Sales 1234 Full

Sales And Retail Management
Module-1 -Season
INTRODUCTION TO SALES MANAGEMENT
Definition: Sales Management

According to American Marketing Association sales
management is planning, direction, and control of personal selling
including recruiting, selecting, equipping, assigning, routing, paying,
supervising as these apply to the personal salesforce.
Evolution of Sales Management:

Industrial revolution that took place in the 18th century gave rise to the
expansion of market which required professional approach in selling. The
history of salesmanship is as old as human civilization . The business and
trade of buying and selling goods flourished over centuries and centred
only on some specific cities of the world.
Pheriwallahs:- The first sales people

The first sales people in the US were yankee peddlers who carried
clothing, spices and household articles from one part of the country to
another part. In India they are called Pheriwallahs. These Pheriwallahs
move from village to village and sell sarees, dress materials and spices
mostly in the rural markets because rural housewives have lesser mobility
than urban housewives.
Pack Peddlers:- the shrewd, unprincipled tricksters:
The pack paddlers in India traded with the tribal Indians and
exchanged knives, beads and ornaments and handicrafts.They sold
coloured sugar water as medicine and cheated people from smaller gains. In
the beginning of the 19th century, these peddlers started using horse driven
carts and wagons and started stocking heavier goods.
Greeters and Drummers: intermediary to buyer
Wholesalers and manufacturers hired greeters and drummers who
would seek out and invite retailers to visit the display of the owner. The
drummers would meet the passaengers form incoming train and ship with
great fanfare to beat their competitiors. In the next phase, the drummers
started visiting customer’s place of business. There were fewer than 1000
travelling sales people before 1860 in the US who were basically credit
investigators and took orders for goods.
John Henry patterson- selling Techniques:- IBM
The techniques of modern sales management and selling techniques
were refined by John Henry Patterson, widely known as the father of modern
Uttamkumar YV.Department of MBA, BIT, Bangalore.

sales management. He ran the National Cash Registry. He asked his best
sales people to demonstrate their sales techniques to other salespeople. The
best sales approach was printed in a sales primer and distributed to all the
other sales people to follow. – Its the beginning of canned sales approach.
Mr. Patterson assigned to his people exclusive territories and quotas in
order to stretch their effort. He arranged meetings. He also sent regular sales
information on techniques of selling. Thomas j. waterson was trained by
Mr. patterson who later founded the IBM.
Modern sales Management:
Today the process of sales management has undergone numerous
changes in terms of strategy, practice and technological adoption to achieve
the desired goal. A sales person has become the information provider. The
real sales activity is now in retaining customers rather than just closing the
sale. This relationship approach has changed the scope of sales management
and research has found that is costs five time more to register a new
customer than to sell a product or service to an existing customer.
The Domain of Sales Management:
The domain of sales management has become multidisciplinary in
which sales manager have to manage a diverse workforce and complex
technologies. Sales manager have to perform duties such as recruiting,
selecting, training , motivating, forecasting, controlling and administering
people. They have to manage and satisfy multiple stakeholders such as
customers, suppliers, sales representatives and top management with the
objective of increasing sales and profitability.
Importance of Sales Management:

Sales Management is important for the following reasons:
- The amount spent on selling product is very high.
- Sales force is the primary contact point so much attention to be given
for improving the ability of selling through training and motivation.
- Personal selling is the most commonly used method of promotion.
- In most industrial markets , personal selling comprises the majority of
the promotional budget and is a significant part of overall budget.
- Customer consider salesperson as the company selling the product .
- With the advent of Internet technology and web based platforms for
interaction with customers, personal selling has become a method of
marketing communication which fosters personalized and interactive
dialogue with customers.

Personal Selling:
Personal selling involves prospecting, formulating prospect definition,
searching out potential customers, qualifying, determining requirement ,
relating and converting them.
Evolution of Personal selling strategies:
- The personal selling strategies have evolved over period of last 150
years. with the beginning of peddlers in the 19th century adopting
persuasion strategy to make sales.
- As competiton grew and buyers had a choice to opt for a particular
player, it became important for the salespeople to understand the need
of the customers, which called for the modification of products, prices
and other related services—Negotiation starategies became more
important than mere persuasion
- IN 1970s when salespeople called on the business and industrial
buyers, they were told to treat the customers not just as account but as
clients.Consultative selling required a seller to think like the buyer
- In the late 1980s and early 1990s, a lot of emphasis was put on the
mgt of territories and accounts as profit centres or as a business. He
must understand the production and marketing systems of a buyer.
The sales people were trained to practice business management
strategies at this phase
- The domestic and international competition, rising costs and recession
forced attention on the need to reduce cost of producing and
marketing goods. This was facilitated by a close working relationship
between the sales people and customers. This called the partnership
pahse in the evolution of personal selling.
Types of personal selling:
The approach is linked to customer choice, behaviour & risk involved
1. Industrial selling- selling to reseller
2. Selling to business users ;IBM sells Intel premium to campaq, HCL
3. Institutional selling : Xerox , Johnson and Johnson - providing
support to buyer business
4. Retail selling
5. selling to Government
6. Services selling
Types of Selling:
- Order taker sales people ( meeting already committed customer)eg;
inside order taker, Delivery sales people, outside order taker

- Order creator –Missionary sales people

- Order taker – Front line Salespeople , sales support salespeople
Emerging Trends in Sales Management:

The field of sales management is changing according to the changes in
the area of personal selling.
Technology
Customer Relationshi
Orientation p selling
Emerging
Trends
in Sales
Manageme
nt
Global and
ethical Diversity
issues
New selling
Methods

Customer Orientation:
The most important is the customer orientation in Indian organization.
Structures, systems, and process are designed around customers to give them
high value products and services, deliver more satisfaction to customers and
retain customers for a longer period. It calls for new method of sales
techniques.
New selling Methods:
The traditional selling process of individual salesperson calling on
individual buyer is fast disappering in many industries. It is observed that in
the late 1980s and 1990s many organization started using non-traditional
selling such as telemarketing, team selling, web based e-selling technique.
In the industrial sector, software companies have turned to cross-
functional selling for the sale of enterprise wide solutions A cross functional
selling team comprises of people across all the functions such as sales,
marketing, finance, operations and human resource so that a holistic picture
of customer’s problem can be snapped and solutions can be developed for
them.
A company such as priceline.com in the USA uses a web based sales
model and practices reverse auctioning as a successful method of selling.
Relationship selling:
This non personal form of intermediation is found in many sectors. The
basic objective of reorienting the selling strategies is to build relationship
with customers. This has changed the selling process from transactional
selling to relationship selling. The long term association between buyers and
sellers become the focus of business with the customers.
Ex:1. HCL technologies has full time employees at the client’s place for
solving any problems relating to computer hardware.
Ex:2 GE and other leading players have opened back office operations in
India to attend customer complaints.
EX:3 Jet Airways programe on Extra Miles for the frequently flying
customers.
Technology
Organisations are adopting technology and integrating their business
across departments. Technology is having an impact in two ways: in terms
of selling function as a whole, and also in terms of the performance of the
selling function by an individual sales person. New technology has made it
possible to automate the salesforce.Orgnaisations have integrated their
requirements with vendors and vendors have adopted systems which are
compatible to the enterprise-wide solutions of their customers.

Ex: Maruthi has a sales automation process whereby all the dealer networks
are linked to its production process at the Gurgaon plant and the production
of different types of cars are linked to the demand patterns in the market
place.
EX: Companies such as Archies and Hallmark use data derived from bar
codes scanned at the check-out counters of retailers to supply information to
their sales people.
Globalisation:
The global legislations such as GATT and WTO and the emergence of
legislation on environment make it binding for a salesforce to look at the the
emergine issues in the business world and take corrective action for the
business success. The growth in consumption in the emerging markets such
as India, china and Malaysia demands special attention to be given
structure, approach and nature of sales force and selling techniques.
Maintaing a certain level of ethical norm is a part of responsible
commercial success. There are ample cases of bribery and cheating in the
world of sales in Indian Market and organisation are being blamed and
ridiculed for the misconduct of business.
Ex: Modi Xerox as a company was found bribing people for selling its
office equipements and photocopiers in the Indian Market.
Qualities and Responsibilities of Sales Manager:-
Qualities:-
1. He should be a good communicator, catalyst, & planner.

2. He should be a prognosticator, & skillful manipulator.
3. He should be an amalgamator, a consolidator and orchestrator
directing efforts of many towards the achievement of common goal.
4. He should be a successful mentor who understands each individual’s
needs, self fulfillment, & economic growth.
5. He should be an innovator and creator of new ideas and promotion.
6. He should be an over achiever rising to the challenge of new forecast
each year.
7. He should be capable of handling unanticipated difficulties and
events.
8. He should be an opportunist and a worthy advisor.
9. He should be a team-mate, umpire, and referee.

Responsibilities:-
1. Sales planning and budgeting.

2. Estimating demand and forecasting of sales.
3. Determination of size and structure of the sales organization.
4. Recruiting, selecting and training of sale’s people.
5. Allocating of sales force and setting sales quotas.
6. Compensating, motivating and leading the sales force.
7. Analyzing sales volume cost and profit.
8. Measuring and evaluating sales force performance.
9. Monitoring marketing environment.
Elementary study of sales organizations:-
Sales organizations are structural entities, which execute a combined

sales plan and are designed to carry out mutually agreed goals with clear
structure, roles and responsibilities for each person. Group and
department.
Sales organization is organization of individual either
working together for the marketing of products and services
manufactured by an enterprise or for products that are produced by the
firm for the purpose of re-selling. It is also a structural body through
which the functions of sales management are carried out.
A properly designed organization is a:-
1. Vehicle for reaching goals; point of orientation.
2. Defined with roles, duties, rights, and responsibilities.
3. Contributes to building morale.
4. Receiver of sincere, morale, hard-working employees.
5. Co-ordinates various departments in achieving objectives.
Functions Influencing Structure:-
1. Product and service related factors.

