s&dm introduction
TRANSCRIPT
BY:BY: Mrs. Gurpreet K ChhabraMrs. Gurpreet K Chhabra
Introduction to Sales Introduction to Sales ManagementManagement UNIT-1UNIT-1
Nature and role of sales management
The determination of sales force objective and goals Sales force organization, size, territory, and quota
finalization Sales forecasting and budgeting Sales force selection, recruitment, and training Motivating and leading the sales force Designing compensation plan and control systems Designing career growth plans and building relationship
strategies with key customers
Persuasion
Consultative
Selling
Partnership
StrategiesBusiness
ManagementNegotiation
Evolution of personal selling
Production conceptProduction concept Product conceptProduct concept Selling conceptSelling concept Marketing conceptMarketing concept Societal conceptSocietal concept
Marketing concepts
Customer Needs
Sales Customers
Emphasis on Seller’s Needs
Production
Production
Sales
Emphasis on Customer
Needs
Societal marketing concept
(Sales Orientation)
(Marketing Orientation)
• Industrial selling• Retail selling• Services selling
Types of personal selling
Types of sales personnels
• Order taker sales people• Order creators• Order getters
SellingFunction
OrderTakers
Order Getters
Order Creators
Outside Order Takers
Inside Order Taker
Merchandisers
Delivery Sales People
Missionary Sales People
New Business Sales People
OrganizationalSales People
ConsumerSales People
Technical Support sales People
Front LineSales People
Sales Support
Sales people
Types of Selling
Formulation of a strategic sales programme
Implementation of the sales programme
Evaluation and control of sales force performance
Sales management process
Technology
Relationship sellingCustomer orientation
Global and ethicalIssues
New selling methods
Diversity
Emerging trends in sales
management
Emerging trends in sales management
Technology
Sell ing and buying stylesSell ing and buying styles
99
88
77
66
55
44
33
22
11 22 33 44 55 66 77 88 99
Con
cern
for
th
e cu
stom
ers
(1,9) People Oriented
I am customer’s friend,
I want to understand him and respond to his feelings and interests so that he will like me. It is the personal bond that leads him to purchase from me.
Sales technique Oriented (5,5)
I have tried an effective routine for getting a customer to buy. It motivates through a blended personality and product emphasis
(1,1) Take it or Leave it
I place the product before the customer and it sells itself as and when it comes.
(9,1) Push the product Oriented
I take challenge of the customer and hard sell him, polling on all the pressure it takes to make him buy
(9,9) Problem Solving Oriented
I consult with the customer so as to inform myself of all the needs in his situation that my products can satisfy. We work towards a sound purchase decision on his part, which yield him the benefits he expects from it.
Concern for sales
Sell ing situationsSell ing situations
Sales task and functionSales task and function
Maintenance sellingMaintenance selling
Developmental sellingDevelopmental selling
Sell ing ski l lsSell ing ski l ls
Selling Skills
Listening Skills
Conflict management and resolution skills
Negotiation and bargaining skills
Problem solving skills
Effective communication skills
Communication processCommunication process
Noise
Channel
FeedbackIntended Message
Sent Message
Encoding
Perceived Message
Received Message
Decoding
Sender Receiver
CommunicationCommunication process (cont…)process (cont…)
Managing body language:Managing body language: Personal AppearancePersonal Appearance PosturePosture GesturesGestures Facial ExpressionsFacial Expressions Eye ContactEye Contact Space DistancingSpace Distancing
Process of listening
Attendance
Interpretation
Evaluations
Remembrance
Response Action
Levels of listening
Feedback
Paraphrasing
Emphatic listening
Clarifications
Active Listening
Barriers to Listening !
