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Sales Management
Sales Management as defined by American Marketing Association — is Planning, direction
and control of Personal selling including recruiting, selecting, equipping assigning, routing,
Supervising, paying and motivating as these task apply to personal Sales force.
Sales Managers are responsible for organizing the sales effort, both within and outside their
Companies. Within the Company the Sales Manager builds formal and informal
organizational structures that ensure effective communication not only inside the sales
department but in its relations with other organizational units.
Outside the Company, Sales Manager serves as a key contact with customers and other
external publics and is responsible for building and maintaining an effective distribution
network. Sales Managers have still other responsibilities. They are responsible for
participating in preparation of information critical to the making of key marketing decisions,
such as those on budgeting quotas and territories. Sales Management helps to respond
proactively and effectively to customers, the key to winning business and processing orders
during the pre-sales, order management and post shipment phases.
PERSONAL SELLING OBJECTIVES
The qualitative personal selling objectives are long term and concern the contribution
management expects personal selling to make in achieving long-term company objectives.
These objectives generally are carried over from one period’s promotional program to the
next. Depending upon company objectives and the promotional mix, personal selling may be
assigned such qualitative objectives as
To do the entire selling job (as when there are no other elements in the promotional mix).
To “service” existing accounts (that is, to maintain contacts with present customers, take
orders, and so forth).
To search out and obtain new customers.
To secure and maintain customers’ cooperation in stocking and promoting the product line.
To keep customers informed on changes in the product line and other aspects of marketing
strategy.
To assist customers in selling the product line (as through “missionary selling”).
To provide technical advice and assistance to customers (as with complicated products and
where products are especially designed to fit buyers’ specializations).
To assist (or handle) the training of middlemen’s sales personnel.
To provide advice and assistance to middlemen on management problems.
To collect and report market information of interest and use to company management.
Sales management
Sales management originally reffered exclusively to the direction of the sales force
personnel. Sales management meant management of all marketing activities , including
advertising , sales promotion , marketing research , physical distribution, pricing and product
merchandising.
According to the committee of the American Marketing Association, “the sales management
meant , 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 salesforce.”
Sales Management is a respectable function today, and its professional status is high as any
other business function. Sales management provide critical inputs for the key marketing
decisions like budgeting , quotas and territory management.
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From the company viewpoint , there are three general objectives of sales management :
Sales volume
Contribution to profit
Continuing growth
Top management delegates to marketing management, which then delegates to sales
management , sufficient authority to achieve the three general objectives.
Purpose of sales force in any organization
To facilitate the development Coordination and balance Interdepartmental conflicts
SALES MANAGEMENT PROCESS A motivated sales team always achieve profitable goal
for their organization. In today’s globalized world the success of the organization depend on
the success of its employees. Whole management of sales can be improve by the process and
different steps of sales management, which is as follows:
Planning and Control: “It reduces hesitancy and false steps”-Henry fayol Planning is looking
ahead on the basis of the present and the immediate past. And Control operates on everything
– things, people, actions.
Reports: i)daily report ii)weekly report iii)tour programme
Monthly Performance Review: Each sales rep to report personally to the branch office once
in a month.
Sales Training: i) Presentation techniques ii) Techniques to prompt and handle participation
iii) The methodology of role-playing, which can be valuable assistance in developing sales
skills. iv) The use of training films.
Presentational techniques: This section is designed to highlight key factors which can be used
to make your presentation more effective. F. Ensuring that learning takes place:
ROLE OF SALES MANAGER
A successful sales manager must possess administrative , conceptual , technical , and human
relation skill which a salesman may not possess. Of course, selling experience is an asset
because a sales manager manages the sales force that performs the selling job. But both these
are two different aspects. A successful salesman may not always make a successful sales
manager. A sales manager jobs has two dimensions ----- planning & operating
Planning function includes the following:
Design a sales programme.
Establish and manage a sales organisation.
Control the sales performance.
Set the sales goals, formulate the sales policies, and design the sales strategies.
