Sales Management (Unit-1)

Sales Management
Sales management is the management of activities and processes relating to the effective planning,
coordination, implementation, control, and evaluation of an organization's sales performance. Sales
management is a core business process in most organizations. A role in sales management is typically a
sales manager whose job plays a vital role in a company’s revenue generation and profits.
Effective sales management requires a thorough understanding of the sales process and how different
techniques can be used to drive sales. By carefully analyzing key performance indicators (KPIs), optimizing
your selling approach, and enhancing your team with the right competencies and tools to succeed, you can
turn your sales department into a profit-generating department.
Sales Management
Sales management is the process of leading, motivating, and influencing people to achieve sales objectives.
The sales manager manages the entire sales cycle, including forecasting and budgeting sales revenue,
recruitment, selection of sales personnel, and ensuring proper training and performance evaluations are
conducted.

Types of Sales management

Sales managers need to possess fundamental skills, such as effective communication, strong organization
and active listening, regardless of the industry they work in. The sales management approach, however,
can vary depending on the industry they are operating in. Certain industries require sales approaches that
focus on increasing the quantity of sales, while others concentrate on generating revenue through high-
value accounts. Each type of sales involves slightly different sales management skills so it is crucial to
identify the niche that suits you best.
1. B2C Sales Management
Business-to-consumer (B2C) sales focus on providing goods and services directly to individual
customers. Thanks to marketing strategies such as social media, digital marketing and events, B2C
organizations rarely struggle with finding leads. Where their challenges come into play is converting
those leads into a sale. Sales managers who can streamline and automate the internal sales process with
tools such as customer relationship management (CRM) software will see an increase in productivity
among the members of the sales team.
2. B2B Sales Management
Sales management style for business-to-business (B2B) sales focuses on strategically building long-term
relationships with clients. This is because transactions tend to be larger and the sales process tends to be
longer than B2C sales. Because of this, sales managers in B2B businesses often work closely with their
sales team to build strong, lasting relationships with their clients in order to drive sustainable growth over
the long term. It is important for B2B sales managers to set clear and measurable goals for their sales
team, use data to track performance and to provide ongoing training in order to increase the sales team’s
performance.
3. SASS Sales Management
Software as a Service (SAAS) companies sell software or applications online typically on a subscription
basis. The sales process is often remote with deals being finalized through email or the phone. A sales
manager overseeing an SAAS team typically employs a results-oriented management style that focuses on
achieving sales targets and maximizing revenue growth. Effective communication is a key aspect to
ensure that team members understand the company’s goals, objectives and sales strategies. SAAS sales
managers tend to be analytical, regularly monitoring sales metrics and performance indicators to identify
areas to optimize the sales processes.
4. Enterprise Sales Management
Enterprise sales are sales that involve selling large-scale corporate solutions directly to large companies.
The complex sales typically involve large contracts that require long sales cycles that need to go through
multiple decision makers in order to be approved. Because the length of the enterprise sales cycle can
take months or even years, it is important for managers to hire sales associates who can not only develop
and maintain relationships with clients, but also have the patience to stick with the relationships over the
long haul.
Scope of Sales Management
The scope of sales management is very important and drives the whole sales system. In nutshell the 3
key factors of sales management are:

1. Sales Operation: This will include identification and allocation of territory to the sales team.
Measuring and monitoring their performance. Motivating and leading by example to help them
close deals and hit their targets and put incentives in their pocket.
2. Sales Strategies: This has got all to do with product positioning, price decisions and running
promotions. Knowing when to discontinue a product and also know the activities of the
competitors.
 3. Sales Analysis: Evaluating and understand product movement, which product is bringing in the
most revenue and which is unmoving. Also measuring forecast versus actual will help a sales
personnel to understand and take corrective measures. To know who is the top 3 sales performing
personnel can give us an judgment of the maneuvers we need to make in the team to reach our
fixed targets.

Importance of Sales Management:

Sales management has gained importance to meet increasing competition and the need for improved
methods of distribution to reduce cost and to increase profits. Sales management today is the most
important function in a commercial and business enterprise.

The following are the other factors showing importance of the sales management:

(i) Introduction of new products in the market.

(ii) Increasing the production of existing products.

(iii) Reducing cost of sales and distribution.

(iv) Export market.

(v) Development in the means and communication of transportation within and outside the country.

(vi) Rise in per capita income and demand for more goods by the consumers.

