S SALES Management PRADIP KUMAR MALLIK Associate Professor, Department of Business Administration The University of Burdwan West Bengal OXFORD UNIVERSITY PRESS
Contents Preface v 1. INTRODUCTION TO PERSONAL SELLING 3 1.1 Introduction to Personal Selling 3 1.1.1 Defining personal selling 4 1.2 Importance of Personal Selling in Communication Mix 5 1.3 Salesmanship 7 1.4 Objectives of Personal Selling 8 1.5 Essentials for Effective Personal Selling 9 1.5.1 Knowing the company 10 1.5.2 Knowledge of competition 10 1.5.3 Knowledge of selling process 10 1.5.4 Selling skill 10 1.5.5 Sales motivation 10 1.6 Advantages and Disadvantages of Personal Selling 11 1.7 Role of Personal Selling in Marketing 12 1.8 Traditional Selling Approach 13 1.9 Modern Selling Approach 15 1.10 Types of Selling 17 1.10.1 Industrial selling 18 1.10.2 Service selling 19 1.10.3 Retail selling 20 1.11 Sales as a profession 21 1.12 Ethics in Selling 23 Case Study 1: Reebok 28 Case Study 2: Selling Strategy at ABC Inc. 28 2. PERSONAL SELLING APPROACHES AND STRATEGIES 30 2.1 Selling Approaches A Theoretical Perspective 30 2.1.1 Aidas approach of selling 31 2.1.2 Right set of circumstances approach 33 2.1.3 Buying formula approach 34 2.1.4 Behavioural equation approach 36 2.1.5 Need satisfaction approach 38 2.1.6 Consultative approach of selling 38
xii CONTENTS 2.1.7 Customer relationship-based approach 39 2.1.8 Problem-solving approach 40 2.1.9 Team selling approach 41 2.2 Buyer-seller Dyad 42 2.2.1 Determinants of seller buyer dyad 44 Case Study 1: A Turnaround Story 55 Case Study 2: Eureka Forbes Ltd 56 3. PERSONAL SELLING PROCESS 58 3.1 Selling Process A Stepwise Approach 58 3.2 Prospecting Meaning, Objectives, and Sources 62 3.3 Pre-approach A Step towards Sales Planning 66 3.4 Customer's Need Discovery A Prime Concern for Selling 70 3.5 Sales Presentation Scope and Methods 72 3.5.1 Presentation methods 73 3.6 Handling Objections A Natural Experience in Selling 74 3.7 Closing the Sale 77 3.8 Follow-up after Sales Importance and Methods 80 Case Study 1: Success in Insurance Selling, in Search of Causes 83 Case Study 2: Genesis of a Selling Problem 84 Part II Organization of Sales Force Functions 4. SALES FORCE MANAGEMENT 89 4.1 Sales Management An Introduction 89 4.2 Functions of Sales Management A Review 91 4.2.1 Formulation of sales plan 91 4.2.2 Implementation of sales plan 94 4.2.3 Evaluation and control of sales operations 94 4.3 Sales Planning An Environmental Perspective 95 4.4 Planning Sales Operations A Useful Guideline 96 4.5 Strategic Planning A Building Block to Sales Management 99 4.5.1 Corporate level strategic plans 700 4.5.2 Business level strategic plans 103 4.5.3 Product/functional level strategic plan 705 4.6 Sales Managers Tasks and Roles 106 4.7 Qualities of a Sales Manager 770 Case Study: Dell's Success Story 118 5. SALES ORGANIZATION 116 5.1 Sales Organization Meaning, Purposes, and Types 116 5.2 Sales Organizational Structure Different Typological Perspectives 775
CONTENTS xiii 5.3 Criteria and Principles of Developing a Sales Organization 725 5.4 Organizing the Sales Force A Description 725 5.5 Determining the Size of the Sales Force A Methodological Study 132 5.6 Managing the Sales Force A Functional Orientation 137 5.7 Integrating the Sales Force within the Organization A Need-based Approach 138 Case Study: Selling Phenomenon under Cross Border Enterprise 142 6. SALES TERRITORIES 145 6.1 Sales Territory Meaning and Definition 145 6.2 Objectives, Benefits, and Imperatives of Sales Territory 747 6.3 Management of Sales Territory 149 6.4 Designing Sales Territory 752 6.5 Routing and Scheduling 163 6.6 Sales Force Automation (SFA) Opening a Vista in Lead Management 167 Case Study: Performance Paradoxes 170 Part III Managing the Sales Team 7. SALESPEOPLE AND SALES MANAGERS PROFILES, ROLES, AND RESPONSIBILITIES 175 7.1 Salesperson A Critical Human Resource 775 7.1.1 Who is a salesperson? 775 7.2 Role of a Salesperson 178 7.3 Duties and Responsibilities of Salespeople 750 7.4 Qualities of a Salesperson 752 7.5 Who is a Sales Manager? 755 7.6 Role of Sales Managers 186 7.7 Duties and Responsibilities of Sales Managers 188. 7.8 Skills of Sales Managers 750 7.9 Face of Sales Force Today 757 Case Study: Profile of Sales Executives 194 8. SALES FORCE RECRUITMENT 196 8.1 Recruitment Meaning and Conception 196 8.1.1 Staffing achieving the right fit 757 8.2 Job Analysis A Prerequisite for Recruitment 755 8.2.1 The process 207 -. 8.2.2 Outcomes job description and job specification 202 8.2.3 Basic traits of a successful salesperson 207 8.3 Methods for Developingjob Specifications 208 8.4 Sources of Sales Recruits 209 Case Study: Recruitment Consultancy 216
