SSM-Lecture-03 (Introduction to Sales Management)

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By :

Prof. Amit Kumar

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“A student pursuing management education from IILM-

Graduate School of Management, for example may find

himself or herself placed in a firm as a Sales Manager.

Our goal is to prepare the student for the exciting

challenges related to leading sales organizations in

today’s hyper-competitive global economy”.

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Importance of this course

Selling & Sales Management

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Selling & Sales Management

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Contents

• Introduction to Sales Management

• Evolution of Sales Management

• The Nature and Role of Sales Management

• The Marketing Concept

• Relationship between Sales & Marketing

• Sales Management Process

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Selling & Sales Management Introduction to Sales Management

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Robert Louis Balfour Stevenson (13 November 1850 – 3 December 1894) was a Scottish novelist, poet, essayist and travel writer. His most well known books

include ‘Treasure Island and Kidnapped’.

He said 'everybody is surviving on selling something to someone'.

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Introduction to Sales Management

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The history of salesmanship is as old as

human civilization.

The sales people in the past were not held in high esteem by the society. 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.

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Evolution of Sales Management

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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'. These move village to village and sell sarees, dress materials, and spices mostly in the rural markets of India, because rural housewives have lesser mobility than urban housewives.

These salespeople move from the manufacturing bases of the country to different consumption centers in India.

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The techniques of modern sales management and selling techniques were refined by John Henry Patterson,

widely known as the father of modern sales management.

Thomas J. Watson was trained by Mr. Patterson who later founded the IBM. Patterson was the pathfinder who showed the strategy and skill required to transform a sales force into an effective workforce for generating sales and profits.

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Before you try to convince anyone else, be sure you are convinced, and if you cannot

convince yourself, drop the subject.

John Henry Patterson

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Today, the process of sales management has undergone numerous changes in terms of strategy, practice, and technological adaptation to achieve the desire sales goal.

A sales manager have to perform duties such as recruiting, selecting, motivating, forecasting, controlling and administrating salespeople, while performing the

primary responsibility of revenue generation for the firms.

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Nature and Role of Sales Management

The basic function and role of selling is to generate sales and earn revenue for an organization.

Today's selling approach, also highlights maintaining good customer relationship, managing customer complaints and building brand value in the eyes of the customer.

The reason behind growing importance of salesperson is that he is one of the most vital contact points with the

customers. Other contact points can be ATMs, Internet

Functions of a sales manager can be classified into two: personal selling & sales management.

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Nature and Role of Sales Management

The determination of sales force objectives & goals Sales force organization, size, territory, and quota

finalization Sales forecasting and budgeting Sales force selection, recruitment, and training Motivating and leading the sales force Designing compensation plan and control systems Designing career growth plans and building

relationship strategies with key customers

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Marketing Concepts Philosophy of Marketing

• The Production Concept• The Product Concept• The Selling Concept• The Marketing Concept• The Holistic Marketing Concept

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The Production Concept

The production concept is one of the oldest concept in business.

• It holds that consumers will prefer products that are

widely available and inexpensive.

• Focus on achieving high production efficiency, low costs and mass distribution.

• Focus on ‘Economies of scale’In microeconomics, EOS are the cost advantages that a business obtains due to expansion. They are factors that cause a producer’s average cost per unit to fall as scale is increased.

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The Product Concept

The product concept holds that consumers will favor those products that offer the most quality, performance or

innovative features.

Focus on making superior products/services and improving them over time.

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The Selling Concept

• Selling concept holds that consumers, if left alone, will not buy enough of the organization’s product.

• The organization must, therefore, undertake an aggressive selling and promotion effort.

Selling concept is practiced most aggressively with unsought goods, goods

that buyers normally do not think of buying, such as insurance, and encyclopedias.

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The Selling Concept

Most firms practice the selling concept when they have overcapacity. The aim is to sell what they

make rather than make what the

market/customer wants.

Selling focuses on the needs of the seller; marketing on the needs of the buyer.

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The Marketing Concept

• The marketing concept emerged in the mid-1950s.

• Instead of a product-centered,' make-and-sell’ philosophy, business shifted to a customer-centered,' sense-and-respond’ philosophy.

• Instead of hunting, marketing is gardening. The job is not to find the right customers for your products, but the right products for your customers.

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Holistic Marketing Concept

• The most advance concept of marketing.

• Holistic marketing concept is based on the development, design and implementation of marketing programs, process, and activities that recognizes their breadth and interdependencies.

