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1 BASICS OF SALES MANAGEMENT UNIT 1 The Field of Sales Management 2 UNIT 2 Role of Sales Manage 2!

E"#e t Committee $ % &ish am Ra'hans( A)ademi)ian Ms% *alla+i Sa'na#,a ( Asst% * ofesso * og amme Coo dinato M % -ess *hili# ./ma Co/ se $esign M % $ee#a0 $al+i Edito s Ms% $ee#ash i .a andi0a Ms% Nidhi .ha e Ms% Megha .adam Blo)0 * e#a ation Team Ms% 12oti Aga ,al Ms% Ma tina A3 aham M % A'in02a $esh#ande Mate ial * od/)tion M % &asant Gad0a i M % S/shant Am3e0a Ms% Rohinee Cha0 al Co#2 ight 4 Indian .no,ledge Co #o ation

All ights ese +ed% No #a t of this 3oo0 ma2 3e e# od/)ed o /tili5ed in an2 fo m o 32 an2 means ele)t oni) o me)hani)al( in)l/ding #hoto)o#2ing( e)o ding o 32 an2 info mation sto age o et ie+al s2stem ,itho/t #e mission in , iting fo m the #/3lishe % S2lla3/s BLOC. 16 BASICS OF SALES MANAGEMENT Unit 16 The Field of Sales Management Unit 26 Role of Sales Manage BLOC. 26 *LANNING FOR SELLING EFFORT Unit 16 $emand Fo e)asting Unit 26 Ma 0et *otential and Sales Te ito 2 BLOC. 76 MAN*O8ER *LANNING Unit 16 Re) /itment and Sele)tion Unit 26 T aining and $e+elo#ment BLOC. 96 CONTROLLING AN$ MANAGING SALES FORCE Unit 16 Cont olling the Selling Effo t Unit 26 Managing Sales Fo )e 1 BLOC. 16 BASICS OF SALES MANAGEMENT Int od/)tion to the Blo)0 This 3lo)0 )o+e s the 3asi) )on)e#ts of sales management and the ole and es#onsi3ilities of sales manage s% Sales management is one of the 0e2 )om#onents that e+e 2 3/siness el2ing on sales m/st # a)ti)e% Sales management is the t aining and management of a sales staff and the t a)0ing and e#o ting of the )om#an2:s sales% It is im#o tant to a 3/siness 3e)a/se if the # in)i#les of sales management a e

# a)ti)ed )o e)tl2( it )an in) ease the )om#an2:s sales% Sales management is an im#o tant a)ti+it2 in the Indian ma 0eting s2stem ,he e )omme )ial fi ms as ,ell as non;)omme )ial o ganisations em#lo2 s/3stantial field fo )es to # omote and dist i3/te # od/)ts <o se +i)es=> to se +i)e and assist # os#e)ts( )lients and middlemen and to e#o t on )ons/me # efe en)es and )om#etiti+e a)ti+it2 et)% 8ith the in) easing e)onomi) and so)ial # ess/ e to ente / al ma 0ets( the im#o tan)e of sales management is in) easing% It is not #ossi3le fo man/fa)t/ e s to el2 enti el2 on the t ade fo de+elo#ing the / al ma 0ets% The in) easing di+e sit2 of o/ ind/st ial st /)t/ e is also ) eating a need fo mo e so#histi)ated methods of sales management% S#e)ial selling s0ills a e e?/i ed in high te)hnolog2 ind/st ies( )hemi)al inte mediate ind/st ies( de)ent alised se)to and small;s)ale /nits( so)ial # og ammes et)% The sales manage holds a /ni?/e #osition in the sales o ganisation% @e #lans( o ganises( di e)ts( staffs and )oo dinates the ,hole of the sales o ganisation% The e a e se+e al )onnotations of the sales manage li0e sales e"e)/ti+e( sales di e)to ( ma 0eting manage ( ma 0eting e"e)/ti+e et)% @e is the #e son ,ho stee s the ,heels of sales o ganisation% @is stat/s and #o,e de#ends on the si5e of the o ganisation in his )ha ge% In small fi ms( the gene al manage o managing di e)to #e fo ms the d/ties of the sales manage % @o,e+e ( in 3ig man/fa)t/ ing fi ms( the e /s/all2 is a sales mange % @e e the sales manage is a##ointed 32 the to# management and he is es#onsi3le to them% In giant;si5ed )om#anies( fo some te ito ies andAo # od/)ts( sales manage s a e a##ointed% 8hate+e the #osition of the sales manage ( he is the g/iding and d i+ing fo )e of the sales o ganisation% 2 Basi)s of

Sales Management UNIT 1 T@E FIEL$ OF SALES MANAGEMENT St /)t/ e 1%B O3'e)ti+es 1%1 Int od/)tion 1%2 Sales Management Con)e#t 1%2%1 Effe)ti+e sales management 1%7 O3'e)ti+es of Sales Management 1%9 F/n)tion of Sales Management 1%9%1 Gene al f/n)tions of sales management 1%9%2 Management of sales 1%9%7 Sales #oli)2 1%9%9 Im#o tan)e of sales o ganisation 1%9%C Management of sales fo )e 1%C E+ol/tion of * ofessional Selling 1%D Sales A)ti+ities and Tas0s 1%E Let Us S/m U# 1%B OB1ECTI&ES In this /nit( ,e ha+e dis)/ssed the )on)e#ts( o3'e)ti+es and f/n)tions of sales management Afte ,o 0ing th o/gh this /nit( 2o/ sho/ld 3e a3le to6 F E"#lain the )on)e#t of sales management F $is)/ss the o3'e)ti+es of sales management F En/me ate the f/n)tions of sales management F $es) i3e the e+ol/tion of # ofessional selling

F S#e)if2 the sales tas0s and a)ti+ities 7 1%1 INTRO$UCTION Sales efe s to the e")hange of goods o se +i)es fo an amo/nt of mone2 o its e?/i+alent in 0ind% Selling is the most im#o tant and the most diffi)/lt f/n)tion in an o ganisation% 8itho/t the sales f/n)tion( a fi m )annot sta2 in 3/siness fo long% The efo e( managing sales in an o ganisation is a ) iti)al a)ti+it2% Selling has 3een an im#o tant #a t of 3/sinesses th o/gho/t histo 2 and ,ill )ontin/e to 3e so% @o,e+e ( if sales is so im#o tant to an o ganisation( then ,hat is the ole of othe a)ti+ities of the fi m s/)h as ad+e tising( ma 0eting( #/3li) elation and so onG Altho/gh these #la2 a ) /)ial ole in ) eating a desi e fo the # od/)t in the minds of the )/stome s( it is /ltimatel2 the inte a)tions( ,hi)h the sales #e sons ha+e ,ith the )/stome s( ,hi)h is ) iti)al in )losing the sale% A )om#an2 ma2 s#end a la ge amo/nt of mone2 in ad+e tising( ma 0eting( #/3li) elations and # omotional a)ti+ities to att a)t # os#e)ti+e )/stome s( 3/t all the mone2 s#ent on ma 0eting and # omotion ,ill go do,n the d ain if the sales #e sons a e ineffe)ti+e% Th/s( ,e need to /nde stand that sales is an im#o tant a)ti+it2 that )an ma0e o ma the f/t/ e of an o ganisation% The sales #e son ass/mes the goal of a mode ato ( his aim 3eing to ma0e the )/stome ealise the im#li)ations of 3/2ing the # od/)t o se +i)e% In this stage of selling( the sales #e son:s fo)/s is not on selling the # od/)t 3/t in hel#ing the )/stome identif2 the long;te m )onse?/en)es of 3/2ing the # od/)t% The sales #e son as0s ?/estions f om the )/stome :s +ie,#oint athe than his o,n% 8hat does the )/stome need the mostG 8hat )hange ,ill 3/2ing the # od/)t ma0e to the )/stome )om#a ed to the # esent sit/ationG 8hat is the #otential ad+antage the )/stome might 3e missing 32 not ma0ing the )hangeG @o, is the )/stome :s sit/ation li0el2 to

im# o+e 32 #/ )hasing the # od/)t as a sol/tion to this )/ ent needG Raising ?/estions s/)h as these hel#s the sales #e sons #la)e the needs of the )/stome s a3o+e his o,n needs( ,hile ma0ing the sale% S/)h an a## oa)h to selling hel#s in ea ning the t /st of the )/stome s( the e32 leading to efe als to the sales #e sons% F/ the ( as a )/stome is not # ess/ ised 32 the sales #e sons to ma0e the #/ )hase( the e is an im# o+ement in the ?/alit2 and ?/antit2 of sales( 3esides an in) ease in the #e sonal le+el of satisfa)tion of 3oth the )/stome as ,ell as the sales #e son% The Field of Sales Management 9 Basi)s of Sales Management 1%2 SALES MANAGEMENT CONCE*T Sales management is attainment of an o ganisation:s sales goals in an effe)ti+e and effi)ient manne th o/gh #lanning( staffing( t aining( leading and )ont olling o ganisational eso/ )es% Re+en/e( sales and so/ )es of f/nds f/el o ganisations and the management of that # o)ess is the most im#o tant f/n)tion% HThe #lanning( di e)tion and )ont ol of #e sonal selling( in)l/ding e) /iting( sele)ting( e?/i##ing( assigning( o/ting( s/#e +ising( #a2ing and moti+ating; these tas0s a##l2 to #e sonal sales fo )eH% Fo ma 0eting its # od/)ts to ele+ant segments of )ons/me s( an o ganisation has to )omm/ni)ate ,ith these )ons/me s% The )hannel of )omm/ni)ation ma2 3e im#e sonal <e%g%( ad+e tisements= o #e sonal <e%g%

salesmen=% To handle #e sonal )omm/ni)ations ,ith )ons/me s( most o ganisations em#lo2 a sales fo )e% The # ima 2 es#onsi3ilit2 of the sales fo )e is to # omote the o ganisation:s # od/)ts( 3/t it ma2 also 3e /sed to dist i3/te the # od/)t( se +i)e the # od/)t and gathe ma 0et intelligen)e% Sales management is )on)e ned ,ith the #lanning( di e)tion and )ont ol of the sales fo )e:s a)ti+ities% Sales management is an im#o tant a)ti+it2 in the Indian ma 0eting s2stem% It is e?/i ed in )omme )ial fi ms as ,ell as non;)omme )ial o ganisations sin)e these em#lo2 s/3stantial field fo )es to # omote and dist i3/te # od/)ts <o se +i)es=% Sales management is also essential fo se +i)ing and assisting # os#e)ti+e )/stome s( )lients and middlemen and fo e#o ting )ons/me # efe en)es and )om#etiti+e a)ti+it2 et)% 8ith the in) easing e)onomi) and so)ial # ess/ e to ente / al ma 0ets( the im#o tan)e of sales management is in) easing sin)e it is not #ossi3le fo man/fa)t/ e s to el2 enti el2 on the t ade fo de+elo#ing the / al ma 0ets% The in) easing di+e sit2 of o/ ind/st ial st /)t/ e is also ) eating a need fo mo e so#histi)ated methods of sales management% S#e)ial selling s0ills a e e?/i ed in high te)hnolog2 ind/st ies( )hemi)al inte mediate ind/st ies( de)ent alised se)to and small;s)ale /nits( so)ial # og ammes et)% 1%2%1 Effe)ti+e Sales Management It is the management # o)ess of esta3lishing( di e)ting and )oo dinating the sales de+elo#ment a)ti+ities fo the )om#an2 # od/)ts% It ma0es ,a2 fo st ategi) #lanning fo ( de+elo#ing and # ofita3l2 #enet ating the ma 0et to ,hi)h the # od/)ts( se +i)es and )a#a3ilities of the )om#an2 )an 3e di e)ted% C This ens/ es that the sales to )/stome s( dist i3/to s and eselle s a)hie+es the 3/dgeted ta get% The s)o#e of sales management +a ies ,ith the follo,ing6

F Nat/ e of the ind/st 2 F * od/)t lines F Geog a#hi)al s# ead F Nat/ e of selling The s)o#e of sales management( in 3 oad te ms( in)l/des the follo,ing6 F Esta3lish sales fo )e o3'e)ti+es F O ganising the Sales fo )e F Re) /iting and Sele)ting Sales#eo#le F T aining Sales *e sonnel F Com#ensating Sales *eo#le F Moti+ating Sales *eo#le F $e+elo#ing sales #lans F $e+elo#ing sales de+elo#ment # og ammes Che)0 2o/ # og ess 1 1% E"#lain the )on)e#t of sales management% 2% 8hat is s)o#e of sales managementG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% The Field of Sales Management D Basi)s of

Sales Management 1%7 OB1ECTI&ES OF SALES MANAGEMENT Sales manage s is mode n o ganisation a e e?/i ed to 3e )/stome o iented and # ofit;di e)ted and #e fo m se+e al tas0s 3esides setting and a)hie+ing #e sonal selling goals of the fi m% F om the )om#an2 +ie, #oint the sales management has the follo,ing th ee 3 oad and im#o tant o3'e)ti+es namel26 1% Sales &ol/me 2% Cont i3/tion to # ofits 7% Contin/o/s G o,th The sales e"e)/ti+es in this )ase a e the ones ,ho hel# im#lement these o3'e)ti+es% @o,e+e ( the to# management has to o/tline the st ategies to a)hie+e these o3'e)ti+es of sales management% The to# management sho/ld # o+ide # od/)ts( ,hi)h a e so)iall2 es#onsi3le and a e ma 0eted in a manne that meets )/stome sI e"#e)tations and does not 3 ea0 it% Th/s( sales management in+ol+es a st ong inte a)tion 3et,een Sales( Ma 0eting and To# Management% Che)0 2o/ # og ess 2 1% 8hat a e the o3'e)ti+es of sales managementG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% E 1%9 FUNCTION OF SALES MANAGEMENT

The main f/n)tion of a sales de#a tment is to att a)t and etain )/stome s% Man2 mo+ing #a ts a e tied to this 3/t the n/m3e one o3'e)ti+e is to att a)t and etain )/stome s% Follo,ing a e the main f/n)tions of the sales de#a tment6 F The sales a)ti+ities need to 3e )o;o dinated i%e% to meet the )/stome demand ,ith a## o# iate s/##l2 F To in) ease the sales +ol/me )onside ing a #a ti)/la #e iod of time ( to find a## o# iate #e sonsA agen)ies to )a 2 o/t the sales a)ti+ities F To hel# ma 0eting de#a tment in meeting the sales +ol/me fo e)asted 32 them( to gi+e moti+ation 32 a## o# iate means to the sales #e sons and to gi+e a## o# iate t aining to them in )a 2ing o/t the sales a)ti+ities s/))essf/ll2 F Anal2sis of the demands of ma 0ets F To st/d2 the )ons/me :s #s2)holog2( st/d2 ma 0et fl/)t/ations( # e#a e sale 3/dgets( e"#lo e ne, ma 0ets and att a)t and etain )/stome s et)% The sales management #e sonnel m/st essentiall2 3e m/lti;tas0e s% @o,e+e ( thei main d/ties a e as follo,s6 F Setting goals fo a sales;fo )e F *lanning( 3/dgeting and o ganising a # og amme to a)hie+e those goals F Im#lementing the # og amme F Cont olling and e+al/ating the es/lts% Afte delegating the d/ties to e+e 2one( a sales manage has to )ontin/o/sl2 monito his s/3o dinates so that he )an ma0e ne)essa 2 )hanges in his #oli)ies a))o ding to the inte nal as ,ell as e"te nal )hanges% 1%9%1 Gene al F/n)tions of Sales Management The gene al f/n)tions of sales management o ma 0eting management a e gi+en 3elo,6 1% Sales #lanning and sales #oli)ies

2% * i)ing #oli)2 and # i)e fi"ing 7% Ad+e tising and sales # omotion 9% S)ientifi) salesmanshi#( management and )ont ol of sales fo )e C% Ma 0eting esea )h The Field of Sales Management ! Basi)s of Sales Management D% *lanning and )ont ol of sales o#e ations and )ont ol of sales )osts E% Sele)tion and management of )hannels of dist i3/tion !% B anding #a)0aging and la3elling J% Afte ;sale se +i)e and satisfa)tion 1B% Integ ation and )o;o dination of all f/n)tions Sales management is a )hallenging # ofession% It is es#onsi3le fo o3taining sales +ol/me( handling the sales o#e ations( )ont i3/ting to # ofits and ens/ ing )ontin/o/s g o,th% Unde the so)iall2 es#onsi3le ma 0eting #oli)2( sales e"e)/ti+es m/st ass/ e the deli+e 2 of # od/)ts ,ith satisf2ing e"#e ien)es% Mode n sales manage is a ma 0eting e"e)/ti+e and not me el2 a sales e"e)/ti+e fo ma"im/m sales +ol/me% Modem Sales Management T ends6 The o/tstanding de+elo#ments in sales management sin)e 1JDB a e en/me ated as follo,s6 1% A))e#tan)e of ma 0eting )on)e#t( i%e% )/stome needs and ,ants gi+en to# attention

2% Re)ognition of im#o tan)e of #lanning and # og amming of sales 7% G eate de#enden)e on ma 0eting esea )h 9% Em#hasis on # ofit #e fo man)e and not me el2 on sales +ol/me C% Mo e attention on )hannel )hoi)e and )hannel elations D% S#e)ial st ess on in) easing # od/)ti+it2 of sales #e sonnel E% $e)ent alisation of sales management !% Im# o+ed moti+ation and elations of salesmen J% Ado#tion of manage ial a## oa)h in selling o ma 0eting 1%9%2 Management of Sales Sales *lanning F *lanning is )hoosing f om the alte nati+e )o/ ses of a)tion% It is a manage ial f/n)tion% F It in+ol+es the sele)tion f om among se+e al alte nati+es( ente # ise o3'e)ti+es( #oli)ies and # o)ed/ es( # og ammes and s)hed/les% Sales #lanning is a #a t of ma 0eting #lanning( )o+e ing sales fo e)asting( sales J # og ammes to a)hie+e sales goals and ma0ing a sales 3/dget% Sales; #lanning is de)iding in ad+an)e a f/t/ e )o/ se of a)tion ega ding the ma 0eting o selling of the # od/)t K ,hat is to 3e sold( ho,( ,hen and 32 ,hom it is to 3e sold% Sales #lanning gi+es /s a f/ll;fledged sales # og amme o sale )am#aign to 3e la/n)hed in the nea f/t/ e% The #i)t/ e of the sales # og amme is 3ased on o3'e)ti+es( #oli)ies and # o)ed/ es% *lanning is the # ima 2 manage ial f/n)tion and it # e)edes all othe manage ial f/n)tions% F 8e 3egin #lanning 32 la2ing do,n o/ o3'e)ti+es o the destination ,he e ,e ,ant to ea)h% 8e o/tline the # o3a3le alte nati+es fo ta0ing a )o/ se of a)tion to ea)h o/ destination% 8e then # o)eed to e+al/ate these alte nati+es

and finall2 sele)t the most a## o# iate )o/ se of a)tion( ,hi)h ,ill f/lfil o/ set goals% 8e fo m/late o/ #lan of a)tion% 8e then im#lement o/ #lan of a)tion% Sales )ont ols ass/ e ealisation of sales ta gets% If ne)essa 2( ,e ma2 ha+e to modif2 o/ #lan% Sales #lanning ado#ts the te)hni?/e of #lanning as /s/al and finds o/t ,a2s and means to a)hie+e the sales goals e)onomi)all2( effi)ientl2 and at the ight time% 8a2s and means to a)hie+e sales goals a e6 F Ma 0et esea )h F * od/)t esea )h F B anding #a)0aging et)% F Re) /itment and t aining of sales #e sonnel F Allo)ation of sales te ito ies and sales ?/otas F Choi)e of )hannels of dist i3/tion F *lan fo ad+e tising and sales # omotion F * o+isions fo ,a eho/sing and t ans#o t F * o+ision fo afte ;sales se +i)e F A anging of sales )ontests F * i)ing and all othe a)ti+ities of the sales o ganisation fo effi)ient selling of ?/antit2 and ?/alit2 of goods at the most e)onomi)al )ost snat)hing the sales goals The Field of Sales Management 1B Basi)s of Sales

Management 1%9%7 Sales *oli)2 *oli)ies a e the g/iding # in)i#les set 32 the )om#an2 to go+e n a)tions( /s/all2 e#etiti+e a)tions% Sales #oli)2 # o+ides the 3asi) g/ide to thin0ing and a)tion ta0en 32 the e"e)/ti+es ,ithin the sales o ganisation /nde a gi+en set of )i )/mstan)es% A so/nd sales #oli)2 )o+e s the follo,ing im#o tant items6 F * od/)ts o se +i)es to 3e sold Kt2#e( n/m3e ( +a iet2 and ?/alit2% F C/stome s of the # od/)ts K t2#es of )/stome s( si5e and lo)ation of )/stome s% Ma 0et )an 3e di+ided into smalle /nifo m segments a))o ding to age( se" and t2#e of )/stome s 7% B anding and #a)0aging #oli)ies F Sele)tion of )hannel of dist i3/tion F * i)es of # od/)ts K sale # i)e( dis)o/nts( esale # i)e maintenan)e F Ad+e tising and sales # omotion A )om# ehensi+e sales #oli)2 and st i)t adhe en)e to its # o+isions ass/ e the s/))ess of an2 3/siness% The 3a)03one of s/))essf/l sales #oli)ies is )ons/me satisfa)tion and )ons/me good,ill( 3ased on e#/tation fo elia3ilit2 and fai t ade # a)ti)es% On)e a high e#/tation is esta3lished th o/gh fai ;t ading( the ente # ise ,ill fa)e minim/m sales esistan)e and it ,ill gain )onside a3le )om#etiti+e st ength% So/nd sales #oli)ies( elia3le ?/alit2 of goods and fai t ade # a)ti)es a e the th ee #illa s of fi mIs ) edi3ilit2 and good,ill% At # esent( sales #oli)ies a e gi+en a ,ide meaning and a e s2non2mo/s ,ith ma 0eting #oli)ies% Ma 0eting mi" e# esents a 3lend o )om3ination of fo/ *Is6 * od/)t( * i)e( *la)e <dist i3/tion= and * omotion and elated #oli)ies% These elements gi+e /s a mi" of a)ti+ities to a)hie+e ma 0eting o selling o3'e)ti+es% 1%9%9 Im#o tan)e of Sales O ganisation F The sales manage is es#onsi3le fo )o;o dinating and )ont olling all the

a)ti+ities of the de#a tment ,ith the hel# of )om#etent e"e)/ti+es% F A sales o ganisation is li0e a #o,e station sending o/t ene g2( ,hi)h is de+oted to the ad+e tising and selling of #a ti)/la lines and the e is t emendo/s loss of ene g2 3et,een the #o,e station and #oints ,he e it ea)hes the )ons/me s% The efo e( the e a ises the g eat ne)essit2 of #lanning o ganising and )ont olling all sales effo ts th o/gh a so/nd sales o ganisation K to # e+ent ,astage in dist i3/tion% 11 F Sales manage m/st 3e s0illed in #lanning o ganising( )o;o dinating and )ont olling all sales o#e ations and m/st ass/ e the o#tim/m )ont i3/tion of #e sonal selling effo ts to the o+e all ma 0eting o3'e)ti+es of the )om#an2 1%9%C Management of Sales fo )e Sales fo )e management is defined as Lthe #lanning( di e)tion and )ont ol of the #e sonal selling a)ti+ities of a 3/siness /nit( in)l/ding e) /iting( sele)ting( t aining( e?/i##ing( assigning( o/ting( s/#e +ising( #a2ing and moti+ating as these tas0s a##l2 to the #e sonal sales fo )e% Sales management has d/al es#onsi3ilities6 gene ating sales +ol/me and de+elo#ing sales man#o,e % Longte m s/))ess of the fi m in gene ating sales +ol/me hinges /#on the de+elo#ment of sales man#o,e % Sales#eo#le a e an in+al/a3le h/man eso/ )e of the fi m% The2 ha+e # a)ti)all2 /nlimited #otential fo g o,th and de+elo#ment% The effe)ti+e management of sales#eo#le is a ma'o tas0 of sales management% In its essentials( sales management is '/st #e sonnel management a##lied to the sales de#a tment% Effe)ti+e management of sales fo )e e?/i es leade shi# #l/s administ ati+e s0ills in #lanning( o ganising( di e)ting( moti+ating and )ont olling the #e sonnel and selling #o tion of the # omotion mi"% Sales manage s m/st

dete mine the n/m3e and t2#es of sales #eo#le e?/i ed to im#lement the sales #lans and # og ammes at a gi+en time% Then sales#eo#le m/st 3e se)/ ed and thei a)ti+ities a e #lanned o ganised and di e)ted in o de to a)hie+e the set sales o3'e)ti+es% The e a e si" a eas fo manage ial de)isions ega ding the sales fo )e6 1% Re) /itment and sele)tion( 2% T aining( 7% Rem/ne ation and e"#enses( 9% S/#e +ision and di e)tion( C% Moti+ation( D% Cont ol and e+al/ation o assessment of sales #e fo man)e% Let /s e+ie,( in 3 ief( im#o tant a)ti+ities of sales management% 1% Re) /itment and Sele)tion * o#e e) /itment and sele)tion # o+ides a so/nd fo/ndation of a good +i3 ant sales o ganisation and sales management% 1o3 anal2sis )an # o+ide 'o3 s#e)ifi)ations of the e?/i ed sales #ositions% Re) /itment deals ,ith se)/ ing as man2 ?/alified #eo#le as #ossi3le so that some of them )an 3e sele)ted to fill the +a)an)ies% *ossi3le so/ )es of a##li)ants in)l/de )om#an2 #e sonnel( f iends( middlemen( sales#eo#le of othe )om#anies( ed/)ational instit/tions( ne,s#a#e and t ade 'o/ nal ad+e tising% The Field of Sales Management 12 Basi)s of Sales Management The sele)tion # o)ess is the info mation gathe ing( info mation e+al/ation and de)ision ;ma0ing e?/i ed to s) een a##li)ants and )hoose among them% The e

a e th ee s) eening stages6 F S) eening of a##li)ations F *s2)hologi)al and othe tests F Inte +ie,% Ea)h s) eening ma0es an im#o tant )ont i3/tion% * o#e sele)tion ,ill ens/ e the ight #e son fo the ight 'o3% It ,ill ed/)e )ost of t aining as ,ell as selling )osts% 8e shall also ha+e sta3le sales fo )e% A3o+e all # o#e sele)tion )an ha+e highe effi)ien)2 in selling% The /s/al # o)ed/ e of s)ientifi) sele)tion of sales#eo#le ma2 3e s/mma ised as follo,s6 F Se)/ ing a##li)ations on the 3asis of 'o3 des) i#tion and 'o3 s#e)ifi)ation F S) eening of a##li)ations( efe en)e )onta)ts( ) edit )he)0s et)% F * elimina 2 inte +ie,s F *s2)hologi)al tests; inte est( a#tit/de and intelligen)e tests F Final inte +ie, F Medi)al e"amination F A##ointment and ind/)tion *e sonal inte +ie, is an indis#ensa3le de+i)e in sele)ting sales#eo#le% Inte +ie, is the hea t of the sele)tion te)hni?/e% It gi+es a))/ ate and elia3le mental #i)t/ e a3o/t the fitness o othe ,ise of the )andidate fo a sales #osition% To 3e most effe)ti+e( tests sho/ld 3e # e#a ed s#e)ifi)all2 fo the sales #ositions and 3e 3ased /#on 'o3 s#e)ifi)ations% *s2)hologi)al tests a e of fo/ ma'o t2#es6 intelligen)e tests( a#tit/de tests( inte est tests and #e sonalit2 tests% Tests offe onl2 one so/ )e of info mation to 3e /sed in the sele)tion # o)ess% At 3est( the2 sho/ld 3e /sed to s) een o/t a##li)ant f om f/ the )onside ation and not as the 3asis fo a))e#tan)e o final sele)tion% 2% T aining

Good salesmen a e not 3o n> the2 a e made K 32 ,ell;#lanned and ,elle"e)/ted t aining # og ammes% T ained salesmen a e a3le to se)/ e sales o de s mo e ?/i)0l2( sell mo e and a e easie to manage% * o#e l2 sele)ted #e sons m/st /nde go ade?/ate t aining 3efo e the2 a e #/t on thei selling 'o3s% T aining is 17 ne)essa 2 to se)/ e effe)ti+e and effi)ient sales% It also fa)ilitates manage ial )ont ol% T ained sales fo )e )an e"e )ise effe)ti+e self;)ont ol and selfs/#e +ision% Us/all2 sales t aining is im#a ted to a)hie+e the follo,ing aims6 F Rising sales F A)?/i ing ne, a))o/nts F Ade?/ate 0no,ledge of te)hnolog2 and # od/)t;line F Bette sales # esentation to ,in the )/stome F G/idan)e to )/stome on the /se of the # od/)t and on its 3enefits F @a monio/s elations ,ith deale sA)/stome s F Bette sales # omotion( ,indo, dis#la2 and me )handising Sales#eo#le m/st ha+e 0no,ledge( s0ill and attit/de t aining if the2 a e to 3e effe)ti+e in thei selling field% .no,ledge t aining in)l/des6 F .no,ledge of the # od/)ts F .no,ledge of t2#es of )/stome s F .no,ledge of the )om#an2 o ganisation( #lans( #oli)ies and # o)ed/ es F .no,ledge of # omotion mi" F .no,ledge of salesmanshi# to do the sales 'o3s F .no,ledge of ma 0et and )om#etition Sales 0no,ledge t aining )an 3e im#a ted th o/gh le)t/ es( sales t aining )onfe en)es( #lant +isits( indi+id/al st/d2 and )o es#onden)e 3et,een sales manage s and thei #eo#le% Sales s0ill t aining is gi+en on the 'o3 32 a s0illed

t aine % S0ills in ea)h ste# of the sales # o)ess ,ill ha+e to 3e de+elo#ed% In addition to a)t/al sales # esentation( salesmen ha+e to 3e t ained on othe #a ts of the sales )alls( in)l/ding a## oa)hing the )/stome ( identif2ing sales # os#e)ts( as ,ell as te)hni?/es of o+e )oming o3'e)tions( )losing of sales and follo,;/# # o)ed/ es% Role;#la2ing and +ideota#e #la23a)0 te)hni?/e a e /sed in sales s0ill t aining% The o3'e)ti+e of s/)h s0ill t aining is to /se sales 0no,ledge effe)ti+el2% This is a))om#lished th o/gh # a)ti)e /nde an e"#e ien)ed t aine % Sales attit/de t aining t ies to st engthen salesmanIs #ositi+e attit/de to,a d his )om#an2( # od/)t and sales manage and to t ansfo m his negati+e attit/des into #ositi+e ones% The Field of Sales Management 19 Basi)s of Sales Management *e sonal )onfe en)e ,ith sales manage s( self;de+elo#ment )o/ ses( +is/al aids and )o es#onden)e a e all em#lo2ed to im#a t # o#e sales attit/des% In salesmanIs t aining( field t aining is essentiall2 on the 'o3 t aining% The t ainee lea ns 32 ,at)hing an e"#e ien)ed salesman in a)tion and 32 # a)tising sales te)hni?/es /nde the ' g/idan)e of the e"#e ien)ed o t ained salesman% 8e ha+e also # og ammed inst /)tion fo sales t aining% Read2;made # og ammed inst /)tional )o/ ses )an 3e # e#a ed 32 s0illed and e"#e t t aine s% At # esent +ideota#e( )losed )i )/it T&( 3 oad)asts a e /sed fo t aining salesmen% T aining is a )ontin/o/s # o)ess as ,e ha+e ne, # od/)ts( ne, # o3lems and ne,

)om#etition% 7% Com#ensation <Rem/ne ation and E"#enses= *e ha#s the ma'o moti+ating fa)to in selling is )om#ensation gi+en to the sales#eo#le% Sales )om#ensation #lan has fo/ elements6 Sala 2( Commission 3ased on # od/)ti+it2( E"#enses <t a+elling( lodging and 3oa ding= and F inge 3enefits <#aid +a)ation( /se of )a ( health ins/ an)e( # o+ident f/nd( g at/it2 et)%= The )om#ensation #lan is 3ased on the o3'e)ti+es set 32 the ma 0eting # og amme and the #e sonal selling o3'e)ti+es% It sho/ld # o+ide sta3ilit2 of ea nings as ,ell as in)enti+es fo salesmen to in) ease sales +ol/me( # ofit and the li0e% It sho/ld 3e sim#le( eas2 to /nde stand and ine"#ensi+e to administe % It sho/ld 3e fai to 3oth the )om#an2 and its sales fo )e and )om#etiti+e ,ith )om#ensation #lans in the ind/st 2 a ea% A#a t f om eim3/ sement of e"#enses and f inge 3enefits( the e a e fi+e ,a2s of #a2ing )om#ensation% F Sala 2 #l/s )ommission #lan F Commission #l/s a## o+ed e"#enses #lan F Sala 2 #l/s g o/# )ommission #lan F Bon/s F * i5e )ontests and #e fo man)e in)enti+es Man2 )om#anies /se )om3ination of the sala 2 and )ommission and 3on/s #lans% Fo instan)e( a )om#an2 #a2s 3asi) sala 2( s/)h as Rs% 9(BBB #e month #l/s a )ommission of C #e )ent of the e")ess of sales o+e Rs% 7B(BBB #l/s 3on/s of Rs% 9(BBB #e 2ea % The '/di)io/s )om3ination of sala 2 #l/s )ommission is )onside ed the 3est #lan% It is desi a3le as it gi+es se)/ it2 of in)ome as ,ell as ne)essa 2 in)enti+e <)ommission= to stim/late salesmen to #/t fo th thei 3est effo ts% T a+elling salesmen a e allo)ated definite sales te ito ies and the2 ha+e to 1C

f/lfil )e tain sales ?/otas also% O+e all( sales ?/otas a e ,o 0ed o/t on the 3asis of sales fo e)asts% The2 a e )om#ensated fo thei o/t;of;#o)0et e"#enses at fai ates% Bon/s o # ofit;sha ing #lans a e additional in)enti+es offe ed to the salesmen fo e"t a;o dina 2 #e fo man)e% Ade?/ate and fai )om#ensation #lans ,ill ens/ e mo ale and moti+ation of sales#eo#le% @ighe mo ale and moti+ation offe highe sales t/ no+e and highe # ofita3ilit2% Non;finan)ial in)enti+es s/)h as # aise( a## e)iation and e)ognition( g ant of stat/s and # estige( 'o3 se)/ it2( so)ial a))e#tan)e( sales )ontests et)%( a e s/##lementa 2 de+i)es to moti+ate sales#eo#le to ma"im/m effi)ien)2% Non;finan)ial moti+ation satisfies highe le+el egoisti) and #s2)hologi)al ,ants of a3o+e;the;a+e age salesmen% 1% Mo ale and moti+ation go hand;in;hand% Sales manage m/st 3/ild /# high mo ale and maintain it at a high le+el so that ,e ha+e 3est #e fo man)e% It is ass/med that e)onomi) needs of salesmen a e d/l2 a)hie+ed 32 ade?/ate moneta 2 )om#ensation% 1o3 e+al/ation ass/ es 3ase ate fo 'o3s ass/ ing e)onomi) se)/ it2% In)enti+e #lan lin0s )om#ensation ,ith sales se)/ ed% *e fo man)e a## aisal # o+ides #e fo man)e o me it e,a d% * ofit sha ing o 3on/s allo,s salesmen to sha e in the f /its of )om#an2Is # os#e it2% Essentials of So/nd Com#ensation *lan6 Fai and ade?/ate )om#ensation is the fi st essential of a so/nd )om#ensation #lan% The #lan m/st M e,a d the salesmen fo 6 F Selling a satisfa)to 2 +ol/me( F Selling goods o se +i)es ,hi)h ass/ e the highest g oss # ofit and F Selling at the lo,est #ossi3le )ost% Th/s( +ol/me( # ofit and lo, )ost a e the )hief dete minants of salesmenIs em/ne ation% A #lan of em/ne ation m/st # o+ide sta3ilit2 of ea nings fo salesmen( manage ial )ont ol o+e

salesmenIs a)ti+ities( in)enti+e to o3tain mo e +ol/me and it m/st ha+e 3/ilt;in fle"i3ilit2 to ad'/st itself ,ith the )hanging e)onomi) )onditions% The #lan m/st 3e sim#le to /nde stand and eas2 to o#e ate% It m/st 3e )om#etiti+e ,ith em/ne ation #aid 32 i+als% A3o+e all( it m/st 3e e?/ita3le to 3oth the )om#an2 and the salesmen% An ideal #lan of em/ne ation to salesmen ,ill 3e6 F Sala 2 o 3ase ,age ,ith )ost of li+ing ad'/stment F All o/t of #o)0et e"#enses( s/)h as t a+elling( lodging( 3oa ding et)% F An ag eed )ommission on a sliding s)ale The Field of Sales Management 1D Basi)s of Sales Management F Additional finan)ial )om#ensation s/)h as #ension #lan( # o+ident f/nd( life ins/ an)e # ote)tion( #aid +a)ation et) F * ofit sha ing o 3on/s( e%g% 1B #e )ent of ann/al sala 2( #e mitting salesmen to #a ti)i#ate in the )o #o ate # os#e it2 8e sho/ld ha+e a ight mi" of sala 2 N in)enti+es in)l/ding )ommission% Unde the #/sh st ateg2 of # omotion( salesman ,ill e?/i e high )ommission and in)enti+es% Unde the #/ll st ateg2 of # omotion( a smalle # o#o tion of )ommission and in)enti+es sho/ld 3e eno/gh as ,e ha+e s/3stantial ad+e tising s/##o t in the sales )am#aign% E/ e0a Fo 3es has ado#ted di e)t selling #lan th o/gh its sales

e# esentati+es fo selling its +a)//m )leane s and ele)t oni) ,ate #/ ifie s% The )om#ensation #lan de#ends s/3stantiall2 on the )ommission 3asis% The sales#eo#le sell these goods th o/gh ho/se;to;ho/se )an+assing% The ma 0ete of @a,0ins * ess/ e Coo0e s has sales#eo#le on all )ommission #lan% Most sales#eo#le a e ea ning 3et,een Rs% 2(BBB to Rs% D(BBB #e month% * i5e )ontests and #e fo man)e in)enti+e a e also # o+ided in addition to e"#ense allo,an)es and sales )ommissions% A good sales#e son ea ns o+e Rs% !(BBB #e month% All sales #e sons a e gi+en man2 othe #e 0s( e%g% medi)al aid( #ension( g at/it2( holida2 t a+el )ost( ente tainment allo,an)e et)% Mi"ed method of em/ne ation in the fo m of sala 2 N )ommission N e"#enses N f inge 3enefits )an 3e )onside ed as a golden #lan as it ,ill emo+e the deme its of #/ e sala 2 o )ommission onl2% It ,ill also a)t as the 3est moti+ato fo salesmen% 9% B andA* od/)t *ositioning S/#e +ision is in on)e 3oth the di e)tions of moti+ation and )ont ol of salesmen and the )ontin/al de+elo#ment of thei a3ilities% $i e)tion and )ont ol e"e )ised 32 the sales manage a e a))e#ta3le to the sales fo )e ,hen the2 #e )ei+e that this ,ill hel# them to a))om#lish thei o,n #e sonal o3'e)ti+e also% Leade m/st 3e a3le to ma0e his s/3o dinates in)lined to follo, him in #/ s/it of thei o,n inte ests% *lease note that s/#e +ision is not 3ossing% In ealit2( s/#e +ision is leade shi# in a)tion% @en)e( sales manage as a leade m/st 0no, his men( thei needs( attit/des( as#i ations and #e )e#tions% @e sho/ld 0no, his men not onl2 as indi+id/als 3/t also as g o/#s% Indi+id/al and g o/# 3eha+io/ 3oth #la2 an im#o tant ole in manage ial s/#e +ision( di e)tion and )ont ol% 1/st as 3/2e 3eha+io/ is im#o tant in the 3/2ing # o)ess( e"a)tl2 in the same 1E

manne ( em#lo2ee 3eha+io/ is im#o tant in management of #eo#le% S/#e +ision m/st 3e tailo ed to needs of the indi+id/al sales#e son '/st as selling # o)ess m/st 3e tailo ed to indi+id/al )/stome s% The s0illed s/#e +ision has to fo m/late the 3est mi" o )om3ination of a/tho it2( 0no,ledge and #e s/asion in a))o dan)e ,ith the needs of sit/ation% A/tho it2 is e"# essed th o/gh o de s and di e)tions ,ith ne)essa 2 san)tions fo diso3edien)e% *e s/asion is demonst ated th o/gh gi+ing e"#lanations fo #oli)2 and easons o the needs fo a)tion% .no,ledge is e"hi3ited in g/iding and )o/nselling the salesmen in thei a)ti+ities and ,o 0 ,ith )e tain )/stome s% S/#e +ision( di e)tion and )ont ol in+ol+e6 <a= O3se +ing( monito ing and e#o ting the #e fo man)e of the sales fo )e <3= Co/nselling and )oa)hing sales#eo#le to emo+e the defe)ts and ,ea0nesses in thei #e fo man)e <)= Gi+ing them ade?/ate info mation ega ding )om#an2 #lans and #oli)ies and )hanges in those #oli)ies <d= Re)ei+ing feed3a)0 and sol+ing thei 3/siness and #e sonal # o3lems <e= Moti+ating the sales#eo#le th o/gh a## o# iate non;finan)ial in)enti+es in o de to satisf2 egoisti) demands of sales#eo#le% Sales s/#e +ision is di e)tl2 )on)e ned ,ith the 3asi) need of moti+ating salesmen 32 satisf2ing thei needs fo se)/ it2( o##o t/nit2( self;e"# ession( es#e)t and good )onditions of ,o 0% In addition( it in+ol+es t aining and et aining( e+al/ation of #e fo man)e( # o+iding t,o;,a2 flo, of )omm/ni)ation fo 3est /nde standing and im# o+ing the #e sonal effe)ti+eness of salesmen% @/man elations a e of fi st im#o tan)e in the sales de#a tment% Unde demo) ati) manage ial st2le( ,e ha+e )ons/ltati+e di e)tion in+ol+ing )ontin/o/s )omm/ni)ation and )o;o#e ation 3et,een the sales manage and his salesmen% *e sonal )omm/ni)ation is most effe)ti+e% Comm/ni)ation 32 means of )o es#onden)e sho/ld 3e s/##lementa 2% The sales manage is

es#onsi3le to de+elo# and maintain the mo ale of the sales fo )e% Mo ale is the mental eadiness of the sales fo )e to )o;o#e ate ,ith the management in the a))om#lishment of o3'e)ti+es% If mo ale is high( o/t#/t is also high% Good mo ale of sales fo )e de#ends /#on the follo,ing6 F Fa+o/ a3le o ganisational )limate F 1/sti)e and fai #la2 ende ed 32 sales e"e)/ti+es F Effe)ti+e sales )omm/ni)ation Good mo aleAmoti+ation )an )on+e t O#otentialI into O# od/)ti+it2I and Oa+e age #e fo man)eI into Oa3o+e a+e age #e fo man)eI% The Field of Sales Management 1! Basi)s of Sales Management C% Moti+ation of Salesmen A3ilit2 o )a#a)it2 to ,o 0 is diffe ent f om the ,ill to ,o 0% Po/ )an 3/2 a manIs time( his #h2si)al # esen)e at a gi+en #la)e( his m/s)/la motions #e ho/ o da2% @o,e+e ( 2o/ )annot 3/2 his ,illingness to ,o 0( his enth/siasm o his lo2alt2% Po/ ha+e to ea n these things% These a e not # i)ed goods% Moti+ation is the a)t of stim/lating someone o oneself to get a desi ed )o/ se of a)tion( to #/sh the ight 3/tton to get a desi ed a)tion K a )om#liment( a #a2 ise( a smile( a # omise of # omotion( # aise( #/3li) e)ognition of me its and so on% Moti+ation ignites the ,ill to ,o 0% It mo+es #eo#le to ta0e a desi ed a)tion% Salesmen a e the most im#o tant single eso/ )e ,ith the sales manage

and this eso/ )e has /nlimited #otential% This )an 3e ta##ed onl2 th o/gh a## o# iate meas/ es of moti+ation% In addition to finan)ial in)enti+es( ,e need non;finan)ial in)enti+es o moti+ato s mo+ing salesmen to a))om#lish sales goals% Non;finan)ial in)enti+es f/lfil egoisti) and highe le+el #s2)hologi)al ,ants of h/man 3eings% Sales Contests6 The sales )ontest is an im#o tant de+i)e to moti+ate salesmen% Sales )ontests /se the s#i it of i+al 2% It /ses the #e sonal desi e to e")el% It # o+ides an in)enti+e to sho, 3ette #e fo man)e and se)/ e es/lts that a e mo e satisfa)to 2% Contests a e em#lo2ed to in) ease sales on an enti e # od/)t line( to la/n)h and int od/)e ne, # od/)ts( to in) ease the n/m3e of sales )alls and sales demonst ations to o3tain ne, )/stome s and to e+al/ate the eal )a#a)it2 of salesmen% The )ontests sho/ld ha+e no mall2 a #e iod of one to th ee months% It )an 3e a #a t of a s#e)ial sales )am#aign% @o,e+e ( sales )ontests ha+e a fe, disad+antages% The2 ma2 lead to 'ealo/s2 among salesmen% The e ma2 3e )ha ges of /nfai ness d/e to high # ess/ e selling% The2 ma2 lead to o+e sto)0ing o /nde se +i)ing of )/stome s% If )ontests a e ,isel2 /sed( the2 )an emo+e man2 disad+antages% Contest a,a ds m/st 3e )ash # i5es( me )handise # i5es o thei )om3inations% A,a ds m/st 3e tem#ting and s/3stantial% Sales Con+entions and Confe en)es6 These a e the de+i)es of g o/# moti+ation% The2 # o+ide o##o t/nities fo salesmen to #a ti)i#ate( gain so)ial satisfa)tion and e"# ess thei +ie,s on matte s di e)tl2 affe)ting thei ,o 0% The2 # omote team,o 0( dissol+e so)ial 3a ie s( ins#i e and aise salesmenIs mo ale% Beside sales )ontests and )on+entions( ,e ha+e othe methods of moti+ation( s/)h as indi+id/al )o/nselling( )om#an2 maga5ines and 3/lletins 1J

# o+iding +al/a3le sales info mation( # omotions( #a2 ise( 3on/s( #e sonal )omm/ni)ation 32 sales manage ,ith his sales fo )e and so on% D% Cont ol and E+al/ation Main As#e)ts of Cont ol * o)ess6 The # o)ess of )ont ol of sales fo )e has th ee as#e)ts6 F SalesmanIs effo ts m/st )li)0 ,ith the ma 0eting #lan and the # omotionmi" of the fi m% F SalesmanIs #e fo man)e m/st fit into #lanned standa ds of effi)ien)2 and salesmanIs a)hie+ements m/st hel# to a)hie+e the desi ed ed/)ed atio of selling e"#enses to sales% F * o+ision of s/#e +ision and g/idan)e to indi+id/al salesman( if needed Methods of Cont ol6 1% *e sonal )onta)t and fa)e;to;fa)e )omm/ni)ation 3et,een the salesman and sales manage 2% Co es#onden)e ,ith salesman 7% SalesmanIs e#o ts *e sonal )onta)t and #e sonal s/#e +ision )an hel# and ins#i e salesman% Co es#onden)e and e#o ts sho/ld not in+ol+e e")essi+e )le i)al ,o 0% Cont ol of the sales fo )e and sales o#e ations has fi+e im#o tant dimensions6 F Allo)ation of sales te ito ies F Assignment of sales ?/otas F SalesmanIs a/tho it2 F Ro/ting and s)hed/ling of sales #e sonnel F E+al/ation of sales #e fo man)e Che)0 2o/ # og ess 7 1% 8 ite a note on sales #lanning% 2% 8hat is sales #oli)2G

