Sales Mgt Unit-1

7/27/2019 Sales Mgt Unit-1

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Sales management

Kamalpreet Singh

Concept

The term sales management is used by a businessman to refer to the directions or

supervision of salesmen. But in present scenario, it has included other aspects of management

such as planning, direction, control of personnel selling, including recruiting, selection,

equipping, supervising, paying and motivating. In other words the sales management means

management of all marketing activities, including advertising, sales promotion, marketing

research, physical distribution, pricing, and product merchandising.

Definition

American marketers association (AMAs) has defined sales management as planning,

direction, and control of then personnel, selling activities of a business unit including

recruiting, selecting, training, assigning, rating, supervising, paying, motivating, as all these

tasks apply to the personnel sales-force.

Evolution of professional selling

Before the industrial revolution the marketing task was relatively simple because the

economic sense was dominated by small scale enterprises. The only problem was to produce

goods for consumers which were sold out without any difficulty. In fact all phases of the

business, including manufacturing and selling, were generally supervised by one individual

and more attention was paid to manufacturing problems rather than the marketing problems.

The importance of marketing problems was realized only after the industrial revolution which

started in England in 1970 and immediately thereafter in united states. The American

revolution, necessitated the need for finding out untapped markets because the nearby

markets were unable to absorb the increased quantities of manufactured good. This gave a lot

of importance to professional selling.

As the business activity became more complex and dynamic, the term professional selling

changed due to the change in business operations.

Objectives of sales management

Every business firm has certain objectives to achieve. These objectives may be very explicit

and definitive, or they may be implicit or general. Although, firms have different mixes ofobjectives, and they do place differing emphasis, on individual ones, the typical objectives


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include (i) profitability, (ii) sales-volume, (iii) market share, (iv) growth, and (v) corporate-

image. While all these objectives are important to a business firm, the objectives, relating to

sales-volume, market share and profitability, are greatly affected by the effectiveness and

efficiency, with which the sales-function is managed.

Business firms, have, in fact, found that it is the most effective management objective of thefirm; that must emanate out of its overall business or corporate objectives. The sales-

management objectives of a business firm, generally relate to the areas of (i) achieving

sufficient sales-volume, (ii) providing sufficient profit, and (iii) experiencing continuing

growth.

Generally, objectives of sales-management have to cover various sales-functions, in an

integrated manner. These objectives are to be expressed, as far as possible, in measurable and

quantitative terms, and should also be realistic and achievable. Since, there are more than one

objective, these should be put, on a hierarchical manner (most important, down to the least

important). To ensure their flawless realisation, they must be congruent, i.e., they must fit

together, and not be in conflict with each other. For example, suppose you ask a salesmanto cut his travelling expenses, and ask him to spend more time, in the field. To make these

two requirements, more meaningful, they must be linked with specific time-element.

The setting of objectives should not be based only on the judgment of the top-management.

Rather, it should be formulated and finalised, with the involvement of the sales-force, at the

grass-roots level. In addition, the process of setting of sales-objectives should begin, only

after the company has conducted benchmark studies, to find out, as to where it stands in

terms of product, brand and market-sales and market share trends (all in measurable terms).

The objectives can be further categorised in terms of Quantitative & Qualitative Objectives:

Quantitative objective (short term)

1. To retain and capture the market share.

2. To determine the sales volume in ways that contributes to profitability.

3. To obtain the new accounts of given types.

4. To keep the personal expenses within specific limits.

5. To secure the targeted percentage of certain accounts (customers) of business.

Qualitative objectives (long term)

1. To do the entire selling job.

2. To service existing customers.

3. To search and maintain customers cooperation.

4. To assist the dealer in selling the product line.

5. To provide technical advice whenever necessary.

6. To assist in training of middlemans sales personnel.

7. To provide advice and assist the middlemen.

8. To collect and report market information of interest and use to the company

management


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BENEFITS OF SELLING ACTIVITIES

There are different benefits of selling activities, which are as follows:

(1) Benefits to the society: economic growth and maximum employment are the basics for

national development. The achievement of both these goals means jobs and incomes for anations labour-force. The number of people, who need jobs, continues to expand, and also

some jobs are being eliminated, because of the introduction of computers and abolition of

obsolete technology. If jobs are to be made available for all those, who want and expect them,

the economy must continuously expand its production of goods and services, which can only

be done by adopting sound government-policies and efficient use of people. Equally

important here is the fact, that an economy needs individuals, to sell what is produced.

