts 5. Clarify at hiring
6. Inadequate support 6. Assist salespersons
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7. Territory jumping 7. Eliminate practice.
8. Overlapping territory 8. Minimize crossovers
9. Selling cost variations 9. Review cost figure
10. High turnover 10. Rectify casual factor
Procedure for developing territory
I. Objectives for territory formulation
a) Determine optimum number of territory
lack of coverage, too fragmented, high turnover
b) Selecting a basic geographical control unit.
Traditional area, city, metro, village, district etc. it determines the sale potential each control unit.
Combination of control unit into tentative sales territory.
Shapes of sales territory in wide use.
a) Circle
When account and prospect are evenly distributed throughout the area
b) Wedge -shaped
This shape is appropriate for territory containing both urban and non-urban area. It radiate out
from densely populated urban centers.
c) Clover leaf:
It is desirable when accounts are located randomly through territory.
c) Equalization of territory potential

d) Adequate challenging territory by taking into consideration
- Coverage difficulty
- Salespersons varying abilities
- Territorial sales potential.
e) Effective sales territory- no significant sales opportunity lie unexploited
Efficient – neither money not time is wasted.
Important to consider, salespersons work lad and nature of the job (a prospecting salesperson
can handle a larger territory than a person who must provide full service for each account)
Redistricting to adjust for coverage difficulty
1. Determine the number, location and size of customers and prospects in each tentative territory.
2. Estimate time required for each sales call.
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3. Determine length of time between calls that is the amount of time required to travel from one
customer to the next.
4. Decide all frequencies.
5. Calculate the number of calls possible within a given period.
6. Adjust the number of calls possible during a given period by the desired call frequencies for the
different classes of customers and prospects.
7. Check out the territory with sales personnel who work or who have worked in each area, and
make further adjustment as required.
II. Basis for territories
1. Geography
2. Potential
3. Servicing requirement
4. Workload
5. Type of customer
III. Methods of devising territories
a) Build up method:
Designing territory through combining enough pieces of a company overall market to create units
that offer sufficient sales challenge.
b) Breakdown method:
Determining the number of territory by dividing projected average sales per salesperson
into an overall sales forecast.
c) Incremental method:
Establishing territory as long as the marginal profit generated by the territory exceed the
cost of servicing them.
d) Assigning salespersons to territory.
Q.7: Write short note on :