7% 8hat f/n)tions does the management of the sales fo )e in)l/deG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% The Field of Sales Management 2B Basi)s of Sales Management 1%C E&OLUTION OF *ROFESSIONAL SELLING * ofessional selling has e+ol+ed 2et man2 o#e ate ,ith methodologies and # a)ti)es that 3elong in last )ent/ 2% Unde standing histo 2 is a ,a2 of ens/ ing that the mista0es of the #ast a e not e#eated% * ofessional selling has e"isted fo tho/sands of 2ea s and )an sim#l2 3e des) i3ed as )omme )ial infl/en)e% The te ms :h/nte : and :fa me : ,e e )oined 32 the ins/ an)e ind/st 2 in the 1!EBs to des) i3e :# od/)e s: <those ,ho , ote ne, 3/siness= and :)olle)to s: <those ,ho )olle)ted the ,ee0l2 # emi/ms=% Cont a 2 to ste eot2#es in ente # ise selling( the 3est fa me s a e a)t/all2 h/nte s ,ithin e"isting )om#le" a))o/nts% Mode n )o #o ate selling 3egan to ta0e sha#e follo,ing 8o ld 8a II and in the 1JCBs( the e ,e e t,o fo )es that )om3ined to fo e+e )hange the sales ind/st 2> one ,as #s2)holog2 and the othe ,as # o)ess methodolog2% These dis)i#lines )on'oined to manifest in a fi+e;ste# method that ,o 0ed ,hen selling

sim#le # od/)ts o )ommodit2 se +i)es in sho t sales )2)le en+i onments% The # o)ess ,as des) i3ed 32 $ale Ca negie in the a) on2m AI$CA and sho,s ho, the selle ,o 0s th o/gh the fi+e ste#s to se)/ e a 3/2ing )ommitment% This methodolog2 ,o 0s 3est in )ommodit2( etail and di e)t )ons/me selling 3/t fails to add ess )om#le"it2 and st ateg2% Ama5ingl2( the e a e still sales #eo#le toda2 that # a)ti)e this st2le of selling in )om#le" )o #o ate sales en+i onments and the2 t ans#a entl2 adhe e to the AI$CA ste#s6 F Attention> th o/gh Osi55leI F Inte est> a o/sed th o/gh feat/ es and 3enefits F $esi e> 32 lin0ing the a3o+e to needs and ,ants F Con+i)tion> f om the selle in o+e )oming o3'e)tions F A)tion> 32 a)ti+el2 and asse ti+el2 )losing fo )ommitment This ,as late a33 e+iated to AI$C ,ith the C standing fo Close% In the 1JDBs and 1JEBs( #s2)hologi)al te)hni?/es 3e)ame mo e so#histi)ated 3/t the a## oa)h ,as still one of mani#/lating the sale and #e s/ading the # os#e)t% The e ,as m/)h em#hasis on #e sonalit2 and )ha isma and the onl2 s/3stanti+e ne, element to 3e added to sales # a)ti)e 3a)0 then ,as g eate anal2sis of the statisti)al as#e)ts of s/))ess% * o3lems #e sisted ho,e+e in la ge )om#le" selling and in the 1JEBs AI$CA ,as /s/ #ed ,ith a fo)/s on Feat/ es <and F/n)tions=( 21 Ad+antages and Benefits <FAB=% B/t this ne, FAB em#hasis meant that sales #eo#le often 3e)ame t a##ed 3elo, the le+el of eal #o,e d/e to the 3ottom;/# a## oa)h% In this e a( dis)i#line in sales # o)ess in#/ts 3e)ame the hallma 0 of effe)ti+e sales management ,hile sales #eo#le fo)/sed on )on+e2ing the message of feat/ es as 3enefits% &endo O3enefitsI ho,e+e a el2 t anslate to tangi3le 3/siness +al/e and the sales #e sonIs a/dien)e often )onsisted of e)ommende s

and infl/en)e s ,ithin )o #o ations athe than eal de)ision ma0e s% $/ ing the 1JEBs and 1J!Bs( la ge )o #o ations made )onside a3le ad+an)es in ho, the2 managed the # o)/ ement # o)ess and de+ised 3/2ing te)hni?/es designed to foste s/##lie )om#etition and th,a t )le+e and )ha ismati) sales #eo#le% Sales te)hni?/es that ,o 0ed in the #ast in) easingl2 3e)ame 3a ie s to s/))ess( es#e)iall2 in mo e )om#le" en+i onments% * ofessional 3/2e s 3e)ame 3ette ed/)ated and mo e so#histi)ated and did not es#ond fa+o/ a3l2 to )l/ms2 o mani#/lati+e selling 3eha+io/ s% Conside ho, toda2Is # os#e)ti+e )lients +ie, o/tdated sales # a)ti)es f om last )ent/ 26 F Asse ti+e o #e s/asi+e is /s/all2 #e )ei+ed as agg essi+e o #/sh2 F *e sistent is often #e )ei+ed as anno2ing and not listening F O*ositi+e ?/estionsI a e #e )ei+ed as heto i)al and mani#/lati+e F *ositioning feat/ es and 3enefits e?/ates to not /nde standing o 3eing too e"#ensi+e Th o/gho/t the 1J!Bs( the e ,as g eate a,a eness of the fa)t that agg ession f om the sales #e son ) eated defensi+eness ,ith the )/stome ( 3/t that t /st and /nde standing ) eated )oo#e ation% It ,as in this )onte"t that the #s2)hologi)al # a)ti)e of Ne/ o;Ling/isti) * og amming <NL*= )ame to the fo ef ont of the sales t aining ind/st 2% Altho/gh not in+ented 32 Anthon2 Ro33ins( he le+e aged and enhan)ed NL*( a##l2ing the # in)i#les to the sales # ofession% This ne, t end mat/ ed in the 1JJBs and fo)/sed on s/3)ons)io/sl2 3/ilding t /st and infl/en)e ,ith othe s% B/t d/ ing this #e iod the e ,as also se io/s esea )h 3eing done )on)e ning s/))essf/l sales 3eha+io/ s meas/ ed f om the #e s#e)ti+e of # ofessional 3/2e s% This esea )h ,as led 32 Neil Ra)0ham f om @/th,aite ,ho de+elo#ed S*IN Selling( the fo e /nne of toda2Is +al/e;3ased a## oa)h to

# ofessional sales% @/th,aite do)/mented a methodolog2 that e+ol/tionised # ofessional selling 32 fo)/sing on # o3lems( the im#li)ations and the s#e)ifi) 3/siness 3enefits of esol+ing them 32 im#lementing sol/tions% Neil Ra)0ham:s The Field of Sales Management 22 Basi)s of Sales Management infl/en)e and )ont i3/tion to # ofessional selling is in) edi3le% @o,e+e ( e+en ,ith his e+ol/tiona 2 a## oa)h( man2 sales #eo#le )ontin/ed to o#e ate 3elo, the le+el of eal #o,e and the +ast ma'o it2 #e sisted ,ith thei feat/ e( f/n)tion( ad+antage( 3enefit <FAB= mant as% Old ha3its eall2 die ha d 3/t things ,e e )hanging% A n/m3e of sales # o)ess methodologies eme ged in the late 1J!Bs and 1JJBs as 3est # a)ti)e fo ?/alif2ing( managing and fo m/lating st ateg2 fo )om#le" sales o##o t/nities% The2 emain highl2 ele+ant toda2 and # omote a to#;do,n a## oa)h aligned to the #oliti)al and e)onomi) #o,e in a 3/2ing o ganisation% Che)0 2o/ # og ess 9 1% 8 ite a note on the e+ol/tion of sales management% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%D SALES ACTI&ITIES AN$ TAS.S The )omm/ni)ation of the selling # o)ess is a m/)h i)he and )om# ehensi+e +ie, of salesmanshi#% *e sonal selling is an o al # esentation in )on+e sation <32 a sales#e son= ,ith one o mo e # os#e)ts fo ma0ing sales% @en)e( ,e ha+e the inte #e sonal )omm/ni)ation of the inte a)tion 3et,een the 3/2e and the selle % Both a e a)ti+e #a ti)i#ants in the di e)t fa)e;to;fa)e )omm/ni)ation% Both f/n)tion as sende and e)ei+e of messages% Both t 2 to infl/en)e ea)h othe % The # o)ess of selling in+ol+es a n/m3e of ste#s s/)h as * e;sale # e#a ation( * os#e)ting( * e;a## oa)h and a## oa)h( Sales # esentation o sales inte +ie, and *ost;sale a)ti+ities% The sales # esentation o inte +ie, ma2 ado#t the AI$AS fo m/la <attention( inte est( desi e( a)tion and satisfa)tion=% O3'e)tions aised 32 the # os#e)t a e handled d/ ing the inte est and desi e stages% The )lima" of sales # esentation is the se)/ ing of a)tion( i%e%( #/ )hase% Follo,ing /# is ne)essa 2 afte se)/ ing #/ )hase% It ,ill )he)0 3/2e Is 27 satisfa)tion and ed/)e his dissonan)e <afte #/ )hase an"ieties and do/3ts= if an2% *ost;#/ )hase a)ti+ities ass/ e 3/2e satisfa)tion and e#/ )hase% Let /s des) i3e in 3 ief the /s/al ste#s of sales # o)ess% 1% * e;sale * e#a ations6 Anti)i#ating the sale means getting ead2% A salesman has to se +e the )/stome % @e m/st identif2 a )/stome Is # o3lem( sol+e that # o3lem and # es) i3e a sol/tion to the )/stome a))o dingl2% To do these things( a salesman m/st 3e familia ,ith the # od/)t( the ma 0et( the o ganisation and the te)hni?/es of selling% @e m/st 0no, his )/stome s( thei /nsatisfied needs and thei # o3lems% @e m/st 0no, himself and his )om#an2% @e m/st 0no, 3/2ing moti+es and 3/2ing 3eha+io/ of the )/stome s o

# os#e)ts to ,hom he has to sell his # od/)ts% @e sho/ld 3e a,a e of )/ ent )om#etition and ma 0et en+i onment in ,hi)h he has to o#e ate% Ba)0g o/nd 0no,ledge <of the )om#an2( its # od/)ts and its i+als= )onstit/tes the essen)e of # e;sale # e#a ation% 2% * os#e)ting6 A salesman has to see0 #otential )/stome s ,ho a e )alled # os#e)ts% A # os#e)t means a # o3a3le 3/2e Kthe one ,ho 3 ings # os#e)ts to the selle Is 3/siness% A # os#e)t is one ,ho has an /nsatisfied need( a3ilit2 to 3/2 <#/ )hasing #o,e = and ,illingness to 3/2 <moti+ation=% * os#e)ting elates to lo)ating of # os#e)ts% The2 )an 3e lo)ated th o/gh # esent )/stome s( othe salesmen( /se of #hone di e)to ies o 32 di e)t )old )an+assing <)alling on st ange s and de+elo#ing )onta)ts 32 s)o/ting o/t leads=% Lo)ated #otential )/stome s ha+e to 3e ?/alified( i%e%( the2 m/st ha+e need( #/ )hasing #o,e ( in)lination to 3/2 and 3/2ing a/tho it2 o #o,e % These ?/alified # os#e)ts m/st( of )o/ se( 3e a))essi3le to the salesman% * os#e)ting is simila to the see0ing f/n)tion fo the total ma 0eting a)ti+ities% 7% * e;a## oa)h6 On)e a # os#e)t is lo)ated and ?/alified( salesman sho/ld find o/t his needs( # o3lems to 3e sol+ed( his # efe en)es( #e sonal ha3its( nat/ e( 3eha+io/ et)% The # od/)t has to 3e tailo ed to the s#e)ifi) e?/i ements of the )/stome % Based on ade?/ate info mation of the )/stome ,ants and desi es( salesman )an # e#a e his #lan of sales # esentation o inte +ie,% The sales # esentation m/st mat)h to the needs of the indi+id/al # os#e)t% It sho/ld ena3le the salesman to handle his # os#e)t smoothl2 th o/gh the 3/2ing # o)ess( i%e%( d/ ing the sales tal0% 9% A## oa)h6 The ne"t ste# is the stage ,he e the salesman )omes fa)e to fa)e ,ith the # os#e)t% The a## oa)h )onsists of the t,o ma'o #a ts K o3taining an inte +ie, and the fi st )onta)t% The salesman ma2 /se +a io/s means of

o3taining an inte +ie,% @e ma2 /se the tele#hone( o3tain an int od/)tion f om The Field of Sales Management 29 Basi)s of Sales Management a )/stome o /se his 3/siness )a d% 8hat is mo e im#o tant is the fi st )onta)t% The salesman m/st 3e a3le to att a)t the # os#e)tIs attention and get him inte ested in the # od/)t% It is +e 2 im#o tant to a+oid 3eing dismissed 3efo e he )an # esent his # od/)t% C% Sales * esentation6 On)e the salesman has so/ght and fo/nd #otential )/stome s and he has mat)hed thei ,ants ,ith his # od/)t( he is ead2 to # esent that # od/)t to the )/stome fo mall2% The sales # esentation sho/ld 3e )losel2 elated to the 3/2ing # o)ess of )/stome s% It sho/ld 3e in the lang/age the # os#e)t /nde stands% The sales inte +ie, sho/ld gene all2 go a))o ding to AI$A theo 2% Se)/ ing attention is the fi st ste#% Attention is att a)ted th o/gh # o#e a## oa)h% Gaining inte est is the se)ond ste#% Man2 de+i)es a e /sed to a o/se and in) ease inte est in the # od/)t% Salesman )an do this th o/gh li+el2 and inte esting sales tal0 as ,ell as th o/gh a)t/al demonst ation of # od/)t and its o#e ations ,he e+e feasi3le% * od/)t o sam#le )an 3e sho,n% &is/al aids )an 3e /sed in sales demonst ation% Sales # esentation sho/ld 3e )lea ( )on)ise( to the #oint and #ositi+e% A #lanned sales # esentation is mo e effe)ti+e% Some )om#anies ha+e standa dised sales tal0s( ,hi)h )an 3e /sed( ,ith a fe, modifi)ations if the sit/ation demands% Afte e"#laining the

# od/)t )ha a)te isti)s and e"#e)ted 3enefits( the salesman sho/ld find o/t )/stome Is ea)tions and o3'e)tions% These o3'e)tions o do/3ts sho/ld 3e ,el)ome and the2 sho/ld 3e ans,e ed ,ith )onfiden)e% The )/stome sho/ld 3e satisfied on all his do/3ts% O3'e)tions and ea)tions e# esent feed3a)0 to salesmanIs )omm/ni)ation% The2 efle)t g o,ing inte est of the )/stome in the # od/)t% Gen/ine o3'e)tions sho/ld 3e inte # eted )o e)tl2 and emo+ed ta)tf/ll2% The # os#e)t m/st 3e )on+in)ed a3o/t the 3enefits( e"#e)ted #e fo man)e and se +i)es of the # od/)t% The a3ilit2 to fa)e and meet 3/2e Is o3'e)tions is a)?/i ed ,ith time and e"#e ien)e% A good # esentation m/st satisf2 fo/ main o3'e)ti+es6 F It m/st 3e )om#lete( i%e% it m/st )o+e e+e 2 #oint that is li0el2 to infl/en)e the # os#e)t% F It m/st 3e )lea and sho/ld lea+e no mis/nde standing o +ag/eness in the # os#e)tIs mind% F It m/st emo+e )om#etition 32 # o+iding that the salesmanIs # od/)t is definitel2 s/#e io and is the onl2 # od/)t that ,ill satisf2 the # os#e)tIs ,ant% 2C F It m/st ,in )onfiden)e of # os#e)t that the salesmanIs statements a e t /e and that the salesman is honestl2 t 2ing to hel# the # os#e)t% D% O3'e)tions6 At an2 stage d/ ing the sales inte +ie,( the salesman ma2 3e )onf onted 32 an o3'e)tion% * os#e)ts ,ill al,a2s t 2 to esist a sale 32 aising a g/ments fo not 3/2ing the # od/)t% Unless the o3'e)tion is satisfa)to il2 ans,e ed( the sale )annot ta0e #la)e% A salesman m/st al,a2s ,el)ome o3'e)tions% @e m/st )onside an o3'e)tion as an indi)ation of ho, the # os#e)tIs mind is ,o 0ing% A # os#e)t that aises o3'e)tions is easie to

satisf2 than a # os#e)t ,ho does not sho, an2 inte est in the # o#osition% The )le+e salesman ,ill al,a2s ,el)ome an o3'e)tion( inte # et the o3'e)tion )o e)tl2 and ,ill emo+e it ta)tf/ll2( ,itho/t a g/ing ,ith the )/stome % @e ma2 sometimes e+en anti)i#ate an o3'e)tion and fo estall it% E% Close6 The )lose is the a)t of a)t/all2 getting the # os#e)tIs assent to 3/2% It is )/lmination of the effo ts so fa made 32 the salesman and is( the efo e( the )lima" of the enti e sales # o)ess% A salesman ,ho )annot )lose the sale )annot in the eal sense 3e )alled a s/))essf/l salesman% It is +e 2 im#o tant fo salesman to 3e ale t and find o/t the ight moment at ,hi)h to )lose the sale% This is 0no,n as the O#s2)hologi)al momentI o the O ea)tion momentI( the moment at ,hi)h the # os#e)tIs mind and the salesmanIs mind a e in #e fe)t a))o d% The salesman m/st ,at)h fo e+e 2 sign( ,hi)h ma2 indi)ate that the # os#e)t is ,illing to 3/2 and a##l2 the )lose% @e m/st also emem3e that the initiati+e m/st )ome f om him% @e )annot ,ait fo the )/stome to as0 fo the # od/)t% A sale is ne+e )om#lete /ntil the # od/)t is finall2 in the hands of a satisfied /se % Salesman alone )an ass/ e s/)h )om#letion of sale% !% The Follo,;/# <*ost;sale )onta)ts=6 Mo+ing the )/stome to the a)tion stage <the #/ )hase de)ision= does not )om#lete the salesmanIs tas0% @e m/st , ite the o de ( a ange fo des#at)h and deli+e 2 of the # od/)t( fa)ilitate g ant of ) edit( eass/ e the 3/2e on the ,isdom of his de)ision and minimise his dissatisfa)tion( if an2% The salesman sho/ld )onta)t the )/stome f e?/entl2 to maintain his good,ill and smooth o+e an2 #ost;#/ )hase # o3lems% The follo,;/# is a good so/ )e of feed3a)0 to the salesman% A sale is made not in the mind of the salesman o o+e the )o/nte ( 3/t in the mind of the 3/2e % Let the 3/2e de)ide to #/ )hase not 3e)a/se 2o/ ,ant him to do so 3/t 3e)a/se he himself is moti+ated <set into motion= to 3/2 2o/ # od/)t 3e)a/se it is

going to sol+e his # o3lem and satisf2 his ,ants% Salesman m/st de+elo# the fa)/lt2 of em#ath2 i%e% mind o tho/ght eading of the )/stome s% This ,ill # o+ide him a))/ ate info mation of his The Field of Sales Management 2D Basi)s of Sales Management <3/2e Is= moti+es( feelings( emotions( attit/de et)% B/2ing moti+es ena3le the salesman to 0no, ,h2 a #e son 3/2s his # od/)ts% .no,ledge of +a io/s t2#es of )/stome s( thei attit/des and 3eha+io/ and a3ilit2 to e)ognise and handle the diffe ent t2#es of )/stome s is a 3asi) e?/i ement fo s/))ess in selling% Che)0 2o/ # og ess C 1% E"#lain the eight stages of a sales # o)ess% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%E LET US SUM U* In this /nit( ,e6 F E"#lained the )on)e#t of sales management F $is)/ssed the o3'e)ti+es of sales management

F Enlisted the f/n)tions of sales management F $es) i3ed the e+ol/tion of # ofessional selling F En/me ated the sales tas0s and a)ti+ities 2E Che)0 Po/ * og ess6 *ossi3le Ans,e s Che)0 2o/ # og ess 1 Ans,e s6 See se)tion 1%2 Che)0 2o/ # og ess 2 Ans,e s6 See se)tion 1%7 Che)0 2o/ # og ess 7 Ans,e s6 See se)tion 1%9 Che)0 2o/ # og ess 9 Ans,e s6 See se)tion 1%C Che)0 2o/ # og ess C Ans,e s6 See se)tion 1%D The Field of Sales Management 2! Basi)s of Sales Management UNIT 2 ROLE OF SALES MANAGER St /)t/ e 2%B O3'e)ti+es 2%1 Int od/)tion

2%2 Nat/ e and Role of Sales Manage 2%2%1 Goal setting 2%2%2 *lanning( B/dgeting and O ganising 2%2%7 Im#lementing 2%2%9 Cont olling and E+al/ating 2%7 Administ ati+e A3ilit2 fo Sales Manage s 2%7%1 The Sales and Ma 0eting Relationshi# 2%7%2 Sales and ma 0eting alignment and integ ation 2%9 Co;o dination ,ith othe Elements in Ma 0eting * og amme 2%C Let Us S/m U# 2%B OB1ECTI&ES In this /nit( ,e ha+e dis)/ssed the nat/ e and ole of sales manage Is 'o3( his administ ati+e a3ilities and his a3ilit2 to )oo dinate% Afte ,o 0ing th o/gh this /nit( 2o/ sho/ld 3e a3le to6 F E"#lain the nat/ e and ole of sales manage Is 'o3 F En/me ate oles li0e goal setting( #lanning( 3/dgeting( im#lementing( )ont olling and e+al/ating F $es) i3e the administ ati+e a3ilit2 fo sales manage s F $is)/ss the im#o tan)e of )o;o dination ,ith othe elements in ma 0eting # og amme 2J 2%1 INTRO$UCTION A sales manage is someone ,ho has the es#onsi3ilit2 fo the hi ing( t aining and de+elo#ment of the sales team fo his o he a ea of es#onsi3ilit2% In no othe #osition in the )om#an2 is a))o/nta3ilit2 meas/ ed mo e 32 the es/lts # od/)ed than the sales manage Qs% The n/m3e s tell all% The sales o ganisation(

the te ito ies and the indi+id/al sales#eo#le meet o do not meet the ?/ota% The e a e man2 easons ,h2 it is so diffi)/lt to 3e s/))essf/l in the sales manage #osition% One is the la)0 of /nde standing on the #a t of senio management of ,hat is in+ol+ed in the sales f/n)tion of a )om#an2% Be)a/se of this la)0 of /nde standing( man2 times senio management ma0es the mista0e of filling the #osition ,ith a to#;# od/)ing sales#e son% 2%2 NATURE AN$ ROLE OF SALES MANAGER The sales manage is the #e son es#onsi3le fo leading and g/iding a team of sales#eo#le% A sales manage :s tas0s often in)l/de assigning sales te ito ies( setting ?/otas( mento ing the mem3e s of he sales team( assigning sales t aining( 3/ilding a sales #lan and hi ing and fi ing sales#eo#le% In la ge )om#anies( sales ?/otas and #lans a e t2#i)all2 esta3lished at the e"e)/ti+e le+el and a manage :s main es#onsi3ilit2 is to see to it that he sales#eo#le meet those ?/otas% Some sales manage s ma2 3e manage s f om othe de#a tments in sales and ma 0eting ,ho t ansfe ed to sales% @o,e+e ( the ma'o it2 a e to#;tie sales#eo#le ,ho ,e e # omoted to a management #osition% These fo me sales#eo#le ha+e little o no management t aining o e"#e ien)e( thei main )hallenge is allo,ing thei sales team to do the selling and offe ing ,hate+e g/idan)e the team mem3e s need% Be)a/se a sales manage :s )om#ensation is tied to ho, man2 sales the team ma0es( the manage is highl2 moti+ated to get the sales#eo#le # od/)ing% This often leads to a s)ena io ,he e the manage mi) omanages the sales team( hanging o+e thei sho/lde s and )onstantl2 as0ing fo /#dates% It is es#e)iall2 )ommon ,ith fo me sta sales#eo#le( ,ho tend to ,ant to feel in )ont ol of e+e 2 sit/ation R #a ti)/la l2 ,he e thei o,n sala 2 is in+ol+ed% Unfo t/natel2( sales#eo#le do not ,o 0 ,ell in this 0ind of en+i onment and thei #e fo man)e

,ill s/ffe ( leading to a +i)io/s )2)le ,he e the sales manage 3e)omes mo e and mo e f anti) as he team fails to meet thei ?/ota% So sales management is a 3alan)ing a)t 3et,een # o+iding g/idan)e and di e)tion ,itho/t ta0ing this to e"t emes% Role of Sales Manage 7B Basi)s of Sales Management Sales manage s ,ho a e es#onsi3le fo hi ing and fi ing mem3e s of thei sales team m/st lea n some h/man eso/ )es s0ills% If a sales manage does not 0no, ho, to ) iti)all2 e+ie, a es/me( as0 # o3ing ?/estions in the inte +ie, o )at)h an2 ed flags d/ ing the # o)ess( he ,ill # o3a3l2 end /# hi ing sales#eo#le ,ho loo0 good on #a#e 3/t fail to # od/)e% .no,ing ho, to get the team moti+ated is a ) iti)al #a t of sales management% Sma t sales manage has se+e al tools in thei a senal( anging f om sill2 # i5es li0e #a#e ) o,ns to ma'o moneta 2 e,a ds fo 3ig # od/)e s% The manage m/st also 0no, ho, to moti+ate a #oo # od/)e into getting 3a)0 on t a)0% The2 m/st e)ognise ,hen the # o3lem is not a la)0 of moti+ation 3/t something mo e 3asi)( s/)h as the la)0 of a s#e)ifi) sales s0ill% Sales manage s m/st also /nde stand the :3ig #i)t/ e%: In all 3/t the smallest )om#anies( sales manage s a e /s/all2 at the middle management le+el of es#onsi3ilit2% The2 s/#e +ise a sales team( 3/t a e s/#e +ised themsel+es 32 a highe ;le+el manage ( often at the e"e)/ti+e le+el% 8hen a sales manage :s team #e fo ms ,ell( he s/#e +iso ,ill often gi+e he the ) edit% @o,e+e ( if a sales

manage :s team fails to meet thei ?/ota( that e"e)/ti+e ,ill e"#e)t the manage to # o+ide a sol/tion% A sales manage m/st ha+e e")ellent )omm/ni)ation s0ills to s/))eed% The2 m/st 3e a3le to /nde stand the sales #lan and e"#lain it )lea l2 to the sales teams% The2 m/st also 3e a3le to /nde stand the sales#eo#le:s needs and )omm/ni)ate those needs to the e"e)/ti+e le+el% If a # o3lem s/)h as an /n ealisti) ?/ota a ises( the2 m/st 3e a3le to go to 3at fo he sales#eo#le ,ith /##e management and get the sit/ation esol+ed% 8hen the sales#eo#le do ,ell( the2 m/st sho, them that thei ha d ,o 0 is a## e)iated and ,hen the2 falte ( the2 m/st /n)o+e the eason and fi" it% It is the goal of a ?/alified and talented sales manage to im#lement +a io/s sales st ategies and management te)hni?/es in o de to fa)ilitate im# o+ed # ofits and in) eased sales +ol/me% The2 a e also es#onsi3le fo )oo dinating the sales and ma 0eting de#a tment as ,ell as o+e sight )on)e ning the fai and honest e"e)/tion of the sales # o)ess 32 his agents% $etail ole of a sales manage is gi+en 3elo,% 2%2%1 Goal Setting The f/n)tion of sales manage s in setting the goals )an 3e /nde stood onl2 if 2o/ /nde stand the #osition that is held 32 them in an o ganisation% In fa)t( sales 71 management is '/st one fa)et of a )om#an2:s o+e all ma 0eting st ateg2% A )om#an2:s ma 0eting # og amme is e# esented 32 its ma 0eting mi"( ,hi)h en)om#asses st ategies elated to # od/)ts( # i)es( # omotion and dist i3/tion% O3'e)ti+es elated to # omotion a e a)hie+ed th o/gh th ee s/##o ting f/n)tions6 F Ad+e tising( ,hi)h in)l/des di e)t mail( adio( tele+ision and # int ad+e tisements( among othe media

F Sales # omotion( s/)h as )ontests and )o/#ons F *e sonal selling( ,hi)h en)om#asses the sales fo )e manage The e?/i ement of the ma 0et dominates the goal setting of a sales fo )e manage % The mi" )oo dinates o3'e)ti+es 3et,een the ma'o )om#onents of the mi" ,ithin the )onte"t of inte nal )onst aints( s/)h as a+aila3le )a#ital and # od/)tion )a#a)it2% Fo e"am#le( the o+e all )o #o ate ma 0eting st ateg2 ma2 di)tate that the sales fo )e needs to in) ease its sha e of the ma 0et 32 fi+e #e )ent o+e t,o 2ea s% @e e the sales fo )e manage needs to anal2se and find a ,a2 to a)hie+e that ta get% The sales fo )e manage ( ho,e+e ( ma2 also #la2 an im#o tant ole in de+elo#ing the o+e all ma 0eting mi" st ategies that dete mine his o3'e)ti+es% Fo e"am#le( he )an find o/t the e?/i ement of the )/stome s and ,ill ha+e the a3ilit2 to ta# the #otential ma 0ets% A +ital ole of a sales manage is to dis)e n the #otential of the # od/)ts o se +i)es that a )om#an2 has to offe % An im#o tant distin)tion e"ists 3et,een ma 0et #otential and sales #otential% The fo me is the total e"#e)ted sales of a gi+en # od/)t o se +i)e fo the enti e ind/st 2 in a s#e)ifi) ma 0et o+e a stated #e iod of time% Sales #otential efe s to the sha e of a ma 0et #otential that an indi+id/al )om#an2 )an easona3l2 e"#e)t to a)hie+e% A))o ding to I ,in( ma0ing a sales # edi)tion means to e+al/ate the amo/nt of sales that a 3/siness o ganisation is e"#e)ted to do o+e a #e iod of time( in a s#e)ifi) ma 0et and ,hi)h is g/ided 32 a set of ma 0eting st ateg2% All the o3'e)ti+es of the ma'o f/n)tions of #lanning li0e( # od/)tion( dist i3/tion and ma 0eting a e fi"ed afte ma0ing an estimate of the sales and the dete mining the ma 0et #otential% N/me o/s sales fo e)asting tools and te)hni?/es( man2 of ,hi)h a e ?/ite ad+an)ed( a e a+aila3le to hel# the sales manage dete mine #otential and ma0e fo e)asts% Ma'o e"te nal fa)to s infl/en)ing sales and ma 0et #otential in)l/de ind/st 2 )onditions( s/)h as stage of mat/ it2> ma 0et )onditions and

e"#e)tations> gene al 3/siness and e)onomi) )onditions> and the eg/lato 2 en+i onment% Role of Sales Manage 72 Basi)s of Sales Management 2%2%2 *lanning( B/dgeting and O ganising The sales manage ( afte goal setting sho/ld 3e a3le to ma0e a #lan as ho, to a)hie+e these goals% A +e 2 3asi) de)ision is ,hethe to hi e a sales fo )e o to sim#l2 )ont a)t ,ith e# esentati+es o/tside of the o ganisation% The latte st ateg2 eliminates )osts asso)iated ,ith hi ing( t aining and s/#e +ising ,o 0e s and it ta0es ad+antage of sales )hannels that ha+e al ead2 3een esta3lished 32 the inde#endent e# esentati+es% On the othe hand( maintaining an inte nal sales fo )e allo,s the manage to e"e t mo e )ont ol o+e the sales#eo#le and to ens/ e that the2 a e t ained # o#e l2% If the inte nal sales fo )e la)0s e"#e ien)e( then the2 )an 3e hi ed at a +e 2 lo, )ost%% The 0ind of sales fo )e that a )om#an2 esta3lishes de#ends on the moneta 2 est i)tions and the +a io/s o3'e)ti+es of that )om#an2% 8hile hi ing the ,o 0 fo )e fo sales( a manage m/st 3e a3le to de)ide its st ength% This dete mination t2#i)all2 entails a )om# omise 3et,een the n/m3e of #eo#le needed to ade?/atel2 se +i)e all #otential )/stome s and the eso/ )es made a+aila3le 32 the )om#an2% One te)hni?/e sometimes /sed to dete mine si5e is the H,o 0 loadH st ateg2( ,he e32 the s/m of e"isting and #otential )/stome s is m/lti#lied 32 the ideal n/m3e of )alls #e )/stome % That s/m is then m/lti#lied

32 the # efe ed length of a sales )all <in ho/ s=% Ne"t( that fig/ e is di+ided 32 the selling time a+aila3le f om one sales #e son% The final s/m is theo eti)all2 the ideal sales fo )e si5e% A se)ond te)hni?/e is the :in) emental: st ateg2( ,hi)h e)ognises that the in) emental in) ease in sales that es/lts f om ea)h additional hi e )ontin/all2 de) eases% In othe ,o ds( sales #eo#le a e g ad/all2 added /ntil the )ost of a ne, hi e e")eeds the 3enefit% Anothe im#o tant de)ision that a sales manage m/st ma0e ,hile hi ing sales #e sonnel is that he sho/ld mat)h thei # io e"#e ien)e and thei st engths to thei #a2% % Basi)all2( the manage )an eithe :ma0e: o :3/2: his fo )e% Po/ng hi es o those ,hom the )om#an2 ma0es:( )ost less o+e a long te m and do not 3 ing an2 3ad sales ha3its ,ith them that ,e e lea ned in othe )om#anies% On the othe hand( the initial )ost asso)iated ,ith e"#e ien)ed sales #eo#le is /s/all2 lo,e and e"#e ien)ed em#lo2ees )an sta t # od/)ing es/lts m/)h mo e ?/i)0l2% Alte nati+el2( if a manage hi es +e 2 ?/alified #eo#le( he might not 3e a3le to do 3/siness in some te ito ies% This might es/lt in losing )/stome s and the e32 leading to loss in sales% Afte fo ming the sales fo )e( a sales manage fo ms a 3/dget% This is the #lan of all the e"#e)ted e"#endit/ e that ,ill 3e in)/ ed ann/all2% The e"#endit/ e that )an 3e affo ded fo the sales fo )e and fo #e sonal 77 selling )om#letel2 de#ends on the 3/dget allo)ation% Ma'o 3/dgeta 2 items in)l/de sales fo )e sala ies( )ommissions and 3on/ses( t a+el e"#enses( sales mate ials( t aining( )le i)al se +i)es and offi)e ent and /tilities% Man2 3/dgets a e # e#a ed 32 sim#l2 e+ie,ing the # e+io/s 2ea :s 3/dget and then ma0ing ad'/stments% A mo e ad+an)ed te)hni?/e( ho,e+e ( is the #e )entage of sales method( ,hi)h allo)ates f/nds 3ased on a #e )entage of e"#e)ted e+en/es% T2#i)al #e )entages ange f om a3o/t t,o #e )ent fo hea+2 ind/st ies to as m/)h

as eight #e )ent o mo e fo )ons/me goods and )om#/te s% The ne"t ste# that a sales manage sho/ld ta0e is to o ganise his sales fo )e( a))o ding to the e?/i ements of his o ganisation% In gene al( the hie a )h2 at la ge o ganisations in)l/des a national o inte national sales manage ( egional manage s( dist i)t manage s and finall2 the sales fo )e% Smalle )om#anies ma2 omit the egional and e+en the dist i)t( management le+els% @o,e+e ( some #oints m/st 3e 0e#t in mind ,hile o ganising the sales fo )e( i es#e)ti+e of the si5e of a fi m% Fo e"am#le6 F Sho/ld the fo )e em#hasise # od/)t( geog a#hi) o )/stome s#e)ialisationG F @o, )ent alised ,ill the management 3eG F @o, man2 la2e s of management a e ne)essa 2G The t end d/ ing the 1J!Bs and ea l2 1JJBs ,as to,a d flatte o ganisations( ,hi)h #ossess fe,e le+els of management and de)ent alised de)ision;ma0ing( ,hi)h em#o,e s ,o 0e s to ma0e de)isions ,ithin thei a ea of e"#e tise% 2%2%7 Im#lementing Afte setting the goals( #lanning the o3'e)ti+es( o ganising the ,o 0 fo )e and # e#a ing the ann/al 3/dget( ,hat emains is the im#lementation of all these a)ti+ities% Im#lementation entails a)ti+ities elated to staffing( designing te ito ies and allo)ating sales effo ts% Staffing( the most signifi)ant of those th ee es#onsi3ilities( in)l/des e) /iting( t aining( )om#ensating and moti+ating sales #eo#le% Befo e a sales #e sonnel is hi ed( a manage has to dete mine the n/m3e of +a)an)ies to 3e filled% This is often a))om#lished 32 sending an o3se +e into the field% The o3se +e e)o ds time s#ent tal0ing to )/stome s( t a+elling( attending meetings and doing #a#e ,o 0% The o3se +e then e#o ts the findings to

the sales manage ( ,ho /ses the info mation to d aft a detailed 'o3 des) i#tion% Also infl/en)ing the 'o3 des) i#tion ,ill 3e se+e al fa)to s( )hiefl2 the Role of Sales Manage 79 Basi)s of Sales Management )ha a)te isti)s of the #eo#le on ,hi)h the #e son ,ill 3e )alling% It is +e 2 im#o tant fo the sales #eo#le to 3e a3le to identif2 ,ith the )/stome s and 3e a3le to as)e tain thei tastes% A manage )an ta# the s/ita3le )andidate th o/gh em#lo2ment agen)ies( ad+e tising and holding e) /itment )am#aigns% Candidates a e t2#i)all2 e+al/ated th o/gh #e sonalit2 tests( inte +ie,s( , itten a##li)ations and 3a)0g o/nd )he)0s% Resea )h has sho,n that the t,o most im#o tant #e sonalit2 t aits that sales #eo#le )an #ossess a e em#ath2( ,hi)h hel#s them elate to )/stome s and d i+e( ,hi)h moti+ates them to satisf2 #e sonal needs fo a))om#lishment% Othe fa)to s of im#o tan)e in)l/de mat/ it2( a##ea an)e( )omm/ni)ation s0ills and te)hni)al 0no,ledge elated to the # od/)t o ind/st 2% The #e sonalit2 t aits that )an #/t off the )/stome s a e la)0 of )on+in)ing #o,e ( #oo )omm/ni)ation s0ills( /n,illingness to t a+el and la)0 of ) eati+it2% Afte the e) /itment # o)ess is o+e ( a sales manage sho/ld de)ide ho, his sales team sho/ld 3e t ained and ,hat sho/ld 3e the d/ ation of thei t aining% Most sales t aining em#hasises # od/)t( )om#an2 and ind/st 2 0no,ledge% Onl2 a3o/t 2C #e )ent of the a+e age )om#an2 t aining # og ammes( in fa)t( add ess #e sonal selling te)hni?/es% Be)a/se of the high )ost( man2 fi ms t 2 to ed/)e the amo/nt of t aining% The a+e age )ost of t aining a #e son to sell ind/st ial

# od/)ts( fo e"am#le( )ommonl2 e")eeds Rs%7B(BBB% The t ainees )an # o+e to 3e +e 2 3enefi)ial fo a )om#an2 if the2 a e gi+en effe)ti+e t aining% Fo instan)e( esea )h indi)ates that t aining ed/)es em#lo2ee t/ no+e ( the e32 lo,e ing the effe)ti+e )ost of hi ing ne, ,o 0e s% Good t aining )an also im# o+e )/stome elations( in) ease em#lo2ee mo ale and 3oost sales% Some of the t aining methods that a e )ommonl2 /sed a e( on;the;'o3;t aining( demonst ations( le)t/ es and ole;#la2s% Afte the sales fo )e is esta3lished( a sales manage sho/ld dete mine the a## o# iate sala ies of his team mem3e s% The main )onfli)t that m/st 3e add essed is that 3et,een #e sonal and )om#an2 goals% The manage ,ants to # o+ide s/ffi)ient in)enti+es fo sales#eo#le 3/t also m/st meet the di+ision o de#a tment:s goals( s/)h as )ont olling )osts( 3oosting ma 0et sha e o in) easing )ash flo,% The ideal s2stem moti+ates sales #eo#le sho/ld a)hie+e 3oth #e sonal and )om#an2 goals% Am3itio/s salesmen ha+e an / ge to ea n mone2( ,hi)h dist a)ts them f om the fi m:s o3'e)ti+es% Most a## oa)hes to )om#ensation /tilise a )om3ination of sala 2 and )ommission o sala 2 and 3on/s% The sales de#a tments /se te)hni?/es othe than the finan)ial e,a ds( to ins#i e thei ,o 0e s% Good sales manage s e)ognise that sales #eo#le( 32 nat/ e( ha+e needs othe than the 3asi) #h2siologi)al needs filled 32 mone26 the2 ,ant to 7C feel li0e the2 a e #a t of ,inning team( that thei 'o3s a e se)/ e and that thei effo ts and )ont i3/tions to the o ganisation a e e)ognised% Methods of meeting those needs in)l/de )ontests( +a)ations and othe #e fo man)e;3ased # i5es in addition to self;im# o+ement 3enefits s/)h as t/ition fo )ollege o /ni+e sit2% The othe te)hni?/e that manage s /se to 3 ing o/t the 3est in thei ,o 0e s is the /se of ?/otas% These )an 3e 3ased on the n/m3e of )alls made in a da2( the total n/m3e of )ons/me s that a e added in a 2ea o a month o ho, m/)h e"#enses

,ill 3e #aid fo % All this gi+e the sales ,o 0 fo )e a ,a2 to )om#a e thei a)hie+ements ,ith othe s% A sales manage ( as seen a3o+e has to e) /it( ins#i e and t ain his team to #e fo m ,ell% @e also has to /se his '/dgment to allo)ate the +a io/s te ito ies and es#onsi3ilities to the mem3e s in his team% @o,e+e ( man2 o ganisations( s/)h as eal estate and ins/ an)e )om#anies( do not /se te ito ies% Te ito ies a e geog a#hi) a eas s/)h as )ities( dist i)ts o )o/nt ies assigned to indi+id/al sales#eo#le% The ad+antage of esta3lishing te ito ies is that it im# o+es )o+e age of the ma 0et( ed/)es ,astef/l o+e la# of sales effo ts and allo,s ea)h sales#e son to define #e sonal es#onsi3ilit2 and '/dge indi+id/al s/))ess% It is +e 2 im#o tant fo a sales manage to delegate 3oth ,o 0 and d/ties to his team mem3e s% T2#i)all2( the to# fe, te ito ies # od/)e a dis# o#o tionatel2 high sales +ol/me% This o))/ s 3e)a/se manage s /s/all2 ) eate smalle a eas fo t ainees( medi/m;si5ed te ito ies fo mo e e"#e ien)ed team mem3e s and la ge a eas fo senio selle s% A d a,3a)0 of that st ateg2( ho,e+e ( is that it 3e)omes diffi)/lt to )om#a e #e fo man)e a) oss te ito ies% An alte nate a## oa)h is to di+ide egions 32 e"isting and #otential 3ase% The e a e se+e al )om#/te # og ams that )an 3e /sed 32 the sales manage s to dema 0 the diffe ent te ito ies( ,hi)h )an # o+e +e 2 3enefi)ial fo a)hie+ing thei goals% 2%2%9 Cont olling and E+al/ating Anothe im#o tant f/n)tion of the sales manage afte #lanning and e"e)/ting( is to )ont ol and e+al/ate the # og amme that has 3een im#lemented% $/ ing this stage( the sales manage )om#a es the o iginal goals and o3'e)ti+es ,ith the a)t/al a))om#lishments of the sales fo )e% The #e fo man)e of ea)h indi+id/al is )om#a ed ,ith goals o ?/otas( loo0ing at elements s/)h as e"#enses( sales +ol/me( )/stome satisfa)tion and )ash flo,% A )ommon model /sed to

e+al/ate indi+id/al sales #eo#le )onside s fo/ 0e2 meas/ es6 the n/m3e of sales )alls( the n/m3e of da2s ,o 0ed( total sales in dolla s and the n/m3e of o de s )olle)ted% Role of Sales Manage 7D Basi)s of Sales Management Sales manage has to 3e es#onsi3le to 2ield # ofits% Indeed( sim#le sales fig/ es ma2 not efle)t an a))/ ate image of the #e fo man)e of the o+e all sales fo )e% The manage m/st dig dee#e 32 anal2sing e"#enses( # i)e;)/tting initiati+es and long;te m )ont a)ts ,ith )/stome s that ,ill affe)t f/t/ e in)ome% An in;de#th anal2sis of these and elated infl/en)es ,ill hel# the manage to dete mine t /e #e fo man)e 3ased on # ofits% In o de to set the goals and ma0e st ategies fo the f/t/ e( a sales manage sho/ld also )onside the othe fa)to s that also ha+e an im#a)t on sales% These a e # od/)t line( te ito 2 and the ma 0et t ends% Afte the manage anal25es and e+al/ates the a)hie+ements of the sales fo )e( that info mation is /sed to ma0e )o e)tions to the )/ ent st ateg2 and sales # og amme% In othe ,o ds( the sales manage et/ ns to the initial goal;setting stage% Che)0 2o/ # og ess 1 1% $es) i3e the # o)ess of )ont olling and e+al/ating% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%7 A$MINISTRATI&E ABILITP OF SALES MANAGERS A sales manage is fi st a manage and an administ ato % Management is a distin)t and essential s0ill% Most sales manage s a e # omoted into an e"e)/ti+e an0 d/e to thei talent and s0ills as a sales e# esentati+e% Late ( thei s/))ess de#ends on thei administ ati+e s0ills( ,hi)h ma2 o ma2 not ha+e de+elo#ed d/ ing thei se +i)e as sales e# esentati+e% It is )lea that sales talent does not )o elate ,ith administ ati+e o manage ial s0ills% In the sales field( the most s/))essf/l sales #e son ma2 not 3e a 7E #assa3le sales manage % The fa)to s that ) eate a good sales #e son ma2 )a/se fail/ e as an administ ato % The Sales Manage sho/ld administe his sales de#a tment in an effe)ti+e manne % Sometime he ma2 need to ta0e di#lomati) de)isions ega ding # i)ing of # od/)ts to # omote sales( fo that he m/st #ossess e")ellent administ ati+e )a#a3ilities% Man2 sale #eo#le ha+e st ong and agg essi+e #e sonalities( fo e"am#le% This ma2 ) eate f i)tion ,hile ,o 0ing ,ith othe de#a tments in the o ganisation% Also( detail e#o ts ,hi)h most o ganisations need ma2 3e)ome a # o3lem fo sales manage s% Some ?/alities that a sales manage sho/ld ha+e a e as follo,s6 F A ,illingness to sha e info mation F St /)t/ ed and dis)i#lined in ,o 0 ha3its F An a3ilit2 to ,o 0 ,ell in teams and g o/#s

F S0ill at selling inte nall2 F M/st not 3e egoisti) Most sales manage s m/st ha+e 0no,ledge of sales 3/t that alone is not ade?/ate% The sales manage is es#onsi3le fo )o;o dinating and )ont olling all the a)ti+ities of the de#a tment ,ith the hel# of )om#etent e"e)/ti+es% A sales o ganisation is li0e a #o,e station sending o/t ene g2( ,hi)h is de+oted to the ad+e tising and selling of #a ti)/la lines and the e is t emendo/s loss of ene g2 3et,een the #o,e station and #oints ,he e it ea)hes the )ons/me s% The efo e( the e a ises the g eat ne)essit2 of #lanning o ganising and )ont olling all sales effo ts th o/gh a so/nd sales o ganisation K to # e+ent ,astage in dist i3/tion% Sales manage m/st 3e s0illed in #lanning o ganising( )o;o dinating and )ont olling all sales o#e ations and m/st ass/ e the o#tim/m )ont i3/tion of #e sonal selling effo ts to the o+e all ma 0eting o3'e)ti+es of the )om#an2 2%7%1 The Sales and Ma 0eting Relationshi# Ma 0eting and sales a e +e 2 diffe ent( 3/t ha+e the same goal% Ma 0eting im# o+es the selling en+i onment and #la2s a +e 2 im#o tant ole in sales% If the ma 0eting de#a tment gene ates a #otential )/stome s list( it )an 3e 3enefi)ial fo sales% The ma 0eting de#a tment:s goal is in) ease the n/m3e of inte a)tions 3et,een #otential )/stome s and the sales team /sing # omotional te)hni?/es s/)h Role of Sales Manage 7! Basi)s of Sales Management

as ad+e tising( sales # omotion( #/3li)it2 and #/3li) elations( ) eating ne, sales )hannels o ) eating ne, # od/)ts <ne, # od/)t de+elo#ment=( among othe things% In most la ge )o #o ations( the ma 0eting de#a tment is st /)t/ ed in a simila fashion to the sales de#a tment and the manage s of these teams m/st )oo dinate effo ts in o de to d i+e # ofits and 3/siness s/))ess% Fo e"am#le( an Hin3o/ndH fo)/sed )am#aign see0s to d i+e mo e )/stome s Hth o/gh the doo H gi+ing the sales de#a tment a 3ette )han)e of selling thei # od/)t to the )ons/me % A good ma 0eting # og am ,o/ld add ess an2 #otential do,nsides as ,ell% The Sales de#a tment:s goal ,o/ld 3e to im# o+e the inte a)tion 3et,een the )/stome and the sales fa)ilit2 o me)hanism <e"am#le( ,e3 site= andAo sales#e son% Sales management ,o/ld 3 ea0 do,n the selling # o)ess and then in) ease the effe)ti+eness of the dis) eet # o)esses as ,ell as the inte a)tion 3et,een # o)esses% Fo e"am#le( in man2 o/t;3o/nd sales en+i onments( the t2#i)al # o)ess is o/t 3o/nd )alling( the sales #it)h( handling o3'e)tions( o##o t/nit2 identifi)ation and the )lose% Ea)h ste# of the # o)ess has sales; elated iss/es( s0ills and t aining needs as ,ell as ma 0eting sol/tions to im# o+e ea)h dis) ete ste#( as ,ell as the ,hole # o)ess% One f/ the )ommon )om#li)ation of ma 0eting in+ol+es the ina3ilit2 to meas/ e es/lts fo a g eat deal of ma 0eting initiati+es% In essen)e( man2 ma 0eting and ad+e tising e"e)/ti+es often lose sight of the o3'e)ti+e of salesA e+en/eA# ofit( as the2 fo)/s on esta3lishing a ) eati+eAinno+ati+e # og am( ,itho/t )on)e n fo the to# o 3ottom lines% S/)h is a f/ndamental #itfall of ma 0eting fo ma 0eting:s sa0e% 2%7%2 Sales and Ma 0eting Alignment and Integ ation Anothe 0e2 a ea of )on+e sation that has a isen is the need fo alignment and integ ation 3et,een )o #o ate sales and ma 0eting f/n)tions% A))o ding to a

e#o t f om the Chief Ma 0eting Offi)e <CMO= Co/n)il( onl2 9B #e )ent of )om#anies ha+e fo mal # og ams( s2stems o # o)esses in #la)e to align and integ ation 3et,een the t,o ) iti)al f/n)tions% T aditionall2( these t,o f/n)tions( as efe en)ed a3o+e( ha+e 3een la gel2 segmented and left in siloed a eas of ta)ti)al es#onsi3ilit2% In Glen *ete senIs 3oo0( LThe * ofit Ma"imisation *a ado"S( the )hanges in the )om#etiti+e lands)a#e 3et,een the 1JCBs and toda2 a e so d amati) that the )om#le"it2 of )hoi)e( # i)e and o##o t/nities fo the )/stome fo )ed this seemingl2 sim#le and integ ated elationshi# 3et,een sales and ma 0eting to )hange fo e+e % *ete sen goes on to highlight that sales#eo#le a e s#ending a## o"imatel2 9B #e )ent of thei time # e#a ing )/stome ;fa)ing 7J deli+e a3les ,hile le+e aging less than CB #e )ent of the mate ials ) eated 32 ma 0eting( adding to the #e )e#tion that ma 0eting is o/t of to/)h ,ith the )/stome and sales is esistant to messaging and st ateg2% O ganisations s/)h as The Coalition to Le+e age and O#timise Sales Effe)ti+eness <CLOSE= ha+e eme ged as fa)ilitato s to mend the elationshi# 3et,een sales and ma 0eting% Che)0 2o/ # og ess 2 1% 8 ite a note on the sales and ma 0eting elationshi#% 2% 8hat is sales and ma 0eting alignment and integ ationG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%9 CO;OR$INATION 8IT@ OT@ER ELEMENTS IN MAR.ETING *ROGRAMME

