JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

Vasant Kunj, New Delhi-l10070.

(Affiliated to Guru Gobind Singh Indraprastha University, Delhi)
NAAC Accredited and ISO 9001:2008 Quality Certified

Solved Question Paper- BBA SEMESTER-III (December-2013

SUBJECT- Sales Management (CODE-303)

Prepared By: Ms. Anjali Singh

Solved End Term Question Paper- BBA SEMESTER- V (December-2013)

SUBJECT- Sales Management (CODE-303)
Do any 5 questions. All questions carry equal marks.

(5 x 15)

Q1. Do any 5 of the following from Q.1 (5 x 3)

a.
b.
c.
d.
e.
f.

Emerging trends in sales management

Importance of motivation in sales management
Steps of selection process
Transactional v/s relationship selling
Steps of evaluation of sales Personnel
Behavioral equation theory

2. Define Sales management. Explain nature, scope and importance of sales management
3. Discuss the key decision areas in sales management which are particularly relevant to strategy
formulation.
4. Discuss the situations conducive for personal selling. Explain using multiple examples.
Also discuss the qualities of a good sales person
5.a. Describe the methods of identifying the training needs of the sales force
5.b. Discuss the factors influencing the design of compensation scheme of a sales person
6.a. how will the sales process differ in the following situations
i) Private bank representative selling services to a senior manager of an MNC
ii) Sales executive selling water purifiers to working women
6b.What are the attributes of a good sales quota plan?
7a. Discuss the legal and ethical issues involved in sales management
7b. Describe the role and importance of information technology in successful sales management
8. Write short notes on any 3.
Determinants of size of sales force
AIDAS theory
Motivation
Sales Audit

1a. Emerging Trends in Sales Management

1. Global Perspective: Global competition is intensifying. Domestic companies who never
thought about foreign competitors are suddenly finding them in their backyard. This is a
challenge which sales managers and salesperson must take on, they have to improve their
personal selling efforts not only in their countries but also in foreign countries. Selling goods and
services in global markets presents a challenge due to differences in culture, language, needs and
requirements.
2. Technological Revolution: Digital revolution and management information system have
greatly increased the capabilities of consumers and marketing organizations. Consumer today
can get information about products, compare it with other brand, place an order and place an
order instantly over the internet. This has led to a different kind of sales force who collects
information about internet users, markets and prospects of internet buyers. It is mandatory for all
companies to have their website now.To compete effectively, sales person and managers will
have
to
adopt
the
latest
technology.
3. Customer Relationship Management [CRM]: Combining information technology with
relationship marketing has resulted in customer relationship management. Interestingly, the
concept of relationship marketing came about earlier by bringing quality, customer service and
marketing together.Relationship marketing aims in building long term satisfying relations with
key customers distributors and suppliers in order to earn and retain their long term preference
and business. CRM enable companies to provide excellent real-time service by focusing on
meeting the individual needs of each valued customer, through the use of CRM software
packages.
4. Sales Force Diversity: The demographic characteristics of sales force is changing and
becoming more varied. For example, more and more women are taking up careers in sales
management and selling. Also the education level of sales people is going up most of them
holding a college degree or a post graduate degree. Sales managers now have to handle a sales
force of these varied demographic, expectations of each and every individual is different and
sales manager needs to use different motivational tools against each one of them.
5. Team Selling Approach: The practice of team selling is more widely followed by most
companies in recent years. Team selling approach is used when company wants to build a long
term mutually beneficial relationship with major customers, who have high sales and profitable
potential. It is used for selling a technically complex product or a service to a potential customer.
The composition of team may vary depending upon the customer from top management,
technical
specialist,
customer
service,
etc
6. Managing Multi-Channels :Multi-channel marketing system occurs when organization uses
two or more marketing channels to target one or more customer segments. Major benefits of
multi-channel marketing system are:
1
Lower channel cost
2
Increased market coverage

3
Customized selling
Multi-channel may also lead to conflicts and control problems, as two or more channels may
compete for same customer. A successful sales manager will have to effectively manage conflict
between the channels.
------ --1.b- Motivation : There was a time when employees were not given enough consideration and
more emphasis was laid down in the production process. But it was later recognized that
companies who retained talented employees have a greater survival rate in the industry and the
market place. Employees are not treated as just another component in conducting business, but
are considered as the prime resource for every business activity and as an important asset of the
organization.
Various studies have been done on the fact that success of organization depends upon the
satisfaction levels of the employees. In an organization, sales representatives may vary across the
spectrum of which satisfy them to keep up the motivational levels. So, in this section let us
analyze various motivational factors which are used by the organizations to sustain enough
enthusiastic levels among their sales representatives.
One of the most attractive and encouraging factor for motivation among most of the sales
representatives would be the compensation scheme or package there are entitled to receive at the
start of the job. Organizations tend to pull in the best talent by offering effective compensation
packages. The sales manager has to understand that often compensation is seen as a level of
loftiness among the representative within the same hierarchy level. Hence enough care has to be
taken in designing the compensation package for the sales representatives.
Incentives play an important role in keeping up the motivation levels of the employees.
Incentives may include yearly bonuses, commission rates based on the individual sales figures
and commission rates based on the group or team sales figures, stock options etc. Zoltners
(2006) describes that the sales force incentive plans effective the sales people and in turn on the
sales force activities followed by customer results and finally the company results.
Hence planning a right incentive system is an important task for the sales manager. Bernardin
(2008) explains various incentive pay for performance level of the employees. Let us examine
them in detail:a) Bonuses: These are one time payments provided as a reward for the level of work done or
objective achieved. This type of incentive system is often used to encourage the sales
representative to work much better and harder in future. The sales manager has to understand
certain issues when dealing with bonuses such as:* The type of impact created by the bonuses is considered to be positive most of the times