FMCG products- organisation size large, flat at lower level
orgn, supported by
Large sales staff.
2. organization related factors,

Organization highly specialized & niche market- smaller

orgn.
Multiple channel/ varied market- large & complex.
Limited financial resources – intermediaries for distribution
If financial resource is sound- sell directly to the customer.
3. marketing mix related factors,
International operation –large size
Selective distribution- own outlet-simple orgn.
Price – low price no of customers large
High price  durables, small market size.
4. External factors:-
Intense competition- expansion – large size.
The customer and tradition used in the past.
Organization principles:-
1. Span of control: - No of sub and sales staff under the supervisor of an

sales Manager is known as span of control. When new recruits have to
be handled Narrow span of Control can be used or else wider span of
control is preferred.
2. Centralization and de-centralization:- the extent of control and
authority of the top management decides the level of centralization.
Highly centralized organisation- Every decision will be made by the
top management. Decentralization helps organisation to be
competitive at the respective market level.
3. Integration & co-ordination:- The orgn across departments
integrated to serve customer with effective co-ordination.
Organization Design:- refers to the formal and co-ordinate task of

assigning territories and establishing free flow of communication and
responsibilities of sales groups and individuals to serve customer
effectively. Structure should respond to environment, organization adopt
different kind of structures:-
1. Line Organization: - chief executive does the decision making and

decisions flow down the line for execution. The chief executive has all
the authority over the sales function. E.g.:- encyclopedia pritannica
India ltd.
The line organization of encyclopedia India ltd is as shown below:-

M. D
Fin/legal
Rector & Executive
Director
head of director &
education head of
Commercial new media
National Manager
sales
National
manager Accounts Sales mgr
executive
Sales mgr Dy sales

(North & mgr (east Sales mgr Asst prdt
south) & west) Mgr
Sales Prdt
Executive Executive
In pure line organization the senior sales executive has direct

control over their subordinates.
2. Organization Design by management function :-

Line & staff;
line – direct control over their subordinates.
Staff- right to give advice.
It contradicts the principle of unity of command.
The organization design is as given below:-
VP Mktg
Mgr mkt
Ad Mgr Sales mgr Research

Sales
People
3. Organization design by territory: - several areas are combined

together as a territory for assigning supervisor and then numbers of
territories are combined for sales manager.
Vice-president
Marketing
National
Sales
manager
Divisional Divisional Divisional

Mgr (east) Mgr (north) Mgr (west)
Regional
sales Mgr Regional Regional
sales Mgr sales Mgr
District
sales Mgr
District
sales Mgr District sales
Mgr
Sales staff
City wise
Sales staff
City wise Sales staff
City wise

Travel Times Ltd

 Sales persons clock to customers
 Quality of customer service (no of customers to be served is limited)
4. Organization Design by Product: - ELGI equipments ltd. Designed

on the basis of the product. Established in 1960. It has become multi-
product, multi-market company. At one level the company is divided
as a product orgn, where each prdt division is then divided by
function.
The organization design is as shown below:-
M.D
AEd Export
ROCD RCD Engines
D
R& FIN
A/C HR
D
President
mktg
RODC- rotary compressor divisor
RCD- reciprocating comp division
AED- automotiveVPequipment division.
Sales
5. Organization Design by Customer:-
Sales Mgr Sales Mgr Sales Mgr

Industrial Wholesale Retail sales
Customer
Sales man Sales man

Sales man

 Helps in buyee supplier interpractices.

 Helps in building successful customer relationship.
6. Combined Organizational Design: - combinations can be made on

the basis of poduct, function, Geography, or the customer.
Organization having a diversified prdt range & serving extreme
market use this structure.
The organizational design is shown below:-
President
VP Pdn VP Mktg VP HRD
Mktg Mgr
Mktg Mgr Internationa
India olllllllllllllll
lll
GM GM
Customer International
Care

Sales Process Automation:-

1. Information technology brought many changes.
2. Telemarketing, internet marketing, online selling has allowed large
corporate to automate much selling process.
3. Automatic order placement through electronic data interchanges
including (VOIP) voice over internet protocols, transaction through
electronic expert system, video conferencing.
4. Emerging organization design; most of the products turning to be
commodities, this puts pressure to reduce the cost- this give rise to:-
a. Agency & distribution selling- independent product business
with the contractual agreement with the sales organization for a
sale of its products.
b. Shared sales force- divide the sales force among the number of
division.
c. Telemarketing.
d. Team based selling ( sales force is grouped to solve customer’s
problem)
The organizational process:
 Understand organizational goals, sales goals,
objectives, product mix,Customers, how many sales
people are needed.
 Organize sales activities.
 Estimating the size of the sales force;
 Assign sales people.
 Establish accountability for sales position.
Estimating the size of the sales force;There are mainly three methods of
estimating the size.
e. Equalize workload
f. Incremental productivity
g. Sales potential.
Equalize Workload Method: - The following are the various steps

involved in the equalize work load method:-
Step1. Classify the present & potential customer according to sales potential;
Total Customers- 500

Class A (large) – 100

Class B (medium) - 180
Class C (small) – 220
Step2. Estimate the length of time per sales call and desired call
frequencies.
Class A: 30 min/call* 150 calls/year=75 hr/yr.
Class B: 20 min/call*210 calls/ year=70hrs
Class C: 15 min/call*160 calls= 40 hrs.
Step3. Compute the total work necessary to cover the entire market.
Class A: 100*75=7500hrs
Class B: 180*70= 12600hrs
Class C: 220*40= 8800hrs
28900hrs
Step 4. Calculate the total work time available per sales person.
Assumption: sales mgr specifies sales people ought to work 40hrs
per week.45
Weeks per year (allowing vacation)
40hrs/ week* 45 weeks=1500 hrs/year.
Step 5. Divide the total work time available per sales person by sales tax.
Selling task: 55%=990hrs
Non-selling task: 20%=360hrs
Traveling: 25%= 450hrs.
1800hrs
Step 6. Determine the total number of sales people required,
Sales people needed=28900hrs/990=29.2
Incremental Productivity Method:- According to this method, sales force

should be enlarged until the profits added by the last sales person hired just
equal the cost of employing that sales person.
Assumption: 1. Total sales volume directly varies with the number of sales
people.
2. Lost of goods sold remain constant at 70% of sales.
3. All the sales people receive a straight salary of $25,000
4. Each person receives 1000 per month for travel
expenses.
Currently there are 32 sales force, and the sales mgr wants to determine
whether or
Not to add more sales people.
Step1: estimate the increase in sales volume, cost of goods sold & gross
margin from adding each sp.

Sales person no sales roles cost of goods GM

33 $ 300,000 $ 210,000 90,000
34 225,000 157,500 67,500
35 150,000 105,000 45,000
36 75,000 52,500 22,500
Step2. Calculate the net profit
Gross margin- (sal+comm. +totalexp) =net profit contribution
33 $ 90,000-25,000+15,000+12,000= 38,000
34 67,500-25,000+11,250+14000=19,250
35 45,000-25,000+7,500+12,000=500
36 22,500-25,000+3750+12,000= -18,250
Add 3 more 32+3=35
Sales Potential Method: - Assumption; what the avg rep achieve in term
of annual sales volume.
N=s/p*(1+T) N= no of sales people needed
S= annual sales forecast for the comp
P= estimated sales productivity of the avg sales person.
T= estimated % of annual sales force turnover.
N=$10,000,000/500,000*1.20=24.
Sales Forecasting
Meaning:
A sales forecasting is an estimate of sales in dollars, or physical
units in a future period under a particular marketing programme and
an assumed set of economic factors outside the unit for which forecast is
made.
Purpose:
-viewed as a central part of strategic planning
- starting point for sales, marketing planning, production, scheduling,
cash flow projection, financial planning, capital investment, procurement,
inventory management, Human resource planning and budgeting
- improves efficiency and effectiveness of the managers reserve
allocation process.
Sales Forecasting Techniques:
Generally, there are two approaches to sales forecasting
a) Break Down approach b) Build up approach

a) Break Down approach:

1) Start with a forecast of general economic conditions.
2) Estimate the Industry’s total market potential for a product
category.
3) Determine the share of this market that the company currently
holds and likely to attain.
4) Forecast sales for the product.
5) Use the sales forecast for operational planning and budgeting
b) Build up approach
Simply asks individual what they expect to sell in the coming period
or surveys customers about what they expect to buy and then sum
their responses for a total forecast
Sales forecasting techniques can be classified in to two:

1) Non – quantitative techniques
Judgemental Methods
a) The jury of executive opinion
b) The Delphi Method
c) Sales force composite method
Counting methods
a) survey of buyers intention
b)Test Marketing
2) Quantitative techniques
Time series anaysis
a) Decomposition method
b) moving average method
c) Exponential smoothing
Causal or association method
a)Correlation/Regression Analysis
b)Econometric Models
c) Input/output Models
Non – quantitative techniques:

Non quantitative techniques can be further classified into two.
Judgemental method and Counting method.

Judgmental Method: Use judgment, mere extrapolation of last

period sales will give the best estimate of next period sales.
a) The jury of executive opinion: A jury may consist of company

president and several executives from different functional areas
calculating rough average of their opinion yields the sales forecast.
Advantages: can be done easily and quickly
Disadvantages: highly subjective, not closely attended to market place.
b) The Delphi Method: Developed by RAND Corporation, it depends on

the advice of a group of experts.
s1: Expert panelist are asked to make their forecast anonymously and
then send them to group coordinators.
s2: Coordinators analyze the forecast and sends each member an average
forecasts. (Opinions, beliefs, expectations can be re- evaluate and
changed but without the dominant influence of any one participant).
s3: Each expert is asked to submit another forecast again revise feed back
from the coordinators. This process continues until a near consensus is
reached.
c) Sales force composite: it combines each sales person’s estimate of

future sales in his or her territory into a total company sales forecast.
The total forecast is then analyzed, adjusted and compared with forecast
from other sources.
Counting Method:
a) Survey of buyers intention: - Customers are sampled and asked about

their intention to buy various products over a specified period. All the
responses are then combined into one forecast.
Advantages: Determined by product users,Relatively fast and
inexpensive, Viable technique when there is no historical data.

Disadvantages: Expensive in market where buyers are numerous. Buyers’

intention can be inaccurate.
b) Test Marketing: It is a “full dress rehearsal” conducted in limited

market area to obtain consumer reaction prior to expanding to and the
regional or national market.
Measures of market share (based material and repurchase rates) in these
small markets can be scaled up for forecasting sales in the total market.
Quantitative Forecasting Techniques:

There are two types of quantitative Techniques: Time series analysis
Causal or Association method
a) Time series analysis: Focus on historical data, analyze past data to

predict future sales.
4 basic factors or types of measurement taken into consideration:

 Trend (T) :- upward or downward movement ( development in
technology, capital formation)
 Period (P) :- consistent pattern of sales movement (seasonal
variation)
 Cyclical (C):- wave like movement, often irregular in occurrence.
Market affected by cyclical fluctuation.
 Erratic (E):- are time specific event. (war, strike)
Y (sales) = f (T, P, C, E)
a-1 Decomposition Method:
- Isolates the components of time series data

- First seasonal pattern is removed, then cyclical element, finally
forecastors considers the input of erratic movement.
Step1: Consider the set of actual data. To remove the seasonal fluctuation
from the data to make them comparable to normal sales figures, multiply
these historical sales figures by seasonal index.

