Subject: SALES MANAGEMENT

Course Code: MM-308 Author: Dr. Surinder Singh Kundu

Lesson No.: 01 Vetter: Dr. V.K. Bishnoi

SALES MANAGEMENT: AN OVERVIEW

STRUCTURE

1.0 Objective
1.1 Introduction

1.2 Definition
1.3 Benefits of selling activities
1.4 Elements of sales management
1.5 Objectives of sales management
1.6 SMBO approach
1.6.1 Process of SMBO
1.6.2 Importance of SMBO
1.7 Organisation of selling unit
1.7.1 Need and Importance
1.7.2 Functions of Sale Organisation

1.7.3 Structure of Sales Organisation

1.7.4 Steps to establish a sales structure
1.8 Summary
1.9 Keywords
1.10 Self assessment questions
1.11 References/suggested readings

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1.0 OBJECTIVE

After going through this lesson, you will be able to-

• Discuss the sales, sales management and related concepts.

• Explain the structure and objectives of a sales organisation.

1.1 INTRODUCTION

In daily life, a layman deals with different transaction in terms of

selling and purchasing of goods and services. In these transactions the
second one persuades the first person. Therefore, selling may be defined
as persuading people to satisfy the want of first one. The person, who
does this act, is called as the salesman, the result of this action as sales,

while these activities of the person, are supervised and controlled by

sales-management. In the present scenario sales executives are
professionals. They plan, build and maintain effective organisations and
design and utilize efficient control procedures. The professionals
approach requires thorough analysis, market-efficient qualitative and
quantitative personal-selling strategy. It calls for skilful application of
organisational principles to the conduct of sales operations. In addition,
the professional approach demands the ability to install, operate, and use
control procedures appropriate to the firm’s situation and its objectives.
Executives capable of applying the professional approach to sales

management are in high demand today. The quality of selling is referred

to as salesmanship. In other words, ‘management’ is synonymous with
leadership. Managers do the same thing in industry, as ministers do in
states and at the centre, i.e., they have to plan, forecast, direct and
control their personnel. Here success lies in running together, hand in
hand. Managers are the captains of the army of their followers.

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1.2 DEFINITION

Originally, the term ‘sales management’ referred to the direction of

sales force personnel. But, it has gained a significant position in the

today’s world. Now, the sales management meant management of all

marketing activities, including advertising, sales promotion, marketing
research, physical distribution, pricing, and product merchandising. The
American marketers association (AMA’s) definition, takes into
consideration a number of these viewpoints. Its definitions runs like: the
planning, direction, and control of the personnel, selling activities of a
business unit including recruiting, selecting, training, assigning, rating,
supervising, paying, motivating, as all these tasks apply to the personnel
sales-force.

Further, it may be quoted: it is a socio-scientific process, involving’

group-effort’ in the pursuit of common goals or objectives, which are pre-

determined. Co-ordination is its key, though, no doubt, it is a system of
authority, but the emphasis is on harmony and not conflict.

Sales-management differs from other fields of management, mainly

in different aspects: the selling operation of a business firm does not exist
in isolation. Thus, simultaneous with the changes taking place in the
business, as well as marketing-orientation, anew concept of sales
management has evolved. The business, is now society-oriented, on
human-welfare aspects. So, sales-management has to work in a broader
and newer environment, in co-existence with the traditional lines. The

present emphasis is now on total development of human resources.

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1.3 BENEFITS OF SELLING ACTIVITIES

There are different benefits of selling activities, which are as

follows:

(1) Benefits to the society: economic growth and maximum

employment are the basics for national development. The
achievement of both these goals means jobs and incomes for
a nation’s labour-force. The number of people, who need
jobs, continues to expand, and also some jobs are being
eliminated, because of the introduction of computers and
abolition of obsolete technology. If jobs are to be made
available for all those, who want and expect them, the
economy must continuously expand its production of goods
and services, which can only be done by adopting sound

government-policies and efficient use of people. Equally

important here is the fact, that an economy needs
individuals, to sell what is produced. Through their
persistent efforts to create and stimulate demand, sales-
people could be said to be the life and blood of a productive
economic-system. The large number of workers, in factories,
and offices, would not be needed, if someone were not selling
their products.

(2) Benefits to consumers: professional people may not know

every fact of a product, but they, at least know its major

uses, limitations and benefits; so they can easily serve their

customers, quite effectively. For exan1ple, an insurance
agent can analyse the hazards and risks that confront a

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 client’s business or home-situation, examine existing
coverage and offer helpful advice, in order to eliminate the
gaps or overlaps in coverage, in addition to saving the client’s
money. The sales-engineers are qualified to analyse
technical-problems, which may be confronting a particular

organisation and they can give the right recommendations

for developing efficient operations. Like-wise, the medical-
representatives may help the busy doctor, by keeping him
abreast of new drugs in the market. The list of sales-people
who can offer assistance to customers is practically without
end.