* The impact depends upon the bonus amount

* Normally it is considered that one month salary pay to be the ideal bonus amount
* The timing of giving the bonus amount also matters a lot
* Usually the bonus should be given when the sales representative is in need i.e. during the
festival season
b) Commission plans: Commission is the percentage of total sales amount given to the sales
representative for successfully making the sale. Often sales representative participate to push the
products/ service for sale which offers them more commission rates. Some of the issues which
the sales manager or the organization has to understand before deciding on the commission plans
are:* Commission rates should neither be too high or too low when compared with the other similar
products
* Commission pay entirely depends upon the sales volume and in turn may be seasonal for most
of the sales
* Sales representatives depend a lot on the commission rates for their living expenses
* During off season sales manager or the organization has to take care of the employees need by
providing them with increased commission rates which can later be cut out during the sales
season
* If the commission is dependent upon the team, then the sales manager has to take care that
every member in the team works with similar efficiency and effectiveness
* Make sure that the group incentive pay is not too high in the salary component as employees
tend to think that why they are penalized for other mistakes
c) Profit or gain share: Companies may share their increased profits or gains for the year or
quarter among the employees of the organization. Depending upon the basic pay of the employee
the gains can be distributed. Such incentive gives a sense of feeling that the employee is working
in a growing organization and he/she has a bright future in the organization.
Non-monetary reward systems
Whenever a monetary reward fails, non-monetary reward system may achieve success in
sustaining motivation and dedication of the employees towards the work place. Let us understand
some of the non monetary rewards as stated below:a) Stock options: The employee stock option is usually a call option which is given as a non cash
reward or incentive system. A lot of employee would like to have the stocks instead of the cash

rewards like bonuses. There are a lot of advantages in giving the stock options to the employees.
Some of the advantages include getting a feel of his/her own company once the stock options are
given. Employees tend to work better to generate more sales and in turn increase the value of
their company and the stocks. Care should be taken such that all the deserving employees in the
group should be given the choice of choosing the cash reward or the stock options.
b) Better working conditions: The sales representatives who work well and achieve the targets
might be given options to work from home and visit the workplace once or twice in a week to
report. Other examples of better working conditions include providing the necessary logistics
like better variety of food, increased cabin space, free telephone and internet services at home to
a certain limit of usage, free insurance policy, better training facilities etc
c) Recognition and awards: Recognition and awards help the sales representatives to gain
respect and help in creating a unique identity in the work place. This type of reward works
effective for the managerial level employees who dont depend upon the monetary rewards for
survival. This system also highlights the mile stones achieved by an individual in his/her career
and also encourage fellow employees to achieve it and hence they work much enthusiastically.
---------1.C. Steps of Selection process : A typical selection process consists of
Application form preliminary interview testing interview reference checks
physical examination Employment offer
Application form should be designed in such a way that it captures the necessary information
which is required to evaluate the candidate across the skill set required by the job description.
For sales representatives, attitude, communication skills and analytical skills are very important;
hence the testing phase should be prepared so that it captures these skills. The preliminary
interview eliminates all those who dont fit the bill. The testing phase can be just an interview or
can have a written test and a group discussion. After the test has been completed, the candidates
will be short-listed according to their performance for an interview round. During the interview
much emphasis should be given in the attitude of the candidate rather than the skills. Two basic
ways in which the interview can take place are:a) In a comfortable mode, where the recruiter would bring the atmosphere to the comfort level of
the candidate and then start observing the behaviour of the candidate.
b) In a stressed mode, where the recruiter would put the candidate under a lot of stress by asking
a lot of questions and then observe the candidates reactions.
Doing an interview in these two ways is important in order to judge the candidate for sales job as
the sales representative would have to encounter both the serene and pressure environment while
making the sale. Previous work experiences and references should be cross checked before

selecting the candidate for the job. Physical examination is important to ensure the candidate is
in good state of health as he/she requires traveling during the sales job. Finally after all the
selection process and the candidate qualifies for it he/she will be given the employment offer
which describes the nature of work, job title, salary, any contract period etc.
-----1. d. Transactional v/s Relational Selling

Objective

Transaction Selling

Relational Selling

Get the order or sale

Become sole or
supplier
Build trust and
customer service
Few high profit
customers
Long period years

Present, overcome objections and close

Focus
Customer Type
Length
relationship
Sales team
Selling efforts
Pricing Strategy

Many customers with low potential

of Short period few days
1 or 2 junior level sales people
Low to medium, involving
functions
Competitive or lowest price

preferred
superior
potential

Team selling with a mix of

junior and senior people
few High involving many functions
Mutually acceptable price for
profits or mutual benefits

