SALES MANAGEMENT

Sales-is activity related to selling or the amount of goods or services sold in a given
time period.
Sales management-Originally, the term ‘sales management’ referred to the direction of
sales force personnel. But, it has gained a significant position in the today’s world. Now,
the sales management meant management of all marketing activities, including
advertising, sales promotion, marketing research, physical distribution, pricing, and
product merchandising.
Sales-management differs from other fields of management, mainly in different aspects:
the selling operation of a business firm does not exist in isolation. Sales-management
has to work in a broader and newer environment, in co-existence with the traditional
lines

BENEFITS OF SELLING ACTIVITIES

There are different benefits of selling activities, which are as follows:
1. Benefits to the society:
Economic growth and maximum employment are the basics for national development.
The achievement of both these goals means jobs and incomes for a nation’s labour-
force. The number of people, who need jobs, continues to expand, and also some jobs
are being eliminated, because of the introduction of computers and abolition of obsolete
technology. If jobs are to be made available for all those, who want and expect them,
the economy must continuously expand its production of goods and services, which can
only be done by adopting sound government-policies and efficient use of people

2. Benefits to consumers:
Professional people may not know every fact of a product, but they, at least know its
major uses, limitations and benefits; so they can easily serve their customers, quite
effectively the sales-engineers are qualified to analyze technical-problems, which may
be confronting a particular organization and they can give the right recommendations for
developing efficient operations. Like-wise, the medical representatives may help the
busy doctor, by keeping him abreast of new drugs in the market. The list of sales-people
who can offer assistance to customers is practically without end.
3. Benefits to business firms;
Their sales-persons and customers: salespersons are owned by their companies, while
customers are the end-users of the company’s product(s) and/or services, all these
people, in the chain of marketing, stand to benefit by sales-activities. A business firm
can be profitable only if its revenues exceed its costs. The prime responsibility of the
salespersons is to sell the goods, produced by the organisation, at a profit.

ELEMENTS OF SALES MANAGEMENT

There are the four basic elements of sales management, discussed below:
1. Planning:
A business cannot be taken as a chance. Every salespeople or person concerned have
to see for the future, in a planned way like what must be done? And who will do it? The
plan must be based on extensive market research, and the facts must be verified at
every stage. The plan should also be evaluated, after investigating the total-market, for
a particular type of product. Flexibility must be provided by establishing a specialist’s
production line, to allow for variation in production. The plan should also be subject to
continued review. The details of the plan should be discussed, with all the departmental
heads, concerned, and their sub-ordinates, who bear responsibility for fulfilling their
parts of the plan.

2. Co-ordination:
Co-ordination is all pervasive and permeates every function of the management-
process. For example, ill planning, departmental-plans are integrated into a master.
Plan, ensuring adequate co-ordination. Similarly, organizing starts by co-ordination
wholly, partially inter-departmental and inter-personnel matters. Co-ordination also
helps in maximum utilization of human-effort by the exercise of effective leadership,
guidance, motivation, supervision, communication etc. The control-system also needs
coordination. Co-ordination does not have any special techniques. Nevertheless, there
are sound principles, on which to develop skills. It has a special need to help the staff,
to see the total picture and co-ordinate their activities, with the rest of the team. The
sales manager has to encourage direct personal-contact, within the organization,
particularly where there is lateral-leadership

3. Controlling:
The sales manager has to check regularly, that the sales activities are moving in the
right direction or not. He guides, leads, and motivates the subordinates, so as to
achieve the goals planned for the business. He has to take steps to ensure that the
activities of the people conform to the plans and objectives of the organization. The
controlling system should be such that one can study the past, note the pitfalls and take
corrective measures, so that similar problems may not occur in the future. The controller
has to ensure that the set targets, budgets and schedules are attained or followed in
letter and spirit. There must be procedures to bring to light the failure to attain a target.
The control-system has to
(i) prepare sales and market forecasts;
(ii) determine the level of sales-budget;
(iii) determine the sales-quotas for each salesman;
(iv) determine, review and select distribution-channels;
(v) organize an efficient sales force
(vi) Establish a system of sales-reporting;
(vii) Establish a system of statistical sales-credit;
(viii) Establish stockcontrol system(s);
(ix) review of performance of the salesforce; and
(x) establish periodical testing programmes.