A sales manage has to 3e a good )oo dinato % @e has to )oo dinate his a)ti+ities ,ith all the othe de#a tments( es#e)iall2 ,ith the ma 0eting team% The sales and ma 0eting f/n)tions loo0 ali0e and a e fo)/sed on the )/stome and the ma 0et% The need to ,o 0 togethe is mo e im#o tant in the t,in )/stome ;fa)ing f/n)tions of ma 0eting and sales% Sales and ma 0eting loo0 simila % @o,e+e ( ,hen 2o/ get nea the f/n)tions( 2o/ 3egin to /nde stand the diffe en)es and to a## e)iate the )hallenge of )oo dinating and integ ating them fo im# o+ed o#e ating #e fo man)e and o/tstanding finan)ial #e fo man)e% If ma 0eting and sales do not )oo#e ate( the )om#an2:s st ateg2 ,ill 3e in)onsistent and ,ea0> and e"e)/tion ,ill 3e fla,ed and ineffi)ient% In toda2:s h2#e ;)om#etiti+e ,o ld( the sales and ma 0eting f/n)tions m/st 2o0e togethe at e+e 2 le+elKf om the )o e )ent al )on)e#ts of the st ateg2 to the min/te details of e"e)/tion% Ma 0eting did the thin0ing( managed the 3 and and )ons/me f an)hise in )ons/me goods )om#anies and # o+ided s/##o t to the sales fo )e% Sales did the e"e)/tion in the field and sold to end /se s and dist i3/to s in 3/siness Role of Sales Manage 9B Basi)s of Sales Management ma 0ets and the Ht adeH <,holesale s and etaile s= in )ons/me goods ma 0ets% Ma 0eting ,as )e e3 al( ) eati+e and long;te m o iented and sales ,as a)tiono iented( elationshi#;fo)/sed and sho t te m% Ea lie ( ma 0eting and sales a)ti+ities ,e e t,o se#a ate and sometimes

ad+e sa ial de#a tments% Ma 0eting:s 'o3 ,as to )a#t/ e attention( ) eate desi e( ma0e )onta)t and then #ass the 'o3 on to sales% It ,as sales: 'o3 to )lose the deal% 8hen sales ,as /na3le to )lose the deal( it ,o/ld 3lame ma 0eting fo #oo ?/alit2 leads% Ma 0eting ,o/ld defend itself 32 sa2ing that sales did not follo, th o/gh o did not listen to the )/stome % In ealit2( it is ,hen ma 0eting and sales o+e la# and ,o 0 togethe that )/stome s sta t 3/2ing% B2 )om3ining the e"#e ien)e <,hi)h )omes f om sales= and the message <,hi)h )omes f om ma 0eting= )/stome s a e delighted ,ith thei e"#e ien)e ,ith 2o/ )om#an2% These da2s in most ind/st ies( the e a e a elati+el2 small n/m3e of la ge ma'o a))o/nts( some mid;si5ed ones <the # e+io/s fo)/s of the field sales fo )e= and often a 3/n)h of little ones% C/stome s a e )onta)ted /sing )om#le" o+e la##ing means that in)l/ded glo3al and national a))o/nt teams> field sales in)l/ding # od/)t and ma 0et s#e)ialists as ,ell as te ito ial gene alists> telesales and telema 0eting> se +i)e s#e)ialists> dist i3/to s> deale s> +al/e;added integ ato s( eselle s and #a)0age s> ,holesale s> etaile s> di e)t mail> and e)omme )e% Fo instan)e( * o)te and Gam3le( has mo e than one h/nd ed #eo#le on the g o/nd in Benton+ille( A 0ansas to sell and se +i)e 8al;Ma t% La ge indi+id/al a))o/nts a e no, se#a a3le ma 0et segments and e+en # ofit )ent es s/##o ted 32 thei o,n m/lti;f/n)tional o ganisations% The da2s of eas2 se#a ation of sales and ma 0eting a e gone along ,ith the homogeneo/s( sim#le( mid;si5ed a))o/nt 3ase%

2 *LANNING FOR SELLING EFFORT UNIT 1

$emand Fo e)asting 2 UNIT 2 Ma 0et *otential and Sales Te ito 2 2D E"#e t Committee $ % &ish am Ra'hans( A)ademi)ian Ms% *alla+i Sa'na#,a ( Asst% * ofesso * og amme Coo dinato M % -ess *hili# ./ma Co/ se $esign M % $ee#a0 $al+i Edito s Ms% $ee#ash i .a andi0a Ms% Nidhi .ha e Ms% Megha .adam Blo)0 * e#a ation Team Ms% 12oti Aga ,al Ms% Ma tina A3 aham M % A'in02a $esh#ande Mate ial * od/)tion M % &asant Gad0a i M % S/shant Am3e0a Ms% Rohinee Cha0 al Co#2 ight 4 Indian .no,ledge Co #o ation All ights ese +ed% No #a t of this 3oo0 ma2 3e e# od/)ed o /tili5ed in an2 fo m o 32 an2 means ele)t oni) o me)hani)al( in)l/ding #hoto)o#2ing( e)o ding o 32 an2 info mation sto age o et ie+al s2stem ,itho/t #e mission in , iting fo m the #/3lishe %

S2lla3/s BLOC. 16 BASICS OF SALES MANAGEMENT Unit 16 The Field of Sales Management Unit 26 Role of Sales Manage BLOC. 26 *LANNING FOR SELLING EFFORT Unit 16 $emand Fo e)asting Unit 26 Ma 0et *otential and Sales Te ito 2 BLOC. 76 MAN*O8ER *LANNING Unit 16 Re) /itment and Sele)tion Unit 26 T aining and $e+elo#ment BLOC. 96 CONTROLLING AN$ MANAGING SALES FORCE Unit 16 Cont olling the Selling Effo t Unit 26 Managing Sales Fo )e 1 BLOC. 26 *LANNING FOR SELLING EFFORT Int od/)tion to the Blo)0 This 3lo)0 )o+e s demand and sales fo e)asting and te ito 2 sales management% $emand fo e)asting is the a)ti+it2 of estimating the ?/antit2 of a # od/)t o se +i)e that )ons/me s ,ill #/ )hase% $emand fo e)asting in+ol+es te)hni?/es in)l/ding info mal methods( s/)h as ed/)ated g/esses as ,ell as ?/antitati+e methods s/)h as the /se of histo i)al sales data o )/ ent data f om test ma 0ets% $emand fo e)asting ma2 3e /sed in ma0ing # i)ing de)isions( in assessing f/t/ e )a#a)it2 e?/i ements o in ma0ing de)isions on ,hethe to ente a ne, ma 0et% Sales fo e)asts a e )ommon and essential tools /sed fo 3/siness #lanning( ma 0eting and gene al management de)ision;ma0ing% A sales fo e)ast is a

# o'e)tion of the e"#e)ted )/stome demand fo # od/)ts o se +i)es at a s#e)ifi) )om#an2( fo a s#e)ifi) time ho i5on and ,ith )e tain /nde l2ing ass/m#tions% A s#e)ial te m in st/d2ing sales and ma 0et fo e)asts is the ,o d H#otentialS% This efe s to the highest #ossi3le le+el of #/ )hasing( ,hethe at the )om#an2 le+el o at the ind/st 2 o ma 0et le+el% In # a)ti)e( f/ll #otential is almost ne+e ea)hed( so a)t/al sales a e t2#i)all2 some,hat less than #otential% @en)e( fo e)asts of #otential m/st 3e disting/ished f om fo e)asts that attem#t to # edi)t ealised sales% Sales te ito 2 is that segment of the ma 0et fo ,hi)h a sales#e son is es#onsi3le% An effe)ti+e te ito 2 management #lan hel#s an o ganisation d i+e and ma"imise e+en/e% Be)a/se te ito ies )an 3e so di+e se( it is im#o tant to fo)/s on 0e2 a eas of a te ito 2 to effe)ti+el2 le+e age selling effo ts and eso/ )es% A ,ell tho/ght;o/t #lan )hanges fo)/s f om sing/la a))o/nts to sing/la te ito 2 as if it ,e e an a))o/nt% The # o)ess 3elo, hel#s in ma0ing the de)isions as to ,he e and ho, to engage a te ito 2% Te ito 2 management and #lanning is ) /)ial as )om#le"it2 in) eases and ma 0ets and )lients )hange% The need fo the sales #e son to ha+e a st /)t/ ed a## oa)h ,ith a d2nami) #lan is essential to ens/ e that ta gets a e a)hie+ed% 2 *lanning fo Selling Effo t UNIT 1 $EMAN$ FORECASTING St /)t/ e 1%B O3'e)ti+es 1%1 Int od/)tion

1%2 Meaning of Sales Fo e)ast 1%2%1 Sales fo e)ast +ital to setting of sales o3'e)ti+es 1%7 Limitations of Sales Fo e)asting 1%9 Sales Fo e)asting Methods 1%C $emand Fo e)asting 1%D E)onomi) and Statisti)al Aid of Fo e)asting 1%E Long and Sho t Te m Fo e)asting 1%! Let Us S/m U# 1%B OB1ECTI&ES In this /nit( ,e ha+e dis)/ssed the meaning and )on)e#ts of sales fo e)asting and its methods% Afte ,o 0ing th o/gh this /nit( 2o/ sho/ld 3e a3le to6 F E"#lain the meaning of sales fo e)asting F $is)/ss the limitations of sales fo e)asting F En/me ate the methods of sales fo e)asting F $efine demand fo e)asting F Ela3o ate on the e)onomi) and statisti)al aid of fo e)asting F $es) i3e long te m and sho t te m fo e)asting 7 1%1 INTRO$UCTION Be)a/se the in)ome f om sales )onstit/tes the lifeline of most # i+ate ente # ises( the logi)al sta ting #oint in the #lanning of 3/siness o#e ations is the sales fo e)ast% Cha ting the )o/ se of f/t/ e o#e ations is a es#onsi3ilit2 that ests la gel2 on the sho/lde s of the )hief ma 0eting e"e)/ti+e% @eAshe( in t/ n( elies fo the a)t/al # e#a ation of the fo e)ast # ima il2 on the hel# of the ma 0eting esea )h manage and the sales manage ( the fo me fo the o+e ;all fo e)ast and

the latte fo the g ass oots 3/ild;/# fo e)ast% Altho/gh these ma 0eting and sales #e sonnel # e#a e o #la2 ma'o oles in # e#a ing it( the sales fo e)ast is not /sed solel2 fo #lanning ma 0eting a)ti+ities> the heads of s/)h de#a tments as # od/)tion( #e sonnel and finan)e de#end /#on the sales estimate in fo m/lating #lans fo thei es#e)ti+e de#a tments% The # od/)tion manage /ses this estimate fo setting man/fa)t/ ing s)hed/les and in ma0ing de)isions ega ding the le+el of #lant o#e ations% The #e sonnel manage /ses the sales estimate and the # od/)tion #lan in dete mining the n/m3e s and t2#es of em#lo2ees that ,ill 3e e?/i ed d/ ing the o#e ating #e iod% The finan)ial offi)e s 3ase thei estimates of needed f/nds /#on the # edi)ted flo, of in)ome es/lting f om sales d/ ing the )oming #e iod% Simila l2( othe high e"e)/ti+es( in)l/ding the ) edit manage ( the t affi) manage and the )hief e"e)/ti+e and othe ma 0eting e"e)/ti+es s/)h as the ad+e tising manage ( the # omotion manage and 3 and manage s( /se the sales fo e)ast as a 3asis fo ma0ing #lans fo thei di+isions% 1%2 MEANING OF SALES FORECAST Sales fo e)asting is estimating ,hat a )om#an2:s f/t/ e sales a e li0el2 to 3e 3ased on sales e)o ds as ,ell as ma 0et esea )h% Info mation /sed fo sales fo e)asting m/st 3e ,ell o ganised and ma2 in)l/de info mation on the )om#etition and statisti)s that affe)t the 3/sinesses: )/stome 3ase% Most of the )om#anies /s/all2 ha+e the fo e)asting done in o de to e)ognise an2 #atte n( so that ma"im/m # ofits )an 3e a)hie+ed% Befo e sta ting the a)ti+it2 of fo e)asting fo +a io/s de#a tments li0e sales and ma 0eting( the manage s m/st fi st de)ide the #e iod fo ,hi)h the fo e)asting needs to 3e done% Sho t;te m fo e)asting )o+e s a ma"im/m of th ee months and is often effe)ti+e fo anal25ing 3/dgets and ma 0ets% Inte mediate

sales fo e)asting is 3et,een a #e iod of th ee months and t,o 2ea s and ma2 3e /sed fo s)hed/les( in+ento 2 and # od/)tion% Long te m fo e)asting is fo a $emand Fo e)asting 9 *lanning fo Selling Effo t minim/m of t,o 2ea s and is good fo dealing ,ith g o,th into ne, ma 0ets o ne, # od/)ts% Sales fo e)asting sho/ld 3e an ongoing # o)ess% Also( its es/lts m/st 3e meas/ ed so that the methods /sed in the f/t/ e )an 3e modified a))o dingl2% Sales fo e)asting is anal25ing all #a ts of a 3/siness f om total in+ento 2 to the st engths and ,ea0nesses of sales#eo#le% Manage s m/st thin0 a3o/t )hanges in )/stome sales o othe )hanges that )o/ld affe)t fo e)asting fig/ es% The2 m/st /se thei dis) etion ,hile ma0ing an anal2sis a3o/t the )om#etito s and ,hile #lanning ho, to meet the ta gets% Com#/te soft,a e )omes in hand2 to ma0e the sales fo e)ast% It hel#s a sales manage to 0ee# himself +e 2 ,ell info med a3o/t the +a io/s de#a tments of sales% Sales fo e)asting soft,a e ma2 ha+e a dash3oa d fo mat in ,hi)h )ha ts and statisti)s a e easil2 a))essi3le on one #age% $ash3oa d soft,a e is # efe ed 32 man2 manage s as athe than ha+ing to loo0 th o/gh length2 e#o ts to find info mation( e+e 2thing is )ha ted( g a#hed and set o/t m/)h li0e the dash3oa d of a )a ,ith its info mation eada3le at a glan)e of its ga/ges% Com#anies )an ma0e )hanges in the dash3oa d a))o ding to thei e?/i ements% Fo e"am#le( sales goals )an often 3e #la)ed on the same #age as

the )ha t feat/ e that t a)0s thei # og ess% O de s and # o#osals s/3mitted to )lients )an 3e tallied and o ganised% T/a te l2 e+en/e flo,s ma2 3e dis#la2ed ,ith fo e)asted f/t/ e e+en/e fo instant # og ess stat/s% The fo e)asting soft,a e hel#s the manage s to 0ee# a ta# on the +a io/s a)hie+ements of the sales team mem3e s% 1%2%1 Sales Fo e)ast &ital to Setting of Sales O3'e)ti+es Not onl2 is the sales fo e)ast essential to the #e fo man)e of the #lanning f/n)tion( it is +ital and # elimina 2 to the setting of s#e)ifi) sales o3'e)ti+es% At the same time( sin)e the sales fo e)ast is affe)ted 32 the #lans and goals of the sales de#a tment( it sho/ld 3e stated onl2 in these # o3a3ilisti)( te ms% 8ith s/)h a sales fo e)ast to /se as a 3asis fo #lanning o#e ations( it is #ossi3le to set fo th de#a tmental o3'e)ti+es mo e )lea l2 and s#e)ifi)all2% 8hen the # o3a3le f/t/ e sales +ol/me( 3ased on stati) #lans and goals( is 0no,n( the fo m/lation of #lans fo a)hie+ing this le+el of sales is fa)ilitated% Goals o ?/otas )an 3e mo e eadil2 esta3lished fo +a io/s segments of ma 0eting )hannelsKthe man/fa)t/ e :s sales o ganisation( the ,holesale dist i3/to s and the etail deale s% If( in o de to ea)h the # edi)ted sales +ol/me( additional salesmen( dist i3/to s o deale s a e e?/i ed( thei n/m3e )an no, 3e eadil2 as)e tained% *lans of this so t made ,itho/t the 3enefit of a sales fo e)ast a e of the most ne3/lo/s 0ind and often a e C fo/nd to 3e im# a)ti)a3le% The a+aila3ilit2 of a ,ell;)onst /)ted sales fo e)ast in) eases the )han)es that the #lans made ,ill 3e stated in ealisti) te ms and ,ill ,o 0 ,hen #/t into effe)t% Che)0 2o/ # og ess 1 1% E"#lain the meaning of sales fo e)asting% 2% @o, is sales fo e)asting im#o tant fo sales o3'e)ti+esG

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%7 LIMITATIONS OF SALES FORECASTING The g eatest dange in sales fo e)asting is that management ma2 3e l/lled into 3elie+ing that the sales fo e)ast is a s/3stit/te fo )ommon sense and '/dgment% The e"isten)e of a statisti)all2 dete mined fo e)ast( e+en if seemingl2 #e fe)t f om the methodologi)al stand#oint( is no ass/ an)e of a )om#letel2 a))/ ate #i)t/ e of )onditions as the2 /nfold% Management m/st )onstantl2 fight against the tem#tation to #la)e :3lind faith: in the fo e)astKthe 3est fo e)ast needs to 3e tem#e ed 32 seasoned e"e)/ti+e '/dgment% Aside f om this dange ( the e a e othe ha5a ds in sales fo e)asting% The deg ee of fo e)asting a))/ a)2 tends to +a 2 di e)tl2 ,ith the /nit # i)e of the # od/)t> the highe the /nit # i)e( the la ge the /#ee e o ,hen the fo e)ast is off a gi+en n/m3e of /nits% Fo e)asts a e mo e ha5a do/s( too( in fields ,he e it is #ossi3le fo )ons/me s to #ost#one thei #/ )hases o+e e"tended #e iods( as in the )ase of home a##lian)es% To )om#ensate( at least #a tiall2( fo this so/ )e of e o ( the fo e)aste ideall2 sho/ld ha+e some meas/ e of the :3/2ing intentions: of )ons/me s> and salesmen # o+ide an im#o tant so/ )e fo s/)h info mation% Management sho/ld also a+oid ma0ing the false ass/m#tion that the )om#an2 fo e)ast ne)essa il2 3ea s a di e)t elation to those fo the ind/st 2 o fo the e)onom2 as a ,hole% Cons/me s ma2 al,a2s s,it)h to )om#etiti+e o s/3stit/te # od/)ts o the2 ma2 sim#l2 allo)ate thei in)omes to othe /ses% $emand

Fo e)asting D *lanning fo Selling Effo t Che)0 2o/ # og ess 2 1% E"#lain the limitations of sales fo e)asting% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%9 SALES FORECASTING MET@O$S The sales fo e)ast ma2 3e )onst /)ted 32 /tilising one o a n/m3e of diffe ent methods% No single method is fool# oof% All a e )ha a)te ised 32 )e tain #itfalls into ,hi)h the /n,a 2 anal2st is li0el2 to fall% The fo e)aste sho/ld 3e,a e of :#/tting all his eggs in one 3as0et:% It is 3ette not to el2 solel2 /#on a single method% The ,ise )o/ se and the one 3est fo most fo e)asting sit/ations( is to ta)0le the # o3lem f om a n/m3e of diffe ent angles% If all indi+id/all2 )onst /)ted fo e)asts seem to #oint in the same di e)tion( mo e )onfiden)e )an 3e #la)ed in the e#o t that is e+ent/all2 t ansmitted to the to# management% Rega dless of the s#e)ifi) methods )hosen( it is /s/all2 ad+isa3le to ) oss)he)0 32 /sing 3oth 3/ild;/# and 3 ea0do,n # o)ed/ es% A 3 ea0do,n # o)ed/ e fi st a i+es at an o+e ;all )om#an2 fo e)ast> then the g and total is s/3di+ided fo +a io/s # od/)ts( te ito ies and mino time inte +als% A 3/ild;/# # o)ed/ e sta ts ,ith indi+id/al fo e)asts fo the diffe ent # od/)ts( te ito ies and mino time

inte +als> these a e then )om3ined into a fo e)ast fo the )om#an2 as a ,hole% Altho/gh methods detailed in the follo,ing dis)/ssion a e no mall2 )onside ed as 3eing 3/ild;/# o 3 ea0do,n # o)ed/ es( a)t/all2 most methods )an /tilise eithe # o)ed/ e% As fo e)asting e"#e ien)e is gained( it ma2 de+elo# that one # o)ed/ e )onsistentl2 # o+ides mo e elia3le es/lts% Ne+e theless( a )he)0 fo e)ast( a i+ed at 32 a diffe ent o/te( is a # e)a/tiona 2 meas/ e that no mall2 e#a2s its )ost man2 times o+e % In othe ,o ds( management is 3ette a3le to '/dge the # o3a3le a))/ a)2 of the fo e)ast ,hen its attention is fo)/sed /#on the +a ian)es that a##ea among diffe ent estimates% Sales fo e)asting )an 3e done 32 the follo,ing methods6 E 1/ 2 of E"e)/ti+e O#inion In most a##li)ations of this method( indi+id/al o#inions a3o/t the # o3a3le f/t/ e le+el of sales a)ti+it2 a e soli)ited f om a small n/m3e of high; an0ing e"e)/ti+es% The a)t/al fo e)ast is de i+ed f om a o/gh a+e aging of these o#inions% The e"e)/ti+es )hosen fo the o#inion s/ +e2 sho/ld in)l/de ?/alified e# esentati+es f om the sales( # od/)tion )ont ol( ma 0eting esea )h and finan)ial de#a tments% This g o/# sho/ld not 3e a me e g/essing )ommittee> it sho/ld 3e a #lanning )ommittee% So fa as #ossi3le( ea)h e"e)/ti+e sho/ld 3e e?/i ed to s/##o t his #osition ,ith fa)t/al mate ial% 8hen e"e)/ti+es a e e"#e)ted to s/##l2 e+iden)e in defense of thei o#inions( the2 a e li0el2 to de+ote )onside a3le tho/ght and anal2sis to the assignment% The o3+io/s st ong #oint of this method is that it is a elati+el2 eas2 ,a2 to t/ n o/t a fo e)ast in a sho t time% Then( too( the '/ 2 of e"e)/ti+e o#inion fo e)ast e# esents the #ooling of e"#e ien)e and '/dgment of a n/m3e of s#e)ialised #eo#le% This ma2 3e the onl2 #ossi3le a## oa)h to sales fo e)asting if

the )om#an2 is so 2o/ng that it has not 2et a))/m/lated the e"#e ien)e ne)essa 2 to /se othe methods% This method also ma2 3e /sed ,hen ade?/ate sales and ma 0et statisti)s a e missing o ,hen these fig/ es ha+e not 2et 3een #/t into the fo m ne)essa 2 fo mo e efined fo e)asting% The '/ 2 of e"e)/ti+e o#inion has o3+io/s ,ea0nesses% As the name indi)ates( its findings a e 3ased # ima il2 on s/3'e)ti+e o#inion and fa)t/al e+iden)e to s/##o t the fo e)ast is often s0et)h2% Using this a## oa)h adds to the ,o 0load of highl2 #aid e"e)/ti+es% The time that is 3e s#ent on the #e fo man)e of othe management f/n)tions sho/ld 3e de+oted to the fo e)ast% Mo eo+e ( a fo e)ast made 32 this method is diffi)/lt to 3 ea0 do,n into estimates of # o3a3le sales 32 # od/)ts( 32 time inte +als( 32 ma 0ets( 32 )/stome s and so on% If the sales fo e)ast is to 3e of ma"im/m +al/e fo o#e ating #/ #oses( 3 ea0do,ns of this so t a e needed% *oll of Sales Fo )e O#inion This method( ,hi)h often is delineated as :the g ass oots a## oa)h:( in+ol+es )om3ining indi+id/al fo e)asts made 32 salesmen( 3 an)h and dist i)t manage s( dist i3/to s and deale s and othe segments of the ma 0eting o ganisation% The logi) /nde l2ing this a## oa)h is that fo e)asting es#onsi3ilit2 is assigned to those ,ho m/st late # od/)e the es/lts% The s#e)ialised 0no,ledge of indi+id/als o fi ms in )losest to/)h ,ith ma 0et )onditions is /tilised f/ll2% @o,e+e ( the e a e othe ad+antages inhe ent in the :g ass oots: a## oa)h% If the $emand Fo e)asting ! *lanning fo Selling

Effo t sales fo )e is /sed in de+elo#ing the fo e)ast( the2 sho/ld ha+e f/lle )onfiden)e in an2 ?/otas 3ased /#on it% Be)a/se the sam#le of o#inion is la ge( the es/lts sho/ld ha+e g eate sta3ilit2 and elia3ilit2( than if onl2 e"e)/ti+es: o#inions a e soli)ited% Finall2( a fo e)ast de+elo#ed in this ,a2 is eas2 to 3 ea0 do,n a))o ding to +a io/s ma 0eting /nits s/)h as # od/)ts( te ito ies( )/stome s( salesmen and middlemen% The #oll of sales fo )e o#inion method has a n/m3e of 3asi) ,ea0nesses% *e ha#s the g eatest is that too m/)h emotion ma2 ente into the fo e)ast% Salesmen a e not )/stoma il2 t ained to do sales fo e)asting ,o 0% As )onditions ,a ant( the2 tend to 3e eithe o+e o#timisti) o o+e #essimisti)% Altho/gh a la ge sam#le sho/ld /s/all2 in) ease sta3ilit2 and elia3ilit2( 3e)a/se of the nat/ al o#timism of salesmen( e o s on the high side a e li0el2 to e")eed those on the lo, side% Mo eo+e ( sim#l2 3e)a/se a la ge sam#le is in+ol+ed( a ) /de method s/)h as this( ,ith man2 3asi) ,ea0nesses( does not ne)essa il2 # o+ide es/lts in ,hi)h it is safe to #la)e high )onfiden)e% Salesmen a e enti el2 too nea the t ees to see the fo est> fo instan)e( the2 a e f e?/entl2 /na,a e of 3 oad )hanges ta0ing #la)e in the e)onomi) st /)t/ e and of t ends in 3/siness )onditions o/tside thei o,n te ito ies% It is also t /e that if the estimates a e to 3e /sed in setting ?/otas( some salesmen ma2 deli3e atel2 /nde estimate so that ?/otas )an 3e ea)hed mo e easil2% Finall2( this a## oa)h )alls fo g eat e"#endit/ es of time on the #a t of 3oth e"e)/ti+es and sales #e sonnel% Sometimes this last disad+antage )an 3e o+e )ome to a )e tain e"tent( if dist i3/to s and deale s a e /sed instead of )om#an2 #e sonnel> ho,e+e ( /nless middlemen o#e ate /nde e")l/si+e f an)hises( the2 a e not li0el2 to gi+e thei 3est effo ts to the assignment% *ast Sales

*ast sales a e ,idel2 /sed as a 3asis fo # edi)ting the )oming 2ea :s sales% The fo e)ast is made me el2 32 adding a set #e )entage to last 2ea :s sales o to a mo+ing a+e age of the sales fig/ es fo se+e al #ast 2ea s% Alte nati+el2( as Fe 3e has s/ggested( if it is ass/med that the e ,ill 3e the same #e )entage sales in) ease ne"t 2ea as this 2ea ( the fo e)aste might /tilise a :nai+e;model: # o'e)tion s/)h as6 Last 2ea :s sales This 2ea :s sales Net 2ea :s sales U This 2ea :s salesV This 2ea :s sales a e ine+ita3l2 elated to last 2ea :s% Simila l2( ne"t 2ea :s sales a e elated to this 2ea :s and to those of all the # e)eding 2ea s% * o'e)ting # esent sales le+els is a fai l2 safe method of sales fo e)asting( #a ti)/la l2 fo J )om#anies in mo e o less sta3le o :mat/ e: ind/st ies> it is a e fo a )om#an2:s sales to +a 2 mo e than 1C #e )ent #l/s o min/s f om the # e)eding 2ea :s e"#e ien)e% Be)a/se onl2 a fe, eadil2 o3taina3le fig/ es a e e?/i ed( the anal2st /sing this method is not )onf/sed 32 a mass of statisti)s% Finall2( 3e)a/se this method is sim#le and eas2 to a##l2( the sales # edi)tions a e a i+ed at elati+el2 fast% The g eat limitation of the #ast sales a## oa)h is that #ast sales histo 2 is ass/med as almost the onl2 fa)to infl/en)ing f/t/ e sales% No allo,an)e is made fo sha # and a#id /#s,ings o do,nt/ ns in 3/siness a)ti+it2( no is it /s/al to ma0e )o e)tions fo #oo sales #e fo man)e e"tending o+e # e+io/s #e iods% The a))/ a)2 of the fo e)ast ma2 de#end la gel2 /#on ho, )lose the )om#an2 is to the ma 0et sat/ ation #oint% If the ma 0et is )om#letel2 sat/ ated( it ma2 3e defensi3le to # edi)t sales 32 a##l2ing a )e tain #e )entage fig/ e( ,hi)h is the e?/i+alent of

the ann/al e#la)ement demand% @o,e+e ( the fi m ,hose # od/)t has a)hie+ed f/ll ma 0et sat/ ation is li0el2 to find( sin)e most )om#anies of this t2#e o#e ate in ind/st ies # od/)ing d/ a3les o semi;d/ a3les( that its # os#e)ti+e 3/2e s a e )a#a3le of #ost#oning o a))ele ating thei #/ )hases to a )onside a3le deg ee% F/ the mo e( this method also fails to ta0e )ogni5an)e of in oads 32 )om#etition% Th/s( the #ast sales method is not a elia3le g/ide fo f/t/ e o#e ations in most sit/ations% @o,e+e ( e")e#tions do e"ist( as in the )ase of those #/3li) /tilities ,hose demand +a ies onl2 slightl2 f om 2ea to 2ea and ,hose ates( 3e)a/se of #/3li) eg/lation( )hange +e 2 slo,l2 o+e time% T end and C2)le Anal2sis In t end and )2)le anal2sis( st/d2 is di e)ted to,a d the 3asi) fa)to s /nde l2ing sales fl/)t/ations% B2 statisti)al means( the fo e)aste isolates and )lassifies the fo/ )hief t2#es of +a iationsKlong;te m t ends( )2)li)al )hanges( seasonal +a iations and i eg/la infl/en)es% Then( t end lines fo the +a io/s /nde l2ing fa)to s a e e"t a#olated o e"tended( to a i+e at the sales estimate% This a## oa)h finds its # in)i#al /se ,hen #atte ns of fl/)t/ations a e so ,ell defined that statisti)al anal2sis eadil2 /n)o+e s the elati+e infl/en)e of ea)h ma'o fo )e% Fo )om#anies in most ind/st ies( the st/d2 and # o'e)tion of )2)les and t ends finds # a)ti)al a##li)ation onl2 in the ma0ing of long; ange fo e)asts and #lans% The es/lts o3tained ma2 3e elia3le fo a #e iod of se+e al 2ea s ahead 3/t the )han)es a e g eat that # edi)tions on a 2ea ;to;2ea o month;to;month 3asis ,ill not 3e elia3le% F/ the ( this method is mo e elia3le in ma0ing fo e)asts fo an ind/st 2 than fo indi+id/al fi ms% Onl2 ,he e sales #atte ns a e )lea l2 defined $emand Fo e)asting

1B *lanning fo Selling Effo t is this t2#e of anal2sis /sed s/))essf/ll2 in 3/ilding a sho t;te m fo e)ast% Anothe d a,3a)0 of this a## oa)h is that it is e"t emel2 diffi)/lt fo the t end and )2)le anal2st to )all the t/ ns:% @e # o3a3l2 )an do a good 'o3 of e"#laining ,h2 a t end( on)e it is /nde ,a2( )ontin/es in a )e tain di e)tion 3/t it is # edi)ting the t/ ns that is im#o tant% On thei )o e)t # ognosis de#ends to a la ge e"tent the ma"imisation of sales o##o t/nities ,hen the t end is f om do,n to /# and the minimisation of losses ,hen the t end e+e ses itself% This is most easil2 a))om#lished in fo e)asting long;te m g o,th of a ne, # od/)t( sin)e s/)h g o,th often follo,s the #atte n of an S;sha#ed )/ +e o ogi+e </sed in statisti)s=% Ashle2 8 ight( e)onomist fo the Standa d Oil Com#an2 of Ne, 1e se2( USA( has de+elo#ed a statisti)al de+i)e( 0no,n as 8 ight:s Indi)ato that is /sed in ma0ing )o e)tions fo sho t;te m +a iations in 3/siness )onditions% This de+i)e is 3ased /#on the statisti)al )on)e#t that di+e ges f om the no m tend to )l/ste in a no mal o 3ell;sha#ed( )/ +e% B2 /sing fo t2 indi)ato s of 3/siness )onditions and #lotting them in a f e?/en)2 dist i3/tion( M % 8 ight dete mines the statisti)al # o3a3ilit2 of a )hange in )e tain indi)ato s im#l2ing eithe a gene al )hange in 3/siness )onditions o a sho t;te m indi+id/al +a iation% Com#osite Fo e)asts of Indi+id/al * od/)t Lines This method in+ol+es the )om3ination of inde#endent sales fo e)asts( se)/ ed th o/gh the /se of one o mo e othe a## oa)hes( fo ea)h of a )on)e n:s # od/)t lines% The s#e)ial me it of this method is that the fo e)aste is )om#elled to )onside the f/t/ e of ea)h # od/)t line 3efo e ma0ing his # edi)tion fo the

ente # ise as a ,hole% This is a logi)al a## oa)h fo the m/lti# od/)t line man/fa)t/ e ( #a ti)/la l2 if his # od/)ts a e sold to diffe ent ma 0ets% Fo e"am#le( a # od/)e of s/)h di+e se lines as films and #hotog a#hi) e?/i#ment( )hemi)als( +itamins and s)ientifi) inst /ments soon lea ns that diffe ent a## oa)hes a e e?/i ed to fo e)ast the sales of ea)h line% The o/tloo0 fo one line is not al,a2s o e+en /s/all2( )losel2 elated to the # os#e)ts of othe s% $iffe ent infl/en)es affe)t the f/t/ e of ea)h ma 0et and inde#endent # edi)tions a e mo e )e tain to # od/)e the desi ed a))/ a)2% The main disad+antage of this a## oa)h a##ea s to 3e the )ost and time e?/i ed in ma0ing se+e al fo e)asts% The )om#an2 /sing the method ma2 find that its fo e)asts m/st )o+e diffe ent time inte +als fo ea)h # od/)t% Se+e al fo e)asts( ea)h of diffe ent d/ ation( a e often ne)essa 2 ,hen management ,ishes to )oo dinate sales # edi)tions ,ith the man/fa)t/ ing )2)le fo ea)h line% As a # a)ti)al e"#edient( es#e)iall2 fo the )om#an2 t/ ning o/t h/nd eds o tho/sands of diffe ent items( # od/)ts ,ith simila )ha a)te isti)s a e g o/#ed into 11 a smalle n/m3e of )lassifi)ations <:3lo)0s:= fo #/ #oses of ma0ing the indi+id/al fo e)asts% E+en tho/gh this g eatl2 ed/)es the magnit/de of the tas0( the # o3lem of ma0ing se+e al fo e)asts is still # esent% S/ +e2 of C/stome s: B/2ing *lans The e )o/ld 3e no mo e logi)al method of fo e)asting than as0ing )/stome s a3o/t thei 3/2ing #lans in the f/t/ e #e iod% This method is #a ti)/la l2 a## o# iate fo # od/)e s of ind/st ial goods( ,he e the n/m3e of )/stome s is often limited( the # od/)e no mall2 sells di e)tl2 to his )/stome s and )/stome s a e )on)ent ated geog a#hi)all2% In s/)h instan)es( it is #ossi3le to s/ +e2 a sam#le of )/stome s and # os#e)ts to o3tain estimated e?/i ements fo

the # od/)t d/ ing the #lanning #e iod and to # o'e)t the sam#le es/lts in o de to o3tain a sales fo e)ast% Of )o/ se( this method )an 3e /sed ,ith )ons/me goods too( 3/t the magnit/de of the sam#le s/ +e2 needed might e?/i e e"#endit/ es of time and mone2 that a e o/t of line ,ith the /sef/lness of the es/lts% @o,e+e ( the es/lts of s/)h s/ +e2s sho/ld 3e tem#e ed 32 management:s s#e)ialised 0no,ledge and a))ess to #e tinent info mation gathe ed f om othe so/ )es% It is dange o/s( in othe ,o ds( to /se the es/lts of a s/ +e2 of )/stome s: 3/2ing #lans as the sole 3asis fo a )om#an2:s sales fo e)ast% The main s#e)ifi) o3'e)tion to the s/ +e2 a## oa)h to sales fo e)asting is its ass/m#tions that )/stome s 0no, ,hat the2 a e going to do and( in addition( that 3/2e s: #lans( on)e made( ,ill not )hangeKat least #a t of the time( eithe o 3oth ass/m#tions a e li0el2 to 3e /n,a anted% E+en tho/gh the s/ +e2 of )/stome s: 3/2ing #lans ,o/ld 3e )lassified as an /nso#histi)ated method of fo e)asting( it )an 3e athe so#histi)ated% If it is a t /e s/ +e2 in the ma 0eting esea )h sense and if the sele)tion of es#ondents is made 32 # o3a3ilit2 sam#ling methods( it )an 3e #otentiall2 a))/ ate% @o,e+e ( sin)e it gathe s o#inions athe than meas/ ing a)tion( a )onside a3le amo/nt of non;sam#ling e o ma2 3e # esent% F/ the mo e( in a)t/al # a)ti)e( little o no attention is #aid to the )om#osition of the sam#le and minim/m effo t is de+oted to meas/ ing sam#ling and non;sam#ling e o s% Ind/st 2 Fo e)ast and Sha e;of;The;Ma 0et *e )entage Be)a/se fo e)aste s f e?/entl2 a e mo e a))/ ate in thei # edi)tions fo the ind/st 2 than fo the indi+id/al )om#anies )om# ising it( some fa+o a st/d2 of the o/tloo0 fo the ind/st 2 as the fi st ste#% Ind/st 2 fo e)asts a e made 32 one o mo e of the methods dis)/ssed in this /nit% The se)ond ste# is to estimate the )om#an2:s sha e of the ma 0et 32 a##l2ing a #e )entage 3ased on #ast o e"#e)ted

$emand Fo e)asting 12 *lanning fo Selling Effo t sales #e fo man)e% Ca e m/st 3e e"e )ised and '/dgment and e"#e ien)e ta0en in to )onside ation in de)iding the sha e;of;the;ma 0et #e )entage to 3e a##lied to the ind/st 2 fo e)ast% In dete mining an a## o# iate #e )entage( good /se )an 3e made of t ade asso)iation fig/ es and of inte nal statisti)s #e taining to the sha e of the ma 0et en'o2ed 32 the )om#an2% B/t these histo i)al data m/st 3e )onside ed in elation to the a)ti+ities and ma 0et #ositions of )om#etito s% It is ne)essa 2 to e"amine and e+al/ate an2 t ends that a##ea to #oint to,a d )hanges in the )om#etiti+e st /)t/ e of the ind/st 2% The fo e)aste m/st anal2se the #ossi3le effe)ts of )ontem#lated )hanges in the )om#an2:s # omotional # og amme o its )om#etito s:% @e m/st also di e)t his attention to,a d )om#eting ind/st ies themsel+es% The fo e)aste m/st al,a2s 0ee# in mind that alte ing the #e )entage of the ma 0et the )om#an2 e"#e)ts to )a#t/ e amo/nts( in effe)t( to )hanging the si5e of the sales +ol/me o3'e)ti+e% This is a de)ision of s/)h im#o tan)e that it sho/ld 3e s/3'e)t to a## o+al and e+ie, 32 to# management% * in)i#al /se s of the ind/st 2 fo e)ast and sha e;of;the;ma 0et #e )entage method o#e ate in ind/st ies ,he e t ade asso)iations f/n)tion as )lea ingho/ses fo the assem3l2 and e")hange of # od/)tion and sales statisti)s% Unfo t/natel2( this # a)ti)e is )onfined to elati+el2 fe, ind/st ies% O))asionall2( it is #ossi3le to se)/ e ind/st 2 statisti)s f om go+e nmental so/ )es% In the no mal )o/ se of e+ents( ho,e+e ( go+e nment fig/ es a e not a+aila3le soon eno/gh to 3e /sef/l

fo fo e)asting #/ #oses% F/ the mo e( it is often t /e that go+e nment statisti)s a e not #/3lished in s/ffi)ient detail> fig/ es fo diffe ent # od/)ts a e l/m#ed togethe o 3 ea0do,ns on a geog a#hi)al 3asis o a))o ding to # i)e )lassifi)ations a e not a+aila3le% In the a3sen)e of /sa3le go+e nment o t ade asso)iation fig/ es( the fo e)aste of ne)essit2 /ses estimates of #ast ind/st 2 sales and s/)h estimates a e f e?/entl2 /n elia3le% * od/)t;In;Use Anal2sis In this method of sales fo e)asting( # edi)tions a e 3ased /#on a )ens/s o e)o ds( of n/m3e s of the # od/)t o )losel2 allied # od/)ts( al ead2 in /se% Fo instan)e( one offi)e ma)hine man/fa)t/ e ,hose # od/)t no mall2 is /sed ,ith a )om#lementa 2 offi)e ma)hine e+al/ates ma 0ets and esta3lishes sales estimates 3ased on the n/m3e s of the )om#lementa 2 # od/)t in a)t/al /se% In some )ases( statisti)s of this t2#e a e e")hanged 32 man/fa)t/ e s of )om#lementa 2 3/t non)om#eting # od/)ts( 3/t mo e often( s/)h fig/ es a e diffi)/lt to o3tain% In some lines <fo e"am#le( offi)e ma)hines and )e tain ho/sehold a##lian)es=( # od/)t;in;/se fig/ es a e o3taina3le f om ind/st 2 t ade asso)iations% F om time 17 to time( too( # od/)t;in;/se data #e taining to a limited n/m3e of # od/)ts a e )olle)ted and dist i3/ted 32 go+e nmental so/ )es% Altho/gh the dea th of statisti)s ende s this fo e)asting method ina## o# iate in man2 ind/st ies( it is /sed 32 some fo e)aste s fo # edi)ting e#la)ement demand% 8hen /sed fo this #/ #ose( the im#li)it ass/m#tion is that # esent /se s ,ill fa+o the )om#an2 ,ith thei e#la)ement o de s% The +alidit2 of this ass/m#tion( of )o/ se( de#ends /#on the satisfa)tion of # esent /se s ,ith the # od/)t:s #e fo man)e( the lo2alt2 of /se s to the man/fa)t/ e :s 3 and and the man/fa)t/ e :s )ontin/ed a3ilit2 to me )handise and # i)e the # od/)t )om#etiti+el2%

To ass/ e the a+aila3ilit2 of # od/)t;in;/se statisti)s( a small n/m3e of )om#anies( mainl2 in the home a##lian)e field( e?/i e /ltimate 3/2e s to fill o/t and et/ n ,a ant2 )a ds to the man/fa)t/ e % The sti#/lation is that the # od/)t g/a antee is +oid /nless the ,a ant2 )a d is et/ ned% Most )on)e ns follo,ing this #oli)2 ha+e a high #e )entage of et/ ns% The ,a ant2 )a ds # o+ide the data fo estimating the n/m3e of the # od/)t in /se( 3/t s/)h data still )ontain ina))/ a)ies% It is ne"t to im#ossi3le to 0ee# s)o e on sales at se)ond hand and of # od/)t emo+als f om one a ea to anothe % Mo eo+e ( ates;of;/sage +a 2 ,ith diffe ent 3/2e s( th/s )om#li)ating the tas0 of )al)/lating the ?/antit2 of the # od/)t s) a##ed o ,o n o/t ea)h 2ea % It sho/ld 3e e)ognised that one ass/m#tion /nde l2ing this fo e)asting method is that the f/t/ e ma 0et fo the # od/)t ,ill +a 2 di e)tl2 ,ith the ?/antit2 al ead2 in /se% This stati) ass/m#tion ma2 o ma2 not 3e +alid% It is # o3a3l2 t /e fo # od/)ts sold in ma 0ets that a e almost o f/ll2 sat/ ated% In ma 0eting sit/ations of this t2#e( demand is la gel2 e#la)ement demandAand initial #/ )hases a e of mino im#o tan)e% The ass/m#tion /s/all2 does not hold fo # od/)ts in the #ionee ing o )om#etiti+e stages of ma 0et de+elo#ment% Mo eo+e ( in so;)alled sat/ ated )ons/me ;goods ma 0ets( s/)h as the ho/sehold ef ige ato ma 0et( # od/)t;in;/se data m/st also 3e ad'/sted fo #o#/lation in) eases and fo )hanges in the ate of famil2 fo mation% Co elation Anal2sis Co elation anal2sis is a statisti)al # o)ess and( as /sed in sales fo e)asting( it dete mines and meas/ es the asso)iation 3et,een )om#an2 sales and othe fa)to s% Be)a/se standa d ,o 0s in the field of statisti)s # o+ide tho o/gh t eatments of the te)hni?/es of )o elation anal2sis( the e is no need to /nde ta0e a te)hni)al e"#lanation of the s/3'e)t he e% HB iefl2 stated( the method

$emand Fo e)asting 19 *lanning fo Selling Effo t in+ol+es the fitting of an e?/ation to e"#lain the fl/)t/ations in sales in te ms of elated and # es/ma3l2 )a/sal +a ia3les( s/3stit/ting fo these +a ia3les +al/es )onside ed li0el2 d/ ing the #e iod to 3e fo e)asted and sol+ing fo the +al/e of salesH% In othe ,o ds( the e a e th ee ma'o ste#s in fo e)asting sales 32 /se of )o elation anal2sis te)hni?/es6 F The identifi)ation of fa)to s )a/sall2 elated to )om#an2 sales( F The )onst /)tion of a fo e)ast of t ends in these elated fa)to s and F The de i+ation of the )om#an2 sales fo e)ast f om these fig/ es% $ete mination of the elation of sales to othe fa)to s fa)ilitates sales fo e)asting> fo e"am#le( if sales fl/)t/ations 3ea a )lose elation to in)ome( fo e)asts of in)ome 32 go+e nment o # i+ate e)onomists ma2 3e /sed as a 3asis fo fo e)asting sales% A##li)ation of the te)hni?/es of sim#le linea )o elation is not +e 2 )om#li)ated% Fo the no+i)e( ho,e+e ( the ,o 0ing of # o3lems e?/i ing the /se of te)hni?/es of m/lti#le and #a tial )o elation in+ol+es man2 #e #le"ing diffi)/lties% The te)hni?/es of )o elation anal2sis ha+e 3een highl2 de+elo#ed> if the2 a e to 3e /sed fo fo e)asting sales( the se +i)es of a )om#etent statisti)ian sho/ld 3e etained% In the not too distant #ast( the time e?/i ed fo sol+ing )om#le" # o3lems in )o elation anal2sis limited the a##li)ation of this method fo sales fo e)asting #/ #oses%

