MBA Third Semister

7/30/2019 MBA Third Semister

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MBA Third semester

sub:SDMUnit 3rdFormulation of personal selling strategy:

Sales strategy is the game plan adopted to achieve

desired objective. It helps a company to reach adesired objective and position from existing positionin sales. The objective may be many in number,require elaborate and careful consideration of thestrategies and game plan of other competitive

organizations. Sales strategy involved with pushingthe sales of products. It involve three steps:

1 Market analysis

2 Setting objective

3 Designing sales strategy


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Step1st Market analysis This means here is macro environmental analysis.

It includes the analysis of social,political,cultural,economical and

technological factors which have a significant bearing on the SWOT analysisof the firm.

The macro environmental analysis and the competitive situation helps in

market analysis which helps in setting the objective of the firm.

Market analysis is a prerequisite to objective setting.The company would

need to know

1 The current size and growth rate of the market.

2 Consumer needs, attitudes and trends in purchasing behaviour.

3 Competitor analysis. It cover whole lot of things and includes

A Current strategy adopted by the other firm B Current performance including market share analysis.

C Their strength and weaknesses.

d Expectation to their future action. While analyzing the market it

necessary to see what type of completion exist.


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-> Pure Competion In such type of marke each seller is too small to

effect the prevailing market price.The competion exists in identicalundifferentiated products. All sellers products are identical so buyers

are indifferent as to which sellers they buy from. All buyers arealways informed about all sellers price

->Monopolistic competion:

In this type of competion, there are large number of sellers of ageneric kind of product but each sellers brand is differentiated fromevery other brand.Products like nail polish remover,pet food,etc

Differentiated can be made through unique packaging, unusualdistribution methods, promotional strategy etc.

-> Oligopolistic competion In such type of competion numbercompetitors are small but are individually identified and known toeach other. Each competitor is large so that any change in his

marketing strategy affects other competitors.All competitors areknown to each other . In USA oligopoly exists in automobilecomputers, machinery, shoes textile etc.


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Step2nd Setting sales objective

Objectives are standards against which performance is measured. Theseare of two types Qualitative objective(long term) derived from the marketand sales policies of the company Where as quantitive objective(shortterm) Derived from the operating result. The objective are set whilekeeping in mind the competetive situation of the company . Thus these

are also depends on the competitive situation and the coprporate goalswhich vary over time. Goals are set in terms of

1- Sales volume

2- Sales cost

3- Account Receivable

4- Inventory level 5- Dealer support

6- Feedback input


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Steps-iii Designing Sales Strategy

Swot Analysis is done-

The objectve are set and then sales strategy isformulated by considering-

1- The type of sales force required

2- The size of the sales fore required

3- Territory design.

4- Channel design and coordination

5- Transaction cost analysis


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Types of sales Force Needed

It depends on the role the sales force has to play. The qualityof sales force is defined as the quality of contributionrequired from the sales force and the work load on them. Ifreselling has been done by advertisement the sellingbecome easy. There are two types of specialization needed

1- Product specialist- highly technical product e.b marketingfor banking services, service packages like agriculturalfinancing, short and long term financial servicescomplicated product like computers etc.

2- Market specialist- know the different market and can alsoadopt different sales approch for different market. Therecan be combination of both .


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Kinds of sales force

Before making this decision we need to consider the qualitative aspect ofpersonal selling objective

What contributions towards the companys long term overall objectiveshould be expected from those performing selling jobs?

What should be the duties and responsibilities of these individuals?Howshould their job performance is measured? Management must face upthese questions when it decides the kind of sales personnel it requires

Each compony deals with the unique set of marketing factors, such as thestrength and weaknesses of its product, the motivation and buyingpractices of its customers and prospects, its pricing and competitivesettingthe relative strength and weaknesses of its competitors

Further consideration like different selling jobs require different levels ofselling and non-selling abilities,training, technical and non-technical andother knowledge.


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Determination of the size of the sales

force

There are 3 methods to determine it

1 Incremental method

2 Work load 3 Sales potential


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Basis for territory design

Geographical Basis:

Sales persons are grouped according to the existing geographicalboundries.

Sales potential Basis:

Spliting the companys customer base according to dispersion of itssales potential.

Servicing requirement Basis:

A company splits its total market according to servicing requirementof its present and prospective customers. Servicing means themaintaining and developing of accounts.

Work load basis This approach consider s both account potential and servicing plus

extra work load created by topographical locations and competitiveforces.


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Channel support and coordination


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Transaction cost analyses


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Recruitment and selection of sales

personnel

Recruitment Recruitment is a process to discoverthe sources of manpower to meet the requirements ofthe staffing schedule and to employ effective measuresfor attracting that man power in adequate numbers to

facilitate effective selection of an efficient workforce. It include all the activities involved in securing the

applications for the sales position are referred to asrecruitment.Recruitment sets out the necessary stagesto clarify what kind of person is required ,Where

he/she might be found and how to make right choice.Thus the choice is very significant.


