50284141-sales-1234-full

Sales And Retail Management

Module-1 -SeasonINTRODUCTION TO SALES MANAGEMENT

Definition: Sales Management According to American Marketing Association sales management is planning, direction, and control of personal selling including recruiting, selecting, equipping, assigning, routing, paying, supervising as these apply to the personal salesforce.

Evolution of Sales Management: Industrial revolution that took place in the 18th century gave rise to the expansion of market which required professional approach in selling. The history of salesmanship is as old as human civilization . The business and trade of buying and selling goods flourished over centuries and centred only on some specific cities of the world.

Pheriwallahs:- The first sales people The first sales people in the US were yankee peddlers who carried

clothing, spices and household articles from one part of the country to another part. In India they are called Pheriwallahs. These Pheriwallahs move from village to village and sell sarees, dress materials and spices mostly in the rural markets because rural housewives have lesser mobility than urban housewives.Pack Peddlers:- the shrewd, unprincipled tricksters: The pack paddlers in India traded with the tribal Indians and exchanged knives, beads and ornaments and handicrafts.They sold coloured sugar water as medicine and cheated people from smaller gains. In the beginning of the 19th century, these peddlers started using horse driven carts and wagons and started stocking heavier goods.Greeters and Drummers: intermediary to buyer

Wholesalers and manufacturers hired greeters and drummers who would seek out and invite retailers to visit the display of the owner. The drummers would meet the passaengers form incoming train and ship with great fanfare to beat their competitiors. In the next phase, the drummers started visiting customer’s place of business. There were fewer than 1000 travelling sales people before 1860 in the US who were basically credit investigators and took orders for goods. John Henry patterson- selling Techniques:- IBM

The techniques of modern sales management and selling techniques were refined by John Henry Patterson, widely known as the father of modern

Uttamkumar YV.Department of MBA, BIT, Bangalore.


sales management. He ran the National Cash Registry. He asked his best sales people to demonstrate their sales techniques to other salespeople. The best sales approach was printed in a sales primer and distributed to all the other sales people to follow. – Its the beginning of canned sales approach.

Mr. Patterson assigned to his people exclusive territories and quotas in order to stretch their effort. He arranged meetings. He also sent regular sales information on techniques of selling. Thomas j. waterson was trained by Mr. patterson who later founded the IBM.Modern sales Management: Today the process of sales management has undergone numerous changes in terms of strategy, practice and technological adoption to achieve the desired goal. A sales person has become the information provider. The real sales activity is now in retaining customers rather than just closing the sale. This relationship approach has changed the scope of sales management and research has found that is costs five time more to register a new customer than to sell a product or service to an existing customer. The Domain of Sales Management: The domain of sales management has become multidisciplinary in which sales manager have to manage a diverse workforce and complex technologies. Sales manager have to perform duties such as recruiting, selecting, training , motivating, forecasting, controlling and administering people. They have to manage and satisfy multiple stakeholders such as customers, suppliers, sales representatives and top management with the objective of increasing sales and profitability.

Importance of Sales Management: Sales Management is important for the following reasons:

- The amount spent on selling product is very high.- Sales force is the primary contact point so much attention to be given

for improving the ability of selling through training and motivation.- Personal selling is the most commonly used method of promotion.- In most industrial markets , personal selling comprises the majority of

the promotional budget and is a significant part of overall budget.- Customer consider salesperson as the company selling the product .- With the advent of Internet technology and web based platforms for

interaction with customers, personal selling has become a method of marketing communication which fosters personalized and interactive dialogue with customers.



Personal Selling:Personal selling involves prospecting, formulating prospect definition,

searching out potential customers, qualifying, determining requirement , relating and converting them.Evolution of Personal selling strategies: - The personal selling strategies have evolved over period of last 150

years. with the beginning of peddlers in the 19th century adopting persuasion strategy to make sales.

- As competiton grew and buyers had a choice to opt for a particular player, it became important for the salespeople to understand the need of the customers, which called for the modification of products, prices and other related services—Negotiation starategies became more important than mere persuasion

- IN 1970s when salespeople called on the business and industrial buyers, they were told to treat the customers not just as account but as clients.Consultative selling required a seller to think like the buyer

- In the late 1980s and early 1990s, a lot of emphasis was put on the mgt of territories and accounts as profit centres or as a business. He must understand the production and marketing systems of a buyer. The sales people were trained to practice business management strategies at this phase

- The domestic and international competition, rising costs and recession forced attention on the need to reduce cost of producing and marketing goods. This was facilitated by a close working relationship between the sales people and customers. This called the partnership pahse in the evolution of personal selling.

Types of personal selling: The approach is linked to customer choice, behaviour & risk involved

1. Industrial selling- selling to reseller2. Selling to business users ;IBM sells Intel premium to campaq, HCL3. Institutional selling : Xerox , Johnson and Johnson - providing

support to buyer business4. Retail selling 5. selling to Government6. Services selling

Types of Selling:- Order taker sales people ( meeting already committed customer)eg;

inside order taker, Delivery sales people, outside order taker



- Order creator –Missionary sales people - Order taker – Front line Salespeople , sales support salespeople

Emerging Trends in Sales Management: The field of sales management is changing according to the changes in the area of personal selling.

Customer Orientation:The most important is the customer orientation in Indian organization.

Structures, systems, and process are designed around customers to give them high value products and services, deliver more satisfaction to customers and


Customer Orientation

Global and ethical issues

New selling Methods

Diversity

Relationship selling

Technology

Emerging Trends

in SalesManageme

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retain customers for a longer period. It calls for new method of sales techniques.New selling Methods:

The traditional selling process of individual salesperson calling on individual buyer is fast disappering in many industries. It is observed that in the late 1980s and 1990s many organization started using non-traditional selling such as telemarketing, team selling, web based e-selling technique.

In the industrial sector, software companies have turned to cross-functional selling for the sale of enterprise wide solutions A cross functional selling team comprises of people across all the functions such as sales, marketing, finance, operations and human resource so that a holistic picture of customer’s problem can be snapped and solutions can be developed for them.

A company such as priceline.com in the USA uses a web based sales model and practices reverse auctioning as a successful method of selling. Relationship selling:This non personal form of intermediation is found in many sectors. The basic objective of reorienting the selling strategies is to build relationship with customers. This has changed the selling process from transactional selling to relationship selling. The long term association between buyers and sellers become the focus of business with the customers.Ex:1. HCL technologies has full time employees at the client’s place for solving any problems relating to computer hardware. Ex:2 GE and other leading players have opened back office operations in India to attend customer complaints.EX:3 Jet Airways programe on Extra Miles for the frequently flying customers.Technology

Organisations are adopting technology and integrating their business across departments. Technology is having an impact in two ways: in terms of selling function as a whole, and also in terms of the performance of the selling function by an individual sales person. New technology has made it possible to automate the salesforce.Orgnaisations have integrated their requirements with vendors and vendors have adopted systems which are compatible to the enterprise-wide solutions of their customers. Ex: Maruthi has a sales automation process whereby all the dealer networks are linked to its production process at the Gurgaon plant and the production of different types of cars are linked to the demand patterns in the market place.



EX: Companies such as Archies and Hallmark use data derived from bar codes scanned at the check-out counters of retailers to supply information to their sales people.Globalisation: The global legislations such as GATT and WTO and the emergence of legislation on environment make it binding for a salesforce to look at the the emergine issues in the business world and take corrective action for the business success. The growth in consumption in the emerging markets such as India, china and Malaysia demands special attention to be given structure, approach and nature of sales force and selling techniques.

Maintaing a certain level of ethical norm is a part of responsible commercial success. There are ample cases of bribery and cheating in the world of sales in Indian Market and organisation are being blamed and ridiculed for the misconduct of business.Ex: Modi Xerox as a company was found bribing people for selling its office equipements and photocopiers in the Indian Market.

Qualities and Responsibilities of Sales Manager:-

Qualities:-

1. He should be a good communicator, catalyst, & planner.2. He should be a prognosticator, & skillful manipulator.3. He should be an amalgamator, a consolidator and orchestrator

directing efforts of many towards the achievement of common goal.4. He should be a successful mentor who understands each individual’s

needs, self fulfillment, & economic growth. 5. He should be an innovator and creator of new ideas and promotion. 6. He should be an over achiever rising to the challenge of new forecast

each year.7. He should be capable of handling unanticipated difficulties and

events.8. He should be an opportunist and a worthy advisor.9. He should be a team-mate, umpire, and referee.

Responsibilities:-

1. Sales planning and budgeting.2. Estimating demand and forecasting of sales.



3. Determination of size and structure of the sales organization.4. Recruiting, selecting and training of sale’s people.5. Allocating of sales force and setting sales quotas.6. Compensating, motivating and leading the sales force.7. Analyzing sales volume cost and profit.8. Measuring and evaluating sales force performance.9. Monitoring marketing environment.

Elementary study of sales organizations:-

Sales organizations are structural entities, which execute a combined sales plan and are designed to carry out mutually agreed goals with clear structure, roles and responsibilities for each person. Group and department. Sales organization is organization of individual either working together for the marketing of products and services manufactured by an enterprise or for products that are produced by the firm for the purpose of re-selling. It is also a structural body through which the functions of sales management are carried out. A properly designed organization is a:-1. Vehicle for reaching goals; point of orientation.2. Defined with roles, duties, rights, and responsibilities.3. Contributes to building morale.4. Receiver of sincere, morale, hard-working employees.5. Co-ordinates various departments in achieving objectives.

Functions Influencing Structure:-

1. Product and service related factors. FMCG products- organisation size large, flat at lower level orgn, supported by Large sales staff. 2. organization related factors, Organization highly specialized & niche market- smaller orgn. Multiple channel/ varied market- large & complex. Limited financial resources – intermediaries for distribution If financial resource is sound- sell directly to the customer.