Transactional selling are mostly one time only exchanges with an objective of getting sales
/orders from customers whose profit potential are low. The selling efforts are minimum with low
or competitive prices, there is little interest by either side to extend the relationship
The objective of Relationship selling is to become the sole supplier or preferred supplier which is
achieved by building strong, social economic and technical ties over a long period of time.
----1. e. Steps in Evaluation of Sales Personnel
It is clearly understood that the sales force performance evaluation plays a key role in the
organization. It is the role of the sales manager to identify the performance of the team in a
correct way. Spiro (2003) explains a procedure for evaluating the sales people which is depicted
by the following diagram:Establish Basic Policy

Select Evaluation Basis

Set Performance Standards

Compare Performance Standards

Discuss Results with Sales people

Procedure for evaluating sales people

The procedure states that establishing basic policies will help in identifying the people who will
monitor the entire process. The next step is to select an evaluation bases and then set the
performance standards. Once the standards are set then compare the results in the evaluation
process with the standards and then discuss them with the sales people. Identifying the objectives
and guidelines play an important role in the procedure for evaluating the sales people.
----------1.F.
Behavioral Equation Theory: J.A Howard Explains buying behavior in terms of the purchasing
decision process viewed as the phases of the learning process. Four essential elements included
in the stimulus response model are drive, cue, response, and reinforcement.
Drives: are strong internal stimuli that impel buyers response. There are two kinds: a) Innate:
drives stem from the physiological needs such as hunger, thirst, pain, cold etc. b) Learned Drive:
striving for status /social approval.
Cues: are weak stimuli which will determine when buyer will respond.
Triggering cues: activate the decision making process for any given purchase
Non-triggering cues: influence the decision process but do not activate it. There are two kinds:
product cue external stimuli received from the product directly color of the product, weight,
price etc. Informational cues: external stimuli that provide information of a symbolic nature bout

the product. This may come from advertising, conversation with other people including sales
personnel. Specific product and information cue:
Response: is what the buyer does.
Reinforcement is any event that strengthens the buyers tendency to make a particular response.
B=PxDxKxV
Where B = response /internal response tendency i.e act of purchasing a brand/ patronizing a
supplier
P = predisposition, could be force of habit
D = present drive level (motivation)
K = incentive potential, value of product or potential satisfaction to the buyer.
V = intensity of all cues triggering, product or informational
The relationship between these variables is multiplicative, if any independent variable has a zero
value, B = 0.
--------------2. Define Sales Management.
Sales Management means selling activities of an organization. According to AMA 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.
According to Albert, Johnson and David, sales force management refers to the planning,
implementation and control of selling efforts. It may be said that sales management is essentially
the personnel management as applied to personal selling activities. Sales management is a wider
term than sales force management.
The main characteristics of sales management are as follows:
Pervasive function: sales function is required in each and every business enterprise irrespective
of its nature and size.
Continuous function: selling is an ongoing process, sales management is a continuous activity.
There are several changes like addition of new sales people, retirement or resignation of some
sales people, changes in the product etc. all of which requires ongoing efforts.

Part of Marketing Management: Sales management is a part of marketing management and sales
is integrated with marketing planning.
Exchange relationships: Selling involves exchange of desired products/ services in return for
money or money worth. These exchanges create some relationship between customer and sales
team, which can lead to customer loyalty.
Variety of Jobs: Selling includes a variety of sales jobs which are different from one another for
example, order taking, delivery, sales support etc.
Scope of Sales management
Sales Management consists of the following elements as functions:
Sales planning: sales planninginvolves setting sales objectives and deciding the sales strategies to
achieve them.
Sales organizing: organizing different selling activities into departments and sections has a direct
impact on the performance of sales force. Without a good organization structure there would be
chaos and confusion and selling efforts are likely to be wasted.
Sales directing: sales staff are recruited, selected and placed. Their compensation and supervision
as well as motivation are important parts of directing of sales.
Sales co-ordinating: all the people working in sales must work as a team. Timing their
operations, balancing conflicting interest and integrating their efforts are necessary for sales coordination.
Sales controlling: it is necessary to check that sales activities are moving in the desired direction.
Controlling ensures that the discrepancy if it occurs is corrected.
Importance of Sales Management
The main benefits of sales management is as follows:
Revenue Generation:Sales is the only function which generates revenue. All other departments/
functions spend money or incur expenses. The financial result of the business firm depends on
the performance of the sales department.
Employment Generation: sales management generates employment both directly and indirectly.
Selling offers a large variety of jobs and as sales increase, the number of people employed in
sales also increases. When sales increase, it also results in a larger number of people being
employed with manufacturing and services.