Historical Sales 3 year quarterly Seasonal Index

average
Year
Quarter 2003 2004 2005
1 110 113 120 114.33 0.85
2 98 83 99 93.33 0.69
3 150 142 149 147.00 1.09
4 190 193 193 183.67 1.36
Note: Sales are cited in units:

 First quarter seasonal index 114.33/134.58 = 0.85
Second quarter 93.33/134.58 = 0.69
 3 years total sales of 1615/12 quarters = 134.58
Average sales per quarter.
-Sales increased from 98 to 150 between the 2nd and 3rd quarter of 2003,
indicating a rising sales trend of 52 units per quarter. A simple line extension
forecast for 4th quarter would add 52 units to 150 for a sales forecast of 202
units.
-But the following table shows that there was no significant increase in sales
once the seasonal pattern of sales is removed:
Deseasonalised sales Year

quarter 2003 2004 2005
1 129 133 141
2 142 120 144
3 138 130 137
4 142 124 142
 Sales in units are compiled by dividing actual sales by the applicable

seasonal index
110/0.85 = 129, 98/0.69 = 142
To transform the deseasonalised sales figure multiply by appropriate
index. Seasonally admitted sales in 2nd quarter 2003 -142, then estimated
sales for 3rd quarter would be 142 times the seasonal index for the
Since actual sales for 3rd period of 2003 were 150(1st table) our forecast
missed only by 3.3%. If the sales data had not been deseasonalised the

forecast for the 3rd quarter would have been off 5.3% (142-150)/150 =
-5.3%.
Actual (missing) is 3.3% [(155 – 150)/150] = 0.33%
Instead of relying on just one period to predict sales, time series frequently
use several periods of historical sales.
a-2 Moving Average method:
F t+1 = St + St – 1 ………. St – n + 1
N
Where: Ft + 1 = forecast for the next period
St = Sales in the current period
St – 1 = Sales in the previous period
n = number of period in the moving average
a-3 Exponential smoothing:
- moving average is sufficiently responsive to the most recent

trends (Exponential smoothing overcomes this)
- Exponential smoothing modifies moving average method by
systematically stressing recent sales trend while de-
emphasizing old sales data.
Ft + 1 = α St + (1 – α) Ft
Where: Ft + 1 = time period that is to be forecast

α = Alpha or smoothing constant
St = current period actual sales
Ft = current period forecasted sales
b)Causal or association Method:

It attempts to find the factors that affect sales and to determine the
nature of that relationship. The correlation –regression is one type of
causal method.
Correlation-regression analyses:
Correlation: variables are studied simultaneously to see whether they are
interrelated, or move together in some way. This technique tries to find
correlations without implying cause and effect.
Regression: attempts to predict how one variable such as sales is affected
by change in another variable, such as advertising expenditures .Both
correlation and regression analyses usually start with the graph of paired
data values, or a scatter diagram.
Simple Regression:
Year x Sales xy X2
(units)Y
1 43 43 1
2 52 104 4
3 73 219 9
4 71 284 16
Sum 239 650 30

10 59.75
Avg.
2.5
Y=a+bX
b=n∑XY-∑X∑Y/

Module-2
Selling skills and selling strategies
 Selling skills are the most important requirement for the sales people
as to meet Organization goal, increase organization image and to
retain existing customers. Selling skills helps sales people to establish
and maintain long term relationship with customers.
 The selling skills can be acquired by sales person through proper

training and exposures. As the sales job is more stressful in nature,
(because most of the times he is away from his family, meeting
different types of customers), the salesperson should posses right kind
of skill to cope up with it.
Selling & Buying Styles :

 Buying styles vary depending on the buyers capability to pay, quantity
of purchase, the buyers ability to take risk, bargaining power, the
competitive landscape in the industry.
 Buying styles of different buyer
Consumers buying styles:

Innovators
-Adventurous and have high risk capital are the overnight buyers.
-mostly buy on impulse and consider non functional reasons for
making a choice
laggards
accept new products and innovations after observing the innovators

using it.
Rogues theory of diffusion
Assumption: Innovators spread across the society in a pattern that is
similar to normal distribution curve
Innovators: -doesn’t give much important sales person
Risk avertors
Always take multiple variables into consideration before they make

final decision
Business Different Groups of business has different pattern
2Business of buying: 1. Government organ- looks for lowest
buying styles bid;2. some organisation considers quality as the
important criteria, 3. still others has centralized
decision making/ decision making committee.
Selling and buying style(Robert Blake and Mouton Model)
(1, 9) (9, 9)
(5,5)
Concern for customer
(0, 0) concern for sales (9, 1)
Blake and Mouton model distinguish various selling styles by analyzing a

salesperson’s concern for the sale and the customer. How much concern the
sales person has for selling his product, and what level of importance he

gives to the customer are the two dimensions used for developing the matrix
of selling styles. Typically a salesperson,who only pushes his product
without considering the buyer needs has more concern for sale. On the
otherhand, a salesperson who always responds to customer’s needs and
present his product as the optimum solution to the customer’s problem has
higher concern for the customer.
(1, 9) People oriented – I am the customer friend; I want to understand him
& respond to is feelings and interest so that he’ll like me. It’s the personal
bind that leads him to purchase.
(9, 9) Problem solving oriented – I consult with customer so as to inform
myself of all the needs in his situation that my products can satisfy we work
towards a secured decision on his part, which yield him the benefits he
experts from it
(5, 5) sales technique oriented – I’ve tried an effective routine for getting a
customer to buy. It motivates there a blended personality and products
emphasis.
(1, 1) Takes it us leave if – I plane the product before the customer and it
sells itself as and when it can.
(9, 1) Push the product oriented – I take changes of the customer and hard
sell him, pilling on all the pressure if takes to make him buy.
SELLING SITUATION:
A typical selling situation explains what kind of customers a
salesperson is going to face and what kind of sales approach will help him
in closing a sale in that situation. When a person makes a sales call to an
individual customer for an insurance product or a mobile connection, he a
faces a situation where the customer either explains his status and intention
of buying or addresses his needs to the salesperson.
- In organizational buying the customer represents a group interest such as
the purchase department of an organisation, and buying pattern is based on
the basis of set parameters.
- In service and solutions selling, the customer does not come with a
specific parameters, and during the sales presentation the customer may
unravel his problems, identify his interests, and develop his criteria of
choice.
-In a retail selling situation, the customer walks into the counter with an
intention to buy a product, whereas in cold calling and door to door selling,
the salesperson looks for potential customer.

-In the case of pharmaceutical selling the sales person makes a sales
presentation to a doctor who is not the original customer but customer’s
decision making largely depends on what the doctor prescribes.
- In creative selling, the salesperson tries to sell an abstract thought to the
customer, eg., an advertising campaign presentation.
Maintenance selling:
Maintenance selling involves the art of servicing the existing accounts,
securing promotional cooperation, counting inventory and taking
replenishment orders and delivering the products. In the IT sector, these
salespeople are posted at the client site and are responsible for solving the
client’s problems.
Developmental Selling:
Salespeople engaged in developmental selling are called business
development sales executives as they try to contact the potential customers
and build business for the firm. They are the real salespeople who try to do
prospecting from the leads either available in the organisation or collected
by them, and then take the prospect through the whole process of selling to
realize a sale.
Rogues theory of diffusion

Assumption: Innovators spread across the society in a pattern that is similar
to normal distribution curve
Innovators: -doesn’t give much important sales person
Theories of selling
AIDAS
Right set of circumstance - seller oriented
Buying formula theory of selling – buyer oriented
Behavior equation theory – buyers decision process
AIDAS
 Securing attention – have a good start, proper attire, show genuine
smile.
 Gaining interest - provide sample, sales portfolio, visual aid-when

the prospects drops hints make a note of it, and ask question from that
 Kindling desire – keep converging along the mainline towards sale

 Inducing action – some use tricks to close . Some ask straight forward
d yes or no answer question- better straight forward
 Building satisfaction – thanking for order, follow up
Right set of circumstances : (situation response theory )

“Every thing is right for the sales”
Present proper stimuli
“Lets go for coffee” - sales present -external coffee, go out -internal
Buying formula theory of selling :
Identify what goes in the mind of buyers – help buyers find solution
For purchase, Trade name must be adequately considered.
Need – solution – purchase
Need – product –trade name – purchasing – satisfaction
Behavioral equation theory (J.AHoward)

1. Drive – internal stimulation that impact the buyer response
2. Cues – weak stimuli that determine when the buyer would respond
Product cues : color, package
Influence cues : external stimuli that prescribe about product
3. Response is what buyer does
4. Reinforcement : is any event that strength buyer’s tendency to make a

particulars response
JA.Howard incorporated these 4 elements

B = P * D * K * V (The retain among the variable in multiplicative)
B = internal response tendency, the aid of purchasing a brand.
P = predisposition or the reward response tendency (i.e) force of the habit
D = “Incentive potential “ – the value of potential satisfaction to buyer
V = intensity of all user

SELLING SKILLS:
The prominent myth is that the successful sales persons are born; but
the evidence shows that the skills can be acquired through scientific way of
learning. The following are the skills required for a successful sales person:
I)Communication skill:
In order to be successful, a salesperson should
- possess good knowledge in vocabulary
- able to intelligently express
- able to understand non-verbal cues of customer.
The entire business of modern day sales rests on building a good
relationship with customers. The relationship becomes long term when it is
built on mutual trust. The following five elements of mutual trust revolve
around the communication.
1. Truth of words communicated by the salesperson
2. Predicability of action
3. competency(ability/knowledge/resource)
4. Intent or empathy
5. Likeability( It is an emotional issue and difficult to clearly define, but
can be understood as a perception of commonality of both the parties)
 communication process: The communication is established by
exchange of ideas through a medium. The communication
process may be disturbed by noise and other psychological
barriers. (pre-occupation with certain messages, self focus, self
–defensiveness, experiential, superiority, egocentrism, selective
attention)
 Managing Body Language:
• Personal appearance: The first impact of customer or
potential is created by the personal appearance(dress,
hairstyle, and overall appearance)of the sales person.
Even before the salesperson speaks the first word, the
potential customer starts making perceptual inferences
about the salesperson and visualizes the way he is going
to talk and do the sales presentation.