Prepare a sales plan to implement the sales objective.
The operating functions include:
Manage the sales force.
Interact with other departments.
Interact with the trade and customers.
Interact with the marketing department and report to the marketing manager.
Characteristics of Sales managers
A sales manager must visualize.
A sales manager must do the right selection. 3. He should do the proper time management.
He should be an effective leader.
CONCEPT OF PERSONAL SELLING Personal selling is a part of the total promotional
activity of the firm, which along with product, price, and place management, goes a long way
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in meeting the overall marketing objectives of the organization. The ultimate objective of the
marketing function is to increase the sales of want-satisfying products and services, thus
leading to a healthy bottom line. Of the several tools available to stimulate sales, one more
important tool is personal selling.
WHAT IS PERSONAL SELLING
It is a method of communication----- a sales person communicates on an individual basis
with a prospect. Personal selling is person to person communication. It is also possible to get
immediate feedback in personal selling by observing the reaction of the prospect, and thus
communication can be modified on the spot. Advertising may be receive by those who are
not our target audience . Personal selling is focused directly on our target audience.
Situations in personal selling:-
Establish product & ongoing relationship with the sales executive.
Established product & new relationship.
New product & ongoing relationship.
New product & new relationship.
SALES MANAGEMENT AND SALESMANSHIP
Sales management , is the direction of the personal selling effort . Mostly, this is
accomplished through salesmanship . A salesperson’s job has many activities , including
salesmanship. A sales manager has to understand these. A sales person faces many problems,
some of which are related to salesmanship. A sales manager must understand these and
provide the right solutions. Salesmanship is defined by Shapiro as the art of persuation which
motivation the customers to buy products which provide them suitable benefits.
Salesmanship is initiated by the seller and provides information to the prospective buyers
about the products and their benefits so as to persuade and motivate them to opt for them.
PROCESS OF PERSONAL SELLING There are six stages in Selling process , which are as
follows: Prospecting & Qualifying Pre- approach & Approach Sales Presentation & Demo
Handling Objections Closing Follow Up & Maintenance
. 5 QUALITIES OF A SUCCESSFUL SALESMAN
There are different qualities of a success salesman : 1. Personality 2. Mental qualities 3.
Sociability 4. Vocational skills 5. Communication ability 6. Patience 7. Determination 8.
Dependability
GOALS IN SALES MANAGEMENT: GOAL SETTING PROCESS IN SALES
MANAGEMENT There are three main goals in sales management. They are: (i) Adequate
sales volume to be achieved (ii) Maximum contribution to profits (iii) Continuing growth To
fulfill these goals and objectives the top management delegates power to marketing
management which further pass it to sales management which finally set the future
operations.
GOAL SETTING PROCESS: The duty of a sales manager is to look after and managing the
company’s personal selling for achieving this goal he has to adopt sales management goal
setting process which is as follows:
Analysis : (a)to analyse the sales records (b)reports of sales people (c) knowing market trends
(d) other environmental factors
Planning : (a) formulating goals for the company’s sales efforts (b)developing sales strategies
and policies for achieving those goals 3. Organization : (a)formation of sales force
(b)delegation of authority for achieving company’s goal
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Direction : (a)to supervise and implement the plans properly and in the direct direction (b)for
this proper communication motivation and right leadership is required
Control : (a)to find out the difference between actual and targeted results (b)to find out the
cause of deviation , if any (c) ultimately taking corrective action to solve them

Sales force Management

The success of any sales organization depends upon the ability, skill and willingness of the
sales force in achieving the desired sales objectives. The willingness to do the work will
enhance his performance level. The willingness depends upon the motivation he gets. Thus,
motivation provides willingness which is quite different from his ability or capacity in doing
his job. Therefore, there are two factors in determining the performance of the salesforce
which are his1. Ability and skill 2. Motivation Ability and skill can be developed through
