The document discusses key concepts in sales management including the meaning and nature of sales management, the scope and objectives of sales management, theories of selling such as AIDAS and the buying formula theory, and strategies for recruiting and selecting successful salespeople by determining job requirements and desirable qualities.

1. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi – 110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
Semester: Fifth Semester
Name of the Subject:
Sales & Distribution Management

2. MEANING
• In simple terms, Sales Management means
management of selling activities of an
organization.
• According to the American Marketing association,
sales management is ,” 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.”

3. NATURE
SYSTEMATIC PROCESS
PERVASIVE FUNCTION
GOAL ORIENTED
CONTINUOUS PROCESS
INTEGRATION WITH MARKETING MANAGEMENT
EXCHANGE RELATIONSHIPS
VARIETY OF JOBS

4. SCOPE OF SALES MANAGEMENT
• SALES PLANNING
• SALES ORGANISING
• SALES DIRECTING
• SALES COORDINATING
• SALES CONTROLLING

5. EVOLUTION OF SALES MANAGEMENT
PRIMITIVE FAMILY ECONOMY
THE BARTER SYSTEM
THE RISE OF MONEY
SMALL SCALE MANUFACTURING
INDUSTRIAL REVOLUTION

6. DIFFERENCE BETWEEN MARKETING
MANAGEMENT AND SALES
MANAGEMENT
BASIS MARKETING
MANAGEMENT
SALES MANAGEMENT
1. CONCEPT NEW CONCEPT OLD CONCEPT
2. NATURE IT INCLUDES SALES
MANAGEMENT
IT IS ONE OF THE PART OF
THE MARKETING
MANAGEMENT
3.OBJECT TO MAXIMISE LONG TERM
PROFITABILITY THROUGH
CUSTOMER SATISFACTION
TO MAXIMISE SALES AND
PROFITA
4. SCOPE WIDE NARROW
5. LEVEL OF AUTHORITY A HIGHER LEVEL FUNCTION A LOWER LEVEL FUNCTION

7. OBJECTIVES
• QUANTITATIVE OBJECTIVES(SHORT TERM)
1. TO RETAIN AND CAPTURE MARKET SHARE
2. TO DETERMINE SALES VOLUME IN WAYS THAT
CONTRIBUTES TO PROFITABILITY
3. TO OBTAIN NEW ACCOUNTS OF GIVEN TYPES
4. TO KEEP PERSONAL EXPENSES WITHIN
SPECIFIED LIMITS
5. TO SECURE TARGETED PERCENTAGE OF CERTAIN
ACCOUNTS OF BUSINESS.

8. QUALITATIVE OBJECTIVES(LONG TERM)
• TO DO THE ENTIRE SELLING JOB
• TO SEARCH EXIXSTING ACCOUNTS.
• TO SEARCH AND MAINTAIN CUSTOMER COOPERATION
• TO ASSIST THE DEALER IN SELLING THE PRODUCT LINE
• TO PROVIDE TECHNICAL ADVICE WHENEVER
NECESSARY
• TO ASSIST IN TRAINING OF MIDDLEMEAN’S SALES
PERSONNEL.
• TO PROVIDE AND ASSIST THE MIDDLEMEN.
• TO COLLECT AND REPORT MARKET INFORMATION OF
INTEREST AND USE TO THE COMPANY MANAGEMENT.

9. IMPORTANCE OF SALES
MANAGEMENT
REVENUE GENERATION
EMPLOYMENT GENERATION
REWARDING CARRER
HIGHER STANDARD OF LIVING
INTELLIGENCE AGENCY

10. EMERGING TRENDS IN SALES MANAGEMENT
• TECHNOLOGICAL REVOLUTION
• GLOBALISATION
• E-SELLING
• SALES FORCE DIVERSITY
• TEAM SELLING APPROACH
• CUSTOMER RELATIONSHIP MANAGEMENT
• MANAGING MULTI CHANNELS
• MANAGING MULTI CHANNELS
• SALES PROFESSINALIZATION
• SOCIAL AND EHICAL ISSUES

12. Management
1. The act, manner, or practice of managing; handling,
supervision, or control; management of a crisis;
management of factory workers.
2. The person or persons who control or direct a business or
other enterprise.
3. Skill in managing; executive ability.
Definition of Manager:
One who handles, controls, or directs, especially
a. One who directs a business or other enterprise
b. One who controls resources and expenditures, as of a
household

13. ROLES OF SALES MANAGERS
Strategic roles
Team Member
Team leader
Monitoring and control
Channel management
Relationship building

14. Skills of sales managers
Human skills
Managing skills
Technical skills

15. Sales Objectives, Strategies and Tactics
The main components of planning in a company are
objectives, strategies and tactics. Their relationship is
shown below
Decide / Set
Objectives
Develop Strategies
Evolve Tactics /
Action Plans
E.G. A company wants to increase sales of electric
motors by 15 percent, as one of the sales objectives.
(see next slide)
Review & revision