• Posture: conveys wealth of meaning in one ways. The

way one stands, and walks , mobility and other parts of
body-reveals personality about how one is vibrant, alive,
dynamic, nervous, jittery.
• Gestures: Playing timed well can drive a point home
faster than anything else in interpersonal
communications. Playing with a ring, twisting a key
chain robs effectiveness of a salespersons presentations.
Oral communication are also accompanied by gestures as
gestures enhance the impact and value of what has been
said.
• Facial Expressions: The face is the most expressive part
of the body. A smile as a symbol of friendliness, a frown
as a symbol of discontent, raising of eyebrows as an
expression of disbelief, or tightening of jaw muscles as a
symbol of antagonism can add to meaning conveyed
through verbal means.
• Eye contact: Eye contact with customer is important
aspect of the body language. Eye is believed to be an
extension of the brain and a window to the soul. Stess
should be laid on continuous eye contact between the
sales person and the potential customer because it is an
expression of sincerity of the seller and attentiveness of
the customer.
• Space distancing: A zone of 4-12 feet is maintained when
it is a formal presentation. Each salesperson maintains a
personal space around himself. This is known as social
distance. Space distancing differs from culture to cuture.
 The sales person should alert to the attitude of the
customers and should not be surprised by the
change in the customers attitude during the
presentation.
 occasionally there should be spells of silence on
the salesperson’s part because these spells of
silence will allow the salesperson to garner new
points and ideas regarding customer reaction.
 The salesperson should always be courteous and
cheerful and should show interest in what
customer say.

II. LISTENING SKILLS:

The salesperson has to be a very good listener and use his listening
skills to lead towards sales realization. It is generally observed that
salespeople spend more time in receiving communication and information
than in transmitting it. Listening is the active search of meaning in the
message received.
Research suggest that people are only 25% efficient in their ability to
listen. An average person remembers only about half of what is being told to
him after 10 minutes,and forgets half of that within 48 hours. When people
are asked to replay what has been told to them, they mix up various things
and present the matter in a different order form the way was presented to
them.
There are 3 types of listening:
1. content Listening –when someone listens to a sales
representative(medical rep), he is engaged in content listening. The
objective of content listening is to understand and retain the speaker’s
message.There is a little scope for the agreement of the message.
2. critical Listening: - The objective of this listening is to understand and
evaluate the meaning of the speaker’s message at several levels.- the
logical level of argument, the strength of the evidence, and validity of
the conclusions.—when the area sales manager presents sales plans,
the divisional manger listens carefully and evaluates it.
3. Empathetic listening: The objective is to understand the speakers
feelings, needs, and demands so that it can be appreciated by the
listeners irrespective of the fact whether he likes it or not. Here the
sales person should avoid the temptation to give advice, and should try
to judge the individual customer’s feeling.
The process of Listening:
Attendanc Interpretatio Remembranc Evaluation Response

e n e s action
Levels of Listening:
Feedback prepharasing clarification Emphathetic Active

listening Listening
1.Feedback- is fundamentally the reaction of the customer to a sales call.

2.Paraphrasing- a salesperson tries to paraphrase the question by mirroring

the questioner’s point. For ex. The sales person may say, ‘so what you are
saying is you think that I am just giving the company line, whereas what you
really need is more help in financing and on the spot service.
3.clarification of the issue: It involves working little harder with the
customer’s words to identify his real concerns.
4. Emphathetic listening:
5. Active Listening: Salesperson identifies the emotions underlying the
customer’s words.
Barriers to Listening: There are various barriers to listening that include
physical and mental barriers. Prejudgement is the most common barrier to
listening. Many listeners are also guilty of self-centeredness.
 Salespeople should try to depersonalize the listening so that they can
decrease the emotional impact of what is being said.
 They should listen to the customer’s idea of the product and the price,
and try to distinguish between facts and arguments by applying their
own market knowledge.
III.CONFLICT MANAGEMENT SKILLS:

Conflict exist in every organisation. Conflict in sales organisation is
more evident than in any other organisation. (eg.)A sales manager wants his
salespeople to cover the territory as thoroughly as they can whereas the
salesperson is interested in realizing the desired sales through a few loyal
customers. The vice president –sales is interested in getting better results
from the same cost to show the board that resources are being used
efficiently.
Conflicts can be classified as
a. functional-support the goals of the group and improves its
performance
b. Dysfunctional – hinders group performance
c. Task conflict-disputes over the content and goals of the work
d. Relationship conflict-tussle based on interpersonal relationship
e. process conflict-fight over how work gets done
Models of conflict:
Dollard and Miller model: apporoach-approach; approach-avoidance;
and avoidance-avoidance( attractiveness of options of parties)
Rummel’s model: differentiates between conflict structures, conflict
situations and manifest conflicts.
Components of Conflicts:

Interests, emotions, and values
The conflict Management Process
Stag2: Stage3: Stage4: Stage5

Stag1: cognition and Intentions Behaviour outcome
potential personalistaion
opposition or
incompatibility
Perceived Increased
conflict Conflict group
handling performance
intentions
Competing
Antecedent Collaboration Decreased
conditions Compromising Group
Communication Avoiding performance
Personal accomadating
variables
structure
Felt conflict

Overt
conflict
Sales And Retail Management party’s
behaviour
others
IV. NEGOTIATION SKILLS:
reaction
Negotiation occurs when someone else has what
you want, and you are prepared to bargain for it and the vice
versa.Successful negotiation is an attempt by two parties to achieve mutually
acceptable solutions, which does not result in a winner and a loser. For
TATA & Maruthi Udyog price has been the only element of negotiation.
Negotiation are very important in selling because majority of selling is done
without a list price.
situations and timing for negotiations:
 when many variable factors bear not only on price but also on quality
and service
 when business risks involved cannot be accurately predicted
 when a longer period of time is required to produce the items
purchasd
 when production is interrupted frequently because of numerous
change orders.
Bargaining is appropriate whenever the five definitional conditions are met
and a zone of agreement exists.
Sellers S Seller wants to

reservation sellers move c up
price(seller surplus
wants s or
more)
final contract X Zone of Agreement
Buyer’s Buyer want to

reservation Buyers move x down
price(buyer surplus
wants b or less) b
If two parties are negotiating price, each establishes the

threshold value that it needs. That is, the seller has a reservation price, s,

which is the minimum he will accept.Any final contract value say, x which
is below s represents a price that is worse than not reaching at an agreement
at all. For any x>s, the seller receives a surplus. The seller desires as large a
surplus as possible while maintaining a good relation with the buyer.
Simillarly, the buyer has a reservation price b, which is the maximum he
will pay. Any x that is above b represents a price that is worse than no
agreement. For any x<b, the buyer receives a surplus. If the sellers
reservation price is below the buyers price, that is s<b, then a zone of
agreement exist and bargaining will determine where x will fall within the
zone.
The purpose of negotiation is to produce better results than what one
would have got without negotiating. This result is known as best alternative
to a negotiated agreement(BATNA). BATNA is the standard of comparision
that can protect a salesperson from accepting unfavourable terms and
rejecting favourable terms. It is the standard against which the proposed
agreement should be measured. Recognising of BATNA early in the
business negotiation process helps the sales manager to be successful and
gain more than the BATNA.
V. PROBLEM SOLVING SKILLS:
Besides the negotiation skills, one also needs problem solving skills
for effective selling. The relational and consultative selling approach states
that a salesperson should not be a mere order taker; he should rather act as a
problem-solver and consultant to the customer. These roles are more
significant for high-tech selling and business to business selling. The
objective is to pick up the best solution for the customer and organizational
problem so that the salesperson becomes an engine for growth of the
enterprise rather than only a person in charge of transfer of ownership of
products and services.
1. Define the problem(did it arise at the level of the sales
rep)
2. Explore the problem(identify all the available
information)
3. identify the present and desired state
4. use Dunkers Diagram-which helps to obtain solutions
that satisfy the criteria set up by the stating the desired
state and present state.
5. statement restatement technique- look at the fuzzy or
unclear problem situation and write a statement
regarding the challenge to be addressed.

6. Evaluate the solution by measuring up its performance

against the implementation plan and its ability to solve
the orgl. plan.
SELLING PROCESS:
Selling follows a sequence or a process. The process vary from one situation
to other situation.
“The selling process is defined as a process by which a salesperson
identifies and locates the prospects, separate the prospects from suspects,
approaches them and makes sales presentation, handles their objection
and closes a sale.
Pre-sale Prospecting Pre-approach Approach to

prepartion before the the
interaction customer
Closing the Handling Sales

Follow up sale objections presentation
action
The Selling process

1.Pre-sale preparation: The sales person has to prepare himself with the
product knowledge, Benefits, style, price. Company knowledge, history,
finance, management, size, policies, procedures, competitor knowledge. The
product Information checklist can be helpful in this regard.
2.Prospecting: It is the process of identifying potential customers who have
a need for the product and service offered by the company, the ability to pay
for it, and the adequate authority to buy it.
3 sets of customers. 1. Lead customer (desire to buy but no purchasing
power). The sales person should have a screening skills. 2. Prospect ( with
the prospect, the sales person should identify the stage of decision making);
3. Qualified prospect ( they are in need, but they need to be further
persuaded)
3.The process of prospecting:
a b c

Searches for Qualify

Identify and sources of prospects from
define prospect potential suspects
customer
a)Identify the attributes and features the prospect expect; find out the
urgency for the need for the product, ability, credit payment, authority to
buy, and dept involoved in buying.
b)Collect data through surveys, queries and trade association, magazines.
c)ranks the prospects according to the need indicators, accesability indicator
and sale person fit indicator.
- Use MAD (Money –Authority-Desire) principle to qualify prospect.
Methods of Prospecting:
1. Cold canvassing – door to door sales call
2. Endless chain customer Referral( from cutomer to his friends and his
relatives to their friends and relatives)
3. Prospect pool( collected from telephone directory , mailing list )
4. Centres of influence( Business, political and religion)
5. Observation –For Key Telephone System ie. EPABX, executives
observes costruction site to find out the potential customer
6. Non-competing salesforce,7. Friends, 8. Directories 9.
Telemarketing.10 Trade shows and demos.
4. Pre approach before selling:
The sales executive has to devise strategy to match the customer data
with the product attributes. Different personality elements indicate
different selling strategies ( Whether a customer is price sensitive, --
propensity to bargain, )
During the product introductory stage the customers demand
more information whereas the product which is in the last stage require
price concession, credit payment.
Selling process explains, helps in developing selling strategy,
estabilising call norms and objectives, and to decide about the
differential advantage offered to the customers.
4 steps involved in this process:
1. Determination of call objectives( sales call in the first instance or to
get permission to make a demo)
2.Devlopment of customer profile
3. Determination of customer benefit
4. Determination of sales presentation
5. Approach to the customer:

It is better to fix appointment over phone. The objective of

approaching the customer may be for getting attention, removing any
inhibition, gaining prospect respect and mind and arousing interest for
presentation. There are various approaches used ( benefit approach, referral
approach and Introductory approach). At this stage, the sales executive
probe insights by asking questions.
6. Sales Presentation:
During sales presentation, the salesperson features presentation with
customer benefit. The salesperson has to keep in mind the level of interest
and time available. In a typical presentation, the salesperson presents the
product, customer accepts or objects and demand explanation or stays
indifferent, doubts potential of the product, and sometimes gives no clear
reaction.
A sales person can follow the AIDAS approach to sales
presentation( AIDAS discussed in the theories of selling part).
Methods of sales presentation:
Generally, the presentation can be classified as oral or written. The
following are the further classification.
a)canned presentation: ( prepared by company, there is a little scope for
modification, new sales people can follow this method)
b)Organised presentation: Developed on the basis of information collected
from field research. It helps in maintaining company marketing plan due to
adherence of company guidline ( allows flexibility and it encourages
participation)
c) tailored presentation. –Emphasis buyer demands and designed to specific
customer.
A sales proposal should convey 5 proposals:
1. Tangibility ( proposal should enhance salesperson message)2.
Assurance( should build trust) 3. Responsiveness( The proposal should
invite purchase responsiveness)4.Reliabilty 5. Emphathy.
7.Handling Customer Objections:

It is human to raise objection about the new product and services.
Objections can take forms doubts, minor objections and major objections.
Sales personal normally answers to objectives in the form of demo,
sampling, and by providing additional information ( Additional information
can be supported by reports of the products published in media, quality
certificate. Parapharases the objections as a question.