Through their persistent efforts to create and stimulate demand, salespeople could be said to

be the life and blood of a productive economic-system. The large number of workers, in

factories, and offices, would not be needed, if someone were not selling their products.

(2) Benefits to consumers: professional people may not know every fact of a product, but

they, at least know its major uses, limitations and benefits; so they can easily serve their

customers, quite effectively. For exan1ple, an insurance agent can analyse the hazards and

risks that confront a clients business or home-situation, examine existing coverage and offer

helpful advice, in order to eliminate the gaps or overlaps in coverage, in addition to saving

the clients money. The sales-engineers are qualified to analyse technical-problems, which

may be confronting a particular organisation and they can give the right recommendations

for developing efficient operations. Like-wise, the medical representatives may help the busy

doctor, by keeping him abreast of new drugs in the market. The list of sales-people who can

offer assistance to customers is practically without end.

(3) Benefits to business firms; their sales-persons and customers: salespersons are owned

by their companies, while customers are the end-users of the companys product(s) and/or

services, all these people, in the chain of marketing, stand to benefit by sales-activities. A

business firm can be profitable only if its revenues exceed its costs. The prime responsibility

of the salespersons is to sell the goods, produced by the organisation, at a profit. The creative

sales-person, tries to penetrate his territory, and adopts suitable means and techniques of

profitable-selling of goods and/or services. Business firms, derive various other benefits

from, non-selling activities of sales-persons. The salesperson, in the field, is an ideal person,

to keep the company abreast, or ahead of competition. He, thus, becomes an important source

of field-intelligence by providing important (and sometimes very crucial) information, about

the nature of competitive-activities, and also about the changing needs of customers. Thesales-force has the additional responsibility of serving the needs of customers that buy the

films product(s). Most firms cannot survive, only on the basis of one-time sales; repeat-sales

are necessary. This is possible only if the customers are served in a professional manner. A

customer-oriented sales-person has to perform such activities as: providing customers with

product-information and demonstration(s); training customers-employees, in product-use;

providing customers with sales-advice; and assisting customers in maintaining inventories.


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EXCHANGE PROCESS

Meenu Chaudhary

Customer is the boss - yesterday, today & tomorrow

Customer is profit - everyone else is overhead

Sales and distribution management is the most important part of marketing

management. Exchange is the core aspect of marketing and sales and distribution

management facilitates it.Sales management is defined as the management of the

firms personal selling functions while distribution management is the indirect selling

effort .sales mgt. tasks include companys sales efforts which are:

Analysis

Planning

Organising

Directing

Controlling


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The central part of any definition of marketing is the exchange, which means giving

something of value in return for something of value. Marketers divide products into three

categories:

Goods, or physical items;

Services and

Ideas.

There are 5 conditions that must exist or are necessary for successful exchange and these are:

At least two parties must be involved

Each party must have something that interests the other party

Each party must be able to communicate and deliver

Each party must be free to adapt or reject any offer from the other party

Each party must consider it desirable, or at least acceptable, to deal with

the other party.

WAYS BY WHICH EXCHANGE CAN TAKE PLACE:

Directly(through its own sales force)

Indirectly(through middlemen,retailers,wholesalers)

Jointly

NATURE OF EXCHANGE PROCESS:

It will depend upon the nature of the product, target market, consumer density and

dispersion and competition practices of the companies. Ex: if the consumer density

is less in a particular area, we cant use personal selling.In personal selling there

are two ways of communication:

Tell the customer how to use the product and remove his doubts.

We see that there is a feedback from the customer.

In selling we are only exchanging.

To consummate successful exchanges we have to go through certain tasks:

1. Contacting: to find and communicate with the prospective buyers.


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2. Prospecting: to bring together the offering of the market and of the customer.

3. Negotiating and transaction: there can be certain negotiations in prices Ex:

lump sum, installments, etc. transactions also means ownership transfer.