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Factors affecting the recruitment

policy of sales personnel The recruitment policy is concerned with quality and qualification of

manpower. It establishes the broad guidelines for the staffingprocess.Following factors

Number of recruits desired.

Recruitment sources.

Recruitment needs. Recruitment costs.

Size of sales organization.

Rate of turnover.

Forecasted sales volume.

Government policies.

Personnel policies of competing organization.

Organizational personnel policies.


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Sequences of recruitment process

Before organization begins recruiting applicants, itshould form a checklist of questions which outline thechronological sequence

1 What kind of job is to be filled.?

2 what sort of persons would do this job? successfully?

3 Where will this person be found?

4 What recruitment sources can be employed to find

this persons? 5 Which persons is to be recruited out of selected

applications


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Selection and placement of sales

personnel

A selection system is a set of successive screens at any of which an

applicant may be dropped from the further consideration.

Selection of proper sales people is very important to avoid

disappointments both to the employer and employee. Unlike other

job success, selling does not depend on the intellectual ability alonebut it also include salesmans emotional demand like his

personality, ability, experiences, temprament and aptitude are also

important in tackling situation that many a times are very

disappointing.

Componies using multi steps selection system.Each company

design its selection system to fit its own information needs and to

meet its own budgetary limitations.


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Selection process

1 Preliminary Interview

2 formal application

3 Interview 4 Reference check

5 Testing

6 Physical Examination 7 Employment offer


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Continue

Preliminary Interview

The initial screening is usually undertaken by the receptionist in theemployment office.

This is a sorting process in which perspective applicants are given thenecessary information about the nature of the jobs in the organisation. Thisinformation is elicited from the candidates relating to theireducation,experience, skills, salary demand the reason for leaving thepresent jobs, their job interest, physical appearance,age and facility ofspeech.

If a candidate meets with the requirements of the organisation , he may beselected for further action.If not than he is eliminated at this preliminarystage .

Formal application :Ideally each company should prepare its own formalapplication form as per its information requirements.But to save the timeand money they can follow a standard application form


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Continue

An application blank is a traditional, widely accepted device forgetting information from a prospective applicant which will enablethe management to make a proper selection.

It provides preliminary information and helps in interview byindicating the areas of interest and discussion.It is also consider as a

useful device for collecting historical data from the candidate aswell as storing information for later reference.

Interview An interview can be defined as an attempt at gatheringinformation information from the candidate concerning hissuitability for the job under consideration. No method other thaninterview is quite as satisfactory in judging an individuals ability in

oral communication Personal appearance and attitude towards selling and personal

impact on others are most important for the persons involved inselling.


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Interviewing Techniques

1 Non-structured interview:

2 Patterned/structured interview:

3 Interaction/Stress Interview:

3 Rating scales

Reference check

Some times applicants are asked to name as references thosepeople on whom they can rely to speak about them

The main purpose of reference check as a selection tool is to verifythe facts such as dates of employment, earnings, sales

volume,absenteeism and nature of the past selling typicalprocedure is to check the references by personal visit, telephone orletter.


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Testing

Psychological Testing

A psychological test can be defined both in a broad as wellas narrow manner. Broadly, it has been defined as aSystematic approach for comparing the behavior of two ormore persons. In narrow sense It is a sample of anindividuals behaviour, performance or attitude. Thus it is asystematic procedure for sampling human behaviour.

This test is gaining greater importance as a selection tool ofsales personnel b/c of sales management becoming moreformalized and rising cost of selection and training.

The major purpose of testing is to identify various aspect ofa persons behavior such as intelligence, achievements,interests, aptitude, personality traits, etc


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Types/classification of psychological

test

1 Apptitude test a) Mental test b)

mechanical test

2 Personality test a) objective test b)

Projective test )C Situation test

3 Achievement test

a Job knowledge test

b Work sampling test

4 Interest test


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Physical Examination

Sales persons jobs require unusual stamina, strength andtolerence of hard working conditions. The presence andabsence of these qualities in the candidates revealed byphysical examination. The major purpose are

1) It gives a clear indication whether candidate is physicallyable to perform the sales persons jobs in the company.

2) It prevents selection of people who suffer from somecontagious diseases

3 )It discovers the existing disabilities of the candidate and

the record of the same is maintained so that the questionof company s responsibilities would be settled in the eventof a workmans compensation claim.


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Employment offer

An Employment offer is extended to the candidate who successfullypasses through all the preceding steps.

