Sdm 1.0

Sdm 1.0
DEPARTMENT OF BUSINESS ADMINISTRATION & RESEARCH Shri Sant Gajanan Maharaj College of Engg., Shegaon MBA Sem-III (Marketing) Course: (MBA/3202/M) Sales and Distribution Management
Introduction to Sales Management: Nature, Rewards, and Responsibilities
WHAT IS SALES MANAGEMENT? Sales management is the attainment of sales force goals in an effective and efficient manner through: • Planning • Staffing • Training • Leading • Controlling organizational resources
FIGURE 1.1 THE SALES MANAGEMENT PROCESS Sales Management Functions
PLANNING The conscious, systemic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future and the use of resources needed to attain them.
STAFFING Activities undertaken to attract, develop, and maintain effective sales personnel within an organization.
SALES TRAINING The effort put forth by an employer to provide the salesperson job-related culture, skills, knowledge, and attitudes that result in improved performance in the selling environment.
LEADING The ability to influence other people toward the attainment of objectives.
CONTROLLING Monitoring sales personnel’s activities, determining whether the organization is on target toward its goals, and making corrections as necessary.
Sales Management is the attainment of sales goals in an ethical, efficient, and effective manner. SALES PERFORMANCE
Three main ethical areas most frequently faced by sales personnel: • Salespeople • Employers • Customers
FIGURE 1.2 THE SYSTEMS VIEW OF AN ORGANIZATION EXTERNAL ENVIRONMENT
Organization is a social system that is goal directed and has a deliberated structure. Social means being made up of two or more people. Deliberated structure means the tasks are divided, and the responsibility for their performance is assigned to organization members. Goal directed means an organization is designed to achieve some outcome.
Organizational effectiveness is the degree to which the organization achieves a stated objective. Organizational efficiency refers to the amount of resources used to achieve an organizational goal. MAJOR PARTS OF AN ORGANIZATIONAL SYSTEM
T o p S a le s L e a d e r s ( S t r a t e g ic ) F ir s t - L in e S a le s L e a d e r s ( O p e r a t io n a l) M id d le S a le s L e a d e r s ( T a c t ic a l) FIGURE 1.3 SALES LEADER LEVELS IN THE ORGANIZATIONAL HIERARCHY Regional Sales Leader CEO President Vice President of Marketing National Sales Leader Zone Sales Leader District Sales Leader Assistant District Sales Leader Nonmanagerial Salespeople Sales Trainee Salesperson Key Account
P la n n in g 3 5 % S t a f f in g 1 0 % T r a in - in g 5 % L e a d in g 3 0 % C o n t r o llin g 2 0 % P la n n in g 2 8 % T r a in in g 1 0 % L e a d in g 3 0 % C o n t r o llin g 2 2 % S t a f f in g 1 0 % P la n n in g 1 5 % T r a in in g 2 5 % L e a d in g 2 5 % C o n t r o l lin g 1 5 % S t a f f in g 2 0 % FIGURE 1.4 PERCENTAGE OF TIME SPENT ON FUNCTIONAL ACTIVITIES BY ORGANIZATIONAL LEVEL Top Managers Middle Managers First-Line Managers
Sales Trainee Salesperson Key Account Salesperson District Sales Manager Regional Sales Manager Zone Sales Manager National Sales Mgr. Vice President of Marketing President FIGURE 1.5 A SALES PERSONNEL CAREER PATH
SALES MANAGEMENT SKILLS 1. CONCEPTUAL AND DECISION SKILLS Refer to the cognitive ability to see the organization as a whole and the relationships among its parts. 2. PEOPLE SKILLS Involve the ability to work with and through other people and to work effectively as a group member. 3. TECHNICAL SKILLS The ability to perform a specialized task that involves a certain method or process.
