Salesmanagement Final

7/29/2019 Salesmanagement Final

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COMPARATIVE STUDY OF ABB, TATATELECOM AND HCLCOMPARATIVE STUDY OF ABB, TATATELECOM AND HCL

PROJECT ON SALES MANAGEMENT

A COMPARATIVE STUDY

OF

SALES FORCE OF ABB,

TATA TELECOM

&

HCL

IN MARKETING OF

SWITCHING DEVICES IN INDIA

Submitted to :-

Prof. Surendra Sanghwan

Submitted by:-

Gaurav Bhalla 2k F-115

Nitin Oberoi 2k- F -133

Rajat Dhall 2k F- 142

INSTITUTE OF MARKETING AND MANAGEMENT

NEW DELHI


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PREFACE

The Project was taken up in a broad perspective of comparing the

sales force of various (in fact three) companies and thereby

understanding the working methodology and functioning of a sales

organisation. We have considered certain parameters and

guidelines with respect to which we compared TataTelecom, ABB

and HCL who have a common product Switching Devices.

The project not only throws light upon the basics of sales

management but also gives a nice picture of Switching device

market in India by comparing the basic functioning of sales force of

above said companies.


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ACKNOWLEGEMENT

We would like to express immense gratitude to all the employees

of HCL Noida, ABB, Kalkaji and TATATELECOM, Gurgaon who

have taken immense pain to entertain our group and spent their

precious time to fill up the questionnaire and imparting the

necessary information, Especially Mr. U.P.Maharane, Mr.

Ramakanth of HCL, Mr. H.K. Pandey of ABB and Mr. Shailendra

Kumar Pandey and Vineet Diwan of TATA TELECOM who have

helped us throughout.

We would also like to thank our Professor Mr.Surendra Sanghwan

for guiding and motivating us in a very practical way sometimes as

a friend and sometimes as a guide in accomplishing this project.


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SYNOPSIS

Switching Device is a generic term and includes various kinds of product,

which are basically used for data transmission and telecommunication. These

electronic devices are made up of semiconductors and very costly and have

only industrial application .To visualize them more we can see the product

description later on in the project.

Though the product we have chosen is too technical and appears as if there

would be very less requirement of direct selling in marketing of the product.

But it was really surprising and interesting for us also to know the

importance of direct selling in the overall marketing strategy of the

product. We also studied the various other aspects of the sales organisation

e.g. the Quota system, Selling objective, Training need identification,

Performance appraisal etc and prepared a very concise report comparing all

of them and later on highlighting the commonalities and differences in them


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COMPANY PROFILE

HCL INFORMATION SYSTEMS

HCL Info systems Ltd. (HCL Insys) is India's premier information technology

company. With its in-depth expertise in developing solutions spanning diverse

technologies, HCL Insys aims to propel its course on to the high-growth path

of 'Total Technology Integration'. Leveraging its expertise in total technology

solutions and services, HCL Insys offers value-added services in key areas

such as SAP implementation, software applications, networking consultancy

and management and a range of support services.

To capture the two ends of the market spectrum - enterprise solutions and

PCs - HCL Insys has made significant strategic infrastructural investments in

the Professional Services Organisation (PSO), the Support Services

Organisation (SSO) and in its manufacturing plants at Noida and Pondicherry.

The approach is to view hardware as one of the key components of the total

solution. The build-up of the services business (both of PSO and SSO) would

enable HCL Insys to offer complete solutions and will also raise

manufacturing volumes to internationally competitive levels.

Established in 1994, HCL Insys' PSO provides single-window enterprise

solutions in key vertical segments of telecommunications, manufacturing,

finance & banking, government, utilities and transportation. Spearheading

HCL Insys' thrust on software exports, the PSO's infrastructure comprises a

taskforce of 600 software specialists, four software factories with SEI-CMM

level 4 certified processes, and dedicated 'Centres of Excellence' for SAP and

telecom solutions. Significant SAP implementation projects by the PSO

include General Motors, HM Lancer, Kalyani Brakes, and Samsung. PSO's


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projects involve high-level integration projects and functional consulting and

implementation services forERP (Enterprise Resource Planning).

Continuously increasing customer expectations and applications, its focus on

integrated enterprise solutions have strengthened the HCL Insys SSO's

capabilities in supporting installation types ranging from single to large, multi-

location orders. The SSO, comprising a direct support force of over 800

members, is operational at 151 locations across the country and is the largest

such human resource of its kind in the IT business. A majority of the SSO hasbeen specially trained in supporting solutions, the company's key focus area.

HCL Insys' manufacturing facilities are ISO 9001 - 2000 & ISO 14001 certified

and adhere to stringent quality standards and global processes. With the

largest installed PC base in the country, three indigenously developed and

manufactured PC brands - 'Infiniti', 'Busybee' and the 'Beanstalk' and its

robust manufacturing facilities, HCL Insys aims to further leverage its

dominance in the PC market. HCL Insys' 'Infiniti' line of business computing

products is incorporated with leading edge products from world leaders such

as Intel. A fully integrated and business-ready intranet family of servers and

workstations, the 'Infiniti' line is targeted at medium and large companies to

help them to manage their intranet-related applications.

