Sales Management


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Sales Management

  1. 1. Sales Management Welcome to the world of SALES
  2. 2. Objectives of Sales Dept. • To achieve Sales Targets • To achieve Market share targets • To manage dealer network • To organize sales training • To handle customer complaints • To manage Sales promotion campaigns • To effectively cover market
  3. 3. Sales Job Classification • Delivery Salesman • Order Taker • Sales officer • Sales Executive • Sales Supervisor • Sales Engineer • Sales Support staff
  4. 4. Various Sales Classification Deliverer: Only delivers goods • Order Taker: Only takes customer orders • Detailer: Details the product • Technician: Engineering sales person • Demand Creator: Creative sale of • tangible and intangible products.
  5. 5. Market Scenario • It’s a battle of Products, Categories, Brands. • Every product category is getting divided further into new categories.
  6. 6. Category. Cell Phones.. • Its NOKIA v/s MOTOROLA v/s SAMSUNG v/s SONY v/s HAIER v/s many others. • Market crowded with too many products.
  7. 7. Category Pizza… • It’s Pizza Hut v/s Domino’s v/s Smokin Joe’s v/s Papa John’s • Market crowded with too many products.
  8. 8. Category Motorbikes… • Hero Honda v/s Bajaj v/s TVS v/s Yamaha v/s Honda v/s Suzuki • Market crowded with too many products.
  9. 9. Category Consumer Durables.. • LG v/s Samsung v/s Sharp v/s Sony v/s Videocon v/s Onida v/s Godrej v/s Hitachi v/s Philips v/s Whirlpool and many more.. • Market is overcrowded..
  10. 10. Category Soft Drinks….. • Coca-Cola v/s Pepsi v/s Thumps up v/s Mountain Dew v/s 7-Up v/s Limca v/s Mirinda v/s Sprite v/s Gold Spot v/s Dukes and many more…. • What will the poor customer do?
  11. 11. Category 4 Wheelers…. • Maruti Suzuki v/s Hyundai v/s Tata Motors v/s General Motors v/s Ford v/s Skoda v/s Mahindra v/s Mercedes Benz v/s Volkswagen v/s Nissan v/s Fiat….. • Too much really….
  12. 12. What is the outcome??? • Too many Co’s • Too many categories • Too many segments • Too many brands • Too much of choice • Too much of confusion…Resulting into ‘THE ASSAULT ON THE MIND’
  13. 13. THEREFORE…….. • Managing Sales has become a complicated function. • Sales has become too challenging and an uphill task.
  14. 14. Sales Management means, • Managing Sales Force • Offering Sales Training • Managing Channel partners • Managing Direct sales • Managing Sales Promotion • Managing Sales Territories • Managing Sales Targets
  15. 15. Sales Planning • Planning is deciding on… • WHAT are we going to do? • WHEN are we going to do? • WHERE are we going to do? • WHO is going to do? • WHY will it be done? AND • HOW will it be done?
  16. 16. Observation • Successful companies do a lot of planning and outperform their rivals and also their own past performance.
  17. 17. Strategic Planning • These are the decisions about company’s lond term objectives and strategies. • Sales planning occurs at various levels in the company. • Multi-product, Multi-business co’s plan at 03 levels..1)Corporate plan 2) SBU plan and 3) Product functional plan.
  18. 18. LEVELS OF PLANNING • Corporate Planning : Long term planning • Div./SBU Planning : Long term planning • Functional Planning : Operational, short term.
  19. 19. Strategic Planning Process. • Step no 1: • DEFINING BUSINESS MISSION
  20. 20. Strategic Planning Step no. 2 • ANALYSIS OF EXTERNAL BUSINESS ENVIRONMENT, 1)Current market size. 2)Growth patterns 3)Product trends 4) Segment trends 5)Customer needs analysis, buying behavior trends.
  21. 21. Step 2 contd… 6)Current product and marketing mix. 7)Competitors analysis: Their strategy, current performance, SWOT analysis and their future plans.