Effective Sales Executive • The job of the sales executive is more action oriented and less planning oriented • Main concern of sales management is the “present” – the “here and now” • Their decisions not only affect the sales department, but may have significant implications elsewhere in the organization
Nature of Sales Management Positions • Requirements of the sales executive’s job position vary from company to company and from position to position in a company • It is possible to generalize about activities and responsibilities of sales managers, district sales managers, product managers and other sales or marketing executives • Some companies have formulated concise statements of duties associated with various positions, known as job or position descriptions
Position Guide – Sales Manager • Reports to the vice president of marketing • The primary objective is to secure maximum volume of dollar sales through the effective development and execution of sales programs and sales policies for all products sold by division • Duties and responsibilities: – Sales Program – Organization – Sales Force Management – Internal and External Relations – Communications – Control
• Performance is satisfactory when, – Department’s Rupees or unit sales are equal to or exceed the quantities budgeted – Profit contribution of the sales department is in line with plan – Details of sales plan are in writing and are acceptable to marketing management – Turnover of sales personnel is maintained at a level regarded as satisfactory by marketing management
Position Guide – District Sales Manager • Reports to the sales manager • The primary objective is to secure maximum dollar sales of the company’s products in the sales district in accordance with established sales policies and sales programs, within the limits of sales budget • Duties and Responsibilities: – Supervision of Sales Personnel – Control – Administration – Communications
• Performance is satisfactory when, – District’s dollar and unit sales are equal to or exceed the quantities budgeted – District’s total expenses are no higher than the amounts budgeted – Profit contribution of the district office and warehouse and stock facilities is in line with plan – Turnover rate of district sales personnel is maintained at a level regarded as satisfactory by the (general) sales manager
Functions of sales Executive • Basically has two sets of functions - Operating - Sales Force Management - Handling relationships with personnel in other company departments and with trade - Communicating and coordinating with other marketing executives - Reporting to some superior executive
- Planning - Setting personal-selling goals - Developing sales program designed to achieve these goals - Formulating sales strategies and personal-selling strategies - Putting together plans for their implementation These functions varies with - The type of products - The size of the company - The type of supervisory organization
Qualities of Effective Sales Executive He should have • Ability to define the position’s exact functions and duties in relation to the goals the company should expect to attain • Ability to select and train capable subordinates and willingness to delegate sufficient authority to enable them to carry out assigned tasks with minimum supervision • Ability to utilize time efficiently • Ability to allocate sufficient time for thinking and planning • Ability to exercise skilled leadership
Relations with Top Management • Effective sales executives need to keep the top management abreast of their progress as their personal goals are intertwined with company’s goals • They should not be dispensable to the company and should be able to delegate tasks effectively • They update the top management of all the latest activities through periodic reports and presentations
Relations with Product management • Product planning and formulation of product policies requires numerous decisions • Sales executives provide input for these decisions • Their contact with the market through subordinates and sales personnel provide them with feedback about product performance and acceptance generally not available from other sources
Relations with Promotion Management • Sales executives play a very important role in promotional activities as they are the one who actually implement them • They must be involved in formulating policies as they are very close to the customers • The sales force must be kept updated about all the latest promotional activities
Relations with Pricing Management • Sales executives have much clearer ideas of the prices the buyers are willing to pay, because of the close and continuing contacts with the market • Pricing policies need to be formulated by a committee comprising of members from different departments • Once the policy is established, its implementation is the responsibility of the sales executive
Relations with Distribution Management • Distribution policies are major determinants of the breadth and complexity of sales department’s organization and functions • It has an impact on the sales organization and its activities • Sales executives play key roles in providing information needed for their formulation
FIGURE 1.6 RELATIONSHIP OF CONCEPTUAL AND DECISION, PEOPLE, AND TECHNICAL SKILLS TO SALES LEADER LEVEL T o p S a le s L e a d e r s M id d le S a le s L e a d e r s F ir s t - L in e S a le s L e a d e r s N o n m a n a g e r ia l S a le s p e o p le C o n c e p t u a l a n d D e c is io n S k ills P e o p le S k ills T e c h n ic a l S k ills
PROBLEMS NEW MANAGERS EXPERIENCE • Lack of preparation for the job. • Expected to step into the job and immediately function effectively. • Often lacks an immediate peer group.
