UNIT 3 SALES MANAGEMENT

Structure

3.0 Objectives
3.1 Introduction
3.2 Evolution
3.3 Meaning
3.4. Importance of Sales Management
3.5 Scope of Sales Management
3.6 Types of Salespersons
3.7 Difference between Selling & Marketing
3.8 Sales Management Process
3.9 Trends in Sales Management
3.10 Let Us Sum Up
3.11 Key Words
3.12 Answers to check your progress
3.13 Terminal Questions

3.0 OBJECTIVES

After studying this unit, you should be able to:

 describe the evolution, meaning and importance of sales management;

● discuss the scope of sales management;
● explain the role of sales managers;
● distinguish between selling and marketing; and
● discuss the Sales management process.

3.1 INTRODUCTION

This unit introduces you with the fundamentals of sales management -evolution, meaning and
importance in the business context. You must note that sales is the only function of marketing
that brings in revenue to the organization and hence assumes a key role in the entire scheme
of things. The sales managers use scientific processes to design and implement sales
management program for their organizations. The salespeople act as the linking pin between
the organization and its customers. They are the face of the companies. Thus, it is very
important to organize and direct their efforts both within and outside the companies.
The sales managers create the formal and informal structures for the effective communication
within the sales department. While outside the organizations, the sales managers build and
maintain effective distribution networks for their brands. In this unit, you will learn about the
evolution, definition, scope and importance of sales management. You will also learn about
the different types of salespersons and sales management process.

3.2 EVOLUTION OF SALES MANAGEMENT

Pre industrial revolution era - Prior to industrial revolution, the economic scenario was
well dominated by the small-scale industries whose focus always remained catering to the
needs of the local customers. Manufacturing and selling functions in such a setup were taken
care of by the single person. The prime challenge that small scale businesses faced was to
produce enough to meet the customer demands.Thus, the focus was more on manufacturing
issues and selling was not a problem at all as all the orders were received well in advance of
the production taking place.

Post industrial Revolution - Industrial Revolution that took place in England in the year
1760 brought about some significant changes in the marketing scene for the businesses. There
started mass production of goods in factories with the help of modern machines which in turn
led businesses to hunt for newer markets to sell their produce. The demand in local markets
was not large enough to absorb the huge quantities produced by the factories. Thus emerged
the need for sales to ensure the surplus produce to be absorbed. The other operational issues
which dominated the business scene were that of recruitment of workers in large numbers and
acquisition of fixed assets like building, machinery etc. for which large funds were required
to be raised. Thus, forcing many firms to adopt the corporate form of organization.Since the
magnitude of the operations increased multifold, separate functional departments came into
being like the financial department, manufacturing department, personnel department, sales
department.

The establishment of sales department helped the firms with the problems related to
expansion of their markets. The goods were sold to the small retailers who then sold in small
quantities to the end users. Subsequently wholesalers came into being who purchased in large
quantities to sell in smaller quantities to the retailers who finally sold to the end users. The
emergence of so many intermediaries created the challenge of communicating with end
customers for the businesses.

On the other hand, the marketing function started receiving more importance in the firms
with advertising and sales promotions becoming more complex. The need to separate
marketing from sales function was increasingly being felt. Thus, new departments like
Marketing Research,Advertising, Merchandising etc. came into existence. Inspite of
emergence of separate marketing functions,sales department continue to hold important
position for the businesses as it is the only function that brings in revenue. It is aptly termed
as “Income Centre “of the business organization. Now let us try to understand the meaning of
sales management.

3.3 DEFINITION

Sales Management was originally said to be the function of directing the efforts of the
salesforce of the business. However, in the modern times the broader view of sales function is
found to be more popular with the businesses. Accordingly, the Sales Management is
concerned with development of the sales staff, managing sales related operations and
implementation of sales techniques such that sales targets of the business are accomplished
effectively.

American Marketing Association defines sales management as follows: “Sales Management

is the planning, direction and control of selling of business unit including recruiting,
selecting, training, equipping, assigning, routing, supervising, paying and motivating as
these tasks apply to the personnel of the sales force”.

The definition of AMA focuses on two broad aspects of sales management. First you have to
plan, direct and control selling activities. Second, you have to recruit, select, train, equip,
assign, rout, supervise, pay and motivate the sales force. The definition equates sales
management to the management of sales staff however contemporary sales managers have a
broad spectrum of responsibilities to perform. In addition to managing the sales staff they are
also responsible for developing the company's long-term sales plan, chalking out sales
strategies to be implemented in target markets, implementing sales budgets. They are
responsible for managing omni channels of the company. They scan the marketing
environment continuously to frame the responsive sales strategies.

