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1. UNIT ‐ 2

2. Sales Organisation
•Salesorganisationisastructuralframework,specifyingtheformal
authorityandresponsibilitybetweenpersonsworkinginthe
organisation.
•Itconsistsofgroupofindividualsworkingjointlytoattainqualitative
and quantitative selling objectives.
•InthewordsofC.L.Boiling,“Agoodsalesorganisationisonewhere
functionsofdepartmentshavebeencarefullyplannedand
coordinatedtowardstheobjectiveofpullingtheproductinthe
handsofthecustomers,thewholeeffortbeingefficientlysupervised
andmanagedsothateachfunctionsiscarriedoutinthedesired
manner.”

3. Characteristics
•1.Salesorganisationisapartofthetotalenterprisedealingwith
sales activities.
•2. It consists of a group of people engaged in selling activities.
•3. It works for the attainment of common objectives of selling.
•4.Thereexistformalandinformalrelationshipsbetweenpersons
engaged in selling activities.
•5.Itdefinestheduties,responsibilitiesandrightsofpeopleinthe
selling jobs.

4. •6.Itestablishesdepartmentalizationofsellingactivities
separately.
•7.Itisameanstotheefficientexecutionofthesales
functionsandaccumulationofresourcestoperformthose
functions.
•8.Thesuccessofsalesorganisationdependsontheunified
and coordinated efforts of salespersons.
•9.Thesellingorganisationactsunderthedirectcontrolthe
sales manager.

5. Sales Organisation
Structure
•ASalesorganizationstructureidentifieshow
thevariouspositionsinanorganizationare
arrangedforachievementoftheorganization
objectives.
•Inthesimplestsense,itisachartwhich
indicatesthegroupingofactivitiesinto
positions in a structural form
•It clearly indicates who reports to whom.

6. The following factors are to be taken into
consideration while designing the structure of a sales
organisation:
•1. Nature of the market
•2. Sales policies of the
enterprise
•3. Nature of the product
•4. Number of products
•5. Availability of financial
resources
•6. Level of distribution
system
•7. Size of the company
•8. Price of the product
•9. Ability of the
professionals
•10. Position of competitors’
Products.

7. Basic Types of Sales
Organisations
•Sales organisations are generally classified into
four basic types:
•Line Organisation
•Line and staff organisation
•Functional organisation
•Horizontal organisation

8. Line Organisation

9. •Characteristics:Allmanagershavelineauthorityto
directandcontrolsubordinates.Usedinsmallfirms/
departments
•Advantages:Simpleorganization,clearauthority,
quick decisions, low cost
•Disadvantages:Nosupporttolinemanagersfrom
subordinateswhohavespecializedknowledge/skills.
Less time for planning /analysis

10. Line and Staff Organization

11. •Characteristics:Specialiststaffmanagersareavailablefor
seniormarketing/salesmanagers.Staffmanagers’roleisto
assist/adviselinemanagers.Usedinmediumandlargesize
organizations
•Advantages:Bettermarketingdecisions,superiorsales
performance
•Disadvantages:Highcostandcoordination,slowerdecision
making, conflict may arise if staff managers’ role is not clear

12. Functional Organization

13. •Characteristics:Eachfunctionalspecialisthasline
responsibilityoversalespeople.Usedbyalargefirm
withmanyproducts/marketsegments,minimizing
line authority to functional managers
•Advantages:Qualifiedspecialistsguidesalesforce,
simple to administer
•Disadvantage:confusionduetomoremanagers
giving orders to sales force

14. Horizontal Organization

15. •Characteristics:
•Removes management levels & departmental boundaries.
•Exceptplanningteam,allothersaremembersofcross‐
functional teams.
•Usedbyfirmshavingpartneringrelationshipswith
customers.
•Advantages:Reductioninsupervision,unnecessarytasks,&
cost; Improved efficiency and customer responses.

16. Specialization within Sales Organization
•Needed to increase effectiveness of sales force
•Done by expanding basic sales organization
•Basis of specialization
•Geography
•Type of product
•Market
•Combination of above
•Criteriaforselection–(1)natureofproduct,(2)salesforceabilities,
(3) demands of selling job, (4) customer and market facts

17. Geographic Specialization

18. •Characteristics:salespeople,assignedgeographicareas,are
responsibleforallsellingactivitiestoallcustomerswithin
assignedareas.Branchsalesmanagersadjustmarketing
plan to local needs
•Advantages:Bettermarketcoverageandcustomerservice,
morecontroloversalesforce,quickresponsetolocal
conditions & competition
•Disadvantages:Limitedspecializationofmarketingtasks.
Hence,itiscombinedwithproduct/marketsales
organization

19. Product Specialization

20. •Advantage:
•Eachproductgetsspecializedattentionfrom
the salesforce
•Disadvantage:
•Sometimes,moresalespeoplecontactthesame
customer,resultingincustomerdissatisfaction
and higher cost

21. Market Specialization

22. •Characteristics:Desirablewhencustomersare
classifiedbytype,userindustry,orchannel.
Salespeoplecarryoutallactivitiesforallproducts
only for specific customer groups
•Advantages:Meetsneedsofspecificcustomer
groups,implementscustomer‐centerdphilosophyof
the company
•Disadvantages: Geographic duplication, high cost

23. Combination Sales Organization

24. •Characteristics:
•Manyfirmsusesomecombinationof
specializationorganizations,calledhybridor
combinationsalesorganisation,withaviewto
minimizedisadvantagesandmaximize
advantages of specialization organizations

25. Sales Planning,
Sales Strategies,
Sales Forecasting, and
Budgeting

26. Strategic Planning
•Planningisdecidingnowwhat,how,andwhenwe
are going to do
•Strategicplanningisdecidingaboutthe
organisation’s long‐term objectives and strategies
•Inalargeorganisation,planningisdoneatthreeor
fourorganisationallevels,asshowninthefigure(in
the next slide)

