Introduction -: Concept of MIS

Definition-:
The Management Information System (MIS) is a concept of the last decade or
two. It has been understood and described in a number ways. It is also known as
the Information System, the Information and Decision System, the Computerbased information System.
The MIS has more than one definition, some of which are give below.
1. The MIS is defined as a system which provides information support for decision
Making in the organization.
2. The MIS is defined as an integrated system of man and machine for providing
the information to support the operations, the management and the decision
making function in the organization.
3.The MIS is defined as a system based on the database of the organization
evolved for the purpose of providing information to the people in the organization.
4. The MIS is defined as a Computer, based Information System.
Management information system can thus be analyzed as-:
Management
Management covers the planning, control, and administration of the operations of a
concern. The top management handles planning; the middle management
concentrates on controlling; and the lower management is concerned with actual
administration.
Information
Information, in MIS, means the processed data that helps the management in
planning, controlling and operations. Data means all the facts arising out of the
operations of the concern. Data is processed i.e. recorded, summarized, compared
and finally presented to the management in the form of MIS report.

System
Data is processed into information with the help of a system. A system is made up
of inputs, processing, output and feedback or control.
Thus MIS means a system for processing data in order to give proper information
to the management for performing its functions

Objectives of MIS
Goals of an MIS are to implement the organizational structure and dynamics of the
enterprise for the purpose of managing the organization in a better way and
capturing the potential of the information system for competitive advantage
Following are the basic objectives of an MIS:
1.Capturing Data: capturing contextual data, or operational information that will
contribute in decision making from various internal and external sources of
organization.
2. Processing Data: the captured data is processed into information needed for
planning, organizing, coordinating, directing and controlling functionalities at
strategic, tactical and operational level. Processing data means:
o making calculations with the data
o sorting data
o classifying data and
o summarizing data
3. Information Storage: information or processed data need to be stored for future
use.
4. Information Retrieval: the system should be able to retrieve this information
from the storage as and when required by various users

Characteristics of MIS:
Following are the characteristics of an MIS:
1. It should be based on a long-term planning.
2 .It should provide a holistic view of the dynamics and structure of the
organization.
3. It should work as a complete and comprehensive system covering all
interconnecting sub-systems within the organization.
4. It should be planned in a top-down way, as the decision makers or the
management should actively take part and provide clear direction at the
development stage of the MIS.
5. It should be based on need of strategic, operational and tactical information of
managers of an organization.
6 .It should also take care of exceptional situations by reporting such situations.
7. It should be able to make forecasts and estimates, and generate advanced
information, thus providing a competitive advantage. Decision makers can take
actions on the basis of such predictions.
8. It should create linkage between all sub-systems within the organization, so that
the decision makers can take the right decision based on integrated view.
9. It should allow easy flow of information through various sub-systems, thus
avoiding redundancy and duplicity of data. It should simplify the operations with
as much practicability as possible.
10.Although the MIS is an integrated, complete system, it should be made in such
a flexible way that it could be easily split into smaller sub-systems as and when
required.
11. A central database is the backbone of a well-built MIS.

Function of MIS
Capturing Data: capturing contextual data, or operational information that will
contribute in decision making from various internal and external sources of
organization

Processing Data: The captured data is processed into information needed

for planning, organizing, coordinating, directing and controlling functionalities
at strategic, tactical and operational level. Processing data means:
o making calculations with the data
o sorting data
o classifying data and
o summarizing data

Information Storage: Information or processed data need to be stored for

future use.

Information Retrieval: The system should be able to retrieve this

information from the storage as and when required by various users.

Information Propagation: Information or the finished product of the MIS

should be circulated to its users periodically using the organizational network.

Application of MIS
1 Personnel management
2. Production management
3. Financial management
4. Material management
5. Marketing management

1. Personal Management.
It has a primary function of providing suitable manpower in number and
certain ability, skill and knowledge, as the business organizations demands
from
time
to
time.
Its goal is to control personnel cost through continuous increase in
manpower productivity by resorting the following techniques:
HRD
through
training
and
Motivation
through
leadership
- Structuring the organization

upgrading
and
job

the
skills.
enrichment.

2. Production Management (PM)

The Objective of PM function is, to provide manufacturing services to the
organization.
1. This involves the manufacture of products of a certain specified quality
and within certain costs in a stipulated time fulfilling the promises given to
the customer.
2.The PM function is supported by other functions, viz. Production
Planning and Control, Industrial Engineering, Maintenance and Quality
Control.

3.FINANCIAL MANAGEMENT
Its function has a primary objective of meeting the financial needs of the
business, from time to time, by the way of providing working capital and
long-term capital to run the business with the goal of containing the cost of
the capital at minimum.
Declaration of audit financial results, submit all reports and returns to the
Government and Tax authorities.

4.Marketing Management
It deals with satisfying the consumer. The scope of function starts from
identifying the need of customer, evolving product concept, designing the
product, positioning the product in market and selling in the appropriate price.
ActivitiesMarket research
Consumer survey
Advertising
Sales promotion campaign
Stocking of products

5.Materials Management
To provide material for production, maintenance and services at economical
prices, in an appropriate quantity and quality with easy stock outs and with no
extra cost of carrying the inventory.
The scope of materials management function is procurement, stocking
control of inventory.