Confl ict management ski l lsConfl ict management ski l ls
Models of conflictModels of conflict Components of conflictComponents of conflict The conflict resolution process:The conflict resolution process:
- lumping- lumping- avoidance- avoidance- coercion- coercion - meditation- meditation- conciliation- conciliation- arbitration- arbitration- adjudication- adjudication- negotiation- negotiation
Stage I
Potential opposition or
Incompatibility
Stage II
Cognition &
Personalization
Stage III
Intentions
Stage IV
Behaviour
Stage V
Outcomes
Antecedent Conditions
Communication
Personal Variables
Structure
Perceived Conflict
Felt Conflict
Conflict handling Intentions
Competing
Collaboration
Compromising
Avoiding
Accommodating
Overt Conflict
Party’s behaviour
Others reaction
Increased group
performance
Decreased group
performance
Conflict management process
Negotiation ski l lsNegotiation ski l ls
• Situation and timing for negotiationsSituation and timing for negotiations• Formulation for a bargaining strategyFormulation for a bargaining strategy• The theory and strategy of principle The theory and strategy of principle negotiationsnegotiations- separate the people from the problemseparate the people from the problem- focus on interests, not on positionsfocus on interests, not on positions- invent options for mutual gainsinvent options for mutual gains- insist on objective criteriainsist on objective criteria
Problem solving ski l lsProblem solving ski l ls
• Habit I: be proactiveHabit I: be proactive• Habit 2: begin with an end in mindHabit 2: begin with an end in mind• Habit 3: put first things firstHabit 3: put first things first• Habit 4: think win–winHabit 4: think win–win• Habit 5: seek first to understand, then to be Habit 5: seek first to understand, then to be
understoodunderstood• Habit 6: synergizeHabit 6: synergize• Habit 7: renewalHabit 7: renewal
Define the problem
Generate alternative solutions
Decide the solution
Implement the solution
Evaluate the solution
Problem solving processProblem solving process
Decision on the best solution
Approval
Planning
Carry through
Follow up
Evaluation
IMPLEMENTATION
Solution implementation process Solution implementation process
Stages in the selling process
Pre-sale preparation
Sales Presentation
Handling Customer Objections
Closing the Sale
Follow up action
Approach to the customer
Pre- approachbefore the interview
Prospecting
Selling process
• Pre approach to selling• Approach to the customer• Sales presentation
- approach to sales presentation- attracting customer attention- creating interest- arousing desire and building conviction
• Methods of sales presentation- canned presentation- organized presentation- tailored presentation
Process of prospecting
Identify and define prospects
Search for sources of potential accounts
Qualify the prospects from the suspects
Prospecting
Successful prospecting
50 potential prospects
15 Qualified prospects
6 Interviews
1 sale
50 potential prospects
25 Qualified prospects
17 Interviews
7 sales
Successful prospecting
No Yes
Methods of prospecting
Cold canvassing Endless chain customer referral Prospect pool Centers of influence Non competing sales force Observation Friends and acquaintances Lists and directories Direct mail Telemarketing Trade shows and demonstrations
Handling customer objections
• Start with your highest expectations
• Avoid conceding first
• BE sure the customer understands the value of a concession
• Make concessions in small amounts
• Admit mistakes and make corrections willingly
• BE prepared to withdraw a concession
• Avoid ‘split the difference’ strategy
• Do not advertise willingness to concede
• Use TRACT formula to buy time
Suggested by SMITH
Forecasting process
The forecasting process is defined as the series of decisions and actions taken by a business organization in:
identifying the forecasting objectives
determining the independent and dependent variables
developing a forecasting procedure
using the available data in the selected method to estimate the sales in future
Qualitative methods
Expert opinion
Survey of buyer’s
expectation
Sales force composite
Delphi technique
History analogy
Quantitative methods
Test marketing Naïve method Trend method
Moving average Regression method
Exponential smoothening
Popular methods in forecasting
Observed sales Forecasted sales
Trend lin
e
Time
Sales
Trend forecast of Sales
Naïve Method
Sales (at the period t) = Sales T+1
The following formula shows how to adjust the naïve method to account for a change in rate of sales levels. The formula is stated this way: Next Year’s Sales = This Year’s Sales X This Year’s Sales Last Year’s Sales
Free Hand Graphic Method
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8 9 10
Years
Sale
s
Series1
Freehand Method
In this method available data are divided into two parts, usually with equal number of years on both the parts
YearYear SalesSales
19931993 102102
19941994 105105
19951995 114114
19961996 110110
19971997 108108
19981998 116116
19991999 112112The average of the first three years will be:
102+105+114 321 ----------- = -------- = 107
3 3 Similarly, for the last three years,
108 + 116 + 112 336 ---------------------- = --------- = 112
3 3
Method of semi-averages
Forecasting market demand
It is the estimated rupee or unit sales for a specific future timePeriod based on the company’s marketing plan and an assumed marketing environment.