10 Excuses customer use on the sales people:

1 Denial – I don’t need 2. Blaming- It’s not my responsibility, my boss will
not like it. 3. Minimising- new idea will not do much for us 4. I have
choice, get along with majority 5. Reframing reality- we are limiting number
of suppliers 6.Alibi- I don’t have money, I don’t have authority. 7.
Justification- we do have need but currently busy with re-organisation
8.Derogation – I have heard this product give night burns 9.
Helplessness( It’s out of my hands, I cant do anything now. 10. Yes…..but
( it’s a fantastic idea, it will not here, it looks inexpensive but we cannot
afford it.
Method of Handling Objections:

a)Superior feature method- accept objections, persuade them through
providing additional advantage.
b) Yes… but Method.- ancient method- sales person agrees at the
beginning and slowly makes an effort to remove the objections
c)Reverse English Method: Change the customer objection in to the
basis of buying.
d)Indirect denial Method: denies the objection cleverly and but
indirectly by giving affirmative answers to the objection
e)Pass-out method: sales person does not pay attention to the customer
objection and expressed neutral opinion . when objections are baseless, they
pass off without attending to it.
f)Comparing method
g)Direct denial – rejects the objections outrightly and then build up
his presentation
h) another angle method- advises customer to look from another
angle, which is positive for the product
i) Question or Why method: Ask question again and again without
any break and try to get suitable answers form the customers themselves.
7.Closing the sale:

Many use questions “ will you buy” ? to close the sale.

Methods :
a)Assumptive close – assume the sale is made and proceeds to issue such as
writing address. Handling a prospect a pen to sign.
b)Caution Method: Make the customer cautions about the availability and
period of availability and request the customer place order
c)Special Induce Method: Remaind promotional scheme by telling the
period of promotion (valid date)
d) Direct to order method: consumers will come toward to place order
e) ownership suggestion (emotional)- should impress upon the social
standing by owning the product.
8. Follow up action:
It begins by thanking the customer after a sale. In case of failure in
sale, it helps in building up of customer interest and in generating repeat
sales after a deal.
After sales service is an important part of the selling process. It
assures that the order will not be cancelled and it paves the way for building
confidence and establishing relationship with customer for future revenues.
Follow up is the way for evaluating the competitive sales move. It
also helps in cross selling and upselling company products. It helps
salesperson in maintaining goodwill and for taking corrective action.
MODULE -3
MANAGEMENT OF SALES TERRITORY AND SALES

QUOTAS
Introduction:--
 Sales Territory: -- is defined as a group of present and potential

customers assigned to an individual sales person, a group of sales
person, a branch, a dealers, a distributor or a marketing organization at
a given period of time.

Definitions:\
David , Still &cundiff—grouping of customers & prospects assigned to an
individual salesperson.
Manard & Davis—basic unit of sales planning and control.
A well planned territorial design for example, helps in matching the selling
efforts with the sales opportunities in that market.
Sales Territories are generally designed on the basis of Geographical areas

but there are sometimes companies decide to build territories on the basis of
the urgenc frequency requirements of customers—A sales territory helps in
better sales planning and effective operational control.
Advantages: —better market coverage, effective utilization of salesforce,

efficient distribution of workload among people, convenient way to evaluate
performance, no enchroachment, understanding customer<-> better serving.
Companies help to get insight (for sales people) for their own territories.
Disadvantages—Many organization do not plan territories and orgaise

sales on the basis of geographic divisions.This include newly established
enterprises, organisations where sales are achieved more through personal
relationship rather than professional approach, and oraganiations selling
highly sophisticated and technically complex products.
Size of sales Territories:

There are various factors influence the size of a sales territory.
Density of the population, population spread within the territory, nature and
demand of the product, mode of physical distribution, the selling process
and transport and communication facilities.
If the product is a consumer durable with a longer shelf life, the
company may prefer to have a larger territory compared to smaller territories

for the perishable commodities.Territories can be established on the basis of

the nature of the product, namely consumer, industrial and durable and non-
durable.
When companies decide to go through intermediaries they prefer to
have a larger territory. On the other hand, industrial buying, where bulk
order booking is done by a salesperson, or in situations where a company
also handles the retailers, the size of the territory is kept small.
DESIGNING OF SALES TERRITORY:

Designing a sales territory is one of the most difficult jobs for sales
managers. Various factors like Size organization; quality of sales person
level of competition ,Level of Customer Support required considered while
designing the sales territory.
Territorial design is done when the market grows to such a size that it
is not possible for the same sales force to cater to the market. it is time
consuming, and manual process where chart, maps and topographical data
are taken into account. Salespeople at Marico Industries, for ex. use
Geogrpahic Information systems software to design territories.
Step 1—Select geographic unit-

The most often used units are states, counties, zip code areas, cities,
metropolitan areas and trading areas. Many companies have used state
boundaries in establishing territory boundaries. A state may be an adequate
control unit if used by a company with a small sales force. The county is
much smaller unit than the state and acts a better focal point for dividing
territories. Another control unit used for establishing sales territories is the
trading area. The trading area is a geographic region that consists of a city
and the surrounding areas that serve as the dominant retail or wholesale
center for the region
Step 2:---Decide on the criteria for allocation

Once the selection of the basic geographical control unit is complete,
the next task is to analyse the consumer a characteristics, buying patterns,
market share data and the competitive position of a firm in order to identify
both the present and prospective customers on the basis of information such
as sex, age, group, likes and dislikes, requirements and standard of living.

Many Indian firms take into account 3 key factors while deciding on
the size of the territory.
1.The customer base compreses of current customer, potential
customers’size and geographic size interms of square kilometers or square
miles to be covered by the salespeople.
2. Market Potential
3. Topographical data
step 3: Decide on the Starting Point:

After ascertaining the sales potential in control units, the sales
manager should form tentative sales territories as the starting point by
selecting geographic location. A common choice is the location point( often
the residence of the salesperson) This is done to avoid the relocation cost of
the salesperson and provides emotional support by keeping the salesperson
closer at home with his family and relatives.
There are 3 types of territory shapes that affects sales expenses and
coverage and time:
Circle- Salesperson located at centre- Maruthi, Hyundai follows this(urban
Market)
Wedge- radiates from densely populated to smaller rural area(both urban and
rural)
Clover Leaf –when accounts are distributed randomly
Hopscotch – sales person starts at the fartherst point from the office and
makes call on the way back to office
Step 4:-- Combine control units adjacent to sales territories

Once the decision about the starting point is taken, the sales managers
then combine control unit to build up the market. The sales manager keep on
running total on the allocation criteria for each newly designed territory.
Step 5:-- Allocates criteria and workload Analysis
-Compare territories (customer per square mile and support detail outlets per
square mile)
Many times, small and large territories in a particular geographic spread
may have an equal potential on customer size. In such cases there is a need
to allocate control units on the basis of traveling and call norms in order to
reach customers. Adjustment is made keeping in view the sales potential,

customer size, market growth rate and sales expenses involved in the market
coverage.
Workload analysis consist of how much of selling effort is require to
meet the sales objectives for a given region.( Refer sales organisation
chapter for workload analysis)
Strategic planning matrix

To determine account call rate, Account planning matrix is used
here.There are two dimensions; 1. Overall opportunity rate 2. Firms
ability to produce
--2 dimension—Overall opportunity—high flow

--firms atrocity to capitalize
High Low
High opportunity/sales organization Good opportunity- Forms overcome
have different advantage company disadvantage
Strategy:- commit high level of Strategy:- Improve the position and
research to take advantage tarde advertising of opportunity
Stable opportunity Little opportunity
Strategy:- Allocate model of research Strategy:-Either commit a minimum
to retain current advantage level or conduct abandoning account
together
Strong Weak
Account planning matrix uses computer simulation model for taking

decision on call norms for the accounts. A popular computer program
( call plan –Xerox) response function to each account is generated
from each salepersons input.
Step 6: Assign Sales force to New Territories

After determining the final form of sales territories and making
necessary adjustment in tentative sales territories, the last step is to assign
the territories to the individual sales force. Suitable salespeople are
appointed for each territory and the exact responsibilities are assigned to

these people. This is done keeping in view the characteristics of each

territory, needs of the territory, and the appointment of intermediaries.
One of the important factors in the territory designing is that the
boundaries of the territories are never kept constant and evolve over a period
of time, depending on the nature and number of customers in these areas.
Use of information technology:

A modern day sales organisation uses IT enabled service and
computer programs for deciding on the sales territories, workload & call
norms
Computer program also used for Territory mapping, simulation,
optimization of Route and call norm behavior
--Sales Manager feeds basic data Market potential, use of
Present accounts, homes location of sales people, geography boundary of
control units and
 Drawtentative territory boundaries.
Revision of territory:-
Sales manager may need to revise territories at time to cope with
challenges.
 Reason—
-Revision is needed if a territory is over estimated.
-Where the territory is too small for a good salesperson
- overlapping territories
-Environmental changes
Effects of Revision—“built mut”—damage morale
--Compensation adjustment
--guarantee previous level income