3. marketing mix related factors, International operation –large size Selective distribution- own outlet-simple orgn. Price – low price no of customers large High price durables, small market size.4. External factors:- Intense competition- expansion – large size. The customer and tradition used in the past.

Organization principles:-

1. Span of control: - No of sub and sales staff under the supervisor of an sales Manager is known as span of control. When new recruits have to be handled Narrow span of Control can be used or else wider span of control is preferred.

2. Centralization and de-centralization:- the extent of control and authority of the top management decides the level of centralization. Highly centralized organisation- Every decision will be made by the top management. Decentralization helps organisation to be competitive at the respective market level.

3. Integration & co-ordination:- The orgn across departments integrated to serve customer with effective co-ordination.

Organization Design:- refers to the formal and co-ordinate task of assigning territories and establishing free flow of communication and responsibilities of sales groups and individuals to serve customer effectively. Structure should respond to environment, organization adopt different kind of structures:-

1. Line Organization: - chief executive does the decision making and decisions flow down the line for execution. The chief executive has all the authority over the sales function. E.g.:- encyclopedia pritannica India ltd.

The line organization of encyclopedia India ltd is as shown below:-



In pure line organization the senior sales executive has direct control over their subordinates.

2. Organization Design by management function :- Line & staff; line – direct control over their subordinates.Staff- right to give advice. It contradicts the principle of unity of command.

The organization design is as given below:-


M. D

Fin/legal Director

Commercial Manager

Accounts executive

Rector & head of education

National sales manager

Sales mgr(North & south)

Dy sales mgr (east & west)

Executive director & head of new media

National Sales mgr

Sales mgr Asst prdt Mgr

SalesExecutive

PrdtExecutive

VP Mktg

Ad Mgr Sales mgrMgr mktResearch

Sales People

Sales staffCity wise Sales staff

City wise


3. Organization design by territory: - several areas are combined together as a territory for assigning supervisor and then numbers of territories are combined for sales manager.

Travel Times Ltd Sales persons clock to customers Quality of customer service (no of customers to be served is limited)

4. Organization Design by Product: - ELGI equipments ltd. Designed on the basis of the product. Established in 1960. It has become multi-product, multi-market company. At one level the company is divided as a product orgn, where each prdt division is then divided by function.


Vice-president Marketing

National Salesmanager

Divisional Mgr (east)

Regional sales Mgr

District sales Mgr

Divisional Mgr (north)

Regional sales Mgr

DivisionalMgr (west)

Regional sales Mgr

Sales staffCity wise

District sales Mgr District sales

Mgr

VP Sales

Sales MgrIndustrialCustomer

Sales man

Sales MgrWholesale

Sales man

Sales MgrRetail sales

Sales man

President mktg


The organization design is as shown below:-

RODC- rotary compressor divisor RCD- reciprocating comp division AED- automotive equipment division.

5. Organization Design by Customer:-

Helps in buyee supplier interpractices. Helps in building successful customer relationship.


M.D

ROCD RCD AEdD

Engines

HRFINA/CR&D

Export


6. Combined Organizational Design: - combinations can be made on the basis of poduct, function, Geography, or the customer. Organization having a diversified prdt range & serving extreme market use this structure.

The organizational design is shown below:-

Sales Process Automation:- 1. Information technology brought many changes.2. Telemarketing, internet marketing, online selling has allowed large

corporate to automate much selling process.3. Automatic order placement through electronic data interchanges

including (VOIP) voice over internet protocols, transaction through electronic expert system, video conferencing.

4. Emerging organization design; most of the products turning to be commodities, this puts pressure to reduce the cost- this give rise to:-

a. Agency & distribution selling- independent product business with the contractual agreement with the sales organization for a sale of its products.


President

GMCustomer Care

GMInternational

VP Pdn VP Mktg VP HRD

Mktg Mgr India

Mktg MgrInternationaollllllllllllllllll


b. Shared sales force- divide the sales force among the number of division.

c. Telemarketing.d. Team based selling ( sales force is grouped to solve customer’s

problem)The organizational process:

Understand organizational goals, sales goals, objectives, product mix,Customers, how many sales people are needed.

Organize sales activities. Estimating the size of the sales force; Assign sales people. Establish accountability for sales position.

Estimating the size of the sales force;There are mainly three methods of estimating the size.

e. Equalize workload f. Incremental productivityg. Sales potential.

Equalize Workload Method: - The following are the various steps involved in the equalize work load method:-

Step1. Classify the present & potential customer according to sales potential; Total Customers- 500 Class A (large) – 100 Class B (medium) - 180 Class C (small) – 220Step2. Estimate the length of time per sales call and desired call frequencies. Class A: 30 min/call* 150 calls/year=75 hr/yr. Class B: 20 min/call*210 calls/ year=70hrs Class C: 15 min/call*160 calls= 40 hrs.Step3. Compute the total work necessary to cover the entire market. Class A: 100*75=7500hrs Class B: 180*70= 12600hrs Class C: 220*40= 8800hrs 28900hrsStep 4. Calculate the total work time available per sales person. Assumption: sales mgr specifies sales people ought to work 40hrs per week.45



Weeks per year (allowing vacation) 40hrs/ week* 45 weeks=1500 hrs/year.Step 5. Divide the total work time available per sales person by sales tax. Selling task: 55%=990hrs Non-selling task: 20%=360hrs Traveling: 25%= 450hrs. 1800hrsStep 6. Determine the total number of sales people required, Sales people needed=28900hrs/990=29.2

Incremental Productivity Method:- According to this method, sales force should be enlarged until the profits added by the last sales person hired just equal the cost of employing that sales person. Assumption: 1. Total sales volume directly varies with the number of sales people. 2. Lost of goods sold remain constant at 70% of sales. 3. All the sales people receive a straight salary of $25,000 4. Each person receives 1000 per month for travel expenses. Currently there are 32 sales force, and the sales mgr wants to determine whether or Not to add more sales people.Step1: estimate the increase in sales volume, cost of goods sold & gross margin from adding each sp.

Sales person no sales roles cost of goods GM33 $ 300,000 $ 210,000 90,00034 225,000 157,500 67,50035 150,000 105,000 45,00036 75,000 52,500 22,500Step2. Calculate the net profit Gross margin- (sal+comm. +totalexp) =net profit contribution33 $ 90,000-25,000+15,000+12,000= 38,00034 67,500-25,000+11,250+14000=19,25035 45,000-25,000+7,500+12,000=50036 22,500-25,000+3750+12,000= -18,250 Add 3 more 32+3=35



Sales Potential Method: - Assumption; what the avg rep achieve in term of annual sales volume. N=s/p*(1+T) N= no of sales people needed S= annual sales forecast for the comp P= estimated sales productivity of the avg sales person. T= estimated % of annual sales force turnover.N=$10,000,000/500,000*1.20=24.

Sales Forecasting Meaning:

A sales forecasting is an estimate of sales in dollars, or physical units in a future period under a particular marketing programme and an assumed set of economic factors outside the unit for which forecast is made.Purpose:

-viewed as a central part of strategic planning- starting point for sales, marketing planning, production, scheduling,

cash flow projection, financial planning, capital investment, procurement, inventory management, Human resource planning and budgeting

- improves efficiency and effectiveness of the managers reserve allocation process.Sales Forecasting Techniques:Generally, there are two approaches to sales forecasting a) Break Down approach b) Build up approach

a) Break Down approach: 1) Start with a forecast of general economic conditions.2) Estimate the Industry’s total market potential for a product

category.3) Determine the share of this market that the company currently

holds and likely to attain.4) Forecast sales for the product.5) Use the sales forecast for operational planning and budgeting

b) Build up approach Simply asks individual what they expect to sell in the coming period

or surveys customers about what they expect to buy and then sum their responses for a total forecast

Sales forecasting techniques can be classified in to two:



1) Non – quantitative techniques Judgemental Methods a) The jury of executive opinion b) The Delphi Method c) Sales force composite methodCounting methods a) survey of buyers intention b)Test Marketing

2) Quantitative techniquesTime series anaysis

a) Decomposition methodb) moving average methodc) Exponential smoothing

Causal or association method a)Correlation/Regression Analysis b)Econometric Models c) Input/output Models

Non – quantitative techniques : Non quantitative techniques can be further classified into two. Judgemental method and Counting method.

Judgmental Method : Use judgment, mere extrapolation of last period sales will give the best estimate of next period sales.

a) The jury of executive opinion: A jury may consist of company president and several executives from different functional areas calculating rough average of their opinion yields the sales forecast.Advantages: can be done easily and quicklyDisadvantages: highly subjective, not closely attended to market place.

b) The Delphi Method : Developed by RAND Corporation, it depends on the advice of a group of experts.

s1: Expert panelist are asked to make their forecast anonymously and then send them to group coordinators.



s2: Coordinators analyze the forecast and sends each member an average forecasts. (Opinions, beliefs, expectations can be re- evaluate and changed but without the dominant influence of any one participant).

s3: Each expert is asked to submit another forecast again revise feed back from the coordinators. This process continues until a near consensus is reached.

c) Sales force composite: it combines each sales person’s estimate of future sales in his or her territory into a total company sales forecast. The total forecast is then analyzed, adjusted and compared with forecast from other sources.

Counting Method:

a) Survey of buyers intention : - Customers are sampled and asked about their intention to buy various products over a specified period. All the responses are then combined into one forecast.

Advantages: Determined by product users,Relatively fast and inexpensive, Viable technique when there is no historical data.Disadvantages: Expensive in market where buyers are numerous. Buyers’ intention can be inaccurate.

b) Test Marketing: It is a “full dress rehearsal” conducted in limited market area to obtain consumer reaction prior to expanding to and the regional or national market.

Measures of market share (based material and repurchase rates) in these small markets can be scaled up for forecasting sales in the total market.

Quantitative Forecasting Techniques:There are two types of quantitative Techniques: Time series analysis

Causal or Association method

a) Time series analysis : Focus on historical data, analyze past data to predict future sales.