Price/ Unit
Price / Unit
Price/ Unit
Price/ Unit
Price/ Unit
Price / Unit
Qty per Unit (E)Qty per Unit F
Qty per Unit C
Qty per Unit (B)
Qty per
Unit (A)
Qty per Unit (D)
Total Market demand
P1
P2
Q1Q2
D D1
D D2
D D1
D D2
Market demand curve
Correlation analysis
• a correlation is basically the degree of linear association between two variables where one variable is treated as independent variable and sales as the dependent variable
• sales managers look for variables that correlate with or relate to sales
• correlation analysis involves the determination of whether a relation exists, and if it does, then measuring it, testing whether it is significant, and establishing the cause and effect relation
• the degree of relationships between the variables is called co-efficient of correlation
• regression analysis is another form of correlational technique
• reveals average relationship between two variables and this makes possible estimation or prediction
• a statistical method used to incorporate independent factors that are thought to influence sales into forecasting procedures
Population
Sales
Population
Sales
(Liner Relationship) (Curvilinear Relationship)
Regression analysis
Sales organization
• an organization of individuals either working together for the marketing of products and services manufactured by an enterprise or for products that are procured by the firm for the purpose of reselling
• a sales organization defines duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective execution of the sales function
Sales organization (cont….)
• a structural body through which the functions of sales management are carried out
• sales organization always makes efforts to increase sales, thereby achieving the principle of profit maximization, which contributes to the overall growth of enterprise
Factors influencing structure
• product and service related factors
• organization related factors
• marketing mix related factors
• external factors:
- the speed of market change- reduction in the number of vendors per buyer- closer to customer relationships- changes in regulations and international practices
Organizational principles
span of control
unity of command
hierarchy of authority
stability and continuity
coordination and integration
homogeneity
objectivity
specialization
Organizational design
- formal and coordinated task- assigning territories - establishing flows of communication and responsibilities of sales groups and individuals to customers effectively
Line organization Mr. Ratnakar ShettyPresident / Owner
Mr. ChandrakantVP (Sales)
Five sales people
Consumer market
Institutional market
Corporate market
National Distributors Direct to
HomeDirect
marketing Distributors /Bundling Gifting
ConsumerRegionalDistributors
Retailers
Consumers
Typical structure of a line organization
Design by territory
VP Marketing
National Sales Manager
Divisional Manager(East)
Divisional Manager(North)
Divisional Manager(West)
Regional Sales Manager
District Sales Manager
Sales Staff(City wise)
Regional Sales Manager
District Sales Manager
Sales Staff(City wise)
Regional Sales Manager
District Sales Manager
Sales Staff(City wise)
Design by management function
Mr. S.P. singh,VP
(Marketing)
Mrs. Chitra Mohanty
(Advt / Sales Promotion Mgr)
Staff Function Line Function
Mr. Dibya Behera(Sales Manager)
Mr. Chandra DeManager
(MR)
20 Sales People
Design by product
President,Marketing
Product Manager (A)
Product Manager (B)
Manager(Sales)
Manager(Training)
Manager(Promotion)
Manager(Sales)
Manager(Training)
Manager(Promotion)
Design by customer
President(Marketing)
Sales ManagerWholesalers
Sales ManagerRetail Sales
Sales People
Sales ManagerIndustrial Relations
Vice President(Marketing)
Sales People Sales People
Functional
Geographic
Customer
Combined Sales Org. Design
President
Marketing ManagerInternational
G.MInternational Sales
Marketing ManagerIndia
Vice President(Marketing)
G.MConsumer care
G.MInternational Sales
Vice President(HRD)
Vice President(Production)
Divisional ManagerSoaps
Divisional ManagerFood
Divisional ManagerPaper
Eastern Sales Division
Western Sales Division
Northern Sales Division
Europe Division America Division Gulf Division
Product
Number of sales people
• determined by:- territories vary in their demand structure for prospecting- product mix demands- levels and types of prospecting- nature of the customer segments
Affordability method (based on sales budget)
Incremental method
Workload method
Number of sales people =(Number of
existing customers)
(Number of Potential
customers)
(Ideal frequency
of calls)
(Length of a call)XXX
Ideal selling time available for a salesperson
Sales territory
• a group of present and potential customers assigned to
an individual
• sales person, a group of sales person, a branch, a dealer,
a distributor or a marketing organization at a given
period of time
Sales territory (contd.)