B/t the #e fe)tion of ele)t oni) data # o)essing ma)hines and the de+elo#ment of im# o+ed s2stems of # og amming s/)h ma)hines ha+e made it #ossi3le to ,o 0 e"t emel2 )om#li)ated )o elation # o3lems ?/i)0l2 and a))/ atel2% Fo e"am#le( a man/fa)t/ e of a/tomo3ile t2 es might ma0e good /se of )o elation anal2sis to fo e)ast salesK)om#an2 sales might 3e )om#a ed ,ith an2 of a n/m3e of othe e)onomi) fa)to s to dete mine ,hethe a /sef/l elationshi# e"ists% One t2 e man/fa)t/ e ?/i)0l2 dis)o+e ed that a #ositi+e )o elation e"isted 3et,een g oss national # od/)t and its o,n sales% @o,e+e ( the )o elation ,as too lo, to 3e of +al/e in fo e)asting )om#an2 sales% The same ,as fo/nd to 3e t /e of #e sonal dis#osa3le in)ome and of etail sales% The st aight line is the es/lt of mathemati)al )om#/tation of the )o elation 3et,een the t,o fa)to s% If the )o elation had 3een #e fe)t( all the dots ,o/ld ha+e fallen on the line( 3/t a)t/all2( the2 a e s)atte ed ,idel2 a o/nd the line% The elation 3et,een a/tomo3ile t2 e sales and the sales of ne, a/tomo3iles ,as also meas/ ed and it ,as fo/nd that a m/)h highe )o elation e"isted% 1C If high )oeffi)ients of )o elation e"ist 3et,een )om#an2 sales and )e tain othe se ies( the fo e)asting # o3lem ma2 3e sim#lified( es#e)iall2 if elated se ies :lead: )om#an2 sales% The # o3a3le )o/ se of sales ma2 then 3e )ha ted on ,hat a##ea s to 3e a elia3le 3asis and the fo e)aste :s attention )an 3e )on)ent ated on fa)to s that might )a/se de+iations f om the indi)ated mo+ement% @o,e+e ( it is still ne)essa 2 to e"amine othe )i )/mstan)es that might /#set #ast elationshi#s /#on ,hi)h the )o elations a e 3ased% A fo e)ast made 32 )o elation anal2sis is fo/nded on the ass/m#tion that elations the )o elated fa)to s ha+e 3o ne to ea)h othe in the #ast ,ill also hold fo the f/t/ e% To ha+e a lead;lag asso)iation in ,hi)h de+iations eg/la l2 o))/ in the elated fa)to s # io to a )hange in

)om#an2 sales is an almost ideal sit/ation% Unfo t/natel2( this ideal is a el2 attained( e")e#t o+e elati+el2 sho t #e iods% Altho/gh lead;lag elationshi#s a e )ommon( asso)iations 3et,een the lead fa)to s and sales in ,hi)h the inte +ening time inte +als emain sta3le a e most /n)ommon% These #e iods not onl2 a e s/3'e)t to )ont a)tions o e"#ansions ,itho/t ,a ning 3/t the2 also e"hi3it g eat +a iations d/ ing diffe ent #hases of the 3/siness )2)le% If the fo e)aste dis)o+e s a )lose asso)iation 3et,een )om#an2 sales and some elia3le 3a omete ( his estimates ,ill 3e im# o+ed 32 the # edi)tions of # o3a3le )hanges in the 3a omete made 32 e"#e t anal2sts% @o,e+e ( the g eatest dange in /sing the )o elation anal2sis method is that the fo e)aste ma2 el2 too hea+il2 /#on statisti)al )om#/tations% In fa)t( the highe the )o elation( the mo e dange o/s it is to /se fo e)asts de+elo#ed 32 )o elation% The fo e)aste is tem#ted to a3andon inde#endent a## aisals of f/t/ e e+ents in fa+o of the statisti)all2 de+elo#ed fo e)ast% *e ha#s it is onl2 nat/ al to #la)e 3lind faith in a method that seems infalli3le> 3/t it is ,ise to )he)0 :too good: es/lts ,ith fo e)asts a i+ed at 32 othe methods% E)onomet i) Model B/ilding E)onomet i) model 3/ilding seems to hold )onside a3le # omise as a method of fo e)asting fo fi ms ma 0eting )ons/me d/ a3les% The a## oa)h /ses mathemati)al models in the fo m of e?/ations to e# esent a set of elations 3et,een diffe ent demand;dete mining /n)ont olla3le and sales% These models a e /sed fo fo e)asting% Co elation anal2ses <# e+io/sl2 des) i3ed= e# esent +e 2 sim#le models( 3/t man2 mo e )om#le" models ma2 also 3e /sed /nde )e tain )i )/mstan)es% B oadl2 defined( an e)onomet i) model is nothing mo e than a sim#lified a3st a)tion of a eal e)onomi) sit/ation( e"# essed in e?/ation fo m and em#lo2ed as a # edi)tion s2stem that ,ill 2ield n/me i)al es/lts%

$emand Fo e)asting 1D *lanning fo Selling Effo t The e)onomet i) model;3/ilding a## oa)h seems a nea ;ideal ,a2 to fo e)ast sales% Not onl2 does it ta0e into a))o/nt the inte a)tion of +a io/s /n)ont olla3le that 3ea logi)al and meas/ a3le elationshi#s to sales( it also /ses )o elation anal2sis te)hni?/es to ?/antif2 these elationshi#s% To date( +e 2 little /se has;3een made of s/)h models in fo e)asting the sales of indi+id/al )om#anies( 3/t n/me o/s effo ts ha+e 3een made to /se them fo fo e)asting ind/st 2 sales% This is 3e)a/se the /n)ont olla3le affe)ting a s#e)ifi) )om#an2:s sales a e mo e n/me o/s and mo e diffi)/lt to meas/ e than those dete mining the sales of a ,hole ind/st 2% This s/ggests that it ,o/ld 3e easona3le to /se an e)onomet i) model to fo e)ast ind/st 2 sales and then to a##l2 some estimate of the fi m:s sha e;of;the;ma 0et #e )entage to the ind/st 2 fo e)ast to a i+e at the )om#an2:s sales fo e)ast * o3a3l2 the main fa)to 3lo)0ing ,ides# ead ado#tion of the e)onomet i) model;3/ilding a## oa)h to sales fo e)asting is that it e?/i es mo e )om#lete info mation on a )om#an2:s ma 0eting sit/ation than do less so#histi)ated a## oa)hes% Che)0 2o/ # og ess 7 1% E"#lain 1/ 2 of e"e)/ti+e o#inion and t end and )2)le anal2sis% 2% E"#lain #oll of sales fo )e o#inion and #ast sales% 7% $efine t end and )2)le anal2sis and s/ +e2 of )/stome 3/2ing #lans% 9% E"#lain ind/st 2 fo e)ast and sha e;of;the ma 0et #e )entage( E)onomet i)s

model 3/ilding and )o elation anal2sis% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1E 1%C $EMAN$ FORECASTING $emand fo e)asting is the a)ti+it2 of estimating the ?/antit2 of a # od/)t o se +i)e that )ons/me s ,ill #/ )hase% $emand fo e)asting in+ol+es te)hni?/es in)l/ding 3oth info mal methods( s/)h as ed/)ated g/esses and ?/antitati+e methods( s/)h as the /se of histo i)al sales data o )/ ent data f om test ma 0ets% $emand fo e)asting ma2 3e /sed in ma0ing # i)ing de)isions( in assessing f/t/ e )a#a)it2 e?/i ements o in ma0ing de)isions on ,hethe to ente a ne, ma 0et% */ #ose of $emand Fo e)asting */ #ose of Sho t; te m Fo e)asting F S)hed/ling of # od/)tion F In+ento 2 management F * i)e st ateg2 F Finan)ial e?/i ements */ #ose of Long; te m fo e)asting F *lanning a ne, # o'e)t F Finan)ial e?/i ements F A anging man#o,e Ste#s in demand fo e)asting6

F Setting the o3'e)ti+e F Sele)tion and )lassifi)ation of goods F Sele)tion of method F Inte # eting the es/lts The time ho i5on of the fo e)ast is )lassified as follo,s6 $es) i#tion Fo e)ast @o i5on Sho t; ange Medi/m; ange Long; ange $/ ation Us/all2 less than 7 months( ma"im/m of 1 2ea 7 months to 7 2ea s Mo e than 7 2ea s A##li)a3ilit2 1o3 s)hed/ling( ,o 0e assignments Sales and # od/)tion #lanning( 3/dgeting Ne, # od/)t de+elo#ment( fa)ilities #lanning $emand Fo e)asting 1! *lanning

fo Selling Effo t Che)0 2o/ # og ess 9 1% E"#lain demand fo e)asting% 2% 8hat is the #/ #ose of demand fo e)astingG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%D ECONOMIC AN$ STATISTICAL AI$ OF FORECASTING $emand fo e)asting /sing T/alitati+e and T/antitati+e methods Afte gathe ing data f om the # ima 2 and se)onda 2 so/ )es( the anal2sts then attem#t to fo e)ast the demand le+els in the f/t/ e% The tools that a e a+aila3le fo fo e)asting )an 3e di+ided into th ee 3 oad )atego ies( ,hi)h a e e"#lained in detail 3elo,6 T/alitati+e Methods These methods el2 on e"#e ts ,ho t 2 to ?/antif2 the le+el of demand f om the a+aila3le ?/alitati+e data% The t,o most ,idel2 follo,ed methods a e6 F 1/ 2 of e"e)/tion o#inion method6 O#inions of a g o/# of e"#e ts is )alled fo and these a e then )om3ined to a i+e at the estimated demand% F $el#hi Method6 In this method( a g o/# of e"#e ts is sent ?/estionnai es th o/gh mail% The es#onses e)ei+ed a e s/mma ised ,itho/t dis)losing the identities% F/ the mails a e sent fo )la ifi)ation in )ases of e"t eme +ie,s% The # o)ess is e#eated till the g o/# ea)hes to a easona3le ag eement%

T/antitati+e Methods These methods fo e)ast demand le+els 3ased on anal2sis of histo i)al time se ies% The im#o tant methods in this )atego 2 a e6 1J T end * o'e)tion Methods These methods in+ol+e dete mining the t end of )ons/m#tion 3ased on #ast )ons/m#tion and # o'e)t f/t/ e )ons/m#tion 32 e"t a#olating this t end% Some mathemati)al e?/ations )an hel# 2o/ to fo e)ast method% G a#hi)all2 if 2o/ #lot a g a#h of #ast fe, 2ea s sale( one )an see e"tend the t end to # edi)t ne"t 2ea Is sale% Fig 1%16 G a#hi)al Sales Fo e)ast Mo+ing A+e age Method A))o ding to this method( the fo e)ast fo the ne"t #e iod e# esents a sim#le o ,eighted a ithmeti) a+e age of the last fe, o3se +ations% T2#es of fo e)asting <E)onomi)= Fo e)asting the GN* and its elements *e ha#s the fo e)asts most familia to the #/3li) a e those of g oss national # od/)t and its elements% G oss national # od/)t o GN* is the total +al/e of the goods and se +i)es # od/)ed in a nation% It is( the efo e( a )on+enient and )om# ehensi+e meas/ e fo assessing )hanges in gene al e)onomi) ,elfa e% A fo e)ast of the GN* also # o+ides a /sef/l f ame,o 0 fo mo e detailed fo e)asts of s#e)ifi) ind/st ies% Almost all de+elo#ed nations maintain sets of national in)ome a))o/nts and ma0e fo e)asts as ,ell% The GN* )an 3e ega ded as 3eing )om#osed of th ee ma'o )om#onents6 s#ending 32 go+e nment( # i+ate in+estment s#ending and s#ending 32 )ons/me% Net e"#o ts <that is( e"#o ts min/s im#o ts= a e also )o/nted in the GN* 3/t thei

magnit/de( ,hi)h ma2 3e #ositi+e o negati+e( is /s/all2 small% $emand Fo e)asting 2B *lanning fo Selling Effo t Go+e nment s#ending is /s/all2 the easiest #a t of the GN* to fo e)ast% Go+e nment e"#endit/ es )an 3e dete mined ,ith a fai deg ee of a))/ a)2 fo ,ell o+e a 2ea in ad+an)e 32 st/d2ing e"isting 3/dgets and a## o# iations( modified to ta0e a))o/nt of ne, #oliti)al o e)onomi) de+elo#ments% Most s/)h ad'/stments a e elati+el2 mino fo an2 fo e)ast that /ns onl2 a 2ea o t,o into the f/t/ e> ne, go+e nment # og ams /s/all2 ha+e onl2 a small effe)t on e"#endit/ es in the sho t /n% An o3+io/s e")e#tion to this is a ma'o )hange in the milita 2 sit/ation( ,hi)h )an d asti)all2 alte s#ending #lans% It is im#o tant to note that go+e nment s#ending( as )o/nted in the GN*( is not the same as total 3/dgeted e"#endit/ es% S#ending gets into the GN* onl2 ,hen mone2 is #aid fo goods( milita 2 e?/i#ment( 3/ildings and so on o se +i)es( ,hi)h # in)i#all2 means the ,ages and sala ies of go+e nment em#lo2ees% These 0inds of e"#endit/ es a))o/nt fo onl2 #a t of the go+e nment 3/dget> the emainde e# esents mone2 t ansfe ed to 3ondholde ( othe # i+ate )iti5ens <#a ti)/la l2 #eo#le e)ei+ing #ensions= and state and lo)al go+e nments% These f/nds affe)t the GN* onl2 ,hen the2 a e finall2 s#ent 32 the e)i#ients% * i+ate in+estment #oses fa mo e diffi)/lt fo e)asting # o3lems 3e)a/se it efle)ts man2 tho/sands of indi+id/al and )o #o ate de)isions that a e not e)o ded #/3li)l2 <as go+e nment 3/dgets a e= and that )an 3e and often a e(

)hanged +e 2 s/3stantiall2% * i+ate in+estment is the most e ati) of the ma'o )atego ies of the GN*Kthe most s/3'e)t to L3oom and 3/stS )2)les% A good fo e)ast of in+estment s#ending is the efo e essential to an a))/ ate a## aisal of the o+e all e)onomi) sit/ation% Ca#ital in+estment 32 3/siness <s#ending fo ne, #lants and e?/i#ment= is #a ti)/la l2 im#o tant% The in)omes gene ated in the # o)ess of man/fa)t/ ing ne, e?/i#ment and 3/ilding ne, #lants #la2 a ma'o ole in in) easing )ons/me s#ending d/ ing #e iods of e"#ansion% @o,e+e ( ,hen in+estment sl/m#s( gene all2 em#lo2ment and in)omes also s/ffe ( slo,ing the enti e e)onom2% B/siness in+estment has th/s 3een st/died ,ith g eat )a e and a ,ide +a iet2 of methods to g/ide fo e)ast ha+e 3een de+elo#ed( in)l/ding e)onomet i) models( s/ +e2s of 3/siness in+estment #lans( eg/la e#o ts on )ommitments fo in+estment and f/ndamental st/dies of the )ondition of the nationIs sto)0 of )a#ital goods B/siness also in+ests in in+ento 2( i%e% goods in the # o)ess of # od/)tion and finished goods not 2et sold to the final )ons/me % Most of the time( in+ento ies in) ease o/ghl2 in line ,ith the t end of sales% If sales fall sho t of e"#e)tations( ho,e+e ( in+ento ies tend to 3e)ome e")essi+e% B/siness then 21 mo+es to ed/)e sto)0s 32 )/tting 3a)0 # od/)tion% S/)h )/t3a)0s )an agg a+ate e)onomi) e)essions> as # od/)tion is ed/)ed 3e)a/se of disa##ointing sales( in)omes a e the e32 ed/)ed and sales fall f/ the > in+ento ies m/st 3e )/t e+en mo e and so on in a do,n,a d s#i al% Conse?/entl2( )o e)t fo e)asts of in+ento 2 in+estment a e 3oth essential to good e)onomi) fo e)asting and also #a ti)/la l2 diffi)/lt% S/ +e2s of 3/siness #lans to 3/ild o ed/)e in+ento 2 ha+e 3een hel#f/l> e)onomet i) methods ha+e also 3een a##lied> 3/t in+ento 2 in+estment emains

one of the ,ea0 lin0s in the fo e)asting # o)ess% Ne, home )onst /)tion a))o/nts fo a elati+el2 small sha e of the GN*( 3/t it is im#o tant to the fo e)aste 3e)a/se home )onst /)tion is a elati+el2 +olatile ind/st 2% @ome3/ilding a)ti+it2 es#onds ?/i)0l2 to )hanges in the a+aila3ilit2 of mo tgage mone2 f om the # in)i#al mo tgage lending instit/tions and th/s fo e)ast follo, )losel2 the flo, of sa+ings to these instit/tions and also the le+el of )ommitments that ha+e 3een made to finan)e f/t/ e )onst /)tion% Info mation on the n/m3e of 3/ilding #e mits iss/ed is also hel#f/l( as a e statisti)s on the +ol/me of ne, )onst /)tion )ont a)ts% E)onomists /sed to 3elie+e that fo e)asting )ons/me s#ending ,as sim#le> as a /le of th/m3( )ons/me )o/ld 3e )o/nted on to s#end J9RJC #e )ent of thei )/ ent in)ome and sa+e the est% Th/s( an anal2st )o/ld )al)/late the amo/nt of in)ome gene ated 32 go+e nment s#ending( # i+ate in+estment and #ast )ons/me s#ending( ad'/st fo ta" #a2ments and a i+e at a good estimate of )ons/me s#ending% This method still ,o 0s ,ell in dete mining the a+e age ate of s#ending o+e an e"tended #e iod% B/t in i)h )o/nt ies )ons/me as a g o/# a e ?/ite f ee to +a 2 thei s#ending #atte ns in the sho t /n> the2 ma2 at an2 #a ti)/la time s#end mo e than /s/al 3e)a/se the2 anti)i#ate sho tages o 3e)a/se the2 3elie+e that thei in)omes ,ill ise f/ the > o the2 ma2 )/t 3a)0 thei s#ending if the2 fea that a e)ession is a3o/t to de+elo#% S/)h +a iations f om no mal s#ending #atte ns ha+e thei main effe)t on d/ a3le goods s/)h as a/tomo3iles and ho/sehold a##lian)es> s#ending is fa mo e sta3le fo nond/ a3les <food( )lothing and the li0e= and fo se +i)es% Be)a/se )ons/me a))o/nt fo s/)h a la ge # o#o tion of all e)onomi) a)ti+it2( a shift of '/st 1 o 2 #e )ent 3et,een s#ending and sa+ing )an ma0e the diffe en)e 3et,een a#id g o,th o e)ession fo the enti e e)onom2% E)onomists

no, /se s/ +e2s of )ons/me attit/des in attem#ting to ead the mood of the #/3li)> s/ +e2s of intentions to 3/2 d/ a3le goods ha+e also 3een hel#f/l% $emand Fo e)asting 22 *lanning fo Selling Effo t Fo e)asting fo an ind/st 2 o fi m Gene al e)onomi) )onditions set the tone fo all #a ts of the e)onom2% Good fo e)asting fo an ind/st 2 o fi m 3egins( the efo e( ,ith a good anal2sis of the o+e all e)onom2% 8ithin this f ame,o 0( the anal2st m/st then ta0e a))o/nt of the #a ti)/la fa)to that a e most im#o tant to his o,n ind/st 2% In some )ases( the sales of an ind/st 2 ma2 )o elate fai l2 di e)tl2 ,ith one o mo e of the elements of the national in)ome and # od/)t a))o/nts( l/m3e sales ,ith home )onst /)tion( fo e"am#le o sales of nond/ a3le )ons/me goods ,ith )ons/me in)ome and total )ons/me s#ending% Fo e)asting fo ind/st ies that # od/)e 3asi) mate ials /s/all2 e?/i es a se ies of # o'e)tions fo s#e)ifi) ma 0ets% A steel fo e)ast might 3e 3ased on the o/tloo0 fo s/)h ma'o steel ma 0ets as a/tomo3iles( )onst /)tion and metal )ontaine % The 3asi) fo e)ast ,o/ld then 3e ad'/sted fo e"#e)ted shifts in e"#o ts and im#o ts of steel and fo )hanges in in+ento ies of steel o steel;/sing # od/)ts% Fo e)asting is most diffi)/lt fo )om#anies that # od/)e d/ a3le goods s/)h as a/tomo3iles( ind/st ial e?/i#ment and a##lian)es and fo )om#anies that s/##l2 the 3asi) mate ials fo these ind/st ies% This is 3e)a/se sales of s/)h goods a e s/3'e)t to e"t eme +a iation% Conse?/entl2( the d/ a3le goods ind/st ies in

gene al and a/tomo3ile )om#anies in #a ti)/la ha+e de+elo#ed es#e)iall2 )om#le" and so#histi)ated fo e)asting te)hni?/es% In addition to )a ef/l anal2sis of in)ome t ends <3ased on a gene al e)onomi) fo e)ast=( a/tomo3ile )om#anies( ,hi)h a e #a ti)/la l2 sensiti+e to )om#etition f om im#o ts( s/##o t a n/m3e of st/dies of )ons/me attit/des and s/ +e2s of intentions to #/ )hase a/tomo3iles% Fo e)asting fo an indi+id/al fi m o3+io/sl2 3egins ,ith a fo e)ast fo the ind/st 2 o ind/st ies in ,hi)h it is in+ol+ed% Be2ond this( the anal2st m/st dete mine the deg ee to ,hi)h the )om#an2Is sha e of ea)h ma 0et ma2 +a 2 d/ ing the fo e)ast #e iod% S/)h +a iations )an es/lt f om the int od/)tion of a ne, # od/)t( the im# o+ement of an e"isting # od/)t( the o#ening( )losing o e"#ansion of #lants( the a)ti+ities of domesti) o fo eign )om#etition( a )hange in sales effo t o a +a iet2 of othe fa)to% Info mation e?/i ed to ma0e s/)h assessments ma2 )ome in #a t f om the )om#an2Is o,n in+estment and ma 0eting #lans% Info mation on the a)ti+it2 and sales # os#e)ts of )om#etition is f e?/entl2 )olle)ted f om the fi mIs o,n salesmen% An in) easing n/m3e of )om#anies no, em#lo2 so#histi)ated ma 0et esea )h te)hni?/es to dete mine the # o3a3le ea)tion of thei )/stome to ne, # od/)ts% 27 Che)0 2o/ # og ess C 1% E"#lain the ?/antitati+e methods of fo e)asting% 2% $efine fo e)asting fo an ind/st 2 o fi m% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

1%E LONG AN$ S@ORT TERM FORECASTING In e)ent 2ea s( in) easing effo t has 3een de+oted to long; ange fo e)asting fo #e iods e"tending fi+e( 1B o mo e 2ea s #ast the no mal Lsho tte mS fo e)ast #e iod of one o t,o 2ea% B/siness has )ome to e)ognise the /sef/lness of s/)h fo e)asts in de+elo#ing #lans fo f/t/ e e"#ansion and finan)ing% Long; ange fo e)asts /s/all2 a e 3ased on the ass/m#tion that a)ti+it2 to,a d the end of the #e iod ,ill efle)t no mal Lf/llS em#lo2ment% Gi+en this ass/m#tion( the o+e all ate of g o,th de#ends on t,o # in)i#al fa)to6 the n/m3e of #eo#le in the la3o/ fo )e and the ate at ,hi)h # od/)ti+it2 <o/t#/t #e ,o 0e = in) eases% The n/m3e of #eo#le of ,o 0ing age is 0no,n( 3a ing some nat/ al disaste <and e")l/ding immig ation=( fa into the f/t/ e> the2 ha+e al ead2 3een 3o n% Fo e)asts /s/all2 ass/me that # od/)ti+it2 ,ill )ontin/e to g o, at the t2#i)al ates of e)ent de)ades% E"#e)ted te)hnologi)al de+elo#ments( ho,e+e ( ma2 alte the # o'e)ted ate of )hange% The )om3ination of )hanges in the la3o/ fo )e and # od/)ti+it2 # od/)es an estimate of the total g o,th ate fo the e)onom2% A meas/ e of total e)onomi) a)ti+it2 a i+ed at 32 s/)h methods as these se +es( in effe)t( as a )ont ol total fo ma0ing long; ange fo e)asts of the )onstit/ent elements of the e)onom2% If estimates fo s#ending 32 )ons/me( go+e nment and 3/siness add /# to mo e than the total of goods and se +i)es that )an easona3l2 3e e"#e)ted( then the # o'e)tion fo one o mo e of these elements m/st 3e ed/)ed% If the s/m of the # o'e)ted #a ts is less than the # o3a3le total( the anal2st is li0el2 to ass/me a shift in e)onomi) #oli)2 that ,ill mo+e the $emand Fo e)asting

29 *lanning fo Selling Effo t e)onom2 /# to f/ll em#lo2ment 32 the end of the fo e)ast #e iod and ad'/st his +a io/s # o'e)tions /# to the a## o# iate total% Che)0 2o/ # og ess D 1% E"#lain long and sho t te m fo e)asting% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%! LET US SUM U* In this /nit( ,e6 F E"#lained the meaning of sales fo e)asting F $is)/ssed the limitations of sales fo e)asting F En/me ated the methods of sales fo e)asting F $efined demand fo e)asting F Ela3o ated on the e)onomi) and statisti)al aid of fo e)asting F $es) i3ed long te m and sho t te m fo e)asting 2C Che)0 Po/ * og ess6 *ossi3le Ans,e s Che)0 2o/ # og ess 1 Ans,e s6 See se)tion 1%2

Che)0 2o/ # og ess 2 Ans,e s6 See se)tion 1%7 Che)0 2o/ # og ess 7 Ans,e s6 See se)tion 1%9 Che)0 2o/ # og ess 9 Ans,e s6 See se)tion 1%C Che)0 2o/ # og ess C Ans,e s6 See se)tion 1%D Che)0 2o/ # og ess D Ans,e s6 See se)tion 1%E $emand Fo e)asting 2D *lanning fo Selling Effo t UNIT 2 MAR.ET *OTENTIAL AN$ SALES TERRITORP St /)t/ e 2%B O3'e)ti+es 2%1 Int od/)tion 2%2 A ea Ma 0et *otential 2%7 The Con)e#t of Ma 0et *otential 2%7%1 Estimating ma 0et #otential )he)0;list 2%9 Estimating Ind/st 2 Sales and Ma 0et Sha e 2%C Sales Te ito 2

2%C%1 Setting /# a sales te ito 2 2%C%2 Segment the te ito 2 2%C%7 Le+e aging a+aila3le eso/ )es 2%C%9 Te ito 2 sales #lanning 2%D Ro/ting and S)hed/ling of Sales *e sonnel 2%E Let Us S/m U# 2%B OB1ECTI&ES In this /nit( ,e ha+e dis)/ssed ma 0et #otential( estimating sale( sales te ito 2 #lanning( o/ting and s)hed/ling% Afte ,o 0ing th o/gh this /nit( 2o/ sho/ld 3e a3le to6 F E"#lain a ea ma 0et #otential F $is)/ss the methods of estimating ma 0et #otential F O/tline the method of estimating ind/st 2 sales and ma 0et sha e F $elineate the # o)ess of esta3lishing sales te ito 2 F Ela3o ate on the im#o tan)e of o/ting and s)hed/ling of sales #e sonnel 2E 2%1 INTRO$UCTION The fa)e of an2 o ganisation is the sales fo )e% Com#anies s#end a )onside a3le amo/nt of time and mone2 on sales fo )e athe than on an2 othe # omotional a)ti+it2% @o,e+e ( sales fo )e is e"#ensi+e and )om#anies a e loo0ing fo ,a d to managing them in an effi)ient and effe)ti+e manne % The intent of Sales Fo )e *lanning is to # o+ide a )olle)ti+e s2stem( ,hi)h # o+ides an insight into +a io/s data so/ )es of the sales% This ena3les manage s of +a io/s le+els f om $i e)to s to ASMs to 3e info med of the )/ ent leadsI stat/s% 2%2 AREA MAR.ET *OTENTIAL Com#anies fa)e the # o3lem of sele)ting the 3est te ito ies and allo)ating

thei ma 0eting 3/dget o#timall2 among the 3est te ito ies% The efo e( the2 need to estimate the ma 0et #otential of diffe ent )ities( states and nations% A ea ma 0et #otential is the g o,th o##o t/nities 3e2ond the )/ ent ma 0et demand% On)e a )ons/me #/ )hases a good( his #ositi+e )omments ma2 )a/se othe )ons/me s to #/ )hase the ne, item% *ositi+e e+ie,s f om )ons/me g o/#s ma2 also #/sh ma 0et demand if the ne, item 3 ings +al/e to the )ons/me % These e"t a sales fall /nde the estimated ma 0et #otential> )om#anies st i+e to fill the ma 0et #otential 3e)a/se it gene ates sales a3o+e the a)t/al ma 0et demand fo goods o se +i)es% A ea ma 0et #otential de#ends on the follo,ing fa)to s6 F The item 3eing ma 0eted <# od/)t( se +i)es( idea( lo)ation o #e son= F Sales of the enti e ind/st 2 in dolla s o # od/)t /nits F A s#e)ifi) time #e iod F A s#e)ifi) ma 0et delineated eithe geog a#hi)all2( 32 the t2#e of )/stome o 3oth Ma 0et *otential data hel#s )om#anies /nde stand( # edi)t and infl/en)e )ons/me 3eha+io 32 # o+iding insight into a eas ,ith the highest g o,th #otential% This allo,s 2o/ to ma0e info med de)isions a3o/t # od/)ts and se +i)es 3ased on the latest t ends and )ons/me demand% 8ith ma 0et #otential data( 2o/ )an6 F O#timise 2o/ me )handise mi" F In+est ma 0eting dolla s mo e effe)ti+el2 Ma 0et *otential and Sales Te ito 2

2! *lanning fo Selling Effo t F $e+elo# s/))essf/l ad+e tising and ma 0eting #lans F $e)ide ,hi)h e"#ansions a e most # ofita3le Che)0 2o/ # og ess 1 1% 8 ite a note on a ea ma 0et #otential% 2% @o, is ma 0et #otential data hel#f/lG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%7 T@E CONCE*T OF MAR.ET *OTENTIAL It is defined as the ma"im/m demand es#onse #ossi3le fo a gi+en g o/# of )/stome s ,ithin a ,ell;defined geog a#hi) a ea fo a gi+en # od/)t o se +i)e o+e a s#e)ified #e iod /nde ,ell defined )om#etiti+e en+i onmental )onditions% Some fa)to s of ma 0et #otential a e as follo,s6 1% Ma 0et #otential is the ma"im/m demand es#onse /nde )e tain ass/m#tions </ltimate demand=% 2% Rele+ant )/stome fo the # od/)t and se +i)e sho/ld 3e dete mined% It is not me el2 the # esent )ons/me 3/t also the #otential )ons/me so that ma"im/m #ossi3le demand is a)hie+ed% 7% The geog a#hi) a ea fo ,hi)h ma 0et #otential is to 3e dete mined sho/ld 3e ,ell defined%

9% The e sho/ld 3e a )lea /nde standing a3o/t the # od/)t and se +i)e fo ,hi)h the ma 0et #otential is to 3e estimated% C% The time fo ,hi)h ma 0et #otential is estimated sho/ld 3e s#e)ifi)% D% Finall2( a )lea /nde standing of en+i onmental and )om#etiti+e )onditions ele+ant in )ase of a #a ti)/la # od/)t o se +i)e is also ne)essa 2% It is im#o tant to emem3e that the estimated ma 0et #otential sets an /##e 3o/nda 2 on the ma 0et si5e and )an 3e e"# essed in /nits andAo sales% 2J Ma 0et #otential )onsists of the /##e limit of total demand ,hi)h ,o/ld theo eti)all2 3e )on+e ged on at <infinite= ise of ma 0eting e"#endit/ es of all ele+ant # o+ide s <see fig/ e=% Fig% 2%16 Ma 0et #otential 8h2 Ma 0et *otential Anal2sis Estimating the ma 0et o ma 0et #otential fo a ne, 3/siness o 3/siness e"#ansion is ) iti)al in dete mining the e)onomi) feasi3ilit2 of a +ent/ e% Estimating the ma 0et #otential fo a 3/siness is ) iti)al in e+al/ating its +ia3ilit2 and # o+ides an estimate of the ma"im/m total sales #otential fo a gi+en ma 0et% Estimating the ma 0et #otential ,ill dete mine if the ma 0et is la ge eno/gh to s/##o t 2o/ 3/sinesses% @en)e( ,e get # e)ise and elia3le info mation in this a ea afte )ond/)ting a ma 0et #otential anal2sis% $iffe en)e 3et,een Sales and Ma 0et *otential Sales #otential is fo an indi+id/al )om#an2 ,he e as ma 0et #otential is fo the enti e ind/st 2 of # od/)t )lass( 3/t 3oth e# esents ma"im/m demand es#onse and a e 3o/nda 2 )onditions% @en)e( ma 0et #otential and sales #otential a e diffe ent% Fo m/la fo Estimating Ma 0et *otential

Estimating the ma 0et #otential fo a 3/siness e?/i es s#e)ifi) info mation on the n/m3e of #eo#le o #otential 3/2e s( an a+e age selling # i)e and an estimate of )ons/m#tion o /sage fo a s#e)ifi) #e iod% On)e this info mation has 3een )olle)ted( it )an 3e #l/gged into the follo,ing fo m/la to de i+e the estimated ma 0et #otential% Ma 0et *otential and Sales Te ito 2 7B *lanning fo Selling Effo t ,he e M*U ma 0et #otential N U n/m3e of #ossi3le 3/2e s *U a+e age selling # i)e T U a+e age ann/al )ons/m#tion 2%7%1 Estimating Ma 0et *otential Che)0;List This )he)0list ,ill add ess a n/m3e of ?/estions that need to 3e ans,e ed 3efo e an estimate )an 3e )al)/lated% 1% 8hat t2#e of )/stome ,ill 3/2 the # od/)t o se +i)eG 2% 8he e a e these )/stome s lo)atedG 7% @o, man2 #otential )/stome s <N= a e the eG 9% @o, often do the2 )ons/me o /se itG C% 8hat is the )om#etitionG

D% 8hat a e #eo#le #a2ingG E% 8hat is the #otential fo the ma 0et to de+elo#G !% 8hat is m2 sha e of the ma 0etG a% Ta get Ma 0et One of the most im#o tant )om#onents of estimating the ma 0et #otential fo a 3/siness is to dete mine its ta get ma 0et% A ta get ma 0et )an 3e tho/ght of as the )/stome s ,ho a e most li0el2 to 3/2 f om 2o/ and gene all2 a e des) i3ed /sing demog a#hi) +a ia3les <gende ( age( ed/)ation= as ,ell as #s2)hog a#hi) +a ia3les <lifest2le and 3elief s2stem +a ia3les=% In man2 )ases( a 3/siness ma2 ha+e mo e than one ta get ma 0et% Thin0 a3o/t the a/tomo3ile ind/st 2( a/tomo3ile man/fa)t/ e s ha+e a n/m3e of ta get ma 0ets( i%e% t /)0 3/2e s( l/"/ 2 )a 3/2e s( e)onom2 3/2e s% A 3/siness sho/ld 3e a3le to de+elo# s#e)ifi) # ofiles fo ea)h of its ta get ma 0ets /sing demog a#hi) and #s2)hog a#hi) +a ia3les% F Set of demog a#hi) +a ia3les in)l/de Age( Ma ital Stat/s( @@ In)ome( Gende ( Ra)eAEthni)it2( Famil2 Life CP( Ed/)ation( Religio/s and Affiliation% F The se)ond # ofile is efe ed to as #s2)hog a#hi) lifest2le and des) i3es 2o/ ta get ma 0et segment 32 thei a)ti+ities <,o 0 and leis/ e=( inte ests 71 <famil2( animals( en+i onment( home and )omm/nit2= and o#inions% The lifest2le # ofile is mo e im#o tant in # edi)ting f/t/ e #at onage than the demog a#hi) # ofile 3e)a/se it ,ill dete mine ,hat t2#e of e"#e ien)e the2 a e see0ing% The follo,ing a e a fe, #s2)hologi)al des) i#to s6 *oliti)al affiliation( so)iall2 )ons)io/s( C/tting;edge( Famil2;o iented

Confo mist( *o,e ;,ielding( T end follo,e ( Th ill see0e ( G een( F/n;lo+ing( Fashion;fo ,a d( S#o ts enth/siast% 3% Ma 0et o T ade A ea The ma 0et a ea )an 3e tho/ght of as the geog a#hi) a ea ,he e the 3/siness intends to o#e ate( i%e% a )it2 3lo)0( 3et,een the i+e s o the glo3e% $efining the ma 0et a ea is im#o tant 3e)a/se it defines the geog a#hi) a ea ,he e #otential )ons/me s li+e andAo ,o 0% The e a e a n/m3e of ,a2s to define a ma 0et a ea( some a e eas2 and othe s a e mo e diffi)/lt and e?/i e the se +i)es of a ma 0eting # ofessional% A ma 0et a ea is gene all2 defined 32 geog a#h2( adi/s( t ade a ea o d i+e time% F The geog a#hi)al a eas in)l/de Neigh3o hoods( Wi# )odes( Cit2 o Co/nt2 Bo/nda ies( Met o#olitan Statisti)al A eas( State <m/lti state= Boa de s( Nation( Continent( 8o ld% F A ing o adi/s defined ma 0et a ea is #e fo med 32 ) eating a )i )le a s#e)ified n/m3e of miles f om a 3/siness lo)ation% F $ i+e Time Anal2ses6 $ i+e time anal2sis is a mo e so#histi)ated anal2sis than the adi/s anal2sis as a n/m3e of +a ia3les a e /sed to estimate the d i+e time to a gi+en lo)ation% )% Ma 0et Si5e On)e the ma 0et a ea and ta get ma 0et has 3een defined( it is #ossi3le to dete mine the n/m3e of #otential )/stome s fo 2o/ 3/siness% This ,ill allo, 2o/ to estimate the N <n/m3e of #otential )/stome s= in the ma 0et #otential e?/ation% This total ma 0et #otential ,ill t2#i)all2 ha+e to 3e ad'/sted do,n,a d to a))o/nt fo non;/se s% E"am#le6 An ag i to/ ism o#e ato has de)ided that it ,ill ta get its ma 0et to,a ds

)hild en /nde J 2ea s old% The 3/siness has )on)l/ded that its ma 0et a ea is 8a0e Co/nt2( ,hi)h has 1B1(ED! )hild en /nde J 2ea s old% The efo e( N U Ma 0et *otential and Sales Te ito 2 72 *lanning fo Selling Effo t 1B1(DBB #otential )/stome s% These n/m3e s ,e e o3tained f om the US Cens/s B/ ea/% @o,e+e ( not all )hild en /nde J 2ea s of age ,ill +isit an ag i)/lt/ al fa)ilit2% It is im#o tant to ad'/st these fig/ es to get a mo e a))/ ate estimate of the a)t/al ma 0et #otential% A s/ +e2 of elementa 2 s)hool tea)he s fo/nd that onl2 D!X of 0inde ga ten th o/gh 7 d g ade tea)he s indi)ated the2 ,o/ld ta0e an ag i)/lt/ all2 elated field t i# in the ne"t 2ea % As a es/lt( the 1B1(DBB 0inde ga ten th o/gh thi d g ade s sho/ld 3e ad'/sted do,n,a d 32 m/lti#l2ing 32 D!X% This es/lts in an ad'/sted ma 0et #otential of DJ(B!!#otential st/dents% Ad'/sted Ma 0et *otential U 1B1(DBBYD!X U DJ(B!! d% Cons/m#tion o Usage A 3/siness need to dete mine ho, often its ta get ma 0et segment /ses its # od/)t o se +i)e% This fig/ e ,ill ha+e a signifi)ant im#a)t on the estimated ma 0et #otential% Fo instan)e( is the # od/)t #/ )hased f e?/entl2( o))asionall2 o inf e?/entl2G O3+io/sl2( the mo e f e?/entl2 the # od/)t is #/ )hased( the la ge the ma 0et #otential% $/ a3le goods( # od/)ts that )an 3e /sed o+e a long

#e iod( a e #/ )hased less f e?/entl2 than #e isha3le items% As a es/lt( the ann/al )ons/m#tion of a##les is g eate than the ann/al )ons/m#tion of tele+ision sets% e% Com#etition Anal2sis One of the 3est so/ )es of info mation is to in+estigate )om#eting 3/sinesses% These 3/sinesses )an # o+ide a ,ealth of info mation that )an 3e /sed in e+al/ating the #otential fo 2o/ 3/siness% B2 e+al/ating ho, a )om#an2 ma 0ets its 3/siness( it is #ossi3le to dete mine the ma 0ets it is ta geting% Fo e"am#le( if )om#eting 3/sinesses a e ad+e tising in So/the n Li+ing( the2 a e ta geting affl/ent( middle age females% @o,e+e ( if the2 a e ad+e tising in the s#o ts se)tion of a met o#olitan ne,s#a#e ( the2 a e most li0el2 ta geting males% In addition to )olle)ting info mation on the ma 0ets the2 a e ta geting( a )om#etito anal2sis )an e+eal #a)0aging # efe en)es( ta get ma 0et info mation( # i)ing st ategies( dist i3/tion )hannels and ma 0eting st ategies% Sim#l2 e+al/ate the # od/)ts and se +i)es 2o/ )om#etito is # o+iding% A e the2 # od/)ing famil2 #a)0s o indi+id/al se +ing si5es of thei # o)essed food # od/)tG @o, a e the2 getting thei # od/)ts to thei )/stome sG A e thei # od/)ts +al/e # i)es o a e the2 # i)ed fo the high;end ma 0etG A e the2 fo)/sed on )on+enien)e( ?/alit2 o ?/antit2G 8hat t2#e of #a)0aging mate ial a e the2 /singG 77 f% * i)ing A # od/)ts # i)ing has a di e)t im#a)t on the 3ottom line of a 3/siness and its s/))ess% The efo e( in+estigate ,hat othe s a e )ha ging and ,hat the )/stome gets at that # i)e ,hen setting 2o/ # i)e% In+estigate 2o/ )om#etition% A e 2o/ # i)es in alignment ,ith thei sG 8hat is the +al/e of 2o/ # od/)t elati+e to thei sG $o not 3e a # i)e ta0e o im#lement a :me( too: # i)ing st ateg2 if 2o/ # od/)t )an 3e diffe entiated and offe s a highe +al/e than )om#eting # od/)ts% If

2o/ # i)e is too high to )om#ete di e)tl2 in the ma 0et( loo0 fo a ni)he ma 0et that desi es 2o/ # od/)ts att i3/tes and )ha ge a))o dingl2% g% Ma 0et O/tloo0 The sit/ational anal2sis )an 3e tho/ght of as a )om# ehensi+e in+estigation into the 3/siness en+i onment in ,hi)h 2o/ )om#an2 ,ill 3e o#e ating% This anal2sis ,ill allo, 2o/ to dete mine the health of the ind/st 2 is it e"#anding( de)lining o stagnate% This sho/ld in)l/de an ind/st 2 o+e +ie, fo)/sed on ind/st 2 t ends and sho/ld # o+ide a gene al e+ie, of the ind/st 2 as ,ell as esea )h into eg/lato 2 and so)ial im#li)ations that ,o/ld di e)tl2 o indi e)tl2 infl/en)e the demand o #e )e#tion of 2o/ 3/siness% One im#o tant as#e)t is to dete mine if the ma 0et is sat/ ated o if the e is oom fo ne, 3/sinesses% Using the Ma 0et $e+elo#ment Inde" <M$I= it is #ossi3le to dete mine a # od/)ts life)2)le% The fo m/la fo estimating this is as follo,s6 M$I U <C/ ent ma 0et demand ZMa"im/m Ma 0et *otential= Y 1BB F M$I [ 77 <Conside a3le g o,th #otential @igh g o,th ma 0et( high # i)es and 3asi) 3enefits F M$I 77;DE G o,th #otential 3/t need to offe mo e than 3asi) # od/)t and )om#ete at lo,e # i)e F M$I \ DE Mat/ e ma 0et( oom fo g o,th 3/t 3e)oming )ommodit2 # od/)ts> need to ha+e +e 2 diffe entiated # od/)ts to meet s#e)ifi) )/stome needs h% Ma 0et Sha e The #e )entage of a ma 0et <in /nits o e+en/e= a))o/nted fo 32 an indi+id/al 3/siness% This fig/ e is im#o tant sin)e it # o+ides insight into ho, m/)h of the total ma 0et #otential a 3/siness might )a#t/ e% If the ma 0et sha e is

not la ge eno/gh to s/##o t the 3/siness( then the e is a # o3lem% In addition( if the n/m3e of /nits needed fo the 3/siness to 3 ea0;e+en finan)iall2 is 0no,n( it Ma 0et *otential and Sales Te ito 2 79 *lanning fo Selling Effo t is #ossi3le to dete mine ,hat sha e of the ma 0et ,ill ha+e to 3e )a#t/ ed fo the 3/siness to a)hie+e this 3 ea0;e+en #oint% Ma 0et sha e info mation is +e 2 diffi)/lt to o3tain and ma2 need to 3e estimated /sing +a io/s s)ena ios% A##li)ation of Ma 0et *otential Anal2sis Ma 0et #otential anal2sis offe s de)ision s/##o t fo s#e)ifi) ?/estions fo ,hi)h s/)h as6 F E"#lo ation of #otential <ta get= ma 0ets F $ete mination of )om#an2 lo)ations F E+al/ation of ideas <s) eening= F $esignation of sales a eas Methods fo Colle)ting $ata Se)onda 2 data is /sed fo the #/ #ose% Most of the data a e a+aila3le on the inte net and some needs to 3e #/ )hased f om ma 0eting esea )h fi ms% The efo e( des0 esea )h is the method th o/gh ,hi)h the data a e )olle)ted% Che)0 2o/ # og ess 2

1% 8hat a e the fa)to s of ma 0et #otentialG 2% 8hat is the fo m/la fo estimating ma 0et #otentialG 7% E"#lain the ma 0et #otential )he)0list% 9% 8hat a e the a##li)ations of ma 0et #otentialG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 7C 2%9 ESTIMATING IN$USTRP SALES AN$ MAR.ET S@ARE Besides estimating total and a ea demand( a )om#an2 ,ill ,ant to 0no, the a)t/al ind/st 2 sales in its ma 0et% Th/s( it m/st identif2 its )om#etito s and estimate thei sales% The ind/st 2:s t ade asso)iation ,ill often )olle)t and #/3lish total ind/st 2 sales( altho/gh not listing indi+id/al )om#an2 sales se#a atel2% In this ,a2( ea)h )om#an2 )an e+al/ate its #e fo man)e against the ind/st 2; as a ,hole% S/##ose the )om#an2:s sales a e in) easing at a ate of C #e )ent a 2ea and ind/st 2 sales a e in) easing at 1B #e )ent% This )om#an2 is losing its elati+e standing in the ind/st 2% Anothe ,a2 to estimate sales is to 3/2 e#o ts f om ma 0eting esea )h fi ms that a/dit total sales and 3 and sales% Fo e"am#le( Nielsen( AGR and othe ma 0eting esea )h fi ms /se s)anne data to a/dit the etail sales of +a io/s # od/)t )atego ies in s/#e ma 0ets and #ha ma)ies and sell this info mation to inte ested )om#anies% A )om#an2 )an o3tain data on total # od/)t )atego 2 sales

as ,ell as 3 and sales% It )an )om#a e its #e fo man)e ,ith that of the total ind/st 2 o an2 #a ti)/la )om#etito to see ,hethe it is gaining o losing in its elati+e standing( Cal)/lating Ma 0et Sha e 1% O3tain as m/)h info mation as #ossi3le a3o/t the # od/)ts o se +i)es 2o/ sell in 2o/ a ea of se +i)e% Fo e"am#le( if 2o/ sell mi) o)hi#s nation,ide( 2o/ ,ill need to 0no, ho, man2 mi) o)hi#s a e sold in the )o/nt 2 ann/all2 and ,hat the total e+en/es a e fo those sales% If 2o/ # o+ide la,n )a e se +i)e in 2o/ )o/nt2( 2o/ ,ill need to 0no, ,hat )ons/me s in 2o/ )o/nt2 s#end on la,n )a e se +i)es% If 2o/ deal in an ind/st 2 ,ith man2 # i+ate )om#anies( 2o/ ma2 find it some,hat diffi)/lt to o3tain this info mation% Resea )h ind/st 2 g o/#s and 3/siness o ganisations to find o/t ,hat statisti)s the2 ha+e a+aila3le fo 2o/ ind/st 2% Sta t ,ith the )ham3e of )omme )e% 2% Cal)/late 2o/ ma 0et sha e on)e 2o/ ha+e the ele+ant statisti)s% The e a e t,o ,a2s to )al)/late 2o/ ma 0et sha e( ea)h of ,hi)h ma2 gi+e 2o/ a diffe ent es/lt% The fi st )al)/lation ,o/ld 3e 3ased on n/m3e of # od/)ts% Fo e"am#le( if the e ,e e 19E(BBB mi) o)hi#s sold in the United States last 2ea and 2o/ )om#an2 sold 11(2BB of them( 2o/ ma 0et sha e ,o/ld 3e e?/al to 11(2BB di+ided 32 19E(BBB o E%D #e )ent% That means that 2o/ Ma 0et *otential and Sales Te ito 2 7D *lanning fo Selling

