Sales Management - Old.amu.ac.in
Sales ManagementThe word sales management is a combination of two words- sales andmanagement. Sales is the art of planning in the mind of another a motive which will inducefavorable action.The committee of American Marketing Association has defined it as- “Selling is thepersonal or impersonal process of assisting and or persuading a prospective customer to buy acommodity or a service or to act favorably upon an idea that has commercial significance to theseller.”Sales management is defined as the planning, direction, and control of personalselling including recruiting, selecting, equipping, assigning, routing, supervising, paying, andmotivating as these tasks apply to personal sales force.
Sales management originally referred exclusively to the direction of the sales force. Laterthe term took on broader significance in addition to the management of personal selling.Sales management spe-cifically contributes to achieve the marketing objectives of a firm.In fact, sales managers set their personal selling objectives and formulate the personal sellingpolicies and strategies.Sales management also organizes the selling effort. To do so, it creates a suitableorganizational structure, with appropriate communication system. Sales management interfaceswith the distribution channels, and external publics.Sales management provides critical inputs for the key marketing decisions like budgeting,quotas and territory management. Sales management interfaces with other marketing functionswhile policies of these functions are being formulated.
ObjectivesObjectives of sales management are as follows:1. Revenue Generation – One of the main objectives of sales management is to generate revenuefor the organization. The sales department is solely responsible to bring in the money.2. Increase Sales Volume – Through efficient sales management, the organization wishes toincrease the number of units sold. This will ensure that the production facilities do not remain idleand are utilized to the fullest.3. Sustained Profits – Sales management has an objective of improving the profits of theorganization through effective planning, coordination and control. Sales management strives toincrease sales and reducing costs, this ensures good profits for the organization.
4. Organization Growth – With the sustained and continuous sales management techniques, theorganization tends to gain market share and results in growth of the organization.5. Market Leadership – With increased sales volumes and profits, ‘sales management’ enables anorganization to become the market leader.6. Converting Prospects to Customers – Getting prospects to become customers is an art and ascience, it requires good planning and sustained efforts. This is accomplished through salesmanagement.7. Motivate the Sales Force – One of the core objectives of sales management is to motivate thesales force. Selling is a very stressful task, achieving sales targets can become very challenging.Therefore, the sales management task is to ensure that the sales force is continuously motivatedthrough proper incentives and reward systems.
8. Compliment Marketing Activities – Sales management’s task is to support the marketingfunctions of the organization. Marketing and sales need to go hand in hand to achieve the desiredresults.Sales volume, contribution to profits and growth are the three major objectivesthe sales function is expected to achieve. Though these are broad corporate functions to beachieved by the top management, sales contribute a great deal in achieving them. Corporateobjectives are communicated to the marketing department who in turn passes on the responsibilityto the sales department.Sales provides invaluable feedback to the higher management while achievingthese objectives.
Personal SellingPersonal selling is a face-to-face selling technique by which a salesperson uses hisor her interpersonal skills to persuade a customer in buying a particular product. The salespersontries to highlight various features of the product to convince the customer that it will only add value.However, getting a customer to buy a product is not the motive behind personal selling every time.Often companies try to follow this approach with customers to make them aware of a new product.Rovert Louis Stevenson stated, “Everyone lives by selling something.” The peoplewho do selling are called salesmen, sales representatives, sales persons, account executives, salesconsultants, sales engineers, field representatives, agents, service representatives, marketingrepresentatives etc. Personal selling and salesmanship are used without distinction.But there are some differences between the two. Personal selling is a broader concept.Philip Kotler is of the opinion that personal selling involves oral presentation in a conversation withone’ or more prospective purchasers for the purpose of making sales. Personal selling is a greatlydistinctive form of promotion.
