1-Introduction To Sales Management
1-Introduction To Sales Management
Course objectives:
Chapter objectives:
1.1 Introduction
This chapter will help the student to understand about the sales
management, its evaluation, importance, sales management process
and overall idea of the current trends in sales management.
Not only that but also it will provide information to understand the
basic principles of designing sales organization, of the process of
fixing quota and allocating territories and forecasting further
demand.
The chapter is a preliminary stage of knowing about all the
managerial skill, the process and procedure fairly suitable for the
firm’s situations and the prevalent marketing environment.
Organization large of small are into selling something or the other for
their survival and growth it may be a product such as (shampoo,
toothpaste) or service like (airline, insurance idea (patriotism) concept
(family Planning) destination (India, Brazil) or person (politician).
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Personal selling strategies have evolved only in the last 150 years or
so. In the 19th century persuasion was the primary skill used by the
salespeople. The peddlers carried their inventory with themselves
and their goal was to persuade buyers to buy their. The evolution of
was first started just after the system of batter in which good were
interchanged with each other soon after this system was started and
India was a good place where traders and resellers in the medieval
age for the spices, carpets, jewelry, etc. Many diverse races and
religions entered our country with the traveling salespeople. Even the
colonial rulers of India the British came to India for purpose of
expanding their business and the trade though subsequently they
satisfied their political interest. They ruled this country to protect
their own business interests. The first salespeople in the US were the
Yankee Peddlers who carried clothing spices and household articles
from one part of the country to another part. In India they are called
pheriwallahs. The peddlers in India traded with the tribal Indians and
exchanged knives beads and ornaments for furs, spices .salt and
handicrafts. They started the business of storing goods such as
furniture, weapons, ammunitions, foods etc. Wholesalers were hiring
the drummers to play drums and invite the visitors all these products.
There were 1000 traveling salespeople before 1860 in US who were
basically credit investigators and told orders for goods. Their
numbers increased as the pace and reach of industrial revolutions
spread across continents.
Compare to past the domain of the sales management has become
multidisciplinary in which lies managers have to manage a diverse
workforce and complex technologies. Sales managers have to perform
duties such as recruiting, training, selecting, motivating, forecasting,
controlling and administering salespeople while performing the
primary responsibility of revenue generation fro the firms.
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Personal selling strategies have evolved only in 150 years or. The first
strategy which was used by the peddlers was persuasion just
encouraging the customers to buy the product till late 19th s. Later
the customer had to be told about the price, quality and quantity of a
product so for this negotiation was more important than the
persuasion. In 1970s salespeople were told to deal customers just like
clients and consult them regarding any problem or issue which was
just like consulting them so that was the sage where consultative
selling was important and accustomed. In the 1980 and early 1990 a
lot of emphasis was put on the management of territories and
accounts as profit center as business men had the knowledge to
mange a territory as profit center.
In 1990 it was felt to have close relationship for generating profits and
retaining customers.
Selling Strategy There was a time when the problems of selling
were simpler than they are today. Recent years have produced a
variety of changes in the selling strategies of businesses. The
complexities involved in selling as we approach the next century are
different from those in the past. As an example, today a high-
principled style of selling that favors a close; trusting, long-term
relationship over a quick sell is recommended. The philosophy is to
serve the customer as a consultant, not as a peddler. Discussed below
are objectives and strategic matters pertaining to selling strategies.
Objectives: Selling objectives should be derived from overall
marketing objectives and should be properly linked with promotional
objectives. For example, if the marketing goal is to raise the current 35
percent market share in a product line to 40 percent, the sales
manager may stipulate the objective to increase sales of specific
products by different percentage points in various sales regions
under his or her control. Selling objectives are usually defined in
terms of sales volume. Objectives, however, may also be defined for
(a) Gross margin targets,
(b) Maximum expenditure levels, and
(c) Fulfillment of specific activities, such as converting a stated
number of competitors’ customers into company customers. The sales
strategist should also specify the role of selling in terms of personal
selling push (vis-à-vis advertising pull). Selling strategies depend on
the consumer decision process, the influence of different
communication alternatives and the cost of these alternatives. The
flexibility associated with personal selling allows sales presentations
to be tailored to individual customers. Further, personal selling offers
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1. production concept
2. product concept
3. selling concept
4. marketing concept
5. societal concept
Production Concept
The production concept has its origin in the production orientation.
The basic tenor of the concept is that customers will choose products
and service that are widely available and are of low cost. Therefore,
managers try to sell a higher volume of goods at low costs and
through and intensive distribution strategy. The managers believe
that consumer like the product which cost or in low price.
