BBA V SEM: SALES MANAGEMENT

UNIT I : Introduction to Sales Management: Concept, Evolution of sales function, Objectives of sales
management positions, Functions of sales manager and their relation with other executives.

CONCEPT OF SALES, PERSONAL SELLING, SALES MANAGEMENT AND

SALESMANSHIP

SALES:
In daily life, we deal with different transaction in terms of selling and purchasing of goods and services.
Sales refers to the exchange of goods or services for an amount of money or its equivalent in kind.
Sales can be Business-to-Consumer (B2C) sales, which involve selling goods and services directly to
consumers; Business-to-Business (B2B) sales, that involve selling goods and services directly to other
businesses; or Enterprise sales, which involve selling complex goods or services directly to large
companies. Sales activities are focused on converting prospects to actual paying customers. It revolves
around reaching to the customer, directly interacting with them to convince and persuade them to
purchase the product, and helps an organization in achieving its business goals.

SALES MANAGEMENT:
Sales Management refers to the direction of sales force personnel. It is defined as all activities,
processes, and decisions involved in managing the sales function in an organization. Numerous tasks
are involved in managing personal selling which includes setting objectives; organizing the sales force;
recruiting, selecting, training, and compensating salespeople; and evaluating the performance of
individual salesmen.

PERSONAL SELLING:
Personal selling consist of contacting prospective buyers personally. Personal selling is a direct, face
to face, seller to buyer conversation where relevant fact about the product and the firm are
communicated to the prospect, so that he or she may take buying decisions. Personal Selling aims at
bringing the right products to the right customers. It takes several forms including calls by company’s
sales representative, assistance by sales clerks etc.

SALESMANSHIP:
Salesmanship is one of the skills used in personal selling. ‘Salesmanship is the art of successfully
persuading prospects or customers to buy products or services from which they can derive suitable
benefits, thereby increasing their total satisfaction’. Salesmanship is a seller initiated effort that
provides prospective buyers with information, and motivates them to make favourable decisions
concerning the seller’s products or services. Salesmanship is the art of selling goods and services to
the buyer. It is the power or ability to influence people to buy and to turn a prospect into a buyer.

Summing up:

Personal Selling may be defined as persuading people to satisfy their wants and needs by buying
goods and services. The person, who does this act, is called the Salesman, the result of this action is
Sales, the skills used by the person to conduct the sales is called Salesmanship, while these activities
of the person are supervised and controlled by Sales Management.

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 DIFFERENCES BETWEEN SALES AND MARKETING

Sales and marketing are two closely related but distinct functions within a business that work together
to drive revenue and promote products or services. Following are the key differences between sales
and marketing:

BASIS MARKETING SELLING

Meaning Marketing means serving customer Selling means transferring of
demands by offering and selling right ownership of goods from the
product, at right price, in right amount, at manufacturers to buyers in exchange of
right place and to the right customers. money and money’s worth.

Emphasis In marketing, the emphasis is on the Sales only focuses on the product, i.e
consumer needs and wants. Marketing converting consumer demand to match
targets on meeting the consumer the products.
demands.

Philosophy Marketing views business as a consumer Sales views business as a goods

satisfying process. producing process.

Duration of Marketing starts before production and Selling starts after production and ends
activity continues after sale. Post-sale research is with the sale of goods or service.
conducted to know about the consumer
satisfaction with the product.

Scope Marketing is wider in scope as it includes Selling is narrower in scope. Selling is

various functions. a part of marketing.

Orientation Marketing includes conduction research Once the product is out in the market,
for identifying the needs of the customer, it is the task of the sales person to
developing and promoting the product persuade the customer to buy the
and create awareness about the product product. Sales means converting the
among the consumers. prospects into purchases and orders.

Outlook Marketing has long term perspective. It Selling has a short term perspective. It
involves a longer process of building a only involves a short term process of
brand name and pursuing the customer to finding the target consumer and selling
buy it even if they do not need it. them the products.

Interaction Marketing as such is not direct and it Sales are interpersonal interactions.
uses various methods like advertising, Sales involve one-on-one meetings,
brand marketing, public relations, and calls and networking.
direct marketing for creating awareness
about the product.