As customers' needs mature, the IT industry has witnessed a continual

evolution through a progressively finer segmentation of markets. To become a

dominant player in providing global IT services; HCL Insys has reorganized

and consolidated its hardware and services businesses. Towards this, it has

set-up overseas subsidiaries in the US, the U.K., Singapore, Malaysia and

Australia.

The Frontline division of HCL Insys markets national and international brandsof computer systems (including Toshiba Laptops) and peripherals within the


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country. With its extensive network of 800 resellers across 300 cities,

Frontline Division has actively promoted the penetration of PCs in the home

and the small office/home office (SOHO) segments. To provide its users

innovative support services and solutions, the Division has established a

countrywide network with 205 partners across 100 cities, termed the "Support

Net". Focusing on the small and medium enterprises (SME), the small

office/home office (SOHO), the home and the First Time User (FTU)

segments, the Frontline Division aims to become a dominant purveyor of IT

products by value added services and enhanced solutions to its customers.

HCL Insys' Office Automation Division, previously known as HCL Office

Automation, markets and supports Toshiba photocopiers, In Focus multimedia

projectors, Duplo digital duplicators, Ericsson EPABX, Samsung Key

Telephone Systems, and Nokia cellular phones. The Division's vast

distribution and support network spanning over 100 locations and over 400

experienced personnel further reinforce its strong operational capabilities.

Among the specific initiatives undertaken by the OA Division are customer

meets held across the country, President Club meets, tele-audits, and setting

up of IVR (Interactive Voice Response) HelpDesks.

HCL Insys' initiatives in setting national and international industry standards in

technology, solutions and processes led to the establishment of two unique

programme - "Program Infiniti" in 1992 and "Enterprise 2000" in 1994.

"Program Infiniti" is a consistent and continuous plan designed to upgrade

and modernize HCL Insys' entire hardware and software capability to world-

class standards. "Enterprise 2000" is a unique programme with an aim to

provide IT solutions to customers, to place them at the cutting edge of their

respective businesses in the new millennium. In keeping with its objective of


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total quality management, over 70 percent of its employees are being trained

under the Phil Crosby methodology of Quality Education System.

In 1992, HCL formed a joint venture company, HCL HP, with the international

computer giant, Hewlett-Packard (HP), and precipitated a technological leap

by achieving world class manufacturing expertise in the country for HP's

RISC/UNIX based business servers and workstations. In 1997, HCL and its

joint venture partner, HP, re-organized their joint business activities in India

through the buying back of HP's 26 per cent of equity in HCL HP by the HCLpromoters.

Following the government's decision to open up the distribution of Internet

services to the private sector, HCL Insys, under a new initiative called

WWW.OW provides a complete range of solutions for the Internet. These

services include setting up of infrastructure for ISPs, solutions for cybercafes,

information kiosks, Net-on-TV, corporate Intranet and extranet (VPNs),

infrastructure for smart cities and a set of management services such as

facilities management, network management etc.

With an enlarged business focus, HCL Insys has strengthened its multiple

strategic alliances with specialists to include world leaders such as Intel for

PC and PC Servers; Microsoft, Novell and SCO for operating systems and

software solutions; Toshiba Corp. for business automation equipment; SAP

AG for specialist ERP solutions; and Oracle, Sybase and Informix for RDBMS

platform. Indeed, a vision to create enterprises of tomorrow.


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ABB

The Company was incorporated on 24th December 1949 as Hindustan

Electric Company Limited. In 1965, the Companys name was changed to

Hindustan Brown Boveri Limited (HBB). Pursuant to the Scheme of

Amalgamation of Asea Limited with HBB with effect from 1st January 1989,

the name was further changed to Asea Brown Boveri Limited (ABB) with

effect from 13th October 1989. Flakt India Limited was amalgamated with

ABB with effect from 5th October 1995.

During 1994-95, a joint venture Company - ABB Daimler-Benz Transportation

AG (Adtranz) was established by ABB Zurich and Daimler-Benz AG,

Germany, in Germany. A subsidiary of Adtranz was incorporated in India viz.

ABB Daimler-Benz Transportation Limited which took over the Transportation

Business of the Company effective 1st January 1996.

ABB is a subsidiary of ABB Zurich, which is now an entity focused on T&D,

automation and robotics. Earlier, ABB worldwide was into the businesses of

power generation (through a joint company, ABB-Alstom Power) and

distribution and industrial systems. It has recently announced the sale of its

holding in ABB-Alstom Power to Alstom for a consideration of Euro 1.25bn.

So, ABB's only venture in India would be ABB Ltd, as it would be getting out

of the remaining ventures.

Capital:

The Authorized Share Capital of the Company is Rs.500, 000,000 and the

paid-up share capital of the Company as at the end of the financial year


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ended 31st December 1999 is Rs.414, 183,560, consisting of 41,418,356

Equity Shares of the face value of Rs.10 each.

Shareholding Pattern: Asea Brown Boveri Limited, India, is a partly owned

subsidiary of ABB Asea Brown Boveri Limited, Zurich, Switzerland (ABBZH).

ABBZH and Flkt AB, Sweden, a 100 percent subsidiary of ABBZH, hold

50.99% of Equity Shares in the Company. The balance stake is held by: FIs

22.14%, FIIs 3.63%, MFs 2.32, Non-resident Individual 0.08%, Nationalised

Banks 0.15%, Bodies Corporate 0.93%, Directors and their relatives 0.01%,NSDL (Transit) 1.95% and General Public 17.8%.