27. Planning in
a Large
Organisatio
n
•Foreffectiveplanning,operations,andcontrol,alargemulti‐product
/multi‐businessfirmdividesitsmajorproducts/servicesinto
divisions / strategic business units ( SBUs)
•EachSBUhasaseparatebusiness,asetofcompetitorsand
customers,andamanagerresponsibleforstrategicplanning,
performance, and control

28. Role of Marketing in Organisational
Planning

29. Marketing and Sales
Strategies•Figure below shows how sales strategy is developed from marketing
strategy

30. Components of Sales
Strategy
•Classifyingmarketsegmentsandindividualcustomerswithinatarget
segment
•Eachfirmshouldfirstdecideontargetmarketsegmentsandifpossible,to
classify customers into high, medium, low sales & profit potentials
•Sales strategy is developed accordingly
•Relationship strategy
•Whetherasellingfirmshouldusetransactional,value‐added,or
collaborative relationship depends on both the seller and the customer
•Eachsellingfirmtodecidewhichsegmentsandindividualcustomers
respond profitably to collaborative relationship

31. Components of Sales Strategy (Continued)
•Selling Methods
•Theseare:(1)Stimulusresponse,(2)mentalstate(3)need‐satisfaction,(4)
problem solving, (5) consultative
•Selection of appropriate selling method depends on relationship strategy
•Channel Strategy
•There are many sales/marketing channels.
•Forexample:companysalesforce,distributors,franchisees,agents,the
internet, brokers, discount stores, etc
•Selectionofasuitablechanneldependsonboththebuyerandtheseller,
products / services, and markets

32. Meaning of Sales Forecasting
•Salesforecastistheestimateofamountofsalestobe
expectedforaitem/productorproductsforafutureperiod
of time.
•Excepttheindustriesbasedonjoborderalmostallthe
enterprisesproduceinadvancetomeetthefuture
requirements.
•Thusaccuratesalesforecastingisessentialforaenterprise
toenableittoproducetherequirednumberofitemsat
right time.

33. Definition
•Accordingtothe“AmericanMarketing
Association” sales forecast is defined as 
“Anestimateofsalesindollarsorphysicalunits
foraspecifiedfutureperiodunderaproposed
marketingplanorprogrammeandunderan
assumedsetofeconomicandotherforces
outside the unit for which the forecast is made.”

34. Basic Terms Used in Sales
Forecasting
•Marketdemandforaproductorserviceistheestimated
totalsalesvolumeinamarket(orindustry)foraspecific
timeperiodinadefinedmarketingenvironment,undera
definedmarketingprogramorexpenditure.Marketdemand
isafunctionassociatedwithvaryinglevelsofindustry
marketing expenditure.
•Market(orindustry)forecast(ormarketsize)isthe
expectedmarket(orindustry)demandatonelevelof
industry marketing expenditure

35. Basic Terms (Continued)
•Marketpotentialisthemaximummarket(orindustry)
demand,resultingfromaveryhighlevelofindustry
marketingexpenditure,wherefurtherincreasesin
expenditure would have little effect on increase in demand
•Companydemandisthecompany’sestimatedshareof
marketdemandforaproductorserviceatalternativelevels
ofthecompanymarketingefforts(orexpenditures)ina
specific time period

36. Basic Terms (Continued)
•Companysalespotentialisthemaximumestimated
companysalesofaproductorservice,basedon
maximumshare(orpercentage)ofmarketpotential
expected by the company
•Companysalesforecastistheestimatedcompany
salesofaproductorservice,basedonachosen(or
proposed)marketingexpenditureplan,foraspecific
time period, in a assumed marketing environment

37. •Salesbudgetistheestimateofexpectedsalesvolumeinunitsor
revenuesfromthecompany’sproductsandservices,andtheselling
expenses.Itissetslightlylowerthanthecompanysalesforecast,to
avoid excessive risks
•Sales Quota:
•A sales quota is a performance goal which is set for a marketing unit.
•Toputitsimply,itisthenumberofsalesinunitsorrupeeswhicha
marketing branch or zone or any unit is expected to make.
•Amarketingunitcouldbeinanyformlikeasalesperson,abranch,a
region, or a member of the trade channel.

38. Forecasting Approaches
•Two basic approaches:
•Top‐down or Break‐down approach
•Bottom‐up or Build‐up approach
•Somecompaniesusebothapproachesto
increase their confidence in the forecast

39. Steps followed in Top‐down / Breakdown
Approach
•Forecast relevant external environmental factors
•Estimate industry sales or market potential
•Calculatecompanysalespotential=marketpotential
x company share
•Decidecompanysalesforecast(lowerthancompany
salespotentialbecausesalespotentialismaximum
estimated sales, without any constraints)

40. Steps followed in Bottom‐up / Build‐up
Approach
•Salespersons estimate sales expected from their customers
•Area/Branchmanagerscombinesalesforecastsreceived
from salespersons
•Regional/Zonalmanagerscombinesalesforecastsreceived
from area / branch managers
•Sales/marketingheadcombinessalesforecastsreceived
fromregional/zonalmanagersintocompanysalesforecast,
which is presented to CEO for discussion and approval

41. Sales Forecasting Methods
Qualitative Methods
•Executive opinion
•Delphi method
•Salesforce composite
•Survey of buyers’ intentions
•Test marketing
Quantitative Methods
•Moving averages
•Exponential smoothing
•Decomposition
•Naïve / Ratio method
•Regression analysis
•Econometric analysis

42. Executive opinion method
•Most widely used
•Procedureincludesdiscussionsand/oraverageofall
executives’ individual opinion
•Advantages: quick forecast, less expensive
•Disadvantages: subjective, no breakdown into subunits
•Accuracy: fair; time required: short to medium (1 – 4 weeks)

43. Delphi method
•Processincludesacoordinatorgettingforecastsseparatelyfrom
experts,summarizingtheforecasts,givingthesummaryreportto
experts,whoareaskedtomakeanotherprediction;theprocessis
repeated till some consensus is reached
•Expertsarecompanymanagers,consultants,intermediaries,and
trade associations
•Advantages: objective, good accuracy
•Disadvantages: getting experts, time required: medium (3/4 weeks)
to long (2/3 months)

