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Wednesday, October 18, 2017

Sales Management Notes: Introduction to Sales Management

Unit – 1: Introduction to Sales Management
Concept of Sales Management
Sales management refers to the administration of the personal selling component of a company's marketing program. It includes the planning, implementation, and control of sales programs, as well as recruiting, training, motivating, and evaluating members of the sales force. In a small business, these various functions may be performed by the owner or by a specialist called a sales manager. The fundamental role of the sales manager is to develop and administer a selling program that effectively contributes to the organization's goals. The sales manager for a small business would likely decide how many salespeople to employ, how best to select and train them, what sort of compensation and incentives to use to motivate them, what type of presentation they should make, and how the sales function should be structured for maximum contact with customers.
The term Sales Management consists of two words- Sales and Management. Both the terms are used commonly in our day-to-day business. Before defining Sales management, we should understand sales and management separately.
Sales mean selling a product or service in return for money or any other compensation. Basically, it is an exchange of goods and services between two parties, the buyer and the seller. The seller gets the monetary reward in the form of profits by satisfying the needs of the buyer.
Many scholars have defined management. Some of the definitions are as follows:
“Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims”. (Heinz Weihrich & Harold Koontz)
 “Management is an art of getting things done through people”. (Mary Parker Follet)
The emphasis is on the word management now–a-days to do the sales exercise with a professional approach by planning, organising and controlling the prescribed tasks.

The Definitions Committee of the American Marketing Association (AMA) gives one of the most acceptable definitions of Sales management: “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”.
This definition emphasised on management of sales force. In actual practice, the Sales Management is much more than that. However, the primary assignment of the Sales manager is the management of personal sales force. While the personnel related tasks do not comprise their total responsibility, as a result, their personnel related responsibilities are called as sales force management.
Elements of Sales Management
There are the four basic elements of sales management, discussed below:
(1) Planning: a business cannot be taken as a chance. Every salespeople or person concerned have to see for the future, in a planned way 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. The plan should also be evaluated, after investigating the total-market, 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 details of the plan should be discussed, with all the departmental heads, concerned, and their sub-ordinates, who bear responsibility for fulfilling their parts of the plan.
(2) Co-ordination: Co-ordination 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 co-ordination. Similarly, organising starts by co-ordination wholly, partially inter-departmental and inter-personnel matters. Co-ordination also helps in maximum utilisation of human-effort by the exercise of effective leadership, guidance, motivation, supervision, communication etc. The control-system also needs coordination. Co-ordination does not have any special techniques. Nevertheless, there are sound principles, on which to develop skills. It has a special need to help the staff, to see the total picture and co-ordinate their activities, with the rest of the team. The sales manager has to encourage direct personal-contact, within the organisation, particularly where there is lateral-leadership.
(3) Controlling: the sales manager has to check regularly, that the sales activities are moving in the right direction or not. He guides, leads, and motivates the subordinates, so as to 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 organisation. 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 attain 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 salesman; (iv) determine, review and select distribution-channels; (v) organise an efficient sales force; (vi) establish a system of sales-reporting; (vii) establish a system of statistical sales-credit; (viii) establish stock control system(s); (ix) review of performance of the salesforce; and (x) establish periodical testing programmes. In a big organisation, each salesman is assigned a territory (not so big that it cannot be adequately covered). Each salesman has a target, set for specific ‘period. From the weekly and monthly sales-reports, the control system is established, that will prepare records 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 behaviour patterns. This is especially important in the case of the sales-force. Only motivated sales-persons can achieve company’s goals.

Sales Management means management of sales force. It is concerned with the planning, direction and control of the activities of the sales force. Sales management is a broader sense means the management of all marketing activities including sales promotion, advertising, marketing research, physical distribution, product merchandising and pricing the product. Sales management are responsible for organizing the sales effort, both within and outside their companies. Within the companies, the sales manager builds formal and informal organizational structures. He ensures effective communication in the sales department as well as its relationship with other departments. Outside the company, the sales manager serves as a key contact with customers and other external parties. He is responsible for building and maintaining an effective distribution network. Thus sales manager is both an administrator in charge of personal selling activity and a member of the executive group that takes all types of marketing decisions.