  22. 22. Step 2 contd.. EXTERNAL ENVIRONMENT, • 1) Economic environment, 2) Demographic environment, 3) Political environment, 4) Technological environment 5) Cultural environment
  23. 23. Internal Environment 1) Employees, 2) Product Mix 3) Channel Partners 4) Suppliers 5) Vendors
  24. 24. Designing, Selecting Strategies • CLEAR-CUT STATEMENT OF OBJECTIVES
  25. 25. Description of Strategies, • Strategies with respect to, • Target Market • Marketing Mix • Positioning • Market research • Network management • CRM and MIS
  26. 26. ACTION PLAN • Identification of weak markets • Identification of strong markets • Identification of focus markets • Identification of focus segments • Identification of strong dealers • Identification of strong dealers • Market coverage, Sales promotion and budgets
  27. 27. Implementation and Control • Weekly sales monitor. • Product and segment wise monitor. • Daily collection monitor • Monitoring of Target v/s Actual performance. • Corrective Action • Controlling expenditure.
  28. 28. Sales Forecasting • Why it is needed? • To plan and achieve and forecasted sales EFFECTIVE, without firefighting…. • On the basis of Sales forecast other dept,s plan their activities. e.g. Production plan, finance planning, Human resource planning..
  29. 29. Types of Sales Forecast 1) Product related, • National sales • Industry sales • Company sales • Product line sales • Area wise sales
  30. 30. Forecast contd. • Time specific, • Long Term sales, • Medium term sales • Short term sales
  31. 31. Forecast contd.. • Area specific, 1. Global sales 2. National sales( country specific) 3. Regional sales( north/south) 4. Territory sales( district level)
  32. 32. Terms used in Forecasting • Market Potential, It is the best possible estimated sales of a given product in a given market for a specific time.
  33. 33. Market forecast. • It is the expected industry sales of a given product at one specific level of industry marketing expenditure, in a given market, for a specific period of time. It is also called as ‘Market size’.
  34. 34. Forecast contd.. • Company Sales Potential.. • Sales potential is defined as maximum share of market potential that is expected to be achieved by a company.
  35. 35. Forecast contd.. • Company sales forecast, • It is the estimated company sales volumes in units or service under a proposed marketing plan, in a given market for a specific period of time.
  36. 36. Forecast contd.. • Sales budget, It is the estimate of expected sales volume in units or revenues from company’s products and services and the selling expenses.
  37. 37. Sales forecasting methods • Top-down/break-down approach. In this method the Sales head breaks down the company sales forecast into region, district, territory, sales officer.
  38. 38. Bottom-up/Build-up approach • This starts with the company’s area office to estimate the sales in their respective territories. • Each Area manager adds the forecast received from the sales team, modifies the same and sends it to the Regional manager.
  39. 39. Bottom-up approach contd.. • Each Regional manager totals up the forecast, modifies the same and sends the regional estimate to the marketing head. • The Sales/Mktg. head presents the proposal to the CEO for further discussions and modifications.
  40. 40. Sales force Composite Method • In this method salespeople are involved to estimate their future sales. This is the example of ‘Bottom-up’ approach. • Sales force makes estimates about their sales after talking to the ‘Channel partners’.
  41. 41. Advantages of Composite method • Salespeople have better insight of the market and competitors. • Detailed sales estimate broken down into product, dealer and territory is possible. • Forecast done by salespeople can be reliable to a large extent.
  42. 42. Sales forecasting… • Important Review areas.. 1) Industry details, Category- wise. 2)Target v/s Actual. 3)% growth over previous year. 4) Variance analysis of Major towns and contributing reasons.
  43. 43. Imp. Review Areas contd. 1) Industry movement with segment % 2) Area wise ,Officer wise Tgt v/s Act and variance analysis. 3) Sales promotional Activity review, Town wise.
  44. 44. Key Result Areas-Review • Key Result Areas could be, 1) CSI( Sales process/service process) 2) Dealer Network Expansion. 3) Sales Training programs. 4) Special Strategic plans( Corporate level) 5) Business Results.
  45. 45. Based on Review, • Planning or forecasting is made. Plan includes, 1) Segment-wise ,Town-wise, Officer-wise, Dealer-wise projections. i.e. Targets. Volumes and Market share. 2) Growth over previous year.
