BBAE0201: SALES & DISTRIBUTION MANAGEMENT

BBA V SEMESTER
BBAE0201: SALES & DISTRIBUTION MANAGEMENT
Syllabus-Module-I
Introduction & Concept of Sales Management: Nature, meaning, scope and objectives of Sales
Management. Concept and Principles of Sales. Distinction between marketing and sales
Management. Objectives of sales. Selling Process: Preparation, prospecting, pre-approach, sales
presentation, closing of sales. Market identification sales forecasting qualitative and
quantitative methods. Sales organization its functions and forms.
Sales Manager and Sales Force: Qualities, types and their functions / duties. Recruitment,
Selection, Training and Remuneration of Sales Force.

History of Evolution of Sales

First Generation- During this generation, selling took place in the form of exchange of goods
with barter system. This barter system has been around since the beginning of civilization and
was one of the simplest forms of exchange.
Second Generation- This generation is characterized by the evolution of store concept. Goods
were stored for sale at one place from where the buyers could purchase whatever they required.
Thus, rather than purchasing goods on a one to one basis, a stockpile of necessary goods were
created. So, from the barter system of trade, sales graduated to the inventory form of trading.
Third Generation- In this generation, traders began selling their wares by searching for and
locating customers rather than waiting for the customers to arrive and purchase their products
from stores. Therefore, the storage concept transformed into mobile selling concept.
Fourth Generation- This generation can be considered as the beginning or first step towards
adopting a systematic approach to selling. In this stage, traders realized that certain customers
purchased goods from them repetitively and at regular intervals. Therefore, they started
focusing on the regular demands of these repetitive customers.
Fifth Generation- This generation of sales was marked by the advent of need based selling.
Selling became more scientific in its approach. The emphasis of trader here was to identify the
This generation is said to have led the
foundation for modern day sales techniques.
Sixth Generation- Sales approach underwent
considerable transformation. There was an increasing demand of salespersons to understand
It gave rise to consultative selling approach. Top priorities were

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given to customer needs. Supplies of best possible offerings were made available to the
customers.
Seventh Generation- Sales person started acting as a moderator. Focus is not just on selling
but telling about the long term consequences of the product. Helps in developing trust among
customers. Improvement in the quality and quantity of sales. Personal satisfaction for both
customer as well as sales-person.

Sales Management (Meaning and Definitions)

Management is a large field and its scope is very vast. There are many areas of business which
require effective management and sales management is no exception. It means controlling,
organizing, planning and directing sales. It is usually done by a sales manager. A key point in sales
management is sales accountability- it is always important for all involved to focus firmly on the
goals and at the same time improve the sales program wherever necessary.
According to American Marketing Association, "Sales Management is 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.
In the words of Hampton and Zabin, "Sales Management is primarily the direction of men
with all the management functions of organisation, control, recruitment, training, supervision
and motivation.
According to B.R. Canfield, "Sales Management involves the direction and control of
salesmen, sales planning, budgeting, policy making, coordination of marketing research,
advertising, sales promotion and merchandising and the integration in the marketing
programme of all business activities that contribute to the increased sales and profits."

Nature & Characteristics

Goal-Oriented: Similar to other management activities, sales management also have a
specific purpose and intended for the achievement of specified goals or objectives.
Continuous Process: The sales manager needs to perform sales management functions
regularly, and this process is never-ending.
Systematic Approach: It is an organized way of handling the sales function of the company
where every problem has a defined and proven solution.

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Relationship Selling: The salespeople make efforts to build a strong customer relationship to
sell the products or services effectively.
Marketing Management Integration: Marketing is a broader concept; marketing
management includes all the activities related to sales management.
Different Sales or Job Position: It is the combined efforts of the whole sales team, including
salesperson, sales executive, sales head, sales manager and after-sales service personnel.
Pervasive Function: It is a universally applicable concept which has been adopted and tested
by every kind of business organizations.

Some Other are-

Strategic Function: Sales management achieves personal-selling objectives through 'personal-
selling strategy.
Specialised Function: Sales management is a significant branch of general management. It is
one of the highly specialized functions of general management.
Customer-oriented: This means that it produces what is needed by the customers for
maximum social welfare.
Functional Area: It is one of the most important functional areas of management including all
the principles of management as planning, organizing, directing etc.
Synonymous with Marketing Management: It also includes management of all the
marketing activities such as advertising, sales promotion, marketing research, distribution,
pricing etc.