Like advertising and sales promotion, personal selling is also a method ofcommunication. It is a two-way form of communication. It involves individual and social behaviour.Each person is contacted by face to face conversation. Personal Celling influences the buyers to buya product.Personal selling reaches the goal of marketing effort i.e., to increase profitablesales. The purpose of personal selling is to bring the right products into contact with the rightcustomers, and to make certain that ownership transfers take place. Personal selling createsproduct awareness, stimulates interest, develops brand preferences, negotiates price etc.The American Marketing Association defines the term salesmanship as “thepersonal or impersonal process of assisting and/or persuading a prospective customer to buy acommodity or service and to act favorably upon an idea that has commercial significance to theseller.”Advertising, sales promotion and personal selling ensure the process of selling. Ofthe three personal selling is more important. It contacts the concerned persons in person and henceit is more effective.
Objectives of Personal Selling:Personal selling has two types of objectives-long-term and short-term. The long-term objectives,which are more or less permanent, are broader. These are also known as qualitative objectives.The objectives under this head are:1. To do the entire job.2 To serve the existing customers.3. To search out and obtain new customers.4. To secure and maintain customers’ co-operation in stocking and promoting the product line.5. To keep customers informed of changes in the product line.6. To assist customers in selling the product line.
7. To provide technical advice and assistance to customers.8. To handle the sales personnel of middlemen.9. To provide advice and assistance to middlemen whenever needed.10. To collect and report market information on interested matters to company management.Apart from these qualitative objectives, certain quantitative objectives are also assigned, knownas short-term objectives to personal selling and they are:1. To obtain a specified sales volume.2. To obtain sales volume in ways that contribute to profit objectives, by selling proper mix ofproducts.3. To keep the personal selling expenses within specified limits.4. To secure and retain a specified share of the market.
Personal Selling-Objectives: (Qualitative):1. To do the entire selling job (as when there are no other elements in the promotional mix).2. To “serve” existing accounts {i.e., to maintain contacts with present customers, take orders etc.)3. To search out and obtain new customers.4. To secure and maintain customer’s cooperation in stocking and promoting the product line.5. To keep customers informed of changes in the product line and other aspects of marketingstrategy.6. To assist customers in selling the product line (as through “missionary selling”).7. To provide technical advice and assistance to customers (as with complicated products and whereproducts are specially designed to fit buyers’ specifications).8. To assist with (or hand) the training of middlemen’s sales personnel
Sales related Marketing PoliciesSales related Marketing Policies Sales related marketing policies directly influence the jobs of salesexecutives.These policies provide the direction to organize ,manage and control the sales effort. These aregenerally company governed and formulated policies which are administered by sales executives.Product Policies – What to Sell ? The products a company sells determines its basic nature. These serve are guidelines for making product decisions. They are derived from product objectives
Product PoliciesProduct Line Policy1.Short line(specialization) or full line (wide selection) policies.2.Governed by willingness to take risk. Narrower the line greater the risk.1. Changes in Product Offerings-to determine the product tuning with market-to determine products which needs to be dropped or added2. Reappraising the product line and line simplification-adding or removal of profitable and non profitable product lines and customer accounts.
3. Reappraising the product line and line diversification-relative to growth objectives4. Ideas for new products-Internal and external sources for new ideas.5. Appraisal of proposed new products.-criteria is profitability, nature and size of likely markets, competition, price policy, salesprograms and legal implications.Distribution Policies – Who to Sell ?Policies on Marketing Channels C should be chosen in order to obtain the optimum combination ofprofit factors. Time dimensions must be considered in addition to :1. Sales Volume Potential2. 2. Comparative distribution costs3. 3. Net Profit Possibilities
Pricing Policies Policy on Pricing Relative to Competition1.Meeting the competition2.Pricing above the competition3.Pricing under the competition Policy on Pricing Relative to Costs1.Full cost pricing2.Promotion pricing3.Contribution pricing
Promotion DecisionsPromotion is another part of the company’s total communication function.Effective Communication with potential customers is a prerequisite to successful marketing, but thecompany must communicate with the right people at the right time in the right place for otherwisethe message will be like the sound of that tree falling down in an empty forest, there will be no onethere to here. The company needs, therefore a communications strategy & promotion of thecompany site products must be part of that. Strategy Promotion aims to influence to persuade, andto inform actual and potential Customers. More often than not, it goes hand in glove with thepackaging design that the brand image.Promotion is another part of the company’s total communication functioneffective communication with potential customers is a prerequisite to successful marketing, but thecompany must communicate with the right people at the right time and in the right place forotherwise the message will be like the sound of that tree falling down in an empty forest; there willbe no one there to hear it. The company needs, therefore, a communications strategy andpromotion of the company and its products must be part of that strategy.