a) Sales meeting
b) Sales contests
c) Sales quotas
Ans:- a) Sales meeting
Sales meeting are important for both communication and motivational purposes. They provide occasion
for management to stimulate the group to raise its standards as to reasonable and acceptable
performance.
Planning Sales Meeting
A C M E E
Deciding the Deciding Methods Executing Evaluation
Specific meeting - short & - speakers -feedback
Meeting aim content participative - seminars - sales meeting
GD - meeting site evaluation form
- time - compare withaims
-duration
-Room arrangement
A) National Sales Meetings:
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These Sales Meeting are more of incentive and motivations organized at a Grand National Level.
In cause of an announcement of a new product or and technology or may be a new strategic planning,
these are easy be made at the common get-together of the executives across the country. the sales staff
from different rungs of the market share common platform and may interact to learn about the market.
B) Regional Sales Meeting:
Regional Sales Meetings are organized at the middle level organizational hierarchy of the
Organisaiton. For e.g. District or state level. It facilitates discussions on regional level common issue
problem & foucs etc. the frequency of organizing such meetings can be high as compared to the national
level meetings, as it does not in much expenditure.
C) Local sales meeting:
These meetings are organized at the branch level itself. The basic purpose is to give personal
attention to the individual sales staff, solve their problems and motivate them for improved performance.
Generally the senior may call his tem daily for such a meeting. It may not be very formal affair and may
just be for a few minutes.
D) Traveling sales meeting
The senior maybe interested in updating himself on the performance the Sales Executive. If it is
not possible to meet him in person, meeting may be held even while traveling. This method is fast
catching up with the intensive use of Mobiles and Internet.
- By telephone
- T home
- By internet/conferencing
b) Sales context
a sale context is a specific selling campaign offering incentives in the form of award beyond those
in the compensation plan.
- Provide extra incentive to increase sales volume
- Aim to fulfill individual needs for achievement and recognition
- Develop team spirit, boost morale.
Objectives
1. To obtain new customers.
2. To secure larger orders per sales call
3. To push moving items
4. To overcome a seasonal sales slumps
5. To improve performance of distributors sales personnel.
6. To get reorders.
7. To sell a more profitable mix of product
Reward/contest prizes
1. Cash
2. Travel package
3. Special Honour and privilege.
4. Merchandise.
Managerial evaluation of contest
a) Contest versus alternatives:
If serious defects exist in key aspect of sales force management, a sales contest is not
likely to provide more than a temporary improvement in the sales result.
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b) Short and long term effect:
A sales contest accomplish its purpose if it increase sales volume and profit both in short
and the long run. No contest is a real success if it borrows sales from preceding months, succeeding
months or both.
c) Design:
A well designed contest provide motivation to achieve the underlying specific purpose by
least expenditure.
d) Fairness:
All sales personnel should feel that the contest format and rule give everyone a fair
chance of winning the reward.
e) Impact on sales force moral:
Successful sales contest results in permanent higher level of sales force moral.
Conclusion:
Thus a judicious use of sales contests builds individual and sales force morale helps to
accomplish company goal.
C) Sales quotas:
Quotas are quantitative objectives assigned to sales organisational until they specify desired
performance level for sales volume such as:
Expenses, gross margins, net profits & return on investment, selling & non-selling related activities, or
some combination of these items.
Some companies set sales quota for organisational units such as individual, district & sales
personnel.
Quotas are devices for directing & controlling sales operations. Their effectiveness depends upon
the kind, amount & accuracy of marketing information used setting them & upon management skills in
administering the quota system.
Objectives in using quotas
1. To provide quantitative performance standard;
2. To obtain tighter sales and expense control;
3. To motivate desired performance
4. To use in connection with sales contest
Types of quotas
1. Sales Volume Quota
2. Budget Quotas
- Expense quota
- Gross margin/net profit quota
3. Activity Quota: The Company defines the important activities sales personnel perform, then it
set target performance frequencies.
4. Combination quota
Budgeting by the objective and task method:
The manage starts with the sales objectives. Then he determines the task must be accomplished in
order to achieve the objectives. if the cost are too high, the manager may inclined to find different ways
to achieve the objectives until the management satisfied with both the objectives and the means of
achieving them. Many firms use this method with some variations.
Budget for sales department activities: Administrative
Budget
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Sales Budget Selling expenses

Sales Budget:
It is revenue or unit volume anticipated from sales of the final products. It is the key budget and is
based on the sales budget forecast management estimates the sales of each product may make
separate forecast each segment.
Selling expense budget:
It anticipates various expenditure for personal selling activities e.g. Salaries, Commissions &
other expenses for the sales forecast must be closely coordinated with the sales budget.
Administrative budget:
There may be several assistant sales manager, sale supervisors, sales trainers, sales department
secretaries and office workers etc. Budgetary provisions must be made for their salaries and their staff,
administrative budget must also budget for sales office operating expenses salaries, rent, power, light,
office equipment and general overhead.
Q.8: What is sales budget? Why and how is it prepared?

Ans: Sales Budget:
A budget is simply a tool, a financial plan, that an administrator uses to plan for profits by
anticipating revenues and expenditure. Sales budget is a detailed blue print of who is going to sell how
much of what during operating period and to which class of customers. It consists of estimates of an
operating period’s probable rupee and unit sales and likely selling expense.
Purpose of Sales Budget:-
1. Planning :-
The company formulates marketing and sales objectives; the budget determines how these
objectives will be met through a detailed breakdown of the sales budget among products, territories and
customers.
2. Co-ordination:-
The budget establishes what the cost of various heads be thereby maintaining a desired
relationship between expenditure and revenues. The budget enables sales executives to coordinate
expenses with sales. It also restricts the sales executives form spending more that their share of eth
funds helping to prevent expenses from getting out of control.
3. Evaluation:-
Sales department budgets become tools to evaluate the department’s performance. By meeting
the sales & cost goals set forth in the budget, a sales manager may prove himself to be a successful
executive. Sales budget can be determined on the basis of following categories:
• BUDGETING BY PERCENTAGE OF SALES METHOD:
Using this method, the manager multiplies the sales forecast into various expense heads by
percentages. The percentage used for each category may be based on the manager’s
experience.
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The expense allocation follows the direction of change in sales. e.g. if sales are forecasted to
decline, then the budget allocation for all expenses heads will decrease as well.
However, the effectiveness of this method is dependent on the firm having accurate sales
forecasts. Despite the limitations, the managers know that if expenses are kept within their
percentage budgets, final operations will come out as planned.
FLOW OF INFORMATION FOR BUDGETING