Rewarding Career: The number of positions available in sales is more as compared to other
professions. Sales people are one of the best paid professions and can also rise to the top
management.
Higher Standard of Living: Sales people attempt to improve customer satisfaction by addressing
their needs and matching the products and services with their requirement. They also educate and
inform people about the new products, their benefits and uses.
Intelligence Agency: sales people are the ones to have firsthand information about the customers,
their preferences, tastes and attitudes. This information enables the companies to design and
manufacture products and services to suit the customers.
----------Discuss the key decision areas in sales management which are particularly relevant to strategy
formulation.
Strategic Planning
Creating, providing, and communicating value requires many different marketing
activities. To ensure that the proper activities are selected and executed, strategic
planning is paramount. Strategic planning calls for action in three key areas: The
first is managing a company's businesses as an investment portfolio. The second
involves assessing each business's strength by considering the market's growth rate
and the company's position and fit in that market. The third is establishing a
strategy. For each business, the company must develop a game plan for achieving
its long-run objectives.
To understand marketing management, we must understand strategic planning.
Most large companies have 4 organizational levels.
Corporate level
Division level
Business level
Product level
At the Corporate level, the strategic plan is to guide the whole enterprise, it is about
the resources allocated to each division, which business to start or eliminate.
At the division level the allocation is made for each business unit within the division.
Each business unit develops a strategic plan to carry the business unit into a
profitable future. Finally each product/product line will develop a marketing plan
for achieving its goals.

The marketing plan operates at two levels strategic and tactical. The strategic
plan lays out the target markets and the value proposition that will be offered based
on the analysis of the best marketing opportunities. The tactical plan specifies the
marketing tactics and includes product features, promotion, merchandising, pricing,
sales channel and service. The Marketing plan is the central instrument for
directing and co-ordinating the marketing effort.
The key decision areas which will help in strategy formulation would be
Sales Channel: Deciding how many and what sales channel to use. This would in
turn be determined by the nature of the product and the objective of the company
Target Market: The target market which can serviced by the sales force both direct
and indirect will determine the selection of the target market.

4. Discuss the situations conducive for personal selling. Explain using multiple examples.
Also discuss the qualities of a good sales person
The situations conducive for personal Selling can be the ones where the following conditions are
met :
a) Flexibility in delivering the message: A sales representative interacts with one potential
customer at a time the messages can be tailored and delivered as per the customer needs. This
flexibility is not available in advertising which happens through the television, newspapers,
magazines, window displays etc.
b) Efficient way of communication Personal sales is a two way communication process which
allows for the efficient dialogue between the customer and the sales representative. It would be
easy to know whether the customer has really understood the communicated message about the
product/ service. The feedback would be immediate by the customer in personal selling, which
would helps the sales representative to know whether the sales approach is working or not
change the approach accordingly. In other promotional tools like advertising which rely on one
way communication, would not guarantee that the customers have understood the communicated
message.
c) Building long term relationships Being a two-way & one-to-one communication, personal
selling certainly has an added advantage over other communication tools in building long lasting
relationships of customer.
d) Better access to various target segments Not all the target groups can be reached with
advertising, sales promotions, and public relations. In such cases personal selling would help to

reach out to the customer and inform about the product/ service. For instance if the company
deals with B2B markets or with the CEO of a company, personal selling would be a better
communication tool than advertising or sales promotion. In B2B markets, the sales process
involves a lot of communication time and hence a high level of two way interaction is required
making the personal sales a practical communication tool.
e) Complex information delivery
In personal selling, greater amount of complex information like technical features of the product
can be conveyed easily in comparison to other communication tools. Since numerous meetings
can happen between the customer and the sales representative, there is ample time available to
explaining all the features of the product.
Qualities of a Good Sales Person

Sales Professionals are the face of an organization. They have the responsibility of making the
brand popular and promoting the products amongst the end users.
They help in the successful running of organization by generating revenues and earning profits.
Some qualities which a sales professional must have:
1. Patience

A sales manager needs to be extremely patient. He cannot afford to

be rude to his customers.

Clients do need time to believe in him and trust the companys

products. Give the client time to think and decide.

2. People Oriented

It is essential for a sales manager to be customer centric. Understand

customers needs and expectations. Dont simply impose things on
him.

Individuals representing the sales vertical need to be caring and kind

towards customers.

One should never misguide the customers. Be honest with them. Avoid
telling lies and creating fake stories just to achieve your targets

3. Aggressive

A sales professional needs to be aggressive and energetic. Lazy

individuals dont make great sales professionals.

4. Go-Getter Attitude

It pays to be optimistic in sales. Sales professionals need to have a gogetter attitude for the best results.

It is really not necessary that all customers would like or need your
product. Dont expect results every time. Remember failures are the
stepping stones to success. One must learn from his previous mistakes
and move on. Dont take failures to heart.

5. Value Time

People in sales must value time. Being late for meetings create a
wrong impression in the minds of customers.

It is a sin to make customers waiting unless and until there is an

emergency. Start a little early and make sure you reach meetings on
time.

6. Sense of Commitment

A sales representative who is committed towards his work manages to

do well and make his mark as compared to others. Commitment in fact
is essential in all areas of work.

If you have promised someone to meet at 5pm, make sure you are
there at the desired venue at 4.45 pm sharp. Dont make silly excuses.
Trust is lost when commitments are taken back. There should be no
turning back.

7. Reliable

The customers must be able to depend on the sales professionals. A

sense of trust is important.

8. Flexible

A sales professional must know how to change his sales pitch as per
the client. Dont just stick to one plan or one idea.