(3) Benefits to business firms; their sales-persons and

customers: salespersons are owned by their companies,
while customers are the end-users of the company’s
product(s) and/or services, all these people, in the chain of
marketing, stand to benefit by sales-activities. A business
firm can be profitable only if its revenues exceed its costs.
The prime responsibility of the salespersons is to sell the
goods, produced by the organisation, at a profit. The creative
sales-person, tries to penetrate his territory, and adopts
suitable means and techniques of profitable-selling of goods
and/or services. Business firms, derive various other benefits
from, non-selling activities of sales-persons. The sales-
person, in the field, is an ideal person, to keep the company
abreast, or ahead of competition. He, thus, becomes an

important source of field-intelligence by providing important

(and sometimes very crucial) information, about the nature of

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 competitive-activities, and also about the changing needs of
customers. The sales-force has the additional responsibility
of serving the needs of customers that buy the film’s
product(s). Most firms cannot survive, only on the basis of
one-time sales; repeat-sales are necessary. This is possible

only if the customers are served in a professional manner. A

customer-oriented sales-person has to perform such
activities as: providing customers with ‘product-information’
and ‘demonstration(s); training customers-employees, in
product-use; providing customers with sales-advice; and
assisting customers in maintaining ‘inventories’.

1.4 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

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 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 co-
ordination. 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. Harmony, and not discord,
should be the guiding mantra. In addition, one has to ensure
free flow of information that is selective to the objectives of
the business. No personal problems, arising from business-
operations are to be ignored, but solved through a free-
exchange of ideas. This is especially true in the case of the
sales-force of any organisation.

(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

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 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 sales-
force; 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.

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 This is especially important in the case of the sales-force.
Only motivated sales-persons can achieve company’s goals.

1.5 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. Since, there are more than one
objective, these should be put, on a hierarchical manner (most-

important, down to the least important). To ensure their flawless

realisation, they must be congruent, i.e., they must fit together, and not

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be in conflict with each other. For example, suppose you ask a salesman
to cut his travelling expenses, and ask him to spend more time, in the
field. To make these two requirements, more meaningful, they must be
linked with specific time-element.

The setting of objectives should not be based only on the judgment

of the top-management. Rather, it should be formulated and finalised,

with the involvement of the sales-force, at the grass-roots level. In
addition, the process of setting of sales-objectives should begin, only after
the company has conducted benchmark studies, to find out, as to where
it stands in terms of product, brand and market-sales and market share
trends (all in measurable terms).

1.6 SMBO APPROACH

It is another approach to formulate and accomplish sales-objectives

is the sales management by objectives (SMBO) technique. It is formulated

combined by sales manager and sales-force (representatives). It aims to
focus on (i) results, within a specified set of objectives and (ii)
participative style of management.

1.6.1 Process of SMBO

The operationalisation of SMBO is a process, comprising of the

following steps:

(i) Setting goals jointly with the salesman: In this process the
goals for sales-man and sales managers are settled
simultaneously in the organisation so that they can built a

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 close coordination between them and lastly they achieve the
main objective of the organisation.

(ii) Planning strategy to reach the objectives: His the

participative style of sales. Management proves to be a boon
to the top-management, in the sense of the close familiarity

of the salesman, with their markets. The outcome of the joint

exercise would be the development of a strategy that directs
the salesman to his objectives, following a plan, in the
correct sequence, with the correct timing, and must be
efficient, in the use of resources of time and money.

1.6.2 Importance of SMBO

The importance of SMBO for a business firm is as follows:

(a) Directing the salesman towards the broader sales and

marketing objectives of the Company;

(b) Providing abetter approach, from the view-point of the

salesman; and

(c) Motivating the salesman.

1.7 ORGANISATION OF SELLING UNIT

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

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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.

1.7.1 Need and Importance

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.

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 (viii) To integrate the individual in the organisation.

Business organisations consist of an input, a processing-unit, an

output and a feedback-loop; with its own environment Organisation as
an open-ended social and dynamic system. Feedback-loop, provides
control mechanism. Input is drawn from the environment. It gives output

to satisfy the needs of environment, which the process itself transfers,

input to output through its operators. In this approach, the main
emphasis is on human-values. Workers are not simply cogs in the
machinery they are social beings first. They are the key players of the
production-system; and the management has to recognise this fact, that
each person is unique. This makes an organisation, in the present-day
context, quite complex.

1.7.2 Functions of Sale Organisation

A sales organisation performs the following functions:

(i) Analysis of markets thoroughly, including products and

market research.

(ii) Adoption of sound and defensible sales-policy.

(iii) Accurate market or sales forecasting and planning the sales-

campaign, based on relevant data or information supplied by
the marketing research staff.

(iv) Deciding about prices of the goods and services; terms of

sales and pricing policies to be implemented in the potential
and existing markets.

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(v) Labelling, Packaging and packing, for the consumer, who
wants a container, which will satisfy his desire for attractive
appearance; keeping qualities, utility, quantity, and correct
price and many other factors in view.

(vi) Branding or naming the product(s) and/or services to

differentiate them from the competitors and to recognise

easily by the customer.

(vii) Deciding the channels of distribution for easy accessibility

and timely delivery of the products and services.

(viii) Selection, training and control of salesmen, and fixing their

remuneration to run the business operations efficiently and
effectively.

(ix) Allocation of territory, and quota setting for effective Selling

and to fix the responsibility to the concern person.

(x) Sales-programmes and sales-promotion-activities prepared

so that every sales activity may be completed in a planned

manner

(xi) Arranging for advertising and publicity to inform the

customer about the new products and services and their
multiple uses.