4 basic factors or types of measurement taken into consideration:



Trend (T) :- upward or downward movement ( development in technology, capital formation)

Period (P) :- consistent pattern of sales movement (seasonal variation)

Cyclical (C):- wave like movement, often irregular in occurrence. Market affected by cyclical fluctuation.

Erratic (E):- are time specific event. (war, strike)Y (sales) = f (T, P, C, E)

Decomposition Method:

- Isolates the components of time series data- First seasonal pattern is removed, then cyclical element, finally

forecastors considers the input of erratic movement.

Step1: Consider the set of actual data. To remove the seasonal fluctuation from the data to make them comparable to normal sales figures, multiply these historical sales figures by seasonal index.

Historical Sales

Year

3 year quarterly average

Seasonal Index

Quarter 2003 2004 20051234

11098150190

11383142193

12099149193

114.3393.33147.00183.67

0.850.691.091.36

Note: Sales are cited in units: First quarter seasonal index 114.33/134.58 = 0.85

Second quarter 93.33/134.58 = 0.69 3 years total sales of 1615/12 quarters = 134.58

Average sales per quarter.

-Sales increased from 98 to 150 between the 2nd and 3rd quarter of 2003, indicating a rising sales trend of 52 units per quarter. A simple line extension


a-1


forecast for 4th quarter would add 52 units to 150 for a sales forecast of 202 units.-But the following table shows that there was no significant increase in sales once the seasonal pattern of sales is removed:

Deseasonalised sales quarter

Year2003 2004 2005

1234

129142138142

133120130124

141144137142

Sales in units are compiled by dividing actual sales by the applicable seasonal index110/0.85 = 129, 98/0.69 = 142

To transform the deseasonalised sales figure multiply by appropriate index. Seasonally admitted sales in 2nd quarter 2003 -142, then estimated sales for 3rd quarter would be 142 times the seasonal index for the

Since actual sales for 3rd period of 2003 were 150(1st table) our forecast missed only by 3.3%. If the sales data had not been deseasonalised the forecast for the 3rd quarter would have been off 5.3% (142-150)/150 = -5.3%. Actual (missing) is 3.3% [(155 – 150)/150] = 0.33%

Instead of relying on just one period to predict sales, time series frequently use several periods of historical sales.

a-2 Moving Average method:

F t+1 = St + St – 1 ………. St – n + 1N

Where: Ft + 1 = forecast for the next periodSt = Sales in the current periodSt – 1 = Sales in the previous periodn = number of period in the moving average



a-3 Exponential smoothing:

- moving average is sufficiently responsive to the most recent trends (Exponential smoothing overcomes this)

- Exponential smoothing modifies moving average method by systematically stressing recent sales trend while de-emphasizing old sales data.

Ft + 1 = α St + (1 – α) Ft

Where: Ft + 1 = time period that is to be forecastα = Alpha or smoothing constantSt = current period actual salesFt = current period forecasted sales

b)Causal or association Method:It attempts to find the factors that affect sales and to determine the

nature of that relationship. The correlation –regression is one type of causal method.Correlation-regression analyses: Correlation: variables are studied simultaneously to see whether they are interrelated, or move together in some way. This technique tries to find correlations without implying cause and effect. Regression: attempts to predict how one variable such as sales is affected by change in another variable, such as advertising expenditures .Both correlation and regression analyses usually start with the graph of paired data values, or a scatter diagram.Simple Regression:

Year x Sales (units)Y

xy X2



1234

43527371

43104219284

14916

Sum 10 Avg. 2.5

23959.75

650 30

Y=a+bXb=nXY-XY/



Module-2

Selling skills and selling strategies

Selling skills are the most important requirement for the sales people as to meet Organization goal, increase organization image and to retain existing customers. Selling skills helps sales people to establish and maintain long term relationship with customers.

The selling skills can be acquired by sales person through proper training and exposures. As the sales job is more stressful in nature,(because most of the times he is away from his family, meeting different types of customers), the salesperson should posses right kind of skill to cope up with it.

Selling & Buying Styles : Buying styles vary depending on the buyers capability to pay, quantity

of purchase, the buyers ability to take risk, bargaining power, the competitive landscape in the industry.

Buying styles of different buyer

Consumers buying styles:



Innovators

-Adventurous and have high risk capital are the overnight buyers.-mostly buy on impulse and consider non functional reasons for making a choicelaggards

accept new products and innovations after observing the innovators using it.Rogues theory of diffusion Assumption: Innovators spread across the society in a pattern that is similar to normal distribution curve Innovators: -doesn’t give much important sales person

Risk avertors

Always take multiple variables into consideration before they make final decisionBusiness 2Business buying styles

Different Groups of business has different pattern of buying: 1. Government organ- looks for lowest bid;2. some organisation considers quality as the important criteria, 3. still others has centralized decision making/ decision making committee.

Selling and buying style(Robert Blake and Mouton Model)

(1, 9) (9, 9)

(5,5)

Concern for customer

(0, 0) concern for sales (9, 1)

Blake and Mouton model distinguish various selling styles by analyzing a salesperson’s concern for the sale and the customer. How much concern the sales person has for selling his product, and what level of importance he gives to the customer are the two dimensions used for developing the matrix of selling styles. Typically a salesperson,who only pushes his product



without considering the buyer needs has more concern for sale. On the otherhand, a salesperson who always responds to customer’s needs and present his product as the optimum solution to the customer’s problem has higher concern for the customer. (1, 9) People oriented – I am the customer friend; I want to understand him & respond to is feelings and interest so that he’ll like me. It’s the personal bind that leads him to purchase.(9, 9) Problem solving oriented – I consult with customer so as to inform myself of all the needs in his situation that my products can satisfy we work towards a secured decision on his part, which yield him the benefits he experts from it(5, 5) sales technique oriented – I’ve tried an effective routine for getting a customer to buy. It motivates there a blended personality and products emphasis.(1, 1) Takes it us leave if – I plane the product before the customer and it sells itself as and when it can.(9, 1) Push the product oriented – I take changes of the customer and hard sell him, pilling on all the pressure if takes to make him buy.

SELLING SITUATION:A typical selling situation explains what kind of customers a

salesperson is going to face and what kind of sales approach will help him in closing a sale in that situation. When a person makes a sales call to an individual customer for an insurance product or a mobile connection, he a faces a situation where the customer either explains his status and intention of buying or addresses his needs to the salesperson. - In organizational buying the customer represents a group interest such as the purchase department of an organisation, and buying pattern is based on the basis of set parameters.- In service and solutions selling, the customer does not come with a specific parameters, and during the sales presentation the customer may unravel his problems, identify his interests, and develop his criteria of choice.-In a retail selling situation, the customer walks into the counter with an intention to buy a product, whereas in cold calling and door to door selling, the salesperson looks for potential customer.-In the case of pharmaceutical selling the sales person makes a sales presentation to a doctor who is not the original customer but customer’s decision making largely depends on what the doctor prescribes.



- In creative selling, the salesperson tries to sell an abstract thought to the customer, eg., an advertising campaign presentation.

Maintenance selling: Maintenance selling involves the art of servicing the existing accounts, securing promotional cooperation, counting inventory and taking replenishment orders and delivering the products. In the IT sector, these salespeople are posted at the client site and are responsible for solving the client’s problems. Developmental Selling:Salespeople engaged in developmental selling are called business development sales executives as they try to contact the potential customers and build business for the firm. They are the real salespeople who try to do prospecting from the leads either available in the organisation or collected by them, and then take the prospect through the whole process of selling to realize a sale.

Rogues theory of diffusion Assumption: Innovators spread across the society in a pattern that is similar to normal distribution curve Innovators: -doesn’t give much important sales person

Theories of sellingAIDASRight set of circumstance - seller oriented Buying formula theory of selling – buyer oriented Behavior equation theory – buyers decision process

AIDAS Securing attention – have a good start, proper attire, show genuine

smile.

Gaining interest - provide sample, sales portfolio, visual aid-when the prospects drops hints make a note of it, and ask question from that

Kindling desire – keep converging along the mainline towards sale

Inducing action – some use tricks to close . Some ask straight forward d yes or no answer question- better straight forward



Building satisfaction – thanking for order, follow up

Right set of circumstances : (situation response theory )“Every thing is right for the sales”Present proper stimuli“Lets go for coffee” - sales present -external coffee, go out -internal Buying formula theory of selling :Identify what goes in the mind of buyers – help buyers find solutionFor purchase, Trade name must be adequately considered.Need – solution – purchaseNeed – product –trade name – purchasing – satisfaction

Behavioral equation theory (J.AHoward)1. Drive – internal stimulation that impact the buyer response

2. Cues – weak stimuli that determine when the buyer would respond

Product cues : color, package

Influence cues : external stimuli that prescribe about product

3. Response is what buyer does

4. Reinforcement : is any event that strength buyer’s tendency to make a particulars response

JA.Howard incorporated these 4 elements B = P * D * K * V (The retain among the variable in multiplicative)B = internal response tendency, the aid of purchasing a brand.P = predisposition or the reward response tendency (i.e) force of the habitD = “Incentive potential “ – the value of potential satisfaction to buyerV = intensity of all user



SELLING SKILLS:The prominent myth is that the successful sales persons are born; but

the evidence shows that the skills can be acquired through scientific way of learning. The following are the skills required for a successful sales person:I)Communication skill:

In order to be successful, a salesperson should- possess good knowledge in vocabulary- able to intelligently express - able to understand non-verbal cues of customer.

The entire business of modern day sales rests on building a good relationship with customers. The relationship becomes long term when it is built on mutual trust. The following five elements of mutual trust revolve around the communication.

