UNIT 3_1 (1).pptx
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The document discusses sales organization and functions. It defines sales organization as a structure specifying formal authority and responsibilities between individuals working to achieve sales objectives. There are different types of sales organizations like line, line and staff, functional, and committee structures. Sales organizations can be structured geographically, by product, industry, or account size. The roles and responsibilities of salespeople include selling, guiding customers, addressing complaints, reporting, and coordinating. The recruitment and selection process for salespeople involves employment planning, sources of recruitment, and evaluating applicants. Training and developing salespeople is also discussed.
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UNIT 3_1 (1).pptx
- 3. Introduction • Sales organization is a structural framework, specifying the formal authority and responsibility between persons working in the organization. • It consists of group of individuals working jointly to attain qualitative and quantitative selling objectives.
- 4. Definitions • In the words of Stiff, Cundiff and Govoni, “Sales organisation is both an orienting point for cooperative endeavour and a structure of human relationships. It is composed of the group of individuals, striving jointly to reach qualitative and quantitative personal selling objectives and bearing both informal and formal relations to one another.” • In the words of H. R. Tosdal, “A sales organisation consists of human beings working together for the marketing of products manufactured by the firm or the commodities which have been purchased for resale.”
- 5. Types of sales organization The line sales organization: hierarchical relationships, small organizations, small product line. Line and staff sales organization: Both hierarchical and flat structures, medium and large organizations. Functional sales organization: specific sales functions like professional services Committee sales organization: Group of sales person, providing group services
- 6. Structure of the sales organization Geographical sales structure: specific territory for each sales person Product specific sales structure: Wide range of product lines, etc. Industry based structure: Large group conglomerates, etc. Account- Size or customer based structures: Based on key accounts size, etc.
- 7. Responsibilities and functions of salespersons Diagnostic: exploring the causes Analyst: strict need analysis and identify links Information disseminator Strategist Tactician Change agent: communication of policy change, business environment changes
- 8. Responsibilities Selling Guiding the buyers Addressing customer complaints Leading the subordinates Concerning the subordinates Reporting Organizing Arranging and attending sales meeting Touring Coordination with third parties
- 9. Recruitment and selection process in Sales
- 10. Employment planning Employment planning refers to the recruitment and selection of applicants for sales jobs. Recruitment begins with the initiation of a search (i.e., prospecting for applicants). Once all of the activities leading up to and including the actual decision by the applicant to accept or reject the final job are over, the recruitment process ends for the individual applicant. In essence, recruiters attempt to close sales by getting applicants to accept employment offers. On the other side, applicants attempt to sell themselves to the prospective employer, while searching for a job that will fulfill their needs and expectations.
- 11. Continued…. • Recruitment involves searching for, finding, and interviewing people for the job. Recruitment of salespeople takes the proper recruiters, budget, and amount of time to attract and hire quality individuals. Recruiting is typically the responsibility of the sales manager rather than the personnel department. • College recruiting, though an expensive process, is a major source of high-quality applicants. Many companies work hard to get top students into their interviews. Applicants are attracted by the type of sales job, the company’s image, word of mouth, and salaries.
- 12. • Selection refers to the process of selecting the best available person for the job. The selection process is no longer based on intuitive feelings; it involves a series of steps designed to test whether a person is right for a company and vice. • The application form is the most common tool used in hiring. Data collected include such information as education, work experience, and physical and personal characteristics. • The personal interview is an important part of the selection process. Although it is a good method for obtaining factual information, it is often too subjective; however, it remains the most popular tool used by managers in building a sales force. People who meet the minimum job qualifications in the initial interview are asked back for several in-depth interviews and often work with salespeople for a day in the field. This gives applicants a realistic preview of what to expect from the job
- 13. PROCESS • Major steps in sales personnel selection process. Not all companies take every step.
- 14. Is Sales the Right Job for the Applicant? • ■ What are my past accomplishments and future goals? ■ Do I want the responsibility of a sales job? ■ Do I mind travel? How much travel is acceptable? ■ How much freedom do I want in the job? ■ Do I have the personality characteristics for the job?
- 15. What Recruiters Look for Applicants need to determine which industries, types of products or services, and specific companies they are interested in. Find out what recruiters from different companies may look for in an applicant to better prepare yourself. Recruiters look for outstanding applicants who are mature and intelligent. They must handle themselves well in the interview, demonstrating good interpersonal skills. They should have well-thought-out career plans and discuss them rationally. They must have friendly, pleasing personalities. A clean, neat appearance is a must.
