CM1 - Introduction to Sales Management (NU Laguna) PDF

SALES MANAGEMENT NU LAGUNA 1 Sales Management (SALEMAN) Course Material No. 1 Joel M. Cuadra Course I...

SALES MANAGEMENT NU LAGUNA 1 Sales Management (SALEMAN) Course Material No. 1 Joel M. Cuadra Course Instructor  2 SALES MANAGEMENT NU LAGUNA Introduction to Sales Management 1 LEARNING OUTCOMES LESSON OUTLINE What is sales Here’s what I will teach you in this course material: Unit Outline management? Understand the sales management; Discuss the sales, sales management and related concepts ; and Explain the structure and objectives of a sales organisation. SALES MANAGEMENT NU LAGUNA 3 TABLE OF CONTENTS Sales Management Pretest 4 Before you start, try answering the following Sales Management questions. 8 by Objective 1. What do you think the importance of sales management in the organization? 9 Lesson Summary _________________________________________ _________________________________________ 10 Key Terms _________________________________________ _________________________________________ Review 10 Questions _________________________________________ _________________________________________ 10 References 2. What is the impact of sales management by objective? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 4 SALES MANAGEMENT NU LAGUNA SALES MANAGEMENT A layman deals with different transactions in terms of selling and purchasing goods and services in daily life. In these transactions, the second one persuades the first person. Therefore, selling may be defined as influencing people to satisfy the want of the first one. The person who does this act is called the salesman, while the person is supervised and controlled by sales management. In the present scenario, sales executives are professionals. They plan, build and maintain effective organizations and design and utilize efficient control procedures. The professional's approach requires thorough analysis, market-efficient qualitative and quantitative personal-selling strategy. It calls for the skillful application of organizational 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 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 the industry as ministers do in states and at the center, i.e., they have to plan, forecast, direct and control their personnel. Her success lies in the running together, hand in hand. Managers are the captains of the army of their followers. The word sales management is a combination of two words- sales and management. Sales are the art of planning in the mind of another a motive that will induce favorable action. Sales management initially referred exclusively to the direction of sales force personnel, and lately, the term transformed into a broader aspect and the management of personnel selling. In general, Sales Management refers to managing overall marketing activities such as advertising, sales promotion, marketing research, physical distribution, pricing, and product merchandising. SALES MANAGEMENT NU LAGUNA 5 DEFINITION: According to American Marketing Association: Sales management refers to “The planning, direction, and control of personnel selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the personal sales force”. SALES MANAGEMENT Work can be categorized as….. ELEMENTS OF SALES MANAGEMENT There are the four essential elements of sales management, discussed below: 1. Planning: a business cannot be taken as a chance. Is every salespeople or person concerned has to see for the future, 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. After investigating the total market, the plan should also be evaluated for a particular type of product. Flexibility must be provided by establishing a specialists production line to allow for variation in production. The plan should also be subject to continued review. The plan details should be discussed, with all the departmental heads, concerned, and their subordinates, who bear responsibility for fulfilling their parts of the plan. 6 SALES MANAGEMENT NU LAGUNA 2. Coordination: Coordination 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 coordination. Similarly, organizing starts by coordination wholly, partially inter-departmental, and inter-personnel matters. Coordination also helps maximize human effort by exercising effective leadership, guidance, motivation, supervision, communication, etc. The control system also needs coordination. Coordination does not have any special techniques. Nevertheless, there are sound principles on which to develop skills. It has a particular need to help the staff see the total picture and coordinate their activities with the rest of the team. The sales manager has to encourage direct personal contact within the organization, particularly lateral leadership. Harmony, and not discord, should be the guiding mantra. In addition, one has to ensure a free flow of information that is selective to the objectives of the business. No personal problems arising from business operations are ignored but solved through a free exchange of ideas. This is especially true in the case of the sales force of any organization. 3. Controlling: the sales manager has to regularly check that the sales activities move in the right direction. He guides, leads, and motivates the subordinates to 8 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 organization. 