Communication ProcessMarketing communication involves sharing of meaning, information and concepts by the source andthe receiver about the products and services and also about the firm selling through the devices ofpromotion via, advertising, publicity, salesmanship and sales promotion.In marketing the source is the marketer who desires to promote the product. Marketer delivers amessage to a receiver, who is the target market segment. Message is received and integrated byconsumers and if their predisposition becomes favorable, they decide to purchase. Feedback is thereverse flow of communication to the marketer.Marketing communication may be distorted particularly when a message passes through a numberof channels. Noise is a major injurious. Noise can arise due to faulty transmission, faulty reception.Competitive communication constitutes the most serious noise.
The main components of communication process are as follows:(i) Context:Communication is affected by the context in which it takes place. This context may be physical,social, chronological or cultural. Every communication proceeds with context. The sender choosesthe message to communicate within a context.(ii) Sender/Encoder:Sender/Encoder are a person who sends the message. A sender makes use of symbols to convey themessage and produce the required response. Sender may be an individual or a group or anorganization. The views, background, approach, skills, competencies and knowledge of the senderhave a great impact on the message.
(iii) Message:Message is a key idea that the sender wants to communicate. It is a sign that elicits the response ofrecipient. Communication process begins with deciding about the message to be conveyed. It mustbe ensured that the main objective of the message is clear.(iv) Medium:Medium is a means used to exchange/transmit the message. The sender must choose anappropriate medium for transmitting the message else the message might not be conveyed to thedesired recipients.The choice of appropriate medium of communication is essential for making the message effectiveand correctly interpreted by the recipient.(v) Recipient/Decoder:Recipient/Decoder are a person for whom the message is intended/aimed/targeted.
(vi) Feedback:Feedback is the main component of communication process as it permits the sender to analyze theefficacy of the message.Promotion MixThe Promotion Mix refers to the blend of several promotional tools used by the business to create,maintain and increase the demand for goods and services. The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on creating theawareness and persuading the customers to initiate the purchase. The several tools that facilitatethe promotion objective of a firm are collectively known as the Promotion Mix. The Promotion Mix is the integration of Advertising, Personal Selling, Sales Promotion, PublicRelations and Direct Marketing. The marketers need to view the following questions in order tohave a balanced blend of these promotional tools.
What is the most effective way to inform the customers? Which marketing methods to be used? To whom the promotion efforts be directed? What is the marketing budget? How is it to be allocated to the promotional tools?
AdvertisingAdvertising is defined as: “ any paid form of non personal presentation and promotion of ideas,goods or services by an identified sponsor.” (The American marketing association). Mathews andBuzell.Marketing an introductory analysis list at least sixteen different reasons for the advertising butthese can be effectively condensed into four major strategies:To stimulate a short term increase in sales volume To develop a new market. To increase thecompany share of an existing market To build a favorable attitude to the company as a whole.There are three fundamental ways of increasing sales:a. To encourage purchases by new usersb. To increase purchases of your product by the customers of the competitionsc. To increase the purchase by existing users and each of these tactics will require a differentadvertising strategy.
Personal sellingPersonal-selling or salesmanship are synonymous terms; with the only difference that the formerterm is of recent origin, while the latter term has been traditionally in usage, in the commercialworld.Since a salesman, in persuading a prospect to buy a certain product, follows a personal approach;salesmanship, in the present-day-times in often popularly called as personal selling.Personal selling (or salesmanship) is the most traditional method, devised by manufactures, forpromotion of the sales of their products. Prior to the development of the advertising technique,personal selling used to be the only method used by manufacturers for promotion of sales. It is, infact, the forerunner of advertising and other sales promotion devices.
