Sales Management: Meaning, Objectives, Functions, Scope, Process, Determinants, Tools and Other Details

Sales management is a business discipline which is focused on the practical application of sales techniques and the management of a firm’s sales operations. It is an important business function as net sales through the sale of products and services and resulting profit drive most commercial business. These are also typically the goals and performance indicators of sales management. Sales manager is the typical title of someone whose role is sales

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Evolution of the Sales Department

Before the Industrial Revolution, small-scale enterprises dominated the eco­nomic scene, and selling was no problem. The chief problem was to produce enough goods for nearby customers. Orders were obtained with minimum effort, and they were on hand before goods were produced. In most firms a single individual supervised all phases of the business, including

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Sales Management

“Sales management” originally referred exclusively to the direction of sales force personnel. Later, the term took on broader significance—in addition to the management of personal selling, “sales management” meant manage­ment of all marketing activities, including advertising, sales promotion, mar­keting research, physical distribution, pricing, and product merchandising. In time, businesses, adopting academic practice, came to

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Objectives of Sales Management

From the company’s viewpoint, there are three general objectives of sales management: sales volume, contribution to profits, and continuing growth. Even though these objectives are important to an organization, 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. Sales executives,

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Sales Management and Financial Results

Sales management and financial results are closely related. Financial results are stated in terms from two basic accounting formulas: sales – cost of sales = gross margin gross margin – expenses = net profit Sales management influences the “numbers cranked into these formulas.” Sales, gross margin, and expenses are affected by the caliber and

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Sales Executive as Coordinator

Optimum marketing performance in terms of sales volume, net profits, and long-term growth requires coordination, and sales executives play significant roles in coordinating. Sales executives have responsibilities for coordination involving (1) the organization, (2) the planning, and (3) other elements in the marketing strategy. Higher-ranking sales exec­utives are those most concerned with obtaining effective

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Sales Management and Control

Sales executives control the personal-selling effort of the organizational units they head. The purpose is to ensure that sales department objectives are reached. Control is part of management, as are planning, organizing, and coordinating. The several phases of control are presented in the fol­lowing discussion in the normal sequence, but in the “real world,”

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Sales Control – Informal and Formal

Informal control. Circumstances exist in which awareness of the changing situation, and the ability to analyze it are adequate control devices. Effective sales executives have their “fingers on the pulse of the business”—they have an uncanny ability to detect situations that require attention. But the larger a company is, and the higher up in

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Sales Control and Organization

Paradoxically, the points in the organizational structure at which effec­tive control is exercised depend upon the degree to which management adheres to the philosophy of “decentralization.” In a decentralized sales organization, greater control is exercised by executives lower in the hier­archy than is true in a centralized organization. Executives higher up in the organization,

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Buyer-Seller Dyads

Fundamental to understanding salesmanship is recognition that it involves buyer-seller interactions. Sociologists use the term “dyad” to describe a situation in which two people interact. The salesperson and the prospect, interacting with each other, constitute one example of a “buyer-seller dyad.” Another is the interaction of a seller using advertising with a particular prospect

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Diversity of Personal-Selling Situations

Considerable diversity exists among personal-selling situations, and it is helpful to distinguish between service and developmental selling. Service selling aims to obtain sales from existing customers whose habits and patterns of thought are already conducive to such sales. Developmental selling aims to convert prospects into customers. Developmental selling, in other words, seeks to create

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Theories of Selling

Is selling a science, with easily taught basic concepts or an art learned through experience? In a survey of 173 marketing executives, 46 percent perceived selling as an art, 8 percent as a science, and 46 percent as an art evolving into a science.[1] The fact that selling is considered an art by some

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SPIN Selling

SPIN Selling by Neil Rackman[1] was developed by observation of 35,000 sales calls. It suggests the significance of asking the right questions in the sale process. SPIN Selling is an abbreviation of four types of questions (Situation, Problem, Implication, and Need-payoff). It emphasizes that the quality of questions asked by a salesperson are critical

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Sales Prospecting

Time management and thorough planning of work are earmarks of above-average salespersons. They look for ways to “stretch” productive selling time. They arrange travel and call schedules to economize on time spent en route and distance traveled. They make appointments to avoid prolonged waiting for callbacks. They do not waste time trying to sell

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Sales Resistance

Prospects show sales resistance by pointing out real or imagined obsta­cles, and by voicing objections, sincere or insincere. In analyzing sales resistance, the salesperson needs skill for accurate and rapid appraisal of people and their motivations. A prospect’s expressed sales resistance is either an obstacle or an objection. An obstacle is real or unreal;

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Closing Sales

The selling tactics followed affect the ease of closing the sale. Low-pressure sales are closed more easily than are high-pressure ones. In low-pressure sales, prospects feel that they are reaching the buying decisions themselves, and primarily through rational processes of thought, so there is no need for extra push just before the sales are

Types of Personal-Selling Objectives

The qualitative personal-selling objectives are long term and concern the contributions 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 To

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Some Important Terms in Setting Personal-Selling objectives

Before examining the planning and analytical work involved in setting sales volume objectives, it is important to define three terms: market poten­tial, sales potential, and sales forecast. Some executives use these terms synonymously, but, as the following discussion indicates, there are good reasons to distinguish among them. 1. Market Potential A market potential is

Analyzing Market Potential

1. Market Identification The first step in analyzing a product’s market potential is to identify its mar­ket. Market identification requires finding out Who buys the product? Who uses it? Who are the prospective buyers and/or users? Some companies find answers to these questions in their internal records, but most companies, especially those that use

Market Indexes

A market index is a numerical expression indicating the degree to which one or more market factors associated with a given product’s demand is present in a given market segment—usually a given geographical market segment. Market indexes are expressed in relative terms, such as in per­centages, rather than in absolute numbers. In analyzing the

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