4. Promotion:this is to make the customer aware of the product. The promotion

must show that product can provide customer satisfaction, he should get good

value for his money. Proper promotion should have customer generating

potential.

5. Physical distribution and collection:physical distribution means actual

transfer of possession. It includes transportation, warehousing and inventory

control.it include installation. Ex: the food must reach the destination

timely and safely. Exchange is never complete without the collection of

money, revenue.

Money is the backbone of any organisation and timely collection of money is

also a very important criteria. Delayed payments lead to shortage of funds

Which affects the organisations adversely?

Most organisations perform exchanges through a combination of their own

salesforce and distribution network. Task are allocated between sales force

and distribution members.

FACTORS FOR SALESFORCE ARE:

Competitive practices

Product and market requirements

Preference of the customer

management philosophy towards control


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SALES MANAGEMENT CYCLE

Sales management deals with ANALYSIS, PLANNING, ORGANISING, DIRECTION

AND CONTROLof the companys selling activities.

Analysis:

Probing into the sales record of the company.

Analysing the reports of sales people.

Investigation of marketing trends other environmental factors.

Planning

Setting objectives of the firms sales efforts.

Formulations of sales strategies & policies in order to achieve those objectives.

Organisations: Determinations of the structure of the sales force delegation of authority.

Analysis

Control

Direction

Planning

Organisation


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it is necessary for achieve organisational objectives.

Direction

proper supervision& implementation of the plans

Proper communication, motivation leadership.

Control

Comparison of actual result with desired result.

Finding out reasons for deviations and taking corrective actions accordingly.

KEY DECISION AREAS IN SALES MANAGEMENT

Important decisions areas in sales management are deciding upon:

1. Type and quality of sales personnel: The sale person is a product specialist or a market

specialist or both product socialists is needed for technical or for pharmaceutical.

2. size of sales force: if we have more sales personnel then we are incurring more

expenditure. The number of sales person should be optimal.

Find optimal size by three methods

Work load method

Incremental method

Sales potential method

3. Organisation and design of sales department: there are three types of organisations:

Functional organisation Management organisation

Territorial organisation

Which type of organisation to follow will depend on our choice.

4. The territory design:There are number of ways to design a territory.

Here we take one segment of the circle as a territory.


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Clover leaf design of territory. Here the territory is designed in the form of a clover

leaf.

Hop scotches method. Here the territory is designed in the form of spokes which

radiate form the hub(residence)

5. The recruitment and training procedure: This deals with recruitment & training of the

people. The recruitment could be within or outside the organisation. Training could be on the

job, off the job and classroom training.

6. The task collection:tasks are allocated depending upon the capabilities and capacities of

the sales personnel.

7. The compensation of sales force: compensation includes salary benefits, profits and

perks. Demographic characteristics are taken into his account for this.

8. Performance appraisal control system: it is important to know how much work is being

done by the sales personnel.

9. Feedback mechanism to be adopted: feedback is taken from sales personnel, dealers

and consumers about product and sales. On the basis of this feedback planning is done.

10.Managing channel relationship: we not only decide on selection of channels but also

decide how it going to be managed.

11.Coordinating with other marketing departments: a sales personnel cant work alone.

He has to take help from all the other departments.


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SALES STRATEGY FORMULATION

Sangeeta Roy

Why have a sales strategy-Without a sales strategy the companys customer facing people will struggleto the focus needed for successful selling...

Strategic Planning and StrategyThe process by which a firms managers

evaluate the future prospects of the firm and decide on appropriate strategies to

achieve long-term objectives is called strategic planning.The objective may be many in number and these require elaborate and carefullyconsideration of the strategies and game plan of other competitive organization.

sale strategy is different from marketing strategy in that marketing strategyinvolves indentifying the target segment and directing the marketing mix on thetarget segment to achieve the objectives and fight completion while salesstrategy is involved with pushing the sales of products.

It basically involves three steps :

Market analysis

Setting objectives

Desiging sale strategy

Market strategy

Market analysis here means marco environmental analysis this include analysis

of social ,political, culture, economic and technological factors which have asignificance bearing on the sought analysis of the firm.

The sales objective is directly affected by corporate mission or goal.

Market analysis is a prerequisite to objective sitting. The company would need

to know:

1.

