1. BEHAVIOURAL EQUATION THEORY
J A Howard formulated the theory
four essential elements of learning process in stimulus-response model
 drives , cues , response , reinforcement
1. drives: strong internal stimuli that impels the buyer to respond.
there are two kinds
 innate drive: stems from physiological needs
 learned drives: such as striving for status or social approval, are acquired
when paired with satisfying of innate drives
2. cues: weak stimuli that determine when the buyer will respond
 triggering cues: activate the decision process for any given purchase
 non-triggering cues: influence the decision process but do not activate it. two
kinds –

2. A) Product cues: external stimuli received from the product directly. (Package, weight,
price)
B) Informational cues: external stimuli. May come from advertising, personal selling etc.
***Specific product and information cues may also act as triggering cues
3. Response: what buyer does
4. Reinforcement: any event that strengthens the buyer’s tendency to
make particular response
Howard incorporates these four elements into an equation:
B=p X D X K X V
B= response (purchasing the brand/patronising the supplier)
P= predisposition (inward response tendency)
D= present drive level (amount of motivation)
K= incentive potential (value of product or its potential satisfaction to the buyer)
V= intensity of all cues

3. CONTD…
the relation among the variable is multiplicative. thus, if
any independent variable has zero value, b will also be
zero and there is no response.
buyer-sellers dyad and reinforcement
 by providing the product to the buyer
 by giving social approval
salespersons influence process
the process is explainable in terms of equation
b= p x d x k x v
 salesperson influences p directly
 sales person also influences d, which ultimately affects k
 finally the sales person vary the intensity of his efforts, so
making difference in v

4. salesperson’s role in reducing buyer’s dissonance: four
types of cases involving the salesperson’s role.
1. an established product: an ongoing salesperson’s-
client relationship
2. an established product: a new salesperson-client
relationship
3. a new product: an ongoing salesperson-client
relationship
4. a new product: a new sales person-client
relationship
how to reduce buyers dissonance
1. to emphasize the advantages of products
purchased
2. by providing the information that permits the buyer
to rationalize the decision

5. FORMULATION OF PERSONAL SELLING STRATEGIES
Pure competition
 No single buyer/seller is so large that affects the product total demand/supply
 All sellers products are identical
 No artificial restraints on price exists
 All buyers are informed about sellers price
Personal selling strategy
Unrealistic assumptions, therefore, no personnel selling
strategies
Monopolistic competition
 Large number of sellers of generic product but each product is differentiated
 Easy entry conditions
 Buyers are not fully informed about the offering of competing sellers
Personal selling strategy
Sellers differentiate their market offerings through individualizing one or
several components of overall marketing strategy.

6.  Oligopolistic competition
– Few & large competitors
– Entry barriers
– Changing of marketing strategy of one competitor has direct
repurcussions on other
Personal selling strategies
Plays important role in building and maintaining dealer
competition, in servicing the distribution network and in
gathering information on competitor’s activities.
 No direct competition
No direct but indirect competition exists.
Personal selling strategies
– Selling strategies required to stimulate primary demand
– Requirement of distribution strategy
– Requirement of pricing strategy
– Integration of product, distribution, pricing strategies in overall
marketing strategies

7. DETERMINING THE KIND OF SALES PERSONNEL
1. Product market analysis
A) Product specialist
B) Market specialist
C) Combination of both
2. Analysis of sales personnel role in securing the order: choice of basic selling style
A) Trade selling:
 Developing and maintaing long-term relationship with stable customers
 Low key selling, little or no pressure, job is dull & routine
 Advetising & other promotional measures are preferrred than personal selling
 Sales person role is to buildup volume by providing promotional assistance
B) Missionary selling
 Low key and does not require high-level technical training or ability
 Salesperson job is to persuade indirect customers to buy from the company’s direct customers
c) Technical selling
d) New business selling

