Nature and role of Sales Management PDF

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It tells about the nature and role, importance , evolution of sales management,Role of Personal Selling in Business ,Emerging Trends in sales managmnt, types of sales job, decision, business orientation, implementation ,etc....

Description

What is Sales Management?

 One definition: “The management of the personal selling part of a company’s marketing function.”  Another definition: “The process of planning, directing, and controlling of personal selling, including recruiting, selecting, equipping, assigning, supervising, paying, and motivating the personal sales force. Difference between Marketing & Selling ?  Though Marketing and Sales differ as explained and discussed earlier, they are interlinked and interconnected.  Ultimate objective is increase in the sales revenue.

Nature and Role of Sales Mgmt.  Sales Management helps to achieve the organizational objectives. The main objectives of sales management is that products should be sold at that price which realizes profits. Buyers and sellers both have same types of business relationships. This relationship is based on exchange of goods, services and money. Importance of Sales Mgmt. The heart of your business success lies in its marketing. Most aspects of your business depend on successful marketing. The overall marketing umbrella covers advertising, public relations, promotions and sales. Marketing is a process by which a product or service is introduced and promoted to potential customers. Without marketing, your business may offer the best products or services in your industry, but none of your potential customers would know about it. Without marketing, sales may crash and companies may have to close.  For a business to succeed, the product or service it provides must be known to potential buyers. Unless your business is known in the community and have communication with your customers readily available, you have to use marketing strategies to create product or service awareness. Without marketing, your potential customers may never be aware of your business offerings and your business may not be given the opportunity to progress and succeed. Using marketing to promote your product, service and company provides your business with a chance of being discovered by prospective customers.  Once your product, service or company gets on the radar screen of your prospects, it increases your chances that consumers will make a purchase. As awareness becomes a reality, it is also the point where new customers start to spread the word, telling friends and family about this amazing new product they discovered. Your sales will steadily increase as the word spreads. Without employing marketing strategies, these sales may not have ever happened; without sales, a company cannot succeed.

 Please note that the Sales Department creates the sales revenue for the organization.  All other departments are Cost Centres.

Nature and role of Sales Mgmt.Sales person develops a positive relationship with the customers. The role of sales team is interdependent and success of one team member depends on the other. The sales team continuously monitor the customer preference, competitors' situation, government policy and other regulatory bodies. Scope of Sales Management The scope of sales management involves every aspect of sales. This begins with prospecting clients, pitching ideas, collecting orders, and handling complaints.  Sales Management includes more than tracking the business you book and providing support for your sales team. It starts with helping develop the right products, setting the right prices and distributing in the right places, and continues with marketing messaging, customer service and other selling efforts.  All of these efforts must be coordinated so one doesn’t interfere with any of the others. Setting plans, monitoring them and tracking results lets you continue to adapt, eliminate weaknesses and take advantage of market opportunities. Sales Management involves(1) formulation of sales strategy through development of management policies, sales force compensation policies, sales revenue forecasts, and sales plan (2) implementation of sales strategy through selecting, training, motivating, and supporting the sales force, setting sales revenue targets (3) and sales force management through development and implementation of sales performance, monitoring, and evaluation methods, and analysis of associated behavioral patterns and costs. (4) Marketing does not occur in a vacuum. The marketing environment consists of external forces that directly and/or indirectly impact the organization. Changes in the environment create opportunities and threats for the organizations. (5) To track these external forces a company uses environmental scanning. Continual monitoring of what is going on is essential. (6) Environmental scanning collects information about external forces. It is conducted through the Marketing Information System.

(7) Environmental analysis determines environmental changes and predicts future changes in the environment. The manager should be able to determine possible threats and opportunities from the changing environment. This will help avoid crisis management.

Environmental Factors Societal  Regulatory o o

Political Legal

o

Regulatory

 Economic  Competitive  Technology

Evolution of Sales Management – The world of sales continues to change and the strategies that created success in the past are failing to generate success in the new world order. What a sales person's job is and the sales person's role in the organization depends to a large extent on the company's basic business orientation and philosophy. A company's business orientation drives what it does and what it is trying to accomplish to be successful. Although, all types of orientation can be found in today's market place, different orientations have tended to be more dominate at different points in time. 

A. The Product Era. Marketing is distribution. The sales person's job is to take orders and despatch products to customers.

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B. The Sales Era. Marketing is aggressive selling. The sales person's job is to find customers and aggressively convince them to buy.

 C. The Marketing Era. Marketing is satisfying customer needs. The sales person's job is as a problem solver. Discover the customer's need and match product to need.  D. Relationship Era. Marketing is building long-term relationships. The sales person's job is to partner with customers.

Role of Personal Selling in Business -

A. Boundary Spanner. The sales person has a boundary spanning role in the organization. This means that the sales person is the contact-point between the marketing organization and the customer.  Obviously, this is a very important role in business. This role is what makes sales interesting and exciting, it is where the action is.  However, the boundary spanning position can also present many challenges to the sales person. A common problem is "role conflict," which occurs when the company and customer have different expectations and therefore, put conflicting demands on the salesperson.   Sales people have to be able to wear two hats at the same time , representing the company to the customer and the customer to the company.  It’s biggest drawback is the fact that it is very expensive (in business-to-business selling it averages around Rs.1000 per sales call).  B. Sales people have to be effective 2-way communicators, getting information to customers and also delivering information from the customer to the company.  Many sales people would tell you that effective listening is more important to sales success than effective speaking  C. Mini-Marketing Manager Particularly in business-to-business marketing, sales people act as mini-marketing managers. They are assigned a territory for which they are responsible (in a sense the territory is a profit center). The sales person regularly makes 4-p's decisions about that territory.  D. Relationship Builder Relationship marketing is one of the hottest buzzwords in business. In organizations that use salespeople, it is the sales person who initiates and maintains the relationship with the customer.  This involves not only a business relationship but in many cases a personal relationship between the sales person and the buyer.  For a significant number of customers, the relationship between the customer and sales person is stronger than the relationship with the marketing organization.

