Meaning & Objective of sales management; Meaning & Personal selling objectives; theories of selling; personal selling process; sales force; compensation and motivation of sales force

1. By: Kanchan Parashar

2. INTRODUCTION TO SALES
MANAGEMENT
• Sales management is a business discipline
which is focused on the practical application
of sales techniques and the management of a
firm's sales operations. It is an important
business function as net sales through the sale
of products and services and resulting profit
drive most commercial business.

3. DEFINITION OF SALES MANAGEMENT
• Sales management is defined as “the
planning, direction and control of personal
selling, including recruiting, selecting,
equipping, assigning, routing, supervising,
paying and motivating as these tasks apply to
the personal sales force”
The American Marketing Association

4. NATURE & IMPORTANCE OF SALES
MANAGEMENT
• Sales management helps to achieve the
organizational objectives.
• The main objectives of sales management is
that products should be sold at that price
which realizes profits.
• Buyers and sellers both have same types of
business relationships. This relationship is
based on exchange of goods, services and
money.

5. NATURE & IMPORTANCE OF SALES
MANAGEMENT
• Sales person develops a positive relationship
with the customers. The role of sales team is
interdependent and success of one team
member depends on the other.
• The sales team continuously monitor the
customer preference, competitors, situation,
government policy and other regulatory
bodies.

6. OBJECTIVES OF SALES MANAGEMENT
• Sales Management entails numerous objectives
which are executed by sales managers. There are
mainly three such objectives
• Sales Volume
• Contribution to profits
• Continuous Growth

7. SALES VOLUME
• Achieving sales volume is the first objective of
Sales. The word “volume” is critical because
whenever a product sales start, the market is
supposed to be a virgin market.
• Thus there needs to be optimum penetration
so that the product reaches all corners of the
region targeted. Ultimately, penetration levels
can be decided on the basis of sales volume
achieved.

8. CONTRIBUTION TO PROFITS
• Sales brings turnover for the company and this
turnover results in profits. Naturally, sales has
a major contribution to profit and it is
categorized as a profit function in several
organizations.

9. CONTINOUS GROWTH
• A company cannot remain stagnant. There are
salaries to be paid, costs have been incurred
and there are shareholders to be answered.
So a company cannot survive without
continuous growth.
• If there is no innovation at the product level or
at the company level, then the company has
to be blamed. But if the products are good,
and still the penetration is not happening,
then it is the fault of sales manager and sales
executives.

10. MEANING OF SALES FORCE
• A "sales force" is a group within a company
that conducts sales.
• Managing the Sales force involves two key
personal selling decisions, which are;
Size of sales force: Depends upon the number
of customer a company wants to reach.
Selling styles

11. COMPENSATING THE SALESFORCE
• A good compensation plan should consider objectives
from the company’s and salespeople’s viewpoint.
• Objectives of compensation plan from the company’s
viewpoint
• To attract, retain, and motivate competent salespeople
• To control salespeople’s activities
• To be competitive, yet economical: It is difficult to
balance these two objectives
• To be flexible to adapt to new products, changing
markets, and differing territory sales potentials

12. OBJECTIVES OF COMPENSATION PLAN
FROM SALESPERSON’S VIEWPOINT
• To have both regular and incentive income
• To have a simple plan, for easy understanding
• To have a fair payment plan: Fair or just
payment to all salespeople is ensured by
selecting measurable and controllable factors

13. COMPENSATING THE SALESFORCE
Factors influencing the design of a
compensation plan
Financial Stability of the firm
Size of the market
 Nature of the Product
Types of Compensation Plan
Financial Compensation
Non Financial Compensation

14. FINANCIAL COMPENSATION
• Straight Salary Plan
• Straight Commission Plan
• Bonus and Incentive
• Salary plus Incentive Plan( Combination Plan)
• Drawing account and Commission Plan

15. NON FINANCIAL COMPENSATION
• Promotions
• Recognition Programmes
• Fringe Benefits
• Expense Accounts
• Perks
• Sales Contests

16. SALES FORCE MOTIVATION
• Motivation is derived from Latin word
“movere”, which means “to move”.
• Motivation is the effort the salesperson
makes to complete various activities of the
sales job.
• 10-15 percent salespeople are self-motivated.
• Importance of motivating salespeople is
recognized, because financial performance of
the company depends upon the achievement
of sales volume objective

17. MOTIVATIONAL THEORIES
• Motivational theories or behavioural concepts
that are relevant to motivation of salespeople
are:
• Maslow’s hierarchy of needs
• Hertzberg’s dual-factor
• Vroom’s expectancy
• Churchill, Ford, and Walker model of sales
force motivation, shown here under:

18. SELECTING A MIX OF MOTIVATIONAL
TOOLS
• Sales manager should know each salesperson
and understand his / her specific needs.
• For designing or selecting a mix of
motivational tools, a compromise between
differing needs of customers, salespeople, and
the company management becomes
necessary
• Motivational tools are divided into (1)
financial, and (2) non-financial. These are
shown in the next slide

19. MOTIVATIONAL TOOLS IN A
MOTIVATIONAL MIX
FINANCIAL
Salary
Commission
Bonus
Fringe Benefits
Combinations
NON FINANCIAL
Promotion
Job enrichment
Job Security
Sales Meeting
Personal growth
oppurtunities

21. MEANING OF PERSONAL SELLING
• Personal selling is selling technique involved
between person to person and between the
prospective buyer and seller.
• Personal selling consists of human contact and
direct communication rather than impersonal
mass communication.
• Personal selling involves developing customers
relationship, discovering & communicating
customer needs, matching the appropriate
products with these needs.

