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Sales Management Notes

The document discusses personal selling and sales force management. It defines personal selling and describes the unique role it plays in promotion compared to mass selling and sales promotion. It also outlines different sales force structures including territorial, product, and customer structures. Additionally, it discusses recruiting salespeople, compensation plans, and the personal selling process.

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Disha Mathur
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
3K views

Sales Management Notes

The document discusses personal selling and sales force management. It defines personal selling and describes the unique role it plays in promotion compared to mass selling and sales promotion. It also outlines different sales force structures including territorial, product, and customer structures. Additionally, it discusses recruiting salespeople, compensation plans, and the personal selling process.

Uploaded by

Disha Mathur
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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MKT 304/500

Lecture 10a: Personal Selling and Sales Force Management


Target Market

Product

Place

Promotion

Personal
Selling

Number and
kind of
salespersons
needed

Selection and
training
procedure

Advertising

Price

Sales
Promotion

Compensation
and motivation
approach

Personal
selling
techniques

Definition
Personal selling is the personal communication between a firms sales force and
customers for the purpose of making sales and building customer relationships.
Job titles
Salespeople
sales representatives
account executives
sales consultants
sales engineers
district managers
marketing representatives etc.
Unique in Promotion Mix

Mass selling, sales promotion


Buyers

Seller
Personal selling

Get more attention, focus on customer assistance


MKT 304 Lecture Notes
Professor Freddy Lee

Adjust what to say and how to say it


Probe customers to learn more about the products
Know customers concerns better and address them more quickly
Marketing offers can be adjusted for special needs and situations and provide market
information function
Build long-term personal relationship with key decision-makers and develop strategic
planning skills
Types of Salespeople
Order getters try to establish relationships with new customers and get new
business.
Order takers sell to regular or established customers, complete most sales
transactions, and maintain relationship with customers.
Supporting salespeople help the first two types, but dont get order themselves.
Missionary salespeople
Technical salespeople
How Do Sales People Spend Time?

12%
Service calls

30%
Face-to-face
selling

17%
Administrative tasks

21%
Telephone
selling

20%
Waiting /
traveling

Sales Force Structure


Four basic ways to divide sales responsibilities

Territorial sales-force structure


Product sales-force structure
Customer (account) sales-force structure
Workload (size) and budget (telemarketing)

Territory Sales Force Structure


MKT 304 Lecture Notes
Professor Freddy Lee

Each sales person sells the full line of products to all customers of an exclusive
geographic territory.

Managerial Structure
VP and General Sales Manager
General Sales Manager
Regional Sales Managers

Report
to

Directors of Retail Sales Operations


Retail Supervisors
Sales Representatives
Sales Merchandisers

Product Sales Force Structure

Sales people specialize and are responsible in selling only a portion of the product
lines.

What types of firms use this?

Customer Sales-Force Structure

Sales people specialize in selling only to certain customers or industries.


Industry-specific, new vs. current customers, major vs. regular accounts, etc.

Canada
1,000-plus-member sales force
Computers, software, services
Banks

Insurance Resource-b
companies ased firms

Deciding on Sales Force Size


MKT 304 Lecture Notes
Professor Freddy Lee

The workload approach

Groups accounts into classes that require different sales effort;


Determine the total workload;
Estimate the average work that a salesperson can take;
Get the number of sales people needed.

Example

100 Type-A customers


200 Type-B customers
A Type-A customer needs 36 calls a year
A Type-B customer needs 12 calls a year
An average salesperson
makes 1000 calls a year

Other Structural Issues


Outside versus inside
Outside (field) sales force
Inside sales force: e.g., technical support people, sales assistants, telemarketers.
Team selling
using teams of people from various departments and even upper management to
service large, complex accounts.
Recruiting Salespeople
What makes a good salesperson?
Type 1: enthusiasm, persistence, initiative, self-confidence, and job commitment.
Type 2: independent, self-motivated, excellent listeners.
Type 3: be a friend to customers as well as persistent, enthusiastic, attentive, and
above all honest.
Interview and selection
Formal tests are popular and counts heavily in large firms.
Tests measure sales aptitude, analytical and organizational skills, and personality
traits.
Exhibit 14-2