Technology In Marketing, the emphasis is on The emphasis is on staying with low-

innovation and providing better value to cost technology for reducing costs.
the customers by adopting better/
superior technology.

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 IMPORTANCE OF SALES / BENEFITS OF SELLING ACTIVITIES:

Selling is the lifeblood of a business, driving revenue, profitability, growth, and overall success.
Effective sales strategies are essential for achieving a competitive advantage, maintaining customer
satisfaction, and achieving long-term sustainability. The different benefits of selling activities are:

1. Employment Opportunities and Economic Impact:

Strong sales have a direct impact on job creation and economic growth. Businesses with healthy
sales volumes are more likely to hire additional staff to meet increased demand. As a company
expands and thrives, it contributes to local and national economies by creating jobs, increasing
consumer spendings, and driving economic activity. Through their efforts to create and stimulate
demand, salespeople are said to be the life and blood of a productive economic-system.

2. Revenue Generation and Financial Stability:

Sales is the fundamental driver of revenue for any business. Revenue is the lifeblood of an
organization, as it fuels all aspects of operations, including paying employees, covering overhead
costs, investing in research and development, and expanding into new markets. Without consistent
and substantial sales, a company would struggle to meet its financial obligations and maintain
stability.

3. Business Survival, Market Share and Competitive Advantage:

The survival of a business hinges on its ability to generate sales. Even the most innovative products
or services will fail if they are not effectively marketed and sold. Companies with strong sales often
lead in terms of market share. A larger market share can lead to increased brand recognition and
competitive advantages. It provides businesses with the leverage needed to negotiate better deals
with suppliers, secure prime shelf-space in retail settings, and influence industry trends.

4. Marketing Feedback, Customer Insights and Relationship Building:

Sales interactions are invaluable sources of customer insights. Through these interactions,
salespeople gain first-hand knowledge of customer preferences, attitudes, and behaviours. This
information can guide product development, marketing campaigns, and customer service
enhancements. Positive sales experiences also foster customer relationships, leading to repeat
business and word-of-mouth referrals. Sales outcomes are crucial indicators of the effectiveness of
marketing strategies. If sales are not meeting expectations, it suggests that marketing efforts need
adjustment.

5. Investor Confidence and Funding Opportunities:

Investors and stakeholders are more likely to be confident in a business that consistently generates
sales. A track record of successful sales growth demonstrates that the company has a marketable
product or service and can generate returns on investment. This confidence can attract external
funding, helping the business in expanding and pursuing new opportunities.

6. Exploration of New Markets and Territories:

Strong sales enable businesses to explore new markets, regions, and territories. Expanding into new
areas can help diversify a company's revenue streams and reduce dependence on a single market.
Effective sales strategies are essential for breaking into these new markets and capturing the
attention of potential customers.

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 CONCEPT OF SALES MANAGEMENT

Originally, the term ‘Sales Management’ is referred to the management of sales force personnel. But, it
has gained a significant position in today’s world. Sales Management is now defined as all activities,
processes, and decisions involved in managing the sales function in an organization. Sales
management encompasses the planning, organization, coordination, direction, and control of a
company's sales activities to achieve specific business goals and objectives. It involves overseeing the
entire sales process, from identifying potential customers to closing deals, while also managing the sales
team, resources, and strategies.

Effective sales management requires strong leadership, communication skills, strategic thinking, and
the ability to adapt to changing market dynamics. Sales management plays a critical role in ensuring
that a company's products or services are effectively marketed, sold, and delivered to the customers,
ultimately contributing to revenue growth and business success.

DEFINITIONS:
Sales management refers to ‘the process of planning, organizing, directing, and controlling a
company's sales activities and resources to achieve specific sales goals and objectives’. It involves
overseeing a team of sales personnel, setting targets, developing strategies, and implementing tactics
to ensure that products or services are effectively marketed, sold, and delivered to the customers.

• The American Marketers Association (AMA) has defined Sales Management as: The planning,
direction, and control of the personal selling activities of a business unit including recruiting,
selecting, training, assigning, rating, supervising, paying, motivating, as all these tasks apply
to the personal sales-force.

• According to Kotler and Armstrong, "Sales management involves the planning, direction,
and control of personal selling activities, including recruiting, selecting, training, motivating,
compensating, and evaluating the sales force."