ABB Ltd's business mainly encompasses power T&D and industrial

automation. The T&D segment is expected to be a major beneficiary of new

projects of Power Grid Corporation of India Ltd (PGCIL), and the proposed

privatization of the T&D segment. Incremental capacities of 28000MW have

been targeted by 2002. Every MW of power generating capacity leads to an

Rs20mn demand for T&D equipment. Industrial systems are expected to

stage a recovery with an upturn in the economic cycle and increase in core

sector investments ABB has the capability to manufacture a whole range of

T&D equipment comprising of transformers, HV and MV switchgears, cables,

capacitors, sub-stations and management systems and a host of other

equipment especially HVDC equipment. ABB has begun the rollout of the

400KV Trafostar transformers from its recently commissioned transformer

facilities at Maneja in Vadodara.


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TataTelecom

Setting up business on the Indian sub-continent in 1987, today Tata Telecom

is an undisputed total business solutions provider. With technical

collaborations and partnerships withAvaya, Tata Telecom is fully equipped to

offer a gamut of state-of-the-art communication systems. Tata Telecom is a

rare organisation in India with proven and comprehensive skills in R&D,

Technical support, Manufacturing, Sales and Customer Support areas of

expertise.

Tata Telecom's Business Communications Division (BCD) provides complete

communication solutions for Business Enterprises. Its product range includes

EPABXs, KTS, Voice Mail Systems, Interactive Voice Response Systems

(I.V.R's), and CTI & Networking_Solutions.

Our constant endeavor to understand complex customer needs has resulted

in a range of products and solutions. The range includes Telephony, Mobility

Solutions, Messaging Solutions, Conferencing, Call Center Solutions, and

Data Networking.Hence,Tata Telecom provides solutions across all segments

- Homes to Shops, Small to Large offices, Factories and large Industrial units,

Banks, Call Centres and 3-4 Star Hotels, Hospitals, MNCs, large Indian

corporates, departmental stores, etc..The unbeatable product range of Tata

Telecom includes the latest in each segment

The technological superiority, comprehensive R&D, upgraded systems, wide

service 3reach, strong customer base and the equity associated with the Tata

heritage .
http://www.avaya.com/http://www.tatatelecom.com/products/telephony/index.htmlhttp://www.tatatelecom.com/products/mobility/index.htmlhttp://www.tatatelecom.com/products/mobility/index.htmlhttp://www.tatatelecom.com/products/messaging/index.htmlhttp://www.tatatelecom.com/products/conferencing/index.htmlhttp://www.tatatelecom.com/products/callcenter/index.htmlhttp://www.tatatelecom.com/products/datanetworking/index.htmlhttp://www.avaya.com/http://www.tatatelecom.com/products/telephony/index.htmlhttp://www.tatatelecom.com/products/mobility/index.htmlhttp://www.tatatelecom.com/products/mobility/index.htmlhttp://www.tatatelecom.com/products/messaging/index.htmlhttp://www.tatatelecom.com/products/conferencing/index.htmlhttp://www.tatatelecom.com/products/callcenter/index.htmlhttp://www.tatatelecom.com/products/datanetworking/index.html


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About The Product Switching Devices

EPABX of EMC of HCL Kajun M770 of ABB

TataTelecom


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Fig. Switching Device products

EPABX of TATA TELECOM is designed specifically to provide the reliability

required for the convergence of voice, data and video into a common

infrastructure, and features its unique Switch Architecture For Extreme

Resiliency (SAFER) that distributes critical switching, management and

processing functions.

EMC of HCL is the foundation for a total networking solution. It is an

exceptionally powerful 80+ Gbps resilient multiservice, multilayer, intranet

service center and the first enterprise backbone switch which integrates

multilayer switching over 100 Mbps, 1 Gbps and ATM over a single, fully-

redundant hub. This support for a broad range of network environments

allows enterprises to use any combination of these technologies with no need

to adhere to any single technology today

The modular, enterprise-class kajun M7T70 Multifunction Switch of ABB is

designed specifically to provide the reliability required for the convergence of

voice, data and video into a common infrastructure, and features its unique

Switch Architecture For Extreme Resiliency (SAFER\231) that distributes

critical switching, management and processing functions.

Basis Of the Study

We developed certain guide lines and decided the following key parameters

which we considered as the most important for visualizing the functioning of a

sales force

1. The role of personal selling in overall marketing strategy

2. Selling objectives and strategies.


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3. Key objections faced by sales personnel

4. Overview of the sales division

5. Responsibilities of the sales executives.

6. Strategies for tracking competitors activities

7. Recruitment process, Selection, Training and compensational

strategies for the sales force

8. Factors taken into account while assigning quotas

9. Performance appraisal system and methods

10.Basis of formation of sales budget and sales forecasting

11.Reporting format and frequency

12.Size of the sales force

Theoretical Perspective

1. Selling objectives and strategy

1. Qualitative (Long term objective)

2. Quantitative (Short term objective)

Qualitative objectives are long term and concern the contributions

management expects personal selling to make in achieving. These objectives

change little over time and generally are carried over from one periods

promotional program to next. The basic considerations influencing the setting

of qualitative personal selling objectives are closely related to the keydecisions on sale policies and personal- selling strategies. These decisions


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determine the kind and size of personal-selling operation that like company

has and its role in the total promotional program. After the role is defined,

qualitative long-term personal-selling objectives become the major

determinants of the types of quantitative short-term personal selling

objectives.