22. MEANING OF PERSONAL SELLING
• Personal selling is the most significant
promotional tool in terms of number of
people employed.
• Personal selling is so important because the
sales person is the catalyst that making
reaction in the Marketing activities.

23. DEFINITIONS OF PERSONAL SELLING
• According to American Marketing Association:-
“Personal Selling is the oral presentation in a
conversation with one or more prospective
purchases for the purpose of making sales , it is
the ability to persuade the people to buy goods
and services at a profit to the seller and benefit
to the buyer.”
• According to Philip Kotler:- “As face to face
interaction with one or more prospective
purchasers for the purposes of making the sales.”

24. PRINCIPLES OF PERSONAL SELLING
• In present times, personal selling is becoming
more and more customer oriented be cause
no more do are have a buyer’s market. Three
major principles of personal selling are :
• i) Professionalism
• ii) Negotiations
• iii) Relationship marketing

25. PROFESSIONALISM
• The modern professional approach to
salesmanship is customer oriented. The act of
selling is projected as aimed at solving the
problems of the customers. Such an approach is
satisfying the customers more there by making
sales activity more and more effective.
• The sales managers realize the importance of
training of the sales force and spend huge sums
of money each year for the same.
• The aim at sharpening the skills of a salesman to
make him more and more effective.

26. NEGOTIATIONS
• Negotiation skills are one of the most
important skills of a salesman. The two parties
need to reach agreement on price and other
terms of sales.
• A good salesman wins the order without
making concessions that will hurt his
profitability. Also, he must not unduly extract
the customer because such as approach will
be detrimental in long run.

27. RELATIONSHIP MARKETING
• The relationship approach is long term and
establishes a relationship between the buyer and
the seller. Both understand each other and
support each other.
• Sales managers have realized that it is far easier
to get sales from an old customer as compared to
getting the same from a new customer. So, it is
important to retain the existing customers.
Personal selling is the most effective method of
building relationships.

28. OBJECTIVES OF PERSONAL SELLING
• Personal selling has two types of objectives-
Qualitative objectives
Quantitative objectives

29. QUALITATIVE OBJECTIVES
• To do the entire selling job (as when there are no
other elements in the promotional mix).
• To “serve” existing accounts {i.e., to maintain
contacts with present customers, take orders
etc.).
• To search out and obtain new customers.
• To secure and maintain customer’s cooperation in
stocking and promoting the product line.
• To keep customers informed of changes in the
product line and other aspects of marketing
strategy.

30. QUALITATIVE OBJECTIVES
• To assist customers in selling the product line (as
through “missionary selling”).
• To provide technical advice and assistance to
customers (as with complicated products and
where products are specially designed to fit
buyers’ specifications).
• To assist with (or hand) the training of
middlemen’s sales personnel.
• To provide advice and assistance to middlemen
on various management problems.
• To collect and report market information of
interest and use to company management.

31. QUANTITATIVE OBJECTIVES
• To obtain sales volume in ways that contribute
to profit objectives.
• To keep personal-selling expenses within
certain limits.
• To secure and retain a certain share of the
market.
• To obtain some number of new accounts of
given types.

32. PROCESS OF PERSONAL SELLING
Prospecting and qualifying
Pre Approach
Approach
Presentation & Demonstration
Closing the Sale
Follow up

33. THEORIES OF SELLING
• There are four theories of Selling:
AIDAS
RIGHT SET OF CIRCUMSTANCES
BUYING FORMULA
BEHAVIOURIAL EQUATION

34. AIDAS THEORY
• A- Securing Attention
• I- Gaining Interest
• D- Kindling Desire
• A- Inducing Action
• S- Building Satisfaction

35. RIGHT SET OF CIRCUMSTANCES
THEORY
• It is also called the “situation-response”
theory.
• The major emphasis of the theory is that a
particular circumstance prevailing in a given
selling situation will cause the prospect to
respond in a predictable way. The set of
circumstances can be both internal and
external to the prospect.
• A sales person needs to be well skilled to
handle the set of circumstances

36. BUYING FORMULA THEORY
• The name “buying formula” has been given by
the late E.K. Strong. solution
• The theory is based on the fact that there is a
need or a problem for which a solution must
be found which would lead to purchase
decision, as shown below:
Need Solution Purchase Satisfaction

37. BUYING FORMULA THEORY
• The buyer’s needs or problems receive major
attention, and the salesperson’s role is to help
the buyer to find solutions. This theory
purports to answer the question: What
thinking process goes on in the prospect's
mind that causes the decision to buy or not to
buy?

38. BEHAVIOURIAL EQUATION
THEORY
Using a stimulus response model and
incorporating findings from behavioral
research, J.A. Howard explains buying
behavior in terms of the purchasing decision
process, viewed as phases of the learning
process.
Four essential elements of the learning process
included in the stimulus-response model are:
1. DRIVES:
a) INNATE DRIVES
b) LEARNED DRIVES

39. BEHAVIOURIAL EQUATION
THEORY
. CUES:
a) PRODUCT CUES
b) INFORMATIONAL CUES
3. RESPONSE
4. REINFORCEMENT

40. BEHAVIOURIAL EQUATION
THEORY
Howard incorporates these four elements
into an equation
B =P * D * k * V
Where
B= response or internal response tendency
P= predisposition or the inward response tendency
K= incentive potential
V= intensity of all the cues