44. Salesforce composite method
•An example of bottom‐up or grass‐roots approach
•Procedureconsistsofeachsalespersonestimatingsales.Company
sales forecast is made up of all salespersons’ sales estimates
•Advantages:Salespeopleareinvolved,breakdownintosubunits
possible
•Disadvantages:Optimisticorpessimisticforecasts,mediumtolong
time required
•Accuracy: fair to good (if trained)

45. Survey of Buyers’ Intentions
Method
•Processincludesaskingcustomersabouttheir
intentionstobuythecompany’sproductsand
services
•Questionnaire may contain other relevant questions
•Advantages:givesmoremarketinformation,can
forecast new and existing products, good accuracy
•Disadvantages:somebuyers’unwillingtorespond,
timerequiredislong(3‐6months),mediumtohigh
cost

46. Test Marketing Method
•Methodsusedforconsumermarkettesting:fullblown,
controlled, and simulated test marketing
•Methodsusedforbusinessmarkettesting:alphaandbeta
testing
•Advantages:usedfornewormodifiedproducts,good
accuracy, minimizes risk of national launch
•Disadvantages:Competitorsmaydisturbifsomemethods
areused,mediumtohighcost,mediumtolongtime
required

47. QUANTITATIVE
METHODS

48. Moving Average Method
•Procedureistocalculatetheaveragecompanysalesforprevious
years
•Movingaveragesnameisduetodroppingsalesintheoldestperiod
and replacing it by sales in the newest period
•Advantages:simpleandeasytocalculate,lowcost,lesstime,good
accuracy for short term and stable conditions
•Disadvantages:cannotpredictdownturn/upturn,notusedfor
unstable market conditions and long‐term forecasts

49. Exponential Smoothing Method
•Theforecasterallowssalesincertainperiodstoinfluencethesales
forecast more than sales in other periods
•Equationused:Salesforecastfornextperiod=(L)(actualsalesofthis
year)+(1‐L)(thisyear’ssalesforecast),where(L)isasmoothing
constant, ranging greater than zero and less than 1
•Advantages:simplemethod,forecaster’sknowledgeused,lowcost,
less time, good accuracy for short term forecast
•Disadvantages:smoothingconstantisarbitrary,notusedforlong‐
term and new product forecast

50. Decomposition Method
•Processincludesbreakingdownthecompany’s
previousperiods’salesdataintocomponentslike
trend,cycle,seasonal,anderraticevents.These
componentsarerecombinedtoproducesales
forecast
•Advantages:Conceptuallysound,fairtogood
accuracy, low cost, less time
•Disadvantages:complexstatisticalmethod,historical
data needed, used for short‐term forecasting only

51. Naive / Ratio Method
•Assumes:whathappenedintheimmediatepast
will happen in immediate future
•Advantages:simpletocalculate,lowcost,less
time, accuracy good for short‐term forecasting
•Disadvantages:lessaccurateifpastsales
fluctuate

52. Regression Analysis
Method
•It is a statistical forecasting method
•Processconsistsofidentifyingcausalrelationshipbetweencompany
sales(dependentvariable,y)andindependentvariable(x),which
influences sales
•Inpractice,companysalesareinfluencedbyseveralindependent
variables, like price, population, promotional expenditure.
•Advantages:Objective,goodaccuracy,predictsupturn/downturn,
short to medium time, low to medium cost
•Disadvantages:technicallycomplex,largehistoricaldataneeded,
software packages essential

53. Econometric Analysis
Method
•Procedureincludesdevelopingmanyregressionequations
representing(i)relationshipsbetweensalesandindependent
variableswhichinfluencesales,and(ii)interrelationshipsbetween
variables. Forecast is prepared by solving these equations
•Computers and software packages are used
•Advantages:Goodaccuracyofforecastsofeconomicconditionsand
industry sales
•Disadvantages:needexpertise&largehistoricaldata,mediumto
long time, medium to high cost

54. How to Improve Forecasting Accuracy?
Following guidelines may help in improving its accuracy
•Use multiple (2/3) forecasting methods
•Selectsuitableforecastingmethods,basedonapplication,cost,and
available time
•Usefewindependentvariables/factors,basedondiscussionswith
salespeople & customers
•Establisharangeofsalesforecasts–minimum,intermediate,and
maximum
•Use computer software forecasting packages

55. SALES
BUDGET

56. What is a Sales Budget?
•It includes estimates of sales volume and selling expenses
•Salesvolumebudgetisderivedfromthecompanysales
forecast–generallyslightlylowerthanthecompanysales
forecast, to avoid excessive risks
•Sellingexpensesbudgetconsistsofpersonalselling
expenses budget and sales administration expenses budget
•Salesbudgetgivesadetailedbreak‐downofestimatesof
sales revenue and selling expenditure

57. Sales Budget Process

58. Sales Budget Process
•DecideaPeriodofSalesBudget:Asalesbudgetcanbeplanned
accuratelyifaspecificperiodisdetermined.Itcanbemademonthly,
quarterly or yearly.
•CollectPreviousSalesData:Thenextstepisgatheringthesalesdata
orrecordforthepreviousperiod.Itactsasabasetoplanasales
budget for future sales.
•GatherIndustry’sSalesInformation:Thecompanyneedstobe
updatedwiththetotalsalesoftheparticularindustryforaspecific
period.Itshouldbeawareofitsmarketshareandtheexpected
growth of the industry within that period.

59. •CompareSalesofConsecutivePeriod:Aftercollectingthe
salesrecords,acomparativeanalysisisrequiredofthe
previoussalesperiodstopredictthefuturesales
possibilities.
•StudyCurrentMarketTrends:Nextstepiskeepinganeye
onthemarketfluctuations,preferenceandtrendwhich
helps in determining a more accurate sales budget.
•CommunicatewithCustomers:Thecustomerreviewsand
buyinghabitsshouldbeanalyzedtoknowtheirbuying
trends and intentions for preparing a sales budget.