(xii) Order-preparation and office-recording to know the

profitability of the business and to evaluate the performance
of the employees.

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 (xiii) Preparation of customer s record-card to the customer
loyalty about the products.

(xiv) Scrutiny and recording of reports to compare the other

competitors and to compare with the past period.

(xv) Study of statistical-records and reports for comparative

analyses in terms of sales, etc.

(xvi) Maintenance of salesman’s records to know their efficiency

and to develop them.

1.7.3 Structure of Sales Organisation

The structure of sales organisation differs from company to

company. There may be a very small and simple one with only a few
salesmen. At the other extreme, there may be quite complex, with many
sub-organisations, based upon divisions, according to territory, product

and marketing-functions. The structure of the sales-organisation, usually

depends upon the following factors:

(i) Nature and size of the firm.

(ii) Methods of distribution, adopted by the firm.

(iii) Selling-policies of the firm.

(iv) Financial conditions of the firm.

(v) Personality of the sales manager.

The other dimension of the sales-organisation-structure, is related

to

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 (i) What shall be the status of the sales manager?

(ii) What functions shall his department perform?

(iii) What shall be the strength of the department? etc.

These are many issues, which, besides being based on the factors,
listed in the procedure shall depend upon the state of the acceptance of

the modem marketing concept, within the organisation, and the extent to
which, it is found to permeate within it. We have some firms in India,
where the sales manager is the head of total marketing and sales-
operations of the company; others where the head of the sales-operations
of the company, is a functional director of the company’s board of
directors, and responsible for total sales-operations of the company.

Further, to carry out the functions of the sales-organisation

successfully, the sales department is divided into sub-departments. Each
sub-department is put under an officer, who is responsible to the sales-
manager, who is the head or chief executive officer (CEO) of the company.

For example, in the case of a big business firm, these sub-departments

could be (i) market-research, (ii) advertising, (iii) sales-promotion, (iv)
recruitment and training, (v) credit and collection, (vi) sales-office for
receiving the orders and arranging to dispatch goods to their
destinations.

1.7.4 Steps to establish a sales structure

The following procedure may be adopted to, establish a practical

and viable sales-organisational structure:

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(i) Begin with a historical profile of the company’s allegiance,
overall organisation and top-management philosophy of the
firm.

(ii) Analyse the requirements of the company and the sales-

department, particularly in terms of its: size, position in the

market, nature of activities, product mix, nature of

customers, state of competition, and sales-people and their
ambitions.

(iii) Appraise the potential of the company, in terms of its impact

on the financial, technical, scientific and human resources,
existing currently.

(iv) Analyse the prevailing working-atmosphere and state of

communications, especially from the view-point of
relationship and human-feelings involved in such
relationships.

(v) List the various administrative-details, connected with the

company.

(vi) Prepare a note, relating to the various administrative-details

including aspects like hierarchy, span of control, etc. on the
sales-department, and overall organisation of the
department.

(vii) Describe the procedures and Processes to be followed for

executing various tasks.

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 (viii) Based on the above, prepare a draft-structure of the sales-
department, giving job-descriptions of the whole of the
department, and a who’s who of the department.

(ix) Examine the structure, from the point of view of viability and
practicality.

In the light of the complexities and vastness of the above process,

for creating a sales structure, once again, we state that various
industries, though being equally efficient, and of the same category,
organise their sales-departments, in different ways.

1.8 SUMMARY

In total, Selling is the act, sales is the result of this act, while
salesman is the person who does this act. So, salesmanship is the quality
of act of selling. Thus, selling and salesmanship cannot be used

synonymously. Salesmanship serves the dual purpose of discovering and

persuading prospective buyers. By his creative faculties, a salesman has
not only to sell but also establish a winning, regular and permanent
relationship with his customers. A satisfied customer is just the
beginning of this type of relationship, which ensures future repeat orders.
Sales-management is governed by the principle of management. The four
elements viz., (i) planning, (ii) co-ordination, (iii) controlling, and (iv)
motivation are very relevant, as per requirement of the special nature of
the business. Objectives are equally important for sound sales-
management. Generally, these are (i) achieving sufficient sales-volume,

(ii) providing reasonable profit, and (iii) experiencing continuing growth.

SMBO (sales management by objectives) is a recent approach to

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formulate and accomplish these objectives. Sales-management also needs
proper organisational structure. Different structures suit different
situations and requirements. These may be based on national or regional
basis or on product market basis. A sales manager/director is the key
person to plan, co-ordinate, control and motivate all the selling-activities

of a business-concern. His job is multi-purpose and he has to face, all

the odd and difficult changes. However, with his skill, urgency, and
adaptability, these can be easily faced with.

1.9 KEYWORDS

SMBO: Sales Management by objective is a selling technique or

approach which focus on result within a specified set of objectives.

Sales Volume: It is the total number of products sold. It may be

expressed in monitory terms as well.

1.10 SELF ASSESSMENT QUESTIONS

1. Differentiate (i) selling, (ii) sales, and (iii) salesmanship.

2. Salesmanship is both an Art as well as a Science. Comment.

3. Write a short essay on sales-management.

4. What do you mean by objectives of any organisation?

Explain.

5. What do you mean by organisation for sales-management?

Explain its need, importance, functions and the essentials of

a good structure.