With the increasing economic and social pressures to enter rural markets, the importance of sales management is increasing. The manufacturers cannot exclusively rely on the trade for developing rural markets. They have to employ substantial field force to promote and distribute the production and services; those who assist and service the prospects, clients and middlemen and those who could report to top management regarding the changing consumer preference and competitive activities. Thus new and sophisticated methods of sales management have to be adopted. Further the responsibilities of sales managers are extending further. They are required to participate in preparation of information which is relevant for key marketing decisions e.g. budgeting, sales quota, sales turnover, sales control, cost analysis etc. Sales management is the key contact with consumers, dealers, relatives, etc. Sales manager has the onus of constructing and maintaining an effective system of distribution.
Following are some dimensions (Scope) of the sales management
1.       The Personal selling.
2.       Establishing sales force objectives.
3.       Determining sales force strategy.
4.       Determining sales force size.
5.       Recruitment and selection of sales force.
6.       Training of sales force.
7.       Motivation of sales force.
8.       Compensating the sales force.
9.       Supervising and controlling the sales force.
10.   Performance evaluation of the sales force.
Broadly there are three areas that cover the functions of Sales Management:
1. Managerial Functions: Management is a process. It is the process of carrying out the essential functions of planning, organizing, and directing and controlling the personal selling function.
(a) Planning is a fundamental managerial function. Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning bridges the gap between where we are and where we want to go. Planning is concerned with setting of objectives and finalizing the approach for achievement of the objectives. It is an attempt by the sales manager to anticipate the future in order to achieve the sales objectives The demand for products and services and profitability of the operations depend upon the sales environment which comprises of political, economic, social, cultural, technological, demographic, legal and ecological factors and the sales manager has to design strategies based on the dynamic environmental conditions.
(b) Organising involves the grouping of activities necessary to accomplish the goals and plans, the assignment of these activities to appropriate departments and provision for authority delegation and co-ordination. It is a managerial activity which is essential for effective use of company’s resources such as men (sales force), materials (Products) and money to achieve the sales objectives. It involves coordination of sales force activities in an orderly manner and developing channels of communication between various levels of responsibilities.
(c) Directing involves instructing, guiding, counselling, motivating and leading the sales force to achieve organizational objectives. Direction consists of the process and technique in issuing instructions and making certain that the operations are carried out as planned”.
(d) Control is an important management function that ensures work is carried out as per plans. Controlling is the process of determining what is to be accomplished that is the standard, what is being accomplished, that is the performance, evaluating the performance and if necessary, applying corrective measures so that the performance takes place according to the plans, that is, in conformity with the standards”.
(e) Coordination is a process whereby, a manager develops an orderly pattern of group effort among his subordinates and secures unity of action in the pursuit of a common purpose.
The main function of sales manager is to coordinate the activities of sales representatives and executives towards the achievement of sales objectives. In addition, he has to coordinate with other functions such as marketing, distribution, finance, HR and production within the organization and external customers like distributors, dealers, users and opinion leaders.
2. Staff Functions: Of all the “Ms” in management, i.e., money, materials, machine, market and methods, the most important “M” stands for men, the manpower working in the organization. While the value of assets depreciates, the value of trained employees increases over time. An organization that is able to acquire, develop and stimulate the manpower will be successful in the long run. Sales force is the backbone of an organization since the ultimate aim of production is sales. The success of the organization depends upon the effectiveness with which they sell goods and services to meet the changing needs of the consumers. Examples: Sales personnel planning, recruitment, selection, training, development, motivation, performance evaluation and career planning.
3. Advisory Functions: Sale management provides specialist advice to the management for taking policy decision in key areas such as Pricing policies, product performance, quality of products, new product introduction, distribution policies, advertising and sales promotion plans.