\
SALES QUOTAS
Meaning :
Sales quotas are the targets that salespeople try to achieve within a
specific period of time, which contributes towards achieving the
organisational goal regarding sales forecasts.
It is an expected performance objective –routinely assigned to the sales

units, such as depts., divisions and individual.
Quotas are established in terms of sales volume, profit or Gross margin,

expenses, activities or some combination of these.
 Importance:--
--divise in strategic planning
--Standard to specify derived level of performance
--guided by time element/controlling tool
--lead organization towards management by exception
(Mgt focuses on highly performance oriented people)
--guiding the behavior of people.
The purpose of sales quota

Providing goals and Incentives

Evaluating performance
Controlling the Salespersons activities
Calling minimum no. of amounts per day
Calling on new accounts
Giving minimum no of demos
Uncovering strengths of weaknesses in selling structure
If sales fall in a particular territory the cause must be determined
Improving the compensation plan’s Effectiveness
Controlling the selling Expenses
Types of quotas:--
1.Sales volume quota(sv):--

Based on sv—most of this quota uses dollar sales, some unit
sales, sales of new products or sales of neglected products.
--They are established on the basis of geographic area, PDT line

and customer type.
a> Dollar sales volume:--

--easily understood by salesperson
--can guage their performance directly against a dollar figure
-- Easier to manage when the salesperson is responsible for many
products
b> Unit sales volume:--

--Useful when the salesperson is responsible for selling only few
products
-- set in terms of no. of units—Use of dollar quota could perhaps even
backfire and level overall performance

c> Point Sales volume: -- Combine dollar or sales unit sales both into
unit points. For e.g. $100 might equal one point, $200 equal to 2 pts
—Companys use this approach because they have problems trying to
implement either a dollar or unit volume quota. It helps in
maintaining balance.
2.Financial Quotas:--
1> Gross margin or net profit quotas

Coys use these quotas to emphasis to the salesperson that the cry
would prefer a large profit to selling a large volume.
By spending so much time as less profitable products, the sales reps

are limit the coy’s opportunity to earn higher profits from the high
margin products.
2> Expense quota:- designed to make sales people aware of the costs
involved in this selling efforts.eg Salespeople may be allowed to
spend 5% of their sales fore expenses.
3> Activity Quotas:--

In an effort to ensure that salespeople are conducting their daily
activity by conscientiously many loys require that their salesperson must
activity quotas.
--Used to control many different activities. Common type of activity
quotas include
--no of prosunts called on
--no of demos made
--no of displays set/service calls made, new accounts established
--no of deals training given
4> Combination quotas: -- Used when they want to control performance

of both selling and non-selling authorities.
Methods of setting Sales Quota:--
1> Quotas based on sales Forecasts and potentials:--

--Organization forecast the total sales for entire territories which is

then divided into territories and then brought to the individual sales
level.
2> Quotas based on past experience:--

collect sales data for previous year, average them out for each geographic
territory and then add an arbitrary % for next year quota.
3> Quotas based on Executive judgment:--

4>Quotas established by sales people:--
--some companie allow the sales representatives to establish their
own quotas because sales people are closest to the market and therefore
thought to be the ones who know the most about its potential.
--The drawback is that sales people may either set exclusively

high quota or ridiculosely set large quotas
Administration of Sales Quota:

Setting realistic quota:
Salesperson should be motivated . It shoud be determined by the
attainability of that quota and recognition and incentives
creating understandable quota:
1. including the sales person in quota setting
2. keeping the salesforce updated
3. maintaining control
RECRUITMENT AND SELECTION OF THE SALES FORCE
Recruitment,
 It is the planned process whereby the scientific

principles of management is utilized for finding out
and filling up the positions in the right territory with
the right people.
 The selection and recruitment of efficient people is

always a competitive advantage for an organization.

 Sales manager perform the sales force right functions.

They execute entire Human Resource Management
function Recruit , select , train ,
Motivate, lead, control and compensate the sales staff for achieving
the desired goals of the organizations.
HIRING PROCESS 3 STAGES:-
 Manpower (HR) planning (examine labor turn over, positive

equipment analysis, hiring objective, deciding number of
people required for particular time).
 Recruitment stage (identifying best source for generating
pool of candidates).
 Selection ( screening, interview)
RECRUITMENT:
 Importance of recruiting
Customer, Cost, EEO, Qualified applicants.
 Who does recruiting?
 What interviewer can and can not ask.
Sex, Marital status, Children, Physical data, Medical history,
Criminal record, military status, Age, House.
The Recruitment process
o Conducting job analysis

 Conducting job analysis:--
1> Analysis the (nature of competitors, nature of customers, what
degree of knowledge/skill)
2> Determine duties/responsibilities
3> Spend time making calls with several people, observe record the
various tasks of the job as they are actually performed
 Preparing job descriptions

-- Result of formal job analysis is job descriptions. It should be in
writing. It’s used in recruiting, selecting training, compensating,
evaluating the sales force.

 Developing a set of job qualifications:--

--The duties and responsibilities set forth in the job descriptions
should be converted into a set of qualifications that a recruit should have
in order to perform the sales job satisfactory.
 Personality traits :-- Industrial psychologist suggest that a successful

salesperson needs only 2 personality traits: empathy and ego drive.
 Empathy—ability to feel as the other follow does. Thus empathic

feeling & provides feedback from the client which enables.
 Levels of qualification :- Sales manager should keep in mind

certain characteristics
- Travels, sometime overnight
-Supervision
-Little work experience
-High turnover
 Model of success: - A comparison of characteristic of good,

average and poor sales people will suggest traits that can
predicts success in sales career with the company.
SELECTION OF SALES FORCES

Involves choosing the candidates who best meet the qualification and
have the greater aptitude for the job.
Steps:
1. Application form
2. Internal screening (Interview:- Major concern for candidate)
3. In depth interview (45% causes path)
4. Reference clubs (43% causes path)
5. Physical exam (6% relative)
6. Test ( Intelligence, knowledge, sales aptitude, vocational interest,

personality test, polygraph, attitude and lifestyle)
ATTRACTING POOL OF CANDIDATES:-
If there are too few applicants, the property is highlighted that a

person with inferior selling attitudes will be hired when a large number of
applicants are processed; recruiting program serves as an automatic
screening system.
SOURCESS OF SALES PEOPLE:-
Persons within the company

Competition (sales force) - advantage is already trained
New competing companies
Educational institutions
Advertisements
Employment agencies
FACTORS TO CONSIDER IN EVALUATING PROCESS

1. Nature of the population , nature of the market, policy of promotion

from within, sales training providing by the company
Selecting the sales force

The selection process involves choosing the candidates to best meet the
qualification and have the greatest aptitude for the job.
2. Selection process vary from company to company depending in the size

of the company, the number of sales people needed and the importance of
the position to be filled
APPLICATION FORM:-
Information about address, position applied for, physical condition,
educational background, work experience, participation in social
organization.
INITIAL SCREENING INTERVIEW:-

Lasts from 20 – 30 minutes and are conducted by assistant personnel
manager, assistant sales manager, sales personal and sometimes
computer.
Internal screening may start with application form, an interview are
some type of test. But no matter which tool is initially used, it should be
brief.
TESTS;-
 Intelligence test ( measure the raw intelligence and trainability)
 Knowledge test (the tests are designed to measure what applicant
knows about product service).
 Sales aptitude test (person’s innate and acquired social services).
 Vocational interest / personality test.
 Polygraph test (measure blood pressure respiration, heart beat and
skin response).
 Attitude and life style.
INTERVIEW: - Sustained / unsustained interviews

 In depth interview – to know the heights of the candidates.

Sustained interviews use at the preliminary stage where as no
sustained is used at the final stage.
 Reference characters
 Employment offer
 Induction / socialization – introduced with product, department
and helping them to acquire skill and adjust to role behavior.
TRAINING THE SALESFORCE
Need for training:
- Guidance to perform the job efficiently

- Exploit the talent of new recruits
- Adapt itself to changing market condition
- To reduce cost by serving customer efficiently
- To bring behavioral changes
- Win-win situation (org & individual benefit)
- To correct deficiencies
Training and development:

Training focuses on current job (short term oriented, addresses
performance problems, (immediate problems of the organization)
Development stresses on the current as well as future job, long term

oriented (growth & success of orgn)
Challenges in sales training:
- Will the training programme effective?

- Will
- Will it produce desired/intended results?

Not all problems require training; some can be solved by

compensations.
A sales mgr weigh how much the current problem will cost vis-à-vis
the cost of eliminating through the training programme.
Theories & principles of sales training:
Training is based on the process of learning a sequence of

programmed behavior and the application of knowledge to the work
environment.
Learning is more effective when there is more level of reinforcement in the

form of rewards and punishment for non-compliance
Learning in itself is a human process by which with, habits attitudes and
knowledge are acquired and utilized in such a way that behavior is
underfeed.
1. Conditioning theories:
Assumption: there is a desired response to stimulus
- When any action causes satisfaction it will be associated with a
particular situation and the same action shall be repeated when a
stimulus situation arises
Eg: pavolos experiment with dog
2. Stimulus operant conditioning:
Theories: Every human, irrespective of his position in the orgn is capable of

learning. Every one has an intellectual capacity and the ability to learn
training programs.
In a typical training programme, a salesperson is expected to have the

knowledge of the company, product, competitor, knowledge of the market,
himself.

THE TRAINING PROCESS:
Training need Assessment
Design & conduct of training Programme
Evaluation of a training Programme
(1) Training Need Assesment Phase:
Orgl Level
Analysis Sales mgr evaluates the orgn struc,
culture, mission,
Business Climate/goals- It provides
strategic info on the
resource commitment to support the
programme.
Task Analysis
Focusses on all the function & jobs in
the sales dept &
determine which are of them which
need attention.
Individual Level
Analysis
Assess the performance of sales staff
& determine all
those people who need training.

The programme can occur not only in key sales areas but also in soft areas
such as team working behavior, interpersonal communications &conformity
to sales group norm.
Training needs are identified in the following manner:
(a) Identification of the specific problems( product, organisation, job

related knowledge deficiency)
(b) Anticipating impending & future problems:
Problems likely to arise due to factors such as Market
expansion, pdt
diversification as entry into new territories.
(c) Mgmt request: request by supervisors to fill the performance gap.
(d) Interviewing or observing the personnel on the job.
(e) Questionnaire Survey- opinion of salesforce on topics related to
commn, job satisfactions, attitude toward working condition.
(f) Che….
(g) Attitude survey
(h) Interpersonal skill test
(2) Designing & conduct phase:
- Location:
- On the job/ off the job
- Inside orgn/outside orgn
- Trained Expert or co. people.
- Timing (how long); Cost
- Types of Training
(a) Skills or retraining:
- for improving customer handling, listening, presentation and

interpersonal skills.
- Retraining, a subset of skills training focuses on giving the
employees those skills that are needed to keep pace with
changing job requirements.

