2. 2
Learning Objectives
➢ To understand evolution, nature and importance of sales
management
➢ To know role and skills of modern sales managers
➢ To understand types of sales managers
➢ To learn objectives, strategies and tactics of sales
management
➢ To know emerging trends in sales management
➢ To understand the concept of and reasons for sales territories
➢ To understand objectives and types of sales quotas
8. 8
➢ The only function / department in a company that generates
revenue / income
➢ The financial results of a firm depend on the performance of
the sales department / management
➢ Many salespeople are among the best paid people in business
➢ It is one of the fastest and surest routes to the top
management
➢ One of the most exciting, financially rewarding & challenging
careers.
9. 9
➢ More positions in sales than any other professional
occupations.
➢ More CEOs are from sales & Marketing background than from
any other functional areas.
➢ Hardly boring, because it deals with people, whose wants or
needs are ever-changing.
➢ In bad economic situation, a good salesperson is the last to be
fired.
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➢ Definition#1: “The management of the personal selling part
of a company’s marketing function.”
➢ Definition#2: “The process of planning, directing, and
controlling of personal selling, including recruiting, selecting,
equipping, assigning, supervising, paying, and motivating the
personal sales force.”
22. 22
➢ Promotion: Consists of Advertising, sales promotion, public
relations, publicity & direct marketing
➢ Marketing Research: Collecting & interpreting information on
customers, competitors, products, markets & so on
➢ Marketing Logistics: Physical distribution of finished goods
including warehousing, inventory, transportation & order
processing
➢ Customer Service: Pre-sales & post-sales service as well as
delivery service to existing & prospective customers
➢ Co-ordination: Co-ordinate between customers, company’s
sales people & production or operations, by employing inside
sales people.
24. 24
➢ Buyers and salespeople, who do business together have some type
of business (or working) relationships.
➢ Relationship Marketing / Selling: The process by which a firm builds
a long-term relationship with its customer for mutual benefits, in
order to create a customer loyalty.
➢ In Relationship selling salespeople concentrate their team selling
efforts on building trust and service on a few carefully selected
customers over a long period with a aim of becoming a preferred
sole supplier.
➢ Their relationships have a range or spectrum:
Transactional
Relationship /
Selling
Value – added
Relationship /
Selling
Collaborative /
Partnering
Relationship /
Selling
25. 25
➢ Transactional Relationship / Selling: One type of relationship
marketing in which salespeople make one-time sale to price-
oriented customers, who are not contacted again.
➢ Value-added Relationship / Selling: Understanding current &
future needs of customers and meeting those needs better
than competitors with value-added solutions to their
problems.
➢ Partnership / Collaborative Relationship: A type of
relationship marketing in which a selling organization works
continuously with its large customer to improve the customer
performance in terms of operations, sales and profit.
27. 27
Some of the important roles of the modern sales manager are:
➢A member of the strategic management team
➢A member of the corporate team to achieve objectives
➢A team leader, working with salespeople
➢Managing multiple sales / marketing channels
➢Using latest technologies (like CRM) to build superior
buyer-seller relationships
➢Continually updating information on changes in marketing
environment
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Skills of a Successful Sales Manager
➢ People skills – include abilities to motivate, lead,
communicate, coordinate, team-oriented relationship, and
mentoring
➢ Managing skills – consist of planning, organizing, controlling
and decision making
➢ Technical skills – include training, selling, negotiating,
problem-solving, and use of computers
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CEO /
President
V. P. Sales /
V. P. Marketing
National Sales Manager
Regional / Zonal / Divisional
Sales Managers
District / Branch / Area Sales Managers
Sales Trainee / Sales Person / Sales Representative
First / Lower Level Sales Managers
Middle-Level Sales Managers
Top-Level Sales Managers /
Leaders
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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
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• Objectives: are statements of intent
• Goals: Quantified to specific and measurable targets with
respect to time periods.
• Strategies: include ways of achieving the objectives
• Tactics (Action Plans): are the activities or the actions that
should be carried out in order to implement the strategy.
Sales Objectives, Strategies and Tactics
E.G. A company wants to increase sales of electric motors by 15
percent, as one of the sales objectives.
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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
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• Sales force diversity
– Demographic characteristics of sales people
– Women, educated, less educated, senior sales people
• Team selling approach
– Companies often use multiple-person sales teams to deal with multiple-
person buying centers (or purchase committees) of their customers.
– The multiple individuals in the sales team are from different functional
areas, such as marketing, sales, manufacturing, design and physical
distribution.
– For technically complex products / services like S/W, H/W, R&D etc.
– Designing an effective compensation plan can be a challenging task.
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• Managing multi-channels
– Organizations use two or more distribution channels to reach one or
more customer segments
– May also lead to conflict & control problems (may compete for same
customer)
• Ethical and social issues
– Sales managers have legal, social & ethical responsibilities
– E.g.: Bribery, Deception (misleading), high-pressure sales tactics.