4. Motivating:
Motivation is essentially a human resource concept. It aims to weld together distinctive
personalities into an efficient team. For this, knowledge of human psychology is needed,
as a means of understanding behaviour patterns. This is especially important in the
case of the sales-force. Only motivated sales-persons can achieve company’s goals.

OBJECTIVES OF SALES MANAGEMENT

Every business firm has certain objectives to achieve. These objectives may be very
explicit and definitive, or they may be implicit or general. Although, firms have different
mixes of objectives, and they do place differing emphasis, on individual ones, the typical
objectives include
(i) profitability,
(ii) sales-volume
(iii) market share
(iv) growth, and
(v) Corporate-image.
While all these objectives are important to a business firm, the objectives, relating to
sales-volume, market share and profitability, are greatly affected by the effectiveness
and efficiency, with which the sales-function is managed.
Generally, objectives of sales-management have to cover various sales-functions, in an
integrated manner. These objectives are to be expressed, as far as possible, in
measurable and quantitative terms, and should also be realistic and achievable. Since,
there are more than one objective, these should be put, on a hierarchical manner (most
important, down to the least important). To ensure their flawless realization, they must
be congruent, i.e., they must fit together, and not be in conflict with each other. For
example, suppose you ask a salesman to cut his travelling expenses, and ask him to
spend more time, in the field. To make these two requirements, more meaningful, they
must be linked with specific time-element.
The setting of objectives should not be based only on the judgment of the top-
management. Rather, it should be formulated and finalized, with the involvement of the
sales-force, at the grass-roots level. In addition, the process of setting of sales-
objectives should begin, only after the company has conducted benchmark studies, to
find out, as to where it stands in terms of product, brand and market-sales and market
share trends (all in measurable terms).

PERSONAL SELLING
Sales management, personal selling and salesmanship are all related. Sales
management directs the personal selling effort, which in turn, is implemented largely
through salesmanship. The term personal selling and salesmanship are often used
without distinction.
‘Personal Selling’ is a highly distinctive form of promotion. It is basically a two way
communication involving not only individual but social behavior also. It aims at bringing
the right products to the right customers. It takes several forms including calls by
company’s sales representative, assistance by a sales clerk, an informal invitation from
one company executive to another. It is employed for the purpose of creating product
awareness, stimulating interest, developing brand preference, negotiating price etc.

PERSONAL SELLING OBJECTIVES

The qualitative personal selling objectives are long term and concern the contribution
management expects personal selling to make in achieving long-term company
objectives. These objectives generally are carried over from one period’s promotional
program to the next. Depending upon company objectives and the promotional mix,
personal selling may be assigned such qualitative objectives as
 To do the entire selling job (as when there are no other elements in the
promotional mix).
 To “service” existing accounts (that is, to maintain contacts with present
customers, take orders, and so forth).
  To search out and obtain new customers.
 To secure and maintain customers’ cooperation in stocking and promoting the
product line.
 To keep customers informed on changes in the product line and other aspects of
marketing strategy.
 To assist customers in selling the product line (as through “missionary selling”).
 To provide technical advice and assistance to customers (as with complicated
products and where products are especially designed to fit buyers’
specializations).
 To assist (or handle) the training of middlemen’s sales personnel.
 To provide advice and assistance to middlemen on management problems.
 To collect and report market information of interest and use to company
management.