The sales management function primarily seeks to accomplish three basic functions namely
sales volume, profit maximization and growth. The authority to achieve these three goals is
delegated by the top-level management to the sales management through marketing
management.

3.4. IMPORTANCE OF SALES MANAGEMENT

The significance of sales management as a function is evident from the huge budgets
allocated for the same across the companies. This is because it helps the firm deal with
competition and is thus considered an inevitable part of the business organization. Importance
of the sales management as a function can be summarized in the following points:

1. Attains organizational goals: Sales management helps in achieving predetermined

organizational goals by transforming the marketing plans into actions to generate
profits, meeting customer demands effectively and capturing the market share.

2. Aids in better planning: One of the fundamental tasks of sales management is to

formulate the sales plans, sales budgets and drawing sales strategies so that the efforts
of the salesforce can be well directed towards achieving the common organizational
goals.

3. Maximises the sales: By supporting the establishment of SMART sales plans, the
sales management aids in maximizing the sales and thereby revenue for the
organizations.

4. Fosters strong customer relationships: Sales management urges the salesforce to

attach highest importance to building strong customer ties .The strong ties with the
customers facilitates the brand develop a loyal customer base and increased
profitability.
 5. Optimum utilization of distribution channels: Channels of distribution can be more
optimally utilized by the organization when the sales management is able to identify
appropriate distribution channel. They must take adequate step to resolve the
distribution issues and enhance the smooth operations of the distribution channel.
6. Develops result driven salesforce: Sales management is concerned with not only
recruiting but also training, motivating and compensating the sales staff. The
continuous training, development and motivation drive them to contribute effectively
towards the profits of the firm.

3.5 SCOPE OF SALES MANAGEMENT

Sales is the management function responsible for ensuring that an organization has
sustainable cash flow. For this, sales department undertakes a variety of functions. Look at
Figure 3.1 which shows scope of sales management.

Fig 3.1: Scope of Sales Management

The scope of the sales management has been discussed below:

1. Sales Forecasting and Budgeting: The sales managers are expected to chalk out
well-structured sales plans well in advance. She/he should estimate the expenses that
will be incurred as a result of various sales activities.
 2. Sales Team Structure: The sales team is expected to perform variety of sales
related activities. The sales manager is responsible for determining and organizing
the functions to be performed by his sales team.

3. Manpower Planning and Hiring: The sales manager is required to estimate the
requirement of sales personnel in the organization. As per requirement of the
organization, She/he should plan recruitment and selection activities.

4. Sales Training: To drive effective performance from the salespeople, it is important

to impart them with the right skill sets. The sales managers are responsible for
providing training and orientation to newly hired sales candidates so as to establish a
suitable match between the know-how and job position.

5. Sales Areas: The sales manager is responsible for establishing sales goals for the
team, for this purpose she/he determines the sales quotas and identifies the sales
territories. She/he further determines the region where the company wants to sell its
products depending on the profitability of the organization.

6. Salesforce Management: The sales manager is entrusted with the responsibility of

motivating the sales personnel, appraising their performance, ascertaining their
remuneration and rewards for the targets achieved. Therefore, she/he should manage
the sales force in such a way that they are driven towards the achievement of the goal.

Check your progress A

1. Fill in the blanks.

i. The ……………. is responsible for determining and organizing functions to
be performed by his sales team.
ii. ................... is the management function responsible for ensuring that the
organization has sustainable cash flow.
iii. Industrial revolution took place in England in the year …………. brought
about some significant changes in the marketing scene.
 iv. The sales management functions primarily seeking to accomplish three basic
functions namely sales volume, ………….. and growth.

2. State whether the following statements are True or False.

i. Sales management is the function of directing the efforts of the sales force of
the business.
ii. The sales management does not use scientific processes to design and
implement sales management program.
iii. Sales Management seeks to accomplish only sales volume.
iv. Sales Training comes under the scope of sales management.

3.6 TYPES OF SALESPERSONS

The existence of varied buying situations has led to the emergence of various selling
functions. Selling tasks determine the nature of the sales process for any situation. Figure 3.2
shows various types of salespersons classified on the basis of various selling situations:

Figure 3.2: Types of Salespersons

1. Order takers: Order takers are not anticipated to steer clients to buy the
organization’s merchandise or increase their quantity of purchase. They are required
to take the orders from the customers and share the information with the relevant
people within the business enterprise. They are also expected to have an up-to-date
information of the date and time of delivery of orders that have been booked by them
to the customers. They need to respond to the queries regarding the delivery date to
the customers.

