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Sales Management

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Sales Management

1. Sales – Cost of Sales = Gross Margin

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Sales Management

1. Sales – Cost of Sales = Gross Margin

GM – Expenses = Net Profit

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Sales Management

1. Sales – Cost of Sales = Gross Margin

GM – Expenses = Net Profit

2. Volumes vs Profits

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Sales Management

1. Sales – Cost of Sales = Gross Margin

GM – Expenses = Net Profit

2. Volumes vs Profits

3. Marketing vis-à-vis Sales

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4. Responsibilities

Sales Planning / Budgeting Estimating Demand / Forecasting Sales Understanding the Sales Organization Recruiting / Training Selecting Sales Force Compensating / Motivating / Leading Sales Quotas Analyzing Sales Cost / Volume / Profit Evaluating Sales Force

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5. Recent Trends in Sales Management

Foreign Competition

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5. Recent Trends in Sales Management

Foreign Competition Rising Customer Expectations

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5. Recent Trends in Sales Management

Foreign Competition Rising Customer Expectations Increasing Buyer Expertise

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5. Recent Trends in Sales Management

Foreign Competition Rising Customer Expectations Increasing Buyer Expertise IT & Communications

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5. Recent Trends in Sales Management

Foreign Competition Rising Customer Expectations Increasing Buyer Expertise IT & Communications Women in Sales Careers

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5. Recent Trends in Sales Management

Foreign Competition Rising Customer Expectations Increasing Buyer Expertise IT & Communications Women in Sales Careers Controlling Costs

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Effective Sales Executive

What does he do?

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Effective Sales Executive

What does he do?

i. Operating Function

ii. Planning Function

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Planning Function

Selling Accounts Sales Force Management Coordinating with other functions Dealer Handling Communicating / Coordinating with Marketing Sets Personal Selling Goals Sales Organization Selling Strategies Staffing, Developing Skills Providing Leadership Developing Sales Programs Customer / Dealer Relationships

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The Effective Sales Executive

Who is an effective sales executive?

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The Effective Sales Executive

Who is an effective sales executive?

Defines exact function & duties of person vis-à-vis company goals

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The Effective Sales Executive

Who is an effective sales executive?

Defines exact function & duties of person vis-à-vis company goals

Able to select & train capable subordinates & delegates authority – empowerment – least supervision

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The Effective Sales Executive

Who is an effective sales executive?

Defines exact function & duties of person vis-à-vis company goals

Able to select & train capable subordinates & delegates authority – empowerment – least supervision

Time utilizationTime for thinking & planningTime for office / field

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The Effective Sales Executive

Who is an effective sales executive?

Defines exact function & duties of person vis-à-vis company goals

Able to select & train capable subordinates & delegates authority – empowerment – least supervision

Time utilizationTime for thinking & planningTime for office / field

Act as skilled leaders, motivate people

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Interrelationships

Top Management

Integrate personal goals with organization Don’t aim to be indispensable; delegate

authority Good problem solvers & decision makers Keep management involved Listens & keeps record of important

conversations Follows given code of conduct

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Product Management

Regular involvement for new products, product quality, services rendered

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Pricing Management

Since sales has the pulse of the market policies are co-operative decisions.

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Distribution Management

Marketing channels determine the pattern of sales force operations – the no. of outlets.

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Promotion Management

SEs implement promotional plans. Personal selling is an important promotional

tool, expenses have to be controlled. Provide important information to advertising

department regarding consumers, motives, behaviours

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Sales Planning

1. Setting Objectives

a) Internal Situation Analysis SWOT of Sales Force Who will sell, what selling methods,

what sales tools, what are available

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Sales Planning

1. Setting Objectives

a) Internal Situation Analysis SWOT of Sales Force Who will sell, what selling methods, what sales tools,

what are available

b) External Environment Audit PEST Analysis Competition

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Sales objectives derived from broader Marketing objectives / Corporative objectives.

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Sales objectives derived from broader Marketing objectives / Corporative objectives.

Must align with corporate vision

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Sales objectives derived from broader Marketing objectives / Corporate objectives.

Must align with corporate visionSet at various levels: Macro (Country / Geographic

region): Micro (Key accounts)

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Sales objectives derived from broader Marketing objectives / Corporative objectives.