MAKING A SUCCESSFUL TRANSITION TO MANAGEMENT • Have a learning attitude – a willingness to learn, change, adapt, and seek help when needed. • Having realistic expectations. • Leave the old job behind.
Sales Organization
Sales Organization Concepts Specialization The degree to which individuals perform some of the required tasks to the exclusion of others. Individuals can become experts on certain tasks, leading to better performance for the entire organization. Centralization The degree two which important decisions and tasks performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels.
Sales Force Specialization Continuum Some specialization of selling activities, products, and/or customers All selling activities and all products to all customers Generalists Certain selling activities for certain products for certain customers Specialists
Flat Sales Organization Span of Control ManagementLevels National Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager Span of Control vs. Management Levels
Tall Sales Organization National Sales Manager Span of Control ManagementLevels District Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager Regional Sales Manager Regional Sales Manager Span of Control vs. Management Levels
National Sales Manager Regional Sales Managers District Sales Managers Sales Training Manager Sales Training Manager Salespeople Staff Position Line Position Line vs. Staff Positions
Organizational Structure Environmental Characteristics Task Performance Performance Objective Specialization High Envir. uncertainty Nonroutine Adaptiveness Centralization Low Envir. Uncertainty Repetitive Effectiveness Selling-Situation Factors and Organizational Structure
Simple Product Offering Complex Range of Products Customer Needs Different Customer Needs Similar Market- Driven Specialization Product/Market- Driven Specialization Geography- Driven Specialization Product- Driven Specialization Customer and Product Determinants of Sales Force Specialization
Geographic Sales Organization National Sales Manager Zone Sales Managers (4) Zone Sales Managers (4) District Sales Managers (20) Salespeople (100) Salespeople (100) District Sales Managers (20) Eastern Region Sales Manager Western Region Sales Manager Sales Training Manager
Product Sales Organization National Sales Manager Office Equipment Sales Manager Office Supplies Sales Manager District Sales Managers (10) Salespeople (100) Salespeople (100) District Sales Managers (10)
Market Sales Organization National Sales Manager Zone Sales Managers (4) District Sales Managers (25) Salespeople (150) District Sales Managers (5) Commercial Accounts Sales Manager Government Accounts Sales Manager Sales Training Manager Salespeople (50)
Functional Sales Organization National Sales Manager Field Sales Manager Telemarketing Sales Manager Regional Sales Managers (4) Salespeople (160) Salespeople (40) District Sales Managers (2) District Sales Managers (16)
Large Small Complexity of Account SizeofAccount Large Account Simple Complex Major Account Regular Account Complex Account Identifying Major Accounts
Develop Major Account Salesforce Assign Major Accounts to Sales Managers Assign Major Accounts to Salespeople along with Other Accounts Major Accounts Options
Comparison of Sales Organization Structures Organizational Structure Advantages Disadvantages Geographic • Low Cost • No geographic duplication • No customer duplication • Fewer management levels • Limited specialization • Lack of management control over product or customer emphasis Product • Salespeople become experts in product attr. & applications • Management control over selling effort • High cost • Geographic duplication • Customer duplication
Comparison of Sales Organization Structures Organizational Structure Advantages Disadvantages Market • Salespeople develop better understanding of unique customer needs • Management control over selling allocated to different markets • High cost • Geographic duplication Functional • Efficiency in performing selling activities • Geographic duplication • Customer duplication • Need for coordination
Hybrid Sales Organization Structure National Sales Manager Major Accounts Sales Manager Regular Accounts Sales Manager Office Equipment Sales Manager Office Supplies Sales Manager Field Sales Manager Telemarketing Sales Manager Commercial Accounts Sales Manager Government Accounts Sales Manager Western Sales Manager Eastern Sales Manager
Sales-force Deployment 1. How much selling effort is needed to cover accounts and prospects adequately so that sales and profit objectives will be achieved? 2. How many salespeople are required to provide the desired amount of selling effort? 3. How should territories be designed to ensure proper coverage of accounts and to provide each salesperson with a reasonable opportunity for success? Sales Force deployment decisions can be viewed as providing answers to three interrelated questions.

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