Advantages of designing a sales territory :
it ensures better market coverage effective utilization of the sales force efficient distribution of workload among sales people it is convenient to evaluate the performance of sales people to control over the direct and indirect costs of the sales function optimum utilization of sales time by sales people
Designing sales territories
Select the basic geographic control units
Decide on the criteria for allocation
Decide on the starting point
Combine control units adjacent to starting pointCompare territories on allocation criteria and
conduct workload analysisAssign sales force to new
territories
Factors influencing the
modifications of a territory:
• mergers• market consolidation• split in division• sales force turnover• customer relocations• product life cycle change• product line change
Modify territorial
boundaries to balance workload
and potential
Territory shapes
circlewedge
Clover leaf
CASELET-1CASELET-1YOU ARE A SALES EXECUTIVE WORKING WITH M/S YOU ARE A SALES EXECUTIVE WORKING WITH M/S
RAJEEV MOTORS LTD. YOUR SHOWROOM STOCKS RAJEEV MOTORS LTD. YOUR SHOWROOM STOCKS VARIOUS MODELS OF MATIZ CARS. YOU HAVE VARIOUS MODELS OF MATIZ CARS. YOU HAVE BEEN SPEAKING TO A PROSPECT WHO IS A BEEN SPEAKING TO A PROSPECT WHO IS A SENIOR EXECUTIVE IN A REPUTED COMPANY. HE SENIOR EXECUTIVE IN A REPUTED COMPANY. HE HAS TOLD YOU THAT ONE OF THE REASONS WHY HAS TOLD YOU THAT ONE OF THE REASONS WHY HE IS LOOKING FOR A SMALL CAR IS THAT HE HAS HE IS LOOKING FOR A SMALL CAR IS THAT HE HAS NOT BEEN CLAIMING CAR ALLOWANCE FROM HIS NOT BEEN CLAIMING CAR ALLOWANCE FROM HIS COMPANY.COMPANY.
HE HAS A SMALL FAMILY OF FOUR PERSONS, HE HAS A SMALL FAMILY OF FOUR PERSONS, WHICH INCLUDES HIS WIFE, 2 SMALL CHILDREN-9 WHICH INCLUDES HIS WIFE, 2 SMALL CHILDREN-9 AND 5 YEARS OLD AND OF COURSE HIMSELF. HE AND 5 YEARS OLD AND OF COURSE HIMSELF. HE WANTS YOU TO GIVE HIM A STEREO AND OTHER WANTS YOU TO GIVE HIM A STEREO AND OTHER ACCESSORIES FREE AS THESE ARE BEING ACCESSORIES FREE AS THESE ARE BEING OFFERED BY ANOTHER DEALER. HE IS ALSO VERY OFFERED BY ANOTHER DEALER. HE IS ALSO VERY PARTICULAR ABOUT THE AFTER SALES SERVICE.PARTICULAR ABOUT THE AFTER SALES SERVICE.
WHAT WILL YOU NEGOTIATE ON?WHAT WILL YOU NEGOTIATE ON?
CASELET-2CASELET-2• YOU ARE THE SALES OFFICER WITH DHL YOU ARE THE SALES OFFICER WITH DHL
LTD. THE COURIER SERVICES OFFERED BY LTD. THE COURIER SERVICES OFFERED BY YOU ARE THE CHEAPEST IN THE YOU ARE THE CHEAPEST IN THE MARKET.YOU ARE GOING TO MEET A MARKET.YOU ARE GOING TO MEET A CLIENT WHO IS REPRESENTING A BIG CLIENT WHO IS REPRESENTING A BIG HOUSE. THE CLIENT HAS MENTIONED THAT HOUSE. THE CLIENT HAS MENTIONED THAT THEY NEED A COURIER WHO CAN ADAPT THEY NEED A COURIER WHO CAN ADAPT TO THE FLEXIBLE REQUIREMENTS OF THE TO THE FLEXIBLE REQUIREMENTS OF THE COMPANY-SOMETIMES MATERIAL HAS TO COMPANY-SOMETIMES MATERIAL HAS TO BE SENT EARLY IN THE MORNING AND BE SENT EARLY IN THE MORNING AND SOMETIMES LATE IN THE EVENING. HE HAS SOMETIMES LATE IN THE EVENING. HE HAS ALSO MENTIONED THAT YOUR PRICE IS ALSO MENTIONED THAT YOUR PRICE IS HIGH.HIGH.
WHAT WILL YOU NEGOTIATE ON? WHAT WILL YOU NEGOTIATE ON? PLEASE GIVE REASONS FOR YOUR PLEASE GIVE REASONS FOR YOUR APPROACH.APPROACH.