Overview

 

In daily life, a layman deals with different transaction in terms of selling and purchasing of goods and services. In these transactions the second one persuades the first person. Therefore, selling may be defined as persuading people to satisfy the want of first one. The person, who does this act, is called as the salesman, the result of this action as sales, while these activities of the person, are supervised and controlled by sales-management. In the present scenario sales executives are professionals. They plan, build and maintain effective organisations and design and utilize efficient control procedures. The professionals approach requires thorough analysis, market-efficient qualitative and quantitative personal-selling strategy. It calls for skillful application of organisational principles to the conduct of sales operations. In addition, the professional approach demands the ability to install, operate, and use control procedures appropriate to the firm’s situation and its objectives.

Executives capable of applying the professional approach to sales management are in high demand today. The quality of selling is referred to as salesmanship. In other words, ‘management’ is synonymous with leadership. Managers do the same thing in industry, as ministers do in states and at the centre, i.e., they have to plan, forecast, direct and control their personnel. Here success lies in running together, hand in hand. Managers are the captains of the army of their followers.

 

 

DEFINITION

Originally, the term ‘sales management’ referred to the direction of sales force personnel. But, it has gained a significant position in the today’s world. Now, the sales management meant management of all marketing activities, including advertising, sales promotion, marketing research, physical distribution, pricing, and product merchandising. The American marketers association (AMA’s) definition, takes into consideration a number of these viewpoints. Its definitions runs like: the planning, direction, and control of the personnel, selling activities of a business unit including recruiting, selecting, training, assigning, rating, supervising, paying, motivating, as all these tasks apply to the personnel sales-force. Further, it may be quoted: it is a socio-scientific process, involving’ group-effort’ in the pursuit of common goals or objectives, which are pre-determined. Co-ordination is its key, though, no doubt, it is a system of authority, but the emphasis is on harmony and not conflict.

Sales-management differs from other fields of management, mainly in different aspects: the selling operation of a business firm does not exist in isolation. Thus, simultaneous with the changes taking place in the business, as well as marketing-orientation, anew concept of sales management has evolved. The business, is now society-oriented, on human-welfare aspects. So, sales-management has to work in a broader and newer environment, in co-existence with the traditional lines. The present emphasis is now on total development of human resources.

 

BENEFITS OF SELLING ACTIVITIES

There are different benefits of selling activities, which are as follows:

(1) Benefits to the society: economic growth and maximum employment are the basics for national development. The achievement of both these goals means jobs and incomes for a nation’s labour-force. The number of people, who need jobs, continues to expand, and also some jobs are being eliminated, because of the introduction of computers and abolition of obsolete technology. If jobs are to be made available for all those, who want and expect them, the economy must continuously expand its production of goods and services, which can only be done by adopting sound government-policies and efficient use of people. Equally important here is the fact, that an economy needs individuals, to sell what is produced. Through their persistent efforts to create and stimulate demand, sales- people could be said to be the life and blood of a productive economic-system. The large number of workers, in factories, and offices, would not be needed, if someone were not selling their products.

(2) Benefits to consumers: professional people may not know every facet of a product, but they, at least know its major uses, limitations and benefits; so they can easily serve their customers, quite effectively. For exan1ple, an insurance agent can analyse the hazards and risks that confront a client’s business or home-situation, examine existing coverage and offer helpful advice, in order to eliminate the gaps or overlaps in coverage, in addition to saving the client’s money. The sales-engineers are qualified to analyse technical-problems, which may be confronting a particular organisation and they can give the right recommendations for developing efficient operations. Like-wise, the medical-representatives may help the busy doctor, by keeping him abreast of new drugs in the market. The list of sales-people who can offer assistance to customers is practically without end.