Eg. Torrent Gujrat, a pharmaceutical firm, allow the sale

staff to undergo training in periodic intervals to keep
pace with the changing technology & tactics in
performing the sales job in a highly competitive
environment.
(b) Cross – functional Training:
A method of job enrichment where employees are trained to

perform activities and duties in functional areas other than their
assigned job responsibilities.
Eg. Cadila pharmaceuticals, sales people are sometimes
given corporate responsibilities.
(c ) Team Training:
An organization where a sale has to be done through a team,

training programme need to be conducted around teams.
Training & Interpersonal skills.

Eg. Hughe Telecom, Infosys & satyam train sales people by
taking them outdoor and inculcating team skills through
experimental learning.
(d) Creativity Training:
Popular approach in brainstorming. The sales Trainee is given

opportunity to generate ideas without fear of judgment- based on
assumptions that creativity can be learned and fostered and that
sales people can solve their problems in newer and more creative
ways.
(e) Literary training:
Mean mastery over basic & functional skills.(reading, writing

& commn)
TRAINING METHODS:
The choice of training method is influenced by

- Training Programme obj

- Team available
- Participant level of understanding
- Previous experience
- Equipment needed/ degree of interaction required/ participation
required/ size of group/ facilities available.
(1) Lecture Method:

The trainee is knowledgeable (expert) & the lecture is delivered
to a no. of people at the same time and cover specific topics
rather than a range of subjects.
Structure the Lecture- The sequence of the delivery should be

streamlined to aid retention.
Reinforce the message
The presentation should be limited to the attention span of the

participants 9usually 20 minutes).
But a change in style, pace of delivery, session for question &
distribution handouts can help in extending attention span.
(2) Conferences:
Highly structured device for conveying message on a large
scale and often to an audience of 100 people.
Used to motivate sale people & presented with some

entertainment.
(3) Seminar:
It is a conference on a smaller scale with in corporate a greater
degree of participation from the members.
Centered on a single theme, which is examine in same depth.
Speakers are specialists who make brief presentation.

(4) Discussion:
Common method useful for the presentation of ideas and plan
particularly when issues related to sale have to be clarified or
expanded & the views of different sales groups are ascertained.
(5) Role Play:

Innovative Method- To expand the sale trainees experience by
presenting them with a commonly encountered situation and
asks them to pair themselves in the role of parties (customers)
involved & then act in the way in which the circumstances
might reach an appropriate conclusion through the play.
(6) Case study:

Objectives- present the sale trainees with real life business
situation & provide considerable background information from
which they are either expected to analyze & compile the
outcome of a series of events as to provide solution to specific
problem.
(7) Fish Bowl:

- To train 2 teams
- 1st team discuss a topic for 30 minutes
- 2nd team is seated around the first team & they are asked observes
comment, criticize (15 minutes)
- The 1st team has no right to reply or even to comment as any
criticism at this stage
- The roles of two teams are then reversed both the teams came
together in full group sessions share/exchange as the process
which were observed
(8) Workshops:
- Method of designing training around identified work problem in
order to find the solutions in the training programme
Objectives:
Obtain contribution from all individuals who are affected & to
optimize the resources available to solve the problem.
(9) Sensitivity Training:

(T. group, study group, group dynamics & group relationship) a

type of laboratory training
Objectives:
- Increase the awareness of our own behavior and to understand
how it is received & interpreted by other.
- Develops sensitivity to the behavior exhibited by other and
enables the trainee to diagnose the causes of that behavior.
This technique relies on its effectiveness in creating a climate in

which participants are willing to be frank, open, & honest with
each other.
Focus is on personal behavior & the discussion focuses on one’s
private thoughts.
(10) Transaction Analysis:

Popular method for studying interpersonal relationships-
Developed by Eric Berne.
Trainee operates as the ego states of participants and try to find

out the transaction of people by analyzing the various ego states
and transaction among them.
(11) In Tray Exercise:

This exercise provides the trainees with a day’s mail, both
internal/external.
Trainees are required to study all the documents, decide

priorities and allocate time.
To add to the realism of the in-tray exercise, other features of

normal working, such as interpretation from telephone calls,
unexpected mission including customers are often built into the
programme.

Evaluation Phase:
Effectiveness is measured either in monetary or non-monetary
terms.
Also, by the collection of ratings by both the trainee & the

trainee in every programme.
Companies also conduct a test before & after the training

programme.
Designing a sales Training Program:
(1) Deciding as the Training objectives

(2) Deciding on the content
(3) Deciding on the method
(4) Deciding on the arrangements made for the execution of
training programme
(5) Deciding on the procedure to evaluate training programme.

MODULE 4
SALES FORCE MOTIVATION

AND COMPENSATION
- Factors influencing design of compensation plan:
(1) Financial ability of the firm- to pay the employees (current &
future) as a continuous bans
(2) Pull model- company emphasis as heavy advertising and hence
(sales person plays the role of order giver)- ( put less effort)
salary will be less
(3) When the size of mkt is very limited, sales person has to put lot
of effort- so he ll demand more salary.
(4) Nature of product- Industrial product- more effort required-
high performance
Types of compensation plan:
(1) Financial compensation plan:

(a) Straight salary:

- Weekly, monthly & forthrightly, many companies also go for

annual payment.
- Used by companies emphasize on relational selling/ high % of
time is developed to non-selling
- Makes sales people free from financial worries.
(b)Straight commission plan:

- Linked directly with performance
- Used to keep talented people & to weed out poor performers.
- It can be executed in 2 ways:
Lateate paid irrespective of level of aim
Progressive & aggressive; higher sale volume
- It does not assure an assured flow of income-loyalty to orgn &

cost also goes up as the sales manager has to spend time &
resource to calculate payrolls, estimate commission, margins,
audit the call report.
(c ) Bonus & Incentives:

- Bonus- one sum supplemental payment for avg.
performance.
- Indian companies- paying during festival time.
(c) Salary plus Incentive plan:

- Limitation of above 2 methods independently led companies to
go for this combination plan.
- It’s a compensation mix-60% salary 30% commission 10%
allowance.
(d) Drawing Account & Commission plan:

- orgn. Opens account in the name of sales person & credits the
commission
- The salesperson can draw from this account within the
permissible limit
- The objective of such plan is to help sales people when they are
not able to achieve target during recession period
(f) Allied methods:

- Profit sharing plan (brings sense of ownership & cordial

relationship), also build a democratic & participative
atmosphere in the company.
- Remuneration plan for specific people who are to
discharge certain function ( road shows, displays, PR) along
with delivery function.
(3) Non- Financial compensation:

(a) Promotion:
Mgt has to plan the promotion programme in such
a way that the higher position seem worth aspiring
& achievable to sale people.
(b)Recognition Program:
In GE capital , the sales people who excel are
awarded fo their outstanding contribution.
These programmes can be designed to encoprise
the individual/ team performance
(c ) Fringe Benefits:
These are employment benefits, life insurance,
stock options, profit sharing, gratuity, PF, pension
provision
Infosys’s & Wipro give stock option
d) Expense Accounts:- reimburse expenses of the field sales force
e) Perks: include the provisions for a car, driver, gardner, club
membership. Status perks(job title,parking space); Financial
perks(conveyance, car,insurance); personal growth
perks(education, sending sales people for training.
Steps in Designing Compensation Plan:

Step 1: Determine ales force & compensation objectives.
(Sales volume, gross margin , mkt penetration,
exploitation of territory potential)
Step 2: Determine major compensation issues.
(comparing payment structure of the Industry & major
competitors, wage level, wage structure, economic
condition)
Step 3: Implement long term / short term compensation plan:
Short term – Issues of low cost drive for firm.

Long term – promotion, retirement pla, disability benefits, life

insurance
Step 4: Relate rewards to performance
Step 5: Measurement of performance

Method of evaluation should also be objective &
transparent
Step 6: Approve the compensation plan
Trends in Compensation:
(1) Level of customer satisfaction is an important tool for
evaluating & rewarding sales people.
(2) Team based compensation. (Majority of the B2B selling
situation, the selling is done through the team selling
strategy & cross functional teams are designed for handling
customers objection in a better way.
MOTIVATING SALES FORCE
Module-4
MOTIVATION
Motivation is the technique to expand internal energy to achieve a goal or

a reward and a process that identifies the needs and goals of sales people
that drives them towards the achievement.
Performance(P)=Ability * Motivation
-Motivation takes place in the context of work culture.
-A manager should posses adequate knowledge about the work environment,
reward policies and level of interpersonal communication, across the
organization while deciding on motivating people. The management need
good communication and listening skills so that he can discover and
understand people need and internal drives.

Nature of motivation:
- motivation is a complex phenomenon that combines the individual
needs, motives, drives, tension, comforts and expectations
- it has a system of orientation goal of individual is shaped by forces
within the individual and its interaction with surroundings.
- Individuals sets feed back from the environment which either reinforces
behavior from processing certain goals.
Process of motivation:
Motive
Behavior Tension Reduction
Goal
Motives:-
Largely subjective and represents the mental picture of the person by
explaining the rationale of human behavior.
Behavior:-
Comprises a series of activities that a person does by being motivated to
achieve individual and organizational goal.
Goals:-
The goals chosen by individuals depends on various individuals depends on
factors like the cultural norms and values, the sales persons inherited
capabilities, influence of personal learning and experience .
Motives and motivational drives:-

Motives- are the drives for the behavioral action of the person
3 Motives- primary- based physiological needs and seek to reduce tensions.