Effo t )om#an2 sold E%D #e )ent of all the mi) o)hi#s sold in the United States last 2ea % The se)ond method of )al)/lation is 3ased on e+en/es% If the total s#ent 32 )ons/me s on la,n )a e se +i)es in 2o/ )o/nt2 last 2ea ,as ]712(BBB and 2o/ e+en/es last 2ea ,e e ]97(DBB( then 2o/ ma 0et sha e ,o/ld 3e ]97(DBB di+ided 32 ]712(BBB o 17%JE #e )ent% Cal)/lating 3ased on /nits and e+en/es ,ill gi+e 2o/ diffe ent es/lts ,he e )om#etito s a e selling thei goods and se +i)es fo diffe ent # i)es% Po/ ,ill need to de)ide ,hi)h meas/ e gi+es 2o/ the 3est es/lts fo 2o/ #a ti)/la ind/st 2% In gene al( # od/)ts a e meas/ ed 3ased on /nits and se +i)es a e meas/ ed 3ased on e+en/es% 7% .ee# t a)0 of 2o/ ma 0et sha e o+e time% If 2o/ see distin)t )hanges to 2o/ ma 0et sha e( find o/t ,hat is )a/sing it% A de) ease in ma 0et sha e )o/ld mean that 2o/ a e losing 3/siness to )om#etito s% An in) ease in ma 0et sha e means 2o/ a e #i)0ing /# 3/siness 3/t 2o/ need to ens/ e that it is # ofita3le 3/siness% Monito ing 2o/ ma 0et sha e is an im#o tant 3ell,ethe to ,a n 2o/ of /#)oming t o/3le% Che)0 2o/ # og ess 7 1% E"#lain the # o)ess of )al)/lating ma 0et sha e% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%C SALES TERRITORP Sales te ito 2 is /s/all2 a geog a#hi)al a ea assigned to a sales#e son o

g o/# of #e sons% The geog a#hi)al a ea ma2 also 3e assigned to f an)hisee( dist i3/to o agent% A sales te ito 2 ma2 also 3e assigned 32 t2#e of )/stome s( as all etaile s o all ,holesale s in geog a#hi)al a ea% A sales te ito 2 ma2 3e as la ge as a )ontinent( a nation o half a nation o as small as a6 to,n o )it2% A sales manage ma2 ha+e a sales te ito 2 diffe ent f om the sales #e sons o+e seen% Sales te ito 2 is a segment of the ma 0et fo ,hi)h a sales#e son is es#onsi3le% Te ito 2 assignments ma2 3e e")l/si+e( meaning no othe sales#e son )an sell in 7E that te ito 2 o none")l/si+e% Te ito ies ma2 3e defined in te ms of geog a#hi) o ma 0et segments( # od/)t o # od/)t lines( si5e of )/stome o 32 s#e)ifi) )/stome s o # os#e)ts% The most )om#etent sales e# esentati+es a e /s/all2 gi+en the te ito ies that 2ield the most # ofits% The indi+id/al talents o )ha a)te isti)s of the sales#eo#le )an also 3e /sed to dete mine te ito 2 assignments% It ta0es a diffe ent s0ill set to ma0e sales to la ge )o #o ations than to small etaile s% Geog a#hi) te ito 2 assignments sho/ld 3e made to minimise the t a+el e"#enses in)/ ed 32 an2 one sales#e son% 8hen ) eating geog a#hi) te ito ies( the densit2 of the # os#e)t 3ase ,ill dete mine the si5e of the te ito 2% Fo instan)e( 3/siness done in Ne, $elhi alone might 2ield the same # ofits as the ,hole of @a 2ana% O3'e)ti+es of sales te ito ies F To fa)ilitate effe)ti+e sales #lanning F To )o+e and manage the enti e ma 0et F To assign salesman es#onsi3ilit2 F To ed/)e the selling )osts F To fa)ilitate )oo dination in ma 0eting f/n)tions F Fo ma 0eting esea )h and de+elo#ment of fai )om#etition

F To im# o+e the )/stome elations F Inde#endent ,o 0 a ea fo ea)h salesman 2%C%1 Setting /# a Sales Te ito 2 The ad+antages of esta3lishing te ito ies a e that the2 im# o+e )o+e age of the ma 0et( ed/)e ,astef/l o+e la# of sales effo ts and allo, ea)h sales#e son to define #e sonal es#onsi3ilit2 and '/dge indi+id/al s/))ess% @o,e+e ( man2 t2#es of 3/sinesses( s/)h as eal estate and ins/ an)e )om#anies( do not /se te ito ies% 8hile e+e 2 de#a tment in a )om#an2 is im#o tant( the e is no s/3stit/te fo a good sales fo )e% The )hallenge is dete mining st ateg2 fo te ito 2 )o+e age% The !BA2B /le states that !B #e )ent of 2o/ # ofits )ome f om 2B #e )ent of 2o/ )/stome s% Segmenting 2o/ )/stome 3ase into st ategi) ta gets 3ased on te ito 2 ,ill # o+ide the o#timal sales st ateg2% Allo)ating #eo#le to diffe ent te ito ies is an im#o tant sales management tas0% T2#i)all2( the to# fe, te ito ies # od/)e a dis# o#o tionatel2 high sales Ma 0et *otential and Sales Te ito 2 7! *lanning fo Selling Effo t +ol/me% This o))/ s 3e)a/se manage s /s/all2 ) eate smalle a eas fo t ainees( medi/m;si5ed te ito ies fo mo e e"#e ien)ed team mem3e s and la ge a eas fo senio selle s% A d a,3a)0 of that st ateg2( ho,e+e ( is that it 3e)omes diffi)/lt to

)om#a e #e fo man)e a) oss te ito ies% An alte nate a## oa)h is to di+ide egions 32 e"isting and #otential )/stome 3ase% A n/m3e of )om#/te # og ams e"ist to hel# sales manage s effe)ti+el2 ) eate te ito ies a))o ding to thei goals% 1% Resea )h fa)to s )ont i3/ting to # o'e)ted sales and gathe the data% * e+io/s 2ea :s sales )an 3e fo/nd in the ann/al e#o t and e"#e)ted ma 0et g o,th )an 3e esea )hed th o/gh ind/st 2;s#e)ifi) e)onomi) fo e)asts% C/stome s/ +e2s and ma 0et esea )h )an also hel# ,ith # o'e)ting )/stome demand% Sales fo e)ast fig/ es )an 3e fo/nd in the )om#an2:s 3/siness o st ategi) #lan% 2% Estimate the sales fo )e si5e 32 anal25ing e)onomi) fo e)asts( ma 0et #otential and e"#e)tations of g o,th% Loo0 at the a+e age sales #e #e son% Com#a e the sales fo e)ast ,ith the a+e age sales #e #e son% 7% $ete mine 2o/ si5e% A glo3al sales te ito 2 is mo e )om#le" than a state sales te ito 2% State sales fo e)asts )an 3e dete mined 3ased on )/ ent ma 0et si5e o f/t/ e g o,th ates% Commonl2 /sed /nits a e #ostal )ode n/m3e s( a eas( to,ns o )ities% Sales te ito ies a e #/t togethe as )onsolidations of 3asi) geog a#hi)al )ont ol /nits% Tho/gh man2 te ito ies a e des) i3ed geog a#hi)all2( the2 a e di+ided 3ased on the )lasses of leads( # os#e)ts and )lients and thei es#e)ti+e sales #otential% 9% Resea )h the )om#etition% The e is nothing , ong ,ith ma0ing 2o/ )om#etito :s idea 3ette % $e+elo# 2o/ o,n st ategies 3ased on those fi ms ,ith ma 0et sat/ ation% Loo0 /# U*S t ansit ma#s 32 5i# )ode fo insights on the most effi)ient o/tes% C% *in#oint !B #e )ent of 2o/ # ofita3le )lients% Segment 3ased on ma 0et sat/ ation and a+e age dolla #e sale% D% Assign the othe 2B #e )ent of 2o/ sales fo )e to less # ofita3le a eas% * io itise 3ased on the o##o t/nit2%

Setting /# sales te ito ies6 F Allo,s sales#eo#le to fo)/s solel2 on one assigned a ea at a time( es/lting in 3ette )lient se +i)e and )o+e age and la)0 of d/#li)ation in )onta)t F Can hel# 2o/ ed/)e 2o/ selling )osts 32 ed/)ing t a+el time and elated t a+el e"#enses F Cont i3/tes to #ositi+e staff mo ale ,hen te ito ies a e di+ided e?/ita3l2 7J 2%C%2 Segment the Te ito 2 The te ito 2 sho/ld 3e 3 o0en do,n into smalle ma 0et segments as #a t of the te ito 2 management #lan% C/ ent and #otential )/stome s fo ha+ing a simila set of needs and e?/i ements sho/ld 3e gi+en # io it2% The g o/#s of )lients ,ho efe en)e ea)h othe ,hen ma0ing a #/ )hasing de)ision a e im#o tant% Ma 0et segments )an 3e 3 o0en do,n 326 F C/stome s ,ith simila needs and e?/i ements F C/stome s ,ho f/n)tion and o#e ate simila 3/sinesses F Lo)ation and geog a#hi) 3o/nda ies F Ind/st 2 and simila SIC )odes F E"isting( ta get o 3/siness de+elo#ment a))o/nts F Si5e and total )om#an2 e+en/e F A))o/nts that /tilise simila #a tne t2#es F Com#etiti+e o st ategi) a))o/nts The segments sho/ld 3e meas/ a3le( a))essi3le( /ni?/e( sta3le and la ge eno/gh to s/stain 2o/ sales e"#enses% 2%C%7 Le+e aging A+aila3le Reso/ )es The 0e2 to de+elo#ing sales in a te ito 2 is to dete mine ,he e to most effe)ti+el2 le+e age eso/ )es% $ete mine ,ho )an assist in a)hie+ing sales goals%

Then e) /it those indi+id/als and eso/ )es and )lea l2 define the oles( a)ti+ities and e"#e)tations fo ea)h% Reso/ )es )an 3e managed 32 doing the follo,ing6 F Lea n indi+id/al )a#a3ilities and )he)0 ho, the2 a##l2 to a te ito 2% F Unde stand ea)h #e son:s histo 2 ,ithin the te ito 2 and f/t/ e #ositioning as it a##lies to sales st ateg2% F Clea l2 identif2 and define the ma 0et segments fo ea)h eso/ )e to #/ s/e% F Identif2 'oint +al/e and e"#e)tations% F $e+elo# o3'e)ti+es and a)tion items and timelines ,ith o,ne s% F Meas/ e and e+ie, # og ess% F Comm/ni)ate a## o# iatel2 and )ele3 ate s/))esses% Ma 0et *otential and Sales Te ito 2 9B *lanning fo Selling Effo t Some s/##o t and eso/ )es a e inte nal and some of is e"te nal #a tne s ,ho )an #ositi+el2 infl/en)e o esell the # od/)ts and se +i)es% Loo0 fo #a tne s ,ho )an hel# in diffe ent a eas in)l/ding6 F * od/)t 0no,ledge and e"#e tise F Ma 0eting to the te ito 2 F Sales )o+e age ,ithin the te ito 2 F The a3ilit2 to de#lo2 and im#lement the # od/)ts F F/lfilment s#e)ialists

F *a tne s ,ho )an # o+ide a))ess F Sol/tion )om#leteness F *a tne s ,ho )an # o+ide )om#etiti+e ad+antage F Se +i)e and s/##o t Also( loo0 fo #a tne s and o ganisations that # o+ide s/3stantial infl/en)e to )/stome s and #otential )lients ,ithin the te ito 2% 2%C%9 Te ito 2 sales #lanning On)e a sales e# esentati+e has 3een assigned a te ito 2( the eal ,o 0 3egins6 the sales e# esentati+e m/st 3egin ea)hing o/t to )/ ent )/stome s( as ,ell as #otential )/stome s and ) eating the ne)essa 2 moment/m to e"#and 3/siness in that te ito 2% F/ the ( as most e"#e ien)ed sales e# esentati+es ha+e fo/nd( the 3est a## oa)h to s/))essf/l sales is te ito 2 #lanning% Te ito 2 #lanning is sim#l2 the # o)ess of ) eating a ,o 0a3le #lan fo ta geting the ight )/stome s( esta3lishing goals fo in)ome and ens/ ing sales g o,th o+e time% 1% Cond/)t an o+e all e+ie,6 Re+ie,ing the sales te ito 2 #lan is the fi st ste#% In othe ,o ds( 3efo e e+en ma0ing the #lan( the sales e# esentati+e needs to anal25e his te ito 2 and e+ie, the )/ ent sit/ation 3efo e # o'e)ting f/t/ e goals% The o+e all e+ie, m/st )om# ise of in)l/de an e+al/ation of 3/siness f om the # e+io/s 2ea ( an anal2sis of )/stome s ,ho a e )/ entl2 the st ongest and ,hi)h the ,ea0est( a )onside ation of the 3est;selling # od/)ts( a e+ie, of s/))essf/l sales te)hni?/es and a list of to# # os#e)ts fo f/t/ e )lients% 2% Identif2 )/stome s to ta get6 An2 sales e# esentati+e ,ho is e+en ma ginall2 familia ,ith he te ito 2 0no,s ,he e to 3egin loo0ing fo ne, )/stome s% In )onside ing )/stome s to ta get( the e# esentati+e sho/ld also ma0e a list of 91

s#e)ifi) methods fo a## oa)hing ea)h )/stome % 8hat ,o 0s fo one )/stome ,ill not ne)essa il2 ,o 0 fo anothe and ,hile some )/stome s # efe to 3e L,ined and dinedS fo thei 3/siness( othe s # efe f an0 dis)/ssions a3o/t the # od/)ts% Ma0ing notes of ea)h of these items ,ill 3e of /se fo the sales e# esentati+e% 7% C eate g o,th goals and st ategies6 * e#a ing g o,th goals and st ategies is a 3ig;#i)t/ e effo t% The g o,th st ategies sho/ld efle)t the sales e# esentati+eIs 3 oade goals fo the te ito 2% Fo instan)e( the e# esentati+eIs sales of a # od/)t 32 a )e tain amo/nt% To a))om#lish these goals( the e# esentati+e sho/ld # e#a e managea3le st ategies% Sales te ito 2 goals and st ategies )an 3e li0e Ne, Pea Is esol/tions6 too man2 and the2 a e o+e ,helming and /n ealisti)% B/t those ,ho set a )o/#le of attaina3le esol/tionsRs/)h as Llose 1B #o/nds ,ith diet and e"e )iseS and Llea n 3all oom dan)ing in ,ee0l2 )lassesSRa e m/)h mo e li0el2 to a)hie+e thei goals% 9% Set in)ome o3'e)ti+es6 In)ome o3'e)ti+es a e essential( 3/t the2 do not /s/all2 )ome solel2 f om the sales e# esentati+e% Most )om#anies # o+ide the e# esentati+e ,ith sales ta gets fo a s#e)ified #e iod of time ; ?/a te l2( t,i)e a 2ea ( 2ea l2% At the same time( the sales e# esentati+e )an still ) eate his o,n st ategies fo a)hie+ing these o3'e)ti+es% If the e# esentati+e has ann/al sales ta gets( he )an #lan fo so m/)h ea)h ?/a te > in the )ase of ?/a te l2 ta gets( he )an #lan monthl2 ta gets% Setting these smalle in)ome goals ,ill allo, e# esentati+es to 0ee# a )lose e2e on meeting the la ge o3'e)ti+es% C% Cond/)t an ongoing e+ie,6 A st ong sales te ito 2 #lan /nde goes f e?/ent e+ie,% The e# esentati+e sho/ld not ) eate the #lan and then fo get a3o/t it%

She sho/ld efe 3a)0 to it ,ee0l2( monthl2 o ?/a te l2 to ma0e s/ e the #lan is on ta get% It is elati+el2 easie to fo get goals /nless the2 a e on hand( so the sales #lan sho/ld 3e a )onstant eminde of te ito 2 o3'e)ti+es% Ma 0et *otential and Sales Te ito 2 92 *lanning fo Selling Effo t Che)0 2o/ # og ess 9 1% 8hat is sales te ito 2G 2% E"#lain the # o)ess of setting a sales te ito 2% 7% E"#lain segmenting te ito ies and le+e aging a+aila3le eso/ )es% 9% 8 ite a note on te ito 2 sales #lanning% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%D ROUTING AN$ SC@E$ULING OF SALES *ERSONNEL

Ro/ting efe s to the mo+ement #lan of the sales #e sonnel it his te ito 2% S)hed/ling means the date and time fo ma0ing sales )alls% A ,ell #lanned o/ting and s)hed/ling #lan hel#s to )/t do,n on t a+elling e"#enses( selling e"#enses( lodging and 3oa ding e"#enses and in) ease )all f e?/en)2 of sales fo )e% Good s)hed/ling and o/ting of sales )alls )an ed/)e ,aiting and t a+el time% The o/ting and s)hed/ling sho/ld 3e # e#a ed in ad+an)e so that the sales manage is a,a e the time( date and #la)e ,he e the sales #e sonnel ,o/ld 3e on a #a ti)/la da2% The sales #e sonnel 3e)ome )ons)io/s of thei ,o 0ing and mo+ement( as the2 0no, that the2 a e 3eing monito ed% Some o3'e)ti+es of Ro/ting and s)hed/ling a e as follo,s6 F Ro/ting and s)hed/ling #lans aim to maintain the lines of )omm/ni)ation( to o#timise sales )o+e age and minimise ,asted time% F 8hen management is info med at all times a3o/t the ,he ea3o/ts of sales #e son( it is eas2 to )onta)t him and gi+e last min/te inst /)tions% 97 F 8hile de)iding the o/te detailed info mation is e?/i ed on the n/m3e s and lo)ation of )/stome s( means of t ans#o tation and desi ed )all f e?/en)2 ates% F Ro/ting and s)hed/ling #lans ed/)e ,asted time 32 sales #e sonnel in 3a)0t a)0ing and t a+elling and gi+es an o#timised sales )o+e age( ,hi)h a/tomati)all2 3/ilds /# the si5e of a+e age o de and in) eases the effi)ien)2 and # od/)ti+it2 of sales #e sonnel%

*LANNING UNIT 1 Re) /itment and Sele)tion 2

UNIT 2 T aining and $e+elo#ment 2E E"#e t Committee $ % &ish am Ra'hans( A)ademi)ian Ms% *alla+i Sa'na#,a ( Asst% * ofesso * og amme Coo dinato M % -ess *hili# ./ma Co/ se $esign M % $ee#a0 $al+i Edito s Ms% $ee#ash i .a andi0a Ms% Nidhi .ha e Ms% Megha .adam Blo)0 * e#a ation Team Ms% 12oti Aga ,al Ms% Ma tina A3 aham M % A'in02a $esh#ande Mate ial * od/)tion M % &asant Gad0a i M % S/shant Am3e0a Ms% Rohinee Cha0 al Co#2 ight 4 Indian .no,ledge Co #o ation All ights ese +ed% No #a t of this 3oo0 ma2 3e e# od/)ed o /tili5ed in an2 fo m o 32 an2 means ele)t oni) o me)hani)al( in)l/ding #hoto)o#2ing( e)o ding o 32 an2 info mation sto age o et ie+al s2stem ,itho/t #e mission in , iting fo m the #/3lishe % S2lla3/s

BLOC. 16 BASICS OF SALES MANAGEMENT Unit 16 The Field of Sales Management Unit 26 Role of Sales Manage BLOC. 26 *LANNING FOR SELLING EFFORT Unit 16 $emand Fo e)asting Unit 26 Ma 0et *otential and Sales Te ito 2 BLOC. 76 MAN*O8ER *LANNING Unit 16 Re) /itment and Sele)tion Unit 26 T aining and $e+elo#ment BLOC. 96 CONTROLLING AN$ MANAGING SALES FORCE Unit 16 Cont olling the Selling Effo t Unit 26 Managing Sales Fo )e 1 BLOC. 76 MAN*O8ER *LANNING Int od/)tion to the Blo)0 This 3lo)0 )o+e s the 3asi) )on)e#ts of man#o,e #lanning in o ganisations% Man#o,e #lanning ma2 3e defined as a # o)ess 32 ,hi)h the management ens/ es that the ight n/m3e and the ight 0ind of #eo#le a e at the ight #la)e and time and a e doing the ight things <fo ,hi)h the2 a e 3est s/ited= fo the a)hie+ement of o ganisational o3'e)ti+es% It is the # o)ess of de+elo#ing and dete mining o3'e)ti+es( #oli)ies of # o)/ ement in elation to man#o,e % It e?/i es fo e)asting man#o,e needs and #lanning of a)ti+ities to f/lfill those fo e)ast needs% It sho/ld also )onside the effe)t of a3senteeism and la3o/ t/ no+e % It in+ol+es anti)i#ating the # esent and f/t/ e e?/i ements of the n/m3e and ?/alit2 of ,o 0 fo )e in the o ganisation%

In toda2:s a#idl2 )hanging 3/siness en+i onment( o ganisations ha+e to es#ond ?/i)0l2 to e?/i ements fo #eo#le% @en)e( it is im#o tant to ha+e a ,elldefined e) /itment #oli)2 in #la)e( ,hi)h )an 3e e"e)/ted effe)ti+el2 to get the 3est fits fo the +a)ant #ositions% Sele)ting the , ong )andidate o e'e)ting the ight )andidate )o/ld t/ n o/t to 3e )ostl2 mista0es fo the o ganisation% Sele)tion is one a ea ,he e the inte fe en)e of e"te nal fa)to s is minimal% @en)e( the @R de#a tment )an /se its dis) etion in f aming its sele)tion #oli)2 and /sing +a io/s sele)tion tools fo the 3est es/lts% Em#lo2ee T aining and $e+elo#ment is essential to the ongoing s/))ess of e+e 2 o ganisation% Altho/gh te)hnolog2 and the inte net ha+e ena3led glo3al )olla3o ation and )om#etition( #eo#le a e the o ganisationIs )om#etiti+e ad+antage% Em#lo2ee t aining and de+elo#ment ena3les em#lo2ees to de+elo# s0ills and )om#eten)ies ne)essa 2 to enhan)e 3ottom;line es/lts fo thei o ganisation% All o ganisations ,ant moti+ated #eo#le% Moti+ation #la2s the 3iggest ole in the Sales $e#a tment% *ossi3l2 the single most im#o tant e+ent ,ithin an2 o ganisation is the sale% B/sinesses a e s/stained 32 sales% Some e+en sa2( L8itho/t a sale( the 3/siness dies%S Rega dless of ho, m/)h sales is +al/ed in 2o/ o ganisation( one thing is )e tain6 fe, 3/sinesses )an e"ist ,itho/t them% 2 Man#o,e *lanning UNIT 1 RECRUITMENT AN$ SELECTION St /)t/ e 1%B O3'e)ti+es 1%1 Int od/)tion 1%2 Estimating Man#o,e Re?/i ements fo Sales $e#a tment

1%7 Man#o,e *lanning 1%7%1 O3'e)ti+es of man#o,e #lanning 1%9 Re) /iting Salesmen 1%9%1 Re) /iting so/ )e identifi)ation 1%9%2 So/ )e ,ithin the )om#an2 1%9%7 So/ )e o/tside the )om#an2 1%9%9 Methods of e) /iting salesman 1%C The Sele)tion S2stem 1%C%1 The inte +ie, a##li)ation 1%C%2 Inte +ie,ing te)hni?/es 1%C%7 Refe en)es and e)ommendations 1%C%9 *h2si)al e"amination 1%C%C C edit info mation 1%D Bases fo E+al/ation of Tests 1%E Let Us S/m U# 7 1%B OB1ECTI&ES In this /nit( ,e ha+e dis)/ssed man#o,e estimation and #lanning( e) /itment and sele)tion s2stem% Afte ,o 0ing th o/gh this /nit( 2o/ sho/ld 3e a3le to6 F E"#lain man#o,e #lanning F $is)/ss the estimation of man#o,e F Ela3o ate on e) /itment # o)ess F o/tline the sele)tion # o)ess F $es) i3e the e+al/ation # o)ess 1%1 INTRO$UCTION

A)?/i ing sales #e sonnel is one the 3iggest )hallenge fa)ed 32 an2 o ganisation% Not onl2 a e the sales #e sonnel the f ont fa)e of the 3/siness ,ith the )losest )onta)t ,ith the )/stome s( the2 also e# esent one of the 3iggest e"#enses in the o ganisations o#e ations% The da/nting tas0 of ha+ing the ight n/m3e of sales #e sonnel a+aila3le at an2 gi+en #oint of time 3e)omes mo e )om#le" in an ind/st 2 that is g eatl2 affe)ted 32 fa)to s li0e seasonalit2( t ends and )hanging e)onomi) )onditions% To maintain a )om#etiti+e edge ,hile ma"imising ma gins( o ganisations )an #lan fo the a## o# iate n/m3e of #e sonnel ,hile ta0ing hel# f om histo i)al sales and # edi)ti+e anal2ti)s% Man#o,e estimation hel#s the o ganisation in a##ointing and maintaining an o#timal team of em#lo2ees fo )omfo ta3le ,o 0ing in the sales field% 1%2 ESTIMATING MAN*O8ER RETUIREMENTS FOR SALES $E*ARTMENT It is )lea that a )om#an2 )annot ho#e to fo e)ast a))/ atel2 its f/t/ e man#o,e e?/i ements /nless these a e elated to f/t/ e # od/)tion and sales le+els% The man#o,e #lanning # o)ess sta ts f om the anal2sis of the #e sonnel st /)t/ e of the o ganisation% 8hile f aming the man#o,e e?/i ement the f ame,o 0 )onside s inte nal fa)to s li0e si5e of a sto e( n/m3e of )atego ies and the le+el of s0ills e?/i ed to #a ti)/la le+el st /)t/ ed in the f ame,o 0% A#a t f om the inte nal fa)to s( the e a e some of the e"te nal t end fa)to s( ,hi)h affe)t the # o)ess of #lanning li0e em#lo2ee t/ no+e ( ne, s0ill e?/i ement( so)ial and e)onomi) )hanges% *lanning is an on;going # o)ess% Re) /itment and Sele)tion 9

Man#o,e *lanning On)e a #lanned f ame is de+elo#ed fo a sales de#a tment( the ne"t ste# is to ens/ e a )ontin/o/s s/##l2 of man#o,e in)l/ding #lanning fo the )ontingen)ies% No, fo e)asting( as a #a t of #lanning 3e)omes im#o tant% The e a e +a io/s fa)to s to 3e )onside ed 3efo e /sing an2 of the fo e)asting te)hni?/es% The inte nal fa)to s )an 3e 3/dget )onst aints( # od/)tion le+els( ne, # od/)ts and se +i)es( o ganisational st /)t/ e and em#lo2ee se#a ation% The e"te nal fa)to s in)l/de )om#etition en+i onment( e)onomi) )limate( la,s and eg/lato 2 3odies( te)hnolog2 )hanges and so)ial fa)to s% Man#o,e fo e)asting )onsists of t,o as#e)ts R man#o,e demand fo e)asting and man#o,e s/##l2 fo e)asting% Man#o,e demand fo e)asting in)l/des dete mining the staff mi" to 3e a##ointed to a))ess +a io/s staffing le+els( a+oiding /nne)essa 2 )osts and de+elo#ing an a)tion #lan to # e+ent sho tage of #eo#le% Some of the te)hni?/es a e6 1% Management 1/dgment6 In this )ase( the sto e le+el manage s o the floo le+el manage s # o+ide thei e)ommendations as #e thei e"#e ien)e% As #e the e+ie, a) oss the senio management( the final n/m3e s of the man#o,e fo a #a ti)/la sto e )an 3e )on)l/ded% 2% Ratio T end Anal2sis6 A##li)ation of atios on the #ast data hel#s in de+elo#ing insights and # edi)tions fo the f/t/ e% 7% 8o 0 St/d2 Te)hni?/e6 Unde this te)hni?/e( the ,o 0 meas/ ement is st/died and fa)to s li0e length of o#e ations( standa d ho/ s( o/t#/t #e ho/ and man;ho/ s e?/i ed a e )al)/lated fo f/t/ e # edi)tions% 9% $el#hi Te)hni?/es6 This te)hni?/e soli)its estimates f om a g o/# of e"#e ts and @/man Reso/ )e *lanning e"#e ts no mall2 a)t as inte media ies(

s/mma ise +a io/s es#onses and e#o t the findings 3a)0 to e"#e ts% C% Flo, Models6 This te)hni?/e in+ol+es the flo, of follo,ing )om#onents% $ete mine the time e?/i ed( esta3lish )atego ies( )o/nt ann/al mo+ements( estimate # o3a3le t ansitions% @e e demand is a f/n)tion of e#la)ing those ,ho ma0e a t ansition% Man#o,e s/##l2 fo e)asting is a # o)ess of meas/ ing the n/m3e of #eo#le li0el2 to 3e a+aila3le f om ,ithin and o/tside the o ganisation afte ma0ing allo,an)es fo a3sentees( inte nal mo+ements and( # omotions( ,astages( )hanges in ho/ s and othe )onditions of ,o 0% Some of the inte nal so/ )es a e @/man Reso/ )e a/dit( inflo,s and o/tflo,s( t/ no+e ate and 'o3 mo+ements% E"te nal so/ )es in)l/de ne, e"#e ien)es( e#lenishing lost #e sonnel( )ons/ltants( )ollege and /ni+e sit2 #otential% C The f ontline sales team a)ts as a fa)e of the o ganisation% The o+e all )/stome elationshi# ,ith the o ganisation is on the sho/lde s of f ontline h/man eso/ )es% The2 e?/i e eg/la t aining and de+elo#ment in )onside ation ,ith o ganisational goals as ,ell as thei #e sonal goals% @en)e( it is +e 2 im#o tant to /se the #lanning and fo e)asting as a tool to ha+e the ight s0ills at the ight #la)e in a sto e o de#a tment% Che)0 2o/ # og ess 1 1% 8h2 is the estimation of man#o,e e?/i ement im#o tantG 2% 8hat a e the te)hni?/es of man#o,e e?/i ementG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%7 MAN*O8ER *LANNING Man#o,e #lanning is essential to the )om#an2 as long as it is in 3/siness% The @R de#a tment )hal0s o/t detailed and int i)ate #lans fo the same% Maintaining ideal staffing le+els is the # emise and ationale fo this e"e )ise Man#o,e #lanning is a +e 2 im#o tant )om#onent of @R management% A tho o/gh assessment of the # esent eso/ )es and the f/t/ e estimated eso/ )es is done 3e)a/se staffing has to 3e o#tim/m% 8ith /nde staffing( the o ganisation loses o de s( )/stome s( sales and # ofits% O+e staffing es/lts in losses in te ms of sala ies and )om#eten)e% Man#o,e #lanning means de+elo#ing st ategies to mat)h the e?/i ement of the staff and the a+aila3le #ositions% The #eo#le ma0ing the #lans m/st ha+e a f/ll 0no,ledge of the o ganisation:s goals% Man#o,e #lanning( in its 3 oadest sense( )o+e s all those a)ti+ities t aditionall2 asso)iated ,ith the management of #e sonnel R e)o ds( e) /itment( sele)tion( t aining and de+elo#ment( a## aisal( )a ee #lanning( management s/))ession and so on% @o,e+e ( it is im#o tant( 3oth fo anal2ti)al #/ #oses and /ltimatel2 fo e"e)/ti+e #/ #oses( to disentangle these a)ti+ities and to thin0 of them as a n/m3e of se?/ential #hases% To #lan staffing( the @R de#a tment Re) /itment and Sele)tion D Man#o,e *lanning ma0es an e+al/ation of the #ast and f/t/ e% The # esent needs and eso/ )es a e

)ont asted ,ith f/t/ e needs and eso/ )es% The th ee main #hases a e6 *hase 16 The de+elo#ment of man#o,e o3'e)ti+es6 This is )on)e ned ,ith the de+elo#ment of fo e)asts of the man#o,e ne)essa 2 to f/lfill the )om#an2Is )o #o ate o3'e)ti+es( ,ith loo0ing at the totalit2 of sit/ations athe than at indi+id/als% It is )on)e ned ,ith detailed anal2sis in o de to identif2 and fo esee # o3lem a eas( to assess f/t/ e demands and to esta3lish ho, those demands ma2 3e met% It is di e)ted to,a ds the de+elo#ment of man#o,e st ateg2 as an integ al #a t of )om#an2 st ateg2% *hase 26 The management of man#o,e 6 In this #hase( the moti+e is to manage man#o,e eso/ )es to meet o3'e)ti+es and de+elo#ment( in mo e s#e)ifi) and indi+id/al te ms( of e) /itment #lans( t aining and de+elo#ment #lans( s/))ession #lans( a## aisal s2stems et)% *hase 76 Cont ol and e+al/ation6 This )on)e ns the )ontin/al e+al/ation and amendment of #lans in the light of a)hie+ement and )hanging )i )/mstan)es% *lanning sta ts f om a gi+en fa)t/al #osition and t ies to loo0 ahead th o/gh a ange of #ossi3ilities% E+al/ation in this )onte"t means tho o/ghl2 )he)0ing fo e)asts and fo e)asting methods against ,hat e+ent/all2 ha##ens and ma0ing s/)h e+isions as ma2 # o+e ne)essa 2% An2 #lanning a)ti+it2 m/st ha+e a s2stem fo this eg/la )he)0ing 3/ilt into it% In othe ,o ds( #lanning m/st 3e a )ontin/ing # o)ess% It is the /ltimate aim of an2 )om#lete s2stem of man#o,e #lanning that all th ee #hases sho/ld 3e f/ll2 integ ated ,ith the )om#an2Is #lan% 8itho/t a )om#an2Is #lan( the e )an 3e no ealisti) man#o,e #lanning% The # esent #osition and the anal2sis of t ends In man#o,e #lanning the e a e th ee 3asi) elements to 3e )onside ed6 the # esent sto)0 of man#o,e ( ,astage and f/t/ e e?/i ements fo man#o,e %

Info mation ,ill 3e needed in a se ies of #e m/tations and )om3inations a))o ding to the needs of the )om#an2% The follo,ing a e the 3asi) O3/ilding 3lo)0sI that ,ill # o3a3l2 3e needed in most )i )/mstan)es6 1% * esent total man#o,e 2% Man#o,e eso/ )es 32 a## o# iate #lanning g o/#s( fo e"am#le( se"( g ade( f/n)tionAde#a tment( # ofessionAs0ill( ?/alifi)ation( age g o/# and length of se +i)e 7% Total man#o,e )osts E 9% Total )osts 32 a## o# iate )om#onent elements( fo e"am#le( sala ies( ,ages( #ension )ont i3/tions( ,elfa e( )anteen et)% C% Costs 32 f/n)tionsAde#a tments D% Total n/m3e s elated to sales( # od/)tion o s/)h othe ) ite ia as ma2 3e a## o# iate( in #h2si)al and finan)ial te ms E% Att ition and etention ates 32 a## o# iate g o/#s( that is( o+e all( 32 f/n)tionAde#a tment( # ofession( se"( age g o/# et)% !% Re) /itment #atte ns 32 age( ed/)ation et)% fo ea)h f/n)tionAde#a tment J% Reso/ )es of # omota3le staff 1%7%1 O3'e)ti+es of man#o,e #lanning The o3'e)ti+e of man#o,e #lanning is to hel# the o ganisation to a)hie+e its goal% Fo this #/ #ose( the man#o,e #lanne s ha+e to de+elo# some st ategies% Staine has s/ggested nine st ategies fo the 3enefit of man#o,e #lanne s6 1% The2 sho/ld )olle)t( maintain and inte # et ele+ant info mation ega ding h/man eso/ )es% 2% The2 sho/ld #e iodi)all2 e#o t man#o,e o3'e)ti+es( e?/i ements( e"isting em#lo2ment and allied feat/ es of man#o,e %

7% The2 sho/ld de+elo# # o)ed/ es and te)hni?/es to dete mine the e?/i ements of diffe ent t2#es of man#o,e o+e a #e iod f om the stand#oint of o ganisationIs goals% 9% The2 sho/ld de+elo# meas/ es of man#o,e /tilisation as )om#onent of fo e)asts of man#o,e e?/i ement along ,ith inde#endent +alidation% C% The2 sho/ld em#lo2 s/ita3le te)hni?/es leading to effe)ti+e allo)ation of ,o 0 ,ith a +ie, to im# o+ing man#o,e /tilisation% D% The2 sho/ld )ond/)t esea )h to dete mine fa)to s ham#e ing the )ont i3/tion of indi+id/als and g o/#s lo the o ganisation ,ith a +ie, to modif2ing o emo+ing these handi)a#s% E% The2 sho/ld de+elo# and em#lo2 methods of e)onomi) assessment of h/man eso/ )es efle)ting its feat/ es as in)ome;gene ato and )ost and a))o dingl2 im# o+ing the ?/alit2 of de)isions affe)ting the man#o,e % !% The2 sho/ld e+al/ate the # o)/ ement( # omotion and etention of the effe)ti+e h/man eso/ )es> and Re) /itment and Sele)tion ! Man#o,e *lanning J% The2 sho/ld anal2se the d2nami) # o)ess of e) /itment( # omotion and loss to the o ganisation and )ont ol these # o)esses ,ith a +ie, to ma"imising indi+id/al and g o/# #e fo man)e ,itho/t in+ol+ing high )ost% Che)0 2o/ # og ess 2 1% 8hat is man#o,e #lanningG

2% E"#lain the th ee #hases of man#o,e #lanning 7% 8hat a e the o3'e)ti+es of man#o,e #lanningG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%9 RECRUITING SALESMEN Th/s fa ( ,e ha+e e"amined fa)to s sales management sho/ld )onside in dete mining man#o,e e?/i ements% Both ?/alitati+e and ?/antitati+e dimensions of the tas0 ha+e 3een anal25edK'o3 anal2ses )ome fi st and es/lts in 'o3 des) i#tions% 1o3 des) i#tions hel# in de i+ing 'o3 s#e)ifi)ations> and all these( )onside ed along ,ith s/)h fa)to s as fo e)asted sales and the sales fo )e t/ no+e ate and )ont i3/te to the dete mination of the n/m3e of /nits of sales man#o,e needed% These a e ne)essa 2 # elimina ies to the ne"t ste#( /s/all2 )alled e) /iting( ,hi)h in+ol+es dete mining ,ho has the ne)essa 2 ?/alifi)ations% The t,o main e) /iting # o3lems a e identif2ing the so/ )es of e) /its and )hoosing e) /iting methods% The salesman; e) /iting effo t diffe s in im#o tan)e f om fi m to fi m( the diffe en)es stemming in #a t f om +a iations in the )ali3 e of man desi ed% The highe the desi ed )ali3 e( the mo e diffi)/lt it is to o3tain an ade?/ate n/m3e % The )ali3 e desi ed( of )o/ se( is infl/en)ed 32 the nat/ e of the 'o3( )om#le"it2 of the # od/)t line( # o3lems in se +i)ing )/stome s and so fo th% If 'o3 s#e)ifi)ations )all fo some s#e)ial talent( s/)h as the a3ilit2 to a##l2 imagination to the sol/tion of )/stome s: # o3lems( then men of high )ali3 e # o3a3l2 ,ill 3e needed% If( ho,e+e ( 'o3 s#e)ifi)ations e?/i e onl2 o de ta0ing a3ilit2( as in the

)ase of man2 3ee and soft d in0 salesmen( then men of lo,e )ali3 e ,ill s/ffi)e% J Simila l2( a highe )ali3 e of salesman is o dina il2 indi)ated fo a # od/)t that is te)hni)al( )om#le" o sells at a high /nit # i)e% The im#o tan)e and s)o#e of the e) /iting effo t is also infl/en)ed 32 the n/m3e of e) /its that m/st 3e o3tained% Re) /iting ises in im#o tan)e ,ith the n/m3e of men needed and this( in t/ n( is affe)ted 32 s/)h fa)to s as fo e)ast sales( # omotional and selling st ateg2 and the sales fo )e t/ no+e ate% No mall2( a la ge 3/siness ,ith la ge sales needs mo e salesmen than does a small 3/siness% Ne+e theless( t,o fi ms of )om#a a3le si5e in the same ind/st 2 ma2 ha+e signifi)antl2 diffe ent;si5ed fo )es( often 3e)a/se one /ses a diffe ent ma 0eting )hannel o st esses ad+e tising mo e in its # omotional # og amme% As might 3e e"#e)ted( fi ms ,ith high sales fo )e t/ no+e ates m/st do m/)h mo e e) /iting than those ,ith lo,e ates% 1%9%1 Re) /iting So/ )e Identifi)ation Afte )om#letion of the 'o3 des) i#tion and 'o3 s#e)ifi)ations( the ne"t # o3lem is lo)ating s/)h )andidates% One ,a2 to sta t is to anal25e so/ )es /sed in the #ast% Ea)h so/ )e sho/ld 3e anal25ed to e+eal the total n/m3e of e) /its # od/)ed and :s/))esses: and :fail/ es:% Ea)h so/ )e( in othe ,o ds( sho/ld 3e anal2sed ?/antitati+el2 and ?/alitati+el2% One so/ )e ma2 ha+e # o+ided n/me o/s e) /its 3/t fe, s/))esses> a se)ond fe,e e) /its 3/t a high # o#o tion of s/))esses% Conside this anal2sis of eight2 salesmen e) /ited 32 one )om#an2 o+e a #e iod of fi+e 2ea s <see ta3le 1%1%= Ta3le 1%16 Re) /itment of salesman So/ )e N/m3e Re) /its

X of Total N/m3e S/))esses Ratio of S/))ess to Total Re)ommendations 32 o,n Salesmen 22 2E%CBX 1B %9CC Ed/)ational Instit/tions 19 1E%CB 1B %E1C Salesmen fo Non)om#eting Fi ms 12 1C%BB 2 %1DE Em#lo2ment Agen)ies 1B 12%CB 7 %7BB *e sonal A)?/aintan)es of E"e)/ti+es ! 1B%BB C %D2C C/stome s Em#lo2ees D E%CB 1 %1DE Re) /itment and Sele)tion 1B Man#o,e *lanning Unsoli)ited

A##li)ations C D%2C 2 %9BB Com#etito s Salesmen 7 7%EC 2 %DEB Totals !B 1BB%BBX 7C Ration of S/))esses to Total f om all So/ )es %97E Noti)e that the so/ )e a))o/nting fo the la gest n/m3e of e) /its sho,ed a s/))ess atio onl2 slightl2 mo e fa+o/ a3le than the atio fo all so/ )es 3/t it did a))o/nt fo 1B of the 7C s/))esses e) /ited and( fo this eason( management might ,ant to )ontin/e /sing it% Th ee so/ )es had highe ;thana+e age s/))ess atios and management sho/ld e"#lo e ,a2s of in) easing the n/m3e of e) /its f om them% Th ee othe so/ )es had +e 2 lo, s/))ess atios and management sho/ld /se them )a/tio/sl2 in the f/t/ e% A ,o d of )a/tion6 these es/lts indi)ate the e"#e ien)e of onl2 one )om#an2 and sho/ld not 3e )onside ed t2#i)al of ind/st 2 in gene al% F/ the mo e( the definition of :s/))ess: ado#ted 32 a #a ti)/la management affe)ts this so t of anal2sis% In the e"am#le gi+en( s/))ess ,as defined as Hdemonst ated a3ilit2 to meet o e")eed sales ?/otas in t,o 2ea s o/t of th eeH% Othe managements might define s/))ess diffe entl2% Anothe ,o d of )a/tion ,ith ega d to /sing data of the a3o+e t2#e is that its elia3ilit2 de#ends /#on the si5e of the g o/# e+al/ated% Mo e elia3le )on)l/sions )o/ld 3e d a,n ,ith ega d to the ,o th of a so/ )e # od/)ing t,ent2t,o e) /its than one # od/)ing onl2 th ee e) /its% @o,e+e ( e+en if onl2 a small n/m3e of )ases a e a+aila3le( the data ma2 still 3e hel#f/l( altho/gh a less elia3le g/ide in identif2ing # omising so/ )es of ne, salesmen% Some f e?/entl2 /sed so/ )es of e) /its a e dis)/ssed 3elo,% The intent is to des) i3e gene al so/ )e )ha a)te isti)s and to #oint /# signifi)ant ad+antages( disad+antages and othe #e tinent info mation )on)e ning ea)h so/ )e%

1%9%2 So/ )es ,ithin the Com#an2 F Com#an2 Salesmen6 Man2 indi+id/als a##l2 fo s#e)ifi) sales 'o3s 3e)a/se the2 0no, )om#an2 salesmen and salesmen:s e)ommendations ma2 )onstit/te an e")ellent so/ )e% Often s/)h a##li)ants al ead2 0no, something a3o/t the 'o3 and a3o/t )om#an2 #oli)ies and the fa)t that the2 a##l2 is some indi)ation of fa+o/ a3le dis#osition to,a d the )om#an2% Salesmen( often g ega io/s #eo#le( t2#i)all2 ha+e ,ide )i )les of a)?/aintan)es( sin)e 3oth on and off the 'o3 the2 )ontin/all2 meet ne, #eo#le and gene all2 ha+e man2 f iends ,ith simila inte ests% It is nat/ al( then( that man2 of thei )onta)ts 11 ha+e good #otentials as salesmenKindeed( man2 a e salesmen al ead2 fo othe fi ms% @o,e+e ( some salesmen a e not #a ti)/la l2 dis) iminating in thei e)ommendations and fo this eason s/)h e)ommendations need )a ef/l a## aisal% One s#e)ial e) /iting sit/ation in ,hi)h salesmen f e?/entl2 a e en)o/ aged to s/3mit e)ommendations in+ol+es filling 'o3s in emote te ito ies> salesmen in the same o ad'a)ent a eas ma2 0no, )onside a3l2 mo e a3o/t /ni?/e te ito ial e?/i ements and lo)al so/ )es of #e sonnel than home offi)e e"e)/ti+es% F Com#an2 E"e)/ti+es6 Re)ommendations of the sales manage ( the # esident and othe )om#an2 e"e)/ti+es a e anothe inte nal so/ )e% The sales e"e)/ti+e:s #e sonal )onta)ts ma2 2ield some to#;)ali3 e #eo#le 3e)a/se of his o,n in+ol+ement ,ith the selling field and his /nde standing of the needed ?/alifi)ations% Othe e"e)/ti+es: e)ommendations( 32 ,a2 of )ont ast( mo e often a e 3ased mainl2 /#on #e sonal f iendshi#s and tend to e# esent less o3'e)ti+e a## aisals% E"#e ien)e is almost the onl2 ,a2 to e+al/ate ea)h e"e)/ti+e:s ,o th as a so/ )e of ne, e) /its and the t2#e of anal2sis ada#ts

easil2 fo this #/ #ose% F Inte nal T ansfe s6 T,o additional so/ )es ,ithin the )om#an2 a e othe de#a tments and the non;selling se)tion of the sales de#a tment% Men desi ing t ansfe s a e al ead2 familia ,ith )om#an2 #oli)ies and the #e sonnel de#a tment sho/ld ha+e )onside a3le detailed info mation a3o/t them% One fa)to limiting e) /itment of t ansfe s is that the )om#an2 /s/all2 0no,s little a3o/t thei a#tit/de fo selling ,o 0> an offsetting fa)to is that the2 often #ossess e")ellent # od/)t 0no,ledge% A#tit/de fo selling( of )o/ se( )an 3e tested fo mall2 o 32 :t ial assignment to the field% T ansfe s a e es#e)iall2 good # os#e)ts fo sales #ositions ,hene+e # od/)t 0no,ledge ma0es /# a s/3stantial #o tion of sales t aining( sin)e thei 3a)0g o/nd ma0es it #ossi3le to a))ele ate field assignments% 1%9%7 So/ )es o/tside the Com#an2 F Ed/)ational Instit/tions6 This so/ )e in)l/des )olleges and /ni+e sities( 3/siness )olleges( high s)hools and night s)hools% It is easona3le to e"#e)t that g ad/ates ha+e attained )e tain minim/m ed/)ational le+els( the amo/nt de#ending /#on the instit/tion% Mo eo+e ( man2 ha+e had t aining in gene al 3/siness( ma 0eting and salesmanshi#% Ed/)ational instit/tions a e a #a ti)/la l2 f /itf/l so/ )e of ne, e) /its at g ad/ation time and some maintain 2ea ; o/nd #la)ement se +i)es fo g ad/ates see0ing 'o3 )hanges% Re) /itment and Sele)tion 12 Man#o,e *lanning