1. Truth of words communicated by the salesperson2. Predicability of action3. competency(ability/knowledge/resource)4. Intent or empathy5. Likeability( It is an emotional issue and difficult to clearly define, but

can be understood as a perception of commonality of both the parties) communication process: The communication is established by

exchange of ideas through a medium. The communication process may be disturbed by noise and other psychological barriers. (pre-occupation with certain messages, self focus, self –defensiveness, experiential, superiority, egocentrism, selective attention)

Managing Body Language: Personal appearance: The first impact of customer or potential is created by the personal appearance(dress, hairstyle, and overall appearance)of the sales person. Even before the salesperson speaks the first word, the potential customer starts making perceptual inferences about the salesperson and visualizes the way he is going to talk and do the sales presentation.Posture: conveys wealth of meaning in one ways. The way one stands, and walks , mobility and other parts of body-reveals personality about how one is vibrant, alive, dynamic, nervous, jittery.



Gestures: Playing timed well can drive a point home faster than anything else in interpersonal communications. Playing with a ring, twisting a key chain robs effectiveness of a salespersons presentations. Oral communication are also accompanied by gestures as gestures enhance the impact and value of what has been said.Facial Expressions: The face is the most expressive part of the body. A smile as a symbol of friendliness, a frown as a symbol of discontent, raising of eyebrows as an expression of disbelief, or tightening of jaw muscles as a symbol of antagonism can add to meaning conveyed through verbal means.Eye contact: Eye contact with customer is important aspect of the body language. Eye is believed to be an extension of the brain and a window to the soul. Stess should be laid on continuous eye contact between the sales person and the potential customer because it is an expression of sincerity of the seller and attentiveness of the customer.Space distancing: A zone of 4-12 feet is maintained when it is a formal presentation. Each salesperson maintains a personal space around himself. This is known as social distance. Space distancing differs from culture to cuture.

The sales person should alert to the attitude of the customers and should not be surprised by the change in the customers attitude during the presentation.

occasionally there should be spells of silence on the salesperson’s part because these spells of silence will allow the salesperson to garner new points and ideas regarding customer reaction.

The salesperson should always be courteous and cheerful and should show interest in what customer say.

II. LISTENING SKILLS: The salesperson has to be a very good listener and use his listening

skills to lead towards sales realization. It is generally observed that salespeople spend more time in receiving communication and information



than in transmitting it. Listening is the active search of meaning in the message received.

Research suggest that people are only 25% efficient in their ability to listen. An average person remembers only about half of what is being told to him after 10 minutes,and forgets half of that within 48 hours. When people are asked to replay what has been told to them, they mix up various things and present the matter in a different order form the way was presented to them.

There are 3 types of listening:1. content Listening –when someone listens to a sales

representative(medical rep), he is engaged in content listening. The objective of content listening is to understand and retain the speaker’s message.There is a little scope for the agreement of the message.

2. critical Listening: - The objective of this listening is to understand and evaluate the meaning of the speaker’s message at several levels.- the logical level of argument, the strength of the evidence, and validity of the conclusions.—when the area sales manager presents sales plans, the divisional manger listens carefully and evaluates it.

3. Empathetic listening: The objective is to understand the speakers feelings, needs, and demands so that it can be appreciated by the listeners irrespective of the fact whether he likes it or not. Here the sales person should avoid the temptation to give advice, and should try to judge the individual customer’s feeling.

The process of Listening:

Attendance

Interpretation

Remembrance

Evaluations

Response action

Levels of Listening:

Feedback prepharasing clarification Emphathetic listening

Active Listening

1.Feedback- is fundamentally the reaction of the customer to a sales call.2.Paraphrasing- a salesperson tries to paraphrase the question by mirroring the questioner’s point. For ex. The sales person may say, ‘so what you are saying is you think that I am just giving the company line, whereas what you really need is more help in financing and on the spot service.



3.clarification of the issue: It involves working little harder with the customer’s words to identify his real concerns.4. Emphathetic listening: 5. Active Listening: Salesperson identifies the emotions underlying the customer’s words.Barriers to Listening: There are various barriers to listening that include physical and mental barriers. Prejudgement is the most common barrier to listening. Many listeners are also guilty of self-centeredness.

Salespeople should try to depersonalize the listening so that they can decrease the emotional impact of what is being said.

They should listen to the customer’s idea of the product and the price, and try to distinguish between facts and arguments by applying their own market knowledge.

III.CONFLICT MANAGEMENT SKILLS:Conflict exist in every organisation. Conflict in sales organisation is

more evident than in any other organisation. (eg.)A sales manager wants his salespeople to cover the territory as thoroughly as they can whereas the salesperson is interested in realizing the desired sales through a few loyal customers. The vice president –sales is interested in getting better results from the same cost to show the board that resources are being used efficiently.

Conflicts can be classified asa. functional-support the goals of the group and improves its

performanceb. Dysfunctional – hinders group performancec. Task conflict-disputes over the content and goals of the workd. Relationship conflict-tussle based on interpersonal relationshipe. process conflict-fight over how work gets done

Models of conflict: Dollard and Miller model: apporoach-approach; approach-avoidance; and avoidance-avoidance( attractiveness of options of parties)Rummel’s model: differentiates between conflict structures, conflict situations and manifest conflicts.Components of Conflicts:

Interests, emotions, and values



The conflict Management Process

Stag1: potential opposition or incompatibility

Stag2: cognition and personalistaion

Stage3: Intentions

Stage4: Behaviour

Stage5 outcome

Perceived conflict

Antecedent conditionsCommunicationPersonal variables structure

Felt conflict

IV. NEGOTIATION SKILLS: Negotiation occurs when someone else has what you want, and you

are prepared to bargain for it and the vice versa.Successful negotiation is an attempt by two parties to achieve mutually acceptable solutions, which does


Increased group performance

Decreased Group performance

Conflict handling intentionsCompetingCollaborationCompromisingAvoidingaccomadating

Overt conflict party’s behaviour others reaction


not result in a winner and a loser. For TATA & Maruthi Udyog price has been the only element of negotiation. Negotiation are very important in selling because majority of selling is done without a list price.

situations and timing for negotiations:

when many variable factors bear not only on price but also on quality and service

when business risks involved cannot be accurately predicted when a longer period of time is required to produce the items

purchasd when production is interrupted frequently because of numerous

change orders.Bargaining is appropriate whenever the five definitional conditions are met and a zone of agreement exists.

Sellers reservation price(seller wants s or more)

Ssellers surplus

Seller wants to move c up

final contract X Zone of Agreement

Buyer’s reservation price(buyer wants b or less)

Buyers surplus

b

Buyer want to move x down

If two parties are negotiating price, each establishes the threshold value that it needs. That is, the seller has a reservation price, s, which is the minimum he will accept.Any final contract value say, x which is below s represents a price that is worse than not reaching at an agreement at all. For any x>s, the seller receives a surplus. The seller desires as large a surplus as possible while maintaining a good relation with the buyer. Simillarly, the buyer has a reservation price b, which is the maximum he will pay. Any x that is above b represents a price that is worse than no agreement. For any x<b, the buyer receives a surplus. If the sellers



reservation price is below the buyers price, that is s<b, then a zone of agreement exist and bargaining will determine where x will fall within the zone.

The purpose of negotiation is to produce better results than what one would have got without negotiating. This result is known as best alternative to a negotiated agreement(BATNA). BATNA is the standard of comparision that can protect a salesperson from accepting unfavourable terms and rejecting favourable terms. It is the standard against which the proposed agreement should be measured. Recognising of BATNA early in the business negotiation process helps the sales manager to be successful and gain more than the BATNA.V. PROBLEM SOLVING SKILLS:

Besides the negotiation skills, one also needs problem solving skills for effective selling. The relational and consultative selling approach states that a salesperson should not be a mere order taker; he should rather act as a problem-solver and consultant to the customer. These roles are more significant for high-tech selling and business to business selling. The objective is to pick up the best solution for the customer and organizational problem so that the salesperson becomes an engine for growth of the enterprise rather than only a person in charge of transfer of ownership of products and services.

1. Define the problem(did it arise at the level of the sales rep)

2. Explore the problem(identify all the available information)

3. identify the present and desired state4. use Dunkers Diagram-which helps to obtain solutions

that satisfy the criteria set up by the stating the desired state and present state.

5. statement restatement technique- look at the fuzzy or unclear problem situation and write a statement regarding the challenge to be addressed.

6. Evaluate the solution by measuring up its performance against the implementation plan and its ability to solve the orgl. plan.

SELLING PROCESS:



Selling follows a sequence or a process. The process vary from one situation to other situation. “The selling process is defined as a process by which a salesperson identifies and locates the prospects, separate the prospects from suspects, approaches them and makes sales presentation, handles their objection and closes a sale.

Pre-sale prepartion

Prospecting Pre-approach before the interaction

Approach to the customer

Follow up action

Closing the sale

Handling objections

Sales presentation

The Selling process1.Pre-sale preparation: The sales person has to prepare himself with the product knowledge, Benefits, style, price. Company knowledge, history, finance, management, size, policies, procedures, competitor knowledge. The product Information checklist can be helpful in this regard.2.Prospecting: It is the process of identifying potential customers who have a need for the product and service offered by the company, the ability to pay for it, and the adequate authority to buy it.

3 sets of customers. 1. Lead customer (desire to buy but no purchasing power). The sales person should have a screening skills. 2. Prospect ( with the prospect, the sales person should identify the stage of decision making); 3. Qualified prospect ( they are in need, but they need to be further persuaded)3.The process of prospecting:

a b c

Identify and define prospect

Searches for sources of potential customer

Qualify prospects from suspects

a)Identify the attributes and features the prospect expect; find out the urgency for the need for the product, ability, credit payment, authority to buy, and dept involoved in buying.b)Collect data through surveys, queries and trade association, magazines.



c)ranks the prospects according to the need indicators, accesability indicator and sale person fit indicator.- Use MAD (Money –Authority-Desire) principle to qualify prospect.Methods of Prospecting:

1. Cold canvassing – door to door sales call2. Endless chain customer Referral( from cutomer to his friends and his

relatives to their friends and relatives)3. Prospect pool( collected from telephone directory , mailing list )4. Centres of influence( Business, political and religion)5. Observation –For Key Telephone System ie. EPABX, executives

observes costruction site to find out the potential customer6. Non-competing salesforce,7. Friends, 8. Directories 9.