The current size and growth rate of the market

2. Customer needs , attitudes and trends in purchasing behavior

3.

Competitor analysis

4.

Expectation to their future action


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Setting sales objective

Objective are standard against which performance is measured these are two

types qualitative objectives and quantitative objectives. Qualitative objective arelong term where as quantitative objective are short term.

A company selling high value technical house hold product expect its salesman

to carry out entire sale function and practical aspect also. the quality of salesforce in this case will be different to those who only coordinate. qualitative are

long term and are derived from the marketing and sales policy of the company.

quantitative objectives on the other hand relate to operating results. these are

also depend on quantitative situation and the corporate goal and vary overtime.Goals are set in terms of

1.

Sales volume

2. Sale cost

3. Accounts recieveable

4.

Inventory levels

5.

Dealer support

6. Feedback input

Designing Sales Strategy

After the market analysis has been carerried out which involves the study of

environmental factors, the SWOT analysis done. The objectives are set and then

the sales strategy is formulated by considering:

1.

The type of sales force required.

2.

The size of the sales forces required.

3. Territory design.

4.

Channel support and coordination.

1. Type of sales force required

- Product specialists

Are for highly technical products, eg., marketing of banking services, services

packages like agriculture financing, short and long term financial services

complicated products like computers etc..


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- Market Specialists

Know the different markets and can also adopt different sales approaches for

different markets. They need to know more than one line of products.

They can be a combination of both products specialists and a market specials in

a sales force of a firm.

2. Size of Sales Force required

- Incremental Method (revenue exceeds

cost)

- Work Load Method ( N=S/P)

- Sales Potential Method.

The basic means by which the company competesits choice of business or

businesses in which to operate and the ways in which it differentiates itself fromits competitorsis its strategy.

Approaches to Formulating and Implementing Strategy

1. Economic Imperative

2. Worldwide strategy based on cost leadership, differentiation, and

segmentation3. Political Imperative

4. Strategic formulation and implementation utilizing strategies that are country-

responsive and designed to protect local market niches5. Quality Imperative

6. Strategic formulation and implementation utilizing strategies of total quality

management to meet or exceed customers expectations and continuously

improve products and/or services


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Strategic Formulation Process

Strategic Formulation Process

1. First phase is the planning phasecompany establishes (or clarifies) itsmission and overall objective

2. Second part is the implementation phaserequires the establishment of

the structure, systems, processes suitable to make the strategy work

Mission and Objective3. Mission of an organization is its overall raison detre or the function it

performs in society

4.

Objectives flow from mission and guide the formulation of international

strategy

Environmental Assessment


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a)

Gathering information and forecasting relevant trends, competitive

actions and circumstances that will affect operations in a geographic area;

should include:

b)

Political instability

c)

Currency instabilityd)Nationalismhome govern. Policies: import duties, protectionisme)

International competition (conducting a global competitor analysis

industry structure)

f)

Environmental scanningwho are current competitors?: positions, goals,

strategies

Basic Steps in Formulating Strategy1.

Environmental Scanning

2.

Process of providing management with accurate forecasts of trends

related to external changes in geographic areas where the firm currently is

doing business and/or is considering setting up operations

3. Internal Resource Analysis

4.

Helps a firm to evaluate its current managerial, technical, material, and

financial strengths and weaknesses.K

Internal Analysis1. Internal analysis determines which areas of the firms operations

represent strengths or weaknesses (currently or potentially) compared to

competitors, so that the firm may use that information to its strategicadvantage

2.

It focuses on the companys resources and operations, and globalsynergies

3. Strengths and weaknesses of the firms financial and managerial expertiseand functional capabilities are evaluated to determine the key successfactors

Competitive Analysis1. Assess the firms capabilities and keysuccess factors compared to those

of its competitors

2. Enables strategic planners to determine where the firm has distinctivecompetencies that will give it an advantage

3.

Most companies develop strategies around key strengths or corecompetencies

4.

This stage is often called a SWOT (Strengths, Weaknesses,

Opportunities, and Threats) analysis


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Strategy Implementation1.

Process of providing goods and services in accord with a plan of action

2.

Location Consideration for Implementation The Country

3.