Evolution of Sales Management Functional

Sales management is a critical component of the marketing function of any organization. The primary
objective of sales management is to ensure that the organization's products or services reach the target
customers efficiently and effectively. The evolution of sales management can be traced back to the early
1900s when businesses began to recognize the importance of sales as a separate function within the
organization. Here, we will explore the evolution of sales management functional and discuss the role of
sales function in marketing and the key decision areas that guide the formulation of sales strategy.
The evolution of sales management functional can be broadly divided into five phases.
Phase 1: The Entrepreneurial Phase (1900-1930)
During the early 1900s, businesses were primarily
small and entrepreneurial in nature. Sales were largely dependent on personal selling, and sales
management was an informal and unstructured function. The sales function was not viewed as a distinct
and separate activity, and sales managers were primarily entrepreneurs who were responsible for
managing the sales team.
Phase 2: The Professional Phase (1930-1960)
During the 1930s, businesses began to adopt a more formal
and structured approach to sales management. The focus shifted from personal selling to creating a sales
force that could sell products in a more efficient and effective manner. Sales managers began to use new
tools and techniques such as advertising, sales promotions, and market research to identify customer
needs and preferences.
Phase 3: The Sales Management Phase (1960-1980)
During the 1960s and 1970s, businesses began to
view sales management as a critical function within the organization. The focus was on managing the
sales force more effectively and efficiently to achieve the sales targets. Sales managers began to use new
tools and techniques such as sales forecasting, sales training, and performance appraisal to improve the
performance of the sales team.
Phase 4: The Strategic Sales Management Phase (1980-2000)
During the 1980s and 1990s, businesses
began to adopt a more strategic approach to sales management. Sales managers began to play a more
strategic role in the organization, and the focus shifted from achieving short-term sales targets to building
long-term customer relationships. Sales managers began to use new tools and techniques such as
customer relationship management (CRM) and sales force automation to improve the customer
experience and increase customer loyalty.
Phase 5: The Relationship Management Phase (2000-Present)
In the present era, businesses are focusing on building long-term
relationships with customers. Sales managers are playing a critical role in building and maintaining these
relationships. The focus is on creating a customer-centric sales strategy that meets the needs and
preferences of the customers. Sales managers are using new tools and techniques such as social media,
mobile marketing, and e-commerce to connect with customers and build strong relationships with them.
 Objectives of sales management
(1) Achieving Sales volume
Achieving sales volume is the first objective of Sales. The word “volume” is critical because whenever a
product sales start, the market is supposed to be a virgin market. Thus there needs to be optimum
penetration so that the product reaches all corners of the region targeted. Ultimately, penetration levels
can be decided on the basis of sales volume achieved.
(2) Contribution to profit
Sales brings turnover for the company and this turnover results in profits. Naturally, sales have a major
contribution to profit and it is categorized as a profit function in several organizations. But there is one
more aspect to the contribution of profit by sales. The objective of sales management is to sell the product
at the optimum price. Some companies might target a premium pricing for a product to make it premium
in the market. But if the sales team drops the prices, then the objectives are not being met and the profit is
dropping.
(3) Continuous growth
A company cannot remain stagnant. There are salaries to be paid, costs have been incurred and there are
shareholders to be answered. So a company cannot survive without continuous growth. If there is no
innovation at the product level or at the company level, then the company has to be blamed. But if the
products are good, and still the penetration is not happening, then it is the fault of sales manager and sales
executives. It is the job of marketing to take feedback and bring new products in the market. But if the
sales team does not provide the appropriate feedback of “Why the product is not selling”, then growth
becomes impossible. This is why, more penetration and more growth is in the hand of sales people.
(4) Sales Management and financial results
Financial Results are another objective of sales management and are closely related and therefore sales
management has financial implications as well.

The Objectives of sales are therefore decided on the basis of where the organization stands and where it
wants to reach. It is a collaborated effort from the top management along with the marketing managers
and sales managers to provide with a targeted estimate.
 Function of Sales Manager
1. Product Development:
Product development, otherwise known as merchandising, is the foundation for successful marketing. It
covers a wide variety of activities of planning and development such as introduction of new products,
bringing home new uses or applications for existing products; modification of existing product by style,
colour, design; elimination of obsolete products; standardization of products as to quality, size, design,
packaging; observation of competitive products for self improvement in terms of cost performance, name
and the like. Hence, sales manager should welcome manufacturing and research and development experts
for his own good and the good of the firm.