• According to Cundiff, Still, and Govoni: "Sales management is the planning, organizing,
staffing, directing, and controlling of the personal selling component of the marketing mix."

These definitions highlight the key aspects of sales management, which involve planning, organizing,
directing, controlling, and optimizing the sales efforts of an organization. Sales management
encompasses a range of activities that aim to maximize sales performance, revenue generation, and
customer satisfaction through effective leadership and strategic decision-making.

OBJECTIVES OF SALES MANAGEMENT

Sales management is all about managing sales teams in a way so that the desired sales of products and
services can be met. The objectives of sales management encompass a range of goals and outcomes
that contribute to the overall success and growth of a business. These objectives guide the activities
and strategies of the sales team and sales managers.

Following are some of the objectives of Sales Management:

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1. Efficient Sales Performance:
Sales management ensures that resources, such as personnel, time, and budget, are allocated
effectively to support the sales team. Monitoring team performance, providing training, and
fostering a motivated work environment are objectives that contribute to a high-performing sales
team. Sales management also seeks to streamline and optimize the sales process. This involves
identifying bottlenecks, reducing inefficiencies, and enhancing the overall speed and effectiveness
of the sales cycle.

2. Generate Revenue and Maximize Profitability:

The primary objective of sales management is to achieve the sales targets and revenue goals set by
the organization. These targets are usually based on the company's financial and growth objectives.
By meeting or exceeding these targets, sales management ensures a steady flow of revenue, which
is crucial for sustaining and expanding the business. Effective sales management also strives to
optimize profitability. By carefully managing pricing, negotiating terms, and minimizing costs,
sales managers contribute to maximizing the profit earned from each sale.

3. Expanding Market Share:

Sales management aims to increase the company's market share by capturing a larger portion of the
market compared to competitors. This is important because a higher market share often correlates
with increased brand recognition, bargaining power, and profitability.

4. Customer Acquisition and Retention:

Sales management focuses on acquiring new customers and retaining the existing ones. Acquiring
new customers expands the customer base and generates more revenue for the business. Retaining
existing customers is equally vital as loyal customers tend to make repeat purchases, provide
referrals, and contribute to stable revenue. Sales management aims to ensure that the sales process
is customer-centric, delivering value and meeting customer needs.

By working towards the above objectives, sales management plays a vital role in driving business
success and maintaining a competitive edge in the market.

EVOLUTION OF SALES MANAGEMENT FUNCTION

The evolution of sales management can be traced back to the early 1900s when businesses began to
recognize the importance of sales as a separate function within the organization. Over the decades,
sales management has been shaped by changes in business practices, technological advancements, and
shifts in consumer behaviour.

Sales management initially focused on personal relationships and one-on-one interactions. Salespeople
were often seen as persuasive individuals who built rapport with customers. The process was largely
manual, involving face-to-face interactions and limited communication tools. With the rise of mass
production, businesses needed to manage larger sales teams, leading to the adoption of more structured
sales management practices. As markets became more competitive, the focus shifted to building
customer relationships. The digital age brought about a wealth of data, enabling sales managers to
make more informed decisions. The field continues to adapt and innovate to meet the demands of a
dynamic and interconnected global marketplace.

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The evolution of sales management function can be broadly divided into five phases.

Phase 1: The Entrepreneurial Phase (1900-1930)

• During the early 1900s, businesses were primarily small and entrepreneurial in nature. Sales
managers were mainly entrepreneurs who were responsible for managing the sales team.
• The sales function was not viewed as a distinct and separate activity.
• Sales were largely dependent on personal selling, which was predominantly informal and
unstructured in nature.

Phase 2: The Professional Phase (1930-1960)

• During the 1930s, businesses began to adopt a more formal and structured approach to sales
management.
• The focus shifted from personal selling to creating a sales force that could sell products in a more
efficient and effective manner.
• Sales managers began to use new tools and techniques such as advertising, sales promotions, and
market research to identify customer needs and preferences.

Phase 3: The Sales Management Phase (1960-1980)

• During the 1960s and 70s, businesses began to view sales management as a critical function within
the organization.
• The focus was on managing the sales force more effectively and efficiently to achieve the sales
targets.
• New tools and techniques such as sales forecasting, sales training and performance appraisal were
now being used by the sales managers to improve the performance of the sales teams.

