Summary

Chapter 12

SALES MANAGEMENT

Learning Objectives:
 Sales Management Meaning, Role, and Objectives
 Sales Organization Importance and its types
 Basic Functions of Sales Organizations
 Management of Salesforce
 Recruitment and Selection of Salesforce
 Training of Salesforce
 Remuneration of Salesforce
 Supervision
 Motivation of Salesman
 Control of Salesforce
 Evaluation of Sales Performance

1. Sales Management
A. Meaning- Sales Management consists of two words i.e., „Sales‟ and
„Management‟. Selling is the process of persuading a prospective
customer to buy a commodity or a service or to act favorably upon an
idea that has commercial significance to the seller. Management is a
process of carrying out the essential functions of panning, organizing,
staffing, leading and controlling. The term Sales Management includes
the following:
a) Managing the Sales Force- includes Recruitment, selection,
training, motivation, remuneration and controlling the sales
force.
b) Organizing the sales effort- Deals with creating appropriate
organizational structure and effective coordination within the
sales department and other departments such as HR,
distribution, Product management in the company.

B. Role of Sales Management in Marketing- Marketing plans, strategies

and policies are implemented through Sales Management. Hence,
sales management acts as the dynamic force (muscle power) behind
marketing management.
Sales Management plays an important role in marketing, especially for
firms in business- to-business markets. Personal selling is the most
frequently used promotional technique in business markets and
management of the sales force is an important quality component of
any selling effort.
 C. Objectives of Sales Management: Major objectives of Sales
Management are given below.
1. Achievement of Sales Volumes/Values
2. Contribution to Profits
3. Growth in Sales
4. Growth in Market Share

2. Sales Organization
A. Importance of Sales Organization-
I. A good sales organisation is a foundation for effective
execution of sales policy and sales programme.
II. A sales organisation must be planned in detail and all
activities should be well coordinated and integrated to secure
united efforts and maximum efficiency.
III. A sales organisation is the medium to execute a sales plan.
IV. A sales organisation helps in planning, organizing, and
controlling all sales efforts through a sound sales
organisation to prevent wastage in distribution.

B. Types of Sales Organization-Common types of sales

organizations are Line or Scalar, Line and Staff, Functional,
Geographic Groups, Productive Group and Customers Type.

i. Line Type of Sales Organisation-

 Chain of command runs from top to bottom vertically.
 Responsibilities are fixed for all levels.
 Every salesperson reports to only one person at a higher
level.

ii. Line and Staff Organisation-

 Provides experts in different functional areas.
 Head of the department has time to focus on long-term
plans.
 Experts play advisory role while dealing with salespersons.

iii. Functional Organisation:

 Specialized activities are given to specialists.
 Functional managers(specialists) have line authority
 Can give instructions to sales executives

iv. Geographic grouping of Field Force:

 Local problems are handled speedily.
 Timely decisions.
 More layers — more expenses.
 Top managers should have sufficient knowledge and skills in
HR/Basic finance/Distribution.
 v. Product-wise Grouping of Sales force
 Product specialization is usually called for when the
product line is large and diverse.
 When the products are technical enough to warrant
specialized applications knowledge.
 When adequate technical knowledge is an important
determinant of successful selling.

vi. Grouping of Field Force — Customer Type

 A Customer oriented sales force is consistent with the
marketing concept with its increased emphasis on
consumer satisfaction.
 The greater market specialization developed because
of constantly working with the same set of consumers.

C. Basic functions of Sales Organization:

Administrative Operating Functions Staff

Functions FunctionsSpecialists
Acting asGuides and
Advisers
1.Sales Policies 1.Recruitment 1.Marketing Research
2.Sales Planning 2.Selection 2.Advertising
3.Sales Programme 3.Training 3.Sales Promotion
4.Evaluation of Performance 4.Routing 4.Merchandising and
5.Controlling Cost 5.Controlling Product Development
6.Direction and Motivation 6.Equipping and Leading 5.Sales Analysis
7.Dealer Relations 7.Supervising 6.Dealer Relations
8.Co-ordination and 8.Evaluating Sale Quotas 7.Sales Personnel
Communication 9.Sales Territories 8.Transportation and
10.Physical Distribution Problems Warehousing Problems
11.Co-ordinating Sales and 9.Sales Planning Programming
Advertising 10.Counselling to Sales People
3. Management of Sales Force
Sales force management is defined as “the planning, direction and control of
the personal selling activities of a business unit, including recruiting, selecting,
training, equipping, assigning, routing, supervising, paying, and motivating as
these tasks apply to the personal sales force.”
Effective management of salesforce requires leadership plus administrative
skills in planning, organizing, directing, motivating and controlling the
personnel selling portion of the promotion- mix.

4. Recruitment and Selection of Salesforce:

 Recruitment involves searching for prospective candidates and
encouraging them to apply for the job.
 Vacancies are finalized, advertised and applications are collected from
interested candidates.
 Selection is concerned with choosing most suitable candidates out of
many available or interested.
  Available candidates are scrutinized, tests and interviews are
conducted to find out most suitable candidates.
 Salesman is the important corner-stone upon which sales organisation
is built.
 Success or failure of the firm depends upon the type of salesman
selected.
 Therefore, selection must be made carefully. It is the duty of the Sales
Manager to select salesmen.