Following are given some popular definitions of salesmanship:(1) “Salesmanship is the art of presenting an offering so that the prospect appreciates the need forit and a mutually satisfactory sale follows.”(2) “It is the part of a salesman’s’ business to create demand by demonstrating that the need doesexist, although before his visit there was no consciousness of that need.”Features of Personal Selling:Some important features of personal selling are given below:(i) Personal selling involves a face-to-face contact between the salesman and the prospect.(ii) It is an art of persuading the prospect, to appreciate the need for the product canvassed by thesalesman, in a democratic, cordial and social manner. This, then, requires outstanding qualities in asalesman; specially the proficiency in selling skills and techniques.
SALES PROMOTIONThis form of promotion is known as below-the-line because sales promotions agencies do not earncommission from media. Clients pay agencies for concept, design and execution. Promotions maybe targeted at the trade in the distribution chain or at consumers. The difference between tradeand consumer promotions is one of objectives:Promotions to the trade push the product through the distribution system; Promotions to theconsumer pull the product off the shelves.Sales promotions can have considerable immediate effects upon sales volumes, though usually thisis not long-lasting unless linked with other promotional methods. The most effective promotional ofthese are usually integrated advertising and sales promotion campaigns.The effects of consumer promotions can be either immediate or delayed in terms of the benefit tothe consumer. Reduced price offers (RPOs) are immediate, whereas any promotion involving thecollection of proofs of purchase is delayed in its effect, and its purpose is to encourage increasedpurchase. Sales promotions can usually be organized more quickly than advertising.
Therefore, they can be more effective in shifting backlogs of unsold stocks. Other aspects of salespromotions include: Point-of-sale (POS) display, the purpose of which is to attract customer attention and encourageinspection and examination of the product; Merchandising which is which is the process of stocking retail and Distribution outlets with goods in a accordance with well researched and tried principles toencourage and facilitate buying decisions. Exhibitions which create awareness and promote recall through the creative scope of the modem exhibition, Sponsorship which has enjoyed rapid growth in recent years.Sponsors
Public relations:The aim of public relations (PR) is to improve and maintain an organization relationship with thevarious groups with which it is associated via the media exhibitions, conferences or by lobbying.Such groups include: Employees Shareholders Local communities Trade union Pressure groups ConsumersPR agencies use their skills to gain favorable media coverage of their clients affairs, but not throughthe medium of paid for advertisement. The basis of public relations is to fulfill a role that essentiallyprovides impacts upon the perception of the organization both by stakeholders and the broadermarketplace, i.e. its public'. Its role is to look after the nature and basis of external relationshipsbetween all stakeholder groups and is aimed at creating, a sustainable corporate, brand and overallcompany image within the marketplace.
Public in the main consist of: Customer groups Local and central government General public Financial institution - investors/shareholders/borrowers The media - TV, press, radio (locally and nationally) Opinion leaders/formers Internal marketplace - employees, trade union employee relations bodies
Determining Advertising BudgetThere are five methods through which advertising budget is determinedMethod # 1. The Percentage of Sales Approach:In this method, the sales value of the preceding year is first taken and then the expected salesduring the year in question are arrived at. Thereafter, some percentage of the expected sales isconsid-ered and this is known as the percentage of sales approach.This method was dominant in the past and even now it is widely used. It may be a fixed percentageor a percentage that varies with conditions of sales. The method is simple in calculation. In thismethod, a clear relationship exists between sales and advertising expenses. By adopting thismethod advertisement war can be avoided.
In spite of these advantages, this method has little to justify it. This method does not provide alogical basis for choosing the specific percentage except what has been done in the past or whatcompetitors are doing. It discourages experimenting with countercyclical promotion or aggressivespending.The aim of advertising is to increase the demand for the product and therefore it should be viewedas the cause, not the result of sales. But this approach views advertising on the results of sales. Itleads to a budget set by the availability of funds rather than by market opportunities.Method # 2. The All-You-Can Afford Approach:Under this approach, a company spends as much on advertising as it can afford. It can spend foradvertising as much as the funds permit. From the name itself, it is clear that the affordable amountset aside for advertising is known as affordable method. This approach appears to be more realistic,for all companies generally spend that much amount on advertisements which they can afford, eventhough they may not say so.