MIS and the Users

Every person in the organization is a user of the MIS. The people in the
organization operate at all levels in the hierarchy. A typical user is a clerk, an
assistant, an officer, an executive or a manager. Each of them has a specific task
and a role to play in the management of business. The MIS caters to the needs of
all persons.
The main task of a clerk is to search the data, make a statement and submit it to the
Higher level. A clerk can use the MIS for a quick search and reporting the same to
higher level. An assistant has the task of collecting and organizing the data, and
Conducting a rudimentary analysis of integrating the data from different and
disciplines to analyze it and make a critical comment if anything adverse is found.
The MIS offers the methods and facilities to integrate the data and report the same
in a proper format. An executive plays the role of a decision maker. He is in of
responsibility and accountability a position of a planner and a decision maker. He
is responsible for achieving the target and goals of the organization. The MIS
provides facilities to analyze the data and offers the decision support systems to
perform the task of execution. The MIS provides an action . oriented information.
The manager has a position of responsibility and accountability for the business
results. His management role expands beyond his management function. He is a
strategist and a long-term planner. He is a person with a foresight, an analytical
ability and is expected to use these abilities in the functions of top management.
MIS provides information in a structured or unstructured format for him to react.
The MIS caters to his constant changing needs of information. The user of the MIS
is expected to be a rational person and the design of the MIS is based on this
assumption.
However, in reality the impact created on individuals by MIS is difficult to explain.
The nature of the impact in a few cases is negative. However, this negative impact
can be handled with proper training and counseling.

Fundamental types of Information System

Transaction Processing System (TPS)
Management Information Systems (MIS)
Decision Support Systems (DSS)
Office Automation Systems (OAS)
Executive Support Systems (ESS

1. Transaction Processing System

Transaction Processing System is a type of information processing system,
software and hardware combination, which supports Transaction processing.
Transaction processing is a type of computer processing in which each
individual indivisible task, called a transaction, is worked upon and executed
as and when it comes. The response to requests is immediate. In contrast to
this is batch processing in which a batch of requests are stored and then
executed all at once. A transaction Processing System is also used to collect,
store, retrieve and modify transactions executed by an organization.
In transaction processing, user or customer interaction is required, unlike
batch processing. It allows only certain predefined, typically short duration,
tasks and transactions to be performed by the user and provides a predictable
request execution time, which is pre- programmed. This gives it the following
characteristics:

Predictability

Reliability

Consistency

Transaction processing systems are helpful in three areas:

8

System runtime functions - An execution environment with high response

time, reliability of execution and security of data

System administration functions - Administrative support required for

managing transactions

2. Management Information System

The Management Information System (MIS) is a concept of the last decade
or two. It has been understood and described in a number ways. It is also
known as the Information System, the Information and Decision System, the
Computer- based information System.
The MIS has more than one definition, some of which are give below.
1. The MIS is defined as a system which provides information support for
decision
Making in the organization.
2. The MIS is defined as an integrated system of man and machine for
providing the information to support the operations, the management and the
decision making function in the organization.
3.The MIS is defined as a system based on the database of the organization
evolved for the purpose of providing information to the people in the
organization.
4. The MIS is defined as a Computer, based Information System.
Management information system can thus be analyzed as-:
Management
Management covers the planning, control, and administration of the operations
of a concern. The top management handles planning; the middle management
concentrates on controlling; and the lower management is concerned with
actual administration.

Information
Information, in MIS, means the processed data that helps the management in
planning, controlling and operations. Data means all the facts arising out of the
operations of the concern. Data is processed i.e. recorded, summarized,
compared and finally presented to the management in the form of MIS report.
System
Data is processed into information with the help of a system. A system is made
up of inputs, processing, output and feedback or control.
Thus MIS means a system for processing data in order to give proper
information to the management for performing its functions

3. Decision Support System

Decision Support Systems (DSS) are a specific class of computerized
information system that supports business and organizational decision-making
activities. A properly designed Decision Support System is an interactive
software-based system intended to help decision makers compile useful
information from raw data, documents, personal knowledge, and/or business
models to identify and solve problems and make decisions.

Typical information that a decision support application might gather and present
would be:

Accessing all of your current information assets, including

legacy and relational data sources, cubes, data warehouses, and data
marts
Comparative sales figures between one week and the next

Projected revenue figures based on new product sales

assumptions

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The consequences of different decision alternatives, given past

experience in a context that is described

5. Office Automation System

Office automation system refers to the use of equipments and processes to
facilitate efficient and effective communication within an organization. The
modern technologies applied in business operation are geared towards
improving productivity by eliminating redundancies. Automation systems
ensure that the required processes run smoothly and are replicated with the
same level of accuracy all the time.
Office automation refers to the type of computer machinery and software
used to digitally create, collect, store, manipulate, and relay office
information needed for accomplishing basic tasks and goals. Raw data
storage, electronic transfer, and the management of electronic business
information comprise the basic activities of an office automation system.

6. Executive Support System

Executive Support System (ESS) is a software reporting tool that provides

the executive level officers the critical organizations data in a useful
concise format so that the executives make quick decisions.

ESS mainly deals with data related to key departments like billing,
accounting, scheduling, staffing etc. In addition to providing quick access to
the data, ESS also acts as an analysis tool and provides good understanding
of the various possible outcomes depending upon the changes in input data.