2. Inside order takers: Retail sales assistants may guide the customers inside the retail
store. The customers freely select the products from the retail outlet without the
presence or impact of a salesman. He is responsible for taking the payments and
delivering the goods.

3. Delivery Salespeople: Timely delivery of the product is the primary responsibility of

delivery salespeople. They do not try to persuade the customers to increase the order
size. Reliability of product delivery determines the probability of getting or losing the
order from the customers. Therefore, the delivery has to be made on time.

4. Outside Order Takers: They are primarily concerned with responding to the
customer calls. They secure the orders from the customers on the basis of sales calls.

5. Order Creators: In certain industries, the job of a salesperson is not to close the sale
but to convince the customer to promote the seller's brand. Such salespersons are
termed as Missionary Salespeople. For example, medical representatives contact
doctors not for the direct sale but convince them to prescribe their brand’s medicines.

6. Order Getters: The main aim of order getters is to convince customers to shop for
the company’s merchandise. The salesman must be able to comprehend client needs
and persuade him that his company’s products best serve his needs. The order getters
must have complete knowledge of the products so that she/he may convince the
people by highlighting the functions and features of the product.
3.7 DIFFERENCE BETWEEN SELLING & MARKETING

In our day to day lives, the term marketing and selling are used synonymously. Both
marketing and selling functions are directed towards revenue generation. Being so closely
interwoven, it becomes difficult for many to differentiate between the two. However, there
exists a big difference between the two functions.

Selling is the part of Marketing. It is concerned with delivering the goods/ services to the
customers in exchange for price. For example, one goes to a shop to buy a pair of shoes and
the shopkeeper sells the shoes in exchange for the price paid to him for the same.

Marketing is much broader in scope. It is a function that begins with determining the needs
and wants of the customers and ends with the customer satisfaction and feedback. In between
various activities like production, pricing, promotion and distribution take place and at last
the selling happens. The customer always remains the focal point of marketing. For example,
when one buys a car and gets after sales service which is also a part of marketing. Let us
learn the difference between marketing and selling.

Point of Marketing Selling

Difference

Definition Marketing is concerned with creating Sales are the process of persuading
value for the customers by delivering the customers to buy the products to
them goods and services according to increase the sales.
their needs and making a profit.

Scope It is wider in scope. It is narrow in scope.

Business It views the business as a process of It views business as a process of

viewpoint satisfying the customer. manufacturing goods.

Orientation Profit orientation. Sales orientation.

Price Price is determined by the consumer. Price is determined by the cost.

Customer It views the customers as the starting Customers are viewed as the last
orientation point of any business. link in any business in selling.

Profits It focusses on earning profits through It focusses on earning profits

customer satisfaction. through aggressive promotions

Emphasis Emphasis on adoption of latest Emphasis on cost reduction by

technology for product innovation to staying with the same technology.
provide enhanced value to the
customers.

Views of It stresses on the needs of the customers. It stresses on the needs of the sellers.
seller’s
needs

3.8 SALES MANAGEMENT PROCESS

Sales management process is concerned with accomplishing salesforce objectives and targets
effectively and in an efficient manner by implementing the management processes of
planning,organizing,staffing,training, leading and controlling. The sales management is a
three-step process. Look at figure 3.3 which shows three steps of sales management process.
 Figure 3.3: Sales Management Process

Let us learn the sales management process in detail.

Devising Strategic Sales Management Programme

A well-planned sales management programme begins with an extensive environment

scanning by the sales planner. The trends prevailing in the contemporary political,
economical, social, technological, ecological and legal environment must be thoroughly
examined to identify the upcoming opportunities and threats for the business. The
competitors’ moves and the demands of the potential customers must also be ascertained.
An appraisal of firm’s internal environmental factors i.e.,organizations’ strategic intent
(Vision,mission, objectives), human capital, financial resources, firm’s current level of
capacity utilization, manufacturing processes, research and development activities must also
be undertaken by the sales planners to determine firm’s ability to carry out certain strategies.
The sales manager is expected to take following five important decisions at this stage:

1. Determining firm’s personal selling strategy.

2. Determining firm’s account management policies.
3. Organization of firm’s salesforce.
4. Decisions regarding the sales forecasts, establishing sales quotas and sales budgets.
5. Designing the sales territories and allocation of the territories to the salespersons.