16. To illustrate the relationship between sales objectives,
strategies and tactics, consider:
Sales Goals /
Objectives
Marketing
Strategy
Sales and Distribution Strategy Tactics /
Action plans
 Increase
sales volume
by 15
percent
 Enter export
markets
 Identify the countries
 Decide distribution channels
 Marketing / sales head to get
relevant information
 Negotiate and sign
agreements in 3-5 months
with intermediaries
 Penetrate
existing
domestic
markets
 Review and improve
salesforce training, motivation
and compensation
 Use effective and efficient
channels
 Add channels and members
 Train salespeople in
deficient areas
 Train field sales managers in
effective supervision
 Link sales volume quotas to
the incentive scheme of the
compensation plan

17. To illustrate the relationship between sales objectives,
strategies and tactics, consider:
Sales Goals /
Objectives
Marketing
Strategy
Sales and Distribution Strategy Tactics /
Action plans
• Reduce
selling
expenses by
10%
• Make
optimum use
of existing
force
 Use ‘ABC Analysis’ for
customer segments
Sales force to focus on high
potential (A Class custoners)
Employ more
efficient
distribution
channels
 Use online selling &
telemarketing
Dealers, telemarketing & online
selling to serve B & C class
custoimers

18. SALES STRATEGY FORMULATION

19. INTRODUCTION
• Sales strategies are adopted to achieve
desired objectives in sales.
• The objective may be in many in number
and these require elaborate and careful
consideration of the strategies and game
plan of competitive organizations

20. SALES STRATEGY
It basically involves three steps
1. Market analysis
2. Setting objectives
3. Designing sales strategy

21. 1. MARKET ANALYSIS
• It means macro environmental analysis.
• Social , political, cultural, economic and
technological factors
• SWOT Analysis
• Mission or goals setting which directly affects
objectives
• Market analysis is a pre requisite for setting
objectives

22. Through market analysis company
would need to know
• The current size and growth rate of the market
• Consumer needs, attitudes and trends in
purchasing behavior
• Competitor analysis: current strategy adopted
by other firms , current performance including
market share analysis and their strengths and
weaknesses
• Expectation of their future actions

23. 2. SETTING SALES OBJECTIVES
• Objectives are standards against which
performance is measured.
• Qualitative and quantitative objective
• Qualitative objectives are long term and
derived from marketing and sales policies
of the company
• whereas quantitative are short term

24. GOALS
• Goals are set in terms of
a. Sales volume
b. Sales cost
c. Accounts receivable
d. Inventory levels
e. Dealer support
f. Feedback input

25. 3. SETTING SALES STRATEGY
• Sales strategy is set considering
a. The type of sales force required.
b. The size of sales force required
c. Territory design
d. Channel support and coordination

26. a. TYPE OF SALES FORCE NEEDED
• It depends on the role the sales force has to play.
• The quality of sales force is defined as the quality of
contribution required from the sales force and the work load
on them.
• If pre - selling has been done by ads, then selling becomes
easy.
• Some companies expect their salesman to do entire job
• Product specialist: highly technical products like banking
services, insurance, computers
• Market specialists: know the different market and can adopt
different sales approaches for different markets

27. b. DETERMINATION OF THE SIZE OF
SALES FORCE
• Incremental method
• Work load method
• Sales potential method

28. Incremental method
• It says we can increase the size of sales force
till the incremental revenue exceeds
incremental costs.
• Assumptions: profits will increase when
additional sales person are employed.

29. Sales potential method
• What an average salesman with averages performance will
accomplish.
• N = S/P
• N= Number of Sales Persons
• S= Forecasted Sales Volume
• P= Estimated sales productivity of one person
• If S= 100000 & P= 10000
• THEN N= 10
• Easiest of all the methods.
• If rate of turnover is 10% then modified formula
• N= S/P + T (S/P) = S/P (1+T)
• = 100000/10000 (1+ 10/100) = 11 SALES PERSONS

30. WORK LOAD METHOD
• Most complex method
• Assumption: all sales person will shoulder equal
responsibilities.
• Total work load is estimated and the it is divided equally
among all the sales people.
• Adv: easy to understand & apply, attractive to practising
managers
• Disadv: does not take profit into consideration; assumes sales
personnel have same work load & same efficiency; time given
to each call is as important as quality of time given per call

31. c. BASIS FOR TERRITORY DESIGN
• Geographical basis: grouping according to
existing geographical boundaries.
• Sales potential basis: splitting according to
dispersion of its sales potential.
• Servicing requirement basis: splitting according
to servicing requirements (maintaining &
developing of account)
• Work load basis: considers both account
potential and servicing requirements.