11

ESS thus saves valuable time of the executives in digging the huge pile of
information to identify the critical data and helps them spend more time on
brainstorming and decision making by providing only the required data.
ESS can be used to view and analyze both the present data and predicted
future data.

ESS can be customized to suite the user requirements and its functioning is
solely dependent on the skills of the developer.

Some of the advantages of ESS are:

1.

Improved personal efficiency

2.

Increased organizational control

3.

Competitive advantage over competitors

4.

Automation of the managerial processes.

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Concept of Information
Definition-:
Information is stimuli that have meaning in some context for its receiver. When
information is entered into and stored in a computer, it is generally referred to
as data After processing (such as formatting and printing), output data can again
be perceived as information.

Types of Information

Strategic Information-:
Strategic information is required by the manager at the strategic levels of
management for the formulation of organizational strategies. This relates to
long term planning policies of the organization as a whole.

Tactical Information-:

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Information in this category is used in short term planning and is of use at

management control level.
Operational Information-:
Operation information applies to short period which may vary from an hour to a
few day.

Concept of System
Definition-:
A system is a collection of elements or components that are organized
for a common purpose.
A computer system consists of hardware components that have been carefully
chosen so that they work well together and software components or programs
that run in the computer.

Kind of Systems

Abstract and physical systems

An abstract or conceptual system is an orderly arrangement of interdependent ideas
or constructs, which may or may not have any counterpart in the real world.
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On the other hand, physical systems are generally concrete operational

systems made up of people, materials, machines, energy and other physical things;
Physical systems are more than conceptual constructs.

Deterministic and Probabilistic Systems

A deterministic system is one in which the occurrence of all events is known with
certainty. A probabilistic system is one in which the occurrence of events cannot be
perfectly predicted. Though the behavior of such a system can be described in
terms of probability, a certain degree of error is always attached to the prediction of
the behavior of the system.

Open and Closed Systems

An open system is one that interacts with its environment and thus
exchanges information, material, or energy with the environment, including
random and undefined inputs. Open systems are adaptive in nature, as they tend to
react with the environment in such a way, so as to favor their continued existence.
Such systems are self organizing, in the sense that they change their organisation
in response to changing conditions.
A closed system is one, which does not interact with its environment. Such systems
in business world, are rare, but relatively closed systems are common. Thus, the
systems that are relatively isolated from the environment but not completely
closed, are termed closed system.

User Machine Systems

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Most of the physical systems are user-machine (or human machines) systems It is
difficult to think of a system composed only of people who do not utilize
equipment of some kind to achieve their goals. In user-machine systems, both, i.e.
human as well as machine perform some activities in the accomplishment of a goal
(e.g. decision-making). The machine elements (may be computer hardware and
software) are relatively closed and deterministic, whereas the human elements of
the system are open and probabilistic.

System Development Life Cycle

Definition-:
The systems development life cycle (SDLC) is a conceptual model used in project
management that describes the stages involved in an information system
development project, from an initial feasibility study through maintenance of the
completed application

Stages in SDLC
Different Stages in SDLC
1. Planning and Requirement Analysis: Requirement analysis is the most
important and fundamental stage in SDLC. It is performed by the senior members
of the team with inputs from the customer, the sales department, market surveys
and domain experts in the industry. This information is then used to plan the basic

16

project approach and to conduct product feasibility study in the economical,

operational, and technical areas.
2. Defining Requirements: Once the requirement analysis is done the next step is
to clearly define and document the product requirements and get them approved
from the customer or the market analysts. This is done through SRS Software
Requirement Specification document which consists of all the product
requirements to be designed and developed during the project life cycle.
3. Designing the product architecture: SRS is the reference for product architects
to come out with the best architecture for the product to be developed. Based on
the requirements specified in SRS, usually more than one design approach for the
product architecture is proposed and documented in a DDS - Design Document
Specification. This DDS is reviewed by all the important stakeholders and based
on various parameters as risk assessment, product robustness, design modularity ,
budget and time constraints , the best design approach is selected for the product.

4. Building or Developing the Product: In this stage of SDLC the actual

development starts and the product is built. The programming code is generated as
per DDS during this stage. If the design is performed in a detailed and organized
manner, code generation can be accomplished without much hassle.
5. Testing the Product : This stage is usually a subset of all the stages as in the
modern SDLC models, the testing activities are mostly involved in all the stages
of SDLC. However this stage refers to the testing only stage of the product where
products defects are reported, tracked, fixed and retested, until the product reaches
the quality standards defined in the SRS.
6. Deployment in the Market and Maintenance: Once the product is tested and
ready to be deployed it is released formally in the appropriate market. Sometime
product deployment happens in stages as per the organizations business strategy.

17

The product may first be released in a limited segment and tested in the real
business environment (UAT- User acceptance testing).
Then based on the feedback, the product may be released as it is or with suggested
enhancements in the targeting market segment. After the product is released in the
market, its maintenance is done for the existing customer base.