Telemarketing.10 Trade shows and demos.4. Pre approach before selling:

The sales executive has to devise strategy to match the customer data with the product attributes. Different personality elements indicate different selling strategies ( Whether a customer is price sensitive, -- propensity to bargain, )

During the product introductory stage the customers demand more information whereas the product which is in the last stage require price concession, credit payment.

Selling process explains, helps in developing selling strategy, estabilising call norms and objectives, and to decide about the differential advantage offered to the customers.4 steps involved in this process:1. Determination of call objectives( sales call in the first instance or to get permission to make a demo)2.Devlopment of customer profile3. Determination of customer benefit4. Determination of sales presentation

5. Approach to the customer: It is better to fix appointment over phone. The objective of

approaching the customer may be for getting attention, removing any inhibition, gaining prospect respect and mind and arousing interest for presentation. There are various approaches used ( benefit approach, referral approach and Introductory approach). At this stage, the sales executive probe insights by asking questions.

6. Sales Presentation:



During sales presentation, the salesperson features presentation with customer benefit. The salesperson has to keep in mind the level of interest and time available. In a typical presentation, the salesperson presents the product, customer accepts or objects and demand explanation or stays indifferent, doubts potential of the product, and sometimes gives no clear reaction.

A sales person can follow the AIDAS approach to sales presentation( AIDAS discussed in the theories of selling part).Methods of sales presentation: Generally, the presentation can be classified as oral or written. The following are the further classification. a)canned presentation: ( prepared by company, there is a little scope for modification, new sales people can follow this method)b)Organised presentation: Developed on the basis of information collected from field research. It helps in maintaining company marketing plan due to adherence of company guidline ( allows flexibility and it encourages participation)c) tailored presentation. –Emphasis buyer demands and designed to specific customer. A sales proposal should convey 5 proposals: 1. Tangibility ( proposal should enhance salesperson message)2. Assurance( should build trust) 3. Responsiveness( The proposal should invite purchase responsiveness)4.Reliabilty 5. Emphathy.

7.Handling Customer Objections: It is human to raise objection about the new product and services.

Objections can take forms doubts, minor objections and major objections. Sales personal normally answers to objectives in the form of demo, sampling, and by providing additional information ( Additional information can be supported by reports of the products published in media, quality certificate. Parapharases the objections as a question.10 Excuses customer use on the sales people: 1 Denial – I don’t need 2. Blaming- It’s not my responsibility, my boss will not like it. 3. Minimising- new idea will not do much for us 4. I have choice, get along with majority 5. Reframing reality- we are limiting number of suppliers 6.Alibi- I don’t have money, I don’t have authority. 7. Justification- we do have need but currently busy with re-organisation 8.Derogation – I have heard this product give night burns 9. Helplessness( It’s out of my hands, I cant do anything now. 10. Yes…..but ( it’s a fantastic idea, it will not here, it looks inexpensive but we cannot



afford it.

Method of Handling Objections: a)Superior feature method- accept objections, persuade them through

providing additional advantage. b) Yes… but Method.- ancient method- sales person agrees at the

beginning and slowly makes an effort to remove the objectionsc)Reverse English Method: Change the customer objection in to the

basis of buying.d)Indirect denial Method: denies the objection cleverly and but

indirectly by giving affirmative answers to the objectione)Pass-out method: sales person does not pay attention to the customer

objection and expressed neutral opinion . when objections are baseless, they pass off without attending to it.

f)Comparing methodg)Direct denial – rejects the objections outrightly and then build up

his presentationh) another angle method- advises customer to look from another

angle, which is positive for the producti) Question or Why method: Ask question again and again without

any break and try to get suitable answers form the customers themselves.

7.Closing the sale: Many use questions “ will you buy” ? to close the sale.Methods :

a)Assumptive close – assume the sale is made and proceeds to issue such as writing address. Handling a prospect a pen to sign.b)Caution Method: Make the customer cautions about the availability and period of availability and request the customer place orderc)Special Induce Method: Remaind promotional scheme by telling the period of promotion (valid date)d) Direct to order method: consumers will come toward to place order



e) ownership suggestion (emotional)- should impress upon the social standing by owning the product.8. Follow up action:

It begins by thanking the customer after a sale. In case of failure in sale, it helps in building up of customer interest and in generating repeat sales after a deal.

After sales service is an important part of the selling process. It assures that the order will not be cancelled and it paves the way for building confidence and establishing relationship with customer for future revenues.

Follow up is the way for evaluating the competitive sales move. It also helps in cross selling and upselling company products. It helps salesperson in maintaining goodwill and for taking corrective action.

MODULE -3

MANAGEMENT OF SALES TERRITORY AND SALES QUOTAS

Introduction:--

Sales Territory: -- is defined as a group of present and potential customers assigned to an individual sales person, a group of sales person, a branch, a dealers, a distributor or a marketing organization at a given period of time.

Definitions:\David , Still &cundiff—grouping of customers & prospects assigned to an individual salesperson.



Manard & Davis—basic unit of sales planning and control.

A well planned territorial design for example, helps in matching the selling efforts with the sales opportunities in that market.

Sales Territories are generally designed on the basis of Geographical areas but there are sometimes companies decide to build territories on the basis of the urgenc frequency requirements of customers—A sales territory helps in better sales planning and effective operational control.

Advantages: —better market coverage, effective utilization of salesforce, efficient distribution of workload among people, convenient way to evaluate performance, no enchroachment, understanding customer<-> better serving. Companies help to get insight (for sales people) for their own territories.

Disadvantages—Many organization do not plan territories and orgaise sales on the basis of geographic divisions.This include newly established enterprises, organisations where sales are achieved more through personal relationship rather than professional approach, and oraganiations selling highly sophisticated and technically complex products.

Size of sales Territories: There are various factors influence the size of a sales territory.

Density of the population, population spread within the territory, nature and demand of the product, mode of physical distribution, the selling process and transport and communication facilities.

If the product is a consumer durable with a longer shelf life, the company may prefer to have a larger territory compared to smaller territories for the perishable commodities.Territories can be established on the basis of the nature of the product, namely consumer, industrial and durable and non-durable.

When companies decide to go through intermediaries they prefer to have a larger territory. On the other hand, industrial buying, where bulk order booking is done by a salesperson, or in situations where a company also handles the retailers, the size of the territory is kept small.



DESIGNING OF SALES TERRITORY:Designing a sales territory is one of the most difficult jobs for sales

managers. Various factors like Size organization; quality of sales person level of competition ,Level of Customer Support required considered while designing the sales territory.

Territorial design is done when the market grows to such a size that it is not possible for the same sales force to cater to the market. it is time consuming, and manual process where chart, maps and topographical data are taken into account. Salespeople at Marico Industries, for ex. use Geogrpahic Information systems software to design territories.

Step 1—Select geographic unit-The most often used units are states, counties, zip code areas, cities,

metropolitan areas and trading areas. Many companies have used state boundaries in establishing territory boundaries. A state may be an adequate control unit if used by a company with a small sales force. The county is much smaller unit than the state and acts a better focal point for dividing territories. Another control unit used for establishing sales territories is the trading area. The trading area is a geographic region that consists of a city and the surrounding areas that serve as the dominant retail or wholesale center for the region

Step 2:---Decide on the criteria for allocationOnce the selection of the basic geographical control unit is complete,

the next task is to analyse the consumer a characteristics, buying patterns, market share data and the competitive position of a firm in order to identify both the present and prospective customers on the basis of information such as sex, age, group, likes and dislikes, requirements and standard of living.

Many Indian firms take into account 3 key factors while deciding on the size of the territory. 1.The customer base compreses of current customer, potential customers’size and geographic size interms of square kilometers or square miles to be covered by the salespeople.2. Market Potential 3. Topographical data

step 3: Decide on the Starting Point:



After ascertaining the sales potential in control units, the sales manager should form tentative sales territories as the starting point by selecting geographic location. A common choice is the location point( often the residence of the salesperson) This is done to avoid the relocation cost of the salesperson and provides emotional support by keeping the salesperson closer at home with his family and relatives.

There are 3 types of territory shapes that affects sales expenses and coverage and time:Circle- Salesperson located at centre- Maruthi, Hyundai follows this(urban Market)Wedge- radiates from densely populated to smaller rural area(both urban and rural)Clover Leaf –when accounts are distributed randomlyHopscotch – sales person starts at the fartherst point from the office and makes call on the way back to office

Step 4:-- Combine control units adjacent to sales territoriesOnce the decision about the starting point is taken, the sales managers

then combine control unit to build up the market. The sales manager keep on running total on the allocation criteria for each newly designed territory.

Step 5:-- Allocates criteria and workload Analysis

-Compare territories (customer per square mile and support detail outlets per square mile)Many times, small and large territories in a particular geographic spread may have an equal potential on customer size. In such cases there is a need to allocate control units on the basis of traveling and call norms in order to reach customers. Adjustment is made keeping in view the sales potential, customer size, market growth rate and sales expenses involved in the market coverage.

Workload analysis consist of how much of selling effort is require to meet the sales objectives for a given region.( Refer sales organisation chapter for workload analysis)

Strategic planning matrix



To determine account call rate, Account planning matrix is used here.There are two dimensions; 1. Overall opportunity rate 2. Firms ability to produce

--2 dimension—Overall opportunity—high flow--firms atrocity to capitalize

High LowHigh opportunity/sales organization have different advantage Strategy:- commit high level of research to take advantage

Good opportunity- Forms overcome company disadvantage Strategy:- Improve the position and tarde advertising of opportunity

Stable opportunity Strategy:- Allocate model of research to retain current advantage

Little opportunityStrategy:-Either commit a minimum level or conduct abandoning account together

Strong Weak

Account planning matrix uses computer simulation model for taking decision on call norms for the accounts. A popular computer program ( call plan –Xerox) response function to each account is generated from each salepersons input. Step 6: Assign Sales force to New Territories

After determining the final form of sales territories and making necessary adjustment in tentative sales territories, the last step is to assign the territories to the individual sales force. Suitable salespeople are appointed for each territory and the exact responsibilities are assigned to these people. This is done keeping in view the characteristics of each territory, needs of the territory, and the appointment of intermediaries.