  46. 46. Key Result Areas-Plan • CSI( Sales/service process satisfaction) • Dealer Network Expansion. • Sales Training programs. • Promotional budget requirements.( Town- wise,activity-wise)
  47. 47. Performance Measurement. • Why it is needed? 1)To identify salesperson’s weak areas and improve. 2)To decide increment in pay based on performance. 3)To identify future Managers. (promotions) 4)To identify training needs. 5)To identify weak salespeople.
  48. 48. Measures of Performance. 1) Target v/s Achieved performance. 2) Growth achieved over last FY. 3) Sales revenue generated. 4) Market Coverage 5) Channel coverage and management. 6) MIS( Reports)
  49. 49. Qualitative Measurement. • Selling Skills, 1)Developing rapport. 2)Presentation skills. 3)Use of Sales tools. 4)Ability to overcome objections. 5)Ability to implement company plans. 6) Ability to close sales.
  50. 50. Qualitative Perf. contd.. • Customer Relationships, 1) Salespersons acceptability. 2) Efficient customer service. 3) Sales/Service advise. 4) Keeping customer records updated. 5) Keeping customer information updated.
  51. 51. ‘Sales Goals or Target settings’ • Sales targets are sales goals set by a company for its sales force for a specific time period. • Sales targets can be set on volumes, profits, market share ,customer satisfaction or combination of all.
  52. 52. Why Sales targets? • Performance standards. • Controlling performance. • Motivating sales people. • Identification of strengths and weaknesses of sales team.
  53. 53. Considerations for Setting targets. • Territory potential. • Past sales experience/performance. • Company’s plans for that market. • Salespeople’s estimates.
  54. 54. Considerations… • Set realistic targets. • Understand problems. • Ensure sales team understands targets. • Involvement of sales team in target setting. • Continuous feedback. • Flexibility.
  55. 55. Sales Organization. What is it and why it is needed? • 1) Defines job relationships among people. 2) Defines reporting pattern. 3) Makes people perform with clarity, efficiency and effectiveness.
  56. 56. Basic concepts in Sales orgn. • Degree of Centralization, It means that in a centralized structure authority and responsibility is with higher management levels.
  57. 57. Basic concepts contd. • Degree of specialization. It means that in today’s competitive scenario a general sales approach may not be effective. Therefore, salespeople are asked to handle special products, lines, areas, segments, customers etc.
  58. 58. Basic concepts contd. • Market orientation, It means that when markets are complex and varied in nature co’s must respond by designing a structure as per client’s need and requirement.
  59. 59. Basic concepts contd.. • Effective co-ordination. It means that Sales and marketing must have co-ordination between themselves for achieving ultimate organizational objectives.
  60. 60. Basic concepts contd.. • Span of control, • It means that how many sales people are controlled by a sales manager and how much should he be controlling?
  61. 61. Line Sales Organization VP (SALES) Zonal Manager Zonal Manager Zonal Manager Zonal Manager Area Manager Area Manager Area Manager Area Manager Sales Officer Sales Officer Sales Officer Sales Officer
  62. 62. Line Sales Organization • It is simplest structure. • Line organizations have clear authority and responsibility. • Decision making is quick. • Too much depends on the Sales head. • Subordinates may lack knowledge and skills of specialized areas.
  63. 63. Line and Staff organization VP (Sales) Manager Manager Sales Training Logistics Manager Manager Advt.and Publicity Mkt .Research General Manager (Sls) Zonal Managers Area Managers
  64. 64. Line and Staff Organization • Provides experts in areas like mkt. research, sales training, logistics etc. • Better decisions can be taken in this structure. • Salespeople can focus on their work and targets. • Better co-ordination and planning can be done.
  65. 65. Horizontal Sales Organization Res. And Design Operations Team •Product design. •Production •Service design •Quality assurance •Customer research •Systems engineering Customer Support Customer Satisfaction Team Team •Service •Sales and Mktg. •Training •Logistics. •Information •Channel management
  66. 66. Horizontal Sales Organization • This structure is cross functional in nature. • Cross functional teams are formed. • This structure reduces supervising costs and efforts. • It also improves efficiency and customer response. • Co’s which are customer focused adopt this structure.
  67. 67. Functional Sales organization. V.P. (Sales) Mktg. Services Market research GM (Sales) Manager Manager ZSM/ASM Sales Officer.