5. Training of Sales force-The Need for Training of Salesforce- A good training

scheme would include the following:
a) Basic principle of salesmanship: Salesmen, to be effective in their
sales efforts, should know fully the buying motives of customers and
the selling points of the products. They should be well-versed with the
methods of approaching the customers, the effective way of arousing
the interest in the product and the art of creating desire for it. They
should be able to meet the objections raised by the customers.

b) Knowledge of the firm: The salesman should be well informed about

the company i.e., history of the company, its organizational set up, the
name it has earned, achievement records, sales policies, distribution
policies, customer‟s service provided by the company, selling outlets,
(channels) etc.

c) Knowledge of the product: To be successful in increasing the sales

volume of a product, salesmen should possess the requisite knowledge
of the product.

d) Knowledge about the customers: A salesman must have a perfect

knowledge of customers to whom the products are to be sold. The
training is required to study at least three factors: What motivates the
buyer to buy? What is the nature and requirement of the customer?
How to deal with different types of customers?

e) Knowledge of competitors: Apart from the knowledge regarding the

firm represented by the salesman and its products, they must possess
the knowledge relating to their products and policies of the competing
firm.

f) Matters pertaining to the day to day work: Salesman should also be

given training to draft periodical reports to the firm, receipt of and
replying letters, preparation of orders and bills,maintenance of
accounts, arrangements of display and demonstration of products.

g) Knowledge of self: This is partly a personal quality and partly to be

developed by constant self-training. Every individual has certain
strengths, weaknesses, and limitations. To become an effective
salesperson, one should seek knowledge in all relevant subjects and
apply the same in day-to-day work.
6. Advantages of Training the Salesforce:
A. Greater sales volume
B. Reduces cost of production
C. Early selling maturity
D. Lowers supervision cost
E. Lowers turnover of salesforce
F. Better customer relations

7. Methods of Training
A. Individual Methods:
a) Initial or Break-in Training: The trainee is asked to work in
different departments and study for himself. He may be
guided but often left free. After a specific period, he would be
asked to work in his field.
b) Special Assignments: Slightly easier assignments are
given and his capacity in handling problems is watched.
Shortcomings, if any, are brought to his notice for future
guidance.
c) Field Coaching: The newly recruited salesman is asked to
work along with an experienced salesman in the field. This
method creates self-confidence, enthusiasm in the newly
recruited salesman.
d) Sales Manuals: These are tailored books where several
problems are stated together with suggested answers. This
is prepared out of company‟s experience and might contain
valuable information. These are given to salesman for self-
study.

B. Group Methods:
a) Lecture Method
b) Audio-visual Methods
c) Conference Method
d) Discussion and Case Method
e) Role-Playing

C. On-the-Job Methods- This method stresses practice-oriented

training.
a) Field Training: The new representative works in the field
meeting various categories of customers.
b) Job Rotation: The salesman is trained in all departments
and he would be asked to work in all sections of each
department.

D. Off-the-Job Method- Many associations generally issue journals,

bulletins, and other publications to enable their members to perform
their duties more promptly and efficiently. The salesperson can
become a member of such associations to upgrade his knowledge
and skills.
 E. Follow-Up Training- Training is not temporary but should be
continuous. Even the trained salesmen require periodic training
termed as „refresher training‟ or „follow-up training.‟

8. Remuneration of Salesforce- There are certain basic reasons as to why the

salesforce is to be paid well.
a) To attract best salesmen
b) To keep salesforce contended
c) To build up loyalty
d) To guarantee sound employer-employee relation

9. Elements of a Good Remuneration Plan:

 Should provide adequate income
 Simplicity
 Flexibility
 Incentive oriented
 Low administration cost
 Fairness
 It is prompt in payment
 Promotion

10. Supervision- Supervision consists of the following:

i. Observing, monitoring, and reporting the performance of the
salesforce.
ii. Counselling and coaching salespeople to remove the defects and
weaknesses in their performances.
iii. Giving them adequate information regarding company plans and
policies and changes in those policies.
iv. Receiving feedback and solving their business and personal problems.
v. Motivating the salespeople through appropriate non-financial incentives
to satisfy egoistic demands of salespeople.

11. Motivation of Salesmen:

i. Motivation is the act of stimulating someone or oneself to get a desired
course of action, to push the right button to get a desired action, a
compliment, a pay-rise, a smile, a promise of promotion, praise, public
recognition of merits etc.
ii. Motivation ignites the will to work.
iii. It moves people to take a desired action.
iv. Motivation can be either financial or non-financial. Sales contests,
conventions and conferences are examples of motivating salesforce.

12. Control of Salesforce- The need of supervision and control arises basically
out of the following factors:
a) To enhance the efficiency of salesforce
b) To ensure co-ordination in the efforts
c) Nature of salesforce demands controlling
d) To have sound public relations
 13. Evaluation of sales performance- There are three reasons to evaluate or
appraise the performance of salespeople:
I. To measure performance against planned sales and marketing
objectives.
II. To distribute rewards for performance.
III. To guide the development of sales force.

Salesman‟s performance can be measured by a number of factors such as:

 ability to sell a satisfactory volume
 ability to sell at a profit
 ability to sell at a low cost
 ability to plan and organize his time and efforts
 knowledge of products, policies, customers, and competition
 ability to attract and hold customers, etc.

The salesmen‟s reports and records are used in evaluating performance.

Sales quotas also enable in evaluating performance.