- 16. Continued…. They should have good grades and other personal, school, and business accomplishments. Finally, they must have clear goals and objectives in life. The more common characteristics on which applicants for our company are judged are appearance, self-expression, maturity, personality, experience, enthusiasm, and interest in the job.
- 17. Preparedness The Application Letter The Résumé The Interview Create a Performance Portfolio
- 18. SOURCES OF RECRUTMENT • From inside • Recruitment agencies • Educational establishment • Competitors • Unemployed
- 20. DEFINITION Sales training is a process by which an attempt to develop the selling skills so as to increase the ability, knowledge and experience of sales person.
- 21. CONCEPT Sales training is a process of providing the sales force with specific skills for performing their task better and helping them to correct deficiencies in their sales performance.
- 22. “ Sales training is an organised activity involving fact finding, planning, coaching ,and purposive attempts to develop selling skill and to these skills to selected native ability and experience.”------Collins
- 23. CHARACTERISTICS Sales training is imparted to develop selling skills of the sales person It develops principles and practice of selling Sales training is a planned and organised activity of sales department
- 24. IMPORTANCE •Increase in Sales •Stability of customers •Low supervision cost •Stability of sales man •Develop better relations between customers ans salesman
- 25. TRAINING PROCESS • Identifying training needs • Setting sales training objectives • Deciding on the training methods • Deciding the training programs • Career cycle • Evaluating Training effectiveness
- 26. TRAINING METHODS
- 31. Sales force Motivaton,Compensation, Incentives and Contests
- 32. Sales force motivation Sales managers are concerned with motivating salespeople at two levels: Individual and organizational level. Sales managers have to decide how much motivation is needed to accomplish assigned job and goals Finally then, they should develop a well designed program coordinated with other sales activities
- 33. • What can the sales manager do to motivate salespeople? • A review of sales management literature reveals five broad classes of factors referred to as the motivation mix. • Sales managers use these factors, to motivate salespeople.
- 34. • The Basic Compensation Plan • ■ Salary. • ■ Commissions. • ■ Fringe benefits. • Special Financial Incentives • ■ Contests. • ■ Bonuses. • ■ Trips. • Nonfinancial Rewards • ■ Achievement awards. • ■ Challenging work assignments. • ■ Psychological rewards. • ✮ Praise. • ✮ Recognition. • Management Control Procedures • ■ Performance evaluation. • ■ Quotas.
- 35. • Nonfinancial Rewards • ■ Achievement awards. • ■ Challenging work assignments. • ■ Psychological rewards. • ✮ Praise. • ✮ Recognition. • Leadership Techniques • ■ Style. • ■ Personal contact methods • (feedback). • ✮ National, regional, district • meetings. • ✮ Individual meetings. • ✮ Letters, telephone calls. • ✮ Joint sales calls.
- 36. • Management Control Procedures • ■ Performance evaluation. • ■ Quotas. • ■ Reports.
- 37. Compensation plans • Straight Salary Plans: Regular income, fixed, less performance orientation, delayed, can lower work norms, etc. l best for jobs in which a high percentage of the workday devoted to non-selling activities like routine selling jobs, lengthy preselling and postselling services, etc. for which management finds it cannot effectively evaluate performance. •
- 39. • Straight Commission Plans: If you do not sell anything, you do not earn anything. There are two basic types of commission plans: straight commission and draw against commission Exhibit shows a 7 percent commission on all sales. The salesperson must generate approximately $314,000 in sales to earn the same $22,000 earned by the person under the straight salary plan
- 40. In addition to the single commission plan, multiple commission rates are sometimes used. For example, a 10 percent commission may be paid on the first $100,000 of sales and 12 percent on sales over that amount in the same year. A person who sold $300,000 would receive $34,000 in commission [($100,000 × .10) + ($200,000 × .12) = $34,000]. When the commission rate increases, it is a progressive commission plan. •
- 41. On the other hand, some companies use a regressive plan, in which commission rates decrease as sales increase, such as paying 12 percent on the first $100,000 and 10 percent on sales over that amount. For sales of $300,000, the salesperson would receive $32,000. • Draw against commission • The salesperson may believe that $2,000 a month is needed to meet base expenditures for that period.
- 42. Thus, at the beginning of the month, a draw or advance of $2,000 against commission for that month is given. If sales for a particular month resulted in commissions of $2,100, at the end of the month, the company would pay $100 in commissions. Conversely, if commissions earned for that month amounted to only $1,300, the salesperson would owe the company $700.
- 43. Sales Appraisal
- 44. Introduction Achieving acceptable levels of performance is essential for the organization to stay in business and for the salesperson to reach personal goals. Motivation to perform at acceptable level. Establishes a management control systems especially for sales functions. Performance Evaluations Let People Know Where They Stand…??