The quantitative objectives assigned to personal selling are short term and are adjusted
from one promotional period to another. All other quantitative personal selling objectives
are derived from or are related to the sales volume objective. Thus, discussion here
focuses upon the setting of sales volume objectives. Setting the sales volume objective
influences the setting of other quantitative personal selling objectives, among them the
following:
 To capture and retain a certain market share.
 To obtain sales volume in ways that contribute to profitability (for example, by
selling the “optimum” mix of company products).
 To obtain some number of new accounts of given types.
 To keep personal selling expenses within set limits.
 To secure targeted percentages of certain accounts’ business.

DIVERSITY OF SELLING SITUATIONS

All of us being consumers often come across variety of selling situations. Differences in
marketing factors cause each company to have individualized selling styles. Each
different type of selling job requires the sales person to perform a variety of different
tasks and activities under different circumstances. The job of a soft drink driver
salesperson who calls in routine fashion on a number of retail stores is different from
that of a computer sales person who sells a system for managing information to
executive of a consultancy firm.
Before categorizing sales persons into basic selling styles, one convenient way to
classify the many different types of sales job is to array them on the basis of the creative
skill required in the job, from simple service-or repeat order selling to the complex
developmental selling. The different kinds of selling positions prevalent in companies
are:

 Delivery Sales Person: The primary job of the delivery sales person is to deliver
the product e.g. soft drink, bread, milk etc. The selling responsibilities are
secondary. Good service and a pleasant personality may lead to more sales.

 Inside order taker: The retail sales person standing behind a counter is an
inside order taker. The customer comes to the sales person with the intention to
buy a product or service, the sales person only serves him or her. The sales
person may use suggestion selling but ordinarily cannot do much more.

 Outside Order Taker: The soap or spices sales person calling on retailer is an
outside order taker. They do little creative selling. In contract with store personnel
these representatives actually may be discouraged from doing any hard selling.
That task is left to executives higher in the hierarchy.

 Missionary sales people: These sales persons are not expected or permitted
to solicit an order. Their job is to build goodwill or to educate actual or potential
user or provide services for the customers, as in the case of Medical
representatives, working for the pharmaceutical company.

 Consultative sales person: Consultative sales are characterized by the product

or service that is sold at the higher level of an organization e.g. computer system
or management consultancy service. The decision to purchase such products
involves higher capital outlay thus sales job requires a low key, low pressure
approach by the sales person. It would also require a very strong knowledge
about product, patience to discuss product with several people of organization
and potential benefits to the user. Even at times when the progress of sales
slows down representative has to make creative and sensitive efforts to resume
interest but without appearing to exert pressure on the prospect.

 Technical sales personnel: The most distinctive characteristic of technical

sales is the product knowledge required by its sales person, unlike the
consultative sales, where sophistication in organization relationship and
persuasive ability are sales persons’ most valuable assets. Even time required to
sell the product is relatively less than consultative sales. Most of the technical
purchasing requires approval of several people but only one or two people with
technical knowledge influence decision. If the sales representative is able to
satisfy these people with product characteristics, application, installation process,
approval from higher management is usually forthcoming.
  Commercial sales person: This field generally includes nontechnical sales to
business, industry, government and non-profit organization e.g. office equipment,
wholesale goods, building products, business services and others. Unlike the
previous two types, it is customary for the commercial sales person to make
sales on first or second call. The process stresses approach to right person
(decision maker), making a smooth presentation and closing the sales.

SELLING PROCESS

All selling process contain the same basic steps, though the detail of each step and
time required to complete it will vary according to the product that is being sold. For
example: a door to door sales representative may go through all the steps from
prospecting to closing of sale in a matter of ten to fifteen minutes in contrast, the selling
process for computer or electronic typewriter may take several visits, even years, for
getting an order.

 PROSPECTING
The selling process begins with prospecting or finding qualified potential customers.
Except in retail selling, it is unlikely that customers will come to the sales person. In
order to sell the product, the sales person must seek out potential customers,
prospecting involves two major activities-
(a) Identifying potential customers also known as prospects; and
(b) Qualifying them in order to determine if they are valid prospects.