60. •PrepareSalesForecast:Basedontheabovedataand
analysisregardingpastsales,markettrendsand
customer’sresponse,salesforaparticularperiodis
forecast.
•CompareActualSaleswiththeForecast:Finally,the
actualperformanceorthesalesvolumeiscompared
withthatoftheestimatedsalestofindoutthe
accuracyofthesalesbudget.Itprovidesfortaking
the corrective measures in future.

61. Factors Influencing Sales Budget

62. Internal Factors
•Thecompany’sinnerstrengthsorweaknesses,influenceitssales
budget.Itinvolvesfactorslikeplant’sproductioncapacity, marketing
channel,promotionandadvertisement,salesvolumeandrevenue,
etc.
•Let us now discuss these factors in detail below:
•SalesTrend:Thepastsalesmadebythecompanywithinaspecific
period plays a significant role in determining future sales possibilities.
•ProductionCapacity:Themaximumutilizationoftheplant’s
manufacturingcapacityshouldbeconsideredforthepreparationof
the sales budget.

63. •ProductDiversificationand ProductDevelopment:When
thecompanyentersintoanewproductlinetoincreaseits
salesvolumeandprofitability,itmustpreparethesales
budget accordingly to facilitate product development.
•SeasonalFluctuation:Thecompanyhastofigureoutthe
changesinthesalestrendduringseasonalfluctuationslike
weekends,thefirstweekofeverymonth,festivals,etc.
while determining the sales forecast.

64. •SellingandDistributionChannel:Theselected
marketingchannelprofoundlyaffectsthesales
forecast.Likefordirectsaleofgoods,amore
accuratesalesdatacanbegathered,andhencea
better sales estimate can be prepared.
•SalesPromotionandAdvertisement:Iftheproduct
iswellpromotedthroughadvertisements,offers,
discounts,etc.;itincreasesthepotentialsalesand
thus influences the sales budget too.

65. •PriceFluctuation:Thechangeinthepriceofthe
productcreatesanimpactonitspotentialsales.
Therefore,thepriceoftheproduct,aswellasthe
priceofthecompetitor’sproduct,mustbetakeninto
consideration while deciding the sales budget.
•MarketResearch:Researchisthebasisfor
determiningsalespossibilities.Salesforecastingis
notjustpredictionbutisapracticalapproach
depending on the past market trends.

66. External Factors
•Theexternalenvironmentofthebusinessconsistsof
multipleopportunitiesaswellasspecificthreats
which affect all the business decisions.
•Thesefactorscomprisegovernmentintervention,
economiccondition,technologicaladvancement,
consumer demand and competition.

67. •GovernmentPolicyandIntervention:Thegovernmentcontrolsthe
tradepracticesandthesaleofspecificproductsbyimposingvarious
laws and policies, thus affecting the sales budget too.
•CompetitionintheMarket:Thenumberofcompetitorsandtheir
marketshareshouldbewellanalyzedbythecompanyatthetimeof
drafting the sales budget to avoid wastage.
•ChangeinConsumerPreferenceandDemand:Thestudyof
consumers’behaviourtowardsaparticularproductandtheirbuying
trends helps in close by sales prediction.

68. •TechnologicalDevelopment:Whenthetechnologychanges,therisk
fordownfallrises.Therefore,thecompanymustbeupdatedwith
suchchangestoanalyzetheshiftinconsumer’spreferenceand
market occupancy.
•EconomicConditionoftheCountry:Thedistributionofwealth
withinthecountryanditsfinancialstabilityregulatethesalesand
performanceofthecompany.Atthetimeofrecessionwhen
people’sspendingcapacitydecreases,thecompanytendstosetthe
sales budget accordingly.

70. Need for Sales Budget
•DetermineSalesGoals:Salesbudgetsetsatargetforthe
salesteamwhichtheyhavetoachieve.Theexpectedsales
volumeforaparticularperiodisdetermined,andtheefforts
of the sales department are directed accordingly.
•CashFlowManagement:Thecompanycanestimateits
futurecashinflowandoutflowthroughsalesbudgeting.
Thishelpsindeterminingthepotentialliquidcashand
prepares for unfavourable market conditions.

71. •EstimateOverheadCosts:Italsoestimatesthevarious
administrativeandsalesexpenseswhichthecompanyhastobear
otherthanthemanufacturingcost.Thus,determiningthepotential
profit margin.
•DevelopCoreStrategies:Asalesbudgetprovidesabaseforactionto
themanagers.Themanagersframetheirstrategiesandutilizethe
resources to attain the desired sales goals.
•StreamlinesBusinessProcess:Allthe businessactivities,i.e.
productionofgoodsorservices,financingtheoperations,engaging
thehumanresourceandmarketingactivities,arebasedonthe
prepared sales estimate.

72. Advantages
•Planning:SalesBudgethelpsintheproperplanningofthe
organizational budget.
•Resourceallocation:SalesBudgethelpsintheallocationof
resourcesforallotherdepartmentsbasedonSalesforecast,sales
plan and other factors.
•ExpenseCheck:SalesBudgetisalsohelpfultokeepacheckonthe
expenses of the company.
•Yardstick:SalesBudgetservesasayardstickforevaluationof
Forecastvsachievementor Target vsAchievementandoverall
economy of the company.

73. •Weakareas:SalesBudgetalsohelpsidentifyweak
linksandareasintheorganizationwhicharea
hindranceinachievingthesalesbudget.Necessary
actionscanbetakentocorrectthoseweaklinksand
strengthen the front line.
•Guide:SalesBudgetactsasaguideandconstant
reminderthroughouttheyearfortheorganization
abouttheagreedbudgetsandhelpseveryonetobe
on track.

74. Disadvantages
•Salesbudgetcannotalwaysbe100%accuratesincenoonecan
predict future events or sudden market trends for the company.
•Asalesbudgetdecidedbyauthorityormanagementmaynotgowell
forvariousreasons.Theunrealisticsalesbudgetisacommon
complaint by the front line executives.
•Preparing,editing,modifying,re‐working,gettingtheapprovalof
salesbudgetcantakeuptoomuchofmanagerialtime,inwhichtime
actual sales can be realized.
•UnforeseenexpensesarenotconsideredinSalesBudgetwhichmay
arise out of any calamity or unpredicted market conditions.