Sales Budget
Sales dept-expense budget Production-department

(advertising, Selling costs) Administrative expense budget
budgets
Cost budgets Profit & loss Budget
Revenues Expenses
Budget periods:
Budgets may be created yearly, semiannually and quarterly. Some firms prefer annual budgets to
reduce the amount of paper work and time involved. Others make shorter budgets to make it more
accurate and specifically designed for each selling season.
Budgetary procedures
There are two basic planning styles for making a budget.
Top down:-
Top management sets objectives and drafts the plans for all organisational units.
Bottom up:
Different organisational units or departments prepare their own tentative
objective and plans. These are forwarded to the top management for consideration. The sales budgeting
procedure differ from company to company with most differences tracing back to differences in basic
planning styles.
Budgeting making procedure:-
1. Translate the Sales forecast into the work that must be done to achieve the forecast.
2. Each administrative unit must determine how much money it will need to meet the performance
goals for it.
a) Surveying each of the activities, the unit must perform.
b) Determining the materials and supplies required to accomplish the jobs.
c) Determining the materials and supplies required to accomplish the jobs.
3. Sales department budgets are complied into one man budget and it is forwarded to the financial
executive who disseminates the information to the other department.
Administrative heads tend to be overly generous in their estimates of funds they need for the coming
year. Few work under tight budgets. Generally in with managed organisation all budgets are tight.
Stages involved in Actual sales budget preparation:-
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a) Each district sales manager estimates district sales volume and expenses for coming period and
the districts contribution to the overhead.
b) The top sales executive must argue effectively for an equitable share funds from the marketing
division. The amount of money finally allocated the sales department depends upon value of
individual budgetary propose to company as a whole.
c) The top management appraises the proposal by looking at intrinsic men and probable value to
the whole organization. Starting point is a carrel assessment of wants and needs of the
prospects.
d) The top management divides the available funds among the department and the share each
receives depends on the ability of the department to accrue for the plan.
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Q.9:- What is sales control? How can it be effectively implemented?
Ans:- SALES CONTROL
“Control” is knowing what you want to do and being able to do. This definition applies whether it refers
to a driver driving an automobile, to a captain commanding his ships, to a quarterback leading his team,
or to a sales manager supervising his men. However, a more precise definition of control for the sales
manager might be ‘knowing what you want your sales manager to do & bring able to get them to do it.
When troops panic under fire and scatter in all directions, their commander has ‘lost control’ he
knows what he want his met to do, but he is unable to make them do it. Similarly, when one of salesman
fails to meet a reasonable quota, or only makes half the calls he is expected to make, or neglect an
important customer to the point where he loses the account, the manger lost control.
Control is the essence of supervision; indeed, it is the purpose of supervision. A sales manager’s
job is to multiply his selling effectiveness through these salesmen. But unless he can control the activities
of his men, unless he can lead to do the right things at the right time, such multiplication of effectiveness
is almost impossible.
What is being control?
a) General Behaviour
The Sales Manager might view his job as if there were three separate areas in which he must
exercise control over his salesmen.
• CONTROLLING:
First, he must control their general behaviour i.e. he must discipline them making certain they
conform to the company’s standards of conduct & appearance.
Controlling salesmen’s personal conduct is seldom a problem with good managers. Their
leadership is firm, & the salesman knows that they are expected to conform to the company’s
standards of decorum & appearance. Horseplay at meeting or in the office is generally not
tailored or even attempted. The men come to work on time, they dress in keeping with their job
and the area in which they work, they perform the minor duties expected of them, such as
keeping their equipment serviced & clean. When breaches of discipline do occur, reprimands a
firm, just & immediate.
• ATTITUDES:
Then he must control the attitudes. He must see to it that they have genuine respect for their
company, for their job , and their customers prospects.
By the same token, the control of attitude in seldom a problem with good managers. Good
attitudes are the natural result of good leadership. When a manager shows respect for company’s
rules & procedure when he exhibits pride in the selling profession, and when he takes the sales
group’s tasks seriously, he is shaping his salesmen’s attitude well.
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• WORK PATTERNS
Finally, the sales manager must control his salesman’s work pattern must set goals, assigns
tasks, and redirect efforts.
STEPS IN OBTAINING WORK CONTROL
A good ‘system’ for controlling salesmen’s work involves these four basic steps:
Deciding what goals your group should strive to attain; and deciding what activities your
salesmen should undertake in order to reach these goals.
Communicating the group’s objectives- in terms of specific activities so that each salesman
knows what he is expected to do and how he is expected to do it.
Checking to see if the salesmen have done what was expected of them.
Redirecting efforts when salesmen go astray, & rewarding performance that meet expectations.
Controlling daily activity
Control through day to day contact
Follow-up on given directions.
Method of sales control
Expenses to sales
Miles-traveled to sales
Actual day s worked to working days available
Active prospects to active account.
New customers sold to repeat customer sold.
Rupee volume of new business to repeat business.
Total expenses to total calls.
Miles traveled of days worked
Productive call to total calls.
THE ICEBERG EFFECT
It may be explained with the help of an e.g.:

Take a salesman of a wide line of sporting goods. His job is to sell to sporting goods shops,
hardware stores, and department stores. His experience, prior to taking this present job, has been in
hardware merchandising, and, as a consequence, he favours selling to this group. This man’s selling
record was good. However, his manager noticed that a preponderance of his orders came from hardware
stores, although this, he felt was not the pattern of the other salesmen in his orders came from hardware
stores, although this, he felt, was not ht pattern of the other salesman in his group. Sa he decided to
analyze the man’s sales by types of account- something he had never bothered to do before. He also
made a similar study of the five other salesmen in his group. The six-month record looked like this.
Percent of sales to
Hardware Sporting Department
Stores Good shops Stores
Salesman A 46 16 38
Salesman B, C, D, E, F 21 22 57
The ‘iceberg’ (total sales) showed that salesman “A” was actually over quota, but the detailed analysis
indicated that the man might not be realizing the potential his territory as far as supporting goods stores
and department stores well organized. It may be that, having got a complete view of the ‘iceberg’, the
manager will want to make some of his effort to get this man to sell to the other outlets with the same
enthusiasm he shows for hardware outlets. At least, he is a position to exercise more precise control over
the salesman’s activities than was before he made his analysis. In addition, he may have at the same
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time discovered that his other five salesmen could generate sales from hardware outlet if they
reallocated their efforts somewhat.
Getting reliable reports from salesmen
Here are three questions to be asked to determine just how necessary a report a request for
information might be:
1. Is this information necessary to maintain control of the salesman’s activity “for routing
purposes”, one company insisted that its salesmen file daily mileage reports. And yet, it was
unable to demonstrate any way in which this information was ever used for routing control.
Salesmen had complied freedom to route themselves. The only mileage figure actually
needed available from the monthly expense report.
2. If there information is useful, is it being used?
As already mentioned, reports that are not read and acted upon worthless even if they contain
much potentially valuable information. The better to eliminate reports that you do not have
time to use, because salesmen quickly discover whether or not they are performing
worthwhile paperwork, ands they resent filling out reports that are of no practical value.
3. Is, there some other way to get this information?
One manager was interested in the average number of calls his men had make on a
customer before that prospect signed an order. He designed special form that showed the
date of each call prior to the one in which the sale was made. The form was in use for 2
months before one of the salesmen suggested that they simply jot down the number of the
order-getting call at the bottom of the order blank. This has the manager all the information he
needed, and saved the salesman the trouble of completing the extra form.
Don’t base discipline on what salesmen report.