32. d. CHANNEL SUPPORT AND
COORDINATION
• If indirect distribution is adopted then organization has
to look for dealer cooperative programs like support for
adequate stock maintenance, local promotion in for of
P.O.P and displays
a. Adequate incentives for the dealers is a must
b. Proper feedback and communication is important
c. Measures have to be taken to promote dealer loyalty

33. DISTRIBUTION
• Intensive Distribution: maximum exposure to the
product eg: HUL, asian paints
• Extensive Distribution: covers large area but do not
concentrate on all customers
• Selective Distribution: selected outlets eg: designer
shirts, cosmetics, tv etc.
• Exclusive Distribution: exclusively by one dealer eg:
automobiles
• Vertical Integration: requiring mgmt membership
rights at various level of distribution

34. Emerging trends in Sales Management
• Global perspective.
• Revolution in technology
• Customer relationship management
• Sales force diversity
• Team selling approach
• Managing multi channels
• Ethical and social issues
• E selling

35. Value Added Selling
• Focus is on complete understanding of the
present and future needs of the customer, and
meeting those needs better than competitors,
so as to obtain maximum share of the
customer’s business.

36. THEORIES OF SELLING

37. THEORIES OF SELLING
Selling is considered as an art by some and a science by others.
This has produced two contrasting approaches to the theory of
selling.

38. Four Theories of Selling
AIDAS
“Right set of circumstances”
“Buying Formula”
“Behavioral Equation”

39. • AIDAS and “Right Set Of Circumstances” are seller
oriented theories.
• “Buying Formula” theory of selling is Buyer
oriented.
• The “Behavioral Equation” theory emphasizes the
buyer’s decision process but also takes the
salesperson’s influence process into account.

40. AIDAS

41. AIDAS theory of selling
• A-Securing attention.
• I-Gaining Interest.
• D-Kindling desire.
• A-Inducing Action.
• S-Building Satisfaction.

42. Securing attention:
• In order to put the prospect into a receptive state of
mind, the first few minutes of the interview are
crucial.

43. Gaining Interest:
• Some sales people develop contagious enthusiasm
for the product or a sample.

44. Kindling Desire:
• Obstacles must be faced and ways found
to get around them. Objections need
answering to the prospects satisfaction.
• Time is saved, and the chance of making
a sale improved if objections are
anticipated and answered before the
prospects raises them

45. Inducing Action:
• Experienced sales personnel do not close until the
prospect is fully convinced of the merits of the
proposition.

46. Building Satisfaction:
• The sales person should reassure the customer that
his buying decision is correct and that sales person
merely helped in deciding.

47. “Right Set of Circumstances” Theory Of Selling
• Summed up as “Everything Was Right for The Sale.”
• Situation Response Theory
• This Theory holds that the particular circumstances
prevailing in a given selling situation cause the prospect in a
predictable way.
• The more skilled the salesperson is in handling the set of
circumstances, the more predictable is the response.

48. “Right Set of Circumstances” Theory Of Selling
• The set of circumstances includes factors external & internal to
the prospect.
• The salesperson and the remark are external factors.
• Proponents of these theory tends to stress external factors and
the expense of internal factors.
• This is a seller oriented theory: it stresses the importance of the
salesperson controlling the situation.

49. The ‘’Buying Formula’’ Theory
• The name ‘’buying formula’’ has been given by E.K.
Strong.
• It emphasizes the buyer’s side of the buyer-seller
dyad.

50. Reduced to its simplest form, the mental processes involved
in a purchase are
Need(or
problem)
Solution Purchase

51. After adding the fourth element, it becomes
Need Solution Purchase Satisfaction

52. After modification in the solution and satisfaction, the
buying formula becomes
Need Product/Service
and trade name
Purchase Satisfaction/Diss
atisfaction

53. After adding adequacy and pleasant feelings, it
becomes
Need
Product/Service
and trade name
Purchase
Satisfaction/Diss
atisfaction
Adequacy
Pleasant feelings

54. • if sales to new prospects are desired, every element
in the formula should be presented.
• developing new uses is comparable to selling to
new prospects.

55. 4: BEHAVIORAL EQUATION THEORY

56. • Developed using stimuli-response model.
• Sophisticated and advanced version of the “Right set of
circumstances” theory.

57. Requires 4 essential elements-
1: Drive-A strong internal stimulus.
a) INNATE DRIVES
b) LEARNED DRIVES
2: Cues-Weak stimuli when the buyers respond.
o Triggering
o Non-Triggering (specific product-eg. special discounts)

58. 3: Response- What does the buyer do?
4: Reinforcement- Event that strengthens the buyer’s
response tendency.

59. • When a product’s potential satisfaction to the
buyer (K) yields rewards, reinforcement occurs.
• When P is positive, K is automatically active.
• When P and K are positive, customers are more
loyal to the product.

