Unit-I

Introduction to Sales Management

 Sub Topics
• Evolution of Sales Management,
• importance of Sales Management,
• types of Selling, difference between Selling
and Marketing,
• Modern Day Sales Activities,
• Selling Skills,
• Selling Strategies,
• Selling Process
 Evolution of Sales Management
• Due to industrial revolution mass production was
possible
• Large scale manufacturing organizations with
huge quantities of goods started dominating the
economy
• Due to manufacturing of large quantities of
goods, selling to nearby markets wasn’t adequate
and there was a need to expand the market
• This was possible with the involvement of
intermediaries such as wholesalers & retailers
selling goods to consumer located far away from
production unit
The splitting of sales and marketing
• Activities like advertising and sales promotion
conducted by manufacturers sales dept
became important & complex
• It became necessary to split sales and
marketing function
• Other support functions like advertising, sales
promotion, marketing research, and logistics
evolved as separate dept
Fig 1.1 Typical marketing organization
structure
 What is sales management?
“ Sales management is the management of
the personal selling part of the company’s
marketing plan”
AMA definition
“Sales management means planning, direction
and control of personal selling including
recruiting, selecting, equipping, assigning,
routing, supervising, paying & motivating as
these tasks apply to personal sales force”
Nature of sales management
 Types of Personal selling
Personal selling is broadly classified into:-
• Industrial Selling
• Retail selling
• Services Selling
 Industrial selling
Termed as B2B selling, it is categorized as
manufacturing sector selling:-
• Selling to retailers
• Selling to business users
• Institutional selling
• Selling to government organizations
 Retail selling
All activities directly related to the sale of good
and services to the ultimate consumer for
personal or non-business use or consumption.
Eg: Shoppers stop, Big Bazzar
 Services Selling
• Services are intangible in nature
• They are produced, sold and consumed at the
same time
• Services cannot be standardized
• Services are very individualized
Types of selling
There are variety of sales jobs or sales
positions. These jobs differ in terms of
degree of problem solving and
requirements of selling simple to
complex products and services.
 DELIVERY SALESPERSON
• Main responsibility of the salesperson is to
deliver a product to household consumers or
to business
• Delivery salespeople also take orders from
customers, but they do not engage in creative
selling
 Inside order takers
• These mainly act as an inside order taker by
responding to customer demands
• There are 2 type of sales person
1. One type salesperson stands behind the counter,
like garment retail store.
2. The second type of salesperson takes customer
orders on telephone and also does outbound
calling
• This is also called telemarketing
• Example include banks and credit card
companies who are major users of
telemarketing
 Outside order takers
• These salespeople go out to the market and sell
the company’s products and services to the
intermediaries like distributors, wholesalers,
dealers and retailers.
• Ex: FMCG like soaps, detergents and biscuit
distributors and wholesalers, whole sale
representatives, in turn sell products to retailers
• The company salesperson perform other tasks
like setting up retailers product displays, solving
problems of intermediaries and training their
sales people
• Theses sales people do little creative selling
 MISSIONARY SALES PEOPLE
• They are a type of sales support salespeople
• They do not ask for orders, but provide
product information and promote goodwill
about the product and the manufacturers.
• For instance, medical representatives in
pharmaceutical industry calling on doctors
who write prescriptions when they are with
their patients
 CREATIVE SELLERS
• These salesperson use imaginative ways to get
orders
• Ex: Selling tangible durable products like vacuum
cleaners and refrigerators as well as intangible
services like insurance policies and educational
courses
• The salesperson first clearly understand the
prospective customers needs or problems by
asking questions
• There after, the salesperson shows how this
product or service meets the customers specific
needs better than any other product or brand
 CONSULTATIVE SELLERS/NEW
BUSINESS SELLERS
• These types of salespeople are experts in
solving problems of business customers
• They are very creative and problem
solvers who serve as consultants to their
customers.
 KEY ACCOUNT SALES EXECUTIVE
• A Key account is an important customer who has high
sales and profit potential
• A key account sales executive is given responsibility to
look after a few (3-5) number of such important
customers
• The supplier develops KAM program with an objective
of becoming a preferred or sole suppliers to the key
account
• The KAM program includes complete understanding of
customers business and needs, adopting relationship
management approach, and using team selling method
to deliver solution
 SALES SUPPORT SALESPEOPLE
• The salespeople support sales representatives
with their specialized product knowledge to solve
customers technical problems.
• They are NOT responsible for selling a
product/service
• These sale support people are included as a part
of the sales teams selling to key accounts to
provide technical information before the sales,
during negotiations, or after sales to solves
customers problems
• They are also involved in educating and training
customers
 Difference between
Selling and Marketing
• Emphasis on product • Emphasis on consumer
• Its sales-volume needs and wants
oriented • Company first
• Planning is short term determined customers
oriented needs and then decides
• Stresses need of a seller on how to deliver
• Management is profit
oriented
• Planning is long term
oriented
 Difference between
Selling and Marketing
• Views business as goods • Stresses needs and
producing process wants of buyers
• Department work as • Views business as
highly separate consumer satisfying
watertight process
compartment • All dept operate in
• Cost determines prices integrated
• Selling views customers • Consumers determine
as last link in business price
• Marketing views the
customers as the very
beginning of a business
 Role of sales mgmt in Marketing
• The primary goal of marketing is to position
and differentiate a product so as to pull
customers to the firm
• The sales department as always attempted to
sell and push the products through the
channels
• Mode of selling are face to face is key selling
options, including telemarketing, KAM, Team
selling, Independent representatives, part-
time sales , network marketing, Internet
selling
 Modern day sales activity
• Modern day sales activities include topics such as
marketing research, consumer behaviour,
strategic planning for long term sales gain
• Conducting more marketing function such as
territory analysis, sales research, market
planning, sales promotion
• Automation of sales reporting and forecasting
systems using SAP
• Daily activities of the sales staff are not constant
or stagnant, rather they present greater
challenges at every point of time
 Sales Management Process
Formulation of strategic sales Management Programme
Organize and plan overall company’s personal selling efforts and integrate
these with other elements of firms marketing strategy