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 6. Write short notes on:

(i) SMBO

(ii) Organisational Structure of Call Center

(iii) Selling activities of a firm.

1.11 REFERENCES/SUGGESTED READINGS

1. Still, Cundiff, and Govoni, ‘Sales Management’, PHI.

2. Stanton and Spiro, ‘Management of a Sales Force’, McGraw

Hill.

3. Anderson, Joseph, and Bush, ‘Professional Sales

Management’, McGraw Hill.

4. Roburt J. Calvin, ‘Sales Management’, Tata McGraw Hill.

5. Dalrymple, Cron, and Decarlo, ‘Sales Management’, John

Wiley and Sons.

6. Manning and Reece, ‘Selling Today’, Pearson Education.

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Subject: Sales Management
Course Code: MM-308 Author: Dr. M.R.P. Singh
Lesson No.: 02 Vetter: Dr. H. Bansal

PERSONAL SELLING

STRUCTURE

2.0 Objectives

2.1. Introduction
2.2 Personal selling objectives
2.3 Relevant situation for personal selling
2.4 Diversity of selling situations
2.5 Selling process
2.5.1 Prospecting
2.5.2 Preparation
2.5.3 Presentation
2.5.4 Handling objections
2.5.5 Closing

2.5.6 Follow-up
2.6 Summary
2.7 Keywords
2.8 Self assessment questions
2.9 References/Suggested readings

2.0 OBJECTIVES

After going through this lesson, you should be able to-

• Define personal selling and salesmanship.

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 • Explain personal selling objectives.

• Discuss the importance and relevance of personal selling in

different situations.

• Explain the diversity of selling situation.

• Elaborate the personal selling process.

2.1 INTRODUCTION

Sales management, personal selling and salesmanship are all

related. Sales management directs the personal selling effort, which in
turn, is implemented largely through salesmanship. The term personal
selling and salesmanship are often used without distinction. However,
there are vital differences between two terms. Personal selling is a
broader concept than salesmanship. Salesmanship is one of the aspects
of personal selling. Salesmanship is one of the skills used in personal

selling, it is not all of it. ‘Salesmanship is the art of successfully

persuading prospects or customers to buy products or services from
which they can derive suitable benefits, thereby increasing their total
satisfaction’. Salesmanship is seller initiated effort that provides
prospective buyers with information, and motivates them to make
favourable decisions concerning the seller’s products or services.

‘Personal Selling’ is a highly distinctive form of promotion. It is

basically a two way communication involving not only individual but
social behaviour also. It aims at bringing the right products to the right
customers. It takes several forms including calls by company’s sales

representative, assistance by a sales clerk, an informal invitation from

one company executive to another. It is employed for the purpose of

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creating product awareness, stimulating interest, developing brand
preference, negotiating price etc.

The increase in complexity of products has increased the

importance of personal selling. Manufacturers of highly technical
products such as computers, electronic typewriters, digital phones,

microwave kitchen appliances, remote control equipments etc. depend

more heavily on personal selling than do grocery or toiletry products
manufacturers.

Ever growing competition from domestic and foreign sources have

also increased the importance of sales persons in the marketing effort of
a firm. In personal selling, company’s sales persons are often referred to
as sales representative, salesman or sales girl, they remain on the
company’s payroll or work on commission basis or both to push the
product in the market by positively motivating the prospective customer
through oral presentation or demonstrating the product in question.

Consumers want all sorts of goods and services but inertia may
keep them from buying. Sales efforts stimulate the consumption process
by reducing people’s inherent reluctance to make purchase decision. In
fact sales person act as catalyst in the market place. When the nature of
the product is such that the buyer needs special information in order to
use it properly, sales representative acts as a consultant to consumer, to
apprise them of products technicalities and usage. Sales person also
work out the details of manner and timing of given physical possession.

In case of industrial products, the promotion mix mostly consist of

personal selling rather than advertising. Being high value and complex

product, personal contact with the customer is essential to convince him

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of the product’s quality and utility. On the other hand, consumer product
companies use personal selling together with advertising, to influence
prospect to try their brand. But personal selling in this case cannot
substitute for advertising, it can only be used tactically to intensify
marketing effort, mainly because it is expensive.

2.2 PERSONAL SELLING OBJECTIVES

The qualitative personal selling objectives are long term and

concern the contribution management expects personal selling to make
in achieving long-term company objectives. These objectives generally are
carried over from one period’s promotional program to the next.
Depending upon company objectives and the promotional mix, personal
selling may be assigned such qualitative objectives as-

1. To do the entire selling job (as when there are no other

elements in the promotional mix).

2. To “service” existing accounts (that is, to maintain contacts

with present customers, take orders, and so forth).

3. To search out and obtain new customers.

4. To secure and maintain customers’ cooperation in stocking

and promoting the product line.

5. To keep customers informed on changes in the product line

and other aspects of marketing strategy.

6. To assist customers in selling the product line (as through

“missionary selling”).

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 7. To provide technical advice and assistance to customers (as
with complicated products and where products are especially
designed to fit buyers’ specializations).

8. To assist (or handle) the training of middlemen’s sales

personnel.

9. To provide advice and assistance to middlemen on

management problems.

10. To collect and report market information of interest and use

to company management.