Importance of Sales Management
Sales management is responsible for organizing the sales effort, both within and outside their business enterprises. Within the business, the sales managers develop formal and informal organizational structure to ensure effective communication related to sales activities. They serve a key contact role with the customers and other external public for building an effective distribution network. Thus the sales management play an important role in analyzing the sales activities, increasing the sales volume, contributing to profits and continuing growth. Sales managers make major contribution to enable the management to reach and achieve the ultimate objectives of increasing profits and continuing growth. Sales management can use variety of techniques to reach that extra potential or increasing sales volume by 5-10 percent and this extra sale potential can lead to continued growth and expansion. Sales management includes more than tracking the business or proving support to the sales team. It starts with developing the right product, distributing in the right place at high price and continuing with improved customer service and other selling efforts. All the selling efforts must be well-coordinated and monitored to get the desired results by taking advantages of the market opportunities.

1.       Improves Product Development: A sales management program include keeping and training the sales staff in close contact with the potential customers and watching the market competition on continuous basis. Sales executives will determine whether the existing product line is relevant, do we need to add a new product to the existing line, should we eliminate or add features in the existing product or drop few items from the existing product mix. Regular conducts and reviews of what needs to be sold and what could be the optimal product offer will help in generating high sales volumes and profit margins.
2.       Optimal Distributive Networks: Sales reports made by sales management provide the information on what is being sold, how much is sold and where the products are sold more rapidly. The analysis of distribution networks with the sales reports can be very useful for future sales promotion plans. For example, if your online sales are more string that the retail volumes, then you should focus more efforts on retailer training programmes, in-store promotions, better product packaging in retain stores etc. to improve the retail sales of your products.
3.       Better Financial Decisions: The ultimate aim of sales management is to increase the profit contribution and reduce the opportunity and carrying costs of the products and their operations. It is quite possible that some of the products of the business may be best-selling in terms of sales volume, but they may provide low profit margins. Here the retailed sales reports of production, overhead and administration expenses can be analyzed to find out the cost-of-sales expenses and their profit margins. A low profit margin with high sales volume may need to be eliminated and substituted by high profit margin products.
4.       Improve Sales Personnel Quality: The key responsibility of every sales management is to recruit, select and train the best quality sales staff. This includes developing their product knowledge, coaching them on calls, improving their presentation skills and motivating them to work their sales quotas and sales territories more effectively.
Objectives of Sales Management
Every business firm has certain objectives to achieve. These objectives may be very explicit and definitive, or they may be implicit or general. Although, firms have different mixes of objectives, 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 important to a business firm, the objectives, relating to sales-volume, market share and profitability, are greatly affected by the effectiveness and efficiency, with which the sales-function is managed.
Business firms, have, in fact, found that it is the most effective management objective of the firm; that must emanate out of its overall business or corporate objectives. The sales-management objectives of a business firm, generally relate to the areas of (i) achieving sufficient sales-volume, (ii) providing sufficient profit, and (iii) experiencing continuing growth.
Generally, objectives of sales-management 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. The main objective of any business firm is to sell effectively its goods and services to the consumer at reasonable prices. So long as the business undertaking operates on a small-scale; the proprietor can handle himself, or with the help of a few salesmen, under his direct control and supervision. But, as the business grows and expands, the size of the target market, to be covered to sell large quantities of goods and services becomes too large to be controlled by the owner of the business firm, personally. Therefore, these activities arises the need of a sales-organisation.
Generally, an organisation is a structured-process in which individuals interact with each other for achieving stated-objectives. It is a social and dynamic system. It emphasises human-values. It is the job of management, to integrate and co-ordinate all its constituents. Objectives of sales management are generally divided into quantitative and qualitative objectives.