Phase 4: The Strategic Sales Management Phase (1980-2000)

• During the 1980s and 1990s, businesses began to adopt a more strategic approach to sales
management.
• The focus shifted from achieving short-term sales targets to building long-term customer
relationships.
• Customer Relationship Management (CRM) and Sales Force Automation became popular tools to
improve the customer experience and increase customer loyalty.

Phase 5: The Relationship Management Phase (2000-Present)

• In the present era, businesses are focusing on building long-term relationships with customers.
Sales managers are playing a critical role in building and maintaining these relationships.
• The focus is on creating a customer-centric sales strategy that meets the needs and preferences of
the customers. Building trust, delivering value, and solving customer problems have become
integral to modern sales strategies.
• Sales managers are using new tools and techniques such as social media, mobile marketing, and
e-commerce to connect with customers and build strong relationships with them.
• Modern sales management is also focusing on ethical and sustainable practices. Businesses are
recognizing the importance of transparency and authenticity in building long-term customer
relationships.
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 FUNCTIONS OF SALES MANAGERS AND THEIR RELATION WITH OTHER
EXECUTIVES

Sales Managers are responsible for organizing the sales effort, both within and outside their
Companies. Within the company, the sales manager builds formal and informal organizational
structures that ensure effective communication not only inside the sales department, but in its relations
with other organizational units. Outside the company, sales manager serves as a key contact with
customers and other external publics and is responsible for building and maintaining an effective
distribution network. Sales managers are responsible for sales decisions, such as budgeting, quotas and
territories. Their tasks include building a sales plan, and hiring and firing salespersons, assigning sales
training, assigning quotas, assigning sales territories, mentoring the members of sales team etc. Sales
manager helps to respond proactively and effectively to the customers.

FUNCTIONS OF A SALES MANAGER

Sales managers play a crucial role in overseeing and guiding a sales team to achieve their targets and
contribute to the overall success of a business. Some of the key functions of a sales manager are:

1. Setting Sales Goals:

Sales managers establish clear and achievable sales goals and targets based on the company's
overall objectives. They break down these goals into measurable targets for individual sales team
members, and communicate these goals clearly to the team to ensure everyone understands what
is expected from them. These goals provide direction to the sales team and help in measuring their
performances.

2. Developing Sales Programs:

The sales manager develops strategic plans to reach sales targets. This involves identifying target
markets, defining sales territories, setting pricing strategies, and determining sales tactics. These
detailed sales programs are designed to improve competitive positions, reduce selling and other
distribution expenses, and reach established sales goals.

3. Manpower Planning, Recruitment and Selection of Sales Force:

The sales manager sees to it that there is an adequate supply of sales executive talent for
replacements in the sales department. He identifies promising sources for the recruitment of new
sales personnel and sets standards for selection of the most promising recruits. He is responsible
for hiring qualified sales representatives with the right skills and attributes. He assigns roles,
delegates tasks, and provide coaching to ensure each team member is equipped to perform
effectively. He conducts regular performance reviews, providing constructive feedback and
identifies the development areas.

4. Training Sales Personnel:

The sales manager designs and delivers training programs that enhance the skills of sales
representatives so as to achieve a high-level of performance in the shortest possible time. He
provides ongoing product knowledge training to ensure that salespeople are well-versed in the
features and benefits of the products and services they are required to sell. He conducts workshops
on effective sales techniques, objection handling, and negotiation strategies. At the same time the
sales manager also provides for the training of senior sales personnel, so as to improve their
performance levels and to prepare them for possible promotions.

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5. Performance Monitoring of Sales Personnel:
Sales managers track individual and team performance against set targets. They conduct regular
performance reviews, providing constructive feedback and identify development areas. They
analyze sales data and use key performance indicators (KPIs) to evaluate progress and identify
areas for improvement in order to maximize results. They nurture a positive team culture that
encourages collaboration and healthy competition.