For e.g.

a. To reach out and obtain new customer.

b. To service existing accounts i.e. to maintain contact with present

customers, take orders and so forth.

c. To keep customers informed on changes in the product line and other

aspects of marketing strategy.

d. To provide advice and assistance to middleman on various

management problems.

e. To collect and report market information of interest and use to

company management.

Quantitative Objectives are short-term objectives and are adjusted from one

promotional period to other. The sales volume objectives- the rupee or unit

sales volume management gets as the target for the promotional period-is the

key quantitative objective. All other quantitative selling objectives derive from

or are related to the Sales volume objective.

For e.g.

a. To capture and retain a certain market share.


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b. To obtain sales volume in ways that contributes to profitability.

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

d. To keep personal selling expenses within set limits.

e. To secure targeted percent of certain accounts business.

Sales related marketing policies are guidelines within which the company

seeks to reach both quantitative and qualitative personal selling objectives.

They provide general guidance on what to sell and whom to sell to shape the

fundamental nature of a company and are important determinants both of the

kind of sales personnel need and their total number (the two components of

personal selling strategy). Pricing policies, too, have an important impact,

especially on the kind of sales staff needed- sales people have to persuade

target buyers not only to accept the companys products but at the price

asked. Sales-related marketing policies, like personal selling objectives, vary

with the competitive setting. It is especially important that they be attained to a

companys particular situation under conditions of monopolistic or oligopolistic

competition, much more so than when there is no direct competition.

Personal- selling strategy involves the implementation of sales policies to

achieve personal selling objectives. Formulating personal-selling strategy

requires analysis of competitive posture to determine the kind of salesperson

needed and the size of sales force. Personal-selling strategy ultimately must

be individualized for each customer and prospect, each salesperson, in the

final analysis, determines how and when to do what in the contacts with each

assigned customer. Although management makes the key decisions on

personal-selling strategy, each salesperson determines (through the quality of

job performance) the effectiveness of that strategy in achieving the companysoverall personal-selling objectives.


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2.Key Objections Faced By The Sales Personnel And The Proposed

Solution

Key Objections

1. Price Objection

It is the most common type of objection raised by prospects in

which they express their inability to purchase at such a higher price.

Sometimes prospects pretend that the price is higher for them with

a view that salesman might decrease the price.

Handling objections

a. Offer substitute: Cheap substitutes.

b. Justify the price: By explaining about the quality, utility and

durability of the product.

c. Discount offers.

d. Offer installment payment.

e. Price factor can be avoided: Start talking about durability, utility

and services of products.

f. Show proofs: Show catalogued copies of invoices cash bills etc.

2. Quality Objection

It is relating to design, durability, size, colour, packing etc.

Handling


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To prove superiority of the product by making a comparison of

competing products. He can show laboratory reports, experts

opinions etc. in suitable cases to meet such objections.

3. Payment Objection

It is regarding lack of ready cash to pay the full price of product.

Handling Objection

Offer credit or pay in installment.

4. Service Objection

It is relating to repair, delivery of goods, timely attendance of the

worker etc.

Handling Objection

Emphasize the service facilities offered by the organization. He can

illustrate the prompt service by experts servicemen, quick delivery

at doorstep, prompt attendance of workers etc.

5. Time to buy objection

Prospect may say he doesnt want to buy now or he is not

interested in the product at present.

Handling Objection

Emphasize value of time and induce them to purchase now. In

some specific cases he can say that in the near future price is going

to rise or the new model will be too costly or the new model will

enter the market after a long period and so on.


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4. Responsibilities of the sales executive and the degree and level of

coordination he has with the Product / Brand manager

Responsibilities

1. Sales Program

He takes initiative in establishing short term and long-term sales

goals of the division and in collaboration with other marketing

executives gets sales, profits, growth and other goals.

2. Organisation

Sales Manager establishes an effective plan of organization and

methods of controlling the activities of members of the sales

organization that will provide sufficient time for carrying out the full

time of departmental responsibilities.

3. Sales force management

Sales Manager identifies promising sources for recruitment of new

sales personnel and sets standards for selection of the most

promising new personnel from among recruits. He ensures that

sales personnel are properly motivated so as to achieve optimum

sales performance.

4. Internal and External relations

He develops effective working relations with other department

heads and the general manager so that significant sales

development can be translated into appropriate course of action.


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He maintains relationship with key accounts as well as with sales

and other key personnel.

5. Communications

Sales manager keeps the vice-president of marketing informed on

sales result and future plans of operations. He also develops a

system of communication with other sales personnel that keeps

them informed of overall departmental sales, objectives, results,

etc.

6. Control

Sales manager consult with production manager so that production

rates and inventories are geared as closely as possible to actual

sales need.

Relation With Product Manager

Executives responsible for product planning and the formulation of product

policies make numerous decisions. Periodically, each product in the live

needs appraising in terms of its profitability and its ability to fulfill buyers

wants. When products come up for review, decisions are made on whether

each should be retained, changed or improved, or dropped from the line.

Other decisions are made on adding new products, on changes in product

design and other product features. Still another product decisions concern

product quality, services rendered in connection with product sales and

packing.