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• Sales professionalism
– A customer-oriented approach that uses truthful and straight-forward
ways to satisfy the long-term needs of both the customer and the
selling firm.
– Top salespeople are largely made, not merely born
– Combination of natural ability & acquired skills: reliability, credibility,
professionalism, integrity and product knowledge
– Knowledge, skills and right attitudes through intensive training and
practice.
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• A sales territory consists of a group of present and potential
customers and/ or a geographic area assigned to a
salesperson. The territory may or may not have a geographic
boundary.
• Most companies allot salespeople to geographic territories,
consisting of current & prospective customers
Major Reasons / Benefits of Sales Territories
• Increase market / customer coverage
• Control selling expenses and time
• Enable better evaluation of salesforce performance
• Improve customer relationships
• Increase salesforce effectiveness
• Improve sales and profit performance
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Procedure for Designing Sales Territories
• Select a control unit*
• Find location and potential of present and prospective customers
within control units**
• Decide basic territories by using
• Build-up method,
Or
• Break-down method
*A control unit is a geographical territorial base. It is a geographic
unit, such as a metro, city, district, or town, that is used for
territory analysis and design.
**Unnecessary & expensive for consumer products
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Methods
• Break-down method: This method is used to decide basic
territories by equalizing the sales potential or territories and is
popularly used by manufacturers of industrial products and
services or by firms that want to adopt selective or exclusive
distribution strategy.
• Build-up method: This is another method used to decide
basic territories by equalizing the workload of salespeople and
is commonly used by manufacturers of consumer products
and services or by companies that want an intensive
distribution strategy.
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Procedure in Breakdown Method
Objective is to equalize sales potential of territories
• Estimate company sales potential for total market
• Forecast sales potential for each control unit
• Estimate sales volume expected from each salesperson
• Make tentative territories
• Develop final territories
Estimate
company
sales
potential for
total market
Forecast
sales
potential for
each control
unit
Estimate
sales volume
expected
from each
salesperson
Make
tentative
sales
territories
Develop final
territories
45. 45
Procedure in Build-up Method
Objective is to equalize the workload of salespeople
• Decide customer call frequencies
• Calculate total customer calls in each control unit
• Estimate workload capacity of a salesperson
• Make tentative territories
• Develop final territories
Decide call
frequencies
Calculate
total of calls
in each
control unit
Estimate
workload
capacity of a
Salesperson
Make
Tentative
Territories
Develop final
territories
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Assigning Salespeople to Territories
Sales Manager should consider two criteria:
(A)Relative ability of salespeople
• Based on key evaluation factors:
(1) Product knowledge, (2) Market knowledge, (3) Past sales
performance, (4) Communication, (5) Selling skills
(B) Salesperson’s Effectiveness in a Territory
• Decided by comparing social, cultural, and physical
characteristics of the salesperson with those of the territory
• Objective is to match salesperson to the territory
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Time Management Tools
To help outside salespeople* to manage their time efficiently and
productively, the tools available are:
• High-tech equipment like laptops & cell phones
• Inside salespeople to provide clerical support, technical
support, and for prospecting, and qualifying, as they remain
within the company. To reduce time demands on outside
salesforce, many companies are using inside salespeople,
such as sales assistants, technical support people, and
telemarketers, who perform certain tasks within the
company.
• Outside salespeople can then spend more time getting
more orders & building relationships with major customers
*Outside salespeople travel outside the organization
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• What are Sales Quotas?
• Sales quotas are sales goals or targets set by a company for
its marketing / sales units for a time period. These are the
sales goals or targets assigned to sales units like
salespersons, territories, or regions.
• Marketing / sales units are regions, branches, territories,
salespeople, and intermediaries
• Generally, company sales budget is broken down to sales
quotas for various marketing units
• Sales territory: It consist of a group of present and potential
customers and/ or a geographic area assigned to a
salesperson. The territory may or may not have a
geographic boundary.
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Objectives of Sales Quotas
• To use quotas as performance standards or performance
goals
• To control performance
• To motivate people by linking quotas to compensation plans
• To identify strengths and weaknesses of the company
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• Sales management is defined as the management of the personal selling
part of a company’s marketing function
• Selling includes varying sales jobs like delivery salesperson, order taker,
sales support person, and order getter
• Sales is the only function or department in an organization that generates
revenue / income
• Skills of a successful sales manager include managing, technical and
people
• Main components of sales planning are objectives, strategies, and tactics
(or action plan)
• Either sales management or distribution management can not exist,
operate or perform without each other
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• A sales territory consists of existing and prospective customers, assigned
to a salesperson
• While assigning salespeople to territories, sales manager should consider
relative ability of salespeople and salesperson’s effectiveness in the
territory
• Time management tools available to outside salespeople are high-tech
equipment and inside salespeople
• Sales quotas are sales goals or targets set by a company for its marketing
units like regions, territories, salespeople