(3) Benefits to business firms; their sales-persons and customers: salespersons are owned by their companies, while customers are the end-users of the company’s product(s) and/or services, all these people, in the chain of marketing, stand to benefit by sales-activities. A business firm can be profitable only if its revenues exceed its costs. The prime responsibility of the salespersons is to sell the goods, produced by the organisation, at a profit. The creative sales-person, tries to penetrate his territory, and adopts suitable means and techniques of profitable-selling of goods and/or services. Business firms, derive various other benefits from, non-selling activities of sales-persons. The sales-person, in the field, is an ideal person, to keep the company abreast, or ahead of competition. He, thus, becomes an important source of field-intelligence by providing important (and sometimes very crucial) information, about the nature of competitive-activities, and also about the changing needs of customers. The sales-force has the additional responsibility of serving the needs of customers that buy the film’s product(s). Most firms cannot survive, only on the basis of one-time sales; repeat-sales are necessary. This is possible only if the customers are served in a professional manner. A customer-oriented sales-person has to perform such activities as: providing customers with ‘product-information’ and ‘demonstration(s); training customers-employees, in product-use; providing customers with sales-advice; and assisting customers in maintaining ‘inventories’.

1.4 ELEMENTS OF SALES MANAGEMENT

There are the four basic elements of sales management, discussed below:

(1) Planning: a business cannot be taken as a chance. Every salespeople or person concerned have to see for the future, in a planned way like what must be done? And who will do it? The plan must be based on extensive market research, and the facts must be verified at every stage. The plan should also be evaluated, after investigating the total-market, for a particular type of product. Flexibility must be provided by establishing a specialist’s production line, to allow for variation in production. The plan should also be subject to continued review. The details of the plan should be discussed, with all the departmental heads, concerned, and their sub-ordinates, who bear responsibility for fulfilling their parts of the plan.

(2) Co-ordination: Co-ordination is all pervasive and permeates every function of the management-process. For example, ill planning, departmental-plans are integrated into a master. Plan, ensuring adequate co-ordination. Similarly, organising starts by co-ordination wholly, partially inter-departmental and inter-personnel matters. Co-ordination also helps in maximum utilisation of human-effort by the exercise of effective leadership, guidance, motivation, supervision, communication etc. The control-system also needs coordination. Co-ordination does not have any special techniques. Nevertheless, there are sound principles, on which to develop skills. It has a special need to help the staff, to see the total picture and co-ordinate their activities, with the rest of the team. The sales manager has to encourage direct personal-contact, within the organisation, particularly where there is lateral-leadership. Harmony, and not discord, should be the guiding mantra. In addition, one has to ensure free flow of information that is selective to the objectives of the business. No personal problems, arising from business-operations are to be ignored, but solved through a free-exchange of ideas. This is especially true in the case of the sales-force of any organisation.

(3) Controlling: the sales manager has to check regularly, that the sales activities are moving in the right direction or not. He guides, leads, and motivates the subordinates, so as to achieve the goals planned for the business. He has to take steps to ensure that the activities of the people conform to the plans and objectives of the organisation. The controlling system should be such that one can study the past, note the pitfalls and take corrective measures, so that similar problems may not occur in the future. The controller has to ensure that the set targets, budgets and schedules are attained or followed in letter and spirit. There must be procedures to bring to light the failure to attain a target. The control-system has to (i) prepare sales and market forecasts; (ii) determine the level of sales-budget; (iii) determine the sales-quotas for each salesman; (iv) determine, review and select distribution-channels; (v) organise an efficient sales force; (vi) establish a system of sales-reporting; (vii) establish a system of statistical sales-credit; (viii) establish stock-control system(s); (ix) review of performance of the sales-force; and (x) establish periodical testing programmes. In a big organisation, each salesman is assigned a territory (not so big that it cannot be adequately covered). Each salesman has a target, set for specific ‘period. From the weekly and monthly sales-reports, the control system is established, that will prepare records whether a particular salesman is working efficiently or not.

(4) Motivating: Motivation is essentially a human resource concept. It aims to weld together distinctive personalities into an efficient team. For this, knowledge of human psychology is needed, as a means of understanding behaviour patterns. This is especially important in the case of the sales-force.

Only motivated sales-persons can achieve company’s goals.

 

OBJECTIVES OF SALES MANAGEMENT

Every business firm has certain objectives to achieve. These objectives may be very explicit and definitive, or they may be implicit or general. Although, firms have different mixes of objectives, and they do place differing emphasis, on individual ones, the typical objectives include (i) profitability, (ii) sales-volume, (iii) market share, (iv) growth, and (v) corporate-image. While all these objectives are important to a business firm, the objectives, relating to sales-volume, market share and profitability, are greatly affected by the effectiveness and efficiency, with which the sales-function is managed.