General- Curiosity manipulation etc induces the person to
increase the amount of stimulation.
Secondary- motives of power and achievement and affiliation.
Theories of motivation:
Content theories (explain the structure of the needs and motives and how
individuals priorities the needs .
Process theories- describes the psychological processes involves in the form

of motivation and its directions.
Content theories-
1. need hierarchy theory
Abraham maslow- propanded and look into the hierarchy structure
of the different types of needs of an individual over a period of time.
Self actualization need
Esteem need
Social need
Security need
Physiological
need

Physiological need: this is the basic needs and they have the greatest
strengths among all the needs of the individuals (food, water, shelter). They
are identified with bodies and are relatively independent of each other.
Safety need: related to physical and physiological safety from external
threat- arise out of physical danger
Social and affiliation need: describes the individuals desire for company and
companionship of other peoples
Esteem needs: sense of self work, personal recognition and satisfaction of
these needs produces self confidence prestige, power.
Self Actualization: desire to grow more and more that is become everything
that one is capable of becoming. It is the need that urges individuals to
optimize their potential.
HerZ bergs two factory theory:

- proponed this theory by grasping the motivating variables into two
categories such as hygiene factors and motivators
- hygiene factors are those factors that when absent in any motivational
program increase dissatisfaction with job and when present help in
preventing dissatisfaction but do not increase satisfaction or motivation
- motivators are the factors that involves the feelings of achievement,
personal growth and recognition that one can experience in a job, which
offers challenges and scope for achievement
Herzbergs 2 factors
Neutral state of motivation, High state of motivation, satisfaction
satisfaction and performance and performance
Extrinsic – content - hygiene Intrinsic – contexts – motivators –
satisfaction
•corporate policy and • achievement
administration • recognition
•rel. with superiors • work
•wc, salary • responsibility
•rel. with personnel • advancement
•personal life • growth
•rel. with subordinates
•security supervision

Alderfer’s ERG Theory
- he proposed a modified need hierarchy with three levels

- people are initially interested in satisfying there existence need, which
combines physiological and security factors (pay, physical condition, job
security and fringe benefits relatedness needs involved being understood
and accepted by people above / below around at work
- growth needs are those involved with the desire for esteem and self
actualization
- the ERG theory argue that it is possible for than one set of need to be
activated at the same time.
McGregor Theory X and Theory Y
Theory- X (Assumption)
- Most people prefer to be directed, not interested in assuming

responsibility and want safety.
- People are motivated by money and threat of punishment
- Work is inherently distasteful to many people.
- Most people have less capacity for creativity in solving Organizational
problems
Theory y-
• Work is as natural as play if the working conditions are favorable.

• Self control is indispensable in activity organizational goal
• The capacity in solving organizational problem is widely distributed
in the population.
• People can be self directed and creative.
• The Individual is seen as growth and capacity
• Integrating individual goal with those of organizational(enlarging
competency)

Conclusions:-
Theory x and y are attitudes or predisposition towards people, although

the best assumption for a manager to have may be theory y, it may not
be appropriate to behave consistently with these assumptions all the
time.
2 theory of William Ouchy:-
-Originated from Japanese practicer

- The success of Japanese firm in Company
To American firm attributed to long term employment, participative
decision making
- Problem is discussed informally And solution is sought
- Best solution from any person may be implemented ,does repentance
agreement of all the members in the organization
- Low performance(punishment)
Process Theory-
-Equity Theory- Explain the relationship of employee motivation with

the perception and feelings of the sales people
- The motivation of people is influenced by the extent to which they feel
that they are treated fairly and equitably.
Employees tend to make social comparison of inputs (education, efforts,
time spent in job) for themselves and others in the organization.
Expectancy Theory
Propounded by Victor Vroom who stated that motivation is a product of

three factors namely
- How much one wants the reward (valance)
- one’s estimate of the probability that efforts it result in successful
performance (expectancy)
- one’s estimate that performance will result in receiving reward
(instrumentality)

- The multiplicative contribution that produces the strongest motivation is

high positive valance, high expectancy and high instrumentality
Force = Valance * Expectancy
SKinner’s Reinforcement Theory
-Positive reinforcement or behavioral modification theory

- individual Can be motivated by proper design of their work environment
and by praise for their performance and that punishment for poor
performance produces negative results.
They analyzed work situations (work course worker the way do act )
- hen initiate changes to eliminate changes troublesome areas
- specific goals are then set with workers participation
- feed back
- reward
- if performance expected ways are found to help people
Factors Influencing the Motivation of Sales person
 personal characteristics
Individual satisfaction with current job, the demographic

variable (personality traits), and attribution about why performance has
been good or bad
 Emotional conditions (territory potential and strength of competition)

 Organizational policies procedures
-Type and nature of scale of supervisors, span of control, leadership

style , method of communication
Designing and motivational program
1) program objective
2) selection motivational tools :- organization and individuals should be

integrated

- managers need to take results of the previous programs and results

- timing, place, duration.
* Individual/regular contact with sales people and application of

the performance, help them to solve the problem, supporting, coaching,
providing guidance
* group methods (conferences, communicate regional, national and

international level.
3) The communication should be clear in and content so that the sales

person can understand so at what level of commitment he likely to
participate in the reward system of organization.
Evaluation of Sales person
- pre-requisite effective sales force management

- useful to test the effectiveness of the sales programme
- performance appraisal, crucial part of the evaluation is the process of
identification, measurement and management of a sale force in
organization
- it is the process of evaluating the performance and qualification and
qualification of the sales force in terms of the requirements of the job to
ensure effective administration, including the selection for promotion,
reward and other recognition in the organization.
Performance appraisal process
Appraisal Criteria
- identification of what is to be measured

- those aspect or dimensions of job performance
-selection of dimension in critical
-assigning a relative score to reflect a sales persons performance

The techniques are classified on the pairs of type of judgment required

for evaluations and focus of the measure (trait, behavior)
Deciding on the criteria

For measuring performance
Deciding on the conduct of the

Performance appraisal
Deciding on evaluation of individual

and teams
comparing of actual performance

With stds
Deciding on the frequency of the

Performance appraisal
The external variables And their influence
Methods
1) relative and Absolute judgment:
Relative : sales manager is asked to compare the sales persons

performance with that other people.
Absolute judgment :
Sales manager is asked to make judgment about the sales persons
performance based on the sales performance measured in sales volume,
market share or revenue realization.
2)Trait based :
-criteria related to the traits and the behavior of the sales fore.

- the most commonly used traits for the purpose are reliability energy and
loyalty.
3)outcome based :
-measure the result of the selling process. Same of the outcome

instruments that allow to asses the results achieved by sales fore are
amt of sales, no of products sold in units or volume.
- the most common approach used in this method are called
M.B.O. M.B.O is a goal directed approach to performance appraisal in
which sales manager and together set goal for
evaluation period.
4) behavior based:
- related to selling criteria and for this the sales manager records how
frequently behaviors listed in a checklist of ratings have occurred.
-presentation quality product knowledge closing ability, service

performed, the no of active accounts and relationship with customer.
5)performance rating:
These instruments include rating forms, forced choice scales and
behavioral observations scales.
Rating forms are statements in the form of an inventory or a list of
adjectives about the sales job.
-it provides uniform and consistent information about sales people.
6)fored choice scales:
The score and weight are predefined and the sales manager is forced
to give a score or weight act of the assigned weights.
-rates sales people as a series of adjectives.
Performance in rating form:
Include table here**

7) behavioral observation scale:
Purely based on significant job incidents which describe behavior that

can either enhance or reduce the level of performance
-the evaluator focuses on special behavior which significantly influences
performances.
-this helps in identifying certain behavior which are desirable and
undesirable in the context of job.
8)call reports:
-periodic accounts and customer statements prepared by sales persons of

how they are dividing this working time between various of the
jobs.like demonstration and follow up.
9) silent call monitoring scores:
Sales managers rating of the sales persons performance during actual

calls to the customer the rating can come a wide range of the aspects like
greeting, ascertaining customer needs, and the level of
communication and listening skills.
10) Activity Reports:
-explain the unusual events and incidents that occur in the field as
reported by a sales manager and sales people including .
-this includes events like the launch of a major price war by the
competitor and the entry of new competitor.
11) Combination methods

-combination of outcome and behavior bared eating models
- do not give much importance to the behavioral issues that help sales
people sort uot their performance evaluated problems and so it is used
objective bared measures.

A combination plan of evaluation
Name total calls made total sales arg sale per content total cust satisfac index
1.john
2.deepak
3.rakesh
4.sufrat
Conduct of performance appraisal
Rater—immediate supervisor & Customer
Under 360 appraisal (immediate supervisor, subordinates, customers

appraisal and self appraisal) Are included.
Rating error:
-occur when a sales manager inflate/deflate the sub’s performance rating.
-either *
-receiving effect- the most recent performance has effect or the current
performance.
-central tendency error—
Hallo effect error – associating certain people into some category as good or
bad as the basis of some characteristics.
Actual performance:
Evaluate the salespersons actual performance against either industry
std (or) stds set by the organization.

-many sales people by to collect actual data over a set of territories and
calculate the avg performance of all the territories and then to compare each
salespersons with the average of the performance of all the sales.
-----------------ALL THE BEST ------------

Sales 1234 Full

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Sales 1234 Full

Enviado por

Direitos autorais:

Formatos disponíveis

Sales And Retail Management

Definition: Sales Management

Evolution of Sales Management:

Pheriwallahs:- The first sales people

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Importance of Sales Management:

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Uttamkumar YV.Department of MBA, BIT, Bangalore.

- Order creator –Missionary sales people

Emerging Trends in Sales Management:

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Qualities and Responsibilities of Sales Manager:-

1. He should be a good communicator, catalyst, & planner.

Uttamkumar YV.Department of MBA, BIT, Bangalore.

1. Sales planning and budgeting.

Elementary study of sales organizations:-

Sales organizations are structural entities, which execute a combined

Functions Influencing Structure:-

1. Product and service related factors.

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Organization highly specialized & niche market- smaller

1. Span of control: - No of sub and sales staff under the supervisor of an

Organization Design:- refers to the formal and co-ordinate task of

1. Line Organization: - chief executive does the decision making and

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Sales mgr Dy sales

In pure line organization the senior sales executive has direct

2. Organization Design by management function :-

Uttamkumar YV.Department of MBA, BIT, Bangalore.

3. Organization design by territory: - several areas are combined

Divisional Divisional Divisional

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Travel Times Ltd

4. Organization Design by Product: - ELGI equipments ltd. Designed

Sales Mgr Sales Mgr Sales Mgr

Sales man Sales man

Uttamkumar YV.Department of MBA, BIT, Bangalore.

 Helps in buyee supplier interpractices.

6. Combined Organizational Design: - combinations can be made on

The organizational design is shown below:-

VP Pdn VP Mktg VP HRD

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Sales Process Automation:-

Equalize Workload Method: - The following are the various steps

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Class A (large) – 100

Incremental Productivity Method:- According to this method, sales force

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Sales person no sales roles cost of goods GM

Uttamkumar YV.Department of MBA, BIT, Bangalore.

a) Break Down approach:

Sales forecasting techniques can be classified in to two:

Non – quantitative techniques:

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Judgmental Method: Use judgment, mere extrapolation of last

a) The jury of executive opinion: A jury may consist of company

b) The Delphi Method: Developed by RAND Corporation, it depends on

c) Sales force composite: it combines each sales person’s estimate of

a) Survey of buyers intention: - Customers are sampled and asked about

Uttamkumar YV.Department of MBA, BIT, Bangalore.

Disadvantages: Expensive in market where buyers are numerous. Buyers’