Sales Management

Definition, Evolution, Objective, Scope, Functions of Sales Executive, Function of Sales Management

1. Prepared by Ms. Shery Asthana Asst. Prof. (Greater Noida Institute of Management )

2. Evolution of Sales Management The history of salesmanship is as old as human civilization. Paul Hermann described Bronze Age’s travelling salesperson’s sample case. The salespeople used a wooden box, 26 inches long, containing, in specifically hollowed compartments, axe, sword blades, buttons, etc. The Roman meaning of the word salesperson is ‘cheater’, and Mercury, the god of cunning and barter, was regarded as the patron deity of merchants and traders.  India was a great destination for traders and resellers in the medieval age for spices, carpets, jewellery, etc. Many diverse races and religions entered our country with the travelling salespeople. Even the erstwhile colonial rulers of India, the British, came to India for the purpose of expanding their business and trade, though subsequently they satisfied their political interest. They ruled this country to protect their own business interests. The first salespeople in the US were the yankee peddlers who carried clothing, spices, and household articles from one part of the country to another part. In India they are called pheriwallahs. The techniques of modern sales management and selling techniques were refined by John Henry Patterson, widely known as the father of modern sales management. Today, the process of sales management has undergone numerous changes in terms of strategy, practice, and technological adoption to achieve the desired sales goal. A salesperson is no longer an order taker or information provider; rather he is viewed as a consultant to the customers.

3. What is Sales Management – Meaning Sales management is solely concerned with the direction and control of the sales force. Sales management refers to the management of sales personnel, though sometimes, in a broader sense, it covers advertising, distribution, pricing and product designing, all elements of marketing management. “The American Marketing Association has defined “sales management” as “the planning, direction and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the personal sales force.” Marketing management refers to several activities of marketing, viz., pricing, promotion, physical distribution, product and sales personnel management. Sales management, however, is mainly concerned with the sales personnel management Marketing management is a broader term which covers sales management and marketing functions.

4. What is Sales Management – Meaning

5. Objectives of Sales Management Achievement of Sales Volumes/Values Contribution to Profits Growth in Sales Growth in Market Share Addition of new distributors and dealers in unrepresented market. Extending field activities to new geographical areas. Increase in sales from existing customers like dealers and direct consumers Increase in sales of profitable products Control of selling expenses Improve sales forecasting accuracy and effective management of finished goods Effective use of sales promotion schemes Extend the use of excising products on new market segments Training of sales force

6. Scope of Sales Management The scope of Sales management are very important. 3 key factors of sales management are:- Sales Operation:- This will include identification and allocation of territory to the sales team. Measuring and monitoring their performance. Motivating and leading by example to help them close deals and hit their targets and put incentives in their pockets. Sales Strategies:- This has got all to do with product positioning, price decisions, and running promotions. Knowing when to discontinue a product and also know the activities of the competitors. Sales analysis:- Evaluating and understanding product movement, which product is bringing in the most revenue. Also measuring forecast versus actual will help a sales personnel to understand and take corrective measures.

7. Sales Management and Financial Results Financial results are stated in terms from two basic accounting formulas: Sales- Cost of Sales = Gross Margin Gross Margin – Expenses = Net Profit Sales gross Margin and expenses are affected by the caliber and performance of Sales Management. Sometimes sales executives stress sales volume while neglecting gross margin and expenses. In these instances, even though sales volume increases, gross margin decline, expenses increase proportionately, and net profit are reduced. If these condition prevail for long, profits disappear and losses appear.

8. Functions of Sales Executive Builds business by identifying and selling prospects; maintaining relationships with clients. Identifies business opportunities by identifying prospects and evaluating their position in the industry; researching and analyzing sales options. Sells products by establishing contact and developing relationships with prospects; recommending solutions. Maintains relationships with clients by providing support, information, and guidance; researching and recommending new opportunities; recommending profit and service improvements. Identifies product improvements or new products by remaining current on industry trends, market activities, and competitors. Prepares reports by collecting, analyzing, and summarizing information. Maintains quality service by establishing and enforcing organization standards. Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; benchmarking state-of-the-art practices; participating in professional societies. Contributes to team effort by accomplishing related results as needed.

9. Skills of Sales Executive Sales management is an art where the sales executive or the salesperson helps the organization or individual to achieve its objective or buy a product with their skills. The following are some skills that a sales executive needs to possess: Conceptual Skills:- Conceptual skill includes the formulation of ideas. Managers understand abstract relationships, improve ideas, and solve issues creatively. The sales executive should be well versed with the concept of the product he/she is selling. People Skills :- People skills involve the ability to interact effectively with people in a friendly way, especially in business. The term ‘people skills’ involves both psychological skills and social skills, but they are less inclusive than life skills. Every person has a different mindset, so a sales executive should know how to present the product depending on the customer’s mindset. Technical Skills: - Technical skills are the abilities captured through learning and practice. They are often job or task specific. In simple words, a specific skill set or proficiency is required to perform a specific job or task. As a part of conceptual skills, a sales executive should also have a good grasp on the technical skills of the product. Decision Skills:- Decision skills are the most important because to tackle the questions from consumers, sales executive should always have the knowledge of competitors’ products and take a wise decision. Monitoring Performance:- Sales executives should monitor the performance of the employees and report to higher management to improve the performance and fill the loop holes.

10. Functions Of Sales Management cont… Managerial Functions: Planning: This involves, forecasting demand, sales territory planning, personal selling and promotional efforts. Organising: This involves structure, resource allocation, responsibility assignment and delegation of authority etc. Direction: This involves leader’s motivation, communication and promotional steps including personal selling. Control: This involves delegation, quota fixing, performance evaluation, incentives and budgets. Co-ordination: This involves liaison, integration of various elements, internally, P.R. and good will by contact with customer / general public.

11. Functions Of Sales Management Operative Functions: Staff Functions: This is related to staff functions of sales force such as the following: • Recruitment and selection. • Deployment and evaluation of performance. • Training and development. • Career development. • Compensation and incentives. • Motivation and empowerment 2. Advisory Functions: This is related to advisory functions of sales management: ❖ Product attributes / quality aspects. ❖ Pricing policies. ❖ Promotional steps and personal selling aspects. Distribution Liaison Functions: Liaison with departments such as the following: Production department. Finance department. Marketing department. R&D department. Distribution network

12. Sales Executive Relation with other Executive Sales &Advertising: both stimulate demand. They need to be blended. Salespersons can improve advertising effectiveness. Advertising needs to support sales where and when they need it most. • Sales & Marketing information: data is needed for analysis of sales problems, for determining sales potential. Raw data is collected by sales people. • Sales and service: contributes to strategy success. • Sales and distribution: minimizes stock out situation; improves inventory control; helps sales to focus on demand generation. • Sales & Production: the amount of demand is assessed by the data provided by salesmen. • Sales and R&D: the R&D is based highly on the changing needs, taste and preferences of people. • Sales &Finance: the higher is the sale, more is the revenue earned by the company.