2. Sales Planning:
Sales manager is to set sales objectives and determine the sales and advertising activities necessary to
attain the established goals. Relying on marketing research, he decides of sales quantum, type, sales
efforts, time and costs. To control expense and plan for profit, he makes budgeting of sales with the
advice of marketing research, accounting and the budgeting staff. Sales planning involve good deal of
coordinating the activities of salesmen, dealers, advertising agencies, people of physical distribution,
sales-personnel, production scheduling, and inventories and so on.

3. Marketing Research:
Sales manager is accountable for gathering, recording, analyzing and interpreting the facts about the
character, quantity and trend of demand through marketing research. Marketing research also covers sales
analysis and research, statistical studies of sales by products, territories, distributors, seasons, salesmen,
costs and expenses. It involves product, consumer, distribution, physical distribution and so on. It is
marketing research that provides up-to-date and authentic knowledge of markets, consumer preferences,
buying habits and product acceptance that are fundamental to the success of sales administration.

4. Physical Distribution:
Though it is the responsibility that is shouldered by traffic and shipping departments, physical distribution
of products is the basic responsibility of the sales manager. Here, the sales manager coordinates the sales
with the traffic on problems concerned with physical handling of products from the points of plant to the
points of consumers. This covers crucial problems of costs of transportation, methods of transportation,
shipping containers, warehouse locations, handling costs, inventories, and use of variant types of
warehouse facilities, reduction of demurrage and damage claims and so on.
5. Sales Policies:
Framing and administration of sales policies is a major responsibility of every sales manager by very
nature. Sales policies are the guidelines set up by the management within which the company is to seek to
reach its personal selling objectives. These sales policies can be broadly classified into three areas
namely, product, distribution, and price.

These sales policies regulate the relationships between the salesmen, distributors, dealers and customers.
They hover round prices terms of sale, claims and adjustments, product quality, methods of distribution,
brands, credit and collections, mechanical service, freight payment, advertising, promotion, reciprocity,
sales personnel, branch operation and delivery.

6. Sales Personnel:
Sales manager is responsible for recruiting, selecting, and training the sales-force, its compensation,
supervision, motivation and control. Sales manager determines the extent of salesman’s territories and
aids them in covering their areas more effectively and better utilizing their time and energy.

He provides the salesman with sales equipment in the form of portfolios, models, demonstrating devices
and audio-visual aids. Thus, manpower development and maintenance at its peak is his task that pays rich
dividends.

7. Financing the Sales:

Sales of the organization are sure to take two forms namely, cash and credit. Of late, credit is forming the
lion’s share of the total transactions. This necessitates the sales executive to appropriate the funds for
marketing in conjunction with the treasurer or the credit and finance department.

Gaps created by credit sales, inventories built-up in anticipation of seasonal demand, advertising and
sales-promotion campaign expenses, sales on consignment basis, all need arrangement for short-term
funds.

Sales manager is to consult and confer and deliberate with finance executives, credit and account
department people to decide about the credit sales, installment sales so that deferred payment plans-length
of credit period rewards for prompt payment or penalty for ever due payment and the like.
8. Sales-promotion and advertising:
Advertising and sales- promotion activities are of paramount importance’s that assist in strengthening the
hands of sales-force. Therefore, the sales manager is responsible for advertising and sales-promotion to
create maintain and extend the consumer demand and to aid the salesmen and the middlemen selling the
company products.

He approves advertising plans, schedules, appropriations, advertising media, special promotions and
cooperative advertising with middlemen. Sales manager directs the personnel of sales- promotion with
regard to the salesmen’s visual aids, demonstrating devices, sales kits, sales contests, direct-mail
advertising, sales publication, displays, exhibitions, motion pictures and sales training programmes for the
salesmen and the dealers.

9. Distributor and Dealer relations:

Cooperation, trust and goodwill of distributors and dealers are of grass-root importance in successful sales
efforts undertaken by the sales organizations. Sales manager, along with public relation department, tries
to establish, maintain and extend sound relation with dealers and distributors.

Good distributor/dealer relations include sales assistance, mechanical service, delivery, adjustments,
informing middlemen about the products services policies and practices of the company.

10. Mechanical services:

Those sales organizations that sell mechanical products that call for after-sale services such as installation
repairs and maintenance they should have adequate and satisfactory arrangements for such mechanical
services.
These are concerned with mechanical service policies, personnel, equipment and facilities, costs and
services rendered to the consumers by the dealers.
Sales manager with the aid of service department personnel plans programmes of service education to
train the manufacturer’s salesmen, dealers’ service men and the consumers.
Their planned service policies are to be effectively implemented so that the customers do not suffer
though the company has made all the arrangements. In other words, the benefits of such service facilities
should reach the customers.