education and training Willingness and interest to perfect well can be achieved through
proper motivation. Thus, motivation can enhance greater selling efficiency in the form of
higher sales volumes. A motive is an emotion within an individual which incites and
encourage him to perform well. Motivation can be aroused by some external stimuli or
incentive. Lec. 12 Organizing the sales force: The following Common approaches are used in
organizing the sales force: 1. Customer – based organisation : The cretria for thease approch
2. Product – based organization 3. Territory based organization 4. National account based
organization 5. Inside/outside sales based organization Lec. 13 Sales force structure: (i) It
requires when the company sells different variety of products to different types of customers
over a large geographical area. (ii) It combines many types of sales force structures. (iii)
Sales people are trained for territorial or product or market structure knowledge. (iv) Then,
these sales people have to report to one or more line and staff managers. The sales force is
very important in marketing mix. Hence, companies need to carefully consider when and
how to use sales representatives. For this, companies are substituting inside mail and phone
based selling units to reduce field sales expenses and they are trying to increase the
productivity of the remaining sales force through better selection, training, motivation and
compensation. Sales personnel serve as the company’s personal link to the customer. Lec. 14
Size of sales force: (i) It is the most important asset and major component of company’s
promotion mix. (ii) It decides the company’s fate as revenues are provided through sales. (iii)
Its effectiveness determines overall marketing objectives of the firm. (iv) Sales force is
required for various kinds of services. Sales force size: (i) A company after formulating its
sales force strategy and structure start considering its sales force size. (ii) It is usually fixed at
the optimum level. (iii) It includes expected level of sales together with the number of sales
persons required for such sales. (iv) Increasing the number of their sales representatives will
increase both sales and costs. (v) Thus, the sales force size can be established on the number
of customers they want to tackle. Note: It is called “work load approach” by Philip Kotler
which is as follows : (i) The buyer’s are categorized according to their yearly sales volume.
(ii) Then, the call frequencies per year is established for each category. (iii) The number of
accounts for each category is multiplied by the call frequencies to find out the complete work
load in sales call per year. (iv) Through it, the number of calls a sales person can utilize per
year is find out. (v) By dividing the total year calls needed with the average year calls done
by the sales person can determine the number of sales persons required by the company. (vi)
The size of sales force depends upon its structure and productivity and some other factors.
(vii) The size is also changeable according to the company’s market conditions. (viii) The
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company determines the sales force size upon its affordability and its requirements for the
job.
Leading and motivating the sales force Motivation is behaviour towards reaching the desired
goal. The need within individual leads a person to act so as to achieve it. Thus, motivation for
sales personnel is amount of effort required for his sales job i.e., (i) Calling on potential
customers (ii) Planning sales deals and (iii) Preparing reports etc. Need for motivation There
is a need for motivation for sales personnel in order1. To improve efficiency 2. To remove
tension 3. Keep them satisfied 4. Provide human treatment 5. Motivation tools Motivation
and leadership (i) Effective sales executives act as leaders of sales personnel and get
voluntary cooperation from them to reach the sales department’s goal. (ii) They very well
know the motives, desires and ambitions of the sales persons and use this knowledge to guide
them in their activities. (iii) The leadership requires to keep good relationship with the sales
personnel which requires skills, experience, maturity and common sense. (iv) They should
treat them fairly in assigning jobs, promotions and remunerations etc. Lec. 18 Training and
compensating the sales force The increasing demand of demand of present world of
marketing requires competent and well trained salesman as a company’s success and
progress depend greatly on the efficiency of its sales force. now-a-days only proper trained
sales person can improve the maximum potentiality of any organization hence, well trained
sales force can be a valuable asset for it to face the modern marketing.