Industrialized countries are the recipients of most investments by MNCs4. Offer the largest markets for goods and services

5.

May have legal restrictions on imports that encourage a local presence

6.

Local Issues

7.

Access to markets

8. Proximity to competitors

9. Availability of transportation and utilities10.

Nature of of the workforce

11.

Cost of doing business

12.

Ownership and Entry Consideration for Implementation13.Wholly Owned Subsidiary14.Overseas operation that is totally owned and controlled by a co.

15.Increasingly acquiring subsidiaries through merger or acquisition

16.Provides company with complete control

17.Joint Venture

18.

Agreement in which two or more partners own and control a business

19.Nonequity venture - one group provides service to another

20.Equity joint venture - involves financial investment

Ownership and Entry Consideration for Implementation

1.

Licensing

2. Agreement that allows one party to use an industrial property right in

exchange for payment to the other party

3.

Used under a number of common conditions

4. Franchising

5. Business arrangement under which one party (the franchisor) allows

another (the franchisee) to operate an enterprise using its trademark, logo,product line, and methods of operation in return for a fee

6.

Export/Import

7. Useful for firms wanting to begin international expansion with a

minimum investment

Strategic Choice1.

The strategic choice of one or more of the entry strategies will depend on

2.

a critical evaluation of the advantages (and disadvantages of each in

relation to the firms capabilities,


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3. the critical environmental factors

4.

the contribution that each choice would make to the overall mission and

objectives of the company.


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PERSONAL SELLING OR SALESMANSHIP

Nisha Sheikh

Personal selling is an important method of selling. It is the process of assisting and

persuading a prospective buyer to buy a product in a face to face situation. it involves

direct and personal contact between the seller or his representative with the

prospective buyer.

Salesmanship is the process whereby the seller ascertains and activates the needs or

wants of the buyer and satisfies the needs or wants to mutual continuous advantage of

both the buyer and the sellers.

Personal selling involves face to face contact between the seller and the prospective

customer with an intention of selling some products. It is the art of representing an

offer that the prospect appreciates the need for it and that a mutually satisfactory sales

follows.

Features of Personal selling

1.

Salesmanship involves persuation of customer

2. Salesmanship involves winning buyers confidence

3. Salesmanship involves providing information

4. Salesmanship aims at mutual benefit.

PERSONAL SELLING OBJECTIVES

The qualitative personal selling objectives are long term and concern the contributionmanagement expects personal selling to make in achieving long-term company objectives.

These objectives generally are carried over from one periods promotional program to the

next. Depending upon company objectives and the promotional mix, personal

selling may be assigned such qualitative objectives as-

1. To do the entire selling job (as when there are no other elements in the promotional mix).

2. To service existing accounts (that is, to maintain contacts with present customers, take

orders, and so forth).

3. To search out and obtain new customers.

4. To secure and maintain customers cooperation in stocking and promoting the product line.

5. To keep customers informed on changes in the product line and other aspects of marketing

strategy.


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6. To assist customers in selling the product line (as through missionary selling).

7. To provide technical advice and assistance to customers (as with complicated products and

where products are especially designed to fit buyers specializations).

8. To assist (or handle) the training of middlemens salespersonnel.

9. To provide advice and assistance to middlemen on management problems.

10. To collect and report market information of interest and use to company management.

The basic considerations in setting qualitative personal selling objectives are decisions on

sales policies and personal selling strategies and their role in the total promotional program.

After this role is defined, qualitative long-term personal selling objectives are set. In turn, the

qualitative personal selling objectives become the major determinants of the quantitative

personal selling objectives. The quantitative objectives assigned to personal selling are short

term and are adjusted from one promotional period to another. The sales volume objective-

the rupee or unit sales volume management sets as the target for the promotional period-is the

key quantitative objective. All other quantitative personal selling objectives are derived from

or are related to the sales volume objective. Thus, discussion here focuses upon the setting of

sales volume objectives. Setting the sales volume objective influences the setting of otherquantitative personal selling objectives, among them the following:

1. To capture and retain a certain market share.

2. To obtain sales volume in ways that contribute to profitability (for example, by selling the

optimum mix ofcompany products).