Product decisions are often a shared responsibility of marketing, production,

research and development and financial executives provide important inputs

for such decisions. Their continuous contact with the market through


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subordinates and sales personnel provide them with feedback about product

performance and acceptance generally not available from other sources.

5. Recruitment Process, Selection, Training (content, faculty, duration)

and compensation strategies for the sales force.

Recruitment

It is the process where the prospective candidates are found and encouraged

to apply. The aim is to attract potential salesmen to fill up vacancies. It is anend less job. The appointment of right person possessing all qualities of good

salesmen is important and it depends on a sound recruitment policy. Good

recruitment policy builds a stable working force and helps in achieving goals

in a systematic and planned way.

Sources of recruitment

1. Internal

2. External

Internal Sources.

i) Promotion of employees: Sincere and hardworking

employees in organization may be promoted to fill up the

vacancies.

ii) Former employees re-employment.

External recruitment:

i) Advertisement

ii) Employment exchanges


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iii) Recommendations

iv) College and School

v) Competing Firms

vi) Non- competing firms

vii) Self-offers

viii) Wholesalers, retailers and customers.

Selection

It is the process of choosing some out of the total candidates provided by

recruitment. The main aim is to find out the most suitable candidate and leave

out misfit candidates.

Methods of Selecting salesman

1. Requisition

Salesman has to send a requisition to the personnel department stating

the number of candidates required and their job specifications.

2. Recruitment

Either through employment exchanges or through newspapers

advertisements or through any other media.

3. Application Blanks


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It is a written formal application submitted by the person in search

of a job. It required

i) Personal datasheet

ii) Job description sheet

iii) Man specification sheet.

4. References

The candidate is required to give two or three references. The sales

manager has to check the references mentioned by the candidates.

This he can do by asking the persons stated or reference, to send

confidential report about the candidates, sometimes telephone calls

or direct face-to-face enquires can be made to references which

reveal the true information about the candidates.

5. Preliminary Interviews

It is used to leave out misfit candidates. The panel of experts

decides the number of candidates to be called for the interview. The

candidate is interviewed by a committee to judge his suitability for

the job.

6. Psychological Test

To test ability, skill, emotional attitudes, behavioral patterns and

aptitudes. There are various types of tests such as intelligence test,

personality test, aptitude test, capacity test etc.

7. Physical examination


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A Salesman is required to possess a standard good health. A

candidate suffering from any physical defect or deficiency is out

rightly disqualified. A candidate having a poor health becomes

burden for organization.

8. Final interview

All information regarding qualification, experience, reference,

physical test, psychological test etc. helps the selection committee

to arrive at a final decision. During final interview candidates are

asked some crucial questions regarding their willingness to accept

the job, their responsibility whether they want to continue or not etc.

Finally, if the selection committee is satisfied about the candidate,

he is selected for the appointment.

Training of Salesmen

1. To improve the performance.

2. To influence people in a better way.

3. Provides expert knowledge.

4. Reduces wastage.

5. Brings more income.

6. Reduces control and supervision

7. Develop high morale.

Method of Sales training


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1. Initial Training

It is given to candidates on their admission to the organisation to

introduce salesmen to organisation and various sales policies.

2. On the Job Training

Salesmen are given opportunity of performing the role of a

typical salesman. Such training is made under the supervision of

senior salesman. It enables salesman to know correct method.

3. Schools and Colleges

Some big organizations have training centers. Small firms may

admit their trainee Salesmen into schools and the colleges,

which impart coaching in salesmanship.

4. Correspondence Training

It is adopted where salesmen are widely scattered and training

needed by them is not very important. The training materials

with necessary instructions are sent to the trainees by post

regularly. It is just like postal coaching and perhaps the easiest

and cheapest method of training salesmen.

5. Sales meeting and conferences

They are held at regular intervals like weekly, monthly or even

half yearly.

6. Sales manual


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They contain information about the organisation, its history, its

policies, particulars of products, advertising etc.

7. Visual Training

Visual Training programmes are imparted with the help of slides,

black boards, graphs, models etc.

8. Role Playing

Under this method a play is presented on stage so that the

trainee salesmen is able to gain enough knowledge. After the

drama is over, a general discussion can be made and newel

recruited salesmen can be given necessary instructions.

9. Brain storming

Five or seven trainees salesmen are grouped under the

chairmen ship of an experienced salesman. The chairman gives

problems to the trainees and the trainees try to find out the

solutions to such problems and write the same on the notebook.

Remuneration method

1. Straight Salary Method

Salesmen are paid a certain amount as salary like other

employees. Salary is paid on the basis of time and not on the

basis of sales. There are three elements in a straight salary

method of remuneration.

i) Salary

ii) Allowances


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iii) Increments

2. Straight Commission Method

Remuneration is paid on the basis of amount of sales made.

This method is; effort oriented and is based on volumes of sales

made. The salesman is paid commission on the basis of a

predetermined % of net sales or profits.

3. Salary and Commission method

The sales force is entitled to a fixed salary and commission. The

salary element gives the salesman the necessary security and

comfort. The commission element is meant to reward hard

working and efficient salesman who put such effort to increase

the sales volume.

4. Salary, Commission and bonus method

The salary is paid for certain specific duties performed by the

salesmen. In case the salesmen put such effort or sells and a

predetermined limit, he is paid commission and / or bonus. It is

meant for the results over and above certain satisfactory level of

effort.