60. RECRUITING & SELECTING SUCCESSFUL
SALES PEOPLE

61. Then let’s start to learn….
What
is
Recruitment
&
Selection

62. RECRUITING SUCCESSFUL SALES PEOPLE
 Introduction: Selecting a team is often the highest value
decision for any Sales Manager. A checklist of questions in
chronological sequence for the selection and recruitment
process should be used as follows:
i) What is the job to be filled?
ii) What sort of person would do this job successfully?
iii) Where will this person be found?
iv) What methods will be used for applicants to respond?
v) Which person should be selected and how?
vi) How should the selected candidate be recruited
successfully?

63. DETERMINING QUALITY OF SALES FORCE
1. Job analysis: it means a careful and objective study of the
selling job. The sales job is assessed in the light of the following
issues:
a. The business & social framework within which sales people
will have to sell and in which their work will be supervised &
evaluated.
b. The nature & extent of competition the sales people will face.
c. The industry structure & practices.
d. The functions performed by sales people and how they spend
their time.

64. DETERMINING QUALITY OF SALES
FORCE (contd..)
2. JOB DESCRIPTION: detailed & written
statement of the specific functions which the
salesman must perform.
Serves as the basis for application , interviews
 A comprehensive job description provides a
good understanding of what to look for.

65. DETERMINING QUALITY OF SALES
FORCE (contd..)
3. JOB SPECIFICATION: a detailed and written
statement of the traits that a successful
salesperson must possess.
a. Initiative
b. Intelligence
c. Balance
d. Poise
e. Communication skills

66. DESIRABLE QUALITIES
• PHYSICAL ATTRIBUTES
Attractive personality, Sound health, Cheerful,
Enthusiasm and ability to work hard.
• MENTAL ATTRIBUTES
Intelligent, Imaginative, Foresightedness,
Alertness, Self confidence, good behaviour,
enthusiasm, patience, power of taking decision,
making plans, desire to initiate, sharp memory
etc.

67. DESIRABLE QUALITIES
• MORAL AND SOCIAL ATTRIBUTES
Honesty, good character, Feeling of
cooperation, Feelings of accomodation,
Polite behaviour, Kindness
• VOCATIONAL ATTRIBUTES- education,
training, tastes and habits, discipline,
punctual, regular, thorough knowledge of
products, regional language, related laws

68. RECRUITMENT DEFINED
• Recruitment means the process of searching
for needed employees and encouraging them
to apply for jobs in the company.
• It involves discovering the sources of recruits
that are consistent with the type of person
desired, selecting the source to be used and
contacting the recruits.
• Securing individuals who will apply for the job.

69. Thumb Rule to Determine no. of Recruits
needed to select one Salesperson
• A Recruiting effort may reach 20 people who
are interested in the job.
• A review of application blank will eliminate 10.
• The initial interview will eliminate another 6
or 7.
• The 3 or 4 finalists are screened further by
interviews, tests and other selection tools.
• One person is finally hired.

70. Importance of Recruitment
• Sound recruitment system = sound selection.
• Risk of hiring unsuitable people will eliminate.
• Continuous recruitment process will help in filling
the vacancy quickly as and when it occurs.
• Delayed process will result in depletion of sales
force.
• New recruitment necessary for expanding
market.

71. Recruitment

72. Internal Sources
• Transfers
• Promotions
• Re employment of former
employees

73. MERITS OF INTERNAL RECRUITMENT
• Least costly and time consuming
• Improves morale and loyalty of sales people.
• Time & cost involved in orientation and training are
reduced.
• Best in case of a highly technical product.
• Helps to retain skilled and experienced salespersons.
• Efficiency and conduct of such persons can be easily
evaluated.
• Internal staff does not demand high compensation.

74. DEMERITS
• Stagnation and inefficiency.
• Leads to inbreeding as fresh talent from outside does not
enter.
• Choice in selection is restricted.
• Chances of pulls and pressures influencing the choice.
• In expanding sales organizations all vacancies can not be filled
from within.
• May cause dissatisfaction and jealousy among sales people
who are not promoted.
• Existing employees may lack enthusiasm and oppose change.
• Outside recruitment may bring new clients and customers.

75. EXTERNAL SOURCES
• Advertisements
• Recruitment/ Employment Agencies
• Educational Institutes
• Competitors (other firms)
• Referrals
• Internet
• Other sources: customers or suppliers

77. Advertising
Advertisement in Newspapers, Magazines & Trade
Journals
->Produce Large No. of applicants
->Short span of time
->Low Cost
->Application screening is time consuming
->Applicants may be of questionable
character.