75. SALES
TERRITORY

76. Meaning
•Asalesterritoryconsistsofagroupofconsumersorageographical
areaassignedtoaparticularsalesperson.Theareaallocatedtothe
salespersoncontainsthepresentandthepotentialconsumersofthe
organization.
•Aftertheallocationofsalesterritory,thesalesmanagercanbeina
positiontocontestbetweensaleseffortsandsalesopportunities.It
wouldbeverydifficultforthesalesmanagertomonitorthetotal
marketasitistoolargeandunmanageablebyoneperson.Henceit
isdividedasperterritoriestomanageeffectivelyandefficientlyand
control the sales force.

77. •Thesalespersondoesnotonlypayattentiontotheareabut
alsotheconsumerprospects.Thus,asalesterritorycanbe
knownasthegroupingofcustomersandprospects,whichis
assigned to an individual salesperson.
•Salesterritoryisforthebigcompanieshavinghugemarket
share.Smallandmediumscalecompaniesdonotuse
geographicallydefinedterritories.Themarketshareisnot
so high to divide into territories.

78. Reasons for Establishing Territories
•Themainmotiveofestablishingsalesterritoriesistosimplifythe
planning and controlling of the selling function.
•Following are some reasons for establishing sales territories −
•To obtain thorough coverage of the market
•Accordingtothedivisionofsalesterritory,theactivitiesareassigned
tosalesperson.Thishelpsinmarketcoverage,ratherthanthe
salespersonsellingtheproductaccordingtohisambition.Ithelps
thesalesmanagertomonitorandtakeupdatesaccordinglyfrom
different sales managers.

79. •To establish the salesperson’s job and responsibilities
•It’sveryimportanttoestablishjobsandresponsibilitiesfor
salespersons.Salesterritorieshelpindoingsobecausethetaskis
assignedtothesalespersonandheisresponsibleandanswerablefor
the same.
•Oncethetaskisassigned,frequentchecksaredonetomonitorthe
calls;ithelpstodeterminetheworkofeachsalesperson.Ifthesales
managerfindstheworkloadforaparticularpersonismore,thework
isdividedandreassignedequally.Thiscreatesmotivationand
interest to work.

80. •To evaluate sales performance
•Inanorganization,thesalesterritoryiscomparedfromtheprevious
yearstocurrenttofindoutthedifference,i.e.,theincreaseor
decreaseinsalesvolumes.Ithelpstoworkonthedifference
accordingly.Thisisdonewiththehelpofsalesterritoryasthe
activitiesareassignedinapropermannerandgatheringofdataand
evaluation becomes easy.
•Thecomparisontoevaluatesalesperformanceisdoneonthe
following basis −
•Individual to District
•District to Regional
•Regional to Entire Sales Force
•Bythiscomparison,wecanevaluateanddeterminewherethesales
force is contributing for high volume of sales.

81. •To improve customer relations
•Asweknow,salespersonshavetospendmostoftheirtimeonroad
toselltheproductsbutifthesalesterritoryisdesignedinaproper
way,thesalespersoncanspendmoretimewiththecustomers
(presentandpotential).Thishelpsinbuildingrapportand
understanding the needs better.
•Salesofacompanycanincreasewhenacustomerreceivesregular
callsandthesalesmanhastovisitthecustomersonthebasisofcalls.
Thesalesmanandthecustomergettimetounderstandeachother
andresolvetheirissuesregardingdemandandsupply.Thisalso
helps in increasing the brand value of the company.

82. •To reduce sales expenses
•Oncethegeographicalareasaredecided,thecompanygets
aproperpictureastotheareasthatcanbeassignedtothe
salespersons.He/sheneedstocoverthatareasothatthere
isnoduplicationofworkbysendingtwosalespersonsinthe
same area.
•Thesellingcostofthecompanygetsreducedandleadsto
increaseinprofits.Thereisalsoanadvantagetothe
salesperson for few travels and overnight trips.

83. •To improve control of the sales force
•Theperformanceofasalespersoncanbemeasured
onthebasisofcallsmadetocustomers,theroutes
takenandtheschedules.Inthiscase,thesalesperson
cannot deny if the results are not positive.
•Thesalespersonhastoworkonthesameroutes,
scheduleandeverythingispredetermined.This
results in better control of the sales force.

84. •To coordinate selling with other marketing functions
•Ifthesalesterritoryisdesignedproperly,ithelpsthemanagementto
performothermarketingfunctionsaswell.Itiseasytoperforman
analysis on the basis territory as compared to the entire market.
•Theresearchdonebythemanagementonmarketingonterritory
basiscanbeusedtosetsalesquotas,expensesandbudgets.The
resultscanbesatisfactoryifthesalespersonhelpsinadvertising,
distributionandpromotionwhentheworkisassignedonterritory
basis instead of the market as a whole.

86. PROCEDURE FOR DESIGNING SALES
TERRITORIES
•Select Control Point
•Asthenamesuggests,themanagementhastoselect
ageographicalcontrolpoint.Thecontrolpointscan
beclassifiedonthebasisofdistrict,pincodes,areas,
states and cities.
•Atthetimeofselectingthecontrolunit,the
managementshouldaimtoselectassmallacontrol
unit as possible.

87. •The following are the reasons behind selecting small control units.
•Reason 1
•Ifthecontrolunitistoolarge,theareaswithlowsalespotentialwill
behiddenbytheareaswithhighsalespotential.Theareaswithhigh
saleswillbeconcealediftheareaswithlowsalespotentialwillbe
included.
•Reason 2
•Incaseofanychangesrequiredinfuture,theycanbedonesmoothly.
 Example −AcompanywantstoallotsometerritorytoMr.A.This
partofterritoryhadearlierbeenassignedtoMr.B.Itcanbedone
easily, as the unit is small.