Must align with corporate visionSet at various levels: Macro (Country / Geographic

region): Micro (Key accounts)Long Term vs Short Term, Accuracy decreases over

long periods …

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Sales objectives derived from broader Marketing objectives / Corporative objectives.

Must align with corporate visionSet at various levels: Macro (Country / Geographic

region): Micro (Key accounts)Long Term vs Short Term, Accuracy decreases over

long periods …Output oriented: ‘Increase Sales’ (X)

Increase Sales by 10%

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Sales objectives derived from broader Marketing objectives / Corporative objectives.

Must align with corporate visionSet at various levels: Macro (Country / Geographic

region): Micro (Key accounts)Long Term vs Short Term, Accuracy decreases over

long periods …Output oriented: ‘Increase Sales’ (X) Increase Sales by 10%Measurable: ‘X’ no. of calls / month … How to measure soft objectives?? Morale?

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2. Determining Operations to meet Objectives Decide on Sales Strategies

SS: Operations which organize & direct sales activities to help achieve objectives

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2. Determining Operations to meet Objectives Decide on Sales Strategies

SS: Operations which organize & direct sales activities to help achieve objectives

Strategy for each objective ….

In Sync. with Corporate Objective ….

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2. Determining Operations to meet Objectives Decide on Sales Strategies SS: Operations which organize & direct sales activities to

help achieve objectives Strategy for each objective …. In Sync. with Corporate Objective …. ‘Build’ – Emphasis on new / current A/cs Increase Sales ‘Hold’ – Consolidating relationships to improve organizational image ‘Harvest’ – Reduce overall operation costs Sales directed to most profitable customers

Objectives & strategies: corporate / sales have to be broken into individual sales objectives.

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3. Organizing for Action

Next Step: Objectives – tactics

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3. Organizing for Action

Next Step: Objectives – tactics Which customers to target? Which products to highlight in range?

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3. Organizing for Action

Next Step: Objectives – tactics Which customers to target? Which products to highlight in range? How is sales department working?

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3. Organizing for Action

Next Step: Objectives – tactics Which customers to target? Which products to highlight in range? How is sales department working? Is compensation plan suitable? Is it in sync. with

industry average?

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3. Organizing for Action

Next Step: Objectives – tactics Which customers to target? Which products to highlight in range? How is sales department working? Is compensation plan suitable? Is it in sync. with

industry average? How to introduce a new product line.

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4. Implementing

Two fold role of Sales Manager

a) Division of responsibilities among salespeople; tasks; time sequence;

Review Schedule

b) Communicate to and coach sales people to implement sales strategies and actions

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5. Measuring Results Against Standards

i. Establish Standards

ii. Measure Performance

iii. Reevaluate and correct variations from standards

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5. Measuring Results Against Standards

i. Establish Standards

ii. Measure Performance

iii. Reevaluate and correct variations from standards

Performance standards needed to measure results: Industry averages, past sales force performance

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5. Measuring Results Against Standards

i. Establish Standards

ii. Measure Performance

iii. Reevaluate and correct variations from standards

Performance standards needed to measure results: Industry averages, past sales force performance

Performance measures:

Sales volumes, selling costs, market shares, profit margins

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6. Re-evaluating and Control

Can start mid way during implementation of sales plan or at the end

Monitored constantly for effective control and to see objectives are met (annual target 10 crores: 2.5 per quarter)

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Why does planning fail?

1. Lack of understanding of important issues: Sales objective different from corporate objective….., SM planning without reference to abilities of sales force, Environmental changes…., Inadequate understanding of competitors policies / organization strength and weaknesses etc.

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Why does planning fail?

1. Lack of understanding of important issues: Sales objective different from corporate objective….., SM planning without reference to abilities of sales force, Environmental changes…., Inadequate understanding of competitors policies / organization strength and weaknesses etc.

2. Absence of proper planning:

SMs: May developed plan which are only numbers and don’t focus on company issues, extra knowledge environment competition.

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Why does planning fail? (Contd..)

3. Inadequate communication

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Why does planning fail? (Contd..)

3. Inadequate communication

4. Lack of sales force involvement:

If sales people are not involved during planning, they are demotivated

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Why does planning fail? (Contd..)

3. Inadequate communication

4. Lack of sales force involvement:

If sales people are not involved during planning, they are demotivated

5. Inaccuracy in sales planning

Mistakes in forecasting, budgeting and territory management; plans more accurate with bottoms – up approach; objectives should be set by top management and supported by sales managers