(a) Identifying prospects

The identification of potential customers is not an easy job, especially for a new sales
person. Rejection rate is quite high and immediate payoffs are usually minimal. In some
consumer goods businesses, identification of prospects usually come from friends and
acquaintances, other sales people, former customers, present customers etc. Few of
the best sources and techniques for finding prospects are discussed below.
Present customers: The best source of prospects is usually the sales person’s existing
satisfied customers. It is much easier to sell additional goods and services to existing
customers than to attract new customers
Endless chain: This is also an effective prospecting tactics. In this method companies
use satisfied customers as source of referrals. Sales representatives ask current
customers for names of friends or business associates who might need similar products
or services. Then, as the sales person contacts and sells to these prospects, more
referrals are solicited. In this way the process continues further.
Centre of Influence:
Another effective prospecting technique based on referrals is the center of influence
approach. A center of influence is a person with information about other people or
influence over them that can help a sales person identify good prospects. Some
frequently used centers of influences are housewives, bankers, local politicians etc.
Spotters: Some companies use spotters as a source for prospecting potential
customers. Spotters are usually ‘sales trainees’ who help sales person identifying
prospects, thus saving time and qualifying sales lead.
Cold call: Cold call is also known as unsolicited sales calls. This prospecting
techniques involves knocking on doors. The sales person makes contact with a
potential customers, introduces himself or herself, and asks if there is a use for the
product or service. This technique is utilized by the sales person when they have time
available between scheduled appointments.
Directories: A wide variety of directories are full of prospect. The classified telephone
directory is the most obvious one. A sales person may also find that membership
directories of trade associations, professional societies, and civic and social
organizations are good sources for prospects.
(b) Qualifying prospects
Once the sales person has identified potential customers, he or she must qualify them
to determine, if they are valid prospects. Unless this is done, time and energy is wasted
in trying to sell to people who cannot or will not purchase the product or service. There
are several factors to consider while qualifying a prospect. One approach to qualifying
often called MAN (Money, Authority and Need) approach is given below:
Money: Does the prospect have the money or resources to purchase a product or
service? Ability to pay is very critical factor in qualifying a prospect. The sales people
must be familiar with financial resources of a prospect.
Authority: Does the prospect have the authority to make commitment? This is a
particular concern when dealing with corporation, government agencies or other large
organizations. Even while selling to a married couple, it may be difficult to identify who
actually makes the purchase decision. A sales person must identify the key decision
maker early to economise on selling time more effectively.
Need: Does the prospect need the product or service? If a sales person cannot
establish that the customer will benefit from purchasing a product or service, there is no
reason to waste a sales call. The prospect either will refuse the offer or will end up
dissatisfied with the purchase. Before proceeding further the sales person should first
appraise whether money, authority and need exist with the prospect.

 PREPARATION
After a prospect has been identified and qualified, the sales person prepares for the
sale of product or service. The preparation stage involves the two key activities i.e. Pre-
approach and Call Planning.

(a) Pre-approach- the pre-approach step includes all the information gathering
activities necessary to learn relevant facts about the prospect and his or her needs
and situations. Four necessary steps of pre-approach are:
1. It should disclose the party need and ability to buy.
2. It should provide information that will enable the seller to tailor the presentation to the
prospect.
3. It should provide information that may keep the sales person from making serious
tactical errors during the presentation.
4. Finally, a good pre-approached increases the sales person confidence and makes
him confident to handle whatever may arise during the sales.
(b) Call planning -Call planning involves a specific planning sequence. The sales
person defines the objective of the call, devise a selling strategy to achieve this
objective, and makes the appointments. The primary objective of any sales effort is
to get an order. For some sales call intermediate objectives may be needed. Some
examples of intermediate objectives are:
 To obtain more information about the prospect.
 To relate the prospects needs and concerns to features and benefits of the product
or service.
 To obtain permission for demonstration of the product.
 To introduce a new distributor.