Implementation of a strategic sales management programme

Selecting sales people, training them, leading them and motivating them and
directing efforts towards achieving corporate goals

Evaluation and control of sales force Performance

Taking corrective steps either formulation or in implementation programmes to
achieve the desired corporate goals
Functions of Sales management
 Problem
solving
Negotiatio
n Communicat

Selling ion skills

skills
Conflict
mgmt & Listening
resolutio skills
n skills
 Assignment
• Communication skills
– Communication process
– Managing Body language
• Listening skills
– Process of listening
– Levels of listening
– Barriers to listening
• Conflict mgmt skills
– Models of conflict
– Components of conflict
– Conflict resolution process
• Negotiation skills
– Situation and timing of negotiation
– Formulation of Bargaining
– Negotiation Process
• Problem solving skills
– Problem solving process
– Defining problems
– Generate Solutions
– Decide course of action
– Implement and evaluate solution
 Refer below text book
Sales and Distribution Management
Tapan k Panda and Sunil Sahadev
(Yellow blue colored book)
Page 48 to 93
The Selling Process
 PROSPECTING
METHODS OF IDENTIFYING LEADS:
• Consulting existing customers
• Referrals and external sources
• Referrals from internal sources
• Publications
• Networking by sales people
• Cold canvassing
• World wide web/internet
 QUALIFYING
• Hot prospects
• Warm prospects
• Cold prospects
 PROCESS OF PROSPECTING &
QUALIFYING
STEP 1: Start with leads/probable
prospects/suspects
STEP 2: From leads to qualified prospects
STEP 3: Hot Prospects
STEP 4: Customers
 PRE- APPROACH
Step 1: Information gathering in greater depth
about the prospect by carrying customer
research
Step 2: planning sales call on the prospect
 Planning sales call
• Whom to see?
• Where to go?
• What are the call objectives?
• How to approach the prospect?
 DISCOVERING & UNDERSTANDING
BUYERS NEEDS
SPIN MODEL
• Situational Questions
• Problem questions
• Implications questions
• Need-payoff questions
THE SALES PRESENTATION
 Understanding sales presentation
methods
1. Stimulus response methods
2. Formula method (AIDA)
3. Need satisfaction method (FAB Approach)
4. Team selling method
5. Consultative selling method
 AIDA MODEL
• ATTENTION – RAPPORT
• INTEREST – NEED
• DESIRE – SOLUTION
• ACTION - CLOSE
 FAB MODEL
• FEATURES
• ADVANTAGES
• BENEFITS
 Team selling model
SALES TEAM BUYING TEAM