The basic considerations in setting qualitative personal selling

objectives are decisions on sales policies and personal selling strategies
and their role in the total promotional program. After this role is defined,
qualitative long-term personal selling objectives are set. In turn, the
qualitative personal selling objectives become the major determinants of
the quantitative personal selling objectives.

The quantitative objectives assigned to personal selling are short

term and are adjusted from one promotional period to another. The sales
volume objective-the rupee or unit sales volume management sets as the
target for the promotional period-is the key quantitative objective. All
other quantitative personal selling objectives are derived from or are
related to the sales volume objective. Thus, discussion here focuses upon
the setting of sales volume objectives. Setting the sales volume objective
influences the setting of other quantitative personal selling objectives,
among them the following:

1. To capture and retain a certain market share.

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 2. To obtain sales volume in ways that contribute to
profitability (for example, by selling the “optimum” mix of
company products).

3. To obtain some number of new accounts of given types.

4. To keep personal selling expenses within set limits.

5. To secure targeted percentages of certain accounts’ business.

2.3 RELEVANT SITUATION FOR PERSONAL SELLING

Let us discuss some of the situations when personal selling in a

company becomes more relevant.

1. Product situation: Personal selling is relatively more

effective and economical in case:

(a) When a product is of a high unit value like Xeroxing

machine, computers etc.

(b) When a product is in the introductory state of its life

cycle and require creation of core demand.

(c) A product requires personal attention to match specific

consumer needs e.g. insurance policy.

(d) Product requires demonstration e.g. most of the

industrial products.

(e) Product requires after-sales service.

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 (f) Product has no brand loyalty or very poor brand
loyalty.

2. Market situation: Personal selling situation can be best

utilized when:

(a) A company is selling to a small number of large-size

buyers.

(b) A company sells in a small-local market or in

government or institutional market.

(c) Desired middle men or agents are not available.

(d) An indirect channel or distribution is used for selling

to merchant-middlemen only.

3. Company situation: Personal selling is relatively more

effective and economical when:

(a) The company is not in a position to identify and make

use of suitable non-personal communication media.

(b) A company cannot afford to have a large and regular

advertising outlay.

4. Consumer behaviour situation: Personal selling is more

effective when:

(a) Purchases are valuable but infrequent.

(b) Consumer needs instant answers to his questions.

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 (c) Consumer requires persuasion and follow-up in the
face of competitive pressure.

2.4 DIVERSITY OF SELLING SITUATIONS

All of us being consumers often come across variety of selling

situations. Differences in marketing factors cause each company to have
individualized selling styles. Each different type of selling job requires the
sales person to perform a variety of different tasks and activities under
different circumstances. The job of a soft drink driver salesperson who
calls in routine fashion on a number of retail stores is different from that
of a computer sales person who sells a system for managing information
to executive of a consultancy firm.

Before categorizing sales persons into basic selling styles, one

convenient way to classify the many different types of sales job is to array

them on the basis of the creative skill required in the job, from simple
service-or repeat order selling to the complex developmental selling. Let
us now discuss the different kinds of selling positions prevalent in Indian
companies.

Delivery sales person: The primary job of the delivery sales person
is to deliver the product e.g. soft drink, bread, milk etc. The selling
responsibilities are secondary. Good service and a pleasant personality
may lead to more sales.

Inside order taker: The retail sales person standing behind a

counter is an inside order taker. The customer comes to the sales person

with the intention to buy a product or service, the sales person only

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serves him or her. The sales person may use suggestion selling but
ordinarily cannot do much more.

Outside order taker: The soap or spices sales person calling on

retailer is an outside order taker. They do little creative selling. In
contract with store personnel these representatives actually may be

discouraged from doing any hard selling. That task is left to executives
higher in the hierarchy.

Missionary sales people: These sales persons are not expected or

permitted to solicit an order. Their job is to build goodwill or to educate
actual or potential user or provide services for the customers, as in the
case of Medical representatives, working for the pharmaceutical
company.

Consultative sales person: Consultative sales are characterized by

the product or service that is sold at the higher level of an organization
e.g. computer system or management consultancy service. The decision

to purchase such products involves higher capital outlay thus sales job
requires a low key, low pressure approach by the sales person. It would
also require a very strong knowledge about product, patience to discuss
product with several people of organization and potential benefits to the
user. Even at times when the progress of sales slows down representative
has to make creative and sensitive efforts to resume interest but without
appearing to exert pressure on the prospect.

Technical sales personnel: The most distinctive characteristic of

technical sales is the product knowledge required by its sales person,
unlike the consultative sales, where sophistication in organization

relationship and persuasive ability are sales persons’ most valuable

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assets. Even time required to sell the product is relatively less than
consultative sales.

Most of the technical purchasing requires approval of several

people but only one or two people with technical knowledge influence
decision. If the sales representative is able to satisfy these people with

product characteristics, application, installation process, approval from

higher management is usually forthcoming. The technical sales persons
though not strangers to the process of making a sale, are trained to
utilize the rational approach, by going into details of product utility and
features.

Commercial sales person: This field generally includes non-

technical sales to business, industry, government and non-profit
organization e.g. office equipment, wholesale goods, building products,
business services and others. Unlike the previous two types, it is
customary for the commercial sales person to make sales on first or

second call. The process stresses approach to right person (decision

maker), making a smooth presentation and closing the sales.