Administration of Strategic Sales Management Programme

Administering the sales management programme involves channelizing the efforts of the
salespeople towards attainment of organizational goals. Various factors play an important
role in determining the job behavior of the salespeople. A sales manager must have the
knowledge of these factors which are stated below:

1. Environment: The macro environmental variables which affect the ability of the
salespeople to achieve their sales goals are economical, political, social,
technological, ecological and legal conditions prevailing in the market. The micro
environmental variables include demand supply related market conditions,
competitor's strategy etc. Various components of marketing mix like brand image,
 product quality, pricing policies, channel design and promotional efforts of the firm
also have a significant bearing on the performance of the salespeople towards
attainment of the sales targets. Therefore, they should analyze the whole range of
marketing mix carefully.

2. The clarity of job description: The roles and responsibilities of the salespeople
should be clearly laid down in the job description so as to clarify the role expectations
and to avoid any confusions. They must be equipped with the know-how of handling
various sales situations which they would face on a day-to-day basis. The proper
analysis of Job and the roles of salesperson may facilitate them to perform sales
activities effectively.

3. Personal factors: Various personal traits possessed by the salesperson like

personality, analytical and critical thinking abilities, education level, sales aptitude,
selling skills, motivation and commitment level etc determine the performance levels
of the salesperson. These traits are very much helpful in performing the sales job.

4. HR Policies: The HR processes of recruitment and selection criteria for the salesman
must be carefully designed. An ongoing training program is a must to upgrade the
know-how of salesforce regarding various aspects of market and the product. To keep
the salespeople going, it is very important for the sales manager to reward the superior
performances suitably. Both financial and non-financial rewards go a long way in
motivating the salesforce towards a consistent superior performance.

Assessment and Control of Strategic Sales Management Programme

To ensure that the sales management programme generates the desired outcome, it's
important for the sales manager to monitor its implementation in a way stated out in the
strategic plan. The sales manager should keep a close watch on the environmental changes in
the light of which sales plans may need some adjustments from time to time.

Various performance parameters need to be measured to make accurate decisions. Three

basic analysis conducted by the firms in this regard are as follows:
 1. Sales Analysis: It is a practice to break down the total sales territory wise, product
wise and customer wise a comparison between the quotas and forecasted sales in the
said areas. If there is any discrepancy, the proactive steps should be taken to bridge
the discrepancy. The breaking up of these activities provides good opportunity to
make.

2. Cost Analysis: The sales managers work out various costs pertaining to each
salesperson, product line, sales territory and customer type. This data then is
combined to the sales analysis data to ascertain customer profitability and the
profitability on each segment. In case the cost of a particular unit is more or less,
necessary corrective measures should be taken.

3. Behavioral Analysis: Here, the salesperson’s job-related behavior is evaluated using

various techniques like self-appraisal, field observations, customer feedback forms,
supervisor’s ratings along with his sales volume to assess his/her overall performance.
The good performers should be encouraged and incentivized.

3.9 TRENDS IN SALES MANAGEMENT

Contemporary businesses operate in the VUCA world which is characterized by high levels
of Volatility, Uncertainty, Complexity and Ambiguity. To survive in this highly disruptive
business environment, the sales manager must continuously scan the emerging trends shown
in figure 3.4
 Figure 3.4 Trends in Sales Management

Global Markets: With the rise of globally connected economies, the companies have also
begun expanding their operations across the national frontiers. While selling the products
abroad, the sales managers may have to face many challenges related to differences in
culture, laws, customer preferences, negotiation style etc. The sales managers must take into
account the global competitors while devising their sales strategies to tap the business
opportunities arising in the global markets.

Technological Advancements: The emerging digital technologies have made the modern-
day customers more aware than ever before about the new product launches, price of various
products, the strengths and weaknesses of various products. The customers can access almost
every information about the brands online. The internet-based content consumption has gone
up significantly amongst the consumers. Marketers are also leveraging the technology to
collect the information about their customers, competitors, market trends and to develop
customized products that offer superior value to their customers. The sales managers also are
utilizing technology at large in the form of latest sales and CRM softwares,
videoconferencing apps etc to deal with the competition effectively and in a cost-effective
manner.

Diverse Salesforce: Modern day salesforce consist of individuals with diverse backgrounds,
gender, age, culture, education, etc. This diversity brings in a difference in the needs and
expectations of the salesforce. A sales manager needs to understand these differences to
manage them effectively.

Omni-Channel Management: Contemporary businesses are increasingly adopting

multichannel route to provide superior customer experience whether they shop from online or
offline. The use of omni channels offer many benefits like reduction in channel cost, better
market coverage and customized selling. However, one flip side of using omni channel is that
at times it leads to emergence of channel conflicts when two or more channels start
competing against each other. The sales managers must utilize various conflict resolution
techniques to handle such disputes.