  68. 68. Functional Sales Organization • In this type of organization staff manager has a line authority of his function over sales people. • Salespeople can receive instructions from staff managers.
  69. 69. Specializations within structures. • Geographical structure. • Product structure. • Market oriented structure. • Functional Structure. • Combination structure.
  70. 70. Geographical Structure. V.P.(Sales) Manager G.M.(Sales) Market Research Regional Manager Regional Manager Regional Manager South West North Area Managers Regional Manager State Heads. East Sales officers Territory Heads.
  71. 71. Geographic Structure • This structure helps in better market coverage. • Better sales force control is possible. • Sales people can be held accountable as they are responsible for a specific territory. • Quick response and customer service can be possible as the salespeople are in the field/market.
  72. 72. Product Specialized Structure Vice President (Sales) General Manager General Manager General Manager (Gen.Sets) (Water pumps) (Dairy Equipment) Regional Manager Regional Manager Regional Manager ( Gen. Sets) (Water pumps) (Dairy Equipment)
  73. 73. Product Spl. • This structure offers focused attention on each product group/division. • Overall growth can be possible in this structure. • Product heads can design a better marketing strategy and can react to market needs quickly.
  74. 74. Market specialized structure Vice President (Sales) General Manager General Manager General Manager (Dealer Sales) (Inst./Govt.Sales) (Rural sales) Regional Manager Regional Manager Regional Manager ( Dealer sales) (Inst./Govt.Sales) (Rural Sales)
  75. 75. Market specialized structure • This structure provides specific market and customer needs. • Customer satisfaction can be achieved. • Selling costs can be on the higher side in this structure. • May create overlap and confusion.
  76. 76. Sales Force staffing • Steps involved in Sales force staffing are as follows, 1) Planning. 2) Recruiting. 3) Selecting. 4) Hiring. 5) Socialization 6) Assimilation
  77. 77. 1) Planning • Is establishing responsibilities. • Is deciding on roles and responsibilities. • Who will do what in the various stages and activities of staffing. • During the entire process co-ordination between Sales dept., and HRD is absolutely necessary.
  78. 78. Planning • Number of Salespeople needed. 1) Decide on optimum sales force size. 2) Consider the no. of promotions. 3) Consider the no. of transfers and retirements. 4) Consider terminations.
  79. 79. Planning. • Type of Salespeople required. 1) Conduct job analysis: Analysis of environment in which salespeople are going to work. What type of customers is he going to meet? Level of competition. Knowledge and skills required for the job.
  80. 80. Planning 2) Prepare job description: • Title of the job.( sales officer, supervisor, GM.) • Reporting relationship. • Products salesperson is going to sell. • Types of customers he would be meeting. • Job demands and expectations. • Posting location and area to be covered. • Technical requirements.
  81. 81. 2) Recruiting • Identification of sources for recruitment. Internal sources: Thru employee referral programs. Vacancies created by promotions and transfers. External sources: Advertisements. Internet. Campus interviews. Employment agencies. Competitors.
  82. 82. 3) Selecting Med.exam. Ref.Check Testing Int.intw. In.Intw. Appl.Bank. Screening
  83. 83. 4) Hiring • After the candidate is short listed co. makes a job offer to him. • After the acceptance of job offer by the candidate a letter of appointment is given to him.
  84. 84. 5) Socialization and assimilation • Socialization: Salesperson understands and learns values, norms, rules and regulations and company culture. This is done through an orientation program, where the recruit is introduced to various departments. • Assimilation: After the orientation program gets over the recruit formally mixes with the team and his/her boss.
  85. 85. Training of Salespeople. • WHY IS SALES TRAINING NEEDED?
  86. 86. Sales training. • To improve the salesperson’s product knowledge. • To improve his selling skills. • To introduce him to new selling techniques. • Special training programs for higher managers like stress management, crisis management, strategic thinking etc.
  87. 87. Sales Training • How are training needs identified? • Thru Sales manager’s observations. • Performance testing. • Sales-force audit. • Routine/refreshers programs.
  88. 88. Various Training Areas • PRODUCT KNOWLEDGE. 1) Technical features. 2) Product comparisons. 3) Technical knowledge/Technology change. 4) FAB analysis.