One of the important factors in the territory designing is that the boundaries of the territories are never kept constant and evolve over a period of time, depending on the nature and number of customers in these areas.



Use of information technology:A modern day sales organisation uses IT enabled service and

computer programs for deciding on the sales territories, workload & call norms

Computer program also used for Territory mapping, simulation, optimization of Route and call norm behavior

--Sales Manager feeds basic data Market potential, use of Present accounts, homes location of sales people, geography boundary of control units and Drawtentative territory boundaries.

Revision of territory:- Sales manager may need to revise territories at time to cope with challenges. Reason—

-Revision is needed if a territory is over estimated.-Where the territory is too small for a good salesperson- overlapping territories-Environmental changes

Effects of Revision—“built mut”—damage morale--Compensation adjustment--guarantee previous level income



\SALES QUOTAS

Meaning :Sales quotas are the targets that salespeople try to achieve within a specific period of time, which contributes towards achieving the organisational goal regarding sales forecasts.

It is an expected performance objective –routinely assigned to the sales units, such as depts., divisions and individual.

Quotas are established in terms of sales volume, profit or Gross margin, expenses, activities or some combination of these.

Importance: -- --divise in strategic planning--Standard to specify derived level of performance--guided by time element/controlling tool--lead organization towards management by exception(Mgt focuses on highly performance oriented people)--guiding the behavior of people.

The purpose of sales quotaProviding goals and IncentivesEvaluating performanceControlling the Salespersons activities

Calling minimum no. of amounts per dayCalling on new accountsGiving minimum no of demos

Uncovering strengths of weaknesses in selling structure If sales fall in a particular territory the cause must be determined Improving the compensation plan’s Effectiveness Controlling the selling Expenses



Types of quotas:--

1.Sales volume quota(sv):-- Based on sv—most of this quota uses dollar sales, some unit sales, sales of new products or sales of neglected products.

--They are established on the basis of geographic area, PDT line and customer type.

a> Dollar sales volume :----easily understood by salesperson--can guage their performance directly against a dollar figure

-- Easier to manage when the salesperson is responsible for many products

b> Unit sales volume :----Useful when the salesperson is responsible for selling only few products-- set in terms of no. of units—Use of dollar quota could perhaps even backfire and level overall performance

c> Point Sales volume: -- Combine dollar or sales unit sales both into unit points. For e.g. $100 might equal one point, $200 equal to 2 pts—Companys use this approach because they have problems trying to implement either a dollar or unit volume quota. It helps in maintaining balance.

2.Financial Quotas:--

1> Gross margin or net profit quotas



Coys use these quotas to emphasis to the salesperson that the cry would prefer a large profit to selling a large volume.

By spending so much time as less profitable products, the sales reps are limit the coy’s opportunity to earn higher profits from the high margin products.

2> Expense quota :- designed to make sales people aware of the costs involved in this selling efforts.eg Salespeople may be allowed to spend 5% of their sales fore expenses.

3> Activity Quotas:--In an effort to ensure that salespeople are conducting their daily

activity by conscientiously many loys require that their salesperson must activity quotas.

--Used to control many different activities. Common type of activity quotas include

--no of prosunts called on--no of demos made--no of displays set/service calls made, new accounts established--no of deals training given

4> Combination quotas : -- Used when they want to control performance of both selling and non-selling authorities.

Methods of setting Sales Quota:--

1> Quotas based on sales Forecasts and potentials :----Organization forecast the total sales for entire territories which is then divided into territories and then brought to the individual sales level.

2> Quotas based on past experience :--collect sales data for previous year, average them out for each geographic territory and then add an arbitrary % for next year quota.

3> Quotas based on Executive judgment:--



4>Quotas established by sales people:-- --some companie allow the sales representatives to establish their own quotas because sales people are closest to the market and therefore thought to be the ones who know the most about its potential.

--The drawback is that sales people may either set exclusively high quota or ridiculosely set large quotas

Administration of Sales Quota:Setting realistic quota:

Salesperson should be motivated . It shoud be determined by the attainability of that quota and recognition and incentivescreating understandable quota:

1. including the sales person in quota setting2. keeping the salesforce updated 3. maintaining control

RECRUITMENT AND SELECTION OF THE SALES FORCE Recruitment,

It is the planned process whereby the scientific principles of management is utilized for finding out and filling up the positions in the right territory with the right people.

The selection and recruitment of efficient people is always a competitive advantage for an organization.

Sales manager perform the sales force right functions. They execute entire Human Resource Management function Recruit , select , train ,

Motivate, lead, control and compensate the sales staff for achieving the desired goals of the organizations.

HIRING PROCESS 3 STAGES:-



Manpower (HR) planning (examine labor turn over, positive equipment analysis, hiring objective, deciding number of people required for particular time).

Recruitment stage (identifying best source for generating pool of candidates).

Selection ( screening, interview)RECRUITMENT:

Importance of recruiting Customer, Cost, EEO, Qualified applicants.

Who does recruiting? What interviewer can and can not ask.

Sex, Marital status, Children, Physical data, Medical history, Criminal record, military status, Age, House.

The Recruitment process

o Conducting job analysis Conducting job analysis:--

1> Analysis the (nature of competitors, nature of customers, what degree of knowledge/skill)

2> Determine duties/responsibilities 3> Spend time making calls with several people, observe record the

various tasks of the job as they are actually performed

Preparing job descriptions-- Result of formal job analysis is job descriptions. It should be in writing. It’s used in recruiting, selecting training, compensating, evaluating the sales force.

Developing a set of job qualifications:-- --The duties and responsibilities set forth in the job descriptions should be converted into a set of qualifications that a recruit should have in order to perform the sales job satisfactory.

Personality traits :-- Industrial psychologist suggest that a successful salesperson needs only 2 personality traits: empathy and ego drive.



Empathy—ability to feel as the other follow does. Thus empathic feeling & provides feedback from the client which enables.

Levels of qualification :- Sales manager should keep in mind certain characteristics - Travels, sometime overnight

-Supervision -Little work experience

-High turnover

Model of success : - A comparison of characteristic of good, average and poor sales people will suggest traits that can predicts success in sales career with the company.

SELECTION OF SALES FORCES

Involves choosing the candidates who best meet the qualification and have the greater aptitude for the job.

Steps:1. Application form

2. Internal screening (Interview:- Major concern for candidate)



3. In depth interview (45% causes path)

4. Reference clubs (43% causes path)

5. Physical exam (6% relative)

6. Test ( Intelligence, knowledge, sales aptitude, vocational interest, personality test, polygraph, attitude and lifestyle)

ATTRACTING POOL OF CANDIDATES:-

If there are too few applicants, the property is highlighted that a person with inferior selling attitudes will be hired when a large number of applicants are processed; recruiting program serves as an automatic screening system.

SOURCESS OF SALES PEOPLE:-

Persons within the company Competition (sales force) - advantage is already trained

New competing companiesEducational institutions Advertisements Employment agencies

FACTORS TO CONSIDER IN EVALUATING PROCESS

1. Nature of the population , nature of the market, policy of promotion from within, sales training providing by the company

Selecting the sales force The selection process involves choosing the candidates to best meet the qualification and have the greatest aptitude for the job.

2. Selection process vary from company to company depending in the size of the company, the number of sales people needed and the importance of the position to be filled



APPLICATION FORM:-Information about address, position applied for, physical condition,

educational background, work experience, participation in social organization.

INITIAL SCREENING INTERVIEW:-Lasts from 20 – 30 minutes and are conducted by assistant personnel

manager, assistant sales manager, sales personal and sometimes computer.

Internal screening may start with application form, an interview are some type of test. But no matter which tool is initially used, it should be brief.

TESTS;- Intelligence test ( measure the raw intelligence and trainability) Knowledge test (the tests are designed to measure what applicant

knows about product service). Sales aptitude test (person’s innate and acquired social services). Vocational interest / personality test. Polygraph test (measure blood pressure respiration, heart beat and

skin response). Attitude and life style.

INTERVIEW: - Sustained / unsustained interviews In depth interview – to know the heights of the candidates.

Sustained interviews use at the preliminary stage where as no sustained is used at the final stage.

Reference characters Employment offer Induction / socialization – introduced with product, department

and helping them to acquire skill and adjust to role behavior.



TRAINING THE SALESFORCE

Need for training:

- Guidance to perform the job efficiently- Exploit the talent of new recruits- Adapt itself to changing market condition- To reduce cost by serving customer efficiently- To bring behavioral changes- Win-win situation (org & individual benefit)- To correct deficiencies

Training and development:Training focuses on current job (short term oriented, addresses

performance problems, (immediate problems of the organization)

Development stresses on the current as well as future job, long term oriented (growth & success of orgn)

Challenges in sales training:

- Will the training programme effective?- Will - Will it produce desired/intended results?

Not all problems require training; some can be solved by compensations.

A sales mgr weigh how much the current problem will cost vis-à-vis the cost of eliminating through the training programme.

Theories & principles of sales training:

Training is based on the process of learning a sequence of programmed behavior and the application of knowledge to the work environment.



Learning is more effective when there is more level of reinforcement in the form of rewards and punishment for non-compliance Learning in itself is a human process by which with, habits attitudes and knowledge are acquired and utilized in such a way that behavior is underfeed.