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 achieve 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 salesperson; (iv) determine, review and select distribution channels; (v) organize an efficient sales force; (vi) establish a system of sales- reporting; (vii) establish a system of statistical sales-credit; (viii) establish stock control SALES MANAGEMENT NU LAGUNA 7 system(s); (ix) review of the performance of the salesforce, and (x) establish periodical testing programs. Each salesperson is assigned a territory (not so big that it cannot be adequately covered). Each salesman has a target set for a specific ‘period. From the weekly and monthly sales reports, the control system is established that will prepare records of 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 behavior patterns. This is especially important in the case of the salesforce. Only motivated salespersons can achieve the Company’s goals. OBJECTIVES OF SALES MANAGEMENT Every business firm has specific objectives to achieve. These objectives may be very explicit and definitive, or they may be implicit or general. Although firms have different mixes of purposes, 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 essential to a business firm, the purposes relating to sales volume, market share, and profitability are greatly affected by the effectiveness and efficiency of the sales function. Business firms have found that it is the most effective management objective of the firm; that must emanate out of its overall business or corporate purposes. The sales-management goals of a business firm generally relate to the areas of (i) achieving sufficient sales volume, (ii) providing sufficient profit, and (iii) experiencing continuing growth. Business firms have found that it is the most effective management objective of the firm; that must emanate out of its overall business or corporate purposes. The sales-management goals of a business firm generally relate to the areas of (i) achieving sufficient sales volume, (ii) providing sufficient profit, and (iii) experiencing continuing growth. 8 SALES MANAGEMENT NU LAGUNA Generally, the objectives of sales managers 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 is more than one objective, these should be hierarchical (most important, down to the least important). To ensure their perfect realization, 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 traveling 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 finalized, with the involvement of the salesforce, at the grassroots level. In addition, the process of setting sales objectives should begin only after the Company has conducted benchmark studies to find out where it stands in terms of product, brand, and market sales and market share trends (all in measurable terms). Sales Management by Objective Another approach to formulate and accomplish sales objectives is the sales management by objectives (SMBO) technique. It is developed combined by the sales manager and salesforce (representatives). It aims to focus on (i) results within a specified set of objectives and (ii) participative management style. Process of SMBO The operationalization of SMBO is a process comprising of the following steps: 1. Setting goals jointly with the salesman: In this process, the plans for salespeople and sales managers are settled simultaneously to build 11 close coordination between them, and lastly, they achieve the organization's primary objective. SALES MANAGEMENT NU LAGUNA 9 2. Planning strategy to reach the objectives: His participative style of sales. Management proves a boon to the top-management 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 right timing, and must be efficient in the use of resources of time and money. 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 better approach, from the viewpoint of the salesman; and c. It is motivating the salesman. LESSON SUMMARY In total, selling is the act, sales are the result of this act, while the salesman is the person who does this act. So, salesmanship is the quality of the front of selling. Thus, selling and salesmanship cannot be used synonymously. Salesmanship serves the dual purpose of discovering and persuading prospective buyers. A salesman has to deal and establish a winning, regular and permanent relationship with his customers by his creative faculties. A satisfied customer is just the beginning of this type of relationship, which ensures future repeat orders. The principle of management governs sales management. The four elements viz., (i) planning, (ii) coordination, (iii) controlling, and (iv) motivation are very relevant, as per the requirement of the unique nature of the business. Objectives are equally crucial for sound sales management. Generally, these are (i) achieving sufficient sales volume, (ii) providing reasonable profit, and (iii)  10 SALES MANAGEMENT NU LAGUNA experiencing continuing growth. SMBO (sales management by objectives) is a recent approach to 19 formulate and accomplish these objectives. Sales management also needs a proper organizational structure. Different structures suit different situations and requirements. These may be based on a national or regional basis or product market basis. A sales manager/director is the key person to plan, coordinate, control, and motivate all business concerns' selling activities. His job is multi-purpose, and he has to face all the odd and challenging changes. However, with his skill, urgency, and adaptability, these can be quickly met with. KEY TERMS SMBO: Sales Management by objective is a selling technique or approach which focus on result within a specified set of objectives. Sales Volume: It is the total number of products sold. It may be expressed in monitory terms as well. REVIEW QUESTIONS FOR DISCUSSION 1. Salesmanship is both an art as well as a Science. Comment. 2. Write a short essay on sales management. 3. What do you mean by the objectives of any organization? Explain. 4. Write short notes on: a. SBMO; and b. Selling activities of a firm. REFERENCES Anderson, Joseph, and Bush, ‘Professional Sales Management’, McGraw Hill. SALES MANAGEMENT NU LAGUNA 11 Dalrymple, Cron, and Decarlo, ‘Sales Management’, John Wiley and Sons. Fundamentals of Selling: Customers for Life through Service, 9th Edition, by Charles M. Futrell Manning and Reece, ‘Selling Today’, Pearson Education. Promotional strategy, 8th Edition, by James F. Engel, Martin R. Warshaw, and Thomas C. Kinnear Robert J. Calvin, ‘Sales Management’, Tata McGraw Hill. Sales and Distribution Management by Krishna K. Havaldar and Vasant M. Cavale Selling, Building Partnerships, 4th Edition, by Barton A Weitz, Stephen B. Castleberry, and John F. Tanner Jr. Stanton and Spiro, ‘Management of a Sales Force’, McGraw Hill. Still, Cundiff, and Govoni, ‘Sales Management’, PHI.