  89. 89. Various training areas. • CUSTOMER KNOWLEDGE: 1) Types of customers. 2) Consumer buying behavior. 3) Customer segmentation. 4) Customer relationship management.
  90. 90. Various training areas • COMPETITION KNOWLEDGE: 1) SWOT analysis. 2) Competition network. 3) Competition policies. 4) Competition promotion schemes. 5) Competition sales force. 6) Competition products. 7) Competition strong and weak markets.
  91. 91. Sales Training Methods 1) Classroom training: Through lectures. Through demonstrations. Through group discussions. Through case studies. Through Role plays.
  92. 92. Sales training methods. 2) On the Job training: New sales recruit can accompany his senior on the field to observe how things are actually managed on the field. e.g. how to manage big dealers, how to manage institutional customers, how to manage weak dealers and markets etc.
  93. 93. Sales training methods 3) On line training: This type of training is less time consuming and less costly than the other methods. This method is also becoming very popular. • Electronic performance support system: This is a computer based training where info. is made available to the salesperson.
  94. 94. Sales Training methods • Interactive multimedia training: This method is faster, cheaper and more effective and informative. • Distance learning: It is an interactive system thru a television network. Sales force can ask questions and get answers from experts. • Self Study: Thru product manuals, books, articles, cd-roms, audio cd’s etc.
  95. 95. Personal Selling Process • Personal selling is one-to-one persuasive selling, where a salesperson sells his product or service directly to a customer. • One must realize that there is no magical formula to make a sale, however if selling process is adopted the probability of making a sale increases.
  96. 96. Personal selling process Pre/ Need. Obj. Opening Demo Idn. Hand. Closing Follow Nego. Sales Up.
  97. 97. 1) Opening • Important points: • Personal Appearance. • Self introduction. • Opening remarks Common mistake, How can I help you? Customer: No, I am just looking. ADOPT TO THE SITUATION.
  98. 98. 2) Need Identification • QUESTION AND LISTEN POSTURE. • Salespeople should avoid the temptation of making a sales presentation without finding out the customers needs and wants.
  99. 99. 3) Demonstration and Presentation • Make your demonstration and its process as simple as possible. • Rehearse the approach to the likely objections. • Know the product USP’s well. • Demonstration should not go wrong. • Make sure you detail the product in a sequence.
  100. 100. Demonstration and presentation • It provides an opportunity for a salesperson to convince the buyer. • Salesperson should remember that “Customers buy benefits and not features”
  101. 101. Demonstration and presentation • While selling, salespeople should use linking phrases like, “Which means that”, “Which results into”, “Which helps you in” Presentation should not mislead the sales person into believing that he/she should do the talking” alone” He should ask questions and pause.
  102. 102. Demonstration and presentation • Some important tips. • TELL ME AND I WILL FORGET. • SHOW ME AND I MAY REMEMBER. • INVOLVE ME AND I WILL UNDERSTAND.
  103. 103. Demonstration and presentation • Some important tips. • Start the demonstration with a concise statement. • Involve the customer into the demo. • Make demo interesting and satisfying. • Do not leave demo halfway. • Sell benefits. • Finally, summarize all the main points.
  104. 104. Advantages of a demonstration. • It is a useful ancillary in selling. • Customer objections can be overcome easily. • Selling becomes more realistic. • Salesperson gets a chance to interact and know the customer, which might help in relationship development.
  105. 105. 4) Dealing with objections • What are objections? • Objections are expressions of interest in the product or service. • Objection highlight issues important to customers.
  106. 106. How to handle objections? • Listen to the customer carefully and do not interrupt him. • Agree and then counter. • Straight denial. • Question the objection itself.
  107. 107. 5) Negotiations. • Where can customers negotiate? • Price. • Credit facility. • Delivery time. • Schemes and offers.
  108. 108. 6) Closing of sale • The most important part of selling process is “asking for an order from the customer” • The entire selling effort will otherwise go waste, because ultimately selling is important.
  109. 109. 7) Follow- up • This is an important step because it can help in building a long term relationship with the customer. • Salesperson can ask about the product performance, service offered to him, his buying experience, service reminders and more importantly customer refferals.