Quantitative Objectives
1.       To increase the sales volume.
2.       To enhance the profitability.
3.       To retain and capture market share.
4.       To determine sales volume in ways that contributes to profitability.
5.       To obtain new accounts of given types.
6.       To keep personal expenses within special limits.
7.       To secure targeted percentage of certain accounts of business.
8.       To gather accurate information to base the sales forecasts.
9.       To acquire more market share.
Qualitative Objectives
1.       To do the entire selling job.
2.       To provide technical advice whenever necessary.
3.       To assist the dealers in selling the product line.
4.       To provide advice and assist the middlemen.
5.       To serve existing accounts.
6.       To assist in training of middleman’s sales personnel.
7.       To have maximum customer satisfaction.
8.       To search and maintain customer co-operation.
9.       Self development of the sales personnel.
Emerging trends in sales management

To be successful in a changing marketing environment it is important that sales managers understand emerging trends in the following areas:
1)      Global perspective: Global competition is intensifying Domestic companies who never thought about foreign competitors suddenly find them in their salesforces to meet foreign competition in their country and improving their company’s personal selling efforts in other countries. Sales managers selling goods and services in the global market place face challenges, different requirements for buying, and different styles of negotiation and so on. Sales managers must also consider opportunities as many global markets are emerging and growing rapidly. A company need not be large to sell globally. Small and medium sized organizations can sell in global niche markets.
2)      Revolution in Technology: Digital revolution and the management of informational have greatly increased the capabilities of consumers and marketing organizations. Buyers today can get information on products, compare supplier’s prices and place orders on the internet in a matter of seconds. They can access online a great amount of information about almost anything. To compete effectively, salespeople and sales managers will have to adopt to the latest technology. Some of the technological innovations for sales management are portable and desktop computers, mobile phones, video conferencing and videotape presentations. Technology can make some sales activity efficient and cost effective.
3)      Customer Relationship management: Combining relationship marketing with information technology has resulted in customer relationship management or customer relationship marketing. Interestingly, the concept of relationship marketing came about earlier by bringing quality, customer service, and marketing together.
4)      Salesforce diversity: The demographic characteristics of the salesforce are changing and are becoming more varied. For example, more women are taking up careers in selling and sales management. In addition, today salespeople are more educated, with college degree and some of them holding postgraduate degrees. Sales manager will have to manage a salesforce consisting of women, more educated and less educated salesperson, as well as senior people. The needs or expectations of the varied salesforce will be different and consequently the motivational tools will not be the same.
5)      Team Selling Approach: The practice of team selling is widely followed by most companies in recent years. Team selling approach is used when a company wants to build a long term mutually beneficial relationship with major customer, who have high sales and profit potential. It is also used for selling a technically complex product or service to a prospective customer. The composition of the team includes members from top management, technical specialist, customer service, inside salesperson and salesperson or manufacturer’s representative. Team selling requires the joint selling effort of several persons, and hence, designing an effective compensation plan can be a challenging task.
6)      Ethical and Social Issues: Sales managers have social and ethical responsibilities. Sales people face ethical issues such as bribery, misleading, and high-pressure sales tactics. Giving payment or gift to get an order, misleading the customer by exaggerating the benefits of a product and using high-pressure tactics of committing wrong delivery schedules to a customer needing urgent delivery of a raw material are example of unethical behavior of salesperson. Today sales manager have no choice but to ensure ethical standards from the salesforce otherwise they may be out of business or even land up in legal problems.
7)      Sales Professionalism: Today’s top sales people are largely made, not merely born. Selling has increased in complexity, because composition is more intense, customers are more sophisticated and products and services have become more technical. Success mostly comes to those salesperson who have a combination of natural ability and acquired skills. A study on what do buyers like most in a salesperson indicated qualities like reliability, credibility, professionalism, integrity and product knowledge as most valued. The knowledge, skills and the right attitudes to meet complex and competitive market conditions of today are required by the professional salesperson through intensive training and practice. Some of the successful organizations have their own centers for training and management development. Today’s companies spend a lot of money each year to train salespeople in the art of selling and to make them professional.
The Sales Organization
Sales organization is a structural entity, which executes sales plans. A sales organization defines the duties, roles, rights and responsibilities of sales people engaged in the selling activities in order to execute the sales function. It also undertakes managerial functions like recruitment and selection of sales force; their induction and training for better performance; and their supervision and control to get the desired results. The sales organization also motivates the sales force so that they remain loyal and committed to achieve the organizational objectives.
The ideal sales organization must have built-in adaptability to respond to market changes. Shifts in marketing, in competition and in other business factors call for changes in sales organization. The sales organization should be able to anticipate and adjusted to fit in the changing market environment. Further a sales organization serves as a unified contact point with customers.