KEY ACCOUNTS EXECUTIVE

NATIONAL ACCOUNTS MGR PURCHASE EXECUTIVE
TECHNICAL SUPPORT ENGR MATERIALS MANAGER
LOGISTICS/SC EXECUTIVE OPERATIONS/DESIGN ENGR
FINANCE EXECUTIVE LOGISTICS/SC EXECUTIVE
FINANCE EXECUTIVE
 GROUP PRESENTATION
• Need analysis
• Introduction
• Convincing
• Specific benefits
• Well prepared
 Consultative selling method
Also known as PROBLEM SOLVING METHOD
The salesperson uses the resources of the selling
organization by seeking help from design,
production/operations or any other functions
within or outside the organization in order to
solve the customers problem.
 HOW TO MAKE AN EFFECTIVE
PRESENTATION?
• Planning
• Use technology
• Adapt presentation
• Benefit plan
• Do not overload
• Buyers language
• Convincing
 TYPES OF DEMONSTRATION
• Trade shows, industry fairs,
• Taking prospective client to already installed/
in use at another customer
• Taking the equipment to customers premises
• Inviting prospective customer to selling firms
factory
• Technical seminar in a hotel inviting all
prospective customers
 HANDLING OBJECTIONS
• HANDLING HIDDEN OBJECTIONS
1. Would you mind sharing the objections
2. Why do you feel that way?
3. What seems to be your concern?
• HANDLING LOGICAL OBJECTIONS?
1. Ask questions
2. Turn an objection into benefit
3. Deny objections tactfully
4. Third party certificate
5. compensation
 TRIAL CLOSE AND CLOSING THE SALE
TRIAL CLOSE: it gives an indication to the
salesperson as to how near he is to actual close.
Trial closing is an effective way of getting feedback,
whether the prospect liked the benefits offered
by the product
If the prospect has responded positively to the
salespersons trial close question, then the
salesperson should know that its time to close
the sale
 BUYING SIGNALS
• Examines the product
• Ask another's opinion
• Asks questions
• Becomes friendly
 CLOSING TECHNIQUES
• Alternative choice method
• Minor points close
• Assumptive close
• Summary of benefits close
• T-account or balance sheet close
• Special offer close
• Probability close
• Negotiation close
NEGOTIATION SKILLS
 WHEN TO NEGOTIATE?
• When buyers put condition
• Agreement happens with several factors
• Products need customization/ longterm to
execute
• When bargaining for price
 PREPARING FOR NEGOTIATION WITH
CUSTOMERS
• Planning
• Building relationship
• Purpose
 STYLES OF NEGOTIATION
1. I WIN , YOU LOSE
2. BOTH OF US WIN
3. YOU WIN, I LOSE
4. BOTH OF US LOSE
 SOME TIPS ON NEGOTIATION
• Observe verbal and non verbal language
• Don’t argue
• Be assertive, not aggressive
• Maintain eye contact
• Stay focused on topic of negotiation
• Don’t blame anyone
• Avoid sarcasm
• Don’t reveal weakness
• Don’t make emotional decisions
Emerging Trends in sales management
Technology

Customer Relationship
orientation selling

Trends

Global and
ethical Diversity
issues

New selling
methods