Most e)ent g ad/ates e# esent net additions to the la3o/ ma 0et and )onse?/entl2( need not 3e att a)ted a,a2 f om othe 'o3s% Colleges and /ni+e sities ha+e 3e)ome in) easingl2 im#o tant so/ )es of sales and management t ainees and )om#etition is 0een fo thei g ad/ates% Often the g ad/ating senio is in a #osition to )hoose f om se+e al att a)ti+e 'o3 offe s% Com#anies not maintaining )lose elations ,ith the )olleges a e at a disad+antage( f e?/entl2 3eing /na3le to o3tain a##ointments on o+e ) o,ded )am#/s e) /iting s)hed/les and finding it diffi)/lt to att a)t st/dents a,a2 f om )om#anies 3ette 0no,n to the )ollege% E+en 3ette 0no,n )om#anies fa)e stiff )om#etition ,ith ea)h othe in hi ing the ) eam of the g ad/ates% A fe, )om#anies offe sales t aining # og ammes to o/tstanding '/nio s d/ ing +a)ation #e iods% Th/s( the t ainee and the )om#an2 ha+e an o##o t/nit2 to e+al/ate ea)h othe and t ainees ,ho # o+e satisfa)to 2 a e offe ed 'o3s on g ad/ation% F Com#etito s: O ganisations6 Salesmen e) /ited f om )om#etito s: o ganisations gene all2 e?/i e minim/m t aining 3e)a/se of e"#e ien)e in selling simila # od/)ts to simila ma 0ets% B/t this is often a )ostl2 so/ )e( 3e)a/se a # emi/m m/st 3e #aid to #e s/ade salesmen to esign thei # esent 'o3s% Some sales manage s a e el/)tant to hi e )om#etito s: e";salesmen( 3e)a/se the2 s/s#e)t the lo2alt2 of s/)h #e sons% An indi+id/al hi ed a,a2 f om one o ganisation fo highe #a2 ma2 3e simila l2 tem#ted at some f/t/ e date% An im#o tant ?/estion to ans,e is ,h2 is this man lea+ing his # esent #ositionG 8hen the ne, 'o3 does not im# o+e #a2 o stat/s fo the a##li)ant( his desi e to )hange ma2 es/lt f om #e sonalit2 )onfli)ts o insta3ilit2% $issatisfa)tion ,ith his # esent 'o3 is not ne)essa il2 the fa/lt of the salesman% If he has good easons fo ma0ing the )hange( it ma2 3e #ossi3le to o3tain a

fi st;)lass man( ead2 at on)e fo # od/)ti+e ,o 0% F Salesmen fo Non)om#eting Com#anies6 Salesmen ,o 0ing fo fi ms in elated and non elated ind/st ies )onstit/te a so/ )e of e) /its% Men f om this so/ )e ma2 not 3e f/ll2 a)?/ainted ,ith the # od/)t line 3/t the2 do ha+e selling e"#e ien)e% This so/ )e # o+ides a )hannel of ad+an)ement fo salesmen in :dead end: 'o3s o those see0ing to /#g ade thei em#lo2ment% F Salesmen Ma0ing Calls on the Com#an26 The #/ )hasing agent is in dail2 )onta)t ,ith salesmen f om othe )om#anies and he is in a st ategi) #osition to e+al/ate thei on;the;'o3 #e fo man)es% It is not /n/s/al fo him to meet high)ali3 e salesmen fo ,hom 'o3s ,ith the #/ )hasing agent:s )om#an2 ,o/ld 3e att a)ti+e finan)iall2 o in othe es#e)ts% @e sho/ld 3e en)o/ aged to ma0e 17 the a## o# iate e)ommendations% F Em#lo2ees of C/stome s6 Some )om#anies ega d thei )/stome s as a e) /iting so/ )e% C/stome s a e as0ed to e)ommend a3le men in thei o,n o ganisations ,ho ha+e ea)hed the ma"im/m #otential of thei e"isting 'o3s% S/)h t ansfe s ma2 ha+e a fa+o/ a3le effe)t /#on mo ale in the )/stome :s o ganisation% @o,e+e ( sin)e )/stome good ,ill is of # ime im#o tan)e( a )/stome :s salesmen sho/ld no mall2 3e e) /ited onl2 ,ith his # io a## o+al and e)ommendation% F Sales E"e)/ti+es: Cl/3s6 Man2 sales e"e)/ti+es: )l/3s o#e ate #la)ement se +i)es% Salesmen see0ing ne, #ositions s/3mit #e sonal data sheets that a e d/#li)ated and fo ,a ded to mem3e s% At eg/la )l/3 meetings( the sales e"e)/ti+e has additional o##o t/nit2 fo info mal dis)/ssion and e")hange of #la)ement info mation% F Em#lo2ment Agen)ies6 Man2 sales manage s t aditionall2 ha+e ega ded

em#lo2ment agen)ies as /n# omising so/ )es of e) /its% Man2 /se agen)ies onl2 afte othe so/ )es a e #/m#ed d 2% Man2 3elie+e( /s/all2 ,ith little e+iden)e that :good: salesmen neithe need no ,ill /se an agen)2:s se +i)es% E"#e ien)e( /nfo t/natel2( tends to einfo )e s/)h attit/des( 3e)a/se too often agen)2 efe als fail to meet sales 'o3 s#e)ifi)ations% Sometimes this is t a)ea3le to agen)2 defi)ien)ies <s/)h as the /ns) /#/lo/s desi e to e)ei+e #la)ement fees= 3/t at least as often the fa/lt is that of the # os#e)ti+e em#lo2e ( ,ho ma2 3e /sing /n ealisti)all2 high 'o3 s#e)ifi)ations( ma2 not ma0e his e?/i ements )lea and so on% Be2ond an2 )on)ei+a3le do/3t( an em#lo2e is /n,ise as ,ell as /n'/stified in gene alising f om his /nsatisfa)to 2 e"#e ien)es ,ith one o a fe, agen)ies( ,hethe the2 a e # i+atel2 o#e ated o lo)al offi)es of state em#lo2ment se +i)es% 8hene+e an agen)2 is /sed( it sho/ld e)ei+e a )lea statement of the 'o3:s o3'e)ti+es and a )om#lete /ndo,n of 'o3 s#e)ifi)ations% If #ossi3le( the e) /ite sho/ld meet ,ith the agen)2 )o/nsello to ass/ e that the latte has the #e tinent info mation and that he f/ll2 /nde stands it% One othe #oint to e)ognise is that agen)ies need time to lea n a3o/t an em#lo2ing fi m and its /ni?/e e?/i ementsKth/s( )onside a3le gains a)) /e f om )ontin/ing elationshi#s ,ith agen)ies that #e fo m satisfa)to il2% Agen)ies ha+e steadil2 im# o+ed and e"#anded thei se +i)es <often the2 administe tests of +a io/s so ts( )he)0 efe en)es and #e fo m tas0s othe ,ise done( if at all( 32 the em#lo2e =% As the nat/ e of these se +i)es 3e)omes 3ette /nde stood 32 sales e"e)/ti+es( this so/ )e sho/ld g o, in im#o tan)e% One de+elo#ment that Re) /itment and Sele)tion

19 Man#o,e *lanning sho/ld inte est sales e"e)/ti+es in+ol+es the g o,ing n/m3e of agen)ies that ta0e the initiati+e in sea )hing o/t # omising 'o3 )andidates( em#lo2ed o not( instead of )onfining themsel+es to :+ol/ntee : a##li)ants% Unfo t/natel2( these agen)ies no mall2 e) /it onl2 e"e)/ti+es and hen)e( do not # o+ide a so/ )e of salesmen% F $i e)t Unsoli)ited A##li)ations6 Most )om#anies e)ei+e some /nsoli)ited :,al0;in: and :, ite;in: a##li)ations fo sales #ositions% Some sales manage s fa+o/ immediate hi ing of a##li)ants ,ho ta0e the initiati+e in see0ing sales 'o3s( the easoning 3eing that this ma2 indi)ate selling agg essi+eness% Othe s( es#e)iall2 those ha+ing fa+o/ a3le e"#e ien)e ,ith othe e) /iting so/ )es( e'e)t di e)t a##li)ations a/tomati)all2 3/t #olitel2% * o3a3l2 the most logi)al #oli)2 is to t eat all +ol/ntee a##li)ations the same as soli)ited a##li)ationsK if an a##li)ant does not meet minim/m e?/i ements as set fo th in 'o3 s#e)ifi)ations( he sho/ld 3e eliminated at on)e> if he meets these e?/i ements( then he sho/ld 3e # o)essed f/ the along ,ith othe a##li)ants% The sele)tion s2stem( if it ,o 0s ,ell( sho/ld es/lt in hi ing the 3est;?/alified a##li)ants ega dless of the so/ )es f om ,hi)h the2 )ome% It sho/ld 3e noted that di e)t /nsoli)ited a##li)ations )annot 3e elied /#on to # o+ide a stead2 flo, of a##li)ants( the +ol/me fl/)t/ating ma 0edl2 ,ith )hanging 3/siness )onditions% F Olde Men6 Man2 )om#anies( as a matte of #oli)2( ef ain f om a)ti+el2 e) /iting men o+e 9C 2ea s of age% Sin)e( these men f e?/entl2 ha+e a diffi)/lt time o3taining 'o3s( a )om#an2 ,illing to )onside them ma2 sele)t

f om a g o/# fo ,hi)h the e is little )om#etiti+e 3idding% Man2 ha+e 2ea s of selling e"#e ien)e and the mat/ it2 that is so +al/a3le in most selling sit/ations% It is im#o tant( of )o/ se( to as)e tain ,h2 an a##a entl2 good man is /nem#lo2ed( 3/t the easons a e often 3e2ond his )ont ol% 8hen olde men a e /nde )onside ation fo sales 'o3s( ass/ming thei ?/alifi)ations )om#a e fa+o/ a3l2 ,ith 'o3 s#e)ifi)ations( hi ing de)isions ma2 hinge /#on the length of the t aining #e iod needed to 3 ing them /# to f/ll # od/)ti+it2% 1%9%9 Methods of Re) /iting Salesmen It is ,ise to # e)ede a)t/al e) /iting ,ith an anal2sis of methods )/ entl2 in /se( an e+al/ation simila to that /sed in dete mining so/ )es of e) /its% S/))esses( fail/ es and te minations m/st 3e s) /tinised to )he)0 the elation to )e tain e) /iting methods% The es/lts sho/ld aid in dete mining the most a## o# iate methods% 1C a% *e sonal Re) /iting *e sonal e) /iting in #a ti)/la is /sed fo s#e)ifi)all2 fo e) /iting g ad/ates% Cam#/s inte +ie,ing is often #lanned as a )om#an2;,ide affai ( 3e)a/se this a+oids m/)h d/#li)ation of effo t% Altho/gh e# esentati+es of diffe ent de#a tments do the inte +ie,ing( the #e sonnel de#a tment #lans and )oo dinates the e) /iting d i+e% In man2 effo ts of this t2#e( an assistant sales manage sha es ,ith the egional o dist i)t sales manage lo)ated on a )lose # o"imit2 the )am#/s es#onsi3ilit2 fo inte +ie,ing st/dents inte ested in sales #ositions% In )e tain othe )ases( home offi)e sales e"e)/ti+es )a 2 o/t )am#/s inte +ie,s and )ond/)t es#onsi3ilities on an alte nati+e 3asis among themsel+es% The e a e times ea)h et/ n on a 2ea l2 3asis to the same )am#/ses( hen)e 3/ilding lasting elationshi#s ,ith indi+id/al s)hools%

8hen it )ollege e) /iting it is mo e than im#o tant to e?/i es #lanning ,ell in ad+an)e of the )am#/s +isit% Statements of t ainee e?/i ements sho/ld 3e mailed to )ollege #la)ement offi)e s ea l2( # efe a3l2 no late than 1an/a 2% The list of )olleges( 3ased # ima il2 /#on #ast inte +ie,ing e"#e ien)e( is /#;dated and lette s a e sent o/t e?/esting inte +ie, dates% B2 fa the ideal months fo e) /iting 1/ne g ad/ates a e Fe3 /a 2( Ma )h and A# il and Ma )h is in the most demand% If the +isit )omes too late in the s# ing( inte +ie,e s find that man2 of the 3est;?/alified g ad/ates ha+e al ead2 ta0en 'o3s% Afte +isiting dates ha+e 3een )onfi med( )olleges a e sent lette s s#e)if2ing s/)h details as sala 2( age e?/i ements( desi ed ma ital stat/s and sta ting date of em#lo2ment% Ce tain sales manage s send )o#ies of # omotional mate ials( )om#an2 histo ies and a##li)ation 3lan0s% College #la)ement offi)e s s)hed/le 2B; to 7B;min/te inte +ie,s fo ea)h st/dent% All inte ested st/dents a e g anted inte +ie,sKfe, )om#anies # e;s) een )ollege a##li)ants% Gene all2( inte +ie,s a e the onl2 s) eening de+i)es /sed% The most # omising )andidates a e in+ited to the )om#an2 offi)es fo :follo,;/#: inte +ie,s ,ith de#a tmental e"e)/ti+es% @o,e+e ( man2 )am#/s inte +ie,e s ha+e a/tho it2 to do a)t/al hi ing if it a##ea s that # omising )andidates ,ill 3e lost th o/gh dela2% 3% Indi e)t Re) /iting Ad+e tisements in )lassified and othe se)tions of ne,s#a#e s and t ade 'o/ nals ha+e long 3een /sed fo e) /iting salesmen% Until e)entl2( ho,e+e ( ad+e tisements ,e e )onside ed /sef/l onl2 fo hi ing lo,;g ade salesmen fo o/tine 'o3s% E+en fo this g ade of #e sonnel( the # o#o tion of ?/alified to Re) /itment and

Sele)tion 1D Man#o,e *lanning /n?/alified es#ondents to a gi+en ad+e tisement ,as often small> and it ,as time)ons/ming and )ostl2 to s) een all the a##li)ants% F/ the mo e( most sales e"e)/ti+es 3elie+ed that high;)ali3 e> s/))essf/l men ,o/ld not see0 em#lo2ment in s/)h an im#e sonal ,a2% Ne+e theless( a )hange in thin0ing e+identl2 has o))/ ed% Toda2( )it2 ne,s#a#e s )a 2 la ge n/m3e s of ad+e tisements #/3li)ising o#enings fo salesmen and e+en fo sales e"e)/ti+es% So g eat is the n/m3e of # os#e)ti+e 'o3 )andidates ea)hed 32 a single ad+e tisement that )om#anies ta0e ste#s to ed/)e the +ol/me of a##li)ations% If the em#lo2e o+e )omes ,hat seems to 3e his nat/ al hesitan)2 to #/3lish details a3o/t the )om#an2 and 'o3( those ans,e ing the ad+e tisement sho/ld in)l/de fe,e #e sons ,ho o3+io/sl2 a e not ?/alified% S#e)ifi) details +a 2 ,ith the )om#an2 and its sit/ation and sho/ld 3e in the ad( if it is to att a)t good # os#e)ti+e salesmen% Some ads mention the sala 2 ange of s/))essf/l )om#an2 salesmen% Othe s e"#lain that the #e son sele)ted is to e#la)e a eg/la salesman in an esta3lished te ito 2 ,ith a)ti+e a))o/nts% Still othe s s#e)if2 that onl2 # ofessional salesmen need a##l2% Info mation of this so t hel#s )on+in)e good men that the o#ening e# esents a legitimate esta3lished 'o3% Most sales manage s fa+o/ :o#en: o+e :3lind: ad+e tisements( altho/gh mi"ed # a)ti)e e"ists% Be)a/se 3lind ads a e /nli0el2 to att a)t the 3est a##li)ants( the )om#an2 name( es#e)iall2 if ,ell 0no,n and es#e)ted( sho/ld 3e # ominentl2 feat/ ed% Lo)ation of the ad+e tisement in the #/3li)ation also is im#o tant% Ne,s#a#e ad+e tisements on s#o ts o finan)ial #ages a e /s/all2 mo e # od/)ti+e(

3/t )ost mo e #e inse tion than those in )lassified se)tions% $is#la2 ads on a s#o ts #age( fo e"am#le( not onl2 att a)t /nem#lo2ed #e sons loo0ing fo ,o 0 3/t em#lo2ed indi+id/als ,ho a e not in the 'o3 ma 0et 3/t ,ho )an 3e att a)ted 32 the l/ e of 3ette 'o3s% Sometimes 3 o)h/ es o/tlining )om#an2 sales )a ee o##o t/nities a e /sed% These a e dist i3/ted to a##li)ants ans,e ing ad+e tisements as ,ell as to those )onta)ted 32 othe methods% The most effe)ti+e 3 o)h/ es a e , itten f om the +ie,#oint of the # os#e)ti+e sales e) /it% Besides des) i3ing the )om#an2 and elating its histo 2( the2 sho/ld ma0e )lea the ?/alifi)ations e?/i ed fo sales 'o3s and the salesman:s d/ties( es#onsi3ilities and ad+an)ement o##o t/nities% It is effe)ti+e to in)l/de se+e al sho t )ase histo ies of those ,ho a e and ha+e 3een s/))essf/l salesmen ,ith the )om#an2% Man2 3 o)h/ es ma0e li3e al /se of #i)t/ es( )ha ts( diag ams and othe +is/al aids% $i e)t;to;)ons/me o ganisations in #a ti)/la ha+e a diffi)/lt time in hi ing salesmen% The t2#e of selling and the /n)e taint2 of ea nings es/lt in high 1E t/ no+e ates among these salesmen% Fo t/natel2( it is # a)ti)al fo these )om#anies to el2 /#on e) /iting methods that a e satisfa)to 2 in o3taining the lo,e g ade salesmen the2 e?/i e( altho/gh almost /seless fo e) /iting high;g ade salesmen% Thei 3est so/ )e of e) /its stems f om the e)ommendations of thei o,n salesmen and often 3on/ses a e offe ed fo ea)h ne, #e son e) /ited% 8hen this method # o+es inade?/ate( di e)t mail e) /iting is /sed( the mailing list often )onsisting of the names of fo me sales #eo#le the )om#an2 ho#es to e;em#lo2% In addition( :hel# ,anted: ads a e #la)ed in lo)al ne,s#a#e s o in #/3li)ations s/)h as S#e)ialt2 Salesman% As a last eso t( di e)t selling )om#anies( es#e)iall2 those ,ith field s/#e +iso s( /se )old;)an+ass e) /iting in the o#en te ito 2%

Che)0 2o/ # og ess 7 1% E"#lain the diffe ent so/ )es of e) /itment% 2% 8hat a e the methods of e) /iting salesmenG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%C T@E SELECTION SPSTEM The sele)tion s2stem m/st 3e ,ell integ ated( as e+e 2 ste# )hi#s in to,a ds the info mation that is needed fo hi ing de)isions% Sele)tion s2stems ange f om sim#le one;ste# s2stems )onsisting of nothing mo e than one info mal #e sonal inte +ie,( to )om#le" m/lti#le;ste# s2stems # o+iding fo the /se of man2 de+i)es and te)hni?/es designed to gathe info mation% It is hel#f/l to +is/alise a sele)tion s2stem as a set of s/))essi+e :s) eens:( ,he e the a##li)ant ma2 3e emo+ed f om f/ the )onside ation% Sin)e( in )e tain )ases the s) eens a e elati+el2 # i)e2 to administe )om#a ed to othe s( the s2stem m/st 3e designed to in)o #o ate the l/) ati+el2 # i)ed s) eens at an ea lie stage% Th o/gh this # o)ess the /#)oming )andidates a e eliminated ,ith minim/m dela2 and e)onomising on mone2 and effo t in+ested% A##li)ants s/ +i+ing all s) eenings a e offe ed #ositions% @o,e+e ( no sele)tion s2stem is infalli3le> all eliminate some ,ho ,o/ld ha+e s/))eeded as salesmen and e)ommend hi ing some ,ho fail% A sele)tion s2stem f/lfills its main mission if it im# o+es management:s a3ilit2 to Re) /itment and Sele)tion

1! Man#o,e *lanning estimate s/))ess and fail/ e # o3a3ilities fo indi+id/al a##li)ants% E+e 2 )om#an2 sho/ld design its sele)tion s2stem to fit its o,n e?/i ements% E+e 2 ste# m/st 3e )onside ed fo a #/ #ose( the eon e+e 2 ste# m/st 3e got id of ,hen it does not ma0e a ,o th,hile )ont i3/tion an2 mo e% 1%C%1 The Inte +ie, A##li)ation Man2 )om#anies /se an inte +ie, a##li)ation fo m to eliminate o3+io/sl2 /n?/alified a##li)ants( th/s sa+ing time of inte +ie,e s and a##li)ants% The inte +ie, a##li)ation o3tains info mation on 3asi) ?/alifi)ations of the 'o3 )andidate% Befo e o/tine inte +ie,ing and testing a e 3eg/n # edete mined minim/m ?/alifi)ations ega ding s/)h fa)to s as age( ed/)ation( health and e"#e ien)e( m/st 3e met% The inte +ie, a##li)ation fo m( ,hi)h is at most t,o #ages long( is )om#leted ,ithin the s#a)e of a fe, min/tes% It sho/ld not 3e )onf/sed ,ith the longe ( mo e detailed a##li)ation fo m /sed late in the sele)tion s2stem% 1%C%2 Inte +ie,ing Te)hni?/es The info mal( /n#lanned inte +ie, has 3een gi+ing ,a2 in man2 )om#anies to ne,e te)hni?/es( some of ,hi)h a e des) i3ed 3elo,6 F The *atte ned Inte +ie,6 @e e the inte +ie,e /ses a # e#a ed o/tline of ?/estions designed to eli)it a 3asi) )o e of info mation% @e ma2 ,o 0 di e)tl2 f om the o/tline( e)o ding ans,e s as the2 a e gi+en 3/t this tends to ma0e the )on+e sation stilted and the a##li)ant ne +o/s% G eate s#ontaneit2 es/lts ,hen the o/tline is memo ised and the ans,e s e)o ded afte the inte +ie,% Inte +ie,e s sho/ld a+oid as0ing too man2 ?/estions that )an 3e ans,e ed 32 a sim#le H2esH o HnoH% It is 3ette to /se mo e #enet ating ?/estions( ones that

e+eal the attit/des and thin0ing of the # os#e)ti+e em#lo2ee% F The Nondi e)ti+e Inte +ie,6 Some #e sonnel e"#e ts sa2 that a nondi e)ti+e te)hni?/e 2ields ma"im/m insight into an indi+id/al:s attit/des and inte ests% In this te)hni?/e( the a##li)ant is en)o/ aged to s#ea0 f eel2 a3o/t his e"#e ien)e( t aining and f/t/ e #lans% The inte +ie,e as0s fe, di e)t ?/estions and sa2s onl2 eno/gh to 0ee# the inte +ie,ee tal0ing% The nondi e)ti+e inte +ie, does not # o+ide ans,e s to standa d ?/estions and m/)h time is s#ent on o/t,a dl2 i ele+ant s/3'e)ts% E"#e t inte # etation( ho,e+e ( e+eals m/)h a3o/t the a##li)antKoften in)l/ding things of ,hi)h he himself is not )ons)io/sl2 a,a e% Th/s( this te)hni?/e:s # o#onents )laim that it is the 3est method fo # o3ing an indi+id/al:s #e sonalit2 in de#th% The main d a,3a)0 to its /se is that administe ing the inte +ie, and inte # eting the es/lts demand s#e)ialised inst /)tion% 1J F The Inte a)tion Inte +ie,6 The inte a)tion inte +ie, sim/lates the st esses the a##li)ant ,o/ld meet in a)t/al selling sit/ations and # o+ides the o))asion fo o3se +ing his ea)tions to them% Administe ing this fo m of inte +ie, e?/i es t,o #eo#le% One /ses #s2)hologi)al te)hni?/es to set /# the sim/lated sit/ations and the othe ( ,ho is # esent 3/t not an a)ti+e #a ti)i#ant in the inte +ie,( )a ef/ll2 o3se +es and e)o ds the a##li)ant:s ea)tions% Be)a/se of thei s/3tlet2( the deli)a)2 in+ol+ed in a##li)ation and the need fo e"#e t inte # etation( inte a)tion inte +ie,s sho/ld 3e #lanned( administe ed and inte # eted 32 t ained #s2)hologists% F Rating S)ales6 One ,idel2 e)ognised defe)t of the #e sonal inte +ie, is its tenden)2 to la)0 o3'e)ti+it2( a defe)t that )an 3e ed/)ed th o/gh ating s)ales% These a e so )onst /)ted that inte +ie,e :s atings a e )hanneled into a limited

)hoi)e of es#onses% In e+al/ating an a##li)ant:s gene al a##ea an)e( fo instan)e( one m/)h;/sed fo m fo )es an inte +ie,e to )hoose one of fi+e des) i#ti+e #h ases6 +e 2 neat( ni)el2 d essed( # esenta3le( /ntid2( slo+enl2% E"#e ien)e indi)ates that this es/lts in mo e )om#a a3le atings of the same indi+id/al 32 diffe ent inte +ie,e s% The )hief d a,3a)0 of the ating s)ale is that its +e 2 o3'e)ti+it2 est i)ts # e)ise des) i#tion of man2 #e sonal ?/alities% It is good # a)ti)e( the efo e( to en)o/ age inte +ie,e s to e"#lain atings in , iting ,hene+e the2 feel )omments a e needed% 1%C%7 Refe en)es and Re)ommendations Refe en)es # o+ided 32 f iends and fo me em#lo2e s a e /sed to se)/ e info mation on the a##li)ant not a+aila3le f om othe so/ )es% The +al/e of efe en)es is s)offed at 32 some em#lo2e s( ,ho )ontend that an a##li)ant names as efe en)es onl2 those on ,hom he )an el2 to s#ea0 in his fa+o/ % 8 ite s of efe en)e lette s gene all2 do hesitate to ) iti)ise f iends o e+en e";em#lo2ees( 3/t the2 often )ondemn them 32 faint # aise% The nat/ al tenden)2 fo efe en)es to 3e 3iased in fa+o/ of the a##li)ant )an 3e #a tiall2 offset 32 )onta)ting #e sons not listed as efe en)es 3/t 0no,ing the a##li)ant% *e sonal )onta)t is the 3est ,a2 to o3tain info mation f om efe en)es( sin)e fa)ial e"# essions and +oi)e intonations e+eal a g eat deal and most #eo#le a e mo e f an0 o all2 than in , iting% 8hen a efe en)e is lo)ated at a distan)e( a tele#hone )all ma2 s/3stit/te fo #e sonal )onta)t% Soli)itation of , itten e)ommendations is the ,ea0est a## oa)h and sho/ld 3e onl2 the last eso t% If efe en)es a e /sed( it is so/nd # a)ti)e to )onta)t #e sons in fo/ )lassifi)ations6 Re) /itment and

Sele)tion 2B Man#o,e *lanning F * esent o Fo me Em#lo2e s6 These #e sons ha+e o3se +ed the a##li)ant /nde )onditions simila to those he ,ill meet on the ne, 'o3% As a matte of # a)ti)e( ho,e+e ( man2 sales e"e)/ti+es do not a## oa)h the # esent em#lo2e ,itho/t the a##li)ant:s #e mission% F Fo me C/stome s6 If the a##li)ant has selling e"#e ien)e( his fo me )/stome s a e in a #osition to assess his sales a3ilit2% It is ad+isa3le( if #ossi3le( to )onta)t these indi+id/als ,itho/t the a##li)ant:s assistan)e% This hel#s a+oid those ,ho a e his f iends% F Re#/ta3le Citi5ens6 If efe en)es s/ggested 32 the a##li)ant a e /sed( it is 3est fi st to )onta)t those ,ho a e e#/ta3le( ,ell;0no,n )iti5ens% S/)h #eo#le a e el/)tant to sta0e thei #e sonal e#/tations on those in ,hom the2 ha+e little )onfiden)e% F M/t/al A)?/aintan)es6 Those ,ho 0no, 3oth the a##li)ant and the em#lo2e ma2 gi+e f an0 e+al/ations% 8hat ma2 3e e+en mo e im#o tant is that the em#lo2e is 3ette a3le to '/dge the elia3ilit2 of s/)h e+al/ations% 1%C%9 *h2si)al E"amination Sin)e good health is essential fo the s/))ess of the salesman( almost all )om#anies need #h2si)al e"aminations of all a##li)ants that a e 3eing )onside ed se io/sl2 fo sales #ositions% Be)a/se of the elati+el2 high )ost( the #h2si)al e"amination gene all2 is one of the last ste#s in the sele)tion s2stem% E+en in )om#anies e?/i ing ent an)e #h2si)al e"aminations( #oo health often a))o/nts fo se#a ations> 3/t ,hen the e"aminations a e not )om#/lso 2( the n/m3e is

highe % It is 3enefi)ial to man as ,ell as to the )om#an2 to identif2 #h2si)al ailments that ma2 late # e+ent him f om ea)hing f/ll # od/)ti+it2% 1%C%C C edit Info mation Toda2( +a io/s )om#anies /n a :) edit )he)0: on a##li)ants fo sales #ositions% C edit files a e )om#iled on most #eo#le 32 lo)al ) edit 3/ ea/s and s#e)ial ) edit e#o ts a e o3taina3le th o/gh s/)h o ganisations as C isil% A hea+2 3/ den of #e sonal de3t ma2 3e indi)ati+e of finan)ial ,o ies inte fe ing ,ith # od/)ti+it2 o of a moti+ating fa)to se +ing to s#/ # od/)ti+it2% In anal25ing the enti e ) edit e#o t( in fa)t( the e"e)/ti+e sho/ld loo0 fo the :dange signals:K )h oni) lateness in ma0ing #a2ments( la ge de3ts o/tstanding fo long #e iods o a 3an0 /#t)2 histo 2Kthe # esen)e of an2 of ,hi)h sho/ld signal the need fo additional # o3ing of the /nde l2ing fa)ts% Finan)ial i es#onsi3ilit2 might not 3e indi)ati+e of i es#onsi3ilit2 in meeting 'o3 o3ligations> the efo e )onside a3le 21 data on all as#e)ts of the a##li)ant:s 3eha+io/ ( nonfinan)ial as ,ell as finan)ial( m/st 3e a+aila3le as a ,a ant fo ,hi)he+e )on)l/sion is d a,n% Che)0 2o/ # og ess 9 1% $es) i3e +a io/s ste#s in the sele)tion # o)ess% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%D BASES FOR E&ALUATION OF TESTS Befo e e"amining the #s2)hologi)al tests /sed in salesman sele)tion( ,e need some ) ite ia fo e+al/ation% Fi st and most im#o tant( does the test meas/ e ,hat it #/ #o ts to meas/ eG The te m :+alidit2: e# esents the deg ee to ,hi)h a

test a)t/all2 meas/ es ,hat it is designed to meas/ e% Fo e"am#le( a , itten intelligen)e test in English is not a +alid meas/ e of the mental a3ilit2 of a fo eigne ,ith an English lang/age handi)a#% A lo, s)o e does not ne)essa il2 indi)ate lo, intelligen)e> it ma2 me el2 efle)t #oo /nde standing of the lang/age% Se)ond( is the test elia3leG Relia3ilit2 efe s to the )onsisten)2 of test es/lts% If the test is elia3le( an indi+id/al sho/ld e)ei+e a## o"imatel2 the same s)o e in s/3se?/ent etesting ,ith the same o e?/i+alent tests% Thi d( is the test o3'e)ti+eG If a test is o3'e)ti+e( it is so administe ed that the s)o e :s o#inion does not ente into the test es/lts% 8hene+e the #e son gi+ing o s)o ing the test is allo,ed to affe)t the es/lts( it is misleading to )om#a e es/lts o3tained 32 diffe ent teste s% Some of the othe fa)to s that need to 3e )onside ed in sele)ting tests a e )ost( time and ease of administ ation% 8ide +a iation e"ists in )ost and e+en small diffe entials ma2 3e im#o tant if tests a e gi+en to la ge g o/#s% Be)a/se the e is little elation 3et,een )ost and ?/alit2( it is sometimes #ossi3le to o3tain ?/alit2 tests at small )ost% The e is( simila l2( ,ide +a iation in the time e?/i ed to administe and s)o e tests% Sin)e time f e?/entl2 is an essential as#e)t of the sele)tion of sales #e sonnel( the em#lo2e needs to set a 3alan)e 3et,een the time e?/i ements of alte nati+e tests against thei elati+e effe)ti+eness% If the 3est a+aila3le test )ons/mes mo e time than )an 3e s#a ed( a medio) e test that )an 3e gi+en ?/i)0l2 ma2 # o+ide mo e effe)ti+e s) eening than no test at all% Some tests )an 3e administe ed and s)o ed onl2 32 e"#e ts> othe s )an 3e gi+en and s)o ed 32 Re) /itment and Sele)tion 22

Man#o,e *lanning #e sons ,ith little o no s#e)ial t aining% Then again( em#lo2e s sho/ld also 3alan)e the gains that a e lin0ed to mo e )om#le" tests against thei )osts in mone2 and time% *s2)hologi)al Tests * io to the de+elo#ment of #s2)hologi)al testing( sales e"e)/ti+es had no o3'e)ti+e ,a2 to meas/ e man2 t aits o )ha a)te isti)s of a##li)ants fo sales 'o3s% Toda2 mo e than half of all )om#anies ma0e some /se of #s2)hologi)al tests as one of the last ste#s in the sele)tion s2stem <the tests )ome to,a d the end 3e)a/se( of thei elati+el2 high )osts=% Nea l2 all the non/se s a e )om#anies ,ith fe,e than fift2 salesmen% Using #s2)hologi)al tests fo sele)tion #/ #oses( ho,e+e ( e?/i es )onside a3le so#histi)ation and thei +e 2 o3'e)ti+it2 leads ine"#e ien)ed /se s to e"#e)t mo e +alidit2 and elia3ilit2 in # edi)ting selling s/))ess than the tests )an offe % It )an 3e said in all fai ness that some ,idel2 /sed tests a e ne"t to ,o thless fo sele)tion #/ #oses( sim#l2 3e)a/se the2 ,e e designed fo enti el2 diffe ent /ses> othe s a e of ?/estiona3le +al/e e+en fo meas/ ing ,hat the2 ,e e intended to meas/ e% *s2)hologi)al testing is still an e"#e imental field and e+e 2 e"#e iment does not s/))eed% Pet mo e than a fe, testing :fail/ es: a e on the ma 0et( a e e+en # omoted and e)ommended and a e /sed 32 e"e)/ti+es /na,a e of the limitations% Ne+e theless( the e a e se+e al highl2 /sef/l and elia3le tests a+aila3le and )e tain ,ea0 tests )an se +e as s) eening de+i)es( so long as thei limitations a e e)ognised% @o,e+e ( the se +i)es of a t ained s#e)ialist in #s2)hologi)al testing sho/ld 3e /sed in sele)ting( administe ing and inte # eting the test 3atte 2 fo an2 #a ti)/la )om#an2% Th ee t2#es of #s2)hologi)al tests a e /sed in salesman sele)tion s2stems6

those of a3ilit2( of ha3it/al )ha a)te isti)s and of a)hie+ement% Tests of a3ilit2 attem#t to meas/ e ho, ,ell a #e son )an #e fo m #a ti)/la tas0s ,ith ma"im/m moti+ation% The2 might 3e )alled tests of 3est #e fo man)e and the2 in)l/de tests of mental a3ilit2 <so;)alled intelligen)e tests:= and tests of s#e)ial a3ilities o a#tit/de tests% Tests of ha3it/al )ha a)te isti)s attem#t to ga/ge ho, the # os#e)ti+e em#lo2ee ,o/ld a)t in his dail2 ,o 0( not ,hen he is on his 3est 3eha+io/ % These might 3e )alled tests of t2#i)al #e fo man)e and the2 in)l/de attit/de( #e sonalit2 and inte est tests% A)hie+ement tests a e designed to meas/ e ho, m/)h an indi+id/al has lea ned f om his t aining o ed/)ation% Tests of Mental A3ilit2 Mental tests a e /sed satisfa)to il2 in a ,ide ange of a eas and the2 ha+e highe +alidit2 and elia3ilit2 than most #s2)hologi)al tests% It m/st 3e 27 /nde stood( ho,e+e ( that the2 meas/ e # ima il2 the a3ilities that ma0e fo s/))ess in ed/)ational o t aining sit/ations( namel2( lang/age /sage and )om# ehension and a3st a)t easoning o # o3lem;sol+ing a3ilit2% The2 do not meas/ e ) eati+it2( o iginalit2 o insight% The efo e( the2 sho/ld 3e ega ded mo e as meas/ es of mental a#tit/de than of gene al intelligen)e% Be)a/se tests of mental a3ilit2 a e :timed tests:( the2 # o+ide an indi)ation of an a##li)ant:s a3ilit2 to lea n ?/i)0l2 and to a i+e at a))/ ate ans,e s /nde # ess/ e% 8ithin these limitations( mental tests a e hel#f/l in the salesman sele)tion # o)ess% 8he e the e is no othe e+iden)e of a3ilit2( s/)h as g ad/ation f om )ollege( the mental a#tit/de test se +es as a s) een to eliminate a##li)ants falling 3elo, a # edete mined le+el% A ,ide +a iet2 of mental a#tit/de tests is a+aila3le% Tests of S#e)ial A#tit/des Ce tain tests a e designed to meas/ e s#e)ial a#tit/des( s/)h as s#atial and

#e )e#t/al a3ilities( s#eed and ea)tion time( steadiness and )ont olled mo+ement( me)hani)al )om# ehension and a tisti) a3ilities% A#tit/de tests /sed indi+id/all2 aid in sele)ting fo some ind/st ial 'o3s as ill/st ated( fo e"am#le( 32 the /se of #e )e#tion tests fo sele)ting )le i)al #e sonnel% B/t 3e)a/se selling e?/i es di+e se a#tit/des and sales 'o3 s#e)ifi)ations diffe e+en among )om#eting )om#anies( an es#e)iall2 de+elo#ed 3atte 2 of a#tit/de tests is most a## o# iate fo sales #e sonnel ,o 0% The # o)ed/ e fo de+elo#ing a 3atte 2 of sales a#tit/de tests fo a #a ti)/la )om#an2 is st aightfo ,a d% The test e"#e t 3egins ,ith the 'o3 s#e)ifi)ations <de i+ed( as 2o/ ,ill e)all( f om the 'o3 des) i#tion=( )he)0ing them to ass/ e that the a3ilities e?/i ed fo 'o3 #e fo man)e a e )o e)tl2 identified% Then he sele)ts e"isting tests andAo )onst /)ts ne, tests to meas/ e ea)h a#tit/de% Finall2 he de+elo#s a s)heme fo ,eighing and )om3ining the s)o es of indi+id/al tests% This ,o 0 of # e#a ingKand late +alidatingKa test 3atte 2 is time;)ons/ming( )ostl2 and )alls fo a #s2)hologist:s se +i)es% Th/s( gene all2 the sit/ation is s/)h that onl2 )om#anies # o)essing la ge n/m3e s of sales 'o3 a##li)ants ann/all2 feel the2 )an affo d es#e)iall2 de+elo#ed test 3atte ies to meas/ e sales a#tit/de% Sin)e( /nfo t/natel2( 3atte ies not )/stom tailo ed fo a #a ti)/la sales 'o3 f e?/entl2 ha+e little +alidit2( it is not too s/ # ising that )om#anies ,ith small sales fo )es /s/all2 find it im# a)ti)al to in)l/de sales a#tit/de test 3atte ies in thei salesman sele)tion s2stems% Re) /itment and Sele)tion 29 Man#o,e

*lanning *e sonalit2 Tests *e sonalit2 tests initiall2 ,e e /sed fo identif2ing mental de+iates ; #eo#le ,ith #s2)hoti) tenden)ies ; and )e tain tests ha+e # o+ed /sef/l fo this #/ #ose% S/3se?/entl2( attem#ts ha+e 3een made to /se them fo meas/ ing #e sonalit2 t aits in no mal indi+id/als( fo ,hi)h #/ #ose the2 seem to ha+e little o no +alidit2 o elia3ilit2% The 3asi) limitation is the la)0 of /nifo m definitions fo s/)h t aits as initiati+e o agg essi+eness( ,hi)h these tests #/ #o t to meas/ e% To the e"tent that these tests a e at all +alid in meas/ ing no mal indi+id/als( +alidit2 m/st 3e dete mined 32 the total s)o e athe than 32 s)o es fo indi+id/al t aits% The )hief /se of the #e sonalit2 test )ontin/es to 3e that of identif2ing #e sons ,ith a3no mal #e sonalities% * o'e)ti+e tests( of ,hi)h the Ro s)ha)h is the 3est 0no,n( a e a # omising te)hni?/e fo #e sonalit2 meas/ ement% @o,e+e ( the2 m/st 3e administe ed 32 s0illed teste s and thei es/lts e# esent a s/3'e)ti+e o#inion athe than an o3'e)ti+e meas/ e% F/ the efinements of # o'e)ti+e te)hni?/es e+ent/all2 ma2 # o+ide /sef/l #e sonalit2 meas/ ements% Inte est Tests In /sing inte est tests as sele)tion de+i)es( it is a 3asi) ass/m#tion that the e is a elation 3et,een inte est and moti+ation% @en)e( if t,o men ha+e e?/al a3ilit2( the one ,ith the g eate inte est in a #a ti)/la 'o3 sho/ld 3e mo e s/))essf/l in that 'o3% A se)ond inhe ent ass/m#tion is that inte ests a e )onstant( that those of a #e son at age 9B a e essentiall2 the same as the2 ,e e at 21% The inte est test is /tilised fo the #/ #ose of +o)ational g/idan)e% Pet( to an e"tent it is less than satisfa)to 2 as a de+i)e fo sele)tion #/ #ose% This is 3e)a/se of the o##o t/nit2 # esent fo fa0ing es#onsesKan indi+id/al ma2 sele)t

ans,e s o+e stating his eal inte est in a #a ti)/la field% Of the t,o most ,idel2 /sed inte est tests( St ong and the R/de ( the St ong /ses the mo e indi e)t and s/3tle a## oa)h and is ha de to fa0e> 3/t 3e)a/se of its g eate )om#le"it2( it is mo e e"#ensi+e to s)o e% The United States Ai Fo )e( ,hi)h has e"#e imented ,ith a te)hni?/e to eliminate fa0ing( /ses an info mation test to meas/ e inte est on the theo 2 that a #e son sho/ld 3e 3est info med on those fields in ,hi)h he is most inte ested% 8hat # oof is the e of the +al/e of inte est tests in # edi)ting selling s/))essG Unfo t/natel2( +e 2 little% St ong has demonst ated that the e is a #ositi+e 3/t lo, )o elation 3et,een inte est s)o es and s/))ess in ins/ an)e selling% Signifi)ant +a iation has also 3een fo/nd in the inte est test s)o es of s/))essf/l 2C and /ns/))essf/l salesmen of a))o/nting ma)hines% Othe ,ise( the e is little tangi3le # oof of the +al/e of inte est tests as de+i)es fo # edi)ting selling s/))ess% Attit/de Tests Attit/de tests a e mo e /sef/l as mo ale;meas/ ing te)hni?/es than as sele)tion aids% The2 a e /sed to as)e tain em#lo2ees: feelings to,a d ,o 0ing )onditions( #a2( ad+an)ement o##o t/nities and the li0e% Used as salesman sele)tion de+i)es( the2 ma2 ma0e limited )ont i3/tions 32 identif2ing a3no mal attit/des on s/)h 3 oad s/3'e)ts as 3ig 3/siness( la3o/ /nions and go+e nment% Thei +alidit2 is ?/estiona3le( sin)e #eo#le often # ofess so)iall2 a))e#ta3le attit/des the2 do not a)t/all2 ha+e% In addition( attit/de tests do not meas/ e the intensit2 ,ith ,hi)h #a ti)/la attit/des a e held% A)hie+ement Tests A)hie+ement tests see0 to dete mine ho, m/)h indi+id/als 0no, a3o/t a

#a ti)/la s/3'e)t% Fe, standa dised tests of this t2#e a e /sed 32 ind/st 2( 3e)a/se s#e)ial s0ills in+ol+ed in ea)h 'o3 e?/i e diffe ent 0inds of 0no,ledge% Tests of )le i)al and stenog a#hi) a3ilit2 a e one e")e#tion and the )i+il se +i)e e"aminations a e anothe % Fo the em#lo2e ,ho has de)ided that it is ,o th,hile to )/stom design an a)hie+ement test fo sales a##li)ants( s/)h an inst /ment )an # o+ide an assessment of 0no,ledge that the a##li)ants #ossess in s/)h a eas as the # od/)t( ma 0eting )hannels and )/stome elations> ho,e+e ( as is t /e of othe #s2)hologi)al tests( s/)h designing is a 'o3 fo an e"#e t( not an amate/ % Re)ent esea )h has # od/)ed some e+iden)e that the e"isten)e of t,o 3asi) ?/alities( em#ath2 and ego d i+e( a e essential in good salesmen% Em#ath2 is the a3ilit2 to feel as othe s do and to #/t oneself in the othe #e son:s shoes% The em#athi) salesman senses the ea)tions of his )/stome s and is a3le to ad'/st to these ea)tions( a)hie+ing eal inte a)tion ,ith )/stome s% The se)ond 3asi) ?/alit2( ego d i+e( ma0es the salesman ,ant to ma0e the sale in a #e sonal ,a2( not me el2 fo the mone2 to 3e gained% @is feeling is that he has to ma0e the sale% @is self;#i)t/ e im# o+es 32 +i t/e of )on?/est and diminishes ,ith fail/ e% The good salesman has a # o#e 3alan)e of these t,o ?/alities% The de+elo#e s of this h2#othesis ha+e demonst ated in e"#e iments that meas/ ement of these t,o ?/alities alone </sing s#e)iall2 de+elo#ed #s2)hologi)al tests= has g eatl2 im# o+ed # edi)tion of s/))ess o fail/ e in a n/m3e of diffe ent selling 'o3s% Re) /itment and Sele)tion 2D Man#o,e *lanning Che)0 2o/ # og ess C

1% E"#lain in 3 ief the +a io/s t2#es of e+al/ation of tests% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1%E LET US SUM U* In this /nit( ,e6 F E"#lained man#o,e #lanning F $is)/ssed the estimation of man#o,e F Ela3o ated on e) /itment # o)ess F O/tlined the sele)tion # o)ess F $es) i3ed the e+al/ation # o)ess Che)0 Po/ * og ess6 *ossi3le Ans,e s Che)0 2o/ # og ess 1 Ans,e s6 See se)tion 1%2 Che)0 2o/ # og ess 2 Ans,e s6 See se)tion 1%7 Che)0 2o/ # og ess 7 Ans,e s6 See se)tion 1%9 Che)0 2o/ # og ess 9 Ans,e s6 See se)tion 1%C Che)0 2o/ # og ess C Ans,e s6 See se)tion 1%D 2E UNIT 2 TRAINING AN$ $E&ELO*MENT St /)t/ e

2%B O3'e)ti+es 2%1 Int od/)tion 2%2 E+ol/tion of T aining 2%7 Im#o tan)e of T aining 2%7%1 .no,ledge( S0ill and $esi e 2%9 S)o#e of T aining 2%9%1 Te)hni)al and soft s0ill t aining fo the st/dents 2%C Con+entional T aining and Mode n T aining 2%D T2#es of T aining 2%E Ste#s in T aining * og amme 2%! *la)ement and Ind/)tion 2%!%1 T2#es of Ind/)tion * og amme 2%J Moti+ating Sales Fo )e 2%1B Let Us S/m U# 2%B OB1ECTI&ES In this /nit( ,e ha+e dis)/ssed e+ol/tion and im#o tan)e of t aining( t2#es of t aining and the ste#s in+ol+ed( #la)ement and ind/)tion and the im#o tan)e of moti+ating the sales fo )e% Afte ,o 0ing th o/gh this /nit( 2o/ sho/ld 3e a3le to6 F $is)/ss the e+ol/tion and im#o tan)e of t aining F E"#lain the s)o#e of t aining F $iffe entialte 3et,een )on+entional T aining and Mode n T aining F En/me ate the t2#es of t aining and the ste#s in+ol+ed F $es) i3e #la)ement and Ind/)tion F State the im#o tan)e of moti+ating sales fo )e 2!