5. Performance appraisal system and method

The purpose of a performance review is not only to help the

employee understand what is expected and how she or he is

doing relative to these expectations, but also to increase

productivity and company loyalty. Performance reviews done


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properly also reduce the chances that an employee terminated

for performance problems could successfully sue the company.

Seven steps can help you discuss performance with an

employee:

1. Listen to your employees self-appraisal before offering an

evaluation. Then give a balanced picture of an employees

strengths and weaknesses from a written document that has

been carefully prepared.

2. Analyze what you arte going to say. You want to be tactful

and sensitive remember, your job is to motivate, not destroy.

3. Discuss differences and offer specific suggestion on how to

capitalize on strong points and improve weaknesses work

with the salesperson to develop realistic goals.

4. If a disagreement occurs listen closely and ask for specific

facts. Dont become defensive. State your position directly

and clearly. Dont allow an emotional situation to get out of

control.

5. Review should never contain surprises. If you constantly

reinforce and give feedback on a regular basis, no one will

be surprised. The appraisal is a chance to fine tune.

6. Dont become therapist! If any personal problems surface

during the discussion that need more professional help,

listen with empathy, then help them find appropriate help.


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7. Dont tie salaries or bonuses directly to the review persons

performance, but also on the financial conditions of the

company, the economy and what the competition is doing. If

you incorporate money with a review, the employee may

have expectations that you are unable to meet. Ensure your

employee understands that compensation decisions include

review results along with many other factors and that the

review alone is not the basis for salary and bonus action.

Following up Three Suggestions

1. Written Records

Once the performance appraisal discussion has been concluded

a manager should immediately make a written record of:

a. The overall appraisal for the previous period;

b. Plans that both parties agreed to;

c. Any personal commitments requiring specific action.

A copy of this summary should be given to employee.

2. Reflection

Following each review is a good time to review your

performance is leading the discussion. Some good questions

are:

a. What was done well?

b. What was done poorly?


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c. What will be done differently next time?

d. What was learned about the employee?

e. What was learned about self and job?

3. Follow through

A third element of follow up is to insure that agreements are kept

and plans followed. If this is not done, the entire appraisal loses

its impact and the employee assumes no one cares very much

about performance. This phase of the follow up is the initial

phase of the next appraisal.

7.Basis for formation of sales budgets and sales

forecasting.

Sales budget is a blueprint for making profitable sales. It details

out how much of what is to be sold during the operating period

and by whom, to what customers are classes of trade.

Defined in simplest terms, a sales budget consists of estimates

of an operating periods probable rupee and unit sales and the

selling expenses invested in obtaining these sales.

Sales budget is a projection of what a given sales program

should mean in terms of sales volume and net profits.

Both the salesvolume and selling expenses portions of the

sales budget have their roots in setting of personal selling

objectives which results in the two key decisions on personal

selling strategy:


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1. The kind of sales personnel

2. The size of the sales force.

The sales forecast is the general source for the sales

volume portion of sales budget. The sales volume

objective, derived from the sales forecast, is broken down

into precise details as to the quantities of products that are

to be sold, the sales personnel or sales districts that are to

sell them, the customers that are to buy them and the

quantities that are to be sold during different time segments

in the operating period.

Once these breakdowns have been, them estimates are

made of the selling expenses that will be incurred in

implementing this sales program.

The sales budget then uses the sales volume objective.

Consequently, the extent of involvement of top executive in

the early phases of budgeting depends upon the degree to

which the executives participate in the forecasting program.

Format of Sales Budget

roduct/Region North

East

Mid

West

West South Total

A 80 90 70 80 320

B 60 60 50 75 245

C 45 35 25 30 135


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8. Reporting Format and frequency:

Every firm has its own ways to communicate between sales

representative and sales office; the choice of method is the

responsibility of management. It is however very much in the

interest of salesman that such communication should be really

adequate and a vital part of his work is to ensure that it is

maintained. Sales reports are necessary for the following four main

reasons:

a. To provide information regarding salesman

b. To provide information on the conditions prevailing

in market.

c. To provide a permanent case history for each

account.

d. To maintain communication between salesman and

sales office.

If you intend to perform any task to the best of your ability, you must approach

it in the right frame of mind. The human mind tends to function at its best

when following the well-trodden path of habit. The wise salesman, therefore,

sets aside a specific time of day to write his reports. He allows himself

perhaps an hour or an hour and a half each evening for this purpose. Many

salesmen prefer to allow themselves an hour or so in which to have a meal

and unwind before they settle down to write their reports.


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Since sales representation may be regarded as a profession, one cannot

expect to work a nine-to-five stint and then finish for the day. The salesman is,

of course, entitled to his leisure and providing he organizes himself properly,

he can have and enjoy it. The work he does, however, is not dull routine.

To write lucidly, one must first marshal ones fact. It helps if you have a logical

mind. If you have not, efforts must be made to adopt a logical approach to the

information you wish to impart. The matter to be reported should be sub

divided and set out under sub headings. Sentence should be as short aspossible. The long unwieldy sentence demands for greater concentration on

the part of the reader than a short one. Paragraphs, too, should be kept short

and consist of no more than two or three sentences.