As advertising outlays are growing out of all proportions in the modern business, this method seemsto provide a basis for many firms with regard to advertising outlet. Generally, a firm has to take intoaccount the financial constraints while resorting to advertisement schemes.This approach to spending on advertising sometimes proves uneconomical. The point upto which afirm can afford to spend is a limiting point. If the increase in sales does not match the expenditureon advertising, it is evident that this is not a wise or economical way of determining the budget.Method # 3. The Return on Investment Approach:This approach treats advertisement as a capital investment rather than as a more currentexpendi-ture.Advertising has a two-fold effect:(i) It increases current sales.(ii) It builds up future goodwill.
An increase in current sales involves such decisions as the selection of the optimum rate of outputin order to maximise short run profits. The building up of goodwill for the future calls for a selectionof the pattern of investment which is expected to produce the best scale of production, leading tothe maximum long run profits.This method emphasizes the relation between advertisement and sales. Sales are measured withadvertising and without advertising. The rate of return provides a basis for advertising budgeting, asthe available funds will have to be distributed among various kinds of internal investment on thebasis of prospective rate of return.The limitation to the return on investment approach is that one cannot accurately judge the rate ofreturn as advertising investment.
Method # 4. The Objective and Task Approach:This method is also known as the research objective method. This method became prominentduring the war time. This method calls upon marketers to develop their promotion budgets bydefining their specific objectives, determining the tasks that must be performed to achieve theseobjectives and estimating the cost of performing these tasks. The sum of these costs in theproposed budget.This approach is an improvement over the percentage of sales approach. But the fundamentalrelationship between the objectives and the advertising media again depends upon the pastexperience of the firm. In reality, tasks to be determined should be related to the objectives of thefirm and to the past records of the firm.
Method # 5. The Competitive Parity Approach:This approach is nothing but a variant of the percentage of sales approach. A firm sets its budgetsolely depending upon the basis of competitors expenditure. The advertising cost is decided on thebasis of spending for advertising by the competitors in the same industry.Two arguments are advanced for this method. One is that the competitors’ expenditures representthe collective wisdom of the industry. The other is that it maintains a competitive parity which helpsto prevent promotion wars.Joel Dean claims that this method is widely used. The defensive logic of large proportion ofadvertising outlay aims at checking the inroads that might be made by competitors. The moneywhich an individual firm spends does not reveal how much it can afford to spend in order to equateits marginal benefits with marginal costs. He finds that no correlation appears to exist between theoutlay and the size of the firm.
Copy Designing and TestingCopy-testing is a comprehensive approach used as part of marketing research to test theeffectiveness of an advertisement based on responses prior to it being aired. This form of pretesting will be beneficial for the company to understand whether an advertisement carries a strongenough message.Marketing activities are expensive and copy-testing can help you make sure that your campaign iseffective. Before an advertisement is launched or aired there are series of tests which are done togauge the effectiveness of the campaign. These tests are carried on even after the campaign islaunched to measure the effectiveness.Both qualitative and quantitative techniques are used to measure the effectiveness of theadvertising campaign. The approach saves the company time and money as the ad will be error-freeand include all the desired changes.
The main purpose of copy-testing is to fix ads which may not connect with the audience. Ifconsumers are not able to connect with the ad, they might get a wrong message.To overcome this challenge, companies often enroll marketing research firms to conduct thesestudies. The advertisement is shown to a small group of people to measure their response.By conducting this experiment, the responses can be quantified to give the company a moremeaningful feedback. Here, analysts can analyse real-time response from the respondents afterwatching the advertisement.The analysis could be done around various things such as how respondents felt after watching thead, their facial expression. A wider survey, post the ad, can provide more information about howthey felt and their feedback.Often changes are made when an ad is shown in different demographics to connect with theaudience of that particular area. Copy testing also evaluates ad on demographics.
Media SelectionWhen deciding which media to select for promotional purposes, firms must consider a number offactors in order to maximise the effectiveness of their marketing campaigns. In this we brieflydiscuss seven of these factors.BudgetWhat is your overall budget for advertising? Will your budget give you the coverage you want? Afirm that has a limited budget for advertising will limit the amount of coverage certain media canprovide. You will need to strike a balance between budget and coverage.Campaign ObjectivesOne factor that will influence the budget and coverage question is the objective of the campaign. Ifthe objective is to raise the brand awareness of the firm amongst the teenage market then this willinfluence any decisions you make above. You may need to spend a little more on certainpublications in order to meet your objectives.