Approaches and Models of SDLC

There are various software development life cycle models defined and designed
which are followed during software development process. These models are also
referred as "Software Development Process Models". Each process model follows
a Series of steps unique to its type, in order to ensure success in process of
software development.
Following are the most important and popular SDLC models followed in the
industry:
1. Waterfall Model
2. Iterative Model
3. Spiral Model
4. V-Model
5. Big Bang Model

18

1. Waterfall Model-:
Waterfall approach was first SDLC Model to be used widely in Software
Engineering to ensure success of the project. In "The Waterfall" approach,
the whole process of software development is divided into separate phases.
In Waterfall model, typically, the outcome of one phase acts as the input for
the next phase sequentially.
Following is a diagrammatic representation of different phases of waterfall
model

The sequential phases in Waterfall model are:

1. Requirement Gathering and analysis All possible requirements of the system
to be developed are captured in this phase and documented in a requirement
specification doc.
2. System Design: The requirement specifications from first phase are studied in
this phase and system design is prepared. System Design helps in specifying
hardware and system requirements and also helps in defining overall system
architecture.
3. Implementation: With inputs from system design, the system is first developed
in small programs called units, which are integrated in the next phase. Each unit is
developed and tested for its functionality which is referred to as Unit Testing.

19

4. Integration and Testing: All the units developed in the implementation phase
are integrated into a system after testing of each unit. Post integration the entire
system is tested for any faults and failures.
5. Deployment of system: Once the functional and non functional testing is done,
the product is deployed in the customer environment or released into the market.
6. Maintenance: There are some issues which come up in the client environment.
To fix those issues patches are released. Also to enhance the product some better
versions are released. Maintenance is done to deliver these changes in the customer
environment.

Waterfall Model Application

Requirements are very well documented, clear and fixed
1. Product definition is stable
2. Technology is understood and is not dynamic
3. There are no ambiguous requirements
4. Ample resources with required expertise are available to support the product
5. The project is short

2. Iterative Model-:
Iterative process starts with a simple implementation of a subset of the
software requirements and iteratively enhances the evolving versions until the
full system is implemented. At each iteration, design modifications are made
and new functional capabilities are added. The basic idea behind this method
is to develop a system through repeated cycles (iterative) and in smaller
portions at a time (incremental).

Iterative Model Application

Like other SDLC models, Iterative and incremental development has some specific
applications in the software industry. This model is most often used in the
following scenarios:

20

1. Requirements of the complete system are clearly defined and understood.

2. Major requirements must be defined; however, some functionalities or requested
enhancements may evolve with time.
3. There is a time to the market constraint.
4. A new technology is being used and is being learnt by the development team
while working on the project.
5. Resources with needed skill set are not available and are planned to be used on
contract basis for specific iterations.
6. There are some high risk features and goals which may change in the future.

3. Spiral Model-:
Spiral model is a combination of iterative development process model and
sequential linear development model i.e. waterfall model with very high
emphasis on risk analysis. It allows for incremental releases of the product,
or incremental refinement through each iteration around the spiral.

Spiral Model design

The spiral model has four phases. A software project repeatedly passes through
these phases in iterations called Spirals.
1. Identification

21

This phase starts with gathering the business requirements in the baseline spiral. In
the subsequent spirals as the product matures, identification of system
requirements, subsystem requirements and unit requirements are all done in this
phase.
This also includes understanding the system requirements by continuous
communication between the customer and the system analyst. At the end of the
spiral the product is deployed in the identified market.
2. Design
Design phase starts with the conceptual design in the baseline spiral and involves
architectural design, logical design of modules, physical product design and final
design in the subsequent spirals.

3. Construct or Build
Construct phase refers to production of the actual software product at every spiral.
In the baseline spiral when the product is just thought of and the design is being
developed a POC (Proof of Concept) is developed in this phase to get customer
feedback.

4. Evaluation and Risk Analysis

Risk Analysis includes identifying, estimating, and monitoring technical feasibility
and management risks, such as schedule slippage and cost overrun. After testing
the build, at the end of first iteration, the customer evaluates the software and
provides feedback.
Based on the customer evaluation, software development process enters into the
next iteration and subsequently follows the linear approach to implement the
feedback suggested by the customer. The process of iterations along the spiral
continues throughout the life of the software.

Spiral Model Application

22

Spiral Model is very widely used in the software industry as it is in synch with the
natural development process of any product i.e. learning with maturity and also
involves minimum risk for the customer as well as the development firms.
Following are the typical uses of Spiral model:
1. When costs there is a budget constraint and risk evaluation is important
2. For medium to high-risk projects.
3. Long-term project commitment because of potential changes to economic
priorities as the requirements change with time.
4. Customer is not sure of their requirements which is usually the case.
5. Requirements are complex and need evaluation to get clarity.
6 New product line which should be released in phases to get enough customer
feedback.
7. Significant changes are expected in the product during the development cycle.

5. V-Model
V-Model is an extension of the waterfall model and is based on association of a
testing phase for each corresponding development stage. This means that for
every single phase in the development cycle there is a directly associated testing
phase. This is a highly disciplined model and next phase starts only after
completion of the previous phase.

V-Model Application
V- Model application is almost same as waterfall model, as both the models are of
sequential type. Requirements have to be very clear before the project starts,
because it is usually expensive to go back and make changes. This model is used in
the medical development field, as it is strictly disciplined domain.

23

Following are the suitable scenarios to use V-Model:

1. Requirements are well defined, clearly documented and fixed.
2. Product definition is stable.
3. Technology is not dynamic and is well understood by the project team.
4. There are no ambiguous or undefined requirements
5. The project is short.