- 45. Reasons for Performance Evaluation 1. To appraise a salesperson’s past performance 2. To develop a sales plan to increase the salesperson’s future sales 3. To motivate sales people to improve their performance
- 46. Who Should Evaluate Salespeople? Immediate superior Sometimes several managers evaluate each salesperson. The simplest approach is for the district manager and the regional manager to arrive at an evaluation together. Other district manager in the region sometimes takes part in evaluation. Many companies use the entire region’s management group and a home office personnel specialist to evaluate salespeople’s work
- 47. Qualitative and Quantitative performance Criteria
- 48. When Should Salespeople Be Evaluated? Salespeople should be evaluated at the end of each performance cycle. A performance cycle is a period related to specific product goals and/or job activities. For example, consumer goods manufacturers typically have certain products they want to emphasize periodically. They may have six performance cycles during the year. Every two months, the sales force is given specific sales goals for 5 to 10 different products. It is necessary to compare goals to results after each cycle.
- 49. Conducting the Evaluation Session Both Manager and Salesperson Should Be Prepared for the Interview Be Positive: Both the manager and salesperson should believe that the evaluation is a positive method of helping the salesperson do the job better.
- 50. A Showcase of positive and negative appraisal interview
- 53. Actual review performance: Research has shown that people tend to evaluate themselves than their superiors. Finalize the performance review: start with high ratings and then work down, care should be taken in low appraisals, discuss with sales person to remove difference of opinions Summarize the total performance Evaluation:
- 54. Develop Mutually Agreed-On Objectives Formalize Evaluation and Objectives: the manager should write a letter to the salesperson restating the results of the performance evaluation and the objectives. A copy is sent to the manager’s superior to go into the salesperson’s permanent personnel file.
- 55. Sales Budget and Sales Territory
- 56. Sales Budget A sales budget is the projected amount of units a company anticipates selling in a set period of time and the revenue it could earn. Typically, organizations measure this either on a monthly, quarterly or yearly basis. When predicting a sales budget, companies consider factors such as previous sales patterns, activities of competitors and the current or expected economic conditions.
- 57. Organizations can determine if their business is successful by examining how closely they reach their target. Sales managers use these to determine corrective actions to take to be more efficient. Other benefits of calculating a sales budget include: Improving cash flow management Building actionable strategies to reach sales goals Determining overhead costs Streamlining business processes
- 58. Elements of a sales budget • Elements of a sales budget • The elements of a sales budget include: Sales forecast Price per unit Total revenue
- 59. Developing a sales budget 1. Select a period of time 2. Gather sales prices 3. Collect sales data 4. Look at industry market trends 5. Communicate with your customers 6. Create your forecast 7. Compare results
- 60. The idea behind the creation of sales territories is to match the sales opportunities with the selling effort. A salesman is given a group of similar customers and prospects for servicing. In a heterogeneous market, a territory is comparatively more homogenous. According to Still and Cundiff (2004), a sales territory is a grouping of customers and prospects assigned to an individual salesperson.
- 61. Conceptually, a territory may represent: (a) A particular geographical area mostly. (b) A group of customer accounts or prospects, e.g., hospitals and institutions. Though most of the companies emphasize geographical territories, some companies with technical style of selling ignore this basis and assign salespersons to a particular customer grouping. Geographical territories also do not matter much in insurance selling, property selling, selling in shares and securities and automobiles.
- 62. Need for establishing sales territories • 1. To provide proper market coverage. • 2. To control selling expenses. • 3. To assist evaluating performance sales personnel. • 4. To contribute to sales force morale, and • 5. To help in the coordination of personnel selling and advertising efforts.
- 63. Facts considerable while allocating territories Even distribution coverage Elimination of duplication of activities Equal opportunity Flexibility in allocation Economical Allocation to new salesmen Prospect density or the number of prospects in the specified area
- 64. Frequency of visits necessary mode of transport available Territory Shape: There are three widely prevalent shapes the wedge, the circle and the clover leaf. Wedge-shaped territories are suitable for urban as well as non- urban areas. It starts from a thickly populated urban centre such as Marico Industries, Procter and Gamble Limited, and Hindustan Unilever Limited.
- 65. Scattered customers call for a circle shaped territory. The salesman remains at the centre of the circle or near to it. For eg. Maruti Udyog Limited, Hyundai Motors, and Park Avenue, follow this kind of territorial design. Randomly located accounts call for clover-leaf type of arrangement. Each clover-leaf represents a week’s work.
Editor's Notes
- Challenging work assignments. ■ Psychological rewards