Placement of sales personnel

This is the final stage where procurement function is concluded,and the process of placement of the individual on the new job is

done inorder to orienting him to the organization. It may be defined as the determination of the job to which an

accepted candidate is to be assigned and his assignment to the job.It is the matching of what the supervisor has reason to think he cando with the job demand or requirement. It is a matching of what heimposes in strained working conditions and what he offer in the

payroll, companionship with others, promotional possibilities, etc


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Probation

Ranging from one to two years

Future

Every company look for future managementrequirements as well as its need for careersalesman

The relationship b/w the two categories will

depend upon the spans of control, number ofmanagement levels and the life span ofmanagement in each jobs.


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Training of sales personnel

After selection , personnel should be given formal training whichinclude learning, coaching, facilitating the sales personnel. Morebroadly it may defined as a planned programmers' complete withschedules, lesson plans, visual aids, other teaching devices andsystematic review and evaluation of it.

Informal training involves the continuous development of salespeople. It includes working with sales people, finding theiractivities, and advising them on improvement, it is also known asfield coaching.

Training also depends upon the sales persons career cycle. Salespersons have various backgrounds, experience levels, learning

abilities etc, thus they have their own training needs. Anotherfactors decides the type of training is the stage of the career of thesales persons. There are four basic stages of their career cycle.


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continue

1 Preparation.

Emphasis should be given on orientation and training. He should know about the environment

in which he has to function and given information about the company and the product he has

to sell. Selling instructions and basic selling techniques are all important to this stage. Some

times experience sales persons new to the company must also be acquainted with the policies

and practices of the company.

2 Development

At this stage salesman becomes productive. He should be supervise and provided field

coaching. He should be able to identify the problems and be kept away from acquiring bad

habits.

3 Maturity

At this stage productivity of the sales persons levels off. He works smarter than harder.

Sometimes refresher training is required to be given to him to retain and acquaint him with

new concepts and techniques. They can also be given new challenges and transferred to new

areas, new territories or can be promoted to more responsible positions. Thus lack of relevant

training hampers growth and development.

Decline


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4 Dcline

In this stage the sales person is a problem for the

management. A lot of motivational retraining is required.

The productivity of the salesman decreases considerably

and is difficult to avert.

training imparted at proper time develops rights working

habits and offsets the effect of detraining.


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AIM OF TRAINING

Defining the specific and general aims of

training programme is the first step in training.

General aims are translated into specific aims

phases in operational terms.

These can be defined in two ways:-

A. Identify initial training needs.

B Continuing sales training programmes.


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A. Identifying Initial Training Needs

The initial training needs of sales trainingprogramme can be identified by the analysisof three main factors.

1. Job Specification-the qualification needed to perform the jobare detailed in job specification. The set of job

specifications needs scrutinizing for clues tothe points on which new personnel are mostlikely to need training.


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2.Trainees Background andexperience-

The gap between the qualifications in the jobspecification and those a trainee already hasrepresented the nature and amount of trainingneeded. But it is not always practical to adjust

training precisely to individual differences andtime and money are safe by putting all recruitsthrough identical programme.


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3. Sales related marketing polices

The analysis of sales related marketing polices is

also needed to determine initial sales training

needs because the differences in products,markets and there selling practices and polices

determines the differences in training

programmes e.g.- selling of highly technical goodsinvolve training with lot of product information

while selling of non technical goods.


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B. Indentifying continuing sales

training programme

It means to indentify training needs ofexperiences sells personals which are felt due

to changes in market, product, marketing

policies, procedures, organization and even inthe sells personnel itself.


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CONTENT OF TRAINING

It is not the same for all the sales training

programme but it defer from company to

company because of differences in products,markets, company policies, training ability,

experiences and organizational size.


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continue

Every initial sells training programme comprises

four areas

1.Product Data.2.Sells Techniques.

Predominant view is that sells personnel need

basic instruction in how to sell, attractivepersonality, good appearance, voice and

reasonable intelligence, product knowledge etc.


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3.Markets.

Customers, there buying habits, motives and

there financial condition, training should be

dynamic.

4.Company Information.


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METHODS OF TRAINING

1.The Lecture.

It is an instruction from trainer to trainee and

its a personal instruction.

Advantages -

Its more economical

It cover the desire training content It a practical way to handle instructions


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continue

Disadvantages More emphasized on teaching then learning

Only one way communication

2.Personal conferenceIt is unstructured and informal method, dependupon the personality of the trainer and thetrainee and the topic discussed. They jointly

analyze the problems such as effective use ofselling time, route planning, call scheduling andhandling selling problems.


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3.DemostrationIn this method sells manager carry out a real

selling call on a customer with the salesman

they are training present as a silent observer it

is best for new salesman.