Company Profile
Croma Tata Enterprises
Croma has been launched by Infiniti Retail Limited, a 100% subsidiary of Tata
Sons. It efficiently and successfully runs Croma's retail operations in India.
It efficiently and successfully runs Croma's retail operations in India.

24

We offer our customers over 6000 products across eight categories in a world-class
ambience and our offerings are growing every day. These categories include
Phones, Camera, Computers, Entertainment, Home Appliance, Kitchen Appliance,
Gaming and Accessories. Great products from some of the best brands ensure you
an exciting shopping experience.
Our own label by the name of Croma Life Accessories is well recognized for
offering innovative and unique products that are hard to find. A diverse range of
merchandise in various categories like kitchen appliances, storage devices, MP4
players, air conditioners & lot more ensures you only the best. From the wide
range of Croma branded products, you are bound to find something great that will
match up to your budget as well as personal requirements.

At Croma, our endeavor has always been fulfilling every electronic requirement by
helping customers choose the best product, as per their needs. Croma's efficient,
well-trained and knowledgeable store advisors are completely equipped to offer
sound and personalized advice for helping a customer receive the best value for
money. Making shopping experience delightful post purchase is the foundation for
investing in a robust customer service support at Croma. Any individual can get in
touch with us through our 24 hours call centre support at 1800-258-3636.
Our Authorized Croma Care Centre provides after sales support for all Croma
branded products.
Ecommerce is our latest venture to achieve yet another important goal, which is to
bring customer the best shopping experience on the go & reach every door step in
the nation. With www.cromaretail.com you can now explore, browse and purchase
from the finest and the most varied range of electronic products in the comfort of
your home. Well structured product information, great deals and swift home
delivery service are our priority for customer's satisfying shopping experience.
25

Crom is an Indian retail chain for consumer electronics and durables. It is the
nation's first large format specialist retail chain for consumer electronics and
durables with successful expansion into Croma Zip stores, Croma Kiosks and latest
online vertical, www.cromaretail.com.Tata Group company Infiniti Retail runs
Crom stores in India. Infiniti Retail Ltd is a 100% subsidiary of TATA
Sons. Presently, there are a total of 101 Crom stores in 25 cities in India. Crom
claims to offer 6000 products across 8 categories.

TATA Croma is the nation's first large format specialist retail chain for consumer
electronics and durables with successful expansion into Croma Zip stores, Croma
Kiosks and latest online vertical, www.cromaretail.com.Croma has been launched
by Infiniti Retail Limited, a 100% subsidiary of Tata Sons. It efficiently and
successfully runs Croma's retail operations in India. In addition, one of the
worldss leading retailers. We offer our customers over 6000 products across eight
categories in a world-class ambiance and our offerings are growing every day.
These categories include Phone, Cameras, Computer Entertainment, Home
Appliance, Kitchen Appliance, Gaming and Accessories. Great products from
some of the best brands ensure you an exciting shopping experience.

Concept of Sales
Definition

Sales Concept of Marketing Sales Concept is a kind of concept which is

basically focused on selling of goods and services to the consumers. Sales
Concept is one of the parts of Marketing Concept. Goods which are

26

produced by a company or services provided by a company to the

consumer are operating under the Sales Concept.

Company uses different kinds of selling techniques to pursued buyers to

buy them through Advertisement, Personal Selling and through various
selling concept. This theory is known as the Sales Concept of
Marketing.

Sales Management

Sales management is defined as the planning, direction and control of personal

selling, including recruiting, selecting, equipping, assigning, routing, supervising,
paying and motivating as these tasks apply to the personal sales force.

According to American Marketing Association Sales force is responsible

for the sale of products of a company and to add profit to the business operations
and fulfill social obligations. Sales force should be hardworking, result oriented,
well educated and competent to handle changing situations. Technical
developments which are taking place at a rapid speed have made the task of sales
force more challenging.

27

Nature and Importance of Sales Management

1. Sales management helps to achieve the organizational objectives.
2. The main objectives of sales management is that products should be sold at that
price which realizes profits.
3. Buyers and sellers both have same types of business relationships. This
relationship is based on exchange of goods, services and money.
4. Sales person develops a positive relationship with the customers. The role of
sales team is interdependent and success of one team member depends on the
other.
5. The sales team continuously monitors the customer preference,
competitors situation, government policy and other regulatory bodies.

Objectives of Sales Management

1) Identify clearly the differences between the functions of MARKETING and
sales.

2) Describe various marketing and sales approaches.

3) Describe the marketing mix and the sales management model.
4) Identify the various functions of a sales manager and his/her objectives.

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Function of Sales Management

(i) Sales research and planning.

(ii) Demand creation.
(iii) Sales costs and budget.
(iv) Price fixations.
(v) Development of products.
(vi) Establishing sales territories.
(vii) Co-ordination of sales.

Elements of Sales Management

Planning: A business cannot be taken as a chance. Every salespeople or person
concerned have to see the future, in planned way like what must be done? And who
will do it? The plan must be based on extensive market research, and the facts must
be verified at every stage. The plan should also be evaluated, after investigating the
total-market, for particular type of product. Flexibility must be provided by
establishing a specialists production line, to allow for variation in production. The
plan should also be subject to continued review. The details of the plan should be
discussed, with all the departmental heads, concerned, and
their sub-ordinates, who bear responsibility for fulfilling their parts of the plan.