3. To obtain some number of new accounts of given types.

4. To keep personal selling expenses within set limits.

5. To secure targeted percentages of certain accounts business.

RELEVANT SITUATION FOR PERSONAL SELLING

Let us discuss some of the situations when personal selling in a company becomes more

relevant.

1. Product situation: Personal selling is relatively more effective and economical in case:

(a) When a product is of a high unit value like Xeroxing machine, computers etc.

(b) When a product is in the introductory state of its life cycle and require creation of core

demand.

(c) A product requires personal attention to match specific consumer needs e.g. insurance

policy.

(d) Product requires demonstration e.g. most of the industrial products.(e) Product requires after-sales service.

(f) Product has no brand loyalty or very poor brand loyalty.

2. Market situation: Personal selling situation can be best utilized when:

(a) A company is selling to a small number of large-size buyers.

(b) A company sells in a small-local market or in government or institutional market.

(c) Desired middle men or agents are not available.

(d) An indirect channel or distribution is used for selling to merchant-middlemen only.

3. Company situation: Personal selling is relatively more effective and economical when:

(a) The company is not in a position to identify and make use of suitable non-personalcommunication media.


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(b) A company cannot afford to have a large and regular advertising outlay.

4. Consumer behaviour situation: Personal selling is more effective when:

(a) Purchases are valuable but infrequent.

(b) Consumer needs instant answers to his questions.

(c) Consumer requires persuasion and follow-up in the face of competitive pressure.

DIVERSITY OF SELLING SITUATIONS

All of us being consumers often come across variety of selling situations. Differences in

marketing factors cause each company to have individualized selling styles. Each different

type of selling job requires the sales person to perform a variety of different tasks and

activities under different circumstances. The job of a soft drink driver salesperson who

calls in routine fashion on a number of retail stores is different from that of a computer sales

person who sells a system for managing information to executive of a consultancy firm.

Before categorizing sales persons into basic selling styles, one convenient way to classify the

many different types of sales job is to array them on the basis of the creative skill required in

the job, from simple service-or repeat order selling to the complex developmental selling. Letus now discuss the different kinds of selling positions prevalent in Indian companies.

Delivery sales person: The primary job of the delivery sales person is to deliver the product

e.g. soft drink, bread, milk etc. The selling responsibilities are secondary. Good service and a

pleasant personality may lead to more sales.

Inside order taker: The retail sales person standing behind a counter is an inside order taker.

The customer comes to the sales person with the intention to buy a product or service, the

sales person only serves him or her. The sales person may use suggestion selling but

ordinarily cannot do much more.

Outside order taker: The soap or spices sales person calling on retailer is an outside order

taker. They do little creative selling. In contract with store personnel these representatives

actually may be discouraged from doing any hard selling. That task is left to executives

higher in the hierarchy.

Missionary sales people: These sales persons are not expected or permitted to solicit an

order. Their job is to build goodwill or to educate actual or potential user or provide services

for the customers, as in the case of Medical representatives, working for the pharmaceutical

company.

Consultative sales person: Consultative sales are characterized by the product or service that

is sold at the higher level of an organization e.g. computer system or management

consultancy service. The decision to purchase such products involves higher capital outlay

thus sales job requires a low key, low pressure approach by the sales person. It would

also require a very strong knowledge about product, patience to discuss product with several

people of organization and potential benefits to the user. Even at times when the progress of

sales slows down representative has to make creative and sensitive efforts to resume interest

but without appearing to exert pressure on the prospect.

Technical sales personnel: The most distinctive characteristic of technical sales is the

product knowledge required by its sales person, unlike the consultative sales, where


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sophistication in organization relationship and persuasive ability are sales persons most

valuable assets. Even time required to sell the product is relatively less than

consultative sales. Most of the technical purchasing requires approval of several people but

only one or two people with technical knowledge influence decision. If the sales

representative is able to satisfy these people with product characteristics, application,

installation process, approval from higher management is usually forthcoming. The technicalsales persons though not strangers to the process of making a sale, are trained to utilize the

rational approach, by going into details of product utility and features.

