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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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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BENEFITS OF SELLING ACTIVITIES
There are
different benefits of
selling activities, which
are as
follows:
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.
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.
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’.
ELEMENTS OF SALES MANAGEMENT
There
are the four basic elements of sales management, discussed below:
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.
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.
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.
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.
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).
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:
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.
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.
Importance of SMBO
The importance of SMBO for a
business firm is as follows:
Directing the salesman towards the broader sales and
marketing objectives of the Company;
Providing abetter approach, from the view-point of the
salesman; and
Motivating
the salesman.