1. Conditioning theories:Assumption: there is a desired response to stimulus - When any action causes satisfaction it will be associated with a

particular situation and the same action shall be repeated when a stimulus situation arises Eg: pavolos experiment with dog

2. Stimulus operant conditioning:

Theories: Every human, irrespective of his position in the orgn is capable of learning. Every one has an intellectual capacity and the ability to learn training programs.

In a typical training programme, a salesperson is expected to have the knowledge of the company, product, competitor, knowledge of the market, himself.

THE TRAINING PROCESS :

Training need Assessment

Design & conduct of training Programme

Evaluation of a training Programme



(1)Training Need Assesment Phase:

Sales mgr evaluates the orgn struc, culture, mission,

Business Climate/goals- It provides strategic info on the

resource commitment to support the programme.

Focusses on all the function & jobs in the sales dept &

determine which are of them which need attention.

Assess the performance of sales staff & determine all

those people who need training.

The programme can occur not only in key sales areas but also in soft areas such as team working behavior, interpersonal communications &conformity to sales group norm.

Training needs are identified in the following manner:

(a) Identification of the specific problems( product, organisation, job related knowledge deficiency)

(b)Anticipating impending & future problems: Problems likely to arise due to factors such as Market expansion, pdt diversification as entry into new territories.


Orgl Level Analysis

Task Analysis

Individual Level Analysis


(c) Mgmt request: request by supervisors to fill the performance gap.(d) Interviewing or observing the personnel on the job.(e) Questionnaire Survey- opinion of salesforce on topics related to

commn, job satisfactions, attitude toward working condition.(f) Che….(g)Attitude survey(h) Interpersonal skill test

(2)Designing & conduct phase:

- Location: - On the job/ off the job- Inside orgn/outside orgn- Trained Expert or co. people.

- Timing (how long); Cost

- Types of Training

(a) Skills or retraining:

- for improving customer handling, listening, presentation and interpersonal skills.

- Retraining, a subset of skills training focuses on giving the employees those skills that are needed to keep pace with changing job requirements.

Eg. Torrent Gujrat, a pharmaceutical firm, allow the sale staff to undergo training in periodic intervals to keep pace with the changing technology & tactics in performing the sales job in a highly competitive environment.

(b)Cross – functional Training:

A method of job enrichment where employees are trained to perform activities and duties in functional areas other than their assigned job responsibilities.

Eg. Cadila pharmaceuticals, sales people are sometimes given corporate responsibilities.



(c ) Team Training:

An organization where a sale has to be done through a team, training programme need to be conducted around teams.

Training & Interpersonal skills.Eg. Hughe Telecom, Infosys & satyam train sales people by taking them outdoor and inculcating team skills through experimental learning.

(d) Creativity Training:

Popular approach in brainstorming. The sales Trainee is given opportunity to generate ideas without fear of judgment- based on assumptions that creativity can be learned and fostered and that sales people can solve their problems in newer and more creative ways.

(e) Literary training:

Mean mastery over basic & functional skills.(reading, writing & commn)

TRAINING METHODS:

The choice of training method is influenced by

- Training Programme obj- Team available- Participant level of understanding- Previous experience- Equipment needed/ degree of interaction required/ participation

required/ size of group/ facilities available.

(1)Lecture Method:The trainee is knowledgeable (expert) & the lecture is delivered to a no. of people at the same time and cover specific topics rather than a range of subjects.



Structure the Lecture- The sequence of the delivery should be streamlined to aid retention.

Reinforce the message

The presentation should be limited to the attention span of the participants 9usually 20 minutes).But a change in style, pace of delivery, session for question & distribution handouts can help in extending attention span.

(2)Conferences:Highly structured device for conveying message on a large scale and often to an audience of 100 people.

Used to motivate sale people & presented with some entertainment.

(3)Seminar:It is a conference on a smaller scale with in corporate a greater degree of participation from the members.

Centered on a single theme, which is examine in same depth.

Speakers are specialists who make brief presentation.

(4)Discussion:Common method useful for the presentation of ideas and plan particularly when issues related to sale have to be clarified or expanded & the views of different sales groups are ascertained.

(5)Role Play:Innovative Method- To expand the sale trainees experience by presenting them with a commonly encountered situation and asks them to pair themselves in the role of parties (customers) involved & then act in the way in which the circumstances might reach an appropriate conclusion through the play.

(6)Case study:



Objectives- present the sale trainees with real life business situation & provide considerable background information from which they are either expected to analyze & compile the outcome of a series of events as to provide solution to specific problem.

(7)Fish Bowl:- To train 2 teams- 1st team discuss a topic for 30 minutes- 2nd team is seated around the first team & they are asked observes

comment, criticize (15 minutes)- The 1st team has no right to reply or even to comment as any

criticism at this stage - The roles of two teams are then reversed both the teams came

together in full group sessions share/exchange as the process which were observed

(8)Workshops:- Method of designing training around identified work problem in

order to find the solutions in the training programme

Objectives:Obtain contribution from all individuals who are affected & to

optimize the resources available to solve the problem.

(9)Sensitivity Training:(T. group, study group, group dynamics & group relationship) a type of laboratory training

Objectives:- Increase the awareness of our own behavior and to understand

how it is received & interpreted by other.- Develops sensitivity to the behavior exhibited by other and

enables the trainee to diagnose the causes of that behavior.

This technique relies on its effectiveness in creating a climate in which participants are willing to be frank, open, & honest with each other.Focus is on personal behavior & the discussion focuses on one’s private thoughts.



(10) Transaction Analysis:Popular method for studying interpersonal relationships- Developed by Eric Berne.

Trainee operates as the ego states of participants and try to find out the transaction of people by analyzing the various ego states and transaction among them.

(11) In Tray Exercise:This exercise provides the trainees with a day’s mail, both internal/external.

Trainees are required to study all the documents, decide priorities and allocate time.

To add to the realism of the in-tray exercise, other features of normal working, such as interpretation from telephone calls, unexpected mission including customers are often built into the programme.

Evaluation Phase:Effectiveness is measured either in monetary or non-monetary

terms.

Also, by the collection of ratings by both the trainee & the trainee in every programme.

Companies also conduct a test before & after the training programme.

Designing a sales Training Program:



(1)Deciding as the Training objectives(2)Deciding on the content(3)Deciding on the method(4)Deciding on the arrangements made for the execution of

training programme(5)Deciding on the procedure to evaluate training programme.



MODULE 4

SALES FORCE MOTIVATION AND COMPENSATION

- Factors influencing design of compensation plan:

(1)Financial ability of the firm- to pay the employees (current & future) as a continuous bans

(2)Pull model- company emphasis as heavy advertising and hence (sales person plays the role of order giver)- ( put less effort) salary will be less

(3)When the size of mkt is very limited, sales person has to put lot of effort- so he ll demand more salary.

(4)Nature of product- Industrial product- more effort required- high performance

Types of compensation plan:

(1)Financial compensation plan:(a) Straight salary:

- Weekly, monthly & forthrightly, many companies also go for annual payment.

- Used by companies emphasize on relational selling/ high % of time is developed to non-selling

- Makes sales people free from financial worries.

(b)Straight commission plan:- Linked directly with performance- Used to keep talented people & to weed out poor performers.- It can be executed in 2 ways:

Lateate paid irrespective of level of aim

Progressive & aggressive; higher sale volume



- It does not assure an assured flow of income-loyalty to orgn & cost also goes up as the sales manager has to spend time & resource to calculate payrolls, estimate commission, margins, audit the call report.

(c ) Bonus & Incentives:- Bonus- one sum supplemental payment for avg.

performance.- Indian companies- paying during festival time.

(c) Salary plus Incentive plan:- Limitation of above 2 methods independently led companies to

go for this combination plan.- It’s a compensation mix-60% salary 30% commission 10%

allowance.

(d)Drawing Account & Commission plan:- orgn. Opens account in the name of sales person & credits the

commission- The salesperson can draw from this account within the

permissible limit- The objective of such plan is to help sales people when they are

not able to achieve target during recession period

(f) Allied methods:- Profit sharing plan (brings sense of ownership & cordial

relationship), also build a democratic & participative atmosphere in the company.

- Remuneration plan for specific people who are to discharge certain function ( road shows, displays, PR) along with delivery function.

(3)Non- Financial compensation:(a)Promotion:

Mgt has to plan the promotion programme in such a way that the higher position seem worth aspiring & achievable to sale people.

(b)Recognition Program:



In GE capital , the sales people who excel are awarded fo their outstanding contribution.These programmes can be designed to encoprise the individual/ team performance

(c ) Fringe Benefits:These are employment benefits, life insurance, stock options, profit sharing, gratuity, PF, pension provisionInfosys’s & Wipro give stock option

d) Expense Accounts:- reimburse expenses of the field sales forcee) Perks: include the provisions for a car, driver, gardner, club

membership. Status perks(job title,parking space); Financial perks(conveyance, car,insurance); personal growth perks(education, sending sales people for training.

Steps in Designing Compensation Plan : Step 1: Determine ales force & compensation objectives.

(Sales volume, gross margin , mkt penetration, exploitation of territory potential)

Step 2: Determine major compensation issues.(comparing payment structure of the Industry & major competitors, wage level, wage structure, economic condition)

Step 3: Implement long term / short term compensation plan:Short term – Issues of low cost drive for firm.

Long term – promotion, retirement pla, disability benefits, life insurance

Step 4: Relate rewards to performance

Step 5: Measurement of performanceMethod of evaluation should also be objective &

transparentStep 6: Approve the compensation planTrends in Compensation:

(1)Level of customer satisfaction is an important tool for evaluating & rewarding sales people.

(2)Team based compensation. (Majority of the B2B selling situation, the selling is done through the team selling



strategy & cross functional teams are designed for handling customers objection in a better way.

MOTIVATING SALES FORCE

Module-4

MOTIVATION

Motivation is the technique to expand internal energy to achieve a goal or a reward and a process that identifies the needs and goals of sales people that drives them towards the achievement.