4.Role Playing

It is a method of human interaction involverealistic behavior in an imaginary situation like

Learning by doing


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Human sensitivity and interaction are stressed The knowledge of result is immediate

Trainee interest tent to be high

Trainee except criticism and suggestions fromothers

Trainee participate in the appraisal of there

own performance It provide chance to learn valuable tricks


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5.Case Discussion

The case is a set of data real, written or oral

summary of such data present issue and

problems calling solutions or action on the

part of training. Trainees are given cases to

analyze to identify the problems and

recommend tentative solutions to groupdiscussion.


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6.Gaming situationIt is similar to role playing with unique feature

that it uses highly structure and contrived

situation based on reality and player receiveinformation feedback.

Advantages

Participants learnt easily develop skills inindentifying key factors influencing decision.


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ON THE JOB TRAINING

Also known as coach and pupil method.In such method sells man are coached and

instructed by skilled co-workers or by supervisor

or by the special training instructor. This method

involve three steps-

coach explains various techniques and

approaches.

Makes actual sells call

Under coach supervision trainee makes sells calls.


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PROGRAMME LEARNING

Teaching by machine method

It involve sequence of steps which are oftensetup through the central penal of an electronic

computer as a guide in the performance of adesired operation itb involves breaking downinformation into meaningful units and thenarranging these in a proper way to form a logical

and sequential learning programme but thismethod not adopted sells training due to therehigh cost of operations and other constraints.


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CORRESPONDING COURSES

Companies with highly technical products andsmall but highly diploid sells forces usecorrespondence courses to acquaint

experience sells people with new productdevelopment and application.

It is an appropriate training method whentrainees are scattered geographically but are

assembled periodically for lectures, seminars,role playing nad other instructions.


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Sales force compensation

Compensation means giving something in return for the work whichhas been performed by the salesman

It varies from company to company, and designed keeping in viewthe companys goals, capabilities and requirements. The companywants to increase sales and profit and profit at minimum cost

where as sales person is interested in maximizing his earning. Aneffective compensation plan take care of both the parties.

Thus compensation plan must attract, retain and motivate capablesales personnel with in the companys budget.

It has three motivational roles, 1st provide a living wage,2nd , adjustpay levels to performance, 3 provide a mechanism for

demonstrating the congruency between attaining companys goalswith individual goals.


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A properly designed sales compensation plan

fits a companys special needs and problems.

Direct salary is similar for all companies but

indirect incentive and prerequisites differ.

i f d l


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Requirements of a good sales

compensation plan

1 provide a living wage in the form of a securedincome.

2 The plan fits with the rest of the motivational plan.

3 The plan is fair, it does not penalize sales personnel

because of the factors beyond their control. 4 The plan adjust pay to changes in performance.

5 It is economical to administer

6 It helps in attaining the objective of the sales

organization. 7 It is easy for the sales personnel to understand and

calculate their own earning.

D i i i k


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Designing a compensation package

Defining a sales job

1 Re-examine the nature of sales job and revise itif it is outdated.

2 Analyze sales department objective

Check out the sales volume objective

The impact of sales related marketing policies aredetermined.

Consider the current and proposed advertisingand sales promotional programmes

A) C id h l


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A) Consider the companys general

compensation structure

For this job evaluation is done

1 simple ranking

2 Classification or grading

3 Point system

4 Factor comparison method

B) C id h i


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B) Consider the compensation pattern

in community and industry

What compensation system are being used.?

What is the average compensation for similarposition?

How are other companies doing with theirplan?

What are the pros and cons of departing from

industries pattern.? What caliber of sales persons are required to

be effective as well as cost efficient.?


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C) Determine compensation level

D) Provide for various compensation elements.

E) Special company needs and problems.

F) Consult the present sales force.

G) Reduce tentative plan to writing and pre-test

it.

H) Revise the plan

I) Implement the plan and provide for follow up.


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Types of compensation plans

1 Straight salary plan(advantages and dis

advantages)

2 Straight compensation plan(advantages and

weaknesses)

3 Determine commission base

4 Salary plus commission(ad and dis-ad)

F t i fl i D i f


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Factors influencing Design of

compensation plan

1 Relation with PLC

2 Compensation related with demographic

characteristics

R l f lli i k ti t t i


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Role of selling in marketing strategies

of the company. By this means how much importance is being given to the sales in

marketing mix of the company and what pattern is being followed.

1 Competitors practices(pure, monopolistic, oligopolistic or nocompetition)

2 Use of Bonus(paid for reaching sales quota, performing

promotional activities, obtaining new accounts, following up leads,setting up displays or carrying out other assigned task.

3 Fringe benefits(company benefits, Insurance, paid vacation, paidleaves, retirement plans, educational assistance, sales forcebenefits, profit sharing, stock purchase plan, credit union,employees services, cafeteria approach

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