2. Importance of motivating salespeople is recognised, because financial performance of the
company depends upon the achievement of sales volume objective Majority of salespeople
are not adequately motivated 10-15 percent salespeople are self-motivated Motivation is the
effort the salesperson makes to complete various activities of the sales job Motivation is
derived from Latin word “movere”, which means “to move”MOTIVATING THE
SALESFORCE
3. Motivational theories or behavioural concepts that are relevant to motivation of
salespeople are: • Maslow’s hierarchy of needs • Hertzberg’s dual-factor • Vroom’s
expectancy • Churchill, Ford, and Walker model of salesforce motivation, shown
hereunder:Motivation Effort Performance Reward SatisfactionMOTIVATIONAL
THEORIES
4. Motivational tools are divided into (1) financial, and (2) non-financial. These are shown in
the next slide Fordesigning or selecting a mix of motivational tools, a compromise between
differing needs of customers, salespeople, and the company management becomes necessary
Sales manager should know each salesperson and understand his / her specific needs
SELECTING A MIX OF MOTIVATIONAL TOOLS
5. Financial compensation is the most widely used tool of motivation, as salespeople give
highest value to it
MOTIVATIONAL TOOLS IN A MOTIVATIONAL MIX Financial Non Financial•
Financial compensation plan • Promotion • Salary • Sense of accomplishment •
Commission/Incentive • Personal growth • Bonus opportunities • Fringe benefits •
Recognition • Combination • Job security• Sales contests • Sales meetings • Sales training
programmes • Job enrichment • Supervision
6. Objectives of compensation plan from the company’s viewpoint • To attract, retain, and
motivate competent salespeople • To control salespeople’s activities • To be competitive, yet
economical: It is difficult to balance these two objectives • To be flexible to adapt to new
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products, changing markets, and differing territory sales potentials A good compensation
plan should consider objectives from the company’s and salespeople’s viewpoint
COMPENSATING THE SALESFORCE
7. To have a fair payment plan • Fair or just payment to all salespeople is ensured by
selecting measurable and controllable factors To have a simple plan, for easy understanding
• This is in conflict with the objective of flexibility To have both regular and incentive
income • Regular income by fixed salary to take care of living expenses • Incentive income
for above average performanceOBJECTIVES OF COMPENSATION PLAN
FROMSALESPERSON’S VIEWPOINT
8. We shall examine these steps briefly Designing a new compensation plan or revising an
existing plan consists of the following steps: • Examine job descriptions • Set up specific
objectives for salespeople • Decide levels of pay / compensation • Develop the compensation
mix • Decide indirect payment plan or fringe benefits • Pretest, administer, and evaluate the
planDESIGNING AN EFFECTIVE SALES COMPENSATION PLAN
9. Objectives should be measurable. E.G. sales volume, selling expenses Salespeople should
have some control on the objectives – E.G. number of sales calls made These are derived
from company’s sales and marketing objectives Each job description should include
responsibilities and key performance standards, to decide how much to pay Set up Specific
Objectives for Salespeople Separate job descriptions are required for different sales positions
or jobs – E.G. missionary salesperson, senior salesperson, key account executiveExamine
Job Descriptions
10. Salespeople earn pay depending on their and company performance Firms decide a
range of average pay, instead of a specific pay Annual average pay levels vary between
industries, within the same industry, and sometimes within the company It is decided based
on the following factors: • Levels of pay for similar positions in the industry • Levels of pay
for comparable jobs in the company • Education, experience, and skills required to do sales
job • Cost of living in different metros and cities It is important to decide levels of pay for all
sales positions It means the average pay or money earned per year (or month)DECIDE
LEVELS OF PAY / COMPENSATION
11. We shall briefly examine above compensation plans 68 percent companies use
combination plan and balance 32 percent firms use straight salary or straight commission
Basic types of compensation plans are: • Straight salary • Straight commission • Combination
of salary, commission, and / or bonus Expense allowances or reimbursements like travel,
lodging, etc are not included Widely used elements of compensation mix are: (1) salaries,
(2) commissions, (3) bonuses, (4) fringe benefits (or perquisites)
DEVELOP THE COMPENSATION MIX