88. FIND LOCATION AND POTENTIAL
CUSTOMER
•Identification of the buyers as precisely as possible.
•Present & potential buyers indicate Market Potential.
•DeterminationofSalesPotentiali.e.unit’smarket
potentialthatthecompanyhasanopportunityto
obtain.
•Marketpotentialisconvertedtosalespotentialby
analyzingthehistoricalmarketshare,adjustingfor
changes in company & competitor selling strategies.

89. DECIDE BASIC TERRITORIES
•Build‐upMethod–Theobjectiveistoequalise
the work load of sales person.
•BreakdownMethod–Theobjectiveisto
equalize sales potential of territories.

90. ASSIGNING SALESPEOPLE TO
TERRITORIES
•The sales manager should consider two criteria:
(A) Relative ability of salespeople
•Based on key evaluation factors:
•(1)Productknowledge(2)marketknowledge(3)pastsales
performance (4) communication (5) selling skills
(B) Salesperson’s Effectiveness in a Territory
•Decidedbycomparingsocial,cultural,andphysical
characteristics of the salesperson with those of the territory.

91. MANAGING TERRITORY COVERAGE
•Itmeans“Howsalespersonshouldcovertheassigned
salesterritory”.Itincludesthreetasksforasales
manager:
•Planning efficient routes for salespeople. (Routing)
•Scheduling salespeople’s time. (Scheduling)
•Using time‐management tools. (Time Management)

92. ROUTING
•Routingisatravelplanorpatternusedbya
salespersonformakingcustomercallsina
territory.
•The main advantage of routing are:
•a) Reduction in travel time and cost
•b) Improvement in territory coverage

93. Procedures for setting up a routing plan
•Identifycurrentandprospectivecustomersonaterritory
map
•Classifyeachcustomerintohigh,medium,orlowsales
potential
•Decide call frequency for each class of customers
•Buildrouteplanaroundlocationsofhighpotential
customers

94. Application and Importance of Routing
•Thedegreeofimportancetotheapplicationof
routing depends on two factors:
a) Nature of the product
b) The type of job of salespeople

95. SCHEDULING
•Schedulingisplanningasalesperson’sspecifictimeofvisitsto
customers. It deals with time allocation problem.
•How to allocate salesperson’s time?
•Salesmanagercommunicatestosalespersonmajoractivitiesand
time allocation for each activity
•Salespersonrecordsactualtimespentonvariousactivitiesfor2
weeks
•Salesmanagerandsalespersondiscussanddecidehowtoincrease
time.

96. TIME MANAGEMENT
TOOLS
•Ithelpsalespeopletomanagetheirtimemore
efficiently and productively.
•Tools available are:
•High‐techEquipmentLikeLaptopComputersAnd
Cellular Phones
•InsideSalespeopleToProvideClericalSupport,
TechnicalSupport,AndForProspectingAsThey
Remain Within The Company

97. Sales Force
Management

98. Sales Force Management – Definition of
SFM
•SalesForceManagement(SFM)isasub‐systemof
marketingmanagement.ItisSalesManagementthat
translates the marketing plan into marketing performance.
•Actuallysalesforcemanagementdoesmuchmorethan
serving as the muscle behind marketing management.
•Salesforcemanagementsystemsareinformationsystems
thathelpautomatesomesalesandsalesforcemanagement
functions.Theyareoftenfoundtobecombinedwitha
marketing information system.

99. Sales Force Objectives
•A Sales Force will have one or more of the following tasks.
•Prospecting – search for leads
•Targeting – allocation of time between prospects and customers
•Communicating – info about company and products
•Selling – Approach, presentation, answering objections, closing sales
•Servicing – consulting, technical, financing, etc.
•Info gathering – market research
•Allocating – scarce products to customers.

100. Identifiable processes involved with sales
force management
•Someoftheidentifiableprocessesinvolvedwithsalesforce
management are:
•i. Setting targets and objectives based on inputs
•ii. Assigning executives for achieving sales objectives
•iii.Controlprocessesareachievedwithinagiventimeframeand
given markets
•iv. Management of system to handle uncertain environment
•Itisnotjustaboutthecontrolsystemsinvolvedwithsalesforce
management process but also the various metrics involved.

101. Metrics that are implemented in the sales
force management processes
•Someofthemetricsthatareimplementedinthesalesforce
management processes are:
•i. Time management‐ measures the tasks and time required for each task
•ii. Call management‐ planning for customer interactions
•iii.Opportunitymanagement‐ifthesalesforcemanagementprocessis
correctly implemented, sales opportunity will be created
•iv.Accountmanagement‐Incaseofmultipleopportunitieswitha
customer,theaccountistobemeasuredbythetools,processesand
objectives
•v.Territorymanagement‐managingsalesterritoriesisofutmost
experience for managing sales figures

102. Advantages and Disadvantages of the sales
force management
•Therearecertaindistinctadvantagesanddisadvantagesofthe
sales force management systems as mentioned below:
•i. Understanding the economic structure of an industry
•ii. Identifying segments within a market
•iii. Identifying a target market
•iv. Identifying the best customers in place
•v.Doingmarketingresearchtodevelopprofiles(demographic,
psychographic, and behavioral) of core customers

103. •vi. Understanding competitors and their products
•vii. Developing new products
•viii.Establishingenvironmentalscanningmechanismstodetect
opportunities and threats
•ix. Understanding one’s company’s strengths and weaknesses
•x. Auditing customers’ experience of a brand in
•xi.Developingmarketingstrategiesforeachofone’sproductsusing
themarketingmixvariablesofprice,product,distribution,and
promotion

104. •xii.Coordinatingthesalesfunctionwithotherpartsofthe
promotionalmix,suchasadvertising,salespromotion,public
relations, and publicity
•xiii. Creating a sustainable competitive advantage
•xiv.Understandingwherebrandsshouldbeinthefuture,and
providinganempiricalbasistowritemarketingplansregularlyto
help get there
•xv.Providinginputintofeedbacksystemstohelpmonitorandadjust
the process.