Learn to take quick decisions as per the situation. Be adaptable to

changes. People in sales should not be too rigid and demanding.

9. Be Transparent

Dont hide things from the customers. Transparency is essential to

avoid problems later on.

Convey only what your product offers.

10.Diligent

Mere sitting at office does not help in sales. One needs to go out, meet
people and make prospective clients. Dont complain if it is too hot or
cold outside.

A sales professional ideally should spend his maximum time in field to

achieve targets in the best possible way.

11.Good Communicator

A sales professional must be a good communicator for the desired

impact.

Take care of your pitch and tone.

----------------------------

5.a. Methods of identifying training needs of the sales force

Before the initiation of training program, it is very important to understand the objective of it.
The main objective of the training program is to inculcate the required knowledge, skills and
attitude and make employees more productive to the organization. It is important to understand
the objectives of the training program and the benefit it provides to the sales representatives and
the company. Identifying the sources for training is an important task which decides the quality
and impact of the training program.Once the training source and the needs are analyzed, the next
step is about action planning i.e. the actual implementation of the training program.
For a sales representative training, there might be a considerable difference of what is being
taught in the training and what is being done in the market place. Hence, action planning has to
deal with such problems using various teaching methodologies, technical tools etc and impart
training program that is closely related to the market place. No training program would end
without a feedback process. Feedback process should not end with just taking the trainees
comments but has to include the follow up process as well.
Sales Training Process: The typical sales training process is as follows :
Asses Sales Training Needs
Set Training Objectives

Evaluate Training Alternatives

Design Sales Training Program
Perform Sales Training
Conduct Follow up and Evaluation
The 1st step sales training need assessment deals with identifying the necessary skills, attitudes,
perceptions and behaviours of the sales representatives. The 2nd step deals with setting up the
training objectives i.e. the necessary measurable outcome of the training program. The 3rd step
deals with identifying various alternatives to conduct the training. The 4th step deals with the
design part of the training program which involves identifying the training program period and
modules and the necessary skills to be imparted, logistics arrangements etc. The 5th step
performing the sales training is the actual implementation of the sales training program which
deals with the way how the training is conducted and the methodologies adopted by the trainer in
imparting the necessary skill set. Once the entire training process is completed, follow-up and
evaluation dealing with analyzing the quality of training program held and the benefit received
by the candidates and the organization need to be conducted.

5.b. Discuss the factors influencing the design of compensation scheme of a sales person
Sales managers should consider carefully the type of compensation plan they wish to use. This is
because there are a number of objectives which can be achieved through a compensation scheme.
First, compensation can be used to motivate a salesforce by linking achievement to monetary
reward. Second, it can be used to attract and hold successful salespeople by providing a good
standard of living for them, by rewarding outstanding performance and providing regularity of
income. Third, it is possible to design compensation schemes, which allow selling costs to
fluctuate in line with changes in sales revenue. Thus, in poor years lower sales are offset to some
extent by lower commission payments, and in good years increased sales costs are financed by
higher sales revenue. Fourth, compensation plans can be formulated to direct the attention of
sales personnel to specific company sales objectives. Higher commission can be paid on product
lines the company particularly wants to move. Special commission can be paid to salespeople
who generate new ac- tive accounts if this is believed to be important to the company. Thus,
compensation plans can be used to control activities.
Sales people can be of the following different types:
Creatures of habit: These salespeople try to maintain their standard of living by earning a
predetermined amount of money.
Satisfiers: These people perform at a level just sufficient to keep their jobs.

Trade-offers: These people allocate their time based upon a personally determined ratio between
work and leisure that is not influenced by the prospect of higher earnings.
Goal orientated: These salespeople prefer recognition as achievers by their peers and superiors
and tend to be sales quota orientated with money mainly serving as recognition of achievement.
Money orientated: These people aim to maximise their earnings. Family relation- ships, leisure
and even health may be sacrificed in the pursuit of money.
There are three broad compensation plans
Fixed
Variable
Combination of fixed and Variable
Industrial selling where technical service is an important element in the selling task and the time
necessary to conclude a sale may be long. It is particularly appropriate when the salesperson sells
very high value products at very low volumes. Under these conditions a commission- based
compensation scheme would lead to widely varying monthly income levels de- pending on when
orders were placed. Therefore a fixed plan for compensation may work better.
Variable plan is most often used in situations where there are a large number of potential
customers, the buying process is relatively short and technical assistance and service is not
required. Insurance selling is an example where commission-only payments are often used.
Combination plan attempts to combine the benefits of both the previous methods in order to
provide financial incentives with a level of security. Since income is not solely dependent upon
commission, management gains a greater degree of control over the salespersons time than
under the commission-only system, and sales costs are to some extent related to revenue
generated. The method is attractive to ambitious salespeople who wish to combine security with
the capability of earning more by greater effort and ability. For these reasons it is the most
commonly used method of compensating sales- people, although the method of calculating
commission may vary. Extra payment may be linked to profits or sales generated, at a constant
rate for all sales or only after a certain level of sales has been generated. Payment may be based
upon a fixed percentage for all products and customers or at a variable rate. Alternatively, a
bonus (a given monetary sum) may be paid on the accomplishment of a particular task (e.g.
achieving a sales target, opening a certain number of new accounts)
---6.a. how will the sales process differ in the following situations
i) Private bank representative selling services to a senior manager of an MNC