Objectives of Sales Organization
1.       To define the line of authority.
2.       To ensure that all necessary activities are assigned and performed.
3.       To establish effective lines of communication.
4.       To delegate authority and fix the responsibility for the performance of all the activities.
5.       To provide for co-ordination in order to gain the benefits of synergistic effects.
6.       To motivate the sales force to achieve greater organizational effectiveness.
7.       To provide insights into avenues of advancement.
8.       To harmonize orders and directives for the smooth operation of sales organization.
9.       To economize on executive time by using the principle of management by exception i.e. higher executives spending less time on operations and more on planning.
Steps of Developing Sales Organization
Some sales organization always exists in almost all the companies and it need to be reorganized to make it more effective. So a sales organization is rarely built entirely from the scratch. It is appropriate, nevertheless, for any sales executive to approach the organization problem, each time it arises, as if a completely new organization is to be built.
There are five major steps in developing up a sales organization:
1)      Defining the Objectives: Top management defines the long term objectives for the company and from them the sales department derives its objectives. The objectives set the direction for the selling execute to put sales efforts.  Following could be the objectives of sales management:
a)      Sales: A continuous flow a sales volume and sales revenue is the most important objective of the sales management.
b)      Profits: To magnify the level of profits by not only out of profitable sales but also by controlling departmental costs and expenditure.
c)       Growth: To have long term growth in sales profits by being ahead of competitors.
2)      Delineating the required activities: All required activities and their volume of performance should be estimated to determine the executive positions and their relationships to other positions. It requires an analysis of the sales department’s objectives to determine which activities should be performed in what volume.
3)      Grouping Activities: After identifying the required activities, they are allocated to different positions. Activities are classified and grouped so that closely related tasks are assigned to the same position. Each position should contain a sufficient number of tasks as well as sufficient vocation to provide for job challenge. The activities of crucial importance should be assigned to the position high up in the organization structure and activities of lesser importance be assigned to lower levels jobs.
4)      Assignment of Personnel to Positions: The next step in the sales organization is to assign personnel to the positions. Some position requirements may be general and many individuals possess the required qualification and talent for the position, while other positions may call for unique talents and abilities. So the top management must recruit special individuals to fill in the positions or they may need to modify the positions to fit the capabilities of available personnel.
5)      Provision for Coordination and Control: An effective means for coordination and control must be provided in a sound organizational structure. No individual should be over-burdened with detailed and un delegated responsibilities. The span of executive control should also be limited. Better coordination and control can be achieved by written job descriptions, providing organizational charts and manuals etc.
Functions of Sales Organizations
The functions of sales organization can be classified into four categories:
1)      Planning Functions:
a)      Setting Sales Objectives: Sales organization will set sales objectives i.e. what it intends to achieve? The main objective of sales organization is to increase sales volume by enhancing the market share. A systematic and careful planning regarding sales promotion techniques will help in achieving sales objectives.
b)      Formulation of Sales Plans: After setting sales objectives, plans will be made to determine sales territories, sales quotas etc. Decisions will also be taken regarding credit sales, payment terms, delivery schedules, return of sold goods, brokerage etc.
c)       Determining Organization Structure: The sales manager sets up the organization structure for his department. He distributes responsibility to sales personnel and establishes authority relationships between them. He also coordinates the activities of other related departments to achieve the organizational objectives.
d)      Sales Forecasting: In order to determine the future course of action, sales organization makes certain estimates of future events. Sales forecasting is the prediction of future sales volume on the basis of certain assumptions. The relevant information is collected and analyzed in order to draw conclusions and then implement the decisions taken for the sales. Sales forecasting techniques are reviewed and revised from time to time for better results.

e)      Sales Budgeting: The sales budget is the final point of sales organization. Sales budget is prepared to forecast the sales revenue and sales expenditure within a stipulated period of time. Sales budget is prepared after taking into consideration the past trends, the trade prospects, the potential customers, the changing environment and government policies etc.
f)       Selling Policy: To attract and retain the customers and to render satisfactory services to them, sales policy is evolved. The objective of a selling policy is to place right type of goods in the hands of consumers at the right place and right time. A selling policy includes methods of sale and distribution, the terms of sale and guarantee and the service facilities. The after-sale service policy is a strong selling point to push up the sales. It shows seller’s concern for the convenience and satisfaction of customers.