Do not assume that the reader is immediately familiar with the detail of the

situation. Ensure that each report contains a brief reference to the existing

situation before the new information is provided. Differentiate clearly between

what has been stated to you by the customer as facts and what is only your

own interpretation of the facts.

If a customer has given you information, which he has asked you to treat as

confidential, state this in the report.

The Format

The first paragraph of your report should state the purpose of the visit. Many

salesmen overlook than fact that their calls should have a specific purpose.

Every visit should have a purpose and the report should state that purpose.

The management is entitled to know the motivation, which caused you to visit

the customer.


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The second paragraph should deal with the main subject of your visit.

Succeeding paragraphs under suitable sub headings. Should deal with any

other items discussed. Opinions and comment on the part of other should

generally be kept to the end and entered under a suitable title such as

Remark.

Finally, the actions required to be taken should be shown at the end of the

report. This should state what is to be done by management or sales office

personnel and also what is to be done by the representative himself. Eachaction item should be numbered.

9. Size of sales force

It is difficult to determine the exact number of sales persons that a

particular company should have. Three basic approaches in

approximating this number are:

1. Work load method

The basic assumption is that all sales personnel should

shoulder equal work load involved in covering the

companys entire market, then divides by the workload

that an individual shall handle, thus determining the

total sales people required.

Steps involved in this approach

a. Classify customers, both present and prospective

into sales-volume-potential categories.

b. Decide on the length of time per sales call

frequencies on each class.


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c. Calculate the total workload involved in covering

the entire market.

d. Determine the total work time available per

salesperson

e. Divide the total work time available per

salesperson by task.

f. Calculate the total number of sales people needed.

This approach is attractive to practicing

sales executives. Large firms like IBM and

AtandT have used this approach.

2. Sales potential method

It is based on the assumption that performance of the set

of activities contained in the salespersons job description

represents one sales personnel unit, not necessarily of

any particular salesperson.

With this assumption management can estimate the

number of rupees of sales volume that each salesperson

should produce. Dividing this amount, into forecasted

sales volume-the companys sales volume objective-and

allows for sales force turnover results is an estimate of

the number of salesperson needed. These relationships

are summarized in equation

N=S/P (1+ T)

Where


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N= number of sales personnel units

S= forecasted sales volume

P= Estimated sales productivity of one sales personnel

unit.

T= allowance for rate of sales force turnover.

3. Incremental method

4. Conceptually it is the best approach to determine sales

force size. It is based on one main proposition; net profit

will increase when additional sales personnel are added

if the incremental sales revenues exceed the

incremental cost incurred. Thus, to apply this method,

one needs two important items of information

a. Incremental revenue

b. Incremental cost

Although this method is the most conceptually correct, it

is also the most difficult to apply in the real world.


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The Comparative Data Presentation

Most of the aspects we could find the difference and The commonalities

among the organisation have been highlighted by different font

VARIABLES TATA

TELECOM

ABB HCL

1. Relative

Importance

Given To

Personal Selling

HIGH

Reason:

They

customize

their

Switching

devices

based on the

requirement

& understand

the customer

more.

MEDIUM-LOW

Reason:

They dont

customize much

as the product

goes as a part

of large turnkey

project.

VERY HIGH

Reason:

They have an

aggressive

marketing strategy

and want to clinch

the deal at any

cost.

2. Selling


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VARIABLES TATA

TELECOM

ABB HCL

Objective Selling

objectives of

Tata telecom

are:

a) Emphasize

overall

benefit of

customers.

b) To reach

out and

obtain new

customer.

c) To

service

existing

accounts i.e.

to maintain

contact with

present

Selling

objectives of

ABB are

a) Emphasize

on high quality

of work

b) Emphasize

overall benefit

of customer.

c) To keep

personal selling

expenses within

set limits.

.

Selling objectives

of HCL are

a) High market

share

This was very

clearly understood

from their top down

and challenging

quotas, budgeting

etc.

b) To obtain sales

volume in ways

that contributes to

profitability.

c) To secure


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VARIABLES TATA

TELECOM

ABB HCL

customers,

take orders

and so forth.

d) To keep

customers

informed on

changes in

the product

line and other

aspects of

marketing

strategy.

targeted percent of

certain accounts

business

3. Key Objections

Faced By Sales

People

Most of the

problems are

faced in

providing

after sales

services.

Do not face

much problems

because of the

high quality

standards

Tough to meet the

targets


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VARIABLES TATA

TELECOM

ABB HCL

Some of the

problems are:

-

Relating to

repair

Delivery of

goods

Timely

attendance

of the worker

Solution:

47 authorized

service center

all over

country and

on an

average

Two centers

are within the

reach of 2

Solution:

Nothing

apparent as

such

Solution:

No steps taken as

such.


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VARIABLES TATA

TELECOM

ABB HCL

kames.

4. Sales Division Sector Wise

That is for

example to

target the

hotel industry,

or railways, or

hospitals etc.

Reason:

The sales

person

becomes

experienced

in the field.

Revenue based

That is amount

of profit you are

obtaining from

the customer

Reason:

Less number of

customer and

due importance

is given.

Geographical

Region wise

Reason:

High customer

interaction is

essential.

5. TrackingCompetitors

TrackCompetitors

They alsoconsider market

They maintaincompetitor analysis


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VARIABLES TATA

TELECOM

ABB HCL

actively from

-Orders won

-Business

magazines

- Journals.

behavior and

extract

information

from customer.

report.