12. Disadvantages: • No financial incentive to salespeople for more efforts and better
performance. Hence, superior performance may not be achieved • May be a burden for new
and loss-making firms Advantages: • Salespeople get secured income to cover living
expenses • Salespeople willing to perform non-selling activities like payment collection,
report writing • Simple to administer Characteristics: • 100 percent compensation is salary,
which is a fixed component • No concern for sales performance or salesperson’s efforts •
This plan is suitable for sales trainees, missionary salespeople, and when a company wants to
introduce a new product or enter a new territory
STRAIGHT – SALARY PLAN
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13. Disadvantages: • Focus is on sales and not on customer relationship • Salespeople may
pay less attention to non-selling activities Advantages: • Strong financial incentive attracts
high performance, removes ineffective salespeople and improves results • Controls selling
costs and requires less supervision Characteristics: • It is opposite of straight-salary plan •
Most popular commission base is sales volume or profitability • Commission rate is a
percentage of sales or gross profit • This plan is generally used by real estate, insurance, and
direct-sales (or network marketing) industries
STRAIGHT – COMMISSION (OR COMMISSION ONLY) PLAN
14. Characteristics: • Combines straight salaryCOMBINATION PLAN & straight
commission plan • Four types of combination plans used by companies: 1) Salary plus
commission: suitable for getting improved sales and customer service 2) Salary plus bonus: a
bonus is a lumpsum, single payment, for achieving short-term objectives. This plan is used
for rewarding team performance 3) Salary plus commission plus bonus: suitable for
increasing sales, controlling salesforce activities, and achieving short- term goals. Also
suitable for selling seasonal products like fans 4) Commission plus bonus: Not popular. Used
for team selling activities for selling to major customers
15. Indirect payment plan, also called fringe benefits or perquisites, help in attracting and
retaining people, but have now come under government tax in India Disadvantages: •
Complex and difficult to administer • May not achieve objectives if not properly planned,
implemented and understood Advantages: • Flexible to reward and control salesforce
activities • Security for living costs and incentives for superior performance for salespeople •
Rewards specific sales performance • Different plans for different sales positions / jobs
16. STRAIGHT COMMISSION Paying a commission is a variable expense rather than a
fixed one. If sales are made, a commission is paid — no sales, no commission. This keeps
sales expenses strictly in line. A straight commission pay plan has many advantages. It is
desirable for a company suffering from a severe cash shortage since the commission need not
be paid until proceeds are received from a sale. Flexible commission rates can be a strong
incentive and many organisations are successful because the sales force enjoys a liberal
commission schedule.
17. TARGET COMMISSION
A straight commission is paid on sales volume. On a fixed commission base,a fixed
percentage of sales volume is paid to the sales force. Other plans callfor increase in rate as
volume increases. A fixed rate commission is easy tofigure and administer. If the rate is 2 per
cent, it stays at that percentagewhether the salesperson sells goods worth Rs 40,000 or Rs
4,00,000. Aprogressive commission rate accomplishes a major objective of mostcompanies:
it provides a constant incentive to the sales force to do better.The following example explains
this: Sales (Rs) Commission Rate Up to 40,000 2% From 40,000 to 1,00,000 3% Above
1,00,000 4% If a salesperson’s quota is Rs 80,000, he would earn Rs 2,000 if heachieved that
target exactly — a composite rate of 2.5 per cent. For example:Smith Kline Beecham is using
this method in their worldwide selling.
18. BONUS, PROFIT SHARING, FRINGE BENEFITS Paying bonus is a method that a
company adopts to reward special contribution and as an incentive to superior performance.
Profit Sharing Many experts in the field of sales management disapprove extending profit
sharing to salespeople. For once, companies agree with them. There may be an argument in
favour of such a payment if no bonus plan is established for excellence in sales performance.
Fringe Benefits Fringe benefits have become a fascinating subject and an item of
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considerable expense to organisations. The costs of fringes can be as high as 30 per cent of
direct compensation expense depending on what benefits are offered and whether a portion
of the expense is shared with the employee.