Co-ordination: Co-ordination is all pervasive and permeates every function of

the management-process. For example, ill planning, departmental-plans are
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integrated into a master. Plan, ensuring adequate co-ordination. Similarly,

organizing starts by co-ordination wholly, partially inter-departmental and interpersonnel matters.
Co-ordination also helps in maximum utilization of human-effort by the
exercise of effective leadership, guidance, motivation, supervision,
communication etc. The control-system also needs coordination. Coordination does not have any special techniques. Nevertheless, there are sound
principles, on which to develop skills. It has a special need to help the staff, to see
the total picture and co-ordinate their activities, with the rest of the team. The sales
manager has to encourage direct personal-contact, within the organization,
particularly where there is lateral-leadership. Harmony, and not discord, should be
the guiding mantra. In addition, one has to ensure free flow of information that is
selective to the objectives of the business. No personal problems, arising from
business operations are to be ignored, but solved through a free exchange of ideas.
This is especially true in the case of the sales-force of any organization.

Controlling: The sales manager has to check regularly, that the sales activities
are moving in the right direction or not.
He guides, leads, and motivates the subordinates, so as to achieve the goals
planned for the business. He has to take steps to ensure that the activities of the
people conform to the plans and objectives of the organization. The controlling
system should be such that one can study the past, note the pitfalls and take
corrective measures, so that similar problems may not occur in the future. The
controller has to ensure that the set targets, budgets and schedules are attained or
followed in letter and spirit. There must be procedures to bring to light the failure
to attain a target. The control-system has to (i) prepare sales and market forecasts;
(ii) determine the level of sales-budget; (iii) determine the sales-quotas for each
salesman; (iv) determine, review and select distribution-channels; (v) organize an
efficient sales force; (vi) establish a system of sales-reporting; (vii) establish a
system of statistical sales-credit; (viii) establish stock control system(s); (ix)
review of performance of the sales force; and (x) establish periodical testing
programmers. In a big organization, each salesman is assigned a territory (not so
big that it cannot be adequately covered). Each salesman has a target, set for
specific period. From the weekly and monthly sales-reports, the control system is
established, that will prepare records whether a particular salesman is working
efficiently or not.

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Motivating: Motivation is essentially a human resource concept. It aims to weld

together distinctive personalities into an efficient team. For this, knowledge of
human psychology is needed, as a means of understanding behavior patterns.

Process of Selling

1. The selling process is defined as a process by which a salesperson identifies and

locates the prospects, separates the prospects from the suspects approaches them
and makes a sales presentation, handles their objections. He also follows up the
existing customers to identify further sales leads and measures the success and
customer satisfaction level of the current products and service offerings.
2. Selling concept refers to the exchange of goods or services for an amount of
money or its equivalent in kind. Selling helps an organization achieve its
organizational goals. Thus, managing sales in an organization is a critical activity.
A sales manager needs to ensure that the salesman are motivated to give their best
performance.

3. The sales team continuously look out the changes taking place in the external
environment regarding competitors, customers, government policy and other
regulatory agencies, advances in technology, and industry trends. This provides the
sales personnel a vital information regarding trends in product sales, product
development, and budgets.
4. The economic slowdown is receding and budgets of companies are increasingly
receptive to alternative direct marketing tools to sell their products.
5. Telemarketing (TM), that is marketing products and services on the telephone, a
direct marketing tool, which has touched a high in the last three years.
6. Apart from professional TM service outfits, many companies, including MNCs,
have set up their in-house TM cells.

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7. A TM outfit works through a well networked team of trained telemarketers who

make calls to potential clients and customers and establish direct contact with
them. The key lies in convincing the customer about the value of the product or
service and fixing up an appointment.
8. Direct customer marketing system allows customers complete flexibility to
purchase our products. Orders can be placed via the Internet, over the phone, by
mail, through our catalogue or through the company personnel.

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Approaches of Sales
Direct sales approach may be:1) Selling to offices- (for examples, Office Automation Products)
2) Selling to Industries- (business to business B2B)
3) Door-to-door sell
In-Direct sales approach
1) Company to retailer to customer
2) Company to wholesaler and then to retailer to customer
3) Company to wholesaler to distributor and then to retailer to customer

SMBO (SALES MANAGEMENT BY OBJECTIVES) APPROACH

It is another approach to formulate and accomplish sales-objectives is the sales
management by objectives (SMBO) technique. It is formulated combined by sales
manager and sales-force (representatives). It aims to focus on (i) results, within a
specified set of objectives and (ii) participative style of management.

Process of SMBO
The operationalization of SMBO is a process, comprising of the following steps:
(i) Setting goals jointly with the salesman: In this process the goals for sales-man
and sales managers are settled simultaneously in the organization so that they can
built a close coordination between them and lastly they achieve the main objective
of the organization.
(ii) Planning strategy to reach the objectives: There has to be participative style

of sales. Management proves to be a boon to the top-management, in the sense of

the close familiarity of the salesman, with their markets. The outcome of the joint

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exercise would be the development of a strategy that directs the salesman to his
objectives, following a plan, in the correct sequence, with the correct timing, and
must be efficient, in the use of resources of time and money.