ii) Sales executive selling water purifiers to working women

For selling banking services to a senior manager of an MNC, the sales person should employ
references or letter of introduction from users of the same services. The sales appointment should
be taken prior to the sales call, cold calling should be avoided. The sales presentation should be
brief and should focus on the convenience and flexibility offered. It would help if the sales
person can approach his office for information regarding his preferences and tailor his sales pitch
accordingly.
The sales executive selling water purifiers to working women should focus on the ease and
convenience of the product. Time saving without compromising the health benefits should be
emphasized. Word of Mouth would work well here.
6b.What is the attributes of a good sales quota plan?
Planning the sales quotas involves identifying the right quota depending upon several factors and
assigning them to the sales representatives. Some of the factors that will result in a good quota
plan will include:a) Market size and potential
For each territory or region the market size and potential must be analysed. The market potential
can be known by the forecasting techniques. Once the existing market size is determined, quotas
have to be planned accordingly so that the market potential is fully utilized to achieve the
maximum productivity levels. Most of the times the sales quotas would be proportionate to the
size and potential of the market.
b) Level of competition
Even if the market size and potential is huge, the sales quotas may not be high due to the level of
competition. Quotas must be realistic in nature taking the account of competition. Again the
quotas depend upon another factor current position of the organization in that region.
c) Current position of the organization
Hence the sales quotas have to be planned accordingly based upon the current position of the
organization.
d) Skills of the sales person
All the employees within the organization may not be able to generate huge number of leads.
Hence, setting same quotas for all the employees may not be achievable and may become a demotivating factor. The sales manager has to plan the quotas according to the skill of the sales
manager and may increase it in future. The new employee may need to have a different sales
quota while compared to the already existing employee. If the quotas are not achievable, some

time should be given by the sales manager to improve the selling skills and help in achieving the
sales quota by the sales representative. If required necessary training should also be provided.
e) Organization/ market objectives
When an organization expands to new territories or launches new products, it needs to, plan the
sales quotas very carefully. When it enters a new territory, the organization objective may be to
test the market or to become a leading player. Hence sales quotas have to be planned accordingly
with the objectives. If the organization objective is to hold in the market in difficult times, the
sales quotas may not be necessary to increase from year to year as the objective of the
organization is to generate the same sales each year. Hence, the organization objectives have to
be kept in mind by the sales manager before planning the sales quotas to the representatives
--7a. Discuss the legal and ethical issues involved in sales management
Consumer protection by the law is very much a twentieth-century phenomenon. Before that the
prevailing attitude can be described by the phrase caveat emptor let the buyer beware. Much of
the legislation has been drawn up since the 1980s, when it was recognized that sellers may have
an unfair advantage compared with consumers when entering into a contract of sale. The major
laws regarding selling activities include

Consumer protection Act , 1986

Weights and Measures Act

Sales of goods act

Hire Purchase Act

Most sales activity is centered upon the contract entered into when a seller agrees to part with
a good or provide a service in exchange for monetary payment. Acontract is made when a
deal is agreed. This can be accomplished verbally or in writing. Once an offer has been
accepted a contract is formed and is legally binding. Important in written contracts are the
terms and conditions which apply.
Terms and Conditions
As the name suggests, terms and conditions state the circumstances under which the buyer is
prepared to purchase and the seller is prepared to sell. They define the limit of responsibility
for both buyer and seller. Thus both buyer and seller are at liberty to state their terms and
conditions. Usually the buyer will state them on the back of the order form and the seller will
do so on the reverse of the quotation form. Often a note is typed on the front of the form in
red ink: Your attention is drawn to our standard terms and conditions on the reverse of this

order. Typical clauses incorporated into the conditions of a purchase order include the
following:
*Only orders issued on the companys printed order form and signed on behalf of the
company will be respected.
*Alterations to orders must be confirmed by official amendment and signed.
* Delivery must be within the specified time period. The right to cancel is reserved for late
delivery.
* Faulty goods will be returned and expenses charged to the supplier.
*All insurance of goods in transit shall be paid for by the supplier.
*This order is subject to a cash discount of 2.5 per cent, unless otherwise arranged, for
payment within 28 days of receipt. Any payment made is without prejudice to our rights if
the goods supplied prove to be unsatisfactory or not in accordance with our agreed
specification or sample.
* Tools supplied by us for the execution of this order must not be used in the service of any
other firm without permission.
Careful drawing up of terms and conditions is essential in business since they provide
protection against claims made by the other party should problems arise in fulfillment of the
contract.
Some if the legal issues could be with regards to :
1. False Descriptions
About the product
Incorrect Place of Manufacturing
Misleading Price indications
2. Faulty Goods
Merchantability ( i.e. fitness for the purpose that goods of this kind are normally
bought)
Fitness for purpose (i.e. fitness for the purpose that a particular product was
specifically bought for example, a car that was bought in Delhi but meant for
use in North-East.)
3. Inertia Selling Sending samples to people who may feel obliged to buy the product
even if they dont want to.