Commercial sales person: This field generally includes nontechnical sales to business,

industry, government and non-profit organization e.g. office equipment, wholesale goods,

building products, business services and others. Unlike the previous two types, it is

customary for the commercial sales person to make sales on first or second call. The process

stresses approach to right person (decision maker), making a smooth presentation and closing

the sales. The field is composed of order takers, to follow up and maintenance of accounts

and order getter, to develop new accounts. Since these require different approaches, they

normally require different personality traits e.g. the order getter are more aggressive andmore highly motivated.

Direct sales people: Direct sales are primarily concerned with the sales of products and

services to ultimate consumers e.g. restaurants, door to door sales, insurance, encyclopaedias,

magazines etc. There is normally some emotional appeal associated with this type of selling,

thus sales persons are required to possess strong persuasive ability. Often length of time to

close sales is shortest in the case of above product categories. In fact, sales person are trained

to close the sales on the first visit because it is felt if consumers are given time, they will

either cool off from buying or will buy from competitor.

PERSONAL SELLING PROCESS

It involves following steps:

1. PRE-SALE PREPARATION:

The first step in personal selling is the preparation of sales persons. The sales persons

must be properly selected, trained and motivated for the job. They must have well

knowledge regarding product, the market, and techniques of selling.

Pre-Sale

Preparation

Closing the sale Handling of

Objections

Prospecting

Identifying and

Qualifying

Approaching

Demonstration

Sales

Presentation

Follow Up


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They should also have knowledge about the motivation and behavior

of the prospects that they are going to meet for the purpose of selling their products.

They should also be well informed about the nature of competition and nature of

competitors products.

2.

PROSPECTING, IDENTIFYING AND QUALIFYING:

The planning work which is essential in eliminating non-buyers is called prospecting.

The most important part of the entire selling process lies in locating the most

promising prospects.

IDENTIFICATION OF PROSPECTS: every sales person should try to collect

information about the potential customers from all available sources.

Some of the sources and technique employed for finding prospects are as follows:

a. Current customers: the current satisfied customers act as one of the best source

of prospective customers. Besides they are also easier to attract while selling

additional goods and services.

b. Referrals of Satisfied Customers: sales person ask the existing satisfied

customers for names of relatives, friends or business associates who might need

similar product or service. When the sales person contacts these prospects for sale

they provide further information or referrals regarding more potential customers.

c. Centre of Influence: this technique is based on referrals by a person, who has

information about other people of an influence over them. Such a person can help

a sales person to identify good prospects. Some of the categories of people to

whom such people belong are housewives, local politicians , bankers etc.

d. Spotters/Sales trainees: sometime a company employees sales trainees

specifically for helping the sales persons identify the prospects. The sales trainees

are referred to as spotters. This greatly helps in reducing the time and effort

required for qualifying a prospect by the sales person alone.

e. Cold canvassing:this technique basically involves calling on a potential customer

without any prior appointment. Here, the sales person just goes in and introduces

himself to the prospect and inquires about the need of the product or service by

the prospects . but this technique involve a lot of time and effort as a large number

of calls so not materialize.

f. Directories: Directories are an abundant source of finding potential customers.

Besides regular telephone directories, membership directories of trade

associations and professional societies etc are good source for prospects


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g. Mailing List: certain organizations compile lists of persons and organizations for

direct mail advertisers, pamphlets etc. such list can also be employed to identified

sales prospects.

h. Trade Shows, Exhibitions etc: more and more companies have started

participating in trade shows, exhibitions etc since not only can they advertise and

promote or sell their product but can also gain valuable market information about

customers and prospective buyers.

QUALIFYING THE PROSPECTS:

For a successful sales presentation the following things regarding the prospect should

be kept in mind:

1. He has clear and well defined need for the product and services

2.

He has adequate financial resources to pay for it

3. He is in a position to buy large enough a quantity to result in a profitable sale

4. He has the authority to make a decision.

These factors which one has to consider in order to qualify a prospect can be

summarised in the acronym MAN i.e

oney:the ability to pay for a product or service

uthority:the authority to make a commitment on his sown

eed :the need for the product or services exists

3. APPROACHING:

Before calling on the prospects the sales person should try to get information about their

nature and behavior. He should try to get information about their nature and behavior. He

should try to ascertain what products or brands they are using.