Target AudienceThe media you selected is obviously influenced by the target audience. A firm must select mediathat the target audience is associated with e.g. the magazines or paper that they read, or the socialnetworking site they use.FocusWhat is the message focus going to be? Will the message be emotional and work on guilt or will themessage be clear cut and say why the firm is better than the leading player?Readership of MediaWhat is the readership of the media you wish to select? Readership is the number times apublication has been read, so if I pick up newspaper on the train, read it and leave it on the trainand that same newspaper has been read by 10 other commuters, the readership in total is 11.
Circulation of MediaA firm will need to find out what the overall circulation of the media chosen is. So how manypublications are sold, and exactly who reads them.TimingWhen do you want the advertising campaign to start? Is it specific to a particular time of the yeare.g. Easter or Christmas?So when selecting your media for advertising you need to take intoaccount all of the above factors into account to maximise the success of your advertising campaign.The importance of a particular factor will depend on the campaign in question so it will beimportant to priorities the list in a manner that suits you and your campaign.
Advertising EffectivenessAdvertisement is a costly affair, but very seldom serious attempts are made to judge how far it iseffective, how many benefits the costs of advertisement yield, how the benefits, if any, are relatedto advertisement and so as. Till recently, the effectiveness of advertisement has been measured inrelation to sales. This is what is known as quantitative way of measurement.This measurement emphasizes whether an advertisement was acceptable to consumers andwhether they digested it and remembered it. This is known as “stimulus response function”. There isno dispute about the fact that the most objective way of measuring an advertisement is throughsales. Sales in turn are influenced by complex-ity of forces which fall into qualitative type ofadvertisements.
Evaluation of Advertising Effectiveness:Good planning and control of advertising depend critically on measures of advertisingeffective-ness.From the stand
Sales Management The word sales management is a combination of two words- sales and management. Sales is the art of planning in the mind of another a motive which will induce . management. 7. Motivate the Sales Force -One of the core objectives of sales management is to motivate the sales force. Selling is a very stressful task, achieving .
Example Exercise 9.1 Atomic Mass and Avogadro's Number. The atomic mass of each element is listed below the symbol of the element in the periodic table: Cu 63.55 amu, Hg 200.59 amu, S 32.07 amu, and He 4.00 amu. The mass of Avogadro's number of atoms is the atomic mass expressed in grams. Therefore, 6.02 . . 10. 23. atoms of
The molar mass is the mass of a mole of objects. It has units of g/mol. 1 amu 1.66054 10-24 g EXERCISES 1. A single carbon-12 atom has a mass of 12 amu by defi nition of the atomic mass unit. Convert 12 amu to grams, and then calculate the mass in grams of a mole of carbon-12 atoms. -24 -23-23 23
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Atomic mass unit and the mole amu definition: 12C 12 amu. The atomic mass unit is defined this way. 1 amu 1.6605 x 10-24 g How many 12C atoms we
17. Magnesium has three naturally occurring isotopes. 78.70% of magnesium atoms exist as magnesium-24 (23.9850 amu), 10.03% exist as magnesium-25 (24.9858 amu) and 11.17% exist as magnesium-26 (25.9826 amu). Calculate the average atomic mass of magnesium 18. Which subatomic particle plays t
69.15% copper – 63, which has an atomic of mass of 62.929601 amu, and 30.85% copper – 65, which has an atomic mass of 64.927794 amu. ISOTOPE EXAMPLE Chlorine consists of two main isotopes where one isotope chlorine – 35 has a mass of 34.96885 amu and the average atomic ma
Reporting Category 1: Matter and Energy Period: Atoms Fill in the missing information to summarize what you know about atomic structure. Name of Subatomic Particle Location within the Atom Electrical Charge Relative Mass inside the nucleus positive 1 amu neutron inside the nucleus neutral 1 amu electron outside the nucleus negative 1/1836 amu
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