78. Re

79. Recruitment / Employment Agencies
•Provide Bio-data of potential candidates for a
fee.
•Screen applicants on various parameters.
•Careful selection of agency and establishing
good relation is vital.
•Eg-HR Consultancy firms,

80. Educational
Institutions

81. Educational Institutions
•Includes Management Institutes, universities &
technical institutes.
•Used for Placement at entry level.
Advantage
•Freshers are more adaptable than experienced.
•Candidates are inteliigent
•Possess required technical qualifications
•Cost effective.
2014
PLACEMENT

82. Hiring from Competitors & Other Industries

83. Competitors & Other Industries
ADVANTAGES:
• Salesperson knows the product, market & its customers.
• Experienced and require little training
• Recruiting company knows the ability of candidate.
• Candidate is acquainted with market trends & customers.
DISADVANTAGES:
• Difficult for these sales people to unlearn old practices
and adjust to the new environment.
• An ethical dilemma may also be involved.

84. REFERRALS

85. A candidate recommended by somebody.
Advantage:
• Likely to posses necessary qualification.
Disadvantage:
• enough number of candidates may not be available
through referrals.
• Referrals must be handled tactfully to avoid hard
feelings in case a referral is rejected.

86. INTERNET

87. • Own websites or jobs portal like naukri.com,
shinejobs.com etc.
• Microsoft receives more than 500 resumes
per week on its website.
• Advantage: most inexpensive,
• But organization has to create a process for
sorting applications.

88. Other sources
• Customers and suppliers may have
suggestions about sales people who call on
them.
• Professional sales associations, local business
associations, job fairs.

89. MERITS OF EXTERNAL RECRUITMENT
• Wide choice.
• Requisite knowledge, skills, education training and
experience can be obtained.
• New talent can be inducted into the organization
• All possible job positions can be filled in a growing firm.
• New employee may bring new customer
• Supervision, control and change are easier.
• New ideas.
• If unsuitable new recruits can be easily terminated.

90. DEMERITS OF EXTERNAL RECRUITMENT
• Time consuming and expensive.
• More time and cost involved in orientation and training.
• Current employees may become dissatisfied and
demoralized.
• New employees takes time in understanding the
organization and in adjusting to new work environment.
• Post remains vacant from date of advertisement till date
of joining.

91. Guidelines for Effective Recruitment
• Plan recruitment in advance rather than crisis hiring.
• Start with a well organized recruiting campaign that
produces a good pool of applicants. Don’t hire the
best- of - bad lot.
• Continuous process- should be thoughtfully organized.
• Maintain a file of potential sales candidates.
• Use multiple sources of recruitment.
• Select and train qualified recruiters.
• Review and update recruitment programme
periodically.

92. AVOID the following pitfalls
• Deficiencies in the overall organization of the
programme.
• Lack of feedback to sales recruiters.
• Little continuity of recruiters
• Lack of status of the rercuiting function within
the company.

93. Sales budget
BY-

94. Meaning of Sales Budget
Sales budgeting is a key function of sales management. It
involves estimating future level of revenue and selling expenses,
and consequently the profit contribution made by the sales
function. The outcome of sales budgeting is seen in the form of
two documents:
1. The sales budget, and
2. The selling expenses budget.

95. •Sales Budget reflects the targeted sales revenue.
•Sales Expense budget shows the expenses necessary to reach the
targeted sales revenue.
Through these two statements sales management can reconcile
these revenues & expenses with the firm’s objectives. Thus, sales
budgeting is concerned with improving selling efficiency &
reducing the selling costs.
More specifically, Sales Budget is a detailed programme
developed for a specified period that indicates the anticipated
sales & selling expenses.

96. • The sales budget is prepared by multiplying the expected unit
sales volume for each product by its anticipated unit selling price.
• Each of the other budgets such as production budget, direct
material budget, direct labor budget, manufacturing overhead
budget & Selling and administration budget depends on the sales
budget.
• It is derived from the sales forecast. It represents
management’s best estimate of sales revenue for the budget
period.

97. 1.Planning :-
The company formulates marketing and sales objectives; the budget
determines how these objectives will be met through a detailed breakdown
of the sales budget among products, territories and customers.
2. Co-ordination:-
The budget establishes what the cost of various heads be thereby
maintaining a desired relationship between expenditure and revenues.
The budget enables sales executives to coordinate expenses with sales.
It also restricts the sales executives form spending more that their share of
the funds helping to prevent expenses from getting out of control.
Objectives of Sales Budget:-

98. 3. Control:-
The sales budget enables sales executives for evaluating
sales performance . A sales manager can improve his success
by meeting sales and cost goals set forth in the sales budget.
4. Evaluation:-
Sales department budgets become tools to evaluate the
department’s performance. By meeting the sales & cost
goals set forth in the budget, a sales manager may prove
himself to be a successful executive.
Sales budget can be determined on the basis of following
categories
Objectives of Sales Budget:-

99. 1. The sales budget is the first component of the master operating
budget. This is because sales affect all other parts of the master
budget.
2. It includes the total sales valued in quantity.
3. It consists of three parts; break even, target and projected sales.
4. The budget also includes sales by product, location, customer
density and seasonal sales patterns.
5. It provides a plan for both cash and credit sales.
6. The basis of a sales budget is the sale price per unit of goods to be
sold multiplied by the quantity of goods to be sold.
7. A sales budget is planned around the competition, the material
available, cost of distribution, government controls and the political
climate.
Features