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Scope of Sales Management

Sales management is a field which has emerged from marketing management; however, the latter
is a broader concept.
Sales Force: Staffing, training, motivating, compensating, leading and evaluating &
controlling.
Intermediaries: Distributors or Dealers (Whole-sellers & Retailers).
Logistics / Transportation: From company to warehouse, from warehouse to distributors,
from distributors to retailers and retailers to company.
Promotion: Joining creative agency, starting a creative agency, promotional material
manufacturing or supply, day to day campaigning and managing promotional force.
Product Space: Storage of goods, commercial usage, retail outlets and promotional activities.

Sales Planning or Forecasting: The sales-related activities need to be planned well in advance
through anticipation of future sales prospectives.
Sales Budgeting: The sales manager needs to determine or estimate the sales budget, i.e., the
expenses which will be incurred in carrying out the sales activities.
Determining Structure and Size of Sales Organization: The department of a company
which is solely responsible for all the sales-related functions is termed as a sales organization.
It provides for determining the size, composition and structure of a sales organization.
Human Resource Planning: The sales management ensures a proper estimation of sales
personnel requirement in the organization.
Hiring Sales Personnel: It initiates the recruitment and selection of efficient and suitable
candidates for various vacant sales positions.

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Training and Development of Salespeople: It also includes providing training and orientation
to the selected candidates to develop their skills and knowledge to match those required for the
job position.
Developing The sales manager set up achievable objectives or
goals for the salespeople appointed under him / her.
Fixing Sales Quotas: Also, the sales quota (monthly, quarterly or yearly) is fixed, either in
terms of volume or value of sales to set targets for the sales team.
Determining Sales Territories: Every sales team or salesperson is given a particular region or
area as a target market, where they need to penetrate for selling products or services.
Motivating Sales Personnel: It also emphasizes on reviewing the work of salespeople and
driving them frequently to perform better.
Compensation and Remuneration of Salespeople: It ascertains appropriate salary,
remuneration, allowance, commission and other benefits to the salespeople.
Controlling Salesforce: Exercising sufficient control by monitoring the performance of the
sales personnel is also a crucial function of sales management.
Branding, Labelling and Packaging: The sales personnel gather customer feedback on the
acceptability of the product packaging, presentation, branding and labelling.
Managing Distribution Channel: It also ensures keeping track of the marketing channels and
filling the loopholes if any.
Sales Promotion: The product advertisements and other promotional tactics are also
determined through sales management functions.
Organizing and Support Service: It includes handling of queries and solving problems of the
sales personnel through proper guidance and support service.
After-Sale Services: The customer recognizes a company mostly through the effectiveness
and efficiency of the after-sale services it provides, which is the concern of sales management.

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Objectives of Sales Management:

Revenue Generation: One of the main objectives of sales management is to generate revenue
for the organization. The sales department is solely responsible to bring in the money.
Increase Sales Volume: Through efficient sales management, the organization wishes to
increase the number of units sold. This will ensure that the production facilities do not remain
idle and are utilized to the fullest.
Sustained Profits: Sales management has an objective of improving the profits of the
organization through effective planning, coordination and control. Sales management strives to
increase sales and reducing costs, this ensures good profits for the organization.
Organization Growth: With the sustained and continuous sales management techniques, the
organization tends to gain market share and results in growth of the organization.
Market Leadership:
organization to become the market leader.
Converting Prospects to Customers: Getting prospects to become customers is an art and a
science, it requires good planning and sustained efforts. This is accomplished through sales
management.
Motivate the Sales Force: One of the core objectives of sales management is to motivate the
sales force. Selling is a very stressful task; achieving sales targets can become very
challenging. Therefore, the sales management task is to ensure that the sales force is
continuously motivated through proper incentives and reward systems.
Compliment Marketing Activities:
functions of the organization. Marketing and sales need to go hand in hand to achieve the
desired results.