Business firms, have, in fact, found that it is the most effective management objective of the firm; that must emanate out of its overall business or corporate objectives. The sales-management objectives of a business firm, generally relate to the areas of (i) achieving sufficient sales-volume, (ii) providing sufficient profit, and (iii) experiencing continuing growth. Generally, objectives of sales-management have to cover various sales-functions, in an integrated manner. These objectives are to be expressed, as far as possible, in measurable and quantitative terms, and should also be realistic and achievable. Since, there are more than one objective, these should be put, on a hierarchical manner (most-important, down to the least important). To ensure their flawless realisation, they must be congruent, i.e., they must fit together, and not be in conflict with each other. For example, suppose you ask a salesman to cut his travelling expenses, and ask him to spend more time, in the field. To make these two requirements, more meaningful, they must be linked with specific time-element. The setting of objectives should not be based only on the judgment of the top-management. Rather, it should be formulated and finalised, with the involvement of the sales-force, at the grass-roots level. In addition, the process of setting of sales-objectives should begin, only after the company has conducted benchmark studies, to find out, as to where it stands in terms of product, brand and market-sales and market share trends (all in measurable terms).

1.6 SMBO APPROACH

It is another approach to formulate and accomplish sales-objectives is the sales management by objectives (SMBO) technique. It is formulated combined by sales manager and sales-force (representatives). It aims to focus on (i) results, within a specified set of objectives and (ii) participative style of management.

1.6.1 Process of SMBO

The operationalisation of SMBO is a process, comprising of the following steps:

(i) Setting goals jointly with the salesman: In this process the goals for sales-man and sales managers are settled simultaneously in the organisation so that they can built a close coordination between them and lastly they achieve the main objective of the organisation.

(ii) Planning strategy to reach the objectives: His the participative style of sales. Management proves to be a boon to the top-management, in the sense of the close familiarity of the salesman, with their markets. The outcome of the joint exercise would be the development of a strategy that directs the salesman to his objectives, following a plan, in the correct sequence, with the correct timing, and must be efficient, in the use of resources of time and money.

1.6.2 Importance of SMBO

The importance of SMBO for a business firm is as follows:

(a) Directing the salesman towards the broader sales and marketing objectives of the Company;

(b) Providing a better approach, from the view-point of the salesman; and

(c) Motivating the salesman.

 

Steps to establish a sales structure

The following procedure may be adopted to, establish a practical and viable sales-organisational structure:

 

(i) Begin with a historical profile of the company’s allegiance, overall organisation and top-management philosophy of the firm.

(ii) Analyse the requirements of the company and the sales-department, particularly in terms of its: size, position in the market, nature of activities, product mix, nature of customers, state of competition, and sales-people and their ambitions.

(iii) Appraise the potential of the company, in terms of its impact on the financial, technical, scientific and human resources, existing currently.

(iv) Analyse the prevailing working-atmosphere and state of communications, especially from the view-point of relationship and human-feelings involved in such relationships.

(v) List the various administrative-details, connected with the company.

(vi) Prepare a note, relating to the various administrative-details including aspects like hierarchy, span of control, etc. on the sales-department, and overall organisation of the department.

(vii) Describe the procedures and Processes to be followed for executing various tasks.

(viii) Based on the above, prepare a draft-structure of the sales-department, giving job-descriptions of the whole of the department, and a who’s who of the department.

(ix) Examine the structure, from the point of view of viability and practicality.

In the light of the complexities and vastness of the above process, for creating a sales structure, once again, we state that various industries, though being equally efficient, and of the same category, organise their sales-departments, in different ways.

 

SELF ASSESSMENT QUESTIONS

  1. Differentiate (i) selling, (ii) sales, and (iii) salesmanship.
  2. Salesmanship is both an Art as well as a Science. Comment.
  3. Write a short essay on sales-management.
  4. What do you mean by objectives of any organisation?

Explain.

  1. What do you mean by organisation for sales-management?

Explain its need, importance, functions and the essentials of a good structure.

  1. Write short notes on:

(i) SMBO

(ii) Organisational Structure of Call Center

(iii) Selling activities of a firm.

 
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