100. •A good sales budget should serve as a guide to company with
regard to its sales target. It should be flexible and resilient to the
volatile changes in the market.
•The budget should not put too many restraints on the sales
functions of the company.
• A sales budget is a financial plan for the sales of goods and
services of a company. It is the basis on which all the financial
decisions of a company with regard to sales are taken.
•The budget also controls the general sales prospects of a
company.
• Online and off line marketing, marketing in the media and other
advertising expenditures are planned around a sales budget.
Importance

101. Among the major factors considered when forecasting sales are:
Sales forecasting is the process of predicting sales of goods and services.
Sales Forecasting
1. Past sales levels and trends
2. General economic trends
3. Economic trends in the company’s
industry
4. Other factors expected to affect
sales in the industry
5. Political and legal events
6. The intended pricing policy of the
company
7. Planned advertising and product
promotion
8. Expected action of competitors
9. New products contemplated by
the company or other firms
10. Market research studies

102. ADVANTAGES OF A SALES BUDGET
A sales budget offers the following benefits:
• It is helpful in framing sales programming so as to achieve the sales
targets of the firm.
• It is useful in allocation of resources to different products, sales
territories,etc.for realising the forecast sales.
• It is helpful in keeping expenses under control so that the objectives of
net profits are achieved.
• It serves as a yard stick for evaluating progress and sales performance of
the company.
• It can reveal the areas/products in which the company needs to
strengthen its position.

103. A sales budget comes with inherent limitations and a good
sales budget is made by overcoming these limitations.
1. A sales budget cannot effectively forecast the future trends of
events.
2. It may not be easily accepted by all people in the
organization.
3. Preparing a sales budget takes up too much managerial time.
4. Usually sales budgets shy away from expenditure that will
give returns in the long run.
Limitations:

104. 1) Situation analysis
2) Identification of problems and
opportunities
3) Development of sales forecast
4) Formulation of objectives
5) Determination of sales task
PROCEDURE OF SALES BUDGETING

105. 6)Specification of resources requirements
7)Finalisation and projections
8)Presentation and review
9)Modification and revision
10)Budget approval

106. There are various external as well as internal factors involved that influence the
sales budget of any firm. Preparing a sales budget is much tougher than an expense
budget. This is because everything in the expense budget are within company
control.
However in the case of a sales budget, the company can only control part of factors
affecting the budgeted numbers and these are called INTERENAL FACTORS.
The other part is influenced by the EXTERNAL FACTORS, such as economy,
competition, season and government to a certain extent. Those factors that are not
within the company’s control are budgeted based on assumptions.
Factors influencing Sales budget

107. INTERNAL FACTORS
1. Volume of sales of the enterprise.
2. Profitability of different products of the enterprise.
3. Advertising and sales promotion strategies.
4. Price policy.
5. Ability and efficiency of the salesman.
These factors fall within the reach of any organisation or enterprise,
and hence if any improvement or changes are required,it could be
easily incorporated,without any wastage of time and money.

108. EXTERNAL FACTORS
1. Purchasing power of the general public.
2. Industrial and taxation policy of the govt.
3. Changes in needs, habits & preference of the consumers.
4. Situation of competition in the market.
5. Distribution of wealth in the country.
These factors greatly influence the sales budget of any organisation,in
fact the sales budget of the firms are prepared in keeping the
external factors in mind for the smooth running of the business.

109. • Affordable Method
• Rule of thumb (percentage of sales method)
• Competitors parity method
• Objective & task method
• Zero base budgeting
METHODS OF SALES BUDGETING

110. A business manager should always go through the above mentioned
factors before framing the final sales budget.
The efficiency of any sales budget is dependent on how accurately
these external and internal factors are considered and kept in mind
by the sales manager.
However external factors play a more important role in preparation
of any sales budget as compared to internal factors as the former is
not under the control of the organization , and also these external
factors keep fluctuating from time to time. But to ignore internal
factors simply means one is preparing an incomplete sales budget ,
thus both the factors should be kept in mind in order to make an
efficient sales budget.

111. SELECTION

112. SELECTION DEFINED
• Selection means choosing most suitable person out of all
the applicants.
• A negative or a process of rejection.
• Executive judgment has a vital role to play.
• Involves three steps:
a. A system of techniques and procedures to measure
recruits against predetermined requirements is
developed.
b. System is applied to the applicants.
c. Actual selection is made.

113. IMPORTANCE
• Poor selection results in mediocre selling.
• Faulty selection causes high absenteeism and
turnover of salespersons.
• Expenses of hiring and training increase in
case of faulty selection.
• Selection of unqualified sales people will
create a poor impression on customers.
• Inefficient performance by sales people will
affect the performance of other departments.