 PRESENTATION :
After establishing rapport with the prospects through calls, the sales person proceeds to
the formal sales presentation. The objective of the presentation is to explain how the
product meets the special needs of the consumer. The job of the sales person is to
inform the prospect about the characteristics, capabilities and availability of goods and
services that are for sale. In order to ensure that the presentation is understood by the
prospect, the sales person should be clear in his/her communication. Presentation
should also be interesting enough to keep the attention of the prospect focused on the
proposal.

Sales presentations are classified into the different categories:

(i) Fully automated
(ii) Semi-automated
(iii)Memorized
(iv)Organized, and
(v) Unstructured.

 HANDLING OBJECTIONS
All sales person confront sales resistance i.e. actions or statements by a prospects that
postpone, hinder or prevent the completion of the sale. Normally sales resistance takes
the form of an objection which can be classified as stated or hidden. Prospects may
state their objections to a proposition openly and give the sales person a chance to
answer them. This is an ideal situation because everything is out in the open and the
sales person does not need to read the prospect’s mind. Unfortunately, in many
instances prospects hide their real reasons for not buying. Besides having hidden
objections, their stated objection may be phone. Unless one can determine the real
barrier to the sale one shall not be able to overcome it. There are two major techniques
for discovering hidden objections. One is to keep the prospect talking by asking probing
questions. The other is to use insights gained through experience in selling the product,
combined with a knowledge of the prospects situation, to perceive the hidden objection.
Often objection to price and product are also faced by sales person either in a form of
unaffordable or too high price. Product objections can be answered best when sales
people have extensive product knowledge of both their own products and competitors.
Many times prospects may be misinformed or may not understand some of the
technical aspects of the proposition. In this case, the sales person should provide
additional information. Even the prospects objections can be met simply and effectively
by altering the product to suit the customer.

 CLOSING
After having answered and overcome objections, it is the stage for sales person to ask
for the order from the prospects. The entire effort is wasted unless the sales person can
get the prospect to agree to buy the product. There are several closing techniques
which are being used by sales person. Sales person should select among these
technique one that fits the specific prospect and selling situation.
In action close technique the sales person take an action that will complete the sale
e.g. in case of high priced products like Motorcar, photocopier or industrial product the
sales person may negotiate with the financial institution for financial assistance for the
prospects.
The gift close technique provides the prospect with an added incentive for taking
immediate buying action. In one more yes close techniques, the sales persons restates
the benefits of the products in a series of questions that will result in positive responses
by the prospects. The process may result in an order.
The direct close is clear and simple technique, many sales persons feel that this is the
best approach for closing, especially if there are strong positive buying motives, the
sales person will summarize the major points that were made during presentation to the
prospects prior to asking for the sale
Closing is the most important aspect of the sales process. Unless the sales person can
close the sale, the other steps in the sales process are meaningless.

 FOLLOW-UP
The selling process is not completed by merely making the sale, as generally assumed
by many sales person. After sales activities are important part of the whole selling
process. Effective sales-follow-up reduces the buyer’s doubt about the product or
services and improves the chance that the person will buy again in the future. In
addition to post-sale activities, sales person are also required to maintain good
customer relations. No matter how efficient a company is, there are always some
customer complaints. The complaint should be taken seriously and handled with
concern. The customer must know that the company cares about maintaining good
customer relations
In addition to handling complaints, they keep customer informed about the latest
products or services, fulfil reasonable request, and provide other forms of assistance.
The sales people should also appreciate the customer by thanking customers for their
business. Small gifts can be given after the sale and at appropriate times during the
year. Sales person should try to make self-analysis for evaluating their own selling
performance and methods. A Sales person should analyze every call to determine what
factors influenced its eventual outcome. Self-analysis is a very useful tool in improving
overall sales effectiveness.