MKT 304 Lecture Notes


Professor Freddy Lee

Sales Force Compensation


Straight salary
Good for a risk-averse person
Sales managers have more control over sales peoples activity
Need more supervision
More motivated to achieve objectives other than short-run sales volume (e.g.,
seeking new accounts)
Suitable when the individuals impact on total sales volume is difficult to measure.
Inability to provide strong motivation for excelling.
Straight commission
Good for a risk-seeking person
More motivated to work hard on sales
Perceived fair
Easy to compute, administer, and understand
Not willing to explore new and uncertain businesses
Combination of Salary and Commission
70% of firms use combination
On average: 60% salary and 40% commission
Which method to go?
Some industry examples
The packaged goods industry: advertising and trade promotions strongly affect
sales.
The nuclear reactor industry: the selling process is complex and involves team
effort.
An award-winning study: Basu et al. (1985), Salesforce Compensation Plans: An
Agency Theoretic Perspective, Marketing Science, 4 (4), pp. 267-291.

MKT 304 Lecture Notes


Professor Freddy Lee

Personal Selling Process

Prospecting
and
qualifying

Preapproach

Approach

Closing

Handling
objections

Presentation
And
demonstration

Follow-up

Prospecting and Qualifying


To find out potential customers, identify good ones and screen out poor ones.
Ratios
Insurance industry: one out of nine prospects becomes a customer.
Computer business: 125 phone calls results in 25 interviews leading to five
demonstrations and one sale.
Source: Vincent L. Zirpoli, You Cant Control the Prospect, So Manage the
Presale Activities to Increase Performance, Marketing News, March 16, 1984, pp.
1
Preapproach and Approach

Preapproach

To learn as much as possible about a prospective customer before making a sales


call.

Set call objectives, decide on the best approach and timing.

Approach is the step in which a salesperson meets and greets the buyer to get the
relationship off to a good start.

Presentation and Demonstration


Prepared sales presentation
A memorized presentation.
Not adapted to each individual customer.

MKT 304 Lecture Notes


Professor Freddy Lee

Consultative selling (i.e., need-satisfaction approach)


Start with general benefit statements.
Customers do most of the talking.
Calls for careful listening and problem-solving skills.
The selling formula approach
Combination of prepared presentation and consultative selling.
Relationship Marketing

Transaction marketing aims at closing a specific sale with a customer.

Relationship marketing emphasizes building and maintaining profitable long-term


relationship with customers.

The AIDA Model

Attention

Interest

Desire

Action
The Negotiation Game
Game Debriefing - The Eight Issues
Four are variable-sum
(or integrative)
Warranty
Financing
Radio
Number of options

MKT 304 Lecture Notes


Professor Freddy Lee

Two are distributive


Price
Delivery time
Two are compatible
Tax
Color
Negotiation Performance
If both of you completely integrate interests and realize the compatible interests, you
can share a total of 13,200 points.
If you distribute, and also could not realize the compatible interests, you will share a
total of 4,800 points.
Other negotiation solutions are possible.
How did we do?
Why Many Groups Go Suboptimal?

Fixed-pie bias of negotiation


most negotiators perceive the task as distributive, rather than integrative.

Loss-loss outcome
some negotiators fail to realize that they have interests which are perfectly
compatible.
In Reality ...

Most negotiators (85%) enter negotiation with a fixed-pie perception.

The relation between fixed-pie bias and negotiation profits is strong; that is,
negotiators who realize potential for joint gain earn higher negotiation profits.

To Be a Better Negotiator, You Need

Exchanging information

Both cooperation and competition are needed!

Fractionating issues
Making tradeoffs
Proposing multiple offers simultaneously

MKT 304 Lecture Notes


Professor Freddy Lee

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