19. Evaluating the new compensation plan • Find if objectives of the plan are achieved •
Some companies audit compensation plans Administering the new compensation plan •
Announce the plan in advance • Explain the new plan and reasons for changing the previous
plan • Outsource administration if plans are changed frequently Pretesting the new /
proposed Compensation Plan: • Companies pretest a new (or proposed) plan, before adoption
• Either it is simulated on a computer, or pretested at one / more branches for 6-12 months •
It should involve all concerned peoplePRETEST, ADMINISTER, AND EVALUATE
COMPENSATION PLAN
Motivating the sales force should be such that each sales person gives her/his best
performance. This is the responsibility of the sales manager and the three ways this objective
can be achieved.
Offering challenging sales territories, in which the sales person finds job satisfaction as well
as spend major time in a week with his family.
ii. Leadership style of the Sales Manager is such that the sales force is fully satisfied with the
work environment. Managerial grid type leadership may be more rewarding.
iii. Suitable compensation package for the sales-force provide motivation to do their best.
Sales-force compensation is an important tool for motivation.
The compensation has two parts:
Monetary and
Non-monetary.
Money helps a person acquire status and improve life styles. But money can provide
motivation up to a point, beyond which non-monetary incentives become important.
Straight Salary Method:
This comprises of fixed salary per month. This form of compensation is useful for selling
capital goods, industrial products and project sale where mostly one time sales deal takes
place. The limitation of this method is that it creates complacency among the sales force who
become used to the fixed salary scheme and loose initiative and aggressiveness for achieving
higher performance.
In this compensation method, the market development suffers, since the salesperson puts no
extra effort for the purpose. However, this compensation method may be satisfying for a non-
performing salesperson. A high calibre and performing sales person will start losing initiative
and the organisation will ultimately be a great looser.
(ii) Commission Only Method:
The only commission method of compensation is applied with the belief that the reward
should be commensurate to one’s efforts. For every sale executed, the sales person gets a
commission fixed at a certain percentage say 3-5% of the total sales made in a month.
In this method a high achiever gets the highest reward but the main draw-back of this method
is that a salesperson becomes uncertain about his/her monthly income. In some month, the
salesperson may not earn at all, because due to situation beyond control, he/she has not
executed any sale.
If the opportunity permits, the salesperson may push the fast moving items with making little
efforts for prospecting a sale. Since, the privatisation of Life-Insurance and General
Insurance fields in India, many large domestic foreign players have entered the field and
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most of these companies are adopting the only commission method for their insurance agents
who put flexible working hours for the sale of policies.
(iii) Combination of Salary and Commission Methods:
The limitations of above two schemes of compensation are over come through a combination
plan. In the combination plan, a sales person is given a fixed monthly salary which is
independent of his/her sales performance. The other part of compensation is the commission
which is linked to his/her sales performance.

These two parts together may make a salesperson satisfying so far as monetary compensation
is concerned and he/she would do the best to earn extra money every month in the way of
larger amount of commission due to improved sales performance.
A good organisation may provide additional perks for the high performing sales force
according to the service rules which may include motor cycle, cars, lunch coupons and club
membership etc. This combination method has the advantage of the sales persons responding
to market conditions and putting in their best efforts. It also ensures prospecting, market
penetration and selling slow moving items whenever the situations arise.
The main drawback of this method is that it equates a senior sales person with a junior one
and it prohibits generation of organisation loyalty for the sales force. The high performing
persons may find opportunity to leave the company for better prospect.
(iv) Non-Monetary Incentives for the Sales force:
It is the wisdom and leadership of the sales manager which help in devising means for
retaining the high achievers in the sales-team within the organisation. A good organisation
where the high performing sales force would like to be associated for long may create
satisfying work environment, good career prospect, and attractive retirement benefits like
superannuation scheme, medical benefits for self and family members, annual leave travel
allowance for the family, children’s education allowance, foreign postings/tours on official
work and recommending for attending management development programmes etc.

It is the responsibility of the sales manager to ensure that a high performing sales person is
adequately rewarded on monetary and non-monetary terms and the salesperson is able to
deliver the best according to his/her potential.