4. Exclusion Clause: Exclude certain practices/parts of products in order to limit their

liability. Not valid for injury or
5. Collusion between Sellers : Sellers may collude to restrict supply or fix prices.
Ethical Issues

Bribery : The act of giving gifts or inducement in order to obtain a sale

Hard Sell : Persistent calling to sell the product

Deception : Misleading the customer

Reciprocal Selling: Buying from the supplier only if they buy the customers products
too. Is unfair to those who cannot into such reciprocal selling.

Promotional Inducements to Trade : Offer inducements to the distributors/ retailers to

push certain products.

Slotting Allowances: Pay money to retailers to display their products. Possible only by
big retailers.

7b. Describe the role and importance of information technology in successful sales
management
Due to continuously expanding nature of business, it is very important to keep track of
customers, an activity which used to be performed with pen and paper. With increasing size of
business and the competitors, it is advantageous to speed up the activities in the sales process, so
that more leads can be generated to the company. This is where computer technology comes in,
to make the processes effective and also to help in increasing the efficiency of sales
representatives in generating leads. It is identified in many companies that sales representatives
spend only 20-30 percent of their time in selling activities. Most of the time ends up in
performing administrative functions like coordinating the day to day meetings, checking the
status of product that needs to be delivered, travelling, training etc. So it is very important for the
companies to use the computer applications in reducing wastage of the resources in nonproductive functions. Another major problem which companies face in todays world is attrition.
Computer applications can help in resolving of the problems which arise when a sales
representative leaves the company.
Advantages
Improved sales planning and management
Automating the lead system
Managing sales opportunities effectively

Streamlining account management

Boosting sales productivity Improved account handling
Managing or resolving customer cases efficiently
Simplifying contract management
Knowledge management to store the staff experiences as a repository
Streamlining the schedules
Automating workflows
----8. Write short notes on any 3.
Determinants of size of sales force
Attaching Photocopies as has calculations
AIDAS theory
A: Attention
I: Interest
D: Desrie
A: Action
S: Satisfaction
According to this theory the prospects mind passes through 5 successive phases
attention, interest, desire, action and satisfaction. The sales person should lead the prospect
through them in the right sequence if sales has to result.
Securing Attention:The first few minutes are crucial, as the prospect has to be in a
receptive stage of mind. The sales person should establish a good rapport at the start itself.
Proper attire, neatness and friendliness can help create favourable first impressions. A good
conversation opener has to set the stage for the rest of the presentation and should tie up with the
remainder of the presentation.
Gaining interest : Intensify the prospects attention so that it evolves into a strong interest.
The hope in this stage is to search out the selling appeal which will be most effective. This would
require considerable probing before the appeal is identified.

Kindling Desire : Kindle the prospects desire to ready to buy point. The sales person
should keep the conversation running towards the sale. Obstacles must be faced and ways found
to get around them.
Inducing Action : When the presentation is perfect, the prospect is ready to act that
isbuy. Buying is however not automatic but has to be induced. The time has to be right for the
close to ask for the close
Building satisfaction: Salesperson has to assure customer that the decision was correct,
building satisfaction means thanking the customer, making sure that order forms are filled and
following up on promises made.

Motivation
There was a time when employees were not given enough consideration and more emphasis was
laid down in the production process. But it was later recognized that companies who retained
talented employees have a greater survival rate in the industry and the market place. Employees
are not treated as just another component in conducting business, but are considered as the prime
resource for every business activity and as an important asset of the organization.
Various studies have been done on the fact that success of organization depends upon the
satisfaction levels of the employees. In an organization, sales representatives may vary across the
spectrum of which satisfy them to keep up the motivational levels. So, in this section let us
analyze various motivational factors which are used by the organizations to sustain enough
enthusiastic levels among their sales representatives.
One of the most attractive and encouraging factor for motivation among most of the sales
representatives would be the compensation scheme or package there are entitled to receive at the
start of the job. Organizations tend to pull in the best talent by offering effective compensation
packages. The sales manager has to understand that often compensation is seen as a level of
loftiness among the representative within the same hierarchy level. Hence enough care has to be
taken in designing the compensation package for the sales representatives.
Incentives play an important role in keeping up the motivation levels of the employees.
Incentives may include yearly bonuses, commission rates based on the individual sales figures
and commission rates based on the group or team sales figures, stock options etc. Zoltners
(2006) describes that the sales force incentive plans effective the sales people and in turn on the
sales force activities followed by customer results and finally the company results.

