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, of course, do not carry the full burden in the effort to reach these objectives, but they make major contributions. Top management has the final responsibility, because it is accountable for the success or failure of the entire enterprise. Ultimately, too, top management is accountable for supplying an ever-increasing volume of “socially responsible” products that final buyers want at satisfactory prices.
Top management delegates to marketing management, which then delegates to sales management, sufficient authority to achieve these three general objectives. In the process, objectives are translated into more specific goals—they are broken down and redefined as definite goals that the company has a reasonable chance of reaching. During the planning that precedes goal setting, sales executives provide estimates on market and sales potentials, the capabilities of the sales force and the intermediaries, and the like. Once these goals are finalized, it is up to sales executives to guide and lead the sales personnel and intermediaries, who play critical roles in implementing the selling plans.
Hence, sales management is influential in charting the course of future operations. It provides higher management with informed estimates and facts for making marketing decisions and for setting sales and profit goals. Largely on sales management’s appraisal of market opportunities, targets are set for sales volume, gross margin, and net profit in units of product and in dollars, with benchmarks of growth projected for sales and profits at specific future dates. Whether or not these targets are reached depends upon the performance of sales and other marketing personnel.
Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.