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Concept of Sales
A sale is a transaction between two or more parties in which the buyer receives tangible or
intangible goods, services, or assets in exchange for money. Sale is the only function in an
organization that generates revenue / income.
A marketing idea i.e. based only on the selling of goods or services, rather than on whether or not
they are actually needed. Operating under the sales concept, a business would produce goods that it
anticipated as profitable return and then attempt to persuade consumers to purchase them by using
advertising and other sales techniques.

Principles of Sales
1. Principle of objective: According to this principle, the objective of the organization must be
clear to the top management and its employees, so that the desired results can be achieved. It
requires careful analysis related to market trends and conditions so that the robust objective can
be designed or formulated.
2. Principle of continuity: According to this sales management should be done in such a way
that, it fulfills all the needs of the business continuously and it may be changed as and when
required.
3. Principle of co-ordination: This principle lays emphasis on the co-ordination between the
different departments, their sub-departments and their workers in the organization so that
mutual understanding between the workers and departments can be achieved. This mutual
understanding leads to achievement of organizational objectives on time bound manner.
4. Principle of flexibility: This principle says that sales management and sales organizational
structure should be flexible in nature so that whenever change is required; it can be easily
changed and implemented for better results.
5. Principle of certainty: According to this work or each worker should be decided well in
advance and it should be kept certain. This makes the sales management effective. Here, it is
necessary that sales management should plan the sales area, territories and sales quotas well in
advance.

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6. Principle of control: According to this principle every work of management and workers must
be controlled so as to increase sales volume.
7. Principle of authority and responsibility: It lays emphasis on the fact every person in the
organization should know their authority and responsibility so that they can easily achieve
objectives, and their accountably can be verified.
8. Principle of unity of command: This principle means that sales management should be done
in such a way, so that each worker must follow the orders of one boss, or every worker must
have one boss. It is because a worker cannot perform two tasks given by two bosses at a same
time. If the worker has to follow the order of two bosses, than he has to see the priority to
avoid any confusion.
9. Principle of specialization: As per this principle, each employee must be given a job which
he/she can easily perform as per their specialty, skills, abilities and capabilities so that proper
outcome can be achieved and assured.
10. Principle of exception: This principle says that the management of sales should be done in
such a way that decision related to day today working operations must be taken by the workers.
Some decisions which are exceptionally very good or which have got more importance can be
accepted by the top management also.
Some points while be remembered while considered these principles:
Effective Customer relationship management (CRM)
Proper training and orientation programme for sales force
Integration of latest technology that help to develop Sales force automation.
Focusing on Team and creative selling.
Attainment of ethical standards.
Proper environmental and marketing analysis should be done.

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Marketing and Selling

Many people of
have different meanings in marketing management.
Understanding of the differences between selling and marketing is necessary for marketing
professional to be a successful marketing manager.
Selling is an action which converts the product into cash, but marketing is the process of meeting
and satisfying the customer needs. Marketing consists of all those activities that are associated
with product planning, pricing, promoting and distributing the product or service. Selling focuses
on the seller needs whereas marketing concentrates on the needs of the buyer.
Selling is the modern version of Exchange under the barter system. When the focus is on selling,
the company management thinks that after production of the product has been completed. It is the
task of the sales department to sell whatever the production department has manufactured.
tion on
for granted.
But marketing is a wide and all-pervasive activity to a business firm. The task commences with
identifying consumer needs and does not end, till feedback on consumer activities which
comprises production, packaging, promotion, pricing, distribution and then the selling.

Focus Marketing Selling

Marketing is consumer oriented and it
Meaning
.It is much more than selling. involves only the transfer of
goods and services

Objective The main objective of selling is to

needs and also the growth and stability of
maximize sales.
the organization.

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It is wider than selling and retailing as it

Its scope is limited to only
Scope includes marketing research, product
exchange of goods and services
planning and advertising apart from
among sellers and buyers.
selling the product.

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Process The process of marketing starts at pre- The process of selling starts after
production stage. production.
In marketing, emphasis is given on
product planning and the development of Here, emphasis is given to sell the
Emphasis the product so that it can meet and match goods and services which are
already produced.
satisfaction.
In selling producer is given
Supremacy Here, customer is treated as the King. He
superiority or supreme
is given the supreme importance.
importance.