Performance(P)=Ability * Motivation-Motivation takes place in the context of work culture.-A manager should posses adequate knowledge about the work environment, reward policies and level of interpersonal communication, across the organization while deciding on motivating people. The management need good communication and listening skills so that he can discover and understand people need and internal drives.

Nature of motivation:- motivation is a complex phenomenon that combines the individual

needs, motives, drives, tension, comforts and expectations- it has a system of orientation goal of individual is shaped by forces

within the individual and its interaction with surroundings.- Individuals sets feed back from the environment which either reinforces

behavior from processing certain goals.

Process of motivation:



Motives:-Largely subjective and represents the mental picture of the person by explaining the rationale of human behavior.Behavior:-Comprises a series of activities that a person does by being motivated to achieve individual and organizational goal.

Goals:-The goals chosen by individuals depends on various individuals depends on factors like the cultural norms and values, the sales persons inherited capabilities, influence of personal learning and experience .

Motives and motivational drives:-Motives- are the drives for the behavioral action of the person

3 Motives- primary- based physiological needs and seek to reduce tensions.General- Curiosity manipulation etc induces the person to increase the amount of stimulation.

Secondary- motives of power and achievement and affiliation.

Theories of motivation:Content theories (explain the structure of the needs and motives and how individuals priorities the needs .

Process theories- describes the psychological processes involves in the form of motivation and its directions.


Motive

Behavior

Goal

Tension Reduction


Content theories- 1. need hierarchy theory Abraham maslow- propanded and look into the hierarchy structure of the different types of needs of an individual over a period of time.

Self actualization need

Esteem need

Social need

Security need

Physiological need

Physiological need: this is the basic needs and they have the greatest strengths among all the needs of the individuals (food, water, shelter). They are identified with bodies and are relatively independent of each other.Safety need: related to physical and physiological safety from external threat- arise out of physical danger

Social and affiliation need: describes the individuals desire for company and companionship of other peoples Esteem needs: sense of self work, personal recognition and satisfaction of these needs produces self confidence prestige, power.



Self Actualization: desire to grow more and more that is become everything that one is capable of becoming. It is the need that urges individuals to optimize their potential.

HerZ bergs two factory theory:- proponed this theory by grasping the motivating variables into two

categories such as hygiene factors and motivators- hygiene factors are those factors that when absent in any motivational

program increase dissatisfaction with job and when present help in preventing dissatisfaction but do not increase satisfaction or motivation

- motivators are the factors that involves the feelings of achievement, personal growth and recognition that one can experience in a job, which offers challenges and scope for achievement

Herzbergs 2 factors Neutral state of motivation, satisfaction and performance

High state of motivation, satisfaction and performance

Extrinsic – content - hygiene Intrinsic – contexts – motivators – satisfaction

corporate policy and administration

rel. with superiors wc, salary rel. with personnel personal life rel. with subordinates security supervision

achievement recognition work responsibility advancement growth

Alderfer’s ERG Theory

- he proposed a modified need hierarchy with three levels- people are initially interested in satisfying there existence need, which

combines physiological and security factors (pay, physical condition, job security and fringe benefits relatedness needs involved being understood and accepted by people above / below around at work

- growth needs are those involved with the desire for esteem and self actualization



- the ERG theory argue that it is possible for than one set of need to be activated at the same time.

McGregor Theory X and Theory Y Theory- X (Assumption)

- Most people prefer to be directed, not interested in assuming responsibility and want safety.

- People are motivated by money and threat of punishment- Work is inherently distasteful to many people.- Most people have less capacity for creativity in solving Organizational

problems

Theory y-

Work is as natural as play if the working conditions are favorable. Self control is indispensable in activity organizational goal The capacity in solving organizational problem is widely distributed

in the population. People can be self directed and creative. The Individual is seen as growth and capacity Integrating individual goal with those of organizational(enlarging

competency)

Conclusions:-

Theory x and y are attitudes or predisposition towards people, although the best assumption for a manager to have may be theory y, it may not be appropriate to behave consistently with these assumptions all the time.

2 theory of William Ouchy:-

-Originated from Japanese practicer- The success of Japanese firm in Company



To American firm attributed to long term employment, participative decision making

- Problem is discussed informally And solution is sought- Best solution from any person may be implemented ,does repentance

agreement of all the members in the organization - Low performance(punishment)

Process Theory-

-Equity Theory- Explain the relationship of employee motivation with the perception and feelings of the sales people - The motivation of people is influenced by the extent to which they feel that they are treated fairly and equitably.Employees tend to make social comparison of inputs (education, efforts, time spent in job) for themselves and others in the organization.

Expectancy Theory

Propounded by Victor Vroom who stated that motivation is a product of three factors namely - How much one wants the reward (valance)

- one’s estimate of the probability that efforts it result in successful performance (expectancy) - one’s estimate that performance will result in receiving reward (instrumentality)

- The multiplicative contribution that produces the strongest motivation is high positive valance, high expectancy and high instrumentality

Force = Valance * Expectancy

SKinner’s Reinforcement Theory

-Positive reinforcement or behavioral modification theory - individual Can be motivated by proper design of their work environment and by praise for their performance and that punishment for poor performance produces negative results.



They analyzed work situations (work course worker the way do act )- hen initiate changes to eliminate changes troublesome areas - specific goals are then set with workers participation - feed back- reward - if performance expected ways are found to help people

Factors Influencing the Motivation of Sales person

personal characteristics Individual satisfaction with current job, the demographic variable (personality traits), and attribution about why performance has been good or bad

Emotional conditions (territory potential and strength of competition) Organizational policies procedures

-Type and nature of scale of supervisors, span of control, leadership style , method of communication

Designing and motivational program

1) program objective

2) selection motivational tools :- organization and individuals should be integrated - managers need to take results of the previous programs and results - timing, place, duration.

* Individual/regular contact with sales people and application of the performance, help them to solve the problem, supporting, coaching, providing guidance

* group methods (conferences, communicate regional, national and international level.



3) The communication should be clear in and content so that the sales person can understand so at what level of commitment he likely to participate in the reward system of organization.

Evaluation of Sales person

- pre-requisite effective sales force management - useful to test the effectiveness of the sales programme- performance appraisal, crucial part of the evaluation is the process of

identification, measurement and management of a sale force in organization

- it is the process of evaluating the performance and qualification and qualification of the sales force in terms of the requirements of the job to ensure effective administration, including the selection for promotion, reward and other recognition in the organization.

Performance appraisal process

Appraisal Criteria

- identification of what is to be measured- those aspect or dimensions of job performance

-selection of dimension in critical-assigning a relative score to reflect a sales persons performance The techniques are classified on the pairs of type of judgment required for evaluations and focus of the measure (trait, behavior)

Deciding on the criteriaFor measuring performance

Deciding on the conduct of thePerformance appraisal



Deciding on evaluation of individualand teams

comparing of actual performanceWith stds

Deciding on the frequency of thePerformance appraisal

The external variables And their influence

Methods

1) relative and Absolute judgment:

Relative : sales manager is asked to compare the sales persons performance with that other people.Absolute judgment : Sales manager is asked to make judgment about the sales persons performance based on the sales performance measured in sales volume, market share or revenue realization.

2)Trait based :

-criteria related to the traits and the behavior of the sales fore.- the most commonly used traits for the purpose are reliability energy and loyalty.

3)outcome based :

-measure the result of the selling process. Same of the outcome instruments that allow to asses the results achieved by sales fore are amt of sales, no of products sold in units or volume. - the most common approach used in this method are called M.B.O. M.B.O is a goal directed approach to performance appraisal in



which sales manager and together set goal for evaluation period.

4) behavior based:

- related to selling criteria and for this the sales manager records how frequently behaviors listed in a checklist of ratings have occurred. -presentation quality product knowledge closing ability, service performed, the no of active accounts and relationship with customer.5)performance rating: These instruments include rating forms, forced choice scales and behavioral observations scales. Rating forms are statements in the form of an inventory or a list of adjectives about the sales job. -it provides uniform and consistent information about sales people. 6)fored choice scales:

The score and weight are predefined and the sales manager is forced to give a score or weight act of the assigned weights.-rates sales people as a series of adjectives.

Performance in rating form:

Include table here**

7) behavioral observation scale: Purely based on significant job incidents which describe behavior that can either enhance or reduce the level of performance -the evaluator focuses on special behavior which significantly influences performances. -this helps in identifying certain behavior which are desirable and undesirable in the context of job.



8)call reports: -periodic accounts and customer statements prepared by sales persons of how they are dividing this working time between various of the jobs.like demonstration and follow up.

9) silent call monitoring scores: Sales managers rating of the sales persons performance during actual calls to the customer the rating can come a wide range of the aspects like greeting, ascertaining customer needs, and the level of communication and listening skills.

10) Activity Reports:

-explain the unusual events and incidents that occur in the field as reported by a sales manager and sales people including . -this includes events like the launch of a major price war by the competitor and the entry of new competitor.

11) Combination methods-combination of outcome and behavior bared eating models

- do not give much importance to the behavioral issues that help sales people sort uot their performance evaluated problems and so it is used objective bared measures.

A combination plan of evaluation

Name total calls made total sales arg sale per content total cust satisfac index

1.john

2.deepak



3.rakesh

4.sufrat

Conduct of performance appraisal

Rater—immediate supervisor & Customer Under 360 appraisal (immediate supervisor, subordinates, customers appraisal and self appraisal) Are included.

Rating error:-occur when a sales manager inflate/deflate the sub’s performance rating.-either *-receiving effect- the most recent performance has effect or the current performance.-central tendency error—Hallo effect error – associating certain people into some category as good or bad as the basis of some characteristics.

Actual performance: Evaluate the salespersons actual performance against either industry std (or) stds set by the organization. -many sales people by to collect actual data over a set of territories and calculate the avg performance of all the territories and then to compare each salespersons with the average of the performance of all the sales.

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