105. Disadvantages
•i. Difficulty in adopting the system
•ii. Too much of time spent on Data Entry
•iii. Losing personal touch in the process of automation
•iv.Laboriousprocessofcontinuousmaintenance,information
updating, information cleansing and system up gradations
•v. Cost involved in Sales Force Automation Systems and Maintenance
•vi.Difficultyinintegrationwithothermanagementinformation
systems

106. SALES JOB ANALYSIS

107. Meaning
•Job analysis is primary tool in personnel management.
•Inthismethod,apersonnelmanagertriestogather,synthesizeand
implementtheinformationavailableregardingtheworkforceinthe
concern.
•Apersonnelmanagerhastoundertakejobanalysissoastoputright
man on right job.
•Jobanalysishasbeendefinedasaprocessbywhichdatawith
respect to a particular job is systematically collected and described.
•Ithelpsassignsuchjobstopeoplethatmatchwiththeirskills
effectively so that there is a person‐fit

108. •SalesJobanalysisinvolvesasystematicgatheringand
study of information regarding the sales job.
•Sales Job analysis involves two tasks:
•Studying the work environment of the salesperson
•Determineduties&responsibilitiesofthesales
person,andhisrelationshipwithpeopleinother
departments,andwithinthesalesfunction,and
with members of the trade channel, etc

109. Importance of Sales Job Analysis
•A sales job analysis helps determine:
•The nature & responsibilities of the job, duties and responsibilities
•Reporting relationships
•Skills required for the job
•Working conditions
•HelpfultoofortheHRmanagerwhilerecruitingandselectingthe
rightpersononsalesjob,decidingonthescopeoftrainingrequired
forthesalesperson,therightcompensationplan,theperformance
management systems, etc

110. Purpose of a Sales Job
Analysis
•Manpower Planning
•Recruitment & Selection
•Training & Development
•Job Evaluation
•Remuneration
•Performance Appraisal

111. JOB DESCRIPTION
•JOBDESCRIPTION isanorganizedfactual
statementofjobcontentsintheformofduties
and responsibilities of a specific job.
•Thepreparationofjobdescriptionisvery
important before a vacancy is advertised.
•It tells in brief the nature and type of job.

112. •Thistypeofdocumentisdescriptiveinnatureanditconstitutesall
those facts which are related to a job such as :
•Title/ Designation of job and location in the concern.
•The nature of duties and operations to be performed in that job.
•The nature of authority‐ responsibility relationships.
•Necessary qualifications that are required for job.
•Relationship of that job with other jobs in a concern.
•Theprovisionofphysicalandworkingconditionorthework
environment required in performance of that job.

113. Advantages of Job
Description
•Ithelpsthesupervisorsinassigningworktothesubordinatessothat
he can guide and monitor their performances.
•It helps in recruitment and selection procedures.
•It assists in manpower planning.
•It is also helpful in performance appraisal.
•Itishelpfulinjobevaluationinordertodecideaboutrateof
remuneration for a specific job.
•It also helps in chalking out training and development programmes.

114. JOB SPECIFICATION
•JOBSPECIFICATION isastatementwhichtellsus
minimumacceptablehumanqualitieswhichhelpsto
perform a job.
•Jobspecificationtranslatesthejobdescriptioninto
humanqualificationssothatajobcanbeperformed
in a better manner.
•Jobspecificationhelpsinhiringanappropriate
person for an appropriate position.

115. •The contents are :
•Job title and designation
•Educational qualifications for that title
•Physical and other related attributes
•Physique and mental health
•Special attributes and abilities
•Maturity and dependability
•Relationship of that job with other jobs in a concern.

116. Advantages of Job Specification
•It is helpful in preliminary screening in the selection procedure.
•It helps in giving due justification to each job.
•It also helps in designing training and development programmes.
•Ithelpsthesupervisorsforcounselingandmonitoringperformance
of employees.
•It helps in job evaluation.
•Ithelpsthemanagementtotakedecisionsregardingpromotion,
transfers and giving extra benefits to the employees.

117. Process of Sales Job
Analysis
•Identify the sales jobs to be analysed
•Gather information
•Process the information gathered for analyzing
the job
•Prepare the job description and job specification

118. Salesforce
Recruitment

119. Meaning
•Theprocessoffindingandhiringthebestqualified
candidate(fromwithinoroutsideofanorganization)
forajobopening,inatimelyandcosteffective
manner.
•Therecruitmentprocessincludesanalyzingthe
requirementsofajob,attractingemployeestothat
job,screeningandselectingapplicants,hiring,and
integrating the new employee to the organization.

120. Sources of Recruitment
•(A)Internal Sources
•(B)External Sources :
•(a)Media Advertisements
•(b)Employment Exchanges
•(c)Educational Institutions
•d)Unsolicited Application
•(e)Recruitment at the Factory gate
•(f)Referrals
•(g)Private Employment Agencies

121. The Requirement Process
•Differenttypesofsalespositionscallfor
performing different activities.
•Toensurethatnewrecruitershavetheaptitude
necessarytobesuccessfulinaparticulartypeof
salesjob,itisbesttofollowsystematic
procedure.
•Newly established firms go through these steps

122. Sales force recruitment process

123. Selection
•Whenanadequatenumberofapplications/namesofinterested
candidateshavebeencollectedthroughtherecruitmentexercises,
the selection process starts.
•Selectionreferstotheprocessofchoosingthemostsuitableperson
from among the list of interested candidates.
•Itinvolvesgoingthroughthequalificationandexperienceofall
candidatesandmatchingthemwiththeexpectationforthejobsoas
to decide on the most suitable ones for the job.
•Theentireprocessgoesthroughanumberofstepswhichmaybe
called as selection procedure.

124. Selection Procedure
•Theselectionprocedureconsistsofanumberofstepsinlogical
order to identify the candidates who are to be finally appointed.
•These steps are :
•(a)Screening the applications
•(b)Holding tests
•(c)Selection interview
•(d)Checking references
•(e)Medical examination of the candidates
•(f)Issue of appointment letter

125. Placement
•Iftheselectedcandidatedecidestojointheorganisation,he/shehas
toreporttotheconcernedauthorityandformallyjoinsthe
organisation by giving his consent in writing.
•Thenhe/sheisplacedtoperformspecificjob.Thus,placementrefers
toselectedcandidate’sjoiningthepositionsintheorganisationfor
which they have been selected.
•Theappointmentofeverycandidateisfollowedbyarecordof
particularsofemployment.Suchrecordsisproperlymaintainedand
describedasemploymentrecord.Itservesausefulpurposeonmany
occasionslikeselectionofemployeesfortraining,promotion,
increments etc.

