UNIT I
LESSON 1:
OBJECTIVE AND SCOPE
OF SALES MANAGEMENT
Learning Objectives
On completion of this lesson,you should be able to
• Explain the objective of sales management.
• Relationship between sales management and control.
I welcome you all to this interesting subject of sales
management.Well,sales management is a topic every manage-
ment student should be aware of.To be a sales expert,one is
supposed to know this concept by heart.So what we are waiting
for.Lets start this interesting journey of sales management.
Sales management originally referred exclusively to the direction
of sales force personnel.Later,the term took on the broader
significance-in addition to the management of personnel
selling. “sales management” meant management of all
marketing activities including advertising,sales
promotion,marketing research,physical distribution, pricing and
product merchandising.According to American Marketing
Association sales managemet means “the planning, direction
and control of personnel selling, including
recruiting,selecting,equipping,assigning,routing,supervising,paying
and motivating as these tasks apply to the 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 organization
structure that ensures effective communication not only inside
the sales department but in its relations with other organiza-
tions units. Outside the company, the sales manager serves as
the key contact with customers and other external publics and is
responsible for building and maintaining an effective distribu-
tion network.
Sales managers have still other responsibilities. they are respon-
sible for ‘participating for the preparation of information critical
to the making of key marketing decisions such as those on
budgeting, quotas and territories. They participate- to an extent
that varies with the company-in decisions on products,
marketing channels and distribution policies, advertising and
other promotion and pricing.Thus,the sales manager is both an
administrator in charge of personal selling activity and a
member of the executive group that makes marketing decisions
of all types.
Objectives of Sales Management
Now,lets discuss the objectives of sales management.
From the company viewpoint, there are three general objectives
of sales management: sales volume, contribution to profits and
continued growth. Sales executive do not carry full burden of
the effort to reach these objectives but they make major
contributions. Top management has the final responsibility
because it is accountable for the success and failure of the entire
enterprise.Ultimately top management is accountable for
supplying an ever increasing volume of socially responsible
products that final buyers want at satisfactory prices.
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Top management delegates to marketing management, which
SALES AND DISTRIBUTION MANAGEMENT
then delegates to sales management, sufficiently authority to
achieve the three general objectives. In the process, objectives are
translated into more specific goals-they are broken down and
restated as definite goals that the company has a reasonable
chance of reaching. During the planning that precedes goal
setting,sales executives provides estimates on market and sales
potentials,the capabilities of the sales force and the middlemen
and the like.Once these goals are finalized, it is up to the sales
executive to guide and lead the sales personnel and the
middlemen who play critical roles in implementing the selling
plans.
Sales management then is influential in charting the coarse of
future operations.It provides higher management with
informed estimates and facts for making marketing decisions
and for setting sales and profit goals. Largely on sales
management’s appraisal of market opportunities, targets are set
for sales volume, gross margin and net profit in units of
product and in dollors,with benchmarks of growth projected
for sales and profits in specific future dates.Whether or not
these targets are reached depends upon the performance of sales
and other marketing personnel.
Sales Management and Financial Results
Sales management and financial results are closely
related.Financial results are stated in terms from two basic
accounting formulas:
Sales –cost of sales=gross margin
Gross margin-expenses=net profit
Sales management influences the numbers cranked into these
formulas.Sales,gross margin and expenses are affected by the
caliber and performance of sales management and these are the
major determinants of net profit.The cost of sales factor cannot
be affected directly by sales management, but it can be affected
directly since sales volume must be large enough to permit
maintenance of targeted unit cost of production and
distribution.Periodically,these formulas become the company
operating statement and are used by the board of directors and
by stockholders, in appraising top management
performance.Moreover,top management uses these formulas in
judging the effectiveness of sales management.
Sales Management and Control
Now,sales management and control are closely related in an
organization.
Sales executive control the personal selling effort of the
organizational units they head.The purpose is to ensure that
sales department objectives are reached.Control is part of
management,as are planning,organizing and coordinating.The
several phases of control are presented in the following
discussions in the normal sequence but in the real world several
phases can occur simultaneously or overlap in time.
1
 Sizing up the Situation economic conditions, changes in governmental activities and
SALES AND DISTRIBUTION MANAGEMENT

Sales executive start by reviewing the personal selling objectives wars,strikes,floods,droughts and other natural disasters.
of the firm.They realize these objectives with respect to the
Action to Correct Controllable Variation
present,past and the future in an attempt to answer the four
Management corrects the variation explained by factors within
questions.
the control of the person being evaluated. Management takes
1. Where are we now? steps to move the individual performance in the direction of
2. How did we get there? the standards. The specific actions taken differ within the nature
3. Where are we going? of the variation. but management assumes one or more of
three forms.
4. How do we get there?
1. Direction or pointing out more effective ways to perform
After satisfying themselves that the company personnel selling
certain tasks.
objectives,long range and short range,are reconcilable, sales
executives appraise them relative to the plans, policies and 2. Guidelines or providing additional instructions or training
procedures that have been used, are being used, or are intended and
for use in the effort to reach personnel selling objectives.In the 3. Restraint or the installation of procedures and practices
coarse of sizing up the situation, sales executives find and aimed at keeping results within desired bounds.
correct weaknesses or imperfections in the sales plans and the Adjusting for Uncontrollable Variation
policies and the procedures used in their implementation. The amount of uncontrollable variation in the comparison
Setting Quantitative Performance Standards indicates the relative need for adjusting sales plans and policies.
After ironing out planning weaknesses,sales executive set If uncontrollable variation suggests that present sales objectives
quantitative standards against which to measure are unrealistic or not in line with the current expectations, basic
performance.standard settings requires continual experimenta- revision in the objective are made.Thus,if the comparison of
tion and most standards are far from precise..The ultimate results with the standard reveals substantial uncontrollable
standard of a particular standard appropriateness is whether it variation, adjustment of standards to attainable levels is in
contributes more to personnel selling efficiency than it costs. order.
Intelligent standard setting requires identification of the Conclusion
individuals who are responsible for the activity or group of Here we have studied the meaning and objectives of sales
activities being put under control. No two salespersons or management,its relationship with control happening in the
executives perform exactly alike,even though they may operate in organization.Its not necessary that the control always produces
identical circumstances.Thus ,standards are often expressed as desired outcome but may also indicate some variations.These
ranges of acceptable performance.Although it is convenient to variations needs to be corrected thereafter.
think of a standard as a fixed value, there should be an upper
Questions
and lower limit within which human variation may take
place.When the performance of an organizational unit passes 1. What do you mean by sales management.Why is it
either of these control limits, the danger flag is up, signaling important to study?
that the situation is out of control. 2. What are the objectives of sales management?
Gathering and Processing Data on Actual 3. Explain the relationship between sales management and
Performance controlling?
The type and amount of information needed for controlling Notes:
sales depend upon the standard selected. but regardless of the
nature of this information it should not be in excess of sales
management real needs, nor should its cost of collection and
processing be more than its worth.Consequently,sales manage-
ment determines-at regular intervals-whether the information
being reported is sufficiently important and being used often
enough to justify its costs.Sales executives also keep in mind
that changes in executives,basic policies or other matters may
alter the usefulness of the information.
Evaluating Performance
Evaluation of performance means comparing actual results
with standards.Because of differences in territorial and other
conditions, it is difficult to compare individual
performances.However,it is possible to explain each individual
salesperson variations from standard.Departures from standard
are classified into controllable and uncontrollable variations.
variations outside the control of the person being appraised
include those caused by rapid and unexpected changes in

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