Marketing Management and Sales Management

Sales management mainly deals wit

concerned with the actual sales of the product or service. Marketing management,
on the other hand, builds the brand. It makes the market aware of the products or services
available. Marketing resources and activities are used to create demand.
Basis of
Sales Management Marketing management
Difference
It means the planning, It is the analysis, planning and enforcement
organizing, motivating, and of marketing program for the satisfaction of
Meaning
controlling the functions of sales customers.
force
Sales management is a part of Marketing management includes sales
Scope
Marketing Management. management.
The birth of sales management The birth of marketing management took
Birth took place after some years of place in the fifth decade of the 20th century.
industrial revolution

Concept It is an old concept. It is a new concept.

Its main objective is to Its main objective is the maximum

maximize profits and sales. satisfaction of the customers wants and to
Objective
utilize the available resources in the best way
to increase the profitability.
The work of sales management The work of the marketing management
Start of Work starts with the production of the starts prior to the manufacturing of the
goods. goods.
The sales management lays The marketing management lays more
Satisfaction of emphasis on the satisfaction of emphasis on the future needs of the
wants the immediate wants of the customers.
customers.

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Seller v/s Sales manag Marketing management is buyers or

oriented
orientation
The inspection and control of The inspection and control of marketing
Inspection and
sales management is under department is under the control of General
control
marketing management. manager.
It lays emphasis on immediate It lays emphasis on long term profit.
Profit
profits.

Sales and Marketing Roles

Sales and marketing are business functions within the organization. The sales role and the
marketing role are very different in their scopes.
The job responsibilities of a sales manager include:

Assessing sales performance

Sales budget forecasting
Dealing with suppliers and distributors
Representing the company at exhibitions and events
Quantity and quality control of goods before sales.

Coordinating between various stakeholders like customers, investors, competitors, suppliers,

etc.
Designing and reviewing marketing
campaigns. Conducting market research.
Organizing various events.

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Selling Process
A selling process is a set of repeatable steps that a sales person takes to take a prospective buyer
from the early stage of awareness to a closed sale. y
from realizing they have a need for a product to making an actual purchase. And since the sales
process is a journey for a prospect, it is a roadmap for a sales person.

Step 1: Prospecting and qualifying: Before planning a sale, do your research to identify the
people or companies who might be interested in your product or service. This step is called
prospecting, the rest of the sales process. A lead is a potential
buyer. A prospect is a lead that is qualified or determined to be ready, willing and able to buy. The
prospecting and qualifying step relates to the needs awareness step in the buying process.
Methods:
Existing customers
Company sources (website, tradeshow, tele-prospecting)
External sources (suppliers, intermediaries, trade associations).

Step 2: Preparation/pre-approach: Before making a sales call, e-mail or visit, it is important to

do your homework by researching your customer and planning what you are going to say. A good
salesperson research
relevant background info about the individual or business.

Step 3: Approach: This is where you make a first impression. You do this by introducing
yourself, explaining the purpose of your call or visit, and establishing a rapport with your prospect.

the customer first. This usually involves introductions, making small talk, asking warm-up
questions, and generally explaining who you are and whom you represent.
There are three common approach methods:
Premium approach: Presenting your potential client with a gift at the beginning of your

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interaction.

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Question approach: Asking a question to get the prospect interested.

Product approach: Giving the prospect a sample or a free trial to review and evaluate your
service.

Step 4: Presentation and Demonstration: Your research and preparation pays off during the
presentation, when you propose your sales solution to your prospect. By the time you are ready to

solution the customer could use. The presentation should be tailored to the customer, explaining

Now is the time to focus on the benefits of your product or service. This might involve a product
demonstration, videos, PowerPoint presentations, or letting the customer look at or interact with
the product. At this point, the customer is using the information being shared as part of a suite of
possible solutions. They might be researching your offer compared to others. It is during this part
of the sale where you can use upselling and cross selling to engage the customer further.

additional benefits from an enhanced product or service offering. This is upselling.

Cross selling is pitching additional products that relate to the product your customer is considering
or purchasing (also known as suggestive selling).