• Holistic marketing recognizes that “everything matters” with marketing and a broad, integrated perspective is often necessary.

• The four components of holistic marketing are1. Relationship marketing

2. Integrated marketing

3. Internal Marketing

4. Social Responsibility Marketing

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HolisticMarketing

Internal Marketing

SocialResponsibleMarketing

RelationshipMarketing

IntegratedMarketing

MarketingDepartment

SeniorManagement

OtherDepartment

Communications Product &Services

Channels

Ethics/Legal

Environment Community Customers Channels Partners

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• Aim of building mutually satisfying long-term relationships with key parties-….in order to earn & retain their business.

• Marketing must not only do customer relationship management (CRM), but also partner relationship management (PRM).

• Ultimate outcome of relationship marketing is the building of unique company asset called a market network.

• A marketing network consists of company and its supporting stakeholders with whom it has built mutually profitable business relationships.

1. Relationship Marketing

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Two key themes of integrated marketing are:

• Many different marketing activities are employed to communicate and deliver the value

• All marketing activities are coordinated to maximize their joint efforts

2. Integrated Marketing

CompanyProduct

PriceServices

Advertising

Events

Direct Marketing

Personal selling

Sales Promotion

Distributionchannels

TargetCustomers

Public Relation

Offering mix

Communication mixMarketing-Mix strategy

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• Internal marketing is the task of hiring, training, & motivating able employees who want to serve customers well.

• It makes no sense to promise excellent service before the company’s staff is ready to provide it.

• Internal marketing must take place at two levels.1. At one level, the various marketing functions-sales

force, advertising, customer service, product management, marketing research-must work together.

2. At another level, marketing must embraced by other department; they must also" think customer". Marketing is not a department so much as a company orientation.

3. Internal Marketing

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• Social responsibility also requires that marketers carefully consider the role that they are playing and could play in terms of social welfare.

• The societal marketing concept calls upon marketers to build social ,ethical, environmental & legal considerations into their marketing practices.


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The Fast-food hamburger industry offers tasty but unhealthy food.

The hamburgers have a high fat content, and the restaurants

promote fries and pies, two products high in starch and fat. The

products are wrapped in convenient packaging, which leads to

much waste. In satisfying consumer wants, these restaurants

may be hurting consumer health and causing

environmental problems.


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Recognizing these criticisms, companies like McDonald’s have added healthier items to theirmenus (e.g. Salads) and introduced environmental initiatives (e.g. replacing polystyrene foam sandwich clamshells with paper wraps and lightweightrecycled boxes).


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What is Marketing Management?

Marketing management is theart and science

of choosing target markets and getting, keeping, and growing

customers throughcreating, delivering, and communicating

superior customer value.- Kotler and Keller

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Selling is only the tip of the iceberg

“There will always be a need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be

needed is to make the product or service available.”

Peter Drucker

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Factory FactorySelling and promoting

Profits though sales volume

Selling concept

Market concept

Market Customer needs

Coordinated marketing

Starting point

Focus Means Ends

Profits through customer satisfaction

Difference Between Sales and Marketing

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Formulation of a Strategic Sales Programme

Implementation of the Sales Programme

Evaluation and Control of Sales Force Performance

Sales Management Process

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There are five key decisions that a sales manager needs totake at this stage:

1. The sales manager should decide on how the personal selling efforts can best be dovetailed to the company’s environment and integrated with other elements of the marketing strategy. This decision is set to explain the firm’s personal the firm’s personal selling strategy.

2. The next decision is to find out and decide in what way the potential customer’s can best be approached, persuaded and serviced. This means deciding the kinds of account management policies the firm should adopt. This is essentially the decision related to sales approach.

Key Decisions in Sales Management Process

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There are five key decisions that a sales manager needs to take at this stage:

3. The third decision is the organization of the sales force to call and manage various types of customers as effectively and efficiently as possible. This is related to the design of sales organization suitable to the market.

4. The fourth decision is related to the level of performance each member of sales force is expected to attain during the planning period under consideration. This involves decisions related to forecasts, quotas and budget-setting.

5. The fifth decision is related to the deployment of the firm’s sales force in the light of the account management policy and demand forecasts. The decision involves deciding on the sales territories and allocation of these territories to the salespeople.

Key Decisions in Sales Management Process

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Technology

Relationship sellingCustomer orientation

Global and ethicalIssues

New selling methods

Diversity

Emerging trends in sales

management

Emerging Trends in Sales Management

Technology

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SSM-Lecture-03 (Introduction to Sales Management)

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