E-Selling: With the increased internet penetration, more and more customers expect the
companies to sell them online. Increased online buying makes brands focus their efforts on
selling to convert passive audience into active customers. The sales managers must select
shopping cart softwares and services carefully.

CHECK YOUR PROGRESS B

1. Discuss technological advancements in trends in sales management.

2. What is the clarity of job description?
3. What is the difference between selling and marketing?
4. Fill in the blanks:
i. …………. is the planning, direction and control of selling of business unit
including recruiting, selecting, training, equipping, assigning, routing,
supervising, paying and motivating as these tasks apply to the personnel of the
sales force.
ii. …………. is a practice to break down the total sales territory wise, product
wise and customer wise so that a comparison can be made between the quotas
and forecasted sales in the said areas.
iii. The main aim of ………… is to convince customers to shop for the
company’s merchandise.
iv. ………….. emphasis on adoption of latest technology for product innovation
to provide enhanced value to the customers.
 v. The job of a ……….. salesperson is not to close the sale but to convince the
customer to promote the seller’s brand.

3.10 LET US SUM UP

Sales is the only function of marketing that brings in revenue to the organization and hence
assumes a key role in the entire scheme of things. The salespeople act as the linking pin
between the organization and its customers.

Sales Management was originally said to be the function of directing the efforts of the
salesforce of the business. However, in the modern times the broader view of sales function is
found to be more popular with the businesses. Accordingly, the Sales Management is
concerned with development of the sales staff, managing sales related operations and
implementation of sales techniques such that sales targets of the business are accomplished
effectively.

The scope of sales activities revolves around sales forecasting and budgeting, sales team
structure, manpower planning and hiring, sales training, sales areas and salesforce
management.

Many times, sales and marketing are used synonymously however there exists many
differences between them. Selling is the part of Marketing. It is concerned with delivering the
goods/ services to the customers in exchange for price. For example, one goes to a shop to
buy a pair of shoes and the shopkeeper sells the shoes in exchange for the price paid to him
for the same.

Marketing is much broader in scope. It is a function that begins with determining the needs
and wants of the customers and ends with the customer satisfaction and feedback.

Sales management process is concerned with accomplishing salesforce objectives and targets
effectively and in an efficient manner by implementing the management processes of
planning,organizing,staffing,training, leading and controlling.
To survive in this highly disruptive business environment, the sales manager must
continuously scan the emerging trends like global market conditions, technological
advancements, diverse workforce, omni-channel management and e-selling.

3.11 KEYWORDS

Cost Analysis: The process through which the sales managers work out various costs
pertaining to each salesperson, product line, sales territory and customer type.

E selling: The process of selling the products using online platforms like websites, apps etc.

Missionary Salespeople: The salesperson who undertakes various activities like product
demonstrations, presentations etc. to spread the word about the brand in order to convert
prospects into customers.

Order Getters: The salesman who comprehends client needs and persuades them that his
company’s products best serve their needs.

Sales analysis: It is a practice to break down the total sales territory wise, product wise and
customer wise so that a comparison can be made between the quotas and forecasted sales in
the said areas.

Sales forecasting: It refers to the process of predicting the future sales revenue usually based
on historical sales data and market trends.

Sales management: Sales Management is the planning, direction and control of selling of
business unit including recruiting, selecting, training, equipping, assigning, routing,
supervising, paying and motivating as these tasks apply to the personnel of the sales force.

3.12 ANSWERS TO CHECK YOUR PROGRESS

A. 1. i. sales manager ii. sales iii. 1760 iv. profit maximization

2. i. True ii. False iii. False iv.True
B. 4. i. Sales management iii. Sales analysis iv. Order getters v. Marketing v.Missionary

3.14 TERMINAL QUESTIONS

1. What do you understand by sales management? Describe the importance of sales

management in the organization.
2. Discuss the scope of sales management activities in an organization.
3. Distinguish between marketing and selling.
4. Describe the steps in the sales management process in detail.
5. Write a short note on the evolution of sales management.
6. Discuss the contemporary trends in sales management.
7. Explain the types of salespersons.

SOME USEFUL BOOKS

Cavale, K. K. H. V. M. (2006). Sales and distribution management: text and cases. Tata
McGraw-Hill Education.
Panda, T.K., Sahadev, S. (2012). Sales and Distribution Management. Oxford Higher
Education.
Still, R. R., Cundiff, E. W., & Norman &A, P. G. (2011). Sales and Distribution
Management.