The sales person must introduce himself and his product to the

prospective customers before he does anything else. He should not try to be over clever and

play with nerves of the prospective customers. He should be very polite while approachingthe prospects so that he does not have much difficulty at the time of presentation.

M

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4. SALES PRESENTATION:

Sales presentation is done mainly to show that the sales person has a good understanding of

the prospects needs and the presentation is all about explaining to the consumer how the

products meet their requirements. When the sales person arrives to deliver the pitch should be

well dressed and should have an understanding and helpful attribute towards the prospective

consumer. He should also posses excellent communication skills.

Categories of Presentation:

1. Fully Automated:this is based on a highly structured approach and is usual done with

the help of films or slide projections. It is mostly used to sell intangibles services like life

insurance to rural or semi urban prospects.

2.

Semi Automated: in this approach the sales person takes help of brochures or literature

and keeps on adding his comments where necessary. It is useful in selling

pharmaceuticals products.

3. Memorised: in this type of presentation, the company message is presented y the sales

person with a few changes.

4. Organised: this is the most popular and effective sales presentation. Here, the sales

person is given a complete flexibility of words has to follow the company prepared

outline or check list, the prospect is taken through the four stages : attention, interest,

Desire, Action (AIDA) to a purchase decision.

5. Unstructured : this is the problem solving approach of presentation. Here the prospects

and sales person get together to explore the problems and find solutions such

presentations are not too well focused and much time is wasted. Therefore, need a

experienced sales persons who can quickly clear the doubts and complaints of the

customers.

Approach:

Introductory Approach: here the sales person introduces himself and his company to

the prospect.

Product Approach:here the sales persons hands over the product to the prospects for

examination after briefly explaining it to them.

Consumer Benefit approach: In this approach the sales person starts the sale by

informing the prospect for examination after briefly explaining it to him.


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Referral Approach: the sales person can give the name of a present satisfied customer to

the prospect as a reference during the meeting.

5. Demonstration :

it is the core of the selling process. There are two stages of demonstration, first

involves a description of the features and benefits of the product and an explanation of

how its works. The second stage is the actual demonstration itself. This process is

mainly directed at converting the prospect into a customer.

An effective product demonstration should be:

1. Well prepared and referred

2.

Should be design to give a hands on experience with the product.

6. Handling of Objections

After demonstrating and explaining the product, its features, price and benefits, the

salesmen should entertain queries from the prospect. A good salesman should realize

that it is the golden opportunity to convince and persuade the prospect. The salesman

should not loose patience if the customer puts many queries and takes time inreaching any decision.

7.Closing the sale

After having dealt with the customers objections comes the stage when the sales

person asks for the order. Unless the sale takes place the entire process is a wasted

effort. Hence, it is important for the sale to materialize.

A few of the effective closing techniques are :

1. Action Close: here the sales person takes an action that will complete the sale like

negotiating for supplying financial assistance to the prospects

2. Gift Close: the sales person provides an added incentive on immediately buying

the product.

3. Benefit Close: here the sales person restates the benefits of the product in order

to elicit a positive response from the prospect.


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4. Direct Close: it is a simple technique and is most appropriate if the buyer is

showing strong positive buying motives , the sales person gives a summary of the

major points of the presentation and directly asks for the order,

5.

Alternative close: this technique provides the customer with alternatives with

regard to the product like a black or red colored one or payment on cash or credit

basis.

6. Objection close: if an objection is the major hurdle in the way of making sales,

the sales person should try to gain a commitment from the buyer that if the

objection is removed he will buy the product.

Thus the close is the most important part of the selling process since all the

efforts and presentation comes down to this moment.

8. FOLLOW UP

after a successful close the sales person has to ensure that the product is delivered at

the desired location and at an appropriate time. Sometime the customer may desire

some minor modifications in the product or service to suit their particular need, the

customer should also be trained how to operate the product properly and safely.

Even after the formalities have been completed the delivery of effective after sale

services are equally important. Sending letters notes, call, greetings etc are good ways

of keeping in touch with customers. Some companies also send customers company

newsletters etc. to keep them well informed. The sales person should keep in touch

with customers and keep them informed about the latest products and services.

Sales Mgt Unit-1

Documents

Transcript of Sales Mgt Unit-1