Importance of SMBO
The importance of SMBO for a business firm is as follows:
(a) Directing the salesman towards the broader sales and
Marketing objectives of the Company;
(b) Providing a better approach, from the view-point of the
Salesman; and
(c) Motivating the salesman.

The Sales Organization

The main objective of any business firm is to sell effectively its goods and services
to the consumer at reasonable prices. So long as the business undertaking operates
on a small-scale; the proprietor can handle himself, or with the help of a few
salesmen, under his direct control and supervision. But, as the business grows and
expands, the size of the target market, to be covered to sell large quantities of
goods and services becomes too large to be controlled by the owner of the business
firm, personally. Therefore, these activities arises the need of a sales-organization.
Effective sales executives insist upon sound organization. They recognize that the
sales organization must achieve both qualitative and quantitative personal-selling
objectives. A sales organization is both an orienting point for cooperative endeavor
and a structure of human relationships. The sale organization is not an end in itself
but rather the vehicle by which individuals achieve given ends. All in all the sales
organization is the vehicle through which the personal selling strategy is
implemented. The sales organization should be adjusted to fit ideally, to anticipate
changing situations. Shifts in marketing, in competition, and in other business
factors call for changes in the sales organization. The ideal sales organization has a
built in adaptability allowing it to respond appropriately in fluid and diverse
marketing environments.

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Need and Importance

The sales organization is required for the following purposes:
(i) To enable the top-management, to devote more time in policy making for the
growth and expansion of business.
(ii) To divide and fix authority among the sub-ordinates so that they may not evade
work.
(iii) To avoid repetition of duties and functions so that there may not be any
confusion among them.
(iv) To locate responsibility of each and every employee so tha they can complete
the whole work in stipulated time; if not then the particular person must be
responsible
(v) To establish the sales-routine in the business unit.
(vi) To stimulate sales-effort.
(vii) To enforce proper supervision of sales-force

Functions of Sale Organization

A sales organization performs the following functions:
(i) Analysis of markets thoroughly, including products and market research.
(ii) Adoption of sound and defensible sales-policy.
(iii) Accurate market or sales forecasting and planning the sales campaign, based
on relevant data or information supplied by the marketing research staff.
(iv) Deciding about prices of the goods and services; terms of sales and pricing
policies to be implemented in the potential and existing markets.
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Steps in establishing a sales Organization structure

The following procedure may be adapted to, establish a practical and viable salesorganizational structure:
(i) Begin with a historical profile of the companys allegiance, overall organization

and top-management philosophy of the firm.

(ii) Analyze the requirements of the company and the sales department, particularly
in terms of its: size, position in the market, nature of activities, product mix, nature
of customers, state of competition, and sales-people and their ambitions.
(iii) Appraise the potential of the company, in terms of its impact on the financial,
technical, and scientific and human resources, existing currently.
(iv) Analyze the prevailing working-atmosphere and state of communications,
especially from the view-point of relationship and human-feelings involved in such
relationships
(v) List the various administrative-details, connected with the company.
(vi) Prepare a note, relating to the various administrative-details including aspects
like hierarchy, span of control, etc. on the sales-department, and overall
organization of the department.
(vii) Describe the procedures and Processes to be followed for executing various
tasks.
(vii) Based on the above, prepare a draft-structure of the sales department, giving

job-descriptions of the whole of the department, and a whos who of the

department.
(ix) Examine the structure, from the point of view of viability and practicality.

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BASIC TYPES OF SALES ORGANIZATIONAL STRUCTURES

Line Sales Organization- this is the oldest and simplest sales organizational
structure. It is widely used in smaller firms and in firms with smaller numbers of
selling personnel for instance in companies that cover a limited geographical area
or a narrow product line. The Chain of command runs down from the top sales
executives down through subordinates. All executives exercise line authority and
each subordinate is responsible only to one person on the next higher-level. Line of
authority runs vertically through the structure and all persons on anyone
organizational levels are independent of all others on that level.

Line & Staff Sales Organization the line and staff sales department is
found in large and medium sized firms employing substantial numbers of sales
personnel, and selling diversified product line over wide geographical areas. This
kind of organization provides the top sales executive with a group of specialists n
experts in dealer and distributor relations, sales analysis, sales personnel, sales
promotion, sales planning, sales training, warehousing etc. This staff helps to
conserve the top sales executives time and frees them from excessively detailed
work. They make it possible for their chiefs to concentrate their efforts where they
have the most skill. Staff sales executives do not have authority to issue orders or
directives.

Functional Sales Organization- This type of sales organization is based upon

the premise that each individual in an organization, executive and employee,
should have a few distinct duties as possible. The principle of specialization is
utilized to the fullest extent. Duty assignments and delegations of authority are
made according to function. The coordinating executive is the director of sales
administration all executives on the next level are specialists.

Committee Sales organization The Committee is never the sole basis for
organizing a sales department. It is a method or organizing the executive group for
planning and policy formulation while leaving actual operations, including
implementation of plans and policies to individual executives. Thus many firms
have a sales training committee (comprised of the general sales manager, his or her
assistants, the sales training manager and perhaps representative divisional Or
regional sales managers) that meets periodically to draft training plans and
formulate sales training policies.