6. Keeps the Sales Force Motivated:

The sales manager ensures that sales personnel are properly motivated, so as to achieve optimum
sales performance, by establishing sound basis for each individual’s self-development. He
develops incentive programs and commission structures to motivate the sales team and ensures
that rewards are in line with responsibilities and performance. He recognizes and rewards the top
performers to boost their morale and foster healthy competition.

7. Supervises and Controls the Sales Force:

The sales manager establishes a system of sales supervision that controls waste and inefficiencies.
He reviews and approves sales and expense budgets and periodically evaluates the performance of
all sales activities in relation to budget and sales goals and takes corrective actions as required.
The sales manager delegates authority and develops control records and performance standards to
permit a proper balance of time spent on various activities in the sales department.

8. Maintains Internal and External Relations:

The sales manager establishes a system of communication with other sales personnel that keeps
them informed of overall departmental sales objectives, results, and problems. He develops
effective working relations with other department heads and the top management so that
significant sales developments can be translated into appropriate courses of action. He also keeps
the senior personnel of marketing informed on sales results and future plans of operation. The sales
manager coordinates with the production personnel so that production rates and inventories are
geared as closely as possible to actual sales needs.

RELATIONSHIP BETWEEN SALES AND OTHER DEPARTMENTS

The relationship between the sales department and other departments within an organization is crucial
for achieving overall business success. The sales department in a business must work collaboratively
with other departments to achieve success. They must build a relationship with marketing, finance,
production and the supply chain to allow them to operate in an efficient and effective way.

Following is the breakdown of the relationship between the sales department and other key
departments within an organisation:

1. Relationship with Marketing

Marketing and sales work together very closely in a business. The role of marketing is to attract a
customer to the business and develop an interest in their products. Marketing also ensures that the
sales department is selling products and services that meet the wants and needs of customers.
Marketing materials, content, and campaigns have to be aligned with sales strategies and target
audience needs. Sales provides valuable feedback to marketing about the quality of leads, the
effectiveness of messaging, and customer preferences.

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2. Relationship with Finance
The finance department provides a budget and an amount of money that allows the sales
department to function effectively, while also monitoring the sales made and the revenues
achieved. Finance department closely monitors the costs that the business has, and ensures the
sales department is selling enough products for the business to achieve a profit. The finance
department monitors the revenue and expenses related to sales activities to ensure profitability and
adherence to financial targets. Finance department collaborates with sales department to design
commission structures, bonuses, and incentives that motivate the sales team while aligning with
the company's financial goals.

3. Relationship with Production

Sales teams play a role in introducing new products or features to the market, conveying their value
to customers. Salespeople interact directly with customers and often hear their needs and pain
points. This feedback is crucial for production to create offerings that meet customer demands.
Production department has to ensure that their products are of a high quality and represent the brand
effectively. This can avoid complaints and returns by customers, and make the role of the sales
department much easier. The Production department need to communicate effectively with the sales
department to inform them of how many products they can make within a certain time period. This
would allow the sales department to inform customers of any delay and avoid disappointments.

4. Relationship with Operations & Supply Chain

Effective communication between sales department and operations ensures that orders are fulfilled
promptly and accurately. The supply chain gains information from the sales team to allow them to
supply the right goods and services to the correct customers. Sales forecasts help operations and
supply chain teams in managing inventory levels and avoiding stockouts or overstocking
situations. Sales department needs to be aware of production lead times, in order to provide
accurate delivery estimates to the customers. The supply chain ensures that customers receive the
products within the time period promised by the sales team.

5. Relationship with Human Resources:

Sales and HR collaborate in recruiting and selecting sales team members with the required set of
skills and qualification. HR supports sales by providing training programs and resources for skill
development and continuous learning. HR assists in setting performance metrics, conducting
reviews, and addressing personnel issues within the sales team for proper performance management
of the sales personnel.

6. Relationship with Customer Service:

A seamless transition from sales to customer service ensures a consistent customer experience after
the sale. Sales personnel might encounter customer issues or concerns during the sales process. A
strong connection with customer service ensures quick resolution and customer satisfaction.
Customer service can identify opportunities to recommend additional products or services based
on customer needs, contributing to revenue growth.

Hence the relationship between the sales department and other departments is interconnected and
interdependent. Collaboration, communication, and a shared understanding of goals can result in
improved customer experiences and business success.