Man#o,e *lanning 2%1 TRAINING AN$ $E&ELO*MENT6 AN INTRO$UCTION @/man 3eings a e )onside ed as +al/a3le eso/ )es% Some innate ?/alities e"ist in e+e 2 indi+id/al% B/t( most of the ?/alities e?/i ed to f/lfill the +a io/s ne)essities of life a e a)?/i ed 32 them slo,l2 th o/gho/t thei life f om life e"#e ien)es% The2 a)?/i e 0no,ledge and then 32 a##l2ing it # a)ti)all2( the2 get s0ills% @o,e+e ( fo getting 0no,ledge and a)hie+ing s0ills( the2 sho/ld ha+e desi e% In )hildhood stage( the enth/siasm ,ill 3e of high le+el and th/s )hild en a)?/i e 0no,ledge +e 2 easil2 and ?/i)0l2% It is a nat/ al # o)ess% In late stages the #o,e of ) eati+it2 and enth/siasm de) ease slo,l2( mostl2 3e)a/se of ad+e se sit/ations% As fo an e"am#le( ,hen ,e s/## ess e#eated ?/estions f om )hild en( ,e a)t/all2 s/## ess thei a3ilit2 to thin0 and g as# 0no,ledge% An2 ,a2 ,e a e t aining o/ sel+es in o/ ,hole life f om 3i th to death% 8e a e intentionall2 t 2ing to add mo e in#/ts 32 # o+iding 0no,ledge and s0ills in a ,ell;o ganised and s2stemati) manne ( ,hi)h )an 3e te med as t aining% This t aining is aimed at de+elo#ment of the eso/ )ef/lness of h/man 3eings% Th o/gh t aining ,e # o+ide 0no,ledge and de+elo# s0ills% 8ith the hel# of t aining ,e )an not onl2 # o+ide te)hni)al 0no,ledge( 3/t ,e )an add in#/ts li0e +al/es and # in)i#les to the h/man 3eings ,hi)h ,ill 3e ne)essa 2 fo thei s/))essf/l life and at the same time fo the 3ette ment of the so)iet2 in ,hi)h the2 a e a #a t% T aining is a )ontin/o/s # o)ess the innate ?/alities and all othe a)?/i ed s0ills )an 3e de+elo#ed /# to that e"tent ,hi)h /ltimatel2 # o+ide the follo,ing6 1% T/alit2 o/t#/t

2% T/antit2 o/t#/t in minim/m time Ad'/sta3le ,ith the en+i onment 2%2 E&OLUTION OF TRAINING If a #e son #e fo ms a #a ti)/la ,o 0 fo a long #e iod( he 3e)omes an e"#e t in it% $/ ing the +a io/s # o)esses of the ,o 0( he ,ill )ome to 0no, the 3est alte nati+es a+aila3le to )om#lete the tas0 ,ith minim/m e o s and ma"im/m a))/ a)2% 2J Afte some time( the ,o 0load ma2 in) ease and mo e #e sons ma2 3e needed% @e e( the ne, #e sons ,ho 'oin a e not e"#e ts% The2 ma2 ) eate mo e e o s and thei s#eed ,o/ld 3e +e 2 less% The efo e( it is ne)essa 2 to ma0e them )a#a3le to #e fo m the ,o 0 ,ith easiness as ea l2 as #ossi3le% So( the al ead2 a+aila3le e"#e t )an # o+ide in#/ts and 0no,ledge of the ,o 0 to the ne, )ome s( ,hi)h ,ill # od/)e mo e e"#e ts in a lesse time% Ultimatel2 ,e )an sa2 that the fi st #e son he e ,as gi+ing the othe #e sons a OT ainingI to de+elo# the s0ills ne)essa 2 to ma0e them 'o3 e"#e ts% This ,a2 the # o)ess of t aining ,as e+ol+ed% Slo,l2 to ma0e the t aining # o)ess easie the2 in+ented ne, methods and te)hni?/es% Th/s +a io/s t2#es of t aining ,e e e+ol+ed% Th o/gh gene ation t aining # o)ess ,as e+ol+ed th o/gh +a io/s stages and in e+e 2 stage ne, and ne, modifi)ation ,e e 3eing done ,hi)h lastl2 im# o+ed the # o)ess of t aining +e 2 m/)h% This ,as es/lted into finel2 de+elo#ed t aining te)hni?/es and methods( ,he e the t aine Is 'o3 as ,ell the t aineeIs 'o3 3e)ame +e 2 eas2% In this ,a2( t aining ,as e+ol+ed slo,l2 th o/gh man2 stages% Che)0 2o/ # og ess 1

1% E"#lain the e+ol/tion of t aining% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%7 IM*ORTANCE OF TRAINING T aining is the ,a2 32 ,hi)h the s/ita3ilit2 of h/man eso/ )es as #e the e?/i ements of the en+i onment is im# o+ed% &a io/s en+i onmental fa)to s demand 0no,ledgea3le and s0illed man#o,e ( ,hi)h )an /se mental o #h2si)al a3ilities to f/lfill the needs% 2%7%1 .no,ledge( S0ill and $esi e Ste#han Co+e2 ,hile des) i3ing the ha3its of highl2 effe)ti+e #eo#le mentioned the im#o tan)e of 0no,ledge( s0ill and desi e ,hi)h a e +e 2 m/)h ne)essa 2 fo s/))ess% @e sa2s a # oa)ti+e #e son a)hie+es s/))ess th o/gh a)?/i ing 0no,ledge and s0ills% T aining and $e+elo#ment 7B Man#o,e *lanning 8itho/t 0no,ledge( no one )an #e fo m an2 of the e?/i ed a)ti+ities% On)e a #e son a)?/i ed 0no,ledge( he /ses that 0no,ledge in # a)ti)al ,a2 and 32 a##l2ing it # a)ti)all2( slo,l2 he 3e)omes s0illed% @o, )an ,e identif2 a s0illed #e sonG The effe)ti+eness of an2 a)ti+it2 de#ends on t,o fa)to s6 S#eed and A))/ a)2% Both a e in+e sel2 # o#o tional% If s#eed in) eases( it affe)ts a))/ a)2% B/t ,hen a #e son 3e)omes s0illed( he )an #e fo m the s#e)ifi) tas0 ,ith

ma"im/m a))/ a)2 <,ith minim/m e o s= 32 maintaining a )om#a ati+el2 high s#eed% @o,e+e ( the most and # elimina 2 e?/i ement fo the a)hie+ement of 0no,ledge and s0ill is L$esi eS% Man2 times this O$esi eI is la)0ing some,he e and 3e)a/se of that #eo#le a e not a3le to # od/)e the e?/i ed ?/alit2 and ?/antit2 th o/gh the o/t#/ts% Most of the time( onl2 3e)a/se of the a3sen)e of desi e( #eo#le fails in a)hie+ing 0no,ledge and s0ills and /ltimatel2 the2 fails in thei enti e life% Th/s( the t aining methodolog2 )hanges as #e the )hanges of e?/i ement% If the e?/i ement is o3taining 0no,ledge( a theo eti)al t aining is eno/gh( ,he eas fo im# o+ing s0ills( along ,ith theo eti)al t aining # a)ti)al t aining is also +e 2 m/)h ne)essa 2% @o,e+e ( fo ) eating desi e( a s/ita3le 0ind of 3eha+io/ al t aining sho/ld 3e # o+ided as # ima 2 t aining% In this ,a2( t aining #la2s an ine+ita3le #a t to add mo e +al/es in h/man life and to ma0e a st ong so)iet2% Che)0 2o/ # og ess 2 1% 8h2 is t aining so im#o tantG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 71 2%9 SCO*E OF TRAINING In an)ient da2s( t aining had onl2 limited s)o#e% 8ea#on t aining and ) aft,o 0 t aining ,e e )ommonl2 # o+ided% @o,e+e ( in mode n ,o ld the s)o#e

of t aining in) eases da2;32;da2 and of )o/ se( ,e )an see a ,ide +a iet2 of te)hni?/es in the field of t aining% Most of the t aining a)ti+ities a e st/dents o iented% To 3e)ome s/))essf/l in life a st/dent has to a)?/i e t emendo/s 0no,ledge and +a io/s s0ills% In an)ient da2s o##o t/nities in the 'o3 ma 0et ,e e +e 2 m/)h less% 8he eas( in the mode n ,o ld ne, fields a e eme ging da2;32;da2 and need fo s/ita3le #e sons to fill the ga#s is also in) easing% In the field enginee ing( so man2 o#tions )an 3e seen% Simila l2( a+iation( hotel and to/ ism ind/st 2( 'o/ nalism( / al de+elo#ment( a ts and ) afts( m/ltimedia and animation( B*Os and )all )ent es( ag i)/lt/ e( # od/)tion( o#e ations et) a e onl2 some of the fields ,he e ade?/atel2 t ained man #o,e is ne)essa 2% $/ ing the s)hool and )ollege da2s itself( the st/dents ha+e to /nde go diffe ent t2#es of t aining( li0e a)ademi)( +o)ational and 'o3 o iented t aining% In addition of all these( as #e the a#tit/de of the st/dents( se+e al othe )e tifi)ate )o/ se )an also 3e attended to a)hie+e +a iet2 of s0ills ,hi)h ,o/ld ma0e him st ong eno/gh to fa)e the )hallenges of life% 2%9%1 Te)hni)al and Soft S0ill T aining fo the St/dents This is the age of te)hnolog2% No,;a;da2s( e+e 2,he e ,e )an see the im#a)t of te)hnolog2% E+en the +illages a e no, de#ends on mode n te)hnolog2% In e+e 2 ind/st 2( the )om#etito s a e t 2ing thei le+el 3est to ado#t the ne,est te)hnolog2 to emain in the f ont% 8hile ada#ting mode n te)hnolog2( the2 also need te)hni)all2 ?/alified as ,ell as t ained man#o,e % The efo e( the s)o#e of te)hni)al t aining is t emendo/s% B/t( st/dents and thei #a ents a e )onf/sed he e% *a ents gene all2 send thei )hild en to s/)h t aining )o/ se( ,hi)h ma2 ha+e mo e demand in the

,o ld% The inte esting thing he e is most of the #a ents a e not at all t 2ing to identif2 the innate ?/alities and a#tit/de of thei )hild( ,hi)h a e essential to ens/ e the s/ita3ilit2 fo s/)h a )o/ se of st/d2% So the )o/ se sele)tion sho/ld 3e done )a ef/ll2 ,hile )hoosing the # og amme of st/d2% T aining and $e+elo#ment 72 Man#o,e *lanning In addition of te)hni)al t aining( to st engthen themsel+es the st/dents ha+e to /nde go +a io/s soft s0ill t aining% The2 ha+e to im# o+e thei )omm/ni)ation s0ills( leade shi# ?/alities( )onfiden)e( manne s and eti?/ette et)% To a)?/i e s/)h s0ills( s#e)ial t aining # og ammes a e a+aila3le% S/)h # og ammes ,ill 3e +e 2 m/)h hel#f/l to )hange thei attit/de and to im# o+e themsel+es as #e the no ms and /les of the so)iet2 and of )o/ se to 3/ild /# thei ,hole #e sonalit2% Fig% 2%16 S)o#e of t aining So( not onl2 to a)hie+e 3est 'o3s( 3/t also to fa)e the )hallenges of 'o3s ,ith highest )om#eten)2 and to )lim3 the )a ee ste#s easil2( # o#e and s/ita3le t aining is essential% Che)0 2o/ # og ess 7 1% 8hat is the s)o#e of t ainingG 2% E"#lain the im#o tan)e of te)hni)al and soft,a e t aining% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 77 2%C CON&ENTIONAL TRAINING AN$ MO$ERN TRAINING 8e )an di+ide t aining in to t,o( i%e% t aining methods /sed 3efo e the s# ead of mode n te)hnolog2 3ased on info te)h and the mode n t aining methods( ,he e /se of )om#/te is an ine+ita3le #a t% An2 t aining # o)ed/ e sho/ld )ontain the follo,ing # elimina 2 #a ts( ,hi)h sho/ld 3e )a ied o/t in a logi)all2 made se?/ential manne 6 a% Theo eti)al Sessions in the )lass oom 3% Li+e $emo )% * a)ti)al ,o 0 Let /s see the f/n)tional diffe en)es of the a3o+e stated #a ts 3oth in )on+entional and mode n methods% 1% Theo eti)al Sessions6 a% Con+entional Methods In )on+entional method( the theo eti)al sessions ,e e )ond/)ted in the )lass oom ,itho/t an2 e"te nal hel# of mode n )om#/te m/ltimedia s2stems% T aining aids ,e e hand made )ha ts( #oste s( #la)a ds( models in #laste of *a is( g a#hs( 3la)0 3oa d( slidomati)( O+e @ead * o'e)to et)% @e e( fo ens/ ing m/ltisenso 2 in+ol+ement( the tea)he A t aine had to do man2 effo ts% The )on+entional t aining aids a e also +a 2ing so m/)h% @e e the t aine /ses the t aining aids as #e the sit/ations demand% Fo e"am#le( models )an 3e made fo Ma# Reading t aining fo the

defense fo )es% 3% Mode n Methods Mode n Ed/)ational Te)hnolog2 methods # o+ide too man2 o#tions to the t aine ( 32 ,hi)h he ,ill 3e a3le to )on+e2 the ideas effe)ti+el2 to the lea ne % @e e he )an /se )om#/te s( LC$ * o'e)to s et)% Com#/te itself )an ,o 0 as a m/ltimedia s2stem in ,hi)h +a io/s media )an 3e )om3ined togethe to fo m an inst /)tional A info mati+e # og am effi)ientl2% &a io/s )om#/te aided inst /)tional #a)0ages and # og ams also in) ease the easiness of the tea)hing R lea ning # o)ess% T aining and $e+elo#ment 79 Man#o,e *lanning E"am#le6 The f/n)tion of a ma)hine )an 3e sho,n as a eal mo+ing #i)t/ e ,ith animations and s#e)ial effe)ts( ,hi)h ,ill not onl2 att a)t attention of the lea ne 3/t also in) eases the le+el of /nde standing /# to a g eat e"tent% Mo eo+e ( setting of m/ltimedia )lass ooms hel#s the t aine to )ont ol the )lass a)ti+it2 th o/gh a lo)al a ea net,o 0 )onne)ted )hain of )om#/te s% @e e( a)ti+e #a ti)i#ation of the st/dents d/ ing )lass oom sessions )an 3e ens/ ed and th/s t aining he e ,ill not emain a one;man sho,% 2% $emonst ation6 a% Con+entional Methods In )on+entional t aining( the demonst ation #a t did not )ontain an2 of the mode n t aining e?/i#ments% The tea)he had to sho, the demo in the )lass oom 32 himself%

E%g%6 Chemi)al Rea)tions6 @e e the tea)he does demo in the la3A oom and sim/ltaneo/sl2 gi+es des) i#tions of the same% The tea)he has to ,o 0 ha d to ma0e it inte esting% 3% Mode n Methods The demonst ation )an 3e sho,n to the st/dents ,ith the hel# of )om#/te and * o'e)to % S/ita3le na ation )an also 3e added% Th/s the ole of tea)he )an 3e minimised( ,he e as the effe)ti+eness of lea ning )an 3e in) eased% 8hen( the lea ne s ha+e an2 do/3ts( the2 )an )lea it 32 sto##ing the demonst ation as man2 times as the2 li0e% @e e the tea)he )an a)t as a g/ide( ,hose 'o3 is to g/ide the st/dents to see( thin0 and /nde stand the demonst ation ,hi)h is sho,n th o/gh +ideo # o'e)tion s2stem <,ith the hel# of al ead2 # e#a ed inst /)tional #a)0ages( ,hi)h )ontains +ideo )li#s( so/nd( animations et)=% 7% * a)ti)al Classes6 a% Con+entional Methods In )on+entional t aining methodolog2( the # a)ti)als sho/ld 3e done 32 the st/dents in the eal life sit/ations% The d a,3a)0s of this method a e as follo,s6 F &e 2 )ostl2 F 8astage of time F Some times it ma2 3e dange o/s <Chemi)al ea)tions et)= F &e 2 +ast # a)ti)al la3s ,ith e?/i#ments a e needed 7C The st/dents ha+e to /nde go +igo o/s # a)ti)al t aining ,he e in s/)h t aining methods dange s a e al,a2s the e% Sometimes instant feed3a)0 s2stem ma2 not 3e #ossi3le( e%g% t aining in ifle shooting( ,he e on)e all the fi ing a)ti+ities ha+e 3een finished( then onl2 the feed3a)0 )an 3e ta0en% Simila l2 in s/)h t aining s#e)iall2 made anges a e

e?/i ed ,he e eno/gh # e)a/tions ha+e to 3e ta0en to a+oid a))idents% 3% Mode n Methods Sim/lato s a e ,idel2 /sed ,he e the eal life sit/ation is ) eated a tifi)iall2% This method is al ead2 in /se in +a io/s fields( li0e t aining of ifle shooting( d i+ing( h/man anatom2( #ilot t aining et)% The st/dent gets immediate feed3a)0 of his s#eed and a))/ a)2 and he )omes to 0no, ho, m/)h im# o+ement is needed% Slo,l2 this method ,ill 3e s# ead o+e e+e 2 field of t aining% The main ad+antages of this s2stem a e as follo,s6 F It is not dange o/s% F Time )an 3e sa+ed% F Mone2 )an 3e sa+ed sin)e +e 2 la ge inf ast /)t/ e is not needed% F It is not ne)essa 2 to ta0e e"t a # e)a/tions% F Immediate feed3a)0 and a#id im# o+ement is #ossi3le% The fields of /se of sim/lato s a e no,;a;da2s +e 2 limited% B/t in nea f/t/ e mo e fields ,ill 3e added ,he e sim/lato s )an 3e /sed% Che)0 2o/ # og ess 9 1% E"#lain the # elimina 2 #a t of a t aining # o)ed/ e% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% T aining and

$e+elo#ment 7D Man#o,e *lanning 2%D TP*ES OF TRAINING T aining )an 3e )lassified into se+e al t2#es as #e the methodolog2% The +a io/s t2#es of t aining a e as follo,s6 a% Class oom t aining 3% On;1o3 T aining )% Te)hni)al T aining d% * o)ess T aining e% Soft s0illA3eha+io/ al t aining f% Com#/te 3ased t aining <CBT= T aine s a e designing t aining # og ammes as a s/ita3le )om3ination of an2 of the a3o+e stated t2#es% St/dents /nde go <a=( <3= and <d= t2#es of t aining # o)ess% @o,e+e ( in )o #o ate se)to ( all the a3o+e stated t aining methods a e a##li)a3le a))o ding to the sit/ational e?/i ements% a% Class Room T aining Off;the 'o3 t aining sim#l2 means that t aining is not a #a t of e+e 2da2 'o3 a)ti+ities% Class oom o off;the;'o3 inst /)tions a e /sef/l ,hen )on)e#ts( attit/des( theo ies and # o3lem;sol+ing a3ilities a e to 3e ta/ght% It is asso)iated mo e ,ith 0no,ledge than s0ill% Off;the;'o3 method )onsists of6 Le)t/ e Method6 This is most )ommonl2 /sed to add ess la ge g o/#s a3o/t gene al to#i)s% The le)t/ e #ossesses a )onside a3le de#th of 0no,ledge on the s/3'e)t at hand% @e see0s to )omm/ni)ate his tho/ghts in s/)h a manne as to inte est the )lass and )a/se them to etain ,hat he has said% The t ainees gene all2 ta0e notes as an aid to lea ning%

The Confe en)e Method6 In this method( the #a ti)i#ating indi+id/als O)onfe I to dis)/ss #oints of )ommon inte est to ea)h othe % It is an effe)ti+e t aining de+i)e fo #e sons in the #ositions of 3oth )onfe en)e mem3e and )onfe en)e leade % As a mem3e ( a #e son )an lea n f om othe s 32 )om#a ing his o#inions ,ith those of othe s% As a )onfe en)e leade ( a #e son )an de+elo# the s0ill to moti+ate #eo#le th o/gh his di e)tion of dis)/ssion% The e a e th ee t2#es of )onfe en)es6 F $i e)t $is)/ssion6 The t aine g/ides the dis)/ssion in s/)h a ,a2 that the fa)ts( # in)i#les o )on)e#ts a e e"#lained( F T aining Confe en)e6 The inst /)to gets the g o/# to #ool its 0no,ledge 7E and #ast e"#e ien)e and 3 ings diffe ent #oints of +ie, on the # o3lem( F Semina Confe en)e6 The inst /)to tells the # o3lem( en)o/ ages and ens/ es f/ll #a ti)i#ation in the dis)/ssion% The )onfe en)e is ideall2 s/ited to lea ning a3o/t # o3lems and iss/es and e"amining them f om diffe ent angles> it is )onside ed the 3est method fo ed/)ing dogmatism em#lo2ed in s/#e +iso 2 and e"e)/ti+e de+elo#ment # og ammes% Semina o Team $is)/ssion6 Semina is 3ased on a #a#e # e#a ed 32 one o mo e t ainees on a s/3'e)t sele)ted in )ons/ltation ,ith the #e son in )ha ge of the semina % The t ainees ead thei #a#e s( follo,ed 32 a ) iti)al dis)/ssion% The )hai man of the semina s/mma ises the )ontents of the #a#e s and the dis)/ssions( ,hi)h follo, thei eading% 3% On;1o3 T aining The most )ommon method /sed 32 ind/st 2 to t ain indi+id/als is on;the'o3 t aining% &i t/all2 e+e 2 em#lo2ee( f om )le 0 to gene al manage ( gets some

Lon;the;'o3 t ainingS% Unde this method( the em#lo2ee is gi+en t aining at his ,o 0#la)e 32 his immediate s/#e io ,ho 0no,s e"a)tl2 ,hat the t ainee sho/ld lea n to do% To 3e effe)ti+e( t aining inst /)tions sho/ld 3e hel#f/l( f iendl2 and #e sonal% The management sho/ld also 0ee# a )lose ,at)h and )he)0 /# on the t aining f om time to time% On;the;'o3 t aining ma2 ta0e an2 one of the follo,ing fo ms6 F Coa)hing6 Unde )oa)hing o /nde st/d2 method( the em#lo2ee is t ained on the 'o3 32 his immediate s/#e io % F 1o3; otation6 The #/ #ose of #osition otation is to 3 oaden the 3a)0g o/nd of the em#lo2ee in +a io/s #ositions% The em#lo2ee is made to mo+e f om 'o3 to 'o3 at )e tain inte +als% F S#e)ial Assignments a e /sed to # o+ide the em#lo2ees ,ith fi st hand e"#e ien)e in ,o 0ing on the a)t/al # o3lems% )% Te)hni)al T aining Te)hni)al t aining is /sed ,hen highl2 te)hni)al to#i)s a e in+ol+ed% @e e the t aine sho/ld 3e ,ell +e sed ,ith s/)h to#i)s% In )o #o ate se)to ( es#e)iall2 in the man/fa)t/ ing ind/st ies o soft,a e ind/st ies( gene all2 enginee s of the es#e)ti+e fields a e the t aine s( 3e)a/se( fo # o+iding te)hni)al t aining( high # ofi)ien)2 in te)hni)al s/3'e)t is m/st% T aining and $e+elo#ment 7! Man#o,e *lanning A))o ding to the ind/st 2( 3/siness and field( the nat/ e and method of te)hni)al t aining also )hanges% To t ain medi)al st/dents( anatom2 is ne)essa 2(

,he eas to t ain a me)hani)al enginee ing st/dent t aining a3o/t the #a ts and f/n)tioning of a ma)hine is e?/i ed% Fo # o+iding te)hni)al t aining( the t aine s sho/ld 3e te)hni)all2 ?/alified and e"#e ien)ed% Simila l2 he sho/ld ha+e the s0ills to t ain the )om#le" te)hni)alities of the +a io/s #a ts and f/n)tions of the ma)hines o the # o)ess% Fo the st/dents( instit/tes li0e '/nio te)hni)al s)hools( #ol2te)hni)s( enginee ing )olleges et) # o+ide s/)h t aining% Gene all2 in man/fa)t/ ing ind/st 2 te)hni)al t aining is /sed% d% &esti3/le T aining This method attem#ts to d/#li)ate on;the;'o3 sit/ations in a )om#an2 )lass oom% The t ainees a e ta0en th o/gh a sho t )o/ se /nde ,o 0ing )onditions that a## o"imate a)t/al sho#( sales o offi)e )onditions% This te)hni?/e ena3les the t ainee to )on)ent ate on lea ning the ne, s0ills athe than on #e fo ming an a)t/al 'o3% &esti3/le t aining is s/ita3le ,he e it is not ad+isa3le to #/t the 3/ den of t aining on line s/#e +iso s and ,he e s#e)ial )oa)hing is e?/i ed% @o,e+e ( t ainees ha+e to fa)e the ad'/stment # o3lem ,hen the2 a e #la)ed in the a)t/al ,o 0 #la)e% e% * o)ess T aining * o)ess T aining is the t aining( ,hi)h is meant to t ain the em#lo2ees to /nde stand the +a io/s ste#s in+ol+ed in a # o)ess% Fo # o+iding s/)h t aining( the t aine has to st/d2 the # o)ess and # e#a e # o)ed/ al do)/mentation% Gene all2 this is one of the t aining methods /sed in )o #o ate se)to % f% Soft s0illABeha+io/ al T aining Fo +a io/s 'o3s( diffe ent t2#es of soft s0ills a e e?/i ed% Fo e"am#le( O)omm/ni)ation s0ills( tele;)omm/ni)ation s0illsI et)% Simila l2 +a io/s ?/alities a e e?/i ed to f/lfill the +a io/s e?/i ements

of 'o3s% Fo manage ial 'o3s( the follo,ing ?/alities a e ne)essa 26 F Leade shi# F Team 3/ilding F $e)ision ma0ing 7J F *ositi+e thin0ing F * oa)ti+it2 Fo de+elo#ing s/)h #e sonalit2 t aits it is ne)essa 2 to design +a io/s 3eha+io/ al t aining mod/les% Simila l2 to emo+e )as/al attit/de f om the t ainee 3eha+io/ al t aining is the ,a2% Fo the f/lfillment of the 'o3 of )/stome )a e e"e)/ti+e( +a io/s s0ills a e e?/i ed% @e sho/ld 3e good in # ofessional )omm/ni)ation% @e sho/ld 3e a3le to anal25e the tho/ght # o)ess of the )/stome et)^ g% Com#/te Based T aining <CBT= In an2 of the a3o+e stated t aining # o)esses( if ,e /se )om#/te s( it is )alled )om#/te ;3ased t aining% In )lass oom ,e )an /se )om#/te s di e)tl2 as a tea)hing aid% In m/ltimedia )lass ooms )om#/te s #la2ed an im#o tant ole% Sim/lato s a e /sed fo # a)ti)al t aining% Fo management of t aining also )om#/te )an do a lot% The assessment and ga# anal2sis )an 3e done ,ith the hel# of t aining% Online tests and assessments )an 3e )a ied o/t ,ith )om#/te s% Com#/te s a e so m/)h +e satile( so that as #e the imagination and ) eati+e thin0ing of the t aine ( it )an 3e /sed /# to an2 e"tent% Che)0 2o/ # og ess C 1% E"#lain the diffe ent t2#es of t aining% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%E STE*S IN TRAINING *ROGRAMME T aining # og amme is a )ostl2 and time;)ons/ming # o)ess% The t aining # o)ed/ e dis)/ssed 3elo, is essentiall2 an ado#tion of the 'o3 inst /)tiont aining )o/ se% The follo,ing ste#s a e /s/all2 )onside ed as ne)essa 2% 1% $is)o+e ing o identif2ing t aining needs 2% * e#a ing the inst /)to o getting ead2 fo the 'o3 7% * e#a ing the t ainee 9% * esenting the o#e ation C% T 2 o/t the t aineesI #e fo man)e T aining and $e+elo#ment 9B Man#o,e *lanning D% Follo,;/# o e,a ds and feed3a)0 1% $is)o+e ing o Identif2ing the T aining Needs A t aining # og amme sho/ld 3e esta3lished onl2 ,hen it is felt that it ,o/ld assist in the sol/tion of s#e)ifi) # o3lems% Identifi)ation of t aining needs m/st )ontain th ee t2#es of anal2sis6 a% O ganisational Anal2sis6 dete mine the o ganisationIs goals( its eso/ )es and the allo)ation of the eso/ )es as the2 elate to the o ganisational goals% 3% O#e ations anal2sis6 fo)/ses on the tas0 o 'o3 ega dless of the em#lo2ee doing the 'o3%

)% Man anal2sis6 e+ie,s the 0no,ledge( attit/des and s0ills a #e son m/st a)?/i e to )ont i3/te satisfa)to il2 to the attainment of o ganisational o3'e)ti+es% A med ,ith the 0no,ledge of ea)h t aineeIs s#e)ifi) t aining needs( # og ammes of im# o+ement )an 3e de+elo#ed that a e tailo ed to these needs% The t aining # og amme then follo,s a gene al se?/en)e aimed at s/##l2ing the t ainee ,ith the o##o t/nit2 to de+elo# his s0ills and a3ilities% 2% * e#a ing the Inst /)to The inst /)to is the 0e2 fig/ e in the enti e # og amme% @e m/st 0no, 3oth the 'o3 to 3e ta/ght and ho, to tea)h it% The 'o3 m/st 3e di+ided into logi)al #a ts so that ea)h )an 3e ta/ght at a # o#e time ,itho/t the t ainee losing #e s#e)ti+e of the ,hole% This 3e)omes a lesson #lan% Fo ea)h #a t one sho/ld ha+e in mind the desi ed te)hni?/e of inst /)tion( i%e% ,hethe a #a ti)/la #oint is 3est ta/ght 32 ill/st ation( demonst ation o e"#lanation% 7% * e#a ing the T ainee This ste# )onsists of6 a% */tting the lea ne at ease 3% Stating the im#o tan)e and ing edients of the 'o3 and its elationshi# to ,o 0 flo, )% E"#laining ,h2 he is 3eing ta/ght d% C eating inte est and en)o/ aging ?/estions( finding o/t ,hat the lea ne al ead2 0no,s a3o/t his 'o3 o othe 'o3s e% E"#laining the O,h2I of the ,hole 'o3 and elating it to some 'o3 the 91 ,o 0e al ead2 0no,s f% *la)ing the lea ne as )lose to his no mal #osition as #ossi3le

g% Familia ising him ,ith the e?/i#ment( mate ials( tools and t ade te ms 9% * esenting the O#e ations This is the most im#o tant ste# in a t aining # og amme% The t aine sho/ld )lea l2 tell( sho,( ill/st ate and ?/estion in o de to #/t a) oss the ne, 0no,ledge and o#e ations% The e a e +a io/s alte nati+e ,a2s of # esenting the o#e ation namel2( e"#lanation( demonst ation et)% An inst /)to mostl2 /ses the method of e"#lanation% In addition( one ma2 ill/st ate +a io/s #oints /sing #i)t/ es( )ha ts( diag ams and othe t aining aids% $emonst ation is an e")ellent de+i)e ,hen the 'o3 is essentiall2 #h2si)al in nat/ e% The follo,ing se?/en)e of t aining ma2 3e follo,ed6 a% E"#lain the se?/en)e of the enti e 'o3% 3% $o the 'o3 ste# 32 ste# a))o ding to the # o)ed/ e% )% E"#lain ea)h ste# that he is #e fo ming% d% @a+e the t ainee e"#lain the enti e 'o3% Inst /)tions sho/ld 3e gi+en )lea l2( )om#letel2 and #atientl2> the e sho/ld 3e an em#hasis on 0e2 #oints and one #oint sho/ld 3e e"#lained at a time% The t ainee sho/ld also 3e en)o/ aged to as0 ?/estions in o de to indi)ate that he eall2 0no,s and /nde stands the 'o3% C% T 2 o/t the T aineesI *e fo man)e Unde this( the t ainee is as0ed to go th o/gh the 'o3 se+e al times slo,l2( e"#laining ea)h ste#% Mista0es a e )o e)ted and if ne)essa 2( some )om#li)ated ste#s a e done fo the t ainee the fi st time% Then the t ainee is as0ed to do the 'o3( g ad/all2 3/ilding /# s0ill and s#eed% As soon as the t ainee demonst ates that he )an do the 'o3 in the ight ,a2( he is #/t on his o,n% The t ainee( th o/gh e#etiti+e # a)ti)e( ,ill a)?/i e mo e s0ill% D% Follo,;U#

The final ste# in most t aining # o)ed/ es is that of follo, /#% This ste# is /nde ta0en ,ith a +ie, to testing the effe)ti+eness of t aining effo ts% The follo, /# s2stem sho/ld # o+ide feed3a)0 on t aining effe)ti+eness and on total +al/e of t aining s2stem% It is ,o th emem3e ing that if the lea ne has not lea nt( the tea)he has not ta/ght% T aining and $e+elo#ment 92 Man#o,e *lanning Che)0 2o/ # og ess D 1% E"#lain the ste#s in a t aining # og am% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%! *LACEMENT AN$ IN$UCTION *la)ement6 the # o)ess of assigning the sele)ted )andidate ,ith the most s/ita3le 'o3 it is mat)hing em#lo2ees s#e)ifi)ation ,ith 'o3 e?/i ements% This f/n)tion in)l/des6 F Co/nseling the #e sonal manage ega ding #la)ement F Cond/)ting follo,;/# st/d2( a## aising the em#lo2ee #e fo man)e in o de to dete mine em#lo2ee ad'/stment ,ith 'o3 F Co e)ting mis#la)ements( if an2 Ind/)tion Afte the )andidate is finall2 sele)ted( the management ,ill ha+e to sell the 'o3 to him% @e sho/ld 3e told as to ,hat his d/ties a e( ,hat is e?/i ed of him and ,hat his f/t/ e # os#e)ts in the o ganisation a e% No mall2 this info mation is

gi+en to the )andidate at the time of final sele)tion inte +ie,% This is the ,a2 the )andidate is ind/)ted into the 'o3% @e is fo mall2 a##ointed 32 iss/ing an a##ointment lette o 32 )on)l/ding ,ith him a se +i)e ag eement% The a##ointment lette )ontains the te ms and )onditions of em#lo2ment( #a2 s)ale and othe 3enefits asso)iated ,ith the 'o3% The inte +ie,e )an des) i3e the )om#an2 and its #oli)ies( the d/ties and es#onsi3ilities of the a##li)ant as ,ell as the o##o t/nities a+aila3le to him fo f/t/ e # omotion% The inte +ie,e sho/ld in fa)t highlight the fa+o/ a3le as#e)ts of the 'o3% 2%!%1 T2#es of Ind/)tion * og amme 1% Gene al Ind/)tion * og amme6 On)e an offe of em#lo2ment has 3een e"tended and a))e#ted( the final stage in # o)/ ement f/n)tion is )on)l/ded% The indi+id/al has then to 3e o iented to,a ds the 'o3 and the o ganisation% This is fo mall2 done th o/gh a # o)ess 0no,n as ind/)tion o o ientation% Ind/)tion is a ,el)oming # o)ess% The idea is to ,el)ome the )andidate( ma0e 97 him feel at home in the )hanged s/ o/ndings and to int od/)e him to the # a)ti)es( #oli)ies and #/ #oses of the o ganisation% The ne)essit2 of an ind/)tion # og amme is that ,hen a #e son 'oins an o ganisation( he is a st ange and is 3o/nd to feel sh2( inse)/ e and ne +o/s% Ind/)tion leads to ed/)tion of s/)h an"ieties% 2% S#e)ifi) O ientation * og amme6 At this stage( ind/)tion is )ond/)ted 32 the fo eman% Ind/)tion is s#e)ifi) and e?/i es s0ill on the #a t of the fo eman% A ne, em#lo2ee m/st 3e # o+ided o#e ational 0no,ledge that is s#e)ifi) to the #osition and lo)ation% The immediate 3oss <fo eman= is es#onsi3le fo t aining and ind/)tion% E+e 2 ne, em#lo2ee sho/ld 0no, the #eo#le ,ho

,o 0 ,ith him( the ,o 0 he is es#onsi3le fo ( the es/lt he is s/##osed to a))om#lish( the stat/s of the ,o 0( his elationshi#s in the o ganisation( e#o ts and e)o ds he m/st /nde stand and maintain( o#e ating #oli)ies( # o)ed/ es and /les and se +i)e g o/# a+aila3le to hel# him% a% The #/ #ose of s#e)ifi) ind/)tion is to ena3le an em#lo2ee to ad'/st himself to his ,o 0 en+i onment% 3% Follo,;/# Ind/)tion * og amme6 The #/ #ose of follo,;/# ind/)tion # og amme is to find o/t ,hethe the em#lo2ee is easona3l2 satisfied ,ith the 'o3% It is /s/all2 )ond/)ted 32 the fo eman o 32 a s#e)ialist f om the #e sonnel de#a tment% G/idan)e and )o/nselling effo ts a e made to emo+e the diffi)/lties e"#e ien)ed 32 the ne,)ome % Us/all2( follo, /# ind/)tion ta0es #la)e afte a3o/t one o t,o months f om the time of a##ointment% F The fi st of these fa)to s ,as ,hat is seen as L# ofessionalismS s/ggested as Lan a3ilit2 to deal sensiti+el2 ,ith # os#e)ti+e )/stome s( 3eing Lh/manS athe than L)lini)alS% F St2le of 3eha+io/ ,hi)h ,as Lnon;th eateningS and Lnon;a ogantS 3/t also L)hallengingS ,hen e?/i ed F S0ills li0e tole an)e fo am3ig/it2 and a )a#a)it2 to em#athise ,ith # os#e)ti+e )/stome s F Sho, L# ideS in ,o 0ing ,ith Info Te)h and thei # od/)ts% )% Using the a3o+e info mation( 2o/ a e e?/i ed to in+estigate an a## o# iate sele)tion st ateg2 ,hi)h sho/ld in)l/de6 F 8hi)h sele)tion te)hni?/es )o/ld meas/ e the att i3/tes identifiedG T aining and $e+elo#ment

99 Man#o,e *lanning F @o, ,o/ld the @R manage o#e ate the sele)tion of sales fo )eG 1/stif2 2o/ ans,e s% Che)0 2o/ # og ess E 1% 8hat is #la)ement and ind/)tionG 2% E"#lain the t2#es of ind/)tion # og am% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 2%J MOTI&ATING SALES FORCE Moti+ating sales #eo#le al,a2s has 3een one of the most im#o tant( as ,ell as #e ha#s the most diffi)/lt( of all the tas0s fa)ing the sales manage % Toda2:s in) easingl2 )om#etiti+e 3/siness )limate demands a highe deg ee of 0no,ledge and s0ill than e+e in moti+ating the sales fo )e to a)hie+e es/lts% A dedi)ated( # ofessional and # od/)ti+e sales fo )e is a 3ig asset fo all o ganisations% .ee#ing that sales fo )e moti+ated might 3e ?/ite eas2 ,hen the e)onom2 is doing ,ell( 3/t d/ ing e)ession it )an 3e m/)h ha de to 0ee# 2o/ to# #e fo me s on 3oa d and 0ee# them moti+ated% Im#lementing a m/ltifa)eted a## oa)h to em#lo2ee moti+ation and mo ale )an 0ee# 2o/ to# sales#eo#le #e fo ming at the to# of thei game( ega dless of o/tside ma 0et )onditions% The e a e th ee ) iti)al elements to moti+ate a s/))essf/l and high #e fo man)e # ofessional sales fo )e% These elements a e A## e)iation(

Re)ognition and Com#ensation% It is ne)essa 2 to # o+ide all th ee ing edients ,ith integ it2% A## e)iation Gi+ing Re)ognition and Com#ensation is not the same as demonst ating A## e)iation% Re)ognition im#lies #e sonal #e fo man)e% A## e)iation e?/i es a m/t/al /nde standing of the +al/e of the #e sonal #e fo man)e as a )ont i3/tion to the g eate good of the o ganisation% The sales # ofessional is '/st one im#o tant #a ti)i#ant% All of the em#lo2ees and oles in the o ganisation )ont i3/te to the s/))ess of the o ganisation% To effe)ti+el2 demonst ate a## e)iation( it is 9C ne)essa 2 to /nde stand and )omm/ni)ate ho, the oles of +a io/s de#a tments and f/n)tions ,o 0 togethe and the2 affe)t ea)h othe % On)e a## e)iation is meas/ ed in te ms of 3enefit to the o ganisation( then it 3e)omes eas2 to identif2 ho, to e"# ess a## e)iation% T/ite often( this e"# ession of a## e)iation is 3esto,ed in the fo m of t aining and de+elo#ment% The t aining is intended to hel# the sales asso)iate s/stain and e"#and on s/))essf/l #e fo man)e 32 # o+iding a #latfo m to lea n mo e a3o/t the # od/)t( # o)ess( integ ation o te)hni?/es% A## e)iation ma2 3e # esented in the fo m of tools that ena3le and em#o,e the sales asso)iate ,ith ha d,a e( soft,a e o 0no,ledge% A## e)iation a)0no,ledges )ont i3/tion to the o ganisation and em#o,e s )ontin/ed s/))ess% The )ont i3/tions of a sales asso)iate ma2 3e ,o th2 of demonst ating a## e)iation( e+en ,hen #e sonal attainment has not a)hie+ed the ne)essa 2 le+els fo e)ognition o )om#ensation% Re)ognition Gi+e e)ognition fo the attainment of #e sonal goals% Re)ognition ma2 3e

sha ed in the fo m of a,a ds( )e tifi)ates o #e sonal a))olades% It ma2 also 3e # o+ided in the fo m of , itten )omm/ni)ation% It is im#o tant to gi+e team o g o/# e)ognition ,hen a## o# iate( '/st as it is im#o tant to # o+ide indi+id/al e)ognition ,hen a## o# iate% Re)ognition sho/ld 3e fai ( 3alan)ed and ea ned% 8hen it is ea ned( it sho/ld not 3e fo gotten% &e 3al e)ognition is a ni)e gest/ e( 3/t not a lasting one% If the )ont i3/tions of the sales asso)iate ha+e had a signifi)ant 3enefit to the o ganisation and if the asso)iate has a)hie+ed #e sonal )ommitments( gi+e lasting e)ognition in the fo m of a )e tifi)ate o a,a d% An a,a d is a lasting eminde to the e)i#ient and to those indi+id/als ,ho ma2 also ,ant to e)ei+e one; that the o ganisation e)ognises and a## e)iates #e sonal a)hie+ement% Com#ensation The # ofessional sales asso)iate is meas/ ed 32 )om#ensation to the o ganisation in the fo m of e+en/e% It is no s/ # ise that the sales asso)iate meas/ es the #e fo man)e of the o ganisation to the sales asso)iate in the same manne % Commission and 3on/s #lans sho/ld 3e )lea and easil2 /nde stood% Commission( as #a2 fo #e fo man)e( sho/ld 3e ealisti)( e+en ,hen it is t eated as a :st et)h goal:% T aining and $e+elo#ment 9D Man#o,e *lanning Some sales )2)les and )/stome s ta0e longe to )lose% $oes the )om#an2 st ateg2 o )om#ensation #lan )hange mo e f e?/entl2 than the # od/)t offe ingG @o, signifi)ant a e these )hanges and ho, ,ell a e the2 /nde stoodG A e

)om#ensation #lans 3ased on histo 2( o##o t/nit2( the sales #i#eline o an /nattaina3le #i#e d eamG $oes the #lan e,a d the team as a #e )entage of indi+id/al effo t( the e32 en)o/ aging e)i# o)al s/##o tG Commission #lans sho/ld 3e 3ased on an allo)ation( as o##osed to a 3/dget% Commission sho/ld 3e an a## o# iated in+estment as in)enti+e fo team 3/ilding and indi+id/al )om#ensation% */tting it All Togethe The sales fo )e sho/ld not 3e t eated as the #i#eline to # ofit% Po/ )om#etito s ma2 +al/e 2o/ to# #e fo me s mo e than 2o/ do% Lo2al )/stome s a e '/st as li0el2 to 3e lo2al to a t /sted sales asso)iate as the2 a e li0el2 to 3e lo2al to a )om#an2 o 3 and% C/lti+ate( ed/)ate and moti+ate 2o/ sales fo )e to n/ t/ e a high #e fo man)e e+en/e;gene ating engine% Use a 3alan)ed a## oa)h of A## e)iation( Re)ognition and Com#ensation to a)0no,ledge( e,a d and moti+ate the sales fo )e as an in+estment to g o,ing e+en/e%

4
CONTROLLING AND MANAGING SALES FORCE
UNIT 1 Cont olling the Selling Effo t 2 UNIT 2 Managing Sales Fo )e 2! Expert Committee
$ % &ish am Ra'hans( A)ademi)ian Ms% *alla+i Sa'na#,a ( Asst% * ofesso

Programme Coordi ator


M % -ess *hili# ./ma

Co!r"e De"ig
M % $ee#a0 $al+i

Editor"
Ms% $ee#ash i .a andi0a Ms% Nidhi .ha e Ms% Megha .adam

#$o%& Preparatio Team


Ms% 12oti Aga ,al Ms% Ma tina A3 aham M % A'in02a $esh#ande

Materia$ Prod!%tio
M % &asant Gad0a i M % S/shant Am3e0a Ms% Rohinee Cha0 al Cop'rig(t ) I dia * o+$edge Corporatio All ights ese +ed% No #a t of this 3oo0 ma2 3e e# od/)ed o /tili5ed in an2 fo m o 32 an2 means ele)t oni) o me)hani)al( in)l/ding #hoto)o#2ing( e)o ding o 32 an2 info mation sto age o et ie+al s2stem ,itho/t #e mission in , iting fo m the #/3lishe %

S'$$a,!"
#LOC* 1- #ASICS OF SALES MANAGEMENT
U it 1- T(e Fie$d o. Sa$e" Ma ageme t

U it 2- Ro$e o. Sa$e" Ma ager

#LOC* 2- PLANNING FOR SELLING EFFORT


U it 1- Dema d Fore%a"ti g U it 2- Mar&et Pote tia$ a d Sa$e" Territor'

#LOC* /- MANPO0ER PLANNING


U it 1- Re%r!itme t a d Se$e%tio U it 2- Trai i g a d De1e$opme t

#LOC* 4- CONTROLLING AND MANAGING SALES FORCE


U it 1- Co tro$$i g t(e Se$$i g E..ort U it 2- Ma agi g Sa$e" For%e
1

#LOC* 4- CONTROLLING AND MANAGING SALES FORCE


I trod!%tio to t(e #$o%&
This 3lo)0 )o+e s the 3asi) )on)e#ts of managing and )ont olling the sales fo )e and sales fo )e o ganisation% Li0e all management( sales fo )e management )onsists la gel2 of Hgetting things done th o/gh #eo#leS% $e)ision;ma0ing and #oli)2 fo m/lation( as ,ell as othe as#e)ts of management de#end /#on #eo#le fo thei im#lementation% Im#lementing a sales #lan( fo instan)e( e?/i es the effo ts not onl2 of diffe ent e"e)/ti+es 3/t also of salesmen% F/ the mo e( effe)ti+eness of im#lementation de#ends /ltimatel2 on the )ali3e and n/m3e of salesmen at sales management:s dis#osal% An im#o tant di+ision of sales fo )e management )on)e ns itself ,ith defining ?/alitati+e and ?/antitati+e e?/i ements fo salesmen and the fo m/lation

and s0illf/l e"e)/tion of a## o# iate e) /itment and sele)tion #oli)ies% Fa)ed ,ith the )hanging glo3al en+i onment( +a 2ing )/stome needs and in) easing )om#etition( o ganisations a e see0ing ne, ,a2s to im# o+e thei #e fo man)e% Sin)e sales fo )e #e fo man)e has a di e)t 3ea ing on the o+e all #e fo man)e of o ganisations( the2 a e el2ing mo e and mo e on the sales fo )e to maintain thei #e fo man)e le+els% No othe fa)to has a g eate im#a)t on the 3ottom;line of o ganisations than the effe)ti+e #e fo man)e of thei sales fo )e% Cla if2ing the lin0 3et,een sales fo )e 3eha+io and sales o3'e)ti+es has led to #e fo man)e im# o+ements in man2 o ganisations% Not s/ # isingl2 then( o ganisations a e see0ing ,a2s to im# o+e sales fo )e #e fo man)e% Ne, methods of sales fo )e t aining( h/man eso/ )e #oli)ies( and a g eate a,a eness of the elements that infl/en)e thei ,o 0ing en+i onment ha+e led to signifi)ant im# o+ement and a 3ette /nde standing of the )on)e#t of sales fo )e #e fo man)e% It is essential that sales manage s a e a,a e of the fa)to s that infl/en)e the #e fo man)e of the sales #e sonnel% This a,a eness ,ill ha+e a g eat infl/en)e on the a## oa)h and # o)ess that the2 ,ill ado#t in e+al/ating the sales fo )e% 2 Co tro$$i g a d Ma agi g Sa$e" For%e

UNIT 1 CONTROLLING T2E SELLING EFFORT


Str!%t!re
1%B O3'e)ti+es

1%1 Int od/)tion 1%2 */ #ose of E+al/ation and Cont ol 1% 7 Sales and Cost Anal2sis 1%9 Sales Fo )e *e fo man)e E+al/ation 1%C 8hen to E+al/ateG 1%C%1 Info mation So/ )es fo E+al/ation 1%C%2 C ite ia fo the E+al/ation of Sales Fo )e *e fo man)e 1%D Esta3lishing *e fo man)e Standa ds 1%E Methods of Sales Fo )e E+al/ation 1%! Monito ing and Re+ie,ing Sales Fo )e *e fo man)e 1%J Let Us S/m U#

134 O#5ECTI6ES
In this /nit( ,e ha+e dis)/ssed the ,a2s of )ont olling sales fo )e and e+al/ation of sales fo )e%

A.ter +or&i g t(ro!g( t(i" ! it7 'o! "(o!$d ,e a,$e toF E"#lain the sales #oli)2 F $is)/ss the management and )ont ol of sales fo )e F E+al/ate the methods of sales fo )e F $es) i3e ho, to monito and e+ie, sales fo )e #e fo man)e 7

131 INTRODUCTION
Sales manage s o+e see a)ti+ities li0e setting sales and # ofit ta gets( fo m/lating sales elated ma 0eting #oli)ies( designing #e sonal selling st ategies( and integ ating the sales o ganisation ,ith the )om#an2:s othe f/n)tions% In sho t( the2 design and de+elo# the sales o ganisation and o+e see the im#lementation of

the sales # og am to get the desi ed es/lts% @o,e+e ( in dis)ha ging these es#onsi3ilities( sales manage s tend to s#end a lot of time in t 2ing to a)hie+e the #lanned es/lts and end /# o+e loo0ing a signifi)ant f/n)tion in the sales management # o)ess ; that of meas/ ing and e+al/ating the effe)ti+eness of the sale fo )e:s #e fo man)e% O ganisations ha+e limited eso/ )es( and it is the sales manage :s es#onsi3ilit2 to /tilise them in s/)h a ,a2 so as to a)hie+e a fai 3alan)e 3et,een )osts and # ofits in o de to ea)h the o+e all o ganisational goals% The sales fo )e is one s/)h eso/ )e that m/st 3e /tilised effe)ti+el2% In this /nit( ,e ,ill dis)/ss the )on)e#t of sales fo )e #e fo man)e and the fa)to s that infl/en)e the #e fo man)e% 8e ,ill also dis)/ss the #/ #ose of( and so/ )es( # o)esses and methods /sed in the e+al/ation of the #e fo man)e of sales #e sonnel in an o ganisation% Both sales fo )e #e fo man)e and e+al/ation a e gene all2 /nde ta0en as a #a t of the sales a/dit( ,hi)h in t/ n( is a )om#onent of the ma 0eting a/dit # o)ess%

132 PURPOSE OF E6ALUATION AND CONTROL


The 3asi) o3'e)ti+e of the #e fo man)e +al/ation of sales#e sons is to dete mine ho, these sales#e sons ha+e #e fo med% The o/t)ome of sales fo )e #e fo man)e e+ie, )an 3e /sed fo othe sales fo )e management #/ #ose s/)h as follo,s6 F To im# o+e the sales #e sons #e fo man)e 32 identif2ing the )a/se of /nsatisfa)to 2 #e fo man)e F To de)ide the in) ement in #a2 and in)enti+es #a2ment 3ased on the a)t/al #e fo man)e of the sales#e son F To identif2 the sales#eo#le ,ho ma2 3e # omoted F To dete mine the t aining needs of the indi+id/al sales#e son and the enti e sales fo )e

F To identif2 the sales#e sons ,hose se +i)es ma2 3e te minated( afte gi+ing ade?/ate )han)es fo im# o+ement Co tro$$i g t(e Se$$i g E..ort 9 Co tro$$i g a d Ma agi g Sa$e" For%e F To moti+ate sales#eo#le th o/gh ade?/ate e)ognition and e,a d fo good #e fo man)e F To find o/t thei st engths and ,ea0nesses The sales#e sons #e fo man)e a## aisal sho/ld 3e )a ef/ll2 de+elo#ed and im#lemented in o de to ma0e a+aila3le diffe ent t2#es of info mation that a e needed fo se+e al #/ #oses mentioned a3o+e%