Step 5: Handling objections:

customer to have some hesitations or concerns, known as objections. Good salespeople look at

Be prepared and use some of the following ideas:

solutions.
Ask questions about their views to find ways to address
them. Re-
Ideally you will be prepared for what customers will say, and be ready to respond.
For-example:
Obje
-

Step 6: Closing the sale: The important and sometimes challenging part of the sale is closing
it! This is where you actually have to ask if the potential customer is willing to make the purchase.
If your customer has been convinced your product or service will meet their needs, you close the

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sale by agreeing on the terms of the sale and finishing up the transaction.

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Step 7: Follow up: Follow-up is the last and important part of assuring customer satisfaction,
retaining customers and prospecting for new customers. This might mean sending a thank you
note, calling the customer to make sure the product was received in satisfactory condition, or

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Meaning of Sales Forecasting

Any forecast can be termed as an indicator of what is likely to happen in a specified future time
frame in a particular field. Therefore, the sales forecast indicates as to how much of a particular
product is likely to be sold in a specified future period in a specified market at specified price.
Accurate sales forecasting is essential for a business house to enable it to produce the required
quantity at the right time. Further, it makes the arrangement in advance for raw materials,

Forecasting means estimation of quantity, type and quality of future work e.g. sales. For any
manufacturing concern it is very necessary to assess the market trends sufficiently in ad-vance.
This is a commitment on the part of sales department and future planning of the entire concern
depends on this forecast.
Thus we can define sales forecasting as, estimation of type, quantity and quality of future sales.
Goal for the sales department is decided on the basis of this forecast and these forecasts also help
in planning future development of the concern. The sales forecast forms a basis for production
targets.
According to Candiff and Still, sales during a specified future
period, whose estimate is tied to a proposed marketing plan and which assumes a particular state of

Importance of Sales Forecasting

To determine production volumes considering availability of facilities, like equipment, capital,
manpower, space etc.
Taking decision about the plant expansion and changes in production mix or should it divert its
resource for manufacturing other products.
It helps in preparing production and purchasing schedules.
Accurate sales forecasting is a very good aid for the purpose of decision making.
It helps in guiding marketing, production and other business activities for achieving these
targets.

Factors affecting sales forecasting:

Some factors that need to be considered for you to predict your sales and revenues for each year.
The sales and revenues that your business generates will vary from year to year. However, it is
possible for you to forecast your business sales with relative accuracy.
Competition: To assess demand, it is the main factor to know about the existing and new
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competitors and their future programme, quality of their product, sales of their product.

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Opinion of the customers about the products of other competitors with reference to the product
manufactured by the firm must also be considered.
Changes in Technology: With the advancement of technology, new products are coming in

change of technology.
Government Action: When the government produces or purchases then depending upon the
government policy and rules, the sales of the products are also affected.
Factors Related to the Concern Itself: These factors are related to the change in the capacity
of the plant, change in price due to the change in expenditure, change in product mix etc.
Current Global Conditions: The world is a global village. What happens in one corner of the
world will likely affect a business at the other end of the world.

Methods of Sales Forecasting

Sales forecasting method is a procedure for estimating how much of a given product can be sold if
a given marketing program is implemented.

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How to Improve Forecasting Accuracy?

Sales forecasting is an important and difficult task. Following guidelines may help in improving its
accuracy-
Use multiple (2or3) forecasting methods.
Select suitable forecasting methods, based on application, cost, and available time.
Use few independent variables / factors, based on discussions with salespeople & customers.
Establish a range of sales forecasts minimum, intermediate, and maximum.
Use computer software forecasting packages.
Why sales forecasts are important
Sales forecasts matter when planning for the future. Internally,
forecasts are necessary when determining:
 Budgets
 Production cycles
 Supply chain purchasing and production capacity

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Top 6 Methods of Forecasting

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Forecasting methods can be broadly classified into:
1. Qualitative Methods – These methods are based on emotions,
intuitions, judgments, personal experiences, and opinions. This
means that there is no math involved in qualitative forecasting
methods. Delphi Method, Market Survey, Executive Opinion,
Sales Force Composite are part of this type of forecasting.
2. Quantitative Methods – These methods depend wholly on
mathematical or quantitative models. The outcome of this
method relies entirely on mathematical calculations. Time
Series and Associative Models are a part of this type of
forecasting.