2)      Administrative functions
a)      Recruitment and Selection of Salesman: Once the sales organization determines the number and kind of salesman, the next step is to get the right applications and select the potential sales personnel.
b)      Training and Motivation of Salesman: Depending upon the organizational tasks and personnel, a training programme will be developed by the sales organization. The basic purpose of designing sales training is to change or reinforce the behaviour of sales people so as to achieve the sales goals more efficiently. Sales people should be motivated to encourage them to put their loyal, dedicated and committed sales efforts.
c)       Assigning of duties: After giving them requisite training, sales personnel are assigned their respective duties. They are supposed to perform selling as well as non-selling duties. Non-selling duties like recovery of the amount on the credit sales, keeping regular contacts with old customers and undertaking market research etc. are also performed by them to enhance the sales.
d)      Equipping Sales Personnel: All necessary equipments like list of products, sample of products, sales slogans, catalogues, charts, diagrams, introduction forms, order forms etc. are provided to sales personnel. This helps the sales force to achieve their sales targets more efficiently and effectively.
e)      Remunerating the Sales Personnel: The methods of payments like commission or salary plus commission are determined while keeping in mind the expectations of the sales personnel. The remuneration must be sufficient to enable them to meet their minimum requirements. It must be justified, motivating and flexible.
f)       Supervisions and Control of Salesman: An effective system of supervision and control becomes essential in order to execute the sales plans. Selling methods should be analyzed to determine the most efficient means of reaching to the customers. This calls for marketing and environmental analysis also.
3)      Executive Functions
a)      Sales Promotion: Sales promotion is the most significant executive function of sales organization in today’s competitive environment. Sales promotion by way of incentives, free samples, coupons, price-offs, contests and point of sales material etc. have become very popular due to the increase of number of brands for almost all the products.
b)      Sales Routine: To execute the sales order of the customers, total customer satisfaction by way of prompt and safe delivery is another executive function of the sales organization. Sales organization should also ensure defect free delivery of stock to the customers.
4)      Other Functions
a)      The sales manager gains the knowledge about the economic conditions of the customers, through the sales force operating in the fields. This helps the sales organization in deciding the pricing and product policies.
b)      To know the changes in the market conditions and technology, sales research in undertaken. This enables the company to judge the marketing and customer characteristics.
c)       To recovery of outstanding amounts on the credit sales is another function of sales personnel.
d)      Maintenance and collection of data bank is still another function of sales organization. This data is very useful for sales forecasting.
e)      Sales manager also looks after the office work like purchase of stationery and other office equipments for the effective administration of the sales department.
Need and Importance of Sales Organisation
The sales organisation is required for the following purposes:
(i) To enable the top-management, to devote to more time in policy making for the growth and expansion of business.
(ii) To divide and fix authority among the sub-ordinates so that they may shirk work.
(iii) To avoid repetition of duties and functions so that there may not be any confusion among them.
(iv) To locate responsibility of each and every employee so that they can complete the whole work in stipulated time; if not then the particular person must be responsible.
(v) To establish the sales-routine in the business unit.
(vi) To stimulate sales-effort.
(vii) To enforce proper supervision of sales-force.
(viii) To integrate the individual in the organisation.
Factors influencing the Organization Structure
The size and structure of field sales force is usually based on some means of specialization like products, customers, geographic divisions, pricing and distribution strategies etc.  These are discussed below:
a)      Product based Sales Organization: The nature of the product or service determines the structure of the sales organization. In case of fast moving consumer goods like soaps, oils, toothpaste etc, the size of sales force organization should be large to cater to large customer base. The quantity of the products to be marketed per period and the quantities involved in each sale transaction will decide the structure of the organization.