Product concept
The product concept has the proposition that consumers will favor
that product that offer high quality attributes such as quality
performance and other innovative features.
The managers focus on developing superior products and improving
the existing product lines over a period of time.
Sales concept
The sale concept purpose that customers that customers either and
individual or an organization will to buy enough of an organizations’
product unless they are persuaded to do so through selling efforts.
Therefore organization should undertake selling and promotion of
their product market success.
This approach is applicable in case of unsought goods such as lie
insurance vacuum cleaner and freighting equipment such as fire
extinguisher.
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Marketing concept
The marketing concept proposes that the reasons for success lies in a
company ability to create deliver and communicates a better blue
proposition through its marketing comparison to its competitors for
its chosen target market. According to Theodore Levis selling focuses
on the needs to convert his product into to cash marketing with the
idea preoccupied with seller‘s of consumer by means of the product
and the whole cluster.
The marketing concept is an elaborate attempt to explain the
phenomenons that rest on four key elements target market customer
need integrated marketing and profitability.
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1. Industrial
2. Retail
3. Service
1. Industrial selling
This type of selling is basically termed as business to business selling
but in a traditional business model it is categorized as the
manufacturing sector selling. These are grouped into four models
Selling to reseller
A reseller is a wholesaler or retailer or and intermediary who buys
finished good and resells them to the end users. Companies such as
Hero cycles T series and Sunshine chemicals sell to resellers
Institutional selling
These institutional customers use the product in their daily operation
for example Xerox in photocopiers Johnson and Johnson Surgical
equipments.
Selling to Government
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2. Retail Selling
This is type of selling is defined as all the activities directly related to
sale of good and services to the ultimate consumers for personal or
non personal consumption.
In retailing environment a customer approaches to seller which is
quite different from industrial selling which is visa versa.
The retailer purchase from industrial seller and then the customer
purchases from retailers.
3. Service selling
Services are the activities or benefits provided to consumers. The
areas of services like the product areas are quite diverse. There are
four unique characteristics that distinguish products from services.
Services are intangible in nature they can not be seen touched tasted
heard or felt like physical goods.
Airline; Insurance can be good example of such type of selling
Order taker
Order-takers are those who put forth little or no effort to complete a
sale. These individuals may be called salespeople, but they do not
actually make sales happen -- they simply write down a list of what
customers have already decided they want, and pass the list along to
the shipping department. A prime example of this type of salesperson
is a catalog representative, who picks up the phone and literally
"takes the order" for customers calling in. There's nothing wrong with
this; these individuals are hired for a specific task and they fulfill it.
They are not expected to 'push' or even suggest specific items. They
simply take the order.
Order creators
They can Missionary salespeople who doesn’t close the sale but
persuade the customer to come and don’t really take the order from
the customers.
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Order Getters
It involves new business salespeople, organizational salespeople,
consumer salespeople and as well as the technical support for any
thing which has been damaged and each perform their own tasks.
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Customer culture
Front-line staffs were now rated as the company's main assets. The
‘Putting People First’ program involved them in redefining the tasks
which win customers, based on teamwork. This became the driver of
business strategy.
Engineers and pilots insisted that they too be involved in the program.
Customer First Teams were created to suggest solutions to customer
problems.
Media advertising communicated ‘The World's Favorite Airline’ to
staff as well as to customers. Motivation and incentives were
prioritized and company-wide performance-related pay was
instituted. Awards for Excellence were conferred by Lord Marshall on
1–1.5% of staff annually.
Measurement
Everything pointed to the need for better metrics and standards. A
Market Place Performance Department, reporting to the CEO, was set
up. Mystery flyers were created [Mystery shoppers/flyers are
researchers who are hired by organizations to pretend to be
customers and secretly evaluate the quality of the customer service].
A continuous upward trend in customer satisfaction ratings was now
registered right through into the late 1990s. Continuous
improvements in market share, passenger traffic and staff
productivity were achieved.
Profitability
The direct result of adopting pan-company marketing was a 30%
increase in productivity and an increase in market share of 2.4% in a
highly competitive market and the posting of improved profits when,
for example, from 1990–1994 the airline industry world-wide lost
US$15 billion.
An organization like British Airways (BA), which takes into account
the needs of its markets before it plans its processes, is said to be
market led or market oriented. It has changed the focus of its marketing
from a marketing plan devised in the marketing department to an
organization-wide involvement in creating an offering of superior
value for the customer. Studies have shown that being market led is
linked to profitability in profit-based organizations and to survival in
non-profit organizations (Slater, 1990).
The market-led approach has three components:
consumer orientation
competitor orientation
Inter-functional co-ordination.
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Summary
This chapter gives us the information about personal selling and sales
management.
Appendix
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