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#1 – Delphi Method

The agreement of a group of experts in consensus is required to

conclude in the Delphi method. This method involves a
discussion between experts on a given problem or situation. An
argument or brainstorming is done to complete that everyone
involved in the debate agrees to.
#2 – Market Survey

In a market survey, interviews and surveys of customers are

made to understand the task of the customer and tap the trend
well in advance to deliver the right product or service according
to the changing needs of the customer.
#3 – Executive Opinion

As the name suggests, the executives or managers are involved

in such forecasting. This method is very similar to the Delphi
method; however, the only difference here is that the executives
may or may not be experts of the matter in question, albeit they
have the experience to understand the problem or situation and
formulate a forecasting method that would bring out the best
possible result.
#4 – Sales Force Composite

The information and intuition of the salesperson determine the

needs of the customer and estimate the sales in the particular
region or area assigned to the salesperson. This information is
vital in forecasting the needs of the customer, which can be
used to make necessary changes in the business to meet the
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needs of the customer and identify the sales volumes

beforehand.
#5 – Time Series Models

Time series models look at historical data and identify patterns

in the past data to arrive at a point in the future based on these
historical values. Since the historical data has a pattern, it
becomes evident that the data in the future should also have a
pattern, and this method looks at cracking the pattern in the
future so that there is very little deviance from the actual
calculations and the outcomes in the real world. Below is the
example of a time series model
Example – Straight Line Method
 Sales territories, quotas, and strategies
Sales Force Characteristics

Effective sales representatives have a style unique to their

personalities, interests and experiences. Moreover, different
types of sales teams--executives, telemarketers, door-to-door
representatives--will typically have different characteristics. At
the same time, however, all high-performance sales teams tend
to share a few fundamental traits. Some are developed over
years of experience in a variety of social, academic and
professional environments; others can be taught and learned in
quality sales workshops.
Confident

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1. Members of an effective sales force are confident in their

abilities as salesmen and in the value of their product or
service. Their confidence is evident in body language, direct
eye contact, enthusiasm and assumption of the sale. Potential
clients will tend to feel persuaded to believe in the quality and
value of a product when they see the sales representative is
genuinely sold on the product.
Organized
Organizational skills are extremely important in sales,
especially when dealing with dozens of clients with different
personalities, needs and timetables. An organized sales force is
punctual, prepared for anything and on top of all accounts,
goals and targets. Disorganization can result in lost leads and
sales opportunities; it can also cause a lack of preparation for
sales meetings which can offend clients and result in higher
stress.
Motivated
Effective sales representatives are motivated to sell. This is due
to many factors like commission incentives; respect and
recognition at the office; loyalty to the company they represent;
and perhaps most importantly, a sincere belief they are
providing their clients with a product that will benefit them in
some way. Motivation and drive will help representatives
maintain their energy and enthusiasm levels, and focus their
will on reaching their sales targets and professional goals.

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Professional
In sales, professionalism can relate to the way you dress and
take care of yourself (hygiene), the caliber of your language,
the timing of your sales calls and your ethics when dealing
with clients. An effective sales force is sharply dressed, polite
and courteous, considerate of a client’s time and honest and
forthright in all dealings. To hire sales representatives not
exemplifying these attributes is to do your product and
company a complete disservice.
Solution-Oriented
Effective sales representatives see challenges, not problems,
and never let a challenge stop them from reaching a
professional goal. When they run into a challenge, they are
motivated to look for solutions instead of getting discouraged
and frustrated. This characteristic is especially important for
sales leaders who are looked to for support and guidance.
Enthusiastic
High-performance sales teams are enthusiastic. They exhibit
positive energy that is infectious; this helps them disarm tough
customers and increase their sales numbers.

Top 5 skills for a career in sales

 Confidence - maintaining a positive attitude.
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 Resilience - communicating with conviction.

 Active listening - understanding the customers' needs.
 Rapport building - selling your personality.
 Entrepreneurial spirit - continual self-improvement.
11 Benefits of a Sales Management System
 Improved Organization. ...
 Better Scheduling. ...
 Time-Saving Automation. ...
 Templates for Faster Correspondence. ...
 Minimal Data Entry. ...
 Better Lead Management and Conversion. ...
 Enhanced Team Collaboration. ...
 Improved Inventory Management.

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