8. DETERMINING THE KIND OF SALES PERSONNEL CONTD…
C) Technical selling
 Sales person deals with company’s established account &
perform advisory function
 Sales person sells directly to the industrial users & other
buyers
 Sales person specialize by either product or market
 The ability to identify, analyze & solve customers problem
is important
D)New business selling
 Sales persons role is to convert prospects into customer
 Sales person should unusually creative, ingenious and
possess a high degree of resourcefulness

9. DETERMINING THE SIZE OF SALES FORCE
1. The workload method: all sales persons should
share equal workload
i. Classify customers into sales volume potential category
ii. Decide on length of time per sales call and desired calls
frequencies on each class
iii. Calculate the total workload
iv. Calculate total worktime available per person
v. Divide total worktime available per person by task
vi. Calculate the total no. Of sales person needed
– Large firms like ibm & at&t has used this approach
– Basic flaw – disregard profit as an explicit consideration
- All sales person will utilize their time with equal efficiency

10. Contd…
2. The sales potential method
 Performance of the set of activities contained in the job
description represents one sales personnel unit
 Does not consider the lead time
 Assumes sales potential are identical in all territories
 Estimate of sales productivity of one unit sale & turnover is
crucial & relies on accuracy
N = s/p+t(s/p) or n=s/p(1+t)
N = no. Of sales personnel units
S = forecasted sales volume
P = estimated sales productivity of one sales personnel unit
T = allowance for rate of sales turnover

11. Contd…
3. Incremental method
 Best approach to determine sales force size
 Based on proposition: net profits will increase when
additional sales personnel are added if the incremental
sales revenues exceeds the incremental costs incurred
 Conceptually most correct but most difficult to apply
 It is doubtful that the method is appropriate where
personal selling is not primary means of making sales
 It fails to account for possible competitive reactions and
long term investment effect of personal selling

12. STEPS IN PERSONAL SELLING
Presentation
Handling
Prospecting Pre-Approach Approach and Close
objects
demonstration

13. PROSPECTING
• the planning work which is essential in eliminating non-buyers
• steps in prospecting
1. formulating prospects definition
2. searching out potential accounts
3. qualifying prospects & determining probable requirements
4. relating company product’s to each prospect’s requirement

14. CONTD…
• methods of prospecting
1. acquintance references
2. cold calling
3. centre of influence method
4. personal observation method
5. direct mail/ telephone method
6. company’s record
7. newspapers
8. retailers
9. any other

15. PRE-APPROACH
• the kind of preparation to meet the buyer
• significance of pre-approach
 concentrate on prospect and not the suspect
 helps gain information about the prospect before approaching
 efficient & effective sales presentation
 does not waste the prospects time & energy

16. APPROACH
• direct contact between sales person & prospect
• importance of successful approach
 enhances sales & thus important for running business
 enlightens the customer
 failed approach gives opportunity to rivals
• key to successful approach
 meet prospect with prior appointment
 professionalism, confidence & complete information
 make prospect feel relaxed
 respect the views & critism of prospects
 effective presentation with the use of sales figure
 efficient follow up

17. CONTD…
• methods of approach
 cashing on brand name or company’s reputation
 customer benefit approach
 innovative products open the door to salesman
 the premium approach
 the shock approach
 the approach of making prospect feel important
 the survey approach
 the interactive approach

18. PRESENTATION & DEMONSTRATION
– requirements of good presentation
 quick presentation of products
 attractive, decorated & well organized packages
 explaination of product features in simple & easy terms
 show the kind of quality demanded by sales person
 product appeal to customer senses
– advantages of demonstration
 shows product features clearly
 reinforcement of buying decisions
 gives customer opportunity to compare products
 increases confidence of customer
 speaks louder than salesman

19. HANDLING OBJECTIONS
• types of objections
 objections on price
 objections on quality
 objections on payment
 objections on after sale service
 objections on timing to buy
• procedure for handling objections
 give opportunity to prospect to raise objection
 admit valid objections and accept in positive spirit
 never offend prospect by overruling objection
 convince prospect to view problem from different angle
 give better deal to customer to counter objection

