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Sales management
The document discusses various sales management structures and organizations. It describes line, line and staff, functional, horizontal, and specialized (geographical, product, market) organizational structures. Specialized structures can be combined to form hybrid structures. The key aspects of each structure are outlined, including their advantages and disadvantages. Overall, the document provides an overview of different approaches to organizing sales management functions within a company.
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Sales management
- 1. By: Priyanka Roy Asst.Prof. MIT
- 2. Planning, directionand control of personal selling including recruiting, selecting, training, equipping, assigning, supervising, compensating and motivating as these tasks apply to the personal sales force. The only business function that generates revenue.
- 3. Management ofthe personal selling task. Selling is an exchange transaction. Exchange of Product or service for money Money is the revenue or the earnings of an enterprise often called ‘turnover’ or ‘top line’ Sales therefore is the only revenue generating function in an enterprise.
- 4. 3 generalunderlying objectives: 1. SALES VOLUME 2. PROFITS 3. GROWTH Sales – cost of sales = gross margin. Gross margin – expenses =net profit.
- 5. Industrial Revolution– 1760 Small home industries – Large scale manufacturing –marketing – sales and sales support The modern day sales manager is both an administrator in-charge of personal selling activity and a member of the group that makes marketing decisions of all types.
- 6. “QUALITIES THAT LEADTO EFFECTIVE SALES MANAGEMENT ARE OFTEN OPPOSITE THE ATTRIBUTES OF A SUCCESSFUL SALES PERSON”
- 7. With varioustasks required to be performed the enterprise had to create a structure to ensure that work is done. Principles of structure: authority, responsibility, performance, support/co- ordinate.
- 8. Concept oforganization: Group of individuals working jointly to achieve a defined goal and bearing formal and informal relations with one another. An organization is oriented towards and a co-operative endeavor and a structure of human relationships.
- 9. Eliminate wasteof effort Minimize friction Maximize co-operation Permit development of specialists Ensure that all activities get done Achieve co-ordination/balance Define authority Fix responsibility
- 10. Line organization:line managers perform sales and sales management activities. Line and staff organization: Staff managers have advisory or support responsibility. e.g. Market research manager, Training manager. They are not directly responsible for achieving sales targets.
- 11. Characteristics: All managershave line authority to direct and control subordinates. Used in small firms / departments Advantages: Simple organisation, clear authority, quick decisions, low cost Disadvantages: No support to line managers from subordinates who have specialised knowledge / skills. Less time for planning / analysis Head Marketing Sales Manager Area Sales Manager1 Area Sales Manager3 Area Sales Manager2 Area Sales Manager4 salespeople salespeople salespeople salespeople
- 12. Characteristics: Specialist staffmanagers are available for senior marketing / sales managers. Staff managers’ role is to assist / advise line managers. Used in medium and large size organisations Advantages: Better marketing decisions, superior sales performance Disadvantages: High cost and coordination, slower decision making, conflict may arise if staff managers’ role is not clear Head-Marketing Marketing Research Manager Sales Manager Promotional Manager Customer Service Manager Area Sales Manager-1 Area Sales Manager-1 Area Sales Manager-1 Salespeople Salespeople Salespeople
- 13. Functional organization:focus is on the principle of specialization. Each specialist has a functional responsibility and are permitted to direct and control the salesperson thru their immediate superior.
- 14. Characteristics: Each functionalspecialist has line responsibility over salespeople. Used by a large firm with many products / market segments, minimising line authority to functional managers Advantages: Qualified specialists guide salesforce, simple to administer Disadvantage: confusion due to more managers giving orders to salesforce Head-Marketing Marketing Research Manager Promotional Manager Customer Service Manager Sales Manager Area Sales Manager #4 Salespeople
- 15. Horizontal structure. Specialised structure: Geographical; Product; Market or customer; Combination of specialised structures.
- 16. Should salesmanager be reporting to marketing manager? Should sales be an independent function?
- 17. Characteristics: Removes managementlevels & departmental boundaries. Except planning team, all others are members of cross-functional teams. Used by firms having partnering relationships with customers. Advantages: Reduction in supervision, unnecessary tasks, & cost; Improved efficiency and customer responses. Research & Design Team: •Customer Research •Product / Service Design Planning Team: •Strategic Planning •Accounts, Finance •HR, Administration •Chief Operation Officer Operations Team: •Production / Operations •Quality Assurance •Systems Engineering Customer Support Team: •Information •Service •Training Customer Satisfaction Team: •Sales & Marketing •Pricing, Promotion •Channels, Logistics
- 18. Characteristics: salespeople, assignedgeographic areas, are responsible for all selling activities to all customers within assigned areas. Branch sales managers adjust marketing plan to local needs Advantages: Better market coverage and customer service, more control over salesforce, quick response to local conditions & competition Disadvantages: Limited specialisation of marketing tasks. Hence, it is combined with product / market sales organisation Head-Marketing Marketing Research Manager General Sales Manager Promotion Manager Customer Service Manager Branch Sales Manager-1 Branch Sales Manager-2 Branch Sales Manager-3 Branch Sales Manager-4 Salespeople Salespeople Salespeople Salespeople
- 19. Used whenthe company has many products and / or brands Two types of product specialisation (x). Sales organisation with product specialised salesforce (y). Sales organisation with product managers as staff specialists Head-Marketing Marketing Research Manager General Sales Manager Sales Training Manager Promotion Manager Area Sales Managers – Product Group ‘A’ Area Sales Managers – Product Group ‘B’ Salespeople – Product Gr. ‘A’ Salespeople – Product Gr. ‘B’ Fig. ‘x’ Sales Organisation with product specialised salesforce
- 20. In fig. ‘x’:Characteristics: Salespeople in each product group sell only the products in that group Advantage: Each product gets specialised attention from the salesforce Disadvantage: Sometimes, more salespeople contact the same customer, resulting in customer dissatisfaction and higher cost In fig. ‘y’: Characteristics: Each product manager plans and implements marketing plan, for a product group Advantage: Corrects the problem of duplication calls on a customer by salespeople Disadvantage: Lack of product specialisation by salespeople Head-Marketing Marketing Research Manager Promotion Manager Product Manager Product Gr. ‘B’ Product Manager Product Gr. ‘A’ General Sales Manager Area Sales Managers Salespeople Product Specialisation (Continued)
- 21. Characteristics: Desirablewhen customers are classified by type, user industry, or channel. Salespeople carry out all activities for all products only for specific customer groups Advantages: Meets needs of specific customer groups, implements customer-centred philosophy of the company Disadvantages: Geographic duplication, high cost General Sales Manager Sales Manager- International- Markets Sales Manager- Commercial Sales Manager- Consumer Markets Sales Manager- Government Area Sales Mgrs International Sales Executives Area Sales Manager- Commercial Salespeople Area Sales Manager- Government Salespeople Area Sales Mgrs- Consumer Markets Salespeople
- 22. Characteristics: Manyfirms use some combination of specialisation organisations, called hybrid or combination sales organisation, with a view to minimise disadvantages and maximise advantages of specialisation organisations Figure above shows combination of geographic and market specialisations Director – Sales & Marketing General Manager Sales - North General Manager Sales - East General Manager Sales - South General Manager Sales - West Regional Sales Mgr. – Govt. Regional Sales Mgr. - Dealers Regional Sales Mgr. - Commercial Salespeople Salespeople Salespeople