The field is composed of order takers, to follow up and

maintenance of accounts and order getter, to develop new accounts.
Since these require different approaches, they normally require different
personality traits e.g. the order getter are more aggressive and more
highly motivated.

Direct sales people: Direct sales are primarily concerned with the
sales of products and services to ultimate consumers e.g. restaurants,
door to door sales, insurance, encyclopaedias, magazines etc. There is

normally some emotional appeal associated with this type of selling, thus

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sales persons are required to possess strong persuasive ability. Often
length of time to close sales is shortest in the case of above product
categories. In fact, sales person are trained to close the sales on the first
visit because it is felt if consumers are given time, they will either cool off
from buying or will buy from competitor.

2.5 SELLING PROCESS

All selling process contain the same basic steps, though the detail
of each step and time required to complete it will vary according to the
product that is being sold. For example: a door to door sales
representative may go through all the steps from prospecting to closing of
sale in a matter of ten to fifteen minutes in contrast, the selling process
for computer or electronic typewriter may take several visits, even years,
for getting an order.

2.5.1 Prospecting

The selling process begins with prospecting or finding qualified

potential customers. Except in retail selling, it is unlikely that customers
will come to the sales person. In order to sell the product, the sales
person must seek out potential customers, prospecting involves two
major activities-

(a) identifying potential customers also known as prospects; and

(b) qualifying them in order to determine if they are valid

prospects.

(a) Identifying prospects

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 The identification of potential customers is not an easy job,
especially for a new sales person. Rejection rate is quite high and
immediate payoffs are usually minimal. In some consumer goods
businesses, identification of prospects usually come from friends and
acquaintances, other sales people, former customers, present customers

etc. Few of the best sources and techniques for finding prospects are
discussed below.

Present customers: The best source of prospects is usually the

sales person’s existing satisfied customers. It is much easier to sell
additional goods and services to existing customers than to attract new
customers. Indian companies are using this method of selling
successfully. For example person or an organization who has purchased
a portable typewriter from an office automation product company and is
pleased with it is usually more receptive to purchase a bigger typewriter
and similar product from the same company than someone else. This is
the main reason, present customers should get first priority by the
company when new products and services are introduced.

Endless chain: This is also an effective prospecting tactics. In this

method companies use satisfied customers as source of referrals. Sales
representatives ask current customers for names of friends or business
associates who might need similar products or services. Then, as the
sales person contacts and sells to these prospects, more referrals are
solicited. In this way the process continues further.

Centre of Influence: Another effective prospecting technique

based on referrals is the center of influence approach. A center of

influence is a person with information about other people or influence

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over them that can help a sales person identify good prospects. Some
frequently used centers of influences are housewives, bankers, local
politicians etc.

Spotters: Some companies use spotters as a source for prospecting

potential customers. Spotters are usually ‘sales trainees’ who help sales

person identifying prospects, thus saving time and qualifying sales lead.

Cold call: Cold call is also known as unsolicited sales calls. This
prospecting techniques involves knocking on doors. The sales person
makes contact with a potential customers, introduces himself or herself,
and asks if there is a use for the product or service. This technique is
utilized by the sales person when they have time available between
scheduled appointments.

Directories: A wide variety of directories are full of prospect. The

classified telephone directory is the most obvious one. A sales person
may also find that membership directories of trade associations,

professional societies, and civic and social organizations are good sources
for prospects.

Mailing lists: In India, specialized companies compile lists of

individuals and organizations for direct mail advertisers. These lists may
also be used to identify sales prospects. The major advantages of mailing
list are that they are often more current and more selective than
directories.

Trade shows and exhibitions: A cost effective way to make

personal contacts and locate prospective buyer is to participate in trade
shows and exhibitions. Now a days more and more companies are

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increasing their participation in these shows and exhibitions to
company’s booth by mailing invitations or promising a gift. Advance
announcements sent to trade publications may also help to attract
prospects. In view of the rising costs of personal selling trade shows have
become an increasingly important source of prospecting. India

International Trade Fair organized by Trade Fair Authority of India every

year provides a good example of usage of trade shows for prospecting.

(b) Qualifying prospects

Once the sales person has identified potential customers, he or she

must qualify them to determine, if they are valid prospects. Unless this is
done, time and energy is wasted in trying to sell to people who cannot or
will not purchase the product or service.

There are several factors to consider while qualifying a prospect.

One approach to qualifying often called MAN (Money, Authority and Need)
approach is given below:

Money: Does the prospect have the money or resources to

purchase a product or service? Ability to pay is very critical factor in
qualifying a prospect. The sales people must be familiar with financial
resources of a prospect.

Authority: Does the prospect have the authority to make

commitment? This is a particular concern when dealing with corporation,
government agencies or other large organizations. Even while selling to a
married couple, it may be difficult to identify who actually makes the

purchase decision. A sales person must identify the key decision maker
early to economise on selling time more effectively.

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 Need: Does the prospect need the product or service? If a sales
person cannot establish that the customer will benefit from purchasing a
product or service, there is no reason to waste a sales call. The prospect
either will refuse the offer or will end up dissatisfied with the purchase.
Before proceeding further the sales person should first appraise whether

money, authority and need exist with the prospect.