114. Selection Process
Employment offer
Physical Examination
Testing
Reference Check
Interview
Application blank
preliminary Interview

115. Selection Procedure
PRELIMINARY INTERVIEW:
• A sorting or initial screening process usually
undertaken by the receptionist.
• Applicants are given details about nature of job.
• And necessary information is elicited from the
candidate regarding education, work experience,
job interest etc.

116. FORMAL APPLICATION BLANK
• A brief history sheet of an employee’s background and can be
used for future reference in case of need.
• It is a traditional , widely accepted device for getting
information from a prospective
applicant.
• Ideally each company prepare its own formal application form
but to save time and
cost it can follow a standard application
form
Selection Procedure

117. STANDARD APPLICATION FORM
• Personal- Name, address, gender, DOB, Age, marital status,
children/ dependents.
• Education- Schooling: Primary/ secondary, higher education
(Institutions), qualifications, specified training, membership of
professional bodies.
• Employment History: No. of jobs held, name of companies
worked for, duration and date of employment, positions,
duties and responsibility.
• Other duties- sports, hobbies, membership of societies/ clubs

118. Interview:
Helps in determine if a person is RIGHT for
Job.
Brings out personal characteristics, confidence, oral communication,
attitude towards selling.
 Interview decisions- WHO, WHERE, WHEN?
Types of Sales Interview:
1.Structural or Patterned interview.
2.Non structured or non directed interview.
3. Stress Interview
4. Rating Scales
Selection Procedure

119. Guidelines for interviewing
• Prepare adequately for the interview
• Select a suitable environment
• Establish rapport
• Listen and observe
• Take few notes

120. • Reference Check:
Secure information that is not available from
application & verification of information from
external sources.
Selection Procedure

121. Psychological Testing:
It is designed to measure such skills &
abilities that are essential for job performance.
Types of Psychological Tests:
1.Knowledge Tests:
Measures knowledge or information regarding sales
job.
Selection Procedure

122. 2.Ability Tests:
Measures the skills and abilities already present in the candidate at the
time of testing.
3.Aptitude Tests:
Measures whether or not the individual has the capacity or latent ability
to learn the job quickly.
4.Simulation Exercises:
A test which duplicates many of the operations & problems confronting
the sales job.
Selection Procedure

123. Reference Check:
Secure information that is not available from application &
verification of information from external sources.
Physical Examination:
Physical Examination reveals whether or not the candidate
possess the required stamina, strength & tolerance needed under hard
working conditions.
Handle job without delay on health grounds.
Selection Procedure

124. Job Offer:
After all steps,company decides whether it should hire the
candidate or not.
If yes,the company gives offer letter.
It must be in writing for the protection of recruit & company
specifying all details.
Sometimes,salespople may have to sign a job- contract too.
Selection Procedure

125. Sales Management
Social, Ethical, and Legal
Responsibilities of Sales
Personnel

126. Sales Management
Management’s Social Responsibilities
Organizational Stakeholders
• Customers
• Community
• Creditors
• Government
• Owners
• Managers
• Employees
• Suppliers

127. Sales Management
Management’s Social Responsibilities
Economic Responsibilities
• Produce Goods and Services
• Maximize Profits
Legal Responsibilities
• Fulfill their Economic Goals Within a
Legal Framework

128. Sales Management
Management’s Social Responsibilities
Ethical Responsibilities
• Act with Equity, Fairness & Impartiality
• Respect the Rights of Individuals
Discretionary Responsibilities
• Voluntary & Guided by Company’s
• Desire to Make Social Contributions

129. Sales Management
Management’s Ethical Responsibilities
“Ethics”
• A set of moral principles and values
that governs the behavior of a
person or a group with respect to
what is right and wrong.

130. Sales Management
Management’s Ethical Responsibilities
What is an Ethical Dilemma?
• There is no uniform codification of ethics so
differences and dilemmas about proper behavior
can occur.
• A situation when all of the choices for a solution
to a problem have some element that could
create negative ethical or personal
consequences.

131. Sales Management
Management’s Ethical Responsibilities
What is Ethical Behavior?
• Being honest
• Maintaining confidence and trust
• Following the rules
• Conduct yourself in proper manner
• Treat others fairly
• Loyalty to company and associates
• Carry your share - 100% effort

132. Primary areas served by Ethics of Sales
Management
• Company policies & Practices
• Sharing confidential Information
• Reciprocity
• Bribery
• Gift Giving
• Entertainment
• The Sales Person’s view
• Towards a personal code of ethics

133. Sales Management
Management’s Ethical Responsibilities
Company to Salesperson dilemmas:
–Level of Sales Pressure
• Setting Sales Goals
(realistic/obtainable)
• Management Style

134. Sales Management
Management’s Ethical Responsibilities
Company to Salesperson dilemmas:
– Territorial Decisions
• Expanding Territories
• Decreasing Territories
• Creating House Accounts