b)      Customer base Sales Organization: This structure of organization is more appropriate when nearly identical products are to be marketed to several types of customers and the problems of selling to each type are different. Organizations such as Xerox, IBM, Hewlett Packard are customer based organizations. Customers specialization enables the sales persons to become more knowledgeable about the unique problems and requirements of each group of customers.
c)       Geographic Sales Organization: The large company is likely to sub-divide line authority geographically. If there are large numbers of customers, they vary by geographical location, selling problems are different in different areas and certain products are more strongly demanded in some regions than in others. Setting up geographical divisions is a way of cutting the sales task down to manageable proportions. However, this type of organization calls for multiple offices and the administrative expenses go up.
d)      Size-based Organization: If the size of the enterprise is small, there will be limited number of products, and customers, so a simple structure of the sales organization can serve the market. The enterprises having highly specialized products and serving niche markets have a smaller and simple sales organization. On the other hand, large business handling large number of products and customers will have large and complex organization structure.
e)      Distribution-based Organization: Companies with selective distribution channels prefer to have their own outlets and decide in favour of simple sales organizations. While the companies with intensive distribution strategy through various retail channels, serving wider and deeper pockets, have complex and large sales organizations.
f)       Price-based Organizations: The price of the product also influences the size and structure of the sales organization. In case of low-priced goods, where the demand and number of customers is large, the company needs to have large organizational structure. While on the other hand, in case of products like cars etc. where price of the product is high and size of the market is limited, the sales organization will be small.
g)      External Factors: There could be certain external factors like customers and traditions and the prevailing competition which influence the size and structure of the organization. For instance if the company has the tradition to flow intermediary network, it becomes difficult to change due to channel conflict. Similarly in case of intense competition, the company may decide to expand the size of the organization to enter into new markets or to serve existing customer better.
Formulation of Sales Strategies
The art of meeting the sales targets effectively through meticulous planning and budgeting refers to sales management. Sales Management helps to extract the best out of employees and achieve the sales goals of the organization in the most effective ways:
1.       Identify goals and objectives of the sales team. Be clear on your sales targets. Make sure the targets are realistic and achievable. Also assign a fixed timeline to achieve the targets.
2.       Know your product well. Understand what benefits end-users would get from your brand. The marketers must interact with customers to find out more about their expectations from the product as well as the organization. One would not be able to convince the customers unless and until he himself is clear with the benefits of the products.
3.       Identify your target market. Selling techniques and strategies can’t be same for all individuals. Each audience has different needs, interests and requirements.
4.       Hire the right individual for the sales team. Remember the sales professionals have a major role in the success and failure of organizations. Recruit individuals who are aggressive, out of the box thinkers and nurture the dream of making it big in the corporate world. Make the sales representatives very clear about their roles and responsibilities in the team. Develop a lucrative incentive plan for them. Incentives and monetary benefits go a long way in motivating the sales team.
5.       Don’t lie to your customers. It is important to maintain transparency. Communicate what all your product actually offers. It is unethical to make false promises. Only commit to what you actually can deliver to customers.
6.       Know what your competitors are offering. It is essential to do a SWOT analysis of your organization to know its strengths, weaknesses, threats and opportunities. A marketer must know how his product is better than his competitors.
7.       Sales representatives must do their homework before going for a sales call. One should never go unprepared. Remember the customer can ask you anything and you have to be ready with your answers. The management must promote training sessions at the workplace to upgrade the skills of the sales professionals and expect them to deliver their level best.
8.       Devise strategies as per the target audience. Know your market well. The individuals must be able to relate to your products. The strategies must be formulated in the presence of all. Each one should have a say in the same. Let everyone come out with his suggestions. Be ready with alternate plans if one plan fails.
9.       The management must conduct frequent meetings with the sales team to review their performances. Keep a track on their daily activities. The sales team must prepare Daily Sales Reports (DSR) for the superiors to know what they are up to.
10.   One must assess his own performance. Recall your interactions with the clients and analyze where you went wrong and where things could have been a little better.
11.   Treat your customers well for higher customer satisfaction and retention. Don’t oversell. Once you are through with your sales presentation, don’t be after your client’s life. Give him time to think and decide.

12.   The sales pitch must be impressive for the desired impact.

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