6. The way they

use competitors

information

-Pricing

strategy

Competitors

information is

very useful

for pricing

strategy .The

basic reason

behind is to

be L1 that is

to get the

tender

passed first

criteria is to

quote lowest

- To

defend

ABB s Sales

manager feels if

you have to

defend the

competitor then

you must know

him

- To be more

competitive

in the

market.


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VARIABLES TATA

TELECOM

ABB HCL

price (they

call it L1).

- To

understand

new strategic

trends.

- To make

strategic

plans.

They too

make use of

competitors

information

for pricing

strategy and

other

strategic

planning

7. Recruitment

Policy

They prefer

- MBA

They prefer

-B.E.

-B. Tech.

-MBA

They prefer

- B.E.

- B.Tech


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VARIABLES TATA

TELECOM

ABB HCL

8. Quota System Combination

Quota: -

They use

combinationquota to

control the

sales

performance

of both selling

and non-

selling

activities. By

adopting this

type of quota

system they

monitor both

revenue

Rupee sales

volume quota:

- They use

rupee salesvolume quota.

As by their

opinion Sales

volume quota

communicates

managements

expectation as

to how

much for what

period.

A key

advantage of

Rupee sales

Combination

Quota:

They use this to

control the sales

performance Also

they follow net

profit margin quota

sometimes as they

emphasize more on

net profit out of a

transaction


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VARIABLES TATA

TELECOM

ABB HCL

generation as

well the as

the no of units

sold out

Since the

performance

against

combination

quota is

measured as

%, it is also

known as

Point System

Quota. It is a

combination

of sales

volume goals

and activity

goals.

volume quota is

that it is easily

relatable to

other

performance

data such as

selling

expenses,

through

computing

ratios or

percentages.

9. Training Need

identificationUsually

training is

imparted

whenever

Boss gives a

report of his

observation on

the weakness of

The groups head

identify the needs

of each person

reporting to them


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VARIABLES TATA

TELECOM

ABB HCL

there is

introduction of

new

technology.

Company

feels that in

todays

competing

world

technology

keeps on

changing and

whenever

such a

change

occurs

training is

imparted toemployees.

individual i.e.

based on his

dissatisfaction.

In ABB the boss

keep track of

the sales force

and whenever

he feels that

training is

needed he refer

it to the training

department.

pass it on to the HR

for further action.

10.Performance

Appraisal

System

-70% based

on

tenders/order

s won.

-20% based

Fix up a

performance

standard and

compare with

that.

Do not fix any

performance

standard and follow

PMS (Performance

Management

System)


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VARIABLES TATA

TELECOM

ABB HCL

on tenders

participated

-10% based

on new

customers.

- 40 %

based on

Number

of new

customer

.

- 30 %

Number

of

customer

complaint

.

- 30 %

based on

winning

the

tenders

In this system the

Top management

identifies up some

KRAs i.e. Key

Result area s.

These are the

areas in which the

organisation has to

emphasize more

and these are the

area where less

effort will give you

more benefit. Then

as per these KRAs

each individual

employee has to fix

up their own CSI

i.e. Critical Success

Indicator .The

achievement of

these CSI will be

the stick yard of the

performance of the


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VARIABLES TATA

TELECOM

ABB HCL

employee.


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Perception Gap between the management and Sales force

While interacting with the sales personnel and the manager we could find out

the differences between their opinions as well the way manager perceive the

things, his approach and way of behavior is remarkably different than his

sales people.

We would like to state following few things regarding this

1. Performance Appraisal system: The major and most usual

complaint we came across is about the performance

appraisal. Though all of them have devised a matured

performance appraisal system based on quantitative

techniques what sales people say that they are actually

nowhere. What actually matters is How you tackle your

boss

2. Tracking Competitor: Though the manager gives lot of

importance to competitors information we could hardly find

that seriousness at sales man side

3. Training: Another area of anomaly is training need

identification. Though management is satisfied about the

training imparted to sales people what they say is training is

like an unpredictable weather and comes and goes. They are

not really aware how relevant and useful are they except few

of them.


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Recommendation

1. Redefining performance appraisal system:

From result oriented platform to effort oriented platform

Though most of the successful organisation practices MBO (Management by

Objective) and considered as highly result oriented but what we personally felt

that this affect organizational culture as well demotivate sales people. Since

sales activity are highly quantifiable and traceable sales people must not be

measured on the basis of end result alone. The methodology can be thought

upon and our idea is in nascent stage.

2. Training must be made a continuous process

Though most of the corporate trainer screams in their speeches training must

be made a continuous process again we found the same thing .We felt People

either dont learn or learn it in a hard way .It is of prime responsibility of

management to ensure quality training to the sales personnel.


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LIMITATIONS

1) We could not get the sales report format as it was confidential

2) We could not get detail information about the size of sales force.

3) It was very difficult to get access in the company and we had to wait for

a very long period of time.

4) We could not get the questioner filled in front of us so for that we had to

move many times in the company which took a lot of time and effort.

5) The three companies are situated at distant places from each other i.e.

in NOIDA, GURGAON and in KALKAJI, which again was a big

limitation.

6) Most of the sales force was in the field so it was very difficult to trackthem.


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Annexure

1. Filled up questionnaire

Salesmanagement Final

Documents

Transcript of Salesmanagement Final