Show that the reported data is read & used.
Check reported information personally from time to time.
Other control mechanism, which may be used to evaluate the effectiveness of the personal
selling effort.
Sales Audit
A sale audit is a systematic & comprehensive critical & unbiased review and appraisal of
the basic objectives and the policies of the selling function and of the organization, methods, procedures
& personnel employed to implement those policies & achieve those objectives. Fundamentally, it
answers the following questions:
Who is buying what & how?

Who is selling what & how?
How is the competition doing?
How are we doing?
Sales Analysis
It is detailed study of sales volume Performa to gains insights on strong and weak territories,
high-volumes & low-volume products and the types of customers providing satisfactory & unsatisfactory
sales volume. Analysis of sales answers the following questions:
• Analysis of sales territories answers how much is being sold.
• Analysis of sales by customers answers who is buying how much.
• It reveals salespersons with good or below average sales performance
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• What is being sold in the market?
Cost Analysis
The third tool available to control the sales effects in the organization is Market Cost Analysis. It
analyses sales volume & selling expenses to determine relative profitability of particular aspects of sales
operations.
It determine the relative profitability of particular aspects of sales operations steps in Marketing
Cost Analysis are:
Sales Analysis
By territories
By Sales Personnel
By product etc.
Assign Selling Expenses
By territories
By Sales Personnel
By product etc.
Analysis of relative
Profitability
Exposing of relative
Strengths & Weaknesses

Conclusion:
Thus an appropriately chosen control technique contributes to the effectiveness sales
management. Periodic sales audits provide comprehensive appraisals of total personal-selling
operations. It helps in identifying areas of strength potential for further exploitation & areas of
weaknesses with potential improvement. Marketing cost analysis goes beyond analysis of sales volume
probes selling expenses to determine relative profitability of particular aspect sales operations. Hence
control of the sales executives last from the general to the scientific methods available to improve the
effectiveness of the person selling operations.
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1 O.D.M Computer & Mgt.

Obtaining Sales Provide Profit Contributing Business

Motivation Sales Management Compensation

Supervision Training Orientation

Advertising Product Decision

Pricing Distribution Channel Policies

Sales Force Mgt. Maintain Relations

Long term Sales Forecast

1. Short term Sales Forecast

2. Long term Sales forecast

Long term Cyclic Seasonal Irregular

To evaluate the sources from which Sales personnel can be obtained

To tap the identified recruiting sources and build a supply of prospective

SOURCES OF SALES FORCE RECRUITS

Inside the company Outside the company

Sales Force required = Sales potential/ Average contribution of a sales executive.

3. The incremental method

Capabilities of the sales force

Demand for the product Effective supervision

Product Availability Competition & Substitutes

9. Sales Force of Non-competing Companies

VARIOUS STEPS FOR DECISIONS IN TRAINING PROGRAMME.

DECIDING TRAINING CONTENTS

DEFINING TRAINING AIMS

SELECTING TRAINING METHODS

EXECUTING THE METHODS

EVALUATING THE RESULTS

(iv) Identifying training needs.

Information about the product:- It considers

It is experienced employees, required due to change in market or company policies.

Sales Technique Training Contents Company

(A) Product Data:

(B) Sales Technique:

2. SELECTING TRAINING METHODS.

TRAINING Role Plays

Correspondence Courses Seminars

IN CASE OF INSURANCE PRODUCTS, THE METHODS APPLICABLE ARE:

4. EXECUTING THE METHODS & EVALUATING THE RESULTS.

STEPS IN ACHIEVING AN OVERALL SALES COMPENSATION PLAN IN AN ORGANISATION

Review job Include job Establish level of

Pretest and Decide on indirect Develop the

Introduce plan to sales force

Methods of compensation Straight Salary

Some Combination Straight Commission

a) Straight Salary Plan

c) Equalization of territory potential

Q.7: Write short note on :

Sales Budget Selling expenses

Q.8: What is sales budget? Why and how is it prepared?

FLOW OF INFORMATION FOR BUDGETING

Sales dept-expense budget Production-department

Cost budgets Profit & loss Budget

It may be explained with the help of an e.g.:

Don’t base discipline on what salesmen report.

Who is buying what & how?

Assign Selling Expenses

Strengths & Weaknesses

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