xiv CONTENTS 9. SALES FORCE SELECTION 219 9.1 Selection An Introduction 275 9.2 Selection Process A Stepwise Journey 227 9.3 Initial Screening The Maiden Step 222 9.4 Interviews Backbone of the Selection Process 223 9.4.1 Interview process 226 9.5 Guidelines for Selection Important Dimensions and Issues 227 9.6 Psychological Tests A Critical Step in Selection 230 9.7 Essential Formalities of Selection 233 9.8 Socialization An Imperative 234 Case Study: Narratives of an Interview Session 240 10. SALES TRAINING 243 10.1 Introduction 243 10.2 Sales Force Training A Strategic Orientation 245 10.3 Benefits of Sales Training 246 10.4 Sales Training A Procedural Discourse 247 10.5 Contents of a Training Programme 254 10.6 Training Programme Time and Place Perspectives 258 10.7 Training Methods A Detailed Illustration 260 10.8 Evaluation of the Training Programme A Practical Understanding 262 Case Study: Sales Force Training in Pharmaceutical Industry 266 11. SALES FORCE MOTIVATION 269 11.1 Motivation A Conceptual Illustration Variegated 269 11.2 Motivating Salespeople Objectives and Benefits 270 11.3 Need A Motivation Booster 277 11.4 Motivation A Strategic Push to Influence Salespeople 273 11.5 Motivation Theories Its Applications to Sales Force Motivation 276 11.5.1 Content tfieories 276 11.5.2 Process theories 285 11.5.3 Non-cognitive process 287 Case Study: Dwindling Sales 290 12. DIRECTING THE SALES FORCE 293 12.1 Direction Concept and Understanding 293 12.2 Leadership A Conceptual Clarification 295 12.3 Leadership and Motivation 297 12.4 Qualities of a Sales Leader 298 12.5 Leadership Theories at a Glance 299 12.6 Highlight of the Leadership Theories A Practical Approach 301
CONTENTS XV 12.7 Sales Leadership A Futuristic Approach 309 Case Study: Vinyl Chemicals Ltd 314 13. SALES FORCE COMPENSATION 317 13.1 Compensation Concept, Definition, and Types 377 13.2 Sales Force Compensation Plan Ah Illustration 318 /- 13.3 Factors Influencing Compensation Plan 375 13.4Aims and Characteristics of Compensation Plan A Strategic Initiative 323 13.5 Steps in Compensation Plan A Developmental Process 325 13.6 Compensation Schemes A Non-financial Approach 337 13.7 Strategic Compensation System (SCS) An Imperative to Sales Force Management 340 Case Study: Compensation Dilemma 344 14. SALES FORCE PERFORMANCE 347 14.1 Performance Appraisal Concepts, Definitions, and Objectives 347 14.2 Performance Appraisal Criteria and Benefits 349 14.3 Steps in Sales Force Performance Appraisal An Elaboration 352 14.4 Sales Force Control A Necessary Adjunct of Performance Appraisal 360 14.5 Performance Appraisal Methods A Special Reference to Sales Force 362 14.5.1 Traditional methods 363 14.5.2 Modern methods 367 14.6 Sales Force Performance Appraisal 369 Case Study: Bottlenecks in Sales Performance 375 Part IV Financial Aspects of Sales 15. SALES BUDGETING AND FORECASTING 379 15.1 Sales Budget An Introductory Approach 379 15.2 Sales Budget Basic Approaches 380 15.3 Sales Budgets Features, Objectives, and Benefits 382 15.4 Factors Influencing Sales Budgets 383 15.5 Steps in Determining Sales Budget 385 15.6 Methods of Determining Sales Budgets 387 15.7 Intelligent Budgeting An Illustration 390 15.8 Sales Forecasting A Preliminary Introduction 390-15.9 Sales Forecasting Factors and Fundamentals 394 15.10 Approaches of Sales Forecasting 397 15.10.1 Top-down approach 397 15.10.2 Bottom-up approach 398 15.11 Methods of Sales Forecasting 399 Case Study: Rural Blues 407
xvi CONTENTS 16. SALES AND COST ANALYSIS 410 16.1 Sales Analysis Concepts And Features 410 16.2 Sales Analyses at Individual Units A Review 477 16.3 Methods of Sales Analysis A Concise Description 473 16.4 Sales Quota A Tool for Sales Analysis 477 16.5 Methods for Setting Sales Quota 418 16.6 Cost Analysis Concepts and Objectives 420 16.7 Cost Control An Important Objective of Cost Analysis 422 16.8 Methods of Cost Analysis 425 Case Study: Performance Evaluation Taking Inputs from Sales Analytics 430 Part V Strategy and Modern Approaches 17. SALES STRATEGY 435 17.1 Strategic Orientation of Selling An Introduction 435 17.2 Environmental Analysis A Prerequisite for Strategic Plan 436 17.3 Sales Strategies Some Common Drivers 439 17.4 Steps in Strategic Sales Management A Schematic Overview 442 17.5 Understanding Competition Essential for Selling Strategy 445 17.6 Marketing Strategy A Trigger of Sales Strategy 447 17.6.1 Sales strategy focus on customer relationship 449 17.6.2 Sales strategy distribution as an implementation channel 457 17.7 Sales Strategy Social Responsibility Issues 453 17.8 The Seed for Success 455 Case Study: Strategic Selling at Its Best 459 18. MODERN SELLING APPROACHES 462 18.1 Dynamics of Selling Tracing Its Traditional Roots 462 18.2 Forces of Orientation Traditional to Modern Selling 464 18.3 E-commerce A Digital Route to Contemporary Personal Selling 472 18.4 Web-based Selling Concepts and Applications 476 18.5 Social Media A New Vista to Modern Selling 480 Case Study: A Great Entrepreneur 483 Index 486