135. Sales Management
Management’s Ethical Responsibilities
Company to Salesperson dilemmas :
– To Tell The Truth?
• Performance
• At Termination
– The Ill Salesperson
• Alcohol or Drug Abuse Treatment
– Employee Rights

136. Sales Management
Management’s Ethical Responsibilities
Company to Salesperson dilemmas :
–Employee Rights
• Termination-at-will
• Privacy
• Sexual Harassment

137. Sales Management
Management’s Ethical Responsibilities
Company to Salesperson dilemmas :
– Reason to Respect Employee Rights
• High quality of work life
• Attracting/Retaining good people
• Avoid costly back-pay and awards
• Establish balance between employee and
employer rights/obligations

138. Sales Management
Salesperson’s Ethical Responsibilities
Salesperson ethics re: The Company
– Misuse of Company Assets
• Automobiles
• Expense Accounts
• Samples
• Damaged merchandise credits
– Moonlighting

139. Sales Management
Salesperson’s Ethical Responsibilities
Salesperson ethics re: The Company
– Cheating
• Contests
– Holding Sales
– Overloading Customer
– Affecting Fellow Salespeople
• Taking Customers

140. Sales Management
Management’s & Salesperson’s Mutual Ethical
Responsibilities
How to Treat The Customer
– Bribes or Gifts
• Offering
• Buyer Originated
– Misrepresentation
• “Sales Puff” vs. Statements of Fact
• Legal Ramifications

141. Sales Management
Management’s & Salesperson’s Mutual
Ethical Responsibilities
How to Stay Legal
– Know capabilities and characteristics of
company products and service
– Statements of Praise vs. Statements of Fact
– Educate Customers before the Sales
– State Product Capabilities Accurately
– Know Technical Specifications

142. Sales Management
Management’s & Salesperson’s Mutual
Ethical Responsibilities
How to Stay Legal
– Avoid Exaggerated Product Safety Claims
– Know Federal and State Laws
– Keep Current with Design Changes and
Revisions
– Avoid Opinions Stick to Testing Statistics
– Never Overstep Authority (Pricing or Policy)

143. Sales Management
Management’s & Salesperson’s Mutual Ethical
Responsibilities
How to Treat The Customer
– Price Discrimination
• Customers who buy similar quantities
should receive same pricing
– Tie-in Sales
• Violates Clayton Antitrust Act

144. Sales Management
Management’s & Salesperson’s Mutual Ethical
Responsibilities
How to Treat The Customer
– Exclusive Dealership
• Purchase from one manufacturer -
Clayton Act
– Reciprocity
• “I’ll Buy Yours If You’ll Buy Mine”
• FTC and Justice Scrutinize

145. Sales Management
Management’s & Salesperson’s Mutual
Ethical Responsibilities
How to Treat The Customer
–Sales Restrictions
• “Cooling Off” Laws - 3 days
• Green River Ordinances

146. Some guidelines
• Use an honest approach
• Put your customer’s interest first
• Avoid misleading sale claims
• Avoid attacking competitors
• Avoid misuse of company resources
• Practice honesty after sales

147. Legal issues in sales management
• Price fixing
• Price discrimination
• Bribes
• Consumer protection

148. Sales Management
International Ethical Issues
U.S. Laws Do Not Stop at The Border
– Employees of American Business Should
Know the Law
–Stick to Features and Benefits and
Sell to Companies Not Individuals

149. Sales Management
Selling Ethics
Surveys Indicate Managers’ Experience
Most Managers:
– Face Ethical Problems
– Believe Managers and Employees Should Be More
Ethical
– Are More Ethical with Friends than Strangers
– Lower Ethics to Meet Job Goals

150. Sales Management
Selling Ethics
Surveys Indicate Managers’ Experience
Most Managers:
– Are Aware of Ethical Issues in Industry
and Company
– Believe Ethics Can Be affected by
Supervisors and Company Environment

151. Sales Management
Selling Ethics
Management Practices Help Responsiveness
Some Guidelines:
– Top Management Takes Lead
• CEO, President, Vice Presidents Must
Champion
– Carefully Select Leaders
– Establish/Follow Code of Ethics

152. Sales Management
Selling Ethics
Management Practices Help Responsiveness
Some Guidelines:
– Establish/Follow Code of Ethics
• Principle Based
• Policy Based
– Create Ethical Structures
• Ethical Committee
• Ethical Ombudsman

153. Sales Management
Selling Ethics
Management Practices Help Responsiveness
Some Guidelines:
– Encourage Whistle Blowing
• “Silent Witness” Program
– Create Ethical Sales Environment
• Actions of Top-Level Managers

154. Sales Management
Selling Ethics
Management Practices Help Responsiveness
Some Guidelines:
– Establish Control Systems
• Low Bid Review Process
• Expense Report Audits