20. THE SALES CLOSE
convince the customer to buy a product
• reasons for failure to close
 prospect not fully convinced
 pressurized by salesman to buy product
 prospects want to postpone purchase
 salesman not recognizing his needs/preferences
 salesman not fully aware
 proper planning, presentation & demonstration is not
there

21. SALES ORGANIZATIONS
• purpose of sales organizations
to permit the development of specialist
to assure that all necessary activities are
performed
to achive coordination or balance
to define authority
to economize on executive time

22. SETTING UP A SALES ORGANIZATION
• Defining the objective
 Set both quantitative as well as qualitative objectives
 Qualitative objectives are indispensable for long-range planning, thus,
kept in mind in short range planning also
 Quantitative objectives are required as operating guideposts
• Delineating the necessary activities
 Determining the necessary activities & their volume of performance is
based on qualitative & quantitative objectives
 Also helps in determining which activities to be performed in what
volume

23. CONTD…
• grouping activities into ‘jobs’ or ‘positions’
 activities identified are allocated to different positions
 activities are grouped so that closely related tasks are assigned to
same positions
 each position must also contain some variations
• assigning personnel to positions
 whether to recruit special individuals to fill the positions or to modify the
positions to fit the capabilities of available persons
• providing for coordination and control
 sales executives require means to control their subordinates & to
coordinate their efforts
 they should not be overburdened nor should have too many
subordinates

24. CONTD…
 coordination & control is obtained through both formal &
informal means
 formal instruments of organizational control:
1. written job description
 reporting relationships
 job objectives, duties & responsibilities
 performance measurements
2. an organization chart
 reduces confusion about individuals role
 delineates formal relationship
3. organizational manuals
 extension of organization chart
 contains chart for both the company & the department

25. BASIC TYPES OF SALES ORGANIZATION
STRUCTURE
• factors affecting the organizational structure
• types of organization structure
 the customers
 the marketing channelsthe company size
 the product or product line
 the practices of competitors
 personalities & abilities of personnel
• line sales organizations
 oldest & simplest structure
 widely used in smaller firms or firms with small numbers
of selling personnels, limited geographical area or
narrow product line
 chain of command run from top to down
 all executives exercise line authority & each sales person
is responsible to next in the hierarchy

26. LINE SALES DEPARTMENT ORGANIZATION
GM
SM
ASSISTANT ASSISTANT ASSISTANT ASSISTANT
SM DIV-1 SM DIV-2 SM DIV-3 SM OFFICE
SALES SALES SALES OFFICE
PEOPLE PEOPLE PEOPLE STAFF

27. CONTD…
 no cross communication between persons at same level
 greatest use in companies where all sales persons report directly to the chief sales
executives
• advantages:
 problems of discipline & control are small
 authority & responsibilty are clear
 saves time in making policy changes
 development of close relationship between superior & subordinate
 administrative expenses are low
• disadvantages
 too much dependence on department head
 insufficient time for policy making & planning
 inappropriate for rapidly growing firms
 offers little opportunity to subordinates to acquire management skills

28. CONTD…
• line & staff sales organizations
 found in large & medium-sized firms employing number of
sales persons, selling diversified product lines over wide
geographic areas
 provide top sales executives with group of specialists to
assist
 staff helps in conserving the time & frees executives for
other works
 staff specialists increases overall effectiveness of
department
 staff do not have authority to issue orders or directives

29. LINE & STAFF SALES DEPTT. ORGANIZATION
President
Vp marketing
Advertising Gm sales Manager market research
Manager
Assistant Sales
Director Sales personel Assistant
To Promotion
Training Director Gm sales
Gm sales Manager
District sales manager
Branch sales manager
Sales personnel