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PREPARATION FOR PURE SELLING AND SALES NEGOTIATIONS

A number of factors can be examined in order to improve the chances of sales
success in both sales negotiations and pure selling.
1. Product knowledge
2. Knowledge of competitors
3. Sales presentation planning
4. Setting sales objectives
5. Understanding buyer behavior
1. Product knowledge and benefits

Knowledge of product features is insufficient for sales success. Since people buy
products for the benefits they offer, successful sales people relate product features
to customer benefits; product features are the means by which benefits are derived.
The way to do this is look at products from the customers point of view.
2. Knowledge of Competitors Products and their benefits
i) It allows a salesperson to offset the strength of competitors products which may
be mentioned having many different kinds of skill or ability; easily able to change
to change from one kind of activity to another.
ii) Industrial Selling Sales Engineers may work with buying organization in order

to solve a technical problem. This may result in, order specification being drawn
up in which sales engineers may have an influence. It is to the benefit of sales
engineers that specification reflects the strengths and capabilities of their products
rather than competitors. Thus knowledge of competitive strengths and weaknesses
will be an advantage in this situation.
Competitive Information can be sourced from
a) Sales catalogues and price lists.

b) Talking with buyers.

c) Observation e.g. prices in Supermarkets.

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3. Sales Presentation Planning

Although versatility, flexibility and the ability to think on ones feet a redesirable
attributes there are considerable advantages to presentational planning.
Advantages of presentational planning
i) The salesperson is less likely to forget important consumer benefits associated
with each product within the range he is planning.
ii) The use of visual aids and demonstrations can be explained into the presentation
at the most appropriate time to reinforce the benefits the salesperson is
communicating.
iii) It builds confidence in the salesperson, particularly the newer less experienced
type that he is well equipped to do the job efficiency and professionally.
iv) Possible objections and questions can be anticipated and persuasive
counterargument prepared. For example, many price objections can be countered
by reference to higher product quality, greater durability, higher productivity and
lower offsetting life-cycles cost e.g. lower maintenance, fuel or man power costs.

4. Setting Sales Objectives

This involves determining what a salesperson wants to accomplish in his visit to a
potential customer.
Examples include:- To determine the customer needs.
- To have customer visit the production site.
- To have the customer try the product e.g. fry on an aircraft
- To have the customer compare the product versus competitive products in terms
of measurable performance criteria.
- To close the sale.

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5. Understanding Buyer Behavior

Many organizational buying decisions are complex, involving many people whose
Evaluative criteria may differ, and that the purchasing officer may play a minor
role in deciding which supplier to choose, particularly with very expensive items.
- Who makes the decision?
- How the decision is made
- Who influences
- Who uses
- The practical implication of these facts is that careful preparation may be
Necessary for industrial sales people, either when selling to new companies or
when selling to existing customers where the nature of the product is different.
- The salesperson should take time to establish who the key influencers and
decision makers are, the name and position of each key influencer and decision
maker times most suitable for interview, the type of competitive products
previously purchased by the buying organization, and threats to a successful sale or
special opportunities afforded by the situation.
PREPARATION FOR SALES NEGOTIATIONS
Assessment of the balance of power
In the sales negotiation, seller and buyer will each be expecting to conclude a deal
which is favorable to themselves. The extent to which each is successful will
depend upon their negotiating skills and the balance of power between the parties.
This balance will be determined by four factors
.

a) The number of options available to each party.

If a buyer has only one option to buy from the seller in question then that seller
is in a powerful position. If the seller, in turn, is not dependent on the buyer, but
has many attractive potential customers for his products, then again he is in a
strong position conversely, when a buyer has many potential sources of supply, and
a seller has few potential customers, the buyer should be able to extract a good
deal. Many buyers deliberately contact many supplies in order to strengthen their
bargaining position.

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b) The Quality and Quantity of Information held by each party. (Knowledge is

power-Machiavelli)
If a buyer has access to a sellers cost structure then he is in a powerful position to
negotiate a cheaper price or avoid paying too high a price. If a seller knows how
much a buyer is willing to pay, then his power position is improved.
c) Need Recognition and Satisfaction
- The greater the salesperson understands of the needs of the buyer and the more

capable he is in satisfying those needs, the stronger will be his bargaining position.
- In some industrial marketing situation suppliers work with buying organization to
solve technical problems. In this way this sellers (suppliers) increases their
negotiation position.
- The buyer, who believes that his needs can only be satisfied by one company, will
be weak in his negotiating stance.
d) The Pressures on the Parties
- Where a technical problem is of great importance to the buying organization, and

its sole difficult, any supplier who can solve it will gain immense bargaining
power.
- One the other hand, if there are pressures on the salesperson because of lower
sales returns, then the buyer will be able to extract extremely favorable terms
during negotiations in return for purchasing from him.
- The implications of these determinants of the balance of power are that before
negotiations (and indeed, during them) a sales person will benefit assessing the
relative strength of his power base. This implies that he needs information
- If the seller knows the number of companies who are competing for order, the
criteria used by the buying organization when deciding between them, the degree
of pressure on key members of decision making unit and formula they might use
for assessing price acceptability, an accurate assessment of the power balance
should be possible.

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Screenshots of Database
Transaction of Raw Data

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Product Text & Description

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MIS Report during the Year

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