Hence planning a right incentive system is an important task for the sales manager. Bernardin
(2008) explains various incentive pay for performance level of the employees. Let us examine
them in detail:a) Bonuses: These are one time payments provided as a reward for the level of work done or
objective achieved. This type of incentive system is often used to encourage the sales
representative to work much better and harder in future. The sales manager has to understand
certain issues when dealing with bonuses such as:* The type of impact created by the bonuses is considered to be positive most of the times
* The impact depends upon the bonus amount
* Normally it is considered that one month salary pay to be the ideal bonus amount
* The timing of giving the bonus amount also matters a lot
* Usually the bonus should be given when the sales representative is in need i.e. during the
festival season
b) Commission plans: Commission is the percentage of total sales amount given to the sales
representative for successfully making the sale. Often sales representative participate to push the
products/ service for sale which offers them more commission rates. Some of the issues which
the sales manager or the organization has to understand before deciding on the commission plans
are:* Commission rates should neither be too high or too low when compared with the other similar
products
* Commission pay entirely depends upon the sales volume and in turn may be seasonal for most
of the sales
* Sales representatives depend a lot on the commission rates for their living expenses
* During off season sales manager or the organization has to take care of the employees need by
providing them with increased commission rates which can later be cut out during the sales
season
* If the commission is dependent upon the team, then the sales manager has to take care that
every member in the team works with similar efficiency and effectiveness
* Make sure that the group incentive pay is not too high in the salary component as employees
tend to think that why they are penalized for other mistakes
c) Profit or gain share: Companies may share their increased profits or gains for the year or
quarter among the employees of the organization. Depending upon the basic pay of the employee

the gains can be distributed. Such incentive gives a sense of feeling that the employee is working
in a growing organization and he/she has a bright future in the organization.
Non-monetary reward systems
Whenever a monetary reward fails, non-monetary reward system may achieve success in
sustaining motivation and dedication of the employees towards the work place. Let us understand
some of the non monetary rewards as stated below:a) Stock options: The employee stock option is usually a call option which is given as a non cash
reward or incentive system. A lot of employee would like to have the stocks instead of the cash
rewards like bonuses. There are a lot of advantages in giving the stock options to the employees.
Some of the advantages include getting a feel of his/her own company once the stock options are
given. Employees tend to work better to generate more sales and in turn increase the value of
their company and the stocks. Care should be taken such that all the deserving employees in the
group should be given the choice of choosing the cash reward or the stock options.
b) Better working conditions: The sales representatives who work well and achieve the targets
might be given options to work from home and visit the workplace once or twice in a week to
report. Other examples of better working conditions include providing the necessary logistics
like better variety of food, increased cabin space, free telephone and internet services at home to
a certain limit of usage, free insurance policy, better training facilities etc
c) Recognition and awards: Recognition and awards help the sales representatives to
gain respect and help in creating a unique identity in the work place. This type of reward works
effective for the managerial level employees who dont depend upon the monetary rewards for
survival. This system also highlights the mile stones achieved by an individual in his/her career
and also encourage fellow employees to achieve it and hence they work much enthusiastically

Sales Audit
A sales audit is a review of a company's entire sales process, from the use of particular types of
software, to the staff, to management strategies. This type of audit is different from a financial
audit in which a company evaluates their operating costs against their sales revenues. A sales
audit evaluates the effectiveness of every aspect of the sales process and helps companies
determine whether or not their methods are cost effective and beneficial in generating revenue.
Some businesses choose to perform this process themselves, often with the aid of specialized
audit software, and others prefer to have an outside consultant objectively carry out the
evaluation.
Sales auditors may begin by analyzing the atmosphere in which a company works, both
externally and internally. The external environment refers to the market size in which a company
markets their product, the market demand for that product, and the growth trends in that area.

The internal environment refers to the culture of the company itself, including the ways in which
the sales team interacts with one another and the nature of their relationships with their
managers. This typically provides a basis for the sales auditor to evaluate the sales performance a
company desires versus what they are actually achieving.
Auditors may next consider a companys specific goals and the sales tactics used to achieve
those goals, including long-term and short-term goals. The audit can evaluate how effectively
management communicates its sales goals to the sales team, for example. It also can be used to
analyze whether the sales strategies used during the time frame of the audit reflect those goals.
These strategies may include setting numerical goals for sales teams, offering rewards in the
form of contests and commissions to encourage the team to achieve those goals, and monitoring
the achievement of those goals in a timely manner.
A companys sales structure and hiring process may also play an important role in the sales
process, as it relates to the structuring of various departments that work together to assist the
sales team. A company can request that their auditor review the inner workings of their support
staff, such as accounting or billing departments and marketing departments. The sales auditor
may seek to learn how these departments work together with the sales department and whether
they effectively communicate with one another regarding interdepartmental needs. Some audits
may use this facet of the process to help a company evaluate future and potential employees by
constructing hiring guidelines to enable the company to hire personalities that fit well within
their specific sales structure and company culture.
At the end of a sales audit, a company typically receives a report delineating their strengths and
weaknesses and suggested ways in which they might improve their overall sales tactics. The
general goal of a sales audit is the improvement of overall sales performance in regards to
management expectations and the increase in the predictability of results. Repeated, predictable
results in regards to sales productivity typically guarantee the sales process is functioning with a
high degree of reliability and efficiency.
A formal sales audit process can make the difference betweensuccess and failure for the
following reasons.
1.Sales and marketing are the core drivers of growth and profits. Improvements in sales and
marketing dramatically impact a companys financial picture.
2. A sales audit provides an external, objective review of the process. Subsequentimprovements
have proven more effective than periodic internal changes to salesprograms.
3. Sales and marketing costs represent significant expenditures in most organizations.
Reviewing the efficiency and effectiveness is a prudent part of management andfinancial
discipline.