2.5.2 Preparation

After a prospect has been identified and qualified, the sales person
prepares for the sale of product or service. The preparation stage involves
the two key activities i.e. Pre-approach and Call Planning.

(a) Pre-approach

The pre-approach step includes all the information gathering

activities necessary to learn relevant facts about the prospect and his or
her needs and situations.

Four necessary steps of pre-approach are:

1. It should disclose the party need and ability to buy.

2. It should provide information that will enable the seller to

tailor the presentation to the prospect.

3. It should provide information that may keep the sales person

from making serious tactical errors during the presentation.

4. Finally, a good pre-approached increases the sales person

confidence and makes him confident to handle whatever may
arise during the sales.

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(b) Call planning

Call planning involves a specific planning sequence. The sales

person defines the objective of the call, devise a selling strategy to achieve

this objective, and makes the appointments. The primary objective of any
sales effort is to get an order. For some sales call intermediate objectives
may be needed. Some examples of intermediate objectives are:

• To obtain more information about the prospect.

• To relate the prospects needs and concerns to features and

benefits of the product or service.

• To obtain permission for demonstration of the product.

• To introduce a new distributor.

The sales person must develop a strategy, or course of action to

achieve his or her objective. Careful consideration of the prospect’s

background and needs is required in order to able to formulate a tailor

made strategy appropriate for the prospect. Since sales calls are costly,
they should be arranged in advance. Cold calls i.e. calls without specific
appointment may be appropriate for introducing the sales person or
dropping off information. This method is generally inefficient for selling
most products and services and is not consistent with modern
professional selling.

2.5.3 Presentation

After establishing rapport with the prospects through calls, the

sales person proceeds to the formal sales presentation. The objective of
the presentation is to explain how the product meets the special needs of
the consumer. The job of the sales person is to inform the prospect about

36
the characteristics, capabilities and availability of goods and services that
are for sale. In order to ensure that the presentation is understood by the
prospect, the sales person should be clear in his/her communication.
Presentation should also be interesting enough to keep the attention of
the prospect focused on the proposal.

Sales presentations are classified into the different categories:

Fully automated, Semi-automated, Memorized, Organized, and
Unstructured.

Fully automated: The fully automated presentation is the most

highly structured approach, based on film or slide presentations. The
sales person simply answer questions or clear up doubts. e.g. selling life
insurance to the rural or semi-urban prospects.

Semi-automated: In this approach, the sales person reads from

brochures or literatures, adding comments to the prepared materials
when necessary. A common example is selling of pharmaceutical

products by medical representatives.

Memorized: In memorized presentation, company message is

presented, with few changes initiated by the sales person.

Organised presentation: The most popular and often the most

effective sales presentation method is the organized presentation. With
this method the sales person has complete flexibility in oral
communication but follows a company prepared outline or checklist. The
organized approach best exemplifies the selling process in which
customers are moved through four stages to a purchase decision; i.e.
attention, interest, desire and action (AIDA).

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 Unstructured presentations: (Also referred to as problem solving)
In this approach, the buyer and seller together explore the problems that
are the real sources of the company’s needs. Although unstructured
presentations are often effective and widely used, they have a number of
limitations. Such presentations tend to be not too well-focused. As a

result, points are often missed and time is wasted. Further, sales person
do not usually anticipate objections but may have to face surprise
complaint from the prospects. Because it is difficult to teach sales person
how to use the unstructured method, the problem solving presentation
seems best suited to experienced, sales person who are selling to
established customers.

Sales presentation comprises of two distinct activities, approach

and demonstration.

a) Approach

When the sales person has the name of the prospect and adequate
pre-approach information, the next step is the actual approach. It
frequently makes or breaks the entire presentation. If the approach fails,
the sales person often does not get a chance to give a presentation or
demonstration. It gets the prospect attention, it immediately inspires
interest in hearing more about the proposition, and it makes easy
transition into the demonstration phase.

Four basic approaches are in common use:

1. The introductory approach, the sales person introduces

himself to the prospect and states what company he

represents.

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 2. The product consists of handling the product to prospect
with little conversation. It can be most effective when the
product is unique and creates interest on sight.

3. The sales person starts the sale in a consumer-benefit

approach by informing the prospect of what the firm can

provide in benefits. In other words, directs the prospects

attention toward the benefits the firm has to deliver.

4. Lastly, referral approach successful in getting an audience

with prospect who is difficult to see directly. It consists of
obtaining the permission of a past or present customer to
use his or her name as a reference in meeting a new
prospect.

(b) Demonstration

The demonstration is the core of the selling process. The sales

person actually transmits the information and attempts to persuade the
prospect through product demonstration to make a customer.

Two factors should be taken into consideration in preparing an

effective product demonstration:

i) The demonstration should be carefully rehearsed to reduce

the possibility of even a minor malfunction.

ii) The demonstration should be designed to give customers

‘hand on’ experience with the product wherever possible. For
example an industrial sales representative might arrange a

demonstration before the purchaser’s technical personnel.