Emerging Trends in Sales Management Global perspective  Revolution in technology  Customer relationship management (CRM)

 Salesforce diversity  Team selling approach  Managing multi-channels  Ethical and social issues  Sales professionalism  Advent of E-Commerce 

Transactions to Relationships

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Individual to Teams

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Volume to Productivity

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Management to Leadership

 Local to Global 

Technology- eg. E Commerce

Changing Trends in Sales Management-

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

composition of team may vary depending upon the customer from top management, technical specialist, customer service, etc  Managing Multi-Channels Multi-channel marketing system occurs when organization uses two or more marketing channels to target one or more customer segments. Major benefits of multi-channel marketing system are: Lower channel cost  Increased market coverage  Customized selling  Multi-channel may also lead to conflicts and control problems, as two or more channels may compete for same customer. A successful sales manager will have to effectively manage conflict between the channels.  Ethical and Social Issues Sales managers have ethical and social responsibilities. Sales people face ethical issues such as bribery, deception (or misleading) and high pressure sales tactics. Today’s sales managers have no choice but to ensure ethical standards from sales force otherwise they may be out of business or even land up in legal problems. With the advent of e-commerce, consumers increasingly want to make online purchases. This has resulted in customers getting good deals due to intensive competition between various companies such as Amazon, Flipkart, Paytm, and many more.  Local stores and shops will be able for the first time act as “fulfillment centers” for online purchase and deliver products quickly to customers located near them.

Types of Sales Jobs It is difficult to generalize about the nature of sales jobs because there is a tremendous variety of different jobs involving different activities.

Major Categories of Sales JobsA. Industrial versus Consumer. Sales Jobs vary because of the nature of the buyer and the product being sold. The basic differences between industrial and consumer marketing comes into play. B. Order Takers versus Order Getters. It also makes a difference in terms of what responsibilities the sales person has. How much of the sales process is handled by the SP? At one extreme are order-takers, who do little selling e.g., route sales people that fill out customer orders on site and make deliveries and some retail sales people who simply process customers orders. At the other

extreme are SP who have to go out and find potential customers and then turn them into customers. C. Inside versus Outside Sales. Where does the sales process take place? Does the customer come to you or do you go out to customer? Example of Online sale- ie E Commerce

Where Sales Come From Generic Growth (growth over a period of time)  Penetration  Product Development  Market Development  Diversification

Business Orientation

Product Orientation

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Sales Orientation

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Marketing Orientation

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Relationship Orientation

DecisionsA. Goals and Objectives B. How to access customers -Direct Sales Force -Agents, -Distributors -Whole sellers - Direct - E Commerce

Account Relationship Strategies1. Transactional 2. Contractual 3. Major Accounts 4. Strategic Partners

Demand EstimationForecasting the Sales Potential 1. Relationship to Sales Planning 2. Issues

C . Sales Territoriees Need for, Size, Design, Coverage D. Sales Quotas

Implementation – A. Recruiting and Selecting B. Training C. Motivation/Leadership D. Compensation and Incentives

Control-EvaluationA. Sales Analysis B. Cost Analysis C. Behaviour Analysis

Sales Management Process –  Focusing on the Big Picture – a firm’s management process is affected by business strategy & its strategy for accessing it’s target market.  Roles of the sales force – strategy must be implemented by sales force (calling on customers, prospecting, managing customer relationships and creating value for customer)  Structuring the sales force – must be well organized. Structure decision influence how customers see the firm & will affect selling skills & knowledge of sales force. This will impact sales management activities (compensation, recruitment, training, evaluation).  Building sales competencies – sales managers are responsible for hiring sales people with right skills & backgrounds to implement sales strategy. Training should be provided on joining to hone their skills.  Leading the sales force – effective sales managers know how to supervise & lead their sales people. They provide leadership by inspiring people to grow & develop professionally at the same time achieving company goals.

 Leading the sales force – effective sales managers know how to supervise & lead their sales people. They provide leadership by inspiring people to grow & develop professionally at the same time achieving company goals.

 Leading the sales force – effective sales managers know how to supervise & lead their sales people. They provide leadership by inspiring people to grow & develop professionally at the same time achieving company goals.

Competencies of Successful Sales Managers –

Strategic action competency Coaching competency Technology

Sales Mgt

competency

Effectiveness Team building competency Strategic action Competency

 Strategic Action Competency Understanding the overall strategy & goals of the company & ensuring your actions are in line (must know industry, organization, strategic actions)  Coaching Competency Providing ongoing feedback (role modeling, building trust, verbal feedback)  Team Building Competency Through small groups (design teams, supportive environment, team dynamics-strengths /weakness)  Self Management Competency Taking responsibility for your actions at work & elsewhere. Includes integrity & ethical conduct, managing personal drive, self awareness & development.  Global Perspective Competency Drawing on human, financial, information & material resources from multiple organizations/countries and serving customers who come from multiple cultures. Develop cultural knowledge & sensitivity, global selling programme..  Technology Competency Understand new technology, sales force automation, CRM (Customer Relationship Management)....