30. CONTD…
• Advantages
 Specialization
 planning activities are divided and apportioned to staff
members
 executives concentrate on coordination & control
• Disadvantages
 increase in administrative expenses
 difficult to prevent some persons from evading unwanted
responsibilities

31. CONTD…
• functional sales organization
 each individual in an organization should have few
distinctive duties as possible
 principle of specialization is utilized to its fullest extent
 sales people receive instructions from several executive
but at different aspects of their work
• Advantages
 improved performance
• disadvantages
 not feasible for small & medium sized firms
 suitable for large firms with stable operations & with
opportunity for considerable division of labour

32. CONTD…
• committee sales organization
 never a sole basis for organizing a sales deptt.
 method of organizing the executive groups for planning &
policy formulation
 the agenda must be planned & controlled to avoid wasting
time
• advantages
• promote coordination
• collective decision making
• provide focal point for discussion & for suggestions

33. SALES TERRITORIES
• a sales territory is a grouping of customers and
prospects assigned to an individual sales person
• reason for establishing or revising sales territories
a. to provide proper market coverage
b. to control selling expenses
c. to assist in evaluating sales personnel
d. to contribute to sales force morale
e. to aid in the co-ordination of personal selling and advertising effort

34. Procedure for setting up or revising sales
territories
• four steps
1. selecting a basic geographical control units: the most commonly
used control units are –
a. counties: smallest unit for which govt. officials report data
b. zip code areas: generally reflects economic characteristics of area
c. cities: used when sales potential is located in urbanized areas
d. metropolitan statistical areas: geographical area with large population nucleus
together with adjacent communities
e. trading areas: the geographical region surrounding the city that serves as dominant
retail or wholesale center or both for the region
f. states: used when company with small sales force covering the market extensively
rather intensively or when company is first using the national distribution , which
assigns its sales person territories with 1 or more states as temporary expedient and
as soon as feasible a change is made to a small control unit

35. CONTD…
2. determining sales potentials in control unit
sales potential represents the maximum possible sales
opportunities open to a specific company selling a good
or services during a stated future period to a particular
market segment
3. combining control units into tentative territories
 decides on number of territories, assuming that all sales
personnel are of average ability
 analysis of past sales experience helps in determinig the % of
total sales potential that an average sales person should realize
 estimate the sales productivity per sales personnel unit and
devides it into the total estimated sales potential = no. of sales
personnel units - & territories required.
 the next step is to decide the territory shape, which affects
selling expenses & ease of coverage

36. CONTD…
4. adjusting for coverage difficulty and redistricting tentative territories – redistricting
to adjust for coverage difficulty is a seven step procedure –
a. determine no., location & size of customers & prospects in each
tentative territory
b. estimate time required for each sales call
c. determine length of time between calls, that is amount of time
required to travel from one customer to another
d. decide call frequencies
e. calculate the no. of calls possible within a given period
f. adjust the no. of calls possible during a given period by the
desired call frequencies for the different classes of customers &
prospects

37. SALES QUOTAS
– quotas are quantitative objectives assigned to
sales organizational units.
– all quotas have time dimension – they quantify
what management expects within a given period
– quotas are devises for directing & controlling sales
operation
– accurate data are important to the effectiveness
of quota system
– judgement & administrative skills are required of
those with quota setting responsibilities.

38. OBJECTIVES IN USING QUOTAS
• to provide quantitative performance standard – comparision
of quota with sales performance identify week & strong
points
• to obtain tighter sales & expense control
• to motivate desired performance
• to use in connection with sales contest
 companies frequently use “performance
against quota” as the main basis of making
awards in sales contest
 sales contest is a powerful incentive if all
participants feel they have equal chance of
winning

39. TYPES OF QUOTAS
• sales volume quota
 oldest & most common type
 communicates – “ how much for what period”
 set for geographical areas, product lines or marketing
channels or combination
 the smaller the unit, the more effective the quota for
controlling sales operation
• budget