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2.5.4 Handling objections

All sales person confront sales resistance i.e. actions or statements

by a prospects that postpone, hinder or prevent the completion of the

sale. Normally sales resistance takes the form of an objection which can
be classified as stated or hidden. Prospects may state their objections to
a proposition openly and give the sales person a chance to answer them.
This is an ideal situation because everything is out in the open and the
sales person does not need to read the prospect’s mind. Unfortunately, in
many instances prospects hide their real reasons for not buying. Beside
having hidden objections, their stated objection may be phoney. Unless
one can determine the real barrier to the sale one shall not be able to
overcome it. There are two major techniques for discovering hidden
objections. One is to keep the prospect talking by asking probing

questions. The other is to use insights gained through experience in

selling the product, combined with a knowledge of the prospects
situation, to perceive the hidden objection. Often objection to price and
product are also faced by sales person either in a form of unaffordable or
too high price. Product objections can be answered best when sales
people have extensive product knowledge of both their own products and
competitors. Many times prospects may be misinformed or may not
understand some of the technical aspects of the proposition. In this case,
the sales person should provide additional information. Even the
prospects objections can be met simply and effectively by altering the

product to suit the customer.

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2.5.5 Closing

After having answered and overcome objections, it is the stage for

sales person to ask for the order from the prospects. The entire effort is

wasted unless the sales person can get the prospect to agree to buy the
product. There are several closing techniques which are being used by
sales person in India. Sales person should select among these technique
one that fits the specific prospect and selling situation. Now we would
discuss few effective closing techniques. In action close technique the
sales person take an action that will complete the sale e.g. in case of high
priced products like Motorcar, photocopier or industrial product the sales
person may negotiate with the financial institution for financial
assistance for the prospects.

The gift close technique provides the prospect with an added

incentive for taking immediate buying action. In one more yes close
techniques, the sales persons restates the benefits of the products in a
series of questions that will result in positive responses by the prospects.
The process may result in an order.

The direct close is clear and simple technique, many sales persons
feel that this is the best approach for closing, especially if there are
strong positive buying motives, the sales person will summarise the
major points that were made during presentation to the prospects prior
to asking for the sale.

Experienced sales people always try to close early. If they are not

successful, they continue the presentation and then try a different

closing technique. Good sales person know that if they have successfully

41
completed all of the earlier steps, then the prospect is worth an extra
effort at closing. In most cases this simply means switching to a different
type of close. Closing is the most important aspect of the sales process.
Unless the sales person can close the sale, the other steps in the sales
process are meaningless.

2.5.6 Follow-up

The selling process is not completed by merely making the sale, as

generally assumed by many sales person. After sales activities are
important part of the whole selling process. Effective sales-follow-up
reduces the buyer’s doubt about the product or services and improves
the chance that the person will buy again in the future. In addition to
post-sale activities, sales person are also required to maintain good
customer relations.

Now-a-days many companies are evolving specific policies and

practices to ensure that customer’s needs are not neglected. No matter
how efficient a company is, there are always some customer complaints.
The complaint should be taken seriously and handled with concern. The
customer must know that the company cares about maintaining good
customer relations. Reasonably frequent contacts with the present
customers are, an expected part of the sales person’s job. For important
customers, personal visit are appropriate. Letters, notes, phone calls,
greetings are also good ways to keep in touch with customers. Many good
business house also offer customer newsletter.

Successful sales person never stop serving customers. In addition

to handling complaints, they keep customer informed about the latest

42
products or services, fulfil reasonable request, and provide other forms of
assistance. The sales people should also appreciate the customer by
thanking customers for their business. Small gifts can be given after the
sale and at appropriate times during the year. Sales person should try to
make self-analysis for evaluating their own selling performance and

methods. A Sales person should analyse every call to determine what

factors influenced its eventual outcome. Self-analysis is a very useful tool
in improving overall sales effectiveness.

2.6 SUMMARY

Today personal selling has become a challenging profession. There

has been a significant change in its role from being a simple order taker
to that of an order maker or consultant to the buyers. Modern sales
persons understand that they are the major link in the total marketing

strategy for the company. If a company wants to maximize the

effectiveness of its marketing programme, the personal selling effort must
be effectively integrated with the other elements of the marketing mix.

With the growing complexity of products, importance of personal

selling has increased. They now act as introducers, intelligent
communicator as well as demand pushers and also add unique utility to
product. Their role has changed drastically from being a simple
communicator to business manager. In order to be successful a sales
person must possess a set of personal, product related and functional
qualities, as variety of analytical and administrative duties are important

component of the job. Before approaching a prospect every sales person

is advised to do bit of homework regarding company’s name, size,
authority concern and general requirement. While meeting the prospect,

43
sales person should introduce himself, his company and the product
under promotion. Product presentation and overcoming of customer
objections, leads to convincing the customer and result in the closing of
mutually satisfying sale.

2.7 KEYWORDS

Personal Selling: Personal selling is finest form of promotion done

by sales force.

Salesmanship: It is the art of successfully persuading customer in

selling situations for mutual benefits.

Prospecting: It is the act of finding or identifying potential

customers.

2.8 SELF ASSESSMENT QUESTIONS

1. Elaborate various steps involved in sales process with

suitable example.

2. Discuss different situations where role of personal selling is

vital.

3. Write the diversity of selling situation with suitable

illustrations.

2.9 REFERENCES/SUGGESTED READINGS

1. Still, Cundiff, and Govoni, ‘Sales Management’, PHI.

2. Stanton and Spiro, ‘Management of a Sales Force’, McGraw

Hill.

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