126. Induction
•Inductionistheprocessofintroducingnewemployeestothe
organisation.Thenewemployeesshouldknowunderwhomand
withwhomhe/sheistowork,getacquaintedandadjustedtothe
workenvironment,getageneralideaabouttherulesand
regulations, working conditions etc.
•Usuallytheimmediatesupervisorofthenewemployeeintroduces
himtohisworkenvironment.Aproperinductionprogrammeislikely
toreducehisanxietyonhowtocopewiththeworkandhowto
becomepartoftheorganisationandhelpsindevelopmentofa
favourable attitude towards the organisation and the job.

127. Training and Development
•Helpingtheemployeestoimprovetheirknowledgeandskillsoasto
beabletoperformtheirtasksmoreefficientlyisknownastraining.It
isanorganisedactivityforincreasingtheknowledgeandskillsof
people for a specific purpose.
•Theterm‘development’referstotheprocessofnotonlybuildingup
theskillandabilitiesforspecificpurposebutalsotheoverall
competenceofemployeestoundertakemoredifficultand
challenging tasks.
•Itisgenerallyusedwithreferencetothetrainingofmanagersand
executives.

128. •Trainingisanactofincreasingtheknowledgeandtechnicalskillsof
an employee fordoing a particular job efficiently.
•Developmentreferstothelearningopportunitiesdesignedtohelp
employeestogrow.Itinvolvesgrowthanindividualinallareas.
Developmenthelpworkforcetoimprovetechnicalskills,problem
solving skills and decision making skills.
•Trainingisnecessaryfornewemployeesaswellastheexisting
employeesforimprovingtheirperformanceatwork.Fornew
employees,trainingisnecessarytohelpthemgetacquaintedwith
the method of operation and skill requirement of the job.

129. Benefits of training for
organisations
•1.Lesswastage,asatrainedworkertakeslesstimeinlearningand
doing a job.
•2.Better employee performance leading to higher profits.
•3.Better utilisation of men, machines and materials.
•4.Developpositiveattitudeinthemindofworkersandmotivate
work force to take new ventures.
•5.Reduce labour turnover and absenteeism.
•6.Trainedworkerwilladoptfasttotheenvironmentalchanges
compared to untrained worker.

130. Benefits of Training to the
Employee
•1.Improvedskillsacquiredfromtrainingbringbetter
career options for workers.
•2.Betterperformancebytheworkerhelphimtoearn
more.
•3.Trainedworkerwillhavebetterawarenessto
handleproblemsandhewillbecapabletodealwith
complex type of work.
•4.Training increases the moral of workforce.

131. Methods of Training
•1.On‐the‐Job methods :
•Inthesemethods,theemployeeslearnabouttheirjobs
whiledoingtheworkdulyassistedbytheirsupervisorsor
seniors.
•Thesemethodsencourageself‐learningthroughpractice.
Jobinstructionorcoaching,andjobrotation,learningwhile
workingasanassistanttoasenior,understudypositions,
temporarypromotionsaresomeofthecommonmethods
of on‐the‐job training.

132. •2.Off‐the‐Job methods :
•Thesemethodsinvolvetrainingemployeesawayfromthe
workplacesothatexpertsmayconductthetrainingand
employeesarefreefromimmediatepressureofcompleting
the jobs at hand.
•Lectureswithdemonstration,conferences,casediscussions,
videoshowsandfilmsaresomeofthecommonmethods
used as off‐the‐job training methods.

133. Performance Appraisal
•Insimplewords,performanceappraisalmeansjudgingthe
performanceofemployees.Specifically,itmeansjudging
therelativeabilitiesofemployeesatworkinasystematic
manner.
•Thisenablesmanagerstoidentifyemployeeswhoare
performingtheassignedworksatisfactorily,andthosewho
arenotabletodoso,andwhy.Tobefair,performance
appraisalneedstobecarriedoutusingthesamemethods
and keeping in view uniform standards of work.

134. •Generallyitistheresponsibilityofsupervisorstocarry
outperformanceappraisaloftheirsubordinates,andreportitto
theirownsuperiors.Hemayalsohavetoidentifythecausesofthe
performanceespeciallyifithasfallenshortoftheexpected
performance.
•Thestandardofperformanceortheexpectedlevelofperformance
ofanemployeeonajobformsthebasisofjudginghowwellthe
employeehasperformed,andwhetheroneemployeeismore
efficient than the other in doing a similar job.

135. Compensation
•Compensationisoneofthemostimportantfactorsinfluencing
relationsbetweenmanagementandtheworkers.Noorganisation
canattractandretainqualifiedemployeeswithoutofferingthema
fair compensation.
•Theterm‘compensation’referstoawiderangeoffinancialandnon
financialrewardstotheemployeesforservicesrenderedtothe
organisation.Itincludeswages,salaries,allowancesandother
benefitswhichanemployerpaystohisemployeesinconsideration
for their services.
•Compensation may be divided into two categories:
•(a)Base/primary compensation. (b)Supplementary compensation.

136. •Baseorprimarycompensationisafixedamountpaid
everymonthtoanemployee.Itincludeswages,
salaryandallowancespaidtoanemployee
irrespective of his performance.
•Supplementarycompensationreferstothe
compensationpaidtotheemployeestomotivate
themtoworkmoreefficiently.Itisalsoknownas
incentive compensation.

137. •The incentives may be monetary or non‐monetary.
•Themonetaryincentivesincludebonus,commissionsales,
or profit sharing plans.
•Thenon‐monetaryincentives,ontheotherhand,include
cordialrelationswiththesupervisor,assignmentof
challengingjobs,recognitionetc.Suchincentiveshelpthe
employeestosustaininterestinthejobandmotivatesthem
to work hard. They also provide job satisfaction.