C(e%& 'o!r progre"" 1


1% 8hat is the #/ #ose of e+al/ation and )ont ol of sales fo )eG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

13/ SALES AND COST ANAL8SIS


Cont ol is one of the most ) iti)al f/n)tions #e fo med 32 a sales manage as it meas/ es the #e fo man)e of the s2stem and hel#s the manage ta0e

)o e)ti+e a)tion if the #e fo man)e of the s2stem is not in ag eement ,ith the fo m/lated #lans% The # esent da2 d2nami) ma 0et#la)e has fo )ed sales manage s to shift thei fo)/s in sales )ont ol f om sales +ol/me alone and to la2 e?/al em#hasis on )osts in)/ ed in im#lementing the sales effo t% The o3'e)ti+e of sales )ont ol is to ens/ e that the )om#an2Is sales effo ts a e in t/ne ,ith its sales #lan 32 ta0ing ne)essa 2 meas/ es in )ase of de+iations% The sales )ont ol f/n)tion meas/ es the #e fo man)e of the sales fo )e and identifies the # o3lems and o##o t/nities that the fi m is e"#osed to% The # o)ess of sales )ont ol in+ol+es setting goals( )om#a ing a)t/als ,ith the ta gets( and ta0ing /# )o e)ti+e a)tion if ne)essa 2% The sales effo ts of a )om#an2 )an 3e st/died th o/gh a sales anal2sis that in+ol+es gathe ing( )lassif2ing( )om#a ing and st/d2ing the sales data of the )om#an2% A t2#i)al sales anal2sis in+ol+es de)iding on the #/ #ose of e+al/ation( )om#a ing the sales fig/ es ,ith some standa ds and # o)essing the data to gene ate e#o ts% A sales anal2sis )an 3e most info mati+e ,hen the sales data is 3 o0en do,n hie a )hi)all2% An anal2sis of C +ol/me of sales 32 )atego ies is +e 2 hel#f/l in identif2ing the oot )a/ses of the # o3lems in the sales a)ti+ities of the fi m% Tho/gh a sales anal2sis hel#s identif2 the # o3lems asso)iated ,ith the sales a)ti+ities of the fi m( it is also 3o/nd 32 a fe, limitations li0e de#enden)2 on a))o/nting e)o ds( ina3ilit2 to efle)t the # ofita3ilit2 of sales( et)% Sales anal2sis in+ol+es anal2sing the sales +ol/me o the total sales of the )om#an2% It in)l/des the total sales of the )om#an2 32 te ito 2( )/stome and # od/)t )atego 2% A sales a/dit is #e iodi)all2 ta0en /# 32 the sales management to e"amine the enti e selling o#e ations of the fi m% The a/dit in+ol+es an a/dit of the sales o ganisation( the sales en+i onment( #lanning s2stems( and sales management f/n)tions% 8hile a sales anal2sis meas/ es the

sales +ol/me a)hie+ed( the ma 0eting )ost anal2sis loo0s into the )osts and e"#enses in)/ ed to a)hie+e the sales +ol/me and thei '/stifi)ation% A )ost anal2sis in+ol+es s# eading the nat/ al )osts( allo)ating them to f/n)tional /nits( st/d2ing the # ofita3ilit2 of the /nits( and im#lementing a## o# iate a)tion de#ending on the findings of the anal2sis% 1/st as a sales a/dit e"amines the enti e sales o#e ations of a fi m( a ma 0eting a/dit e+al/ates and enhan)es the effe)ti+eness of a fi mIs ma 0eting o#e ations 32 st/d2ing its ma 0eting st ategies( #oli)ies and # a)ti)es% Sales manage s /se # ofita3ilit2 anal2sis to elate the sales e+en/es to ma 0eting )osts% This hel#s sales manage s to ta0e ne)essa 2 meas/ es to ens/ e highe # ofita3ilit2 of the fi mIs sales t ansa)tions%

C(e%& 'o!r progre"" 2


1% E"#lain the sales manage Is ole of sales anal2sis and )ont ol% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Co tro$$i g t(e Se$$i g E..ort D Co tro$$i g

a d Ma agi g Sa$e" For%e

134 SALES FORCE PERFORMANCE E6ALUATION


Afte the sales #lan has 3een im#lemented( the sales manage :s es#onsi3ilit2 3e)omes )ont olling and e+al/ating the # og am% $/ ing this stage( the sales manage )om#a es the o iginal goals and o3'e)ti+es ,ith the a)t/al a))om#lishments of the sales fo )e% The #e fo man)e of ea)h indi+id/al is )om#a ed ,ith goals o ?/otas( loo0ing at elements s/)h as e"#enses( sales +ol/me( )/stome satisfa)tion and )ash flo,% An im#o tant )onside ation fo the sales manage is # ofita3ilit2% Indeed( sim#le sales fig/ es ma2 not efle)t an a))/ ate image of the #e fo man)e of the sales fo )e% The manage m/st dig dee#e 32 anal2sing e"#enses( # i)e;)/tting initiati+es and long;te m )ont a)ts ,ith )/stome s that ,ill affe)t f/t/ e in)ome% An in;de#th anal2sis of these and elated infl/en)es ,ill hel# the manage to dete mine t /e #e fo man)e 3ased on # ofits% Fo /se in f/t/ e goal;setting and #lanning effo ts( the manage ma2 also e+al/ate sales t ends 32 diffe ent fa)to s( s/)h as # od/)t line( +ol/me( te ito 2 and ma 0et% Afte the manage anal2ses and e+al/ates the a)hie+ements of the sales fo )e( that info mation is /sed to ma0e )o e)tions to the )/ ent st ateg2 and sales # og am% In othe ,o ds( the sales manage et/ ns to the initial goal;setting stage% *e fo man)e e+al/ation is an im#o tant # o)ess fo s/#e +iso s and em#lo2ees% This tool )an enhan)e the ,a2 in ,hi)h an o ganisation is managed% It allo,s em#lo2ees to 3e e)ognised fo good #e fo man)e and # o+ides e)ommendations fo f/ the im# o+ement% 8hen done # o#e l2( it st engthens the elationshi# 3et,een the sales manage and sales #e sonnel( in) eases the flo, of )omm/ni)ation 3et,een the sales fo )e and management( highlights # esent

e"#e)tations f om the management and a## aises #ast #e fo man)e% In) easing )om#etition( )osts of selling and g eate de#enden)e on the sales fo )e fo maintaining # ofita3ilit2( ha+e led to #e fo man)e e+al/ation 3e)oming a ) iti)al f/n)tion fo the sales manage % Sim#l2 stated( e+al/ation in+ol+es )om#a ing the o3'e)ti+es gi+en to the sales fo )e ,ith the a)t/al es/lts a)hie+ed at the end of a #a ti)/la time;#e iod% The method of e+al/ation +a ies f om )om#an2 to )om#an2% An effe)ti+e #e fo man)e e+al/ation hel#s in a)hie+ing the desi ed sales o3'e)ti+es and in )ont olling the e")ess )osts in)/ ed 32 ineffi)ient selling # a)ti)es% Anothe im#o tant /se of #e fo man)e e+al/ation is to # o+ide feed3a)0 to sales #e sonnel and sales manage s a3o/t an2 inhe ent ,ea0nesses in the selling a## oa)h and # o)ess% If the #e fo man)e e+al/ation s2stem is not # o#e l2 E designed( it )annot )o e)tl2 )on+e2 to the sales #e sonnel ,hat the management e"#e)ts f om them in te ms of desi ed 3eha+io and a)ti+ities% This ma2 also affe)t the mo ale of the sales fo )e and gi+e ise to ole )onfli)ts that ma2 e+ent/all2 lead to sales fo )e att ition% B/t o+e the 2ea s( sales fo )e e+al/ation has 3e)ome mo e )om#li)ated d/e to the in) easing em#hasis on non;)o e a)ti+ities s/)h as elationshi#;3/ilding and )/stome satisfa)tion( ,hi)h )annot easil2 3e identified o meas/ ed /sing the e"isting e+al/ation methods% The 3asi) ste#s that need to 3e ta0en to )a 2 o/t the e+al/ation # o)ess a e sho,n in Fig/ e% The fi st ste# is to dete mine the fa)to s that affe)t the #e fo man)e of the sales fo )e in the o ganisation% The ne"t ste# is to sele)t the ) ite ia( ,hi)h ,ill 3e /sed to e+al/ate the #e fo man)e% Ste# 7 in+ol+es esta3lishing #e fo man)e standa ds against ,hi)h the sales fo )e #e fo man)e )an 3e )om#a ed% Ste# 9 in+ol+es monito ing a)t/al #e fo man)e ,hile the last ste# is

e+ie,ing and # o+iding feed3a)0 to the sales #e sonnel% Fig3 131- Sa$e" .or%e E1a$!atio Pro%e"" P!rpo"e a d Rea"o " The #/ #ose of e+al/ation is to monito the #e fo man)e of the sales #e sonnel and ens/ e that it is in line ,ith )o #o ate goals and o3'e)ti+es% E+al/ation also hel#s a manage to meas/ e the effi)ien)2 of sales fo )e a)ti+ities and 0ee# t a)0 of the # og ess made 32 the sale fo )e to,a ds the f/lfillment of Co tro$$i g t(e Se$$i g E..ort ! Co tro$$i g a d Ma agi g Sa$e" For%e o3'e)ti+es% The es/lts of #e fo man)e e+al/ation infl/en)e de)isions elating to )om#ensation( # omotion and t ansfe of sales #e sonnel% O ganisations /se #e fo man)e e+al/ation es/lts to ate the #e fo man)e of sales #e sonnel and e,a d those ,ho #e fo m ,ell% In o de to ma0e an a))/ ate assessment of the #e fo man)e of sales #e sonnel( the sales manage m/st ha+e a )lea /nde standing of thei d/ties and 'o3 des) i#tions% 8itho/t ele+ant info mation( it ,o/ld # o+e diffi)/lt fo him to a))/ atel2 meas/ e thei #e fo man)e% *e fo man)e e+al/ation hel#s to f/lfil )e tain o3'e)ti+es% It a)ts a tool to hel# a## e)iate good #e fo man)e> it also hel#s dis)/ss sho t)omings o#enl2 and esta3lish methods fo o+e )oming ea)h sho t)oming> it hel#s to e+ie, o /#date 'o3 des) i#tions( )la if2 'o3 e"#e)tations and set standa ds of #e fo man)e% A #e fo man)e e+al/ation # o)ess m/st )ontin/all2 g/ide the sales manage and the

sales fo )e and hel# enhan)e the s/#e io ;s/3o dinate elationshi#% Some of the easons fo #e fo man)e e+al/ation a e des) i3ed 3elo,% 1% To 3e a,a e of )om#an2 o3'e)ti+es6 O ganisational o3'e)ti+es ha+e a # ofo/nd infl/en)e on the #e fo man)e of sales #e sonnel% The sales manage sho/ld 3e a,a e of these o3'e)ti+es and of thei elationshi# ,ith dail2 sales a)ti+ities% This ,ill hel# him di e)t the sales fo )e% Some o ganisational o3'e)ti+es that ha+e an infl/en)e on sales fo )e #e fo man)e( a e6 1% In) easing the fo)/s on ne, # od/)ts6 The o ganisation sho/ld # o+ide the ne)essa 2 s/##o t to sales #e sonnel to in) ease the # od/)t:s ma 0et #enet ation and im# o+e ma 0et sha e% 2% Red/)ing the time s#ent on non;selling a)ti+ities% @e e the sales #e sonnel ha+e to fo)/s attention and eso/ )es on # ima 2 selling a)ti+ities and )/t do,n on time s#ent on e#o t # e#a ation and #a#e ,o 0 fo malities% 7% Retaining the e"isting )/stome 3ase6 The sales fo )e m/st la2 g eate em#hasis on 3/ilding long;te m elationshi#s ,ith e"isting )/stome s% 9% * o+iding t aining fa)ilities so that sales #e sonnel 3e)ome mo e )om#etent ,ithin a sho te time% C% * o+iding fo)/s on +al/e;added a)ti+ities and fo m/lating )om#ensation #lans that ens/ e etention of talented sales #e sonnel% 2% To im# o+e moti+ation and s0ills6 *e fo man)e e+al/ation )an hel# in moti+ating sales #e sonnel( the e32 leading to an im# o+ement in # od/)ti+it2% A #e fo man)e e+al/ation s2stem that is fai ( di e)ted to,a ds o ganisational o3'e)ti+es that la2s do,n )lea #e fo man)e;3ased ) ite ia and # o+ides # o#e J feed3a)0 in te ms of ?/antitati+e and ?/alitati+e fa)to s hel#s in im# o+ing the moti+ation le+els of sales #e sonnel%

7% To a## aise #ast #e fo man)e6 *e fo man)e e+al/ation hel#s the sales manage a## aise a sales#e son:s #ast #e fo man)e% B2 )om#a ing his # esent #e fo man)e ,ith #e fo man)e standa ds( he )an identif2 the diffe en)e in #e fo man)e le+els% The # og ess made 32 the sales #e sonnel in +a io/s selling a)ti+ities )an also 3e monito ed% This hel#s the sales manage identif2 t aining needs and a eas in ,hi)h the sales#e son needs to de+elo# mo e% 9% To de+elo# a sales #lan to in) ease f/t/ e sales6 *e fo man)e e+al/ation hel#s the sales manage e+al/ate the diffe ent selling and non;selling a)ti+ities that a sales#e son /nde ta0es% This 0no,ledge aids him in de+elo#ing sales #lans that ,ill im# o+e the #e fo man)e of the sales#e son% The sales manage )an d a, /# t aining and de+elo#ment # og ammes that ,ill add ess an2 ,ea0nesses of his sales#eo#le% This ,ill hel# them in) ease thei sales +ol/mes All these o3'e)ti+es infl/en)e the em#hasis that the sales #e sonnel la2 on the diffe ent selling a)ti+ities%

C(e%& 'o!r progre"" /


1% E"#lain the sales fo )e #e fo man)e e+al/ation% 2% 8hat is the #/ #ose and eason of sales fo )e #e fo man)e e+al/ationG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

139 02EN TO E6ALUATE


The timing of the #e fo man)e e+al/ation #la2s a ) /)ial ole in 0ee#ing

sales #lans on )o/ se% *e fo man)e e+al/ation #e iods +a 2 f om o ganisation to o ganisation% It ma2 3e on a ,ee0l2( monthl2( ?/a te l2( half;2ea l2( o ann/al 3asis% @o,e+e ( the o/tine monito ing of selling a)ti+ities )annot 3e )onside ed as a #e fo man)e a## aisal # o)ed/ e> onl2 s2stemati) and fo mal # o)ed/ es aimed at meas/ ing the #e fo man)e of the em#lo2ees )ome /nde an e+al/ation Co tro$$i g t(e Se$$i g E..ort 1B Co tro$$i g a d Ma agi g Sa$e" For%e #lan% The f e?/en)2 of e+al/ation de#ends on the t2#e of sales #lan de+elo#ed% Fo e"am#le( the #e iod of e+al/ation is longe fo )om#le" sales #lans% The +a iation in e+al/ation time ma2 also 3e d/e to e)onomi) )osts and the feasi3ilit2 of )ond/)ting an a## aisal% The +a iations in the #e iod gi+en to sales #e sonnel to es#ond to and ta0e )o e)ti+e ste#s 3ased on the # e+io/s e+al/ation( also infl/en)e the timing of e+al/ation in an o ganisation% $es#ite these )onditions( #e fo man)e e+al/ation has to 3e )ond/)ted as f e?/entl2 as #ossi3le to identif2 and )omm/ni)ate +a iations in #e fo man)e to sales #e sonnel at the ea liest% *e fo man)e e+al/ation m/st 3e )ond/)ted in a s2stemati) manne and the d/ ation m/st 3e 3ased on the 'o3 # ofile of the sales#e son% The time;#e iod fo the e+al/ation m/st 3e )omm/ni)ated ,ell in ad+an)e to ena3le the sales #e sonnel to o ganise and #lan thei a)ti+ities%

13931 I .ormatio So!r%e" .or E1a$!atio


The )olle)tion and anal2sis of ele+ant info mation #la2 an im#o tant ole

in hel#ing the sales manage /nde stand the fa)to s that infl/en)e #e fo man)e and de+elo# the ) ite ia to 3e /sed fo #e fo man)e e+al/ation% The so/ )e of info mation infl/en)es the ) ite ia that the manage sele)ts to meas/ e sales fo )e #e fo man)e% If the sales manage is a,a e of the st engths and ,ea0nesses of diffe ent so/ )es of info mation( it ,ill lead to a 3ette de+elo#ment of ) ite ia fo e+al/ation and im# o+e the effi)ien)2 and a))/ a)2 of the enti e # o)ess% O ganisations m/st fo mall2 esta3lish a # o#e # o)ess fo the )olle)tion of info mation so that #e fo man)e e+al/ation )an 3e done effi)ientl2 and a))/ atel2% The ma'o so/ )es of info mation that a sales manage )an /se a e6 F Compa ' re%ord"- These a e the main so/ )e of data 32 ,hi)h sales manage s e+al/ate the sales #e sonnel% Com#an2 e)o ds a e /sed mainl2 as a so/ )e of info mation fo de+elo#ing ?/antitati+e o/t#/t ) ite ia( ,hi)h a e /sed to )om#a e sales fo )e #e fo man)e% Sales in+oi)es( a))o/nting e)o ds and )/stome o de s a e #a ts of the )om#an2 e)o ds% 8ith the ad+ent of info mation s2stems( it has 3e)ome easie fo o ganisations to )olle)t( anal2se( and dissi#ate ele+ant info mation to sales manage s ,ith minimal effo t% The2 also sa+e on time and )osts% Com#an2 e)o ds hel# anal2se ?/antitati+e fa)to s li0e sales +ol/mes( sales o de to )all atio( # ofita3ilit2( selling e"#enses( and so on% F Report" .rom "a$e"per"o "- Sales #e sonnel send data in the fo m of dail2( ,ee0l2( monthl2( a)ti+it2( e"#ense( and )all e#o ts% These e#o ts a)t as a so/ )e of info mation fo the sales manage % The disad+antage ,ith this so/ )e 11 is mat the a))/ a)2 and +alidit2 of the info mation de#ends on ho, #/n)t/al and ethi)al the sales#e son is% F C!"tomer"- C/stome s a e a +al/a3le so/ )e of info mation fo sales

manage s% The2 hel# to ma0e /# the inade?/a)2 asso)iated ,ith the e#o ts of sales#e sons% A manage )an get to 0no, the es/lts o im#a)t of the o+e all sales effo ts 32 so/ )ing the e?/i ed info mation f om )/stome s th o/gh )/stome s/ +e2s o info mal dis)/ssions ,ith them% Tho/gh )/stome s a e the ideal so/ )e of info mation fo sales fo )e e+al/ation( the2 ma2 sometimes fa+o those sales #e sonnel ,ho # o+ide additional 3enefits to them% @o,e+e ( the 3enefits offe ed ma2 not 3e fa+o a3le to the o ganisation% F Ma ager:" .ie$d 1i"it- The sales manage /s/all2 s#ends time in the field di e)tl2 s/#e +ising the sales #e sonnel% Field s/#e +ision not onl2 hel#s him to gain a fi sthand /nde standing of the a)ti+ities of the sales #e sonnel and gi+e the e?/i ed t aining and )oa)hing( 3/t also # o+ides him ,ith +al/a3le info mation on ?/alitati+e as#e)ts li0e thei )omm/ni)ation s0ills( inte #e sonal s0ills( te)hni)al # od/)t 0no,ledge( and #e sonalit2 t aits <ada#ta3ilit2( em#ath2( so)ia3ilit2( et)%(=% F Ma ager:" per"o a$ i "ig(t"- The #e sonal insights of a sales manage a e la gel2 est i)ted 32 #e sonal e"#e ien)e in a simila 'o3 as his sales #e sonnel% T aining and de+elo#ment # og ams and dis)/ssions ,ith #ee s and s/#e io s also a)t as a +al/a3le so/ )e of info mation% F Ot(er "o!r%e"- Sales manage s also ma0e /se of othe e"te nal so/ )es of info mation li0e dist i3/to s( info mal and fo mal #e sonal )onta)ts( #/3lished and ele)t oni) so/ )es and e+al/ation ) ite ia and so/ )es /sed in othe o ganisations fo e+al/ation #/ #oses% The a3o+e so/ )es of info mation infl/en)e the sales manage s ,hile dete mining the ?/antitati+e and ?/alitati+e ) ite ia fo sales fo )e #e fo man)e% It has 3een o3se +ed that sales manage s el2 mo e on )e tain so/ )es of info mation ,hile dete mining the ) ite ia% Com#an2 e)o ds( field sales e#o ts of sales

#e sonnel( and feed3a)0 f om )/stome s a e the # ima 2 so/ )es of info mation /sed to dete mine ?/antitati+e ) ite ia ,hile #e sonal o3se +ations of the sales manage ,hen inte a)ting ,ith the sales#e son( field sales +isits( and )/stome feed3a)0 a e the 0e2 so/ )es of info mation in dete mining ?/antitati+e ) ite ia% Ea lie ( info mation gathe ed f om #ee s and s/3o dinates ,as a el2 # efe ed( 3/t that is )hanging no,% Man2 o ganisations ha+e sta ted ma0ing /se of the )omments gi+en 32 #ee s( #e sonnel f om othe management f/n)tions( and Co tro$$i g t(e Se$$i g E..ort 12 Co tro$$i g a d Ma agi g Sa$e" For%e s/3o dinates fo #e fo man)e e+al/ation% This method of gathe ing info mation is done th o/gh the 7DB;deg ee feed3a)0%

13932 Criteria .or t(e E1a$!atio o. Sa$e" For%e Per.orma %e


13 ;!a$itati1e The #e fo man)e of the sales #e sonnel )an 3e )onside ed and e+al/ated in te ms of 3eha+io and o/t)ome;3ased )om#onents% The 3eha+io )om#onent in)l/des e+al/ating all the a)ti+ities( #lans( and st ategies )a ied o/t 32 the sales #e sonnel ,hile f/lfilling thei 'o3 es#onsi3ilities in te ms of selling a)ti+ities% @e e the fo)/s is on ,hat the sales #e sonnel do and not on the es/lts the2 a)hie+e% It is also )alled the ?/alitati+e ) ite ia fo sales fo )e e+al/ation% Sales #lanning( te)hni)al 0no,ledge( ada#ti+eness( sales s/##o t( sales # esentations( team,o 0( te ito 2 management and #e sonal t aits a e all ?/alitati+e ) ite ia fo

e+al/ation% The es/lts o3tained as a )onse?/en)e of sales fo )e effo ts and s0ills )ome /nde the o/t)ome;3ased o ?/antitati+e )om#onent of sales fo )e e+al/ation% Sales +ol/me( ma 0et sha e( )/stome etention( sales o de s( g oss # ofit f om ne, )/stome s and n/m3e of )alls #e da2 a e some of the ) ite ia that )ome /nde the ?/antitati+e )om#onent% Both these )om#onents ha+e a signifi)ant infl/en)e on the #e fo man)e of the sales #e sonnel and fo m the 3asis on ,hi)h the sales manage )an e+al/ate them% Signifi)ant diffe en)es ha+e 3een o3se +ed 3et,een the ?/alitati+e and ?/antitati+e )om#onents of highl2 effe)ti+e and less effe)ti+e sales o ganisations% The ) ite ia fo meas/ ing sales fo )e #e fo man)e sho/ld 3e de i+ed f om and )losel2 elated to the 'o3 des) i#tion of the sales #e sonnel% As mentioned ea lie ( ?/alitati+e meas/ es in)l/de the #e sonal )om#eten)ies o 3eha+io of sales #e sonnel that a e inhe ent in and /ni?/e to ea)h indi+id/al% It in)l/des distin)t as#e)ts li0e #lanning s0ills( team,o 0( a#tit/de and attit/de( # od/)t 0no,ledge( ethi)al 3eha+io ( time management( )omm/ni)ation s0ills( e#o t # e#a ation( and te)hni)al s0ills% These ?/alitati+e meas/ es a e /s/all2 o3tained afte the e+al/ato Asales manage fills /# a ating s)ale% T/alitati+e meas/ es of #e fo man)e a e /s/all2 /sed as a s/##o t fo ?/antitati+e meas/ es( d/e to thei s/3'e)ti+e nat/ e% La)0 of a distin)t meas/ a3ilit2 ma2 lead to am3ig/it2 in /nde standing fo the sales #e sonnel and the #ossi3ilit2 of #e sonal 3ias d/ ing e+al/ation on the #a t of the sales manage % The e is also a #ossi3ilit2 of a )onfli)t a ising 3et,een the sales #e sonnel and sales manage d/e to a diffe en)e of o#inion a3o/t a fa)to li0e moti+ation o a#tit/de% In s#ite of these limitations( man2 o ganisations no,ada2s # efe to /se ?/alitati+e fa)to s ,hile )ond/)ting sales fo )e #e fo man)e e+al/ation% Thei 17

# efe en)es ega ding the meas/ es to 3e /sed 0ee# )hanging o+e the 2ea s% The # efe en)e fo #lanning s0ills( 0no,ledge of )om#an2 #oli)ies( and time management has ed/)ed ,he eas the # efe en)e fo )omm/ni)ation s0ills( ethi)al 3eha+io/ and team o ientation has in) eased in most o ganisations% F Sa$e" "&i$$"- Sales s0ills a e one of the most im#o tant fa)to s that ha+e an infl/en)e on sales fo )e #e fo man)e% Selling s0ills elate to the e"tent to ,hi)h the sales#e son has lea ned the tas0s that a e needed fo a #a ti)/la sales 'o3% The sales s0ills of a sales#e son )an 3e di+ided into th ee se)tions ;; te)hni)al s0ills( inte #e sonal s0ills and salesmanshi# s0ills% Te)hni)al s0ills in+ol+e s0ills to o#e ate an enginee ing # od/)t( 0no,ledge of the )om#an2( a,a eness of )om#etito s: # od/)ts and o#e ations( and so on% Inte #e sonal s0ills in)l/de the a3ilit2 to )o#e in a #a ti)/la selling sit/ation( to #e s/ade )/stome s( o to 3e em#atheti)% The2 also in)l/de +e 3al and non;+e 3al s0ills% Salesmanshi# s0ills in)l/de the a3ilit2 to identif2 and sele)t # os#e)ts( the s0ill to ma0e sales # esentations( se +i)e # os#e)ts( and de+elo# long;te m elationshi#s ,ith )/stome s% The a3ilit2 of a sales#e son to ada#t to a #a ti)/la selling sit/ation hel#s in im# o+ing his sales #e fo man)e% The le+el and )om3ination of s0ills e?/i ed fo a #a ti)/la sales 'o3 )an 3e de)ided 3ased on the sales manage :s #e sonal e"#e ien)e and an anal2sis of the 'o3 des) i#tion and # ofile% The s0ills e?/i ed +a 2 ,ith the t2#e of # od/)ts sold( the egion of o#e ation( the st ateg2 ado#ted as #a t of the sales #lan( and so on% F Territor' ma ageme t- This fa)to )an also 3e /sed as a ) ite ion fo #e fo man)e e+al/ation and it )a ies mo e ,eight fo geog a#hi)all2 3ased sales #e sonnel% The sales manage )an )onside se+e al as#e)ts in e+al/ating sales #e sonnel /sing this ) ite ion% It ma2 in)l/de the n/m3e of # os#e)ts(

total )/stome 3ase 3eing se +i)ed( le+el of )om#etition( the o/ting and s)hed/ling #lan of the sales#e son( te ito 2 te ain( total time s#ent on ma0ing sales )alls( and 0no,ledge of 0e2 de)ision;ma0e s in ma'o a))o/nts% The sales manage )an )onside all these fa)to s /nde the ) ite ia fo te ito 2 management ,hen e+al/ating the sales fo )e #e fo man)e% F Per"o a$it' trait"- The sales manage has to list the ideal t aits that a e needed fo a #a ti)/la t2#e of sales 'o3% Onl2 afte this is done )an the sales fo )e 3e e+al/ated% Most of the #e sonalit2 t aits a e #s2)hologi)al in o igin and it is diffi)/lt fo a sales manage to e+al/ate the sales fo )e 32 administe ing and e+al/ating #s2)hologi)al tests% @o,e+e ( #e sonalit2 t aits fo moti+ation( )om#etiti+eness( ole am3ig/it2 and )onfli)t )an 3e identified% Co tro$$i g t(e Se$$i g E..ort 19 Co tro$$i g a d Ma agi g Sa$e" For%e Fo e"am#le( a sales#e son:s deg ee of inst /mentalit2 infl/en)es moti+ation le+els% Inst /mentalit2 signifies the e"tent to ,hi)h a #e son is indi+id/alisti) in #e fo ming the selling a)ti+ities% Sales #e sonnel ,ith a high le+el of inst /mentalit2 a e mo e agg essi+e( inde#endent( and ha+e a g eate tenden)2 to )om#lete the assigned tas0s than those ,ho ha+e a lo, le+el of inst /mentalit2% The sales manage m/st 3e a3le to identif2 the e?/i ed le+el of inst /mentalit2 needed fo a #a ti)/la 'o3 in o de to effe)ti+el2 e+al/ate the sales fo )e% The le+el of )om#etiti+eness is anothe indi+id/al fa)to that

des) i3es the inhe ent desi e of an indi+id/al to ,in o+e othe s% Ada#ta3ilit2( lo)/s of )ont ol( ego d i+e et)%( a e some of the othe im#o tant t aits that infl/en)e sales fo )e #e fo man)e% 23 ;!a titati1e T/antitati+e ) ite ia( 3eing o3'e)ti+e in nat/ e( a e /sed most ,idel2 in meas/ ing sales fo )e #e fo man)e% These meas/ es of #e fo man)e a e easie to im#lement than ?/alitati+e ) ite ia and )an 3e standa dised% T/antitati+e meas/ es )an 3e f/ the seg egated in te ms of in#/t and o/t#/t meas/ es% In#/t meas/ es in)l/de as#e)ts li0e the a+e age n/m3e of sales )alls made #e da2( atio of sales )ost to sales and the n/m3e of e#o ts s/3mitted 32 the sales#e sons% O/t#/t meas/ es in)l/de as#e)ts li0e sales +ol/me( sales o de s and n/m3e of ne, a))o/nts% E+al/ating the sales#e sons: effo ts in te ms of the # o)ess of selling <in#/t meas/ es= ,ill sho, ,hat the2 did d/ ing selling% E+al/ating the o/t#/t meas/ es ,ill sho, ho, the2 a)hie+ed the es/lts% A sales manage )an also )om3ine the in#/t and o/t#/t meas/ es fo sales fo )e e+al/ation% @e )an dete mine the easons fo a #a ti)/la o/t#/t of sales#e sons 32 ta0ing into a))o/nt thei in#/t meas/ es% Cons/me goods ma 0ete s a e mo e li0el2 to /se o/t#/t meas/ es li0e sales +ol/mes and n/m3e of ad+e tising dis#la2s in s/#e ma 0ets and etail o/tlets than ind/st ial ma 0ete s% F Sa$e" 1o$!me- Sales +ol/me is the most ,idel2 /sed meas/ e in o ganisations to e+al/ate sales fo )e #e fo man)e% Sales +ol/me is not est i)ted to '/st meas/ ing the total sales of the sales #e sonnel in te ms of mone2> the e a e man2 othe +a iations as ,ell% This meas/ e ma2 in)l/de sales +ol/me in /#eesAdolla s( sales +ol/me 32 )/stome ( sales +ol/me #e o de ( sales +ol/me to # e+io/s 2ea :s sales( sales +ol/me #e # od/)t o # od/)t line( sales +ol/me #e )all( sales +ol/me 32 ?/ota( o sales +ol/me in /nits% Use of sales

+ol/me 32 ?/ota and sales +ol/me 32 /nits has ed/)ed and the /se of o/t#/t meas/ es li0e sales +ol/me #e )/stome ha+e gained # edominan)e% 1C F A1erage %a$$" per da'- This is anothe ?/antitati+e meas/ e that )an 3e /sed to e+al/ate sales fo )e #e fo man)e% The sales manage monito s this as#e)t th o/gh the dail2 e#o ts sent 32 the sales #e sonnel% @o,e+e ( this meas/ e is not # efe ed no,ada2s 3e)a/se of the la)0 of 3oth a))/ a)2 and the means of dete mining the ) edi3ilit2 of the dail2 e#o ts% Sales #e sonnel ma2 fa0e the total n/m3e of )alls to get a good #e fo man)e es/lt% F Sa$e" order"- Sales o de s a e also /sed as a meas/ e fo sales fo )e #e fo man)e% The e a e man2 +a iations in this meas/ e too% Sales manage s ma2 /se the sales o de #e )all atio <)ommonl2 te med 3atting a+e age=( net sales o de s #e e#eat o de ( the a+e age si5e of a sales o de ( o the n/m3e of sales o de s gained o )an)eled to meas/ e sales fo )e #e fo man)e% F Ratio o. "e$$i g %o"t" to "a$e"- Sales manage s /se this meas/ e to )ont ol the )osts in te ms of the selling e"#enses in)/ ed fo a #a ti)/la sales +ol/me% This meas/ e has gained im#o tan)e d/e to the em#hasis 32 the to# management on )o #o ate # ofita3ilit2% Red/)ing selling )osts )an hel# in the a)hie+ement of this o3'e)ti+e% The selling )ost to sales atio +a ies fo sales #e sonnel d/e to diffe en)es in te ito 2 #otential( )/stome dist i3/tion and te ito 2 si5e% The sales manage m/st esta3lish diffe ent e"#ense atios fo the sales #e sonnel 3ased on the # e+alent fa)to s% Othe ,ise( the #ossi3ilit2 of ine?/it2 in #e fo man)e e+al/ation is #ossi3le% Ind/st ial o ganisations gi+e mo e # efe en)e to this meas/ e in sales fo )e e+al/ation than )ons/me # od/)t )om#anies% F Gro"" pro.it o,tai ed .rom e+ %!"tomer"- This meas/ e is /s/all2 lin0ed

to the # ofit ?/otas set 32 sales manage s% It hel#s in ga/ging # ofit as a #e )entage of sales% G oss # ofit is o3tained 32 ed/)ing the )ost # i)e of the # od/)ts f om the total sales +ol/me o3tained 32 a sales#e son% This meas/ e is /sef/l ,hen an o ganisation la/n)hes a ne, # od/)t o ente s ne, te ito ies to in) ease the )/stome 3ase% The em#hasis gi+en to ?/alitati+e and ?/antitati+e fa)to s 32 +a io/s o ganisations diffe s de#ending on thei si5e( o#e ating ind/st 2( et)% Sales manage s m/st t 2 to esta3lish ) ite ia that efle)t the enti e ange of the sales#e son:s selling a)ti+ities% Co tro$$i g t(e Se$$i g E..ort 1D Co tro$$i g a d Ma agi g Sa$e" For%e

C(e%& 'o!r progre"" 4


1% 8hat a e the info mation so/ )es fo e+al/ation of sales fo )eG 2% 8hat a e the ) ite ia fo the e+al/ation of sales fo )e #e fo man)eG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

13< ESTA#LIS2ING PERFORMANCE STANDARDS

Afte esta3lishing the ) ite ia 3ased on ,hi)h the sales fo )e ,ill 3e e+al/ated( the sales manage has to fo m/late standa ds ,ith ,hi)h the #e fo man)e of the sales #e sonnel )an 3e )om#a ed% Com#a ison ,ith #e fo man)e standa ds ena3les the manage to 0no, ho, the sales #e sonnel a e doing +is;_;+is thei 'o3 des) i#tion and e"#e)ted a)ti+ities% The2 a)t as a 3en)hma 0 to e+al/ate sales fo )e a)ti+ities and as a g/ide fo sales #e sonnel to #lan thei a)ti+ities% *e fo man)e standa ds also hel# sales #e sonnel 0no, the le+el of #e fo man)e the2 a e e"#e)ted to a)hie+e and the ,a2s to a)hie+e it% *e fo man)e standa ds that a e s#e)ifi) and easil2 meas/ a3le hel# in easil2 dete mining ,hethe esta3lished o3'e)ti+es a e 3eing a)hie+ed% Esta3lishing #e fo man)e standa ds is one of the most diffi)/lt ste#s in the #e fo man)e e+al/ation # o)ess% The #e fo man)e standa ds )an 3e # e#a ed 32 the sales manage s singl2 o in )ons/ltation ,ith sales #e sonnel ,ho ha+e a simila 'o3 # ofile% A standa d list that is gene all2 # e#a ed fo e+e 2 'o3 des) i#tion ma2 also 3e /sed% The most im#o tant iss/e in this ega d is the n/m3e of standa ds that a e to 3e /sed to meas/ e sales fo )e #e fo man)e% Sales manage s in most o ganisations f e?/entl2 de#end on sales ?/otas as the singlemost im#o tant #e fo man)e standa d% @o,e+e ( it m/st 3e emem3e ed that the sales fo )e #e fo man)e is de#endent on a n/m3e of inte nal and e"te nal fa)to s( as dis)/ssed ea lie % This de#enden)2 ma0es it ne)essa 2 fo sales manage s to ado#t m/lti#le standa ds fo #e fo man)e meas/ ement% The diffi)/lt2 in this a## oa)h tho/gh( is the )om#le"it2 in gi+ing a## o# iate ,eights to ea)h #a amete to ena3le )om#a ison% The sele)tion of the standa ds is also infl/en)ed 1E 32 the so/ )es of info mation the sales manage /ses% Anothe diffi)/lt2 in /sing a )ommon set of #e fo man)e standa ds a ises 3e)a/se of the +a iations in the sales

te ito 2 #otential( # od/)t #o tfolio( a))o/nt si5es( )om#etiti+e )onditions and t2#es of )/stome s% Com#anies that ha+e a la ge sales fo )e ha+e to /se a )ommon set of #e fo man)e standa ds 3e)a/se it is diffi)/lt to de+elo# #e fo man)e meas/ es tailo ed to indi+id/al sales#e sons% The sales manage m/st 0ee# in mind the elationshi# 3et,een the in#/t and o/t#/t meas/ es ,hile setting #e fo man)e standa ds% Com3ined standa ds li0e sales +ol/meAe"#enses( g oss ma ginAo de and o de sA)alls )an im# o+e the a3ilit2 and a))/ a)2 of #e fo man)e e+al/ation 32 ed/)ing the dis) e#an)2 in )om#a ing sales fo )e es/lts ,ith standa ds% *e fo man)e standa ds )an 3e )lassified into fo/ ma'o a eas% O ganisations )an /se all the fo/ t2#es of #e fo man)e standa ds o an2 )om3ination of these% The2 a e ?/antit2 standa ds( ?/alit2 standa ds( time;3ased standa ds and )ost;3ased standa ds% F ;!a tit' Sta dard"- These standa ds in)l/de all as#e)ts that )an 3e meas/ ed di e)tl2 ,itho/t an2 )om#le" )al)/lations% The2 in)l/de the n/m3e of sales )alls #e da2( the n/m3e of o de s( the n/m3e of sales # esentations and n/m3e of l/n)hes hosted fo a )/stome % T/antit2 standa ds a e the easiest to set and the most )on+enient to )om#a e ,ith the es/lts of the sales fo )e% F ;!a$it' Sta dard"- These standa ds a e s/3'e)ti+e in nat/ e and a e meas/ ed 32;inte # etation% The2 in)l/de as#e)ts li0e team,o 0( ada#ta3ilit2( ethi)al 3eha+io ( a3ilit2 to gathe info mation( and so on% Fo e"am#le( a sales manage )an meas/ e the info mation gathe ing a3ilit2 of a sales#e son 32 )om#a ing the n/m3e of sales )alls of his that 2ielded info mation fo # e#a ing a sales # o#osal to the n/m3e of sales )alls that did not 2ield an2 info mation%

F Time=,a"ed Sta dard"- All as#e)ts in+ol+ed in the selling a)ti+it2 that )an 3e meas/ ed elati+e to the fa)to of time )an 3e )onside ed /nde time;3ased standa ds% The time ta0en 3et,een identif2ing the )/stome need and # e#a ing a sales # o#osal( the time 3et,een a )/stome in?/i 2 and the sales )all( the time 3et,een a )/stome :s )om#laint and sol+ing the # o3lem( the time 3et,een getting the o de and )olle)ting the sales amo/nt( et)%( a e some as#e)ts that )an 3e meas/ ed ,ith the hel# of time;3ased standa ds% Co tro$$i g t(e Se$$i g E..ort 1! Co tro$$i g a d Ma agi g Sa$e" For%e F Co"t=,a"ed Sta dard"- All the selling a)ti+ities that a e lin0ed to o ganisational e"#enses and # ofita3ilit2 )an 3e meas/ ed /nde )ost;3ased standa ds% These in)l/de the atio of selling )osts to sales( g oss # ofit ma gin o3tained f om ne, )/stome s( e"#enses in)/ ed #e o de ( and the n/m3e of gifts o ente tainment e"#enses% Most o ganisations # efe to /se m/lti#le meas/ es o #e fo man)e standa ds to e+al/ate sales fo )e #e fo man)e% The most ,idel2 /sed ?/antitati+e #e fo man)e standa ds a e6 sales +ol/me 3ased on ?/ota( sales +ol/me in )om#a ison to # e+io/s 2ea :s sales( and net # ofits% The glo3al en+i onment and )om#etition ha+e led to )ost;3ased standa ds ass/ming im#o tan)e in man2 o ganisations% This is 3e)a/se of the diffi)/lt2 o ganisations ha+e in maintaining # ofita3ilit2% Time;3ased standa ds a e # efe ed in the se +i)e ind/st 2 and 32

o ganisations that fo)/s on )/stome satisfa)tion and )/stome elationshi# management%

C(e%& 'o!r progre"" 9


1% 8hat a e #e fo man)e standa dsG @o, a e the2 )lassifiedG %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

13> MET2ODS OF SALES FORCE E6ALUATION


Se+e al methods of #e fo man)e e+al/ation ha+e 3een de+elo#ed 3ased on esea )h st/dies )ond/)ted o+e the 2ea s% @o,e+e ( no single method has 3een a))e#ted as the most a))/ ate fo e+al/ating the sales fo )e% Gotham and C a+ens( in 1JDJ( s/ggested /sing the standa d de+iation to minimise the +a iations )a/sed ;32 meas/ ing sales #e fo man)e /sing m/lti#le meas/ es% This method hel#ed to )om#a e #e fo man)es of sales #e sonnel o#e ating in diffe ent selling sit/ations% In 1JE2( C a+ens( 8ood /ff and Stam#e de+elo#ed an e+al/ation model that hel#ed # edi)t the #e fo man)e of sales #e sonnel in a gi+en te ito 2 and e+al/ate them on the 3asis of total sales +ol/mes( in te ms of the n/m3e of /nits sold% 1a)0son and Aldag # o#o/nded the Management 32 O3'e)ti+es <MBO= method 1J fo e+al/ating the sales fo )e in 1JE9% Co)ana/ghe and I+an)e+i)h de+elo#ed a 3eha+io all2 an)ho ed ating s)ale <BARS= s2stem of e+al/ation in 1JE!( fo the sales fo )e% In 1J!2( Beh man and *e a/lt de+elo#ed a self; e#o t #e fo man)e s)ale as a method to e+al/ate the sales fo )e%

Most methods of #e fo man)e e+al/ation a e 3ased on #e sonalit2 t aits o 3eha+io and es/lts% In the #e sonalit2 t ait method( the o3se +a3le as#e)ts of sales#e son 3eha+io li0e ada#ta3ilit2( de#enda3ilit2 o so)ia3ilit2 a e /sed to meas/ e #e fo man)e% This method is not a))/ ate sin)e it )onside s onl2 the #e sonal )ha a)te isti)s and not the fa)to s that infl/en)e sales fo )e # od/)ti+it2% In the 3eha+io ;3ased method( the sales manage o3se +es )e tain 0e2 ,o 0 3eha+io s and meas/ es them against the #ossi3le o/t)omes in te ms of a se+en#oint s)ale% Sales fo )e 3eha+io is ated in deg ees f om least desi a3le to most desi a3le% Res/lts;3ased methods of meas/ ing sales fo )e #e fo man)e ha+e gained #o#/la it2 d/e to the /se of o3'e)ti+es that a e easil2 meas/ a3le% Management 32 o3'e)ti+es is the most ,idel2 /sed #e fo man)e e+al/ation method /nde the es/lt;3ased method% 8e ,ill st/d2 some of the methods of e+al/ating the sales fo )e in detail% 13 E""a'" This is the sim#lest of all the methods of sales fo )e e+al/ation% In this method( the sales manage des) i3es the #e fo man)e of the sales#e son in a fe, #a ag a#hs% @e mentions details li0e indi+id/al #otential( st engths( ,ea0nesses and othe ele+ant matte s in the essa2% The 3asis fo /sing this method is the ass/m#tion that a , itten o ,o d;of;mo/th statement is as elia3le as an2 othe fo mal e+al/ation method% O ganisations ma0e /se of essa2 a## aisal f om fo me em#lo2e s o )olleag/es ,hile e) /iting sales #e sonnel% The # o3lem ,ith this method is that the e is no standa dised #atte n fo the essa2% $iffe ent manage s /se diffe ent a## oa)hes to , iting thei e+al/ation and a diffe ent ,a2 of inte # eting and ating the )ha a)te isti)s e?/i ed fo a #a ti)/la 'o3% $/e to this diffe en)e( ea)h essa2 ma2 highlight onl2 )e tain )ha a)te isti)s of a sales#e son and this ) eates a diffi)/lt2 in )om#a ing the # ofiles d/ ing the e+al/ation

# o)ess( es#e)iall2 d/ ing the time of # omotion% In addition( the e is a #ossi3ilit2 of 3ias d/e to the a3sen)e of )on) ete fa)to s of e+al/ation% 23 Rati g S%a$e" In this method of #e fo man)e e+al/ation( ,hi)h is the most ,idel2 /sed( the sales manage identifies )e tain s#e)ifi) ) ite ia fo a #a ti)/la t2#e of 'o3% The ) ite ia ma2 3e 3ased on #e sonalit2 t aits( and 3eha+io al fa)to s( o the2 Co tro$$i g t(e Se$$i g E..ort 2B Co tro$$i g a d Ma agi g Sa$e" For%e ma2 3e #e fo man)e elated% The sales #e sonnel a e e+al/ated 3ased on the e"tent to ,hi)h the2 e"hi3it the desi ed 3eha+io o the e"tent to ,hi)h the2 meet the desi ed #e fo man)e ) ite ia% The ad+antage of this method is that it hel#s identif2 a eas ,he e the sales#e son has to im# o+e o maintain the desi ed le+els of #e fo man)e% The disad+antage of this method is that the most e)ent 3eha+io of the sales fo )e is )onside ed ,itho/t loo0ing at the sales#e son:s 3eha+io fo a #e iod of time <sa2( on a ?/a te l2 o ann/al 3asis=% Anothe disad+antage is the diffi)/lt2 that a ises in # e#a ing 3eha+io al )ha ts that a e elia3le eno/gh to meas/ e the sales#e son:s #e fo man)e% The e is also the #ossi3ilit2 of the e+al/ato not /nde standing ,hat the #e fo man)e ) ite ia o atings mean% /3 For%ed C(oi%e Met(od Fo )ed;)hoi)e ating is a method of ating that hel#s in )om#a ing sales #e sonnel 32 ) eating standa ds fo meas/ ing sales fo )e #e fo man)e% In this

method( the sales manage is as0ed to go th o/gh g o/#s of statements and sele)t those that 3est e"#lain the indi+id/al% Us/all2( ,ithin a g o/#( 3oth o all statements a e eithe #ositi+e o negati+e% The ate is fo )ed to )hoose ,hat des) i3es the sales#e son 3est f om a g o/# of all #ositi+e o all negati+e statements% Ea)h statement is gi+en ,eights that the e+al/ato is not a,a e of% The fo m is e+al/ated 32 the #e sonnel de#a tment and the sales#e son ,ith the ma"im/m s)o e is ated the highest% The ad+antage of this method is that it hel#s emo+e ate 3ias% The disad+antage is that it is not /sef/l d/ ing the #e fo man)e a## aisal inte +ie,% It is not eas2 to # e#a e standa d fo ms 3e)a/se of the +a iations in the 'o3 # ofiles of the sales #e sonnel% Also( the )osts of # e#a ation a e +e 2 high% Anothe method of #e fo man)e e+al/ation is the Beha+io O3se +ation S)ale <BOS=( ,hi)h o+e )omes most of the disad+antages asso)iated ,ith ating s)ales% E"hi3it 1D%7 des) i3es this method% 43 Ra &i g This method of #e fo man)e e+al/ation is /sef/l ,hen the sales #e sonnel in the enti e sales fo )e ,o 0ing in diffe ent a eas ha+e to 3e )om#a ed% All the sales #e sonnel a e #la)ed in o de ( 3eginning ,ith the to# #e fo me % This is /sef/l ,he e essa2s( ating s)ales o a## aisal fo ms a e not% Ran0ing is # efe ed ,hen sales #e sonnel f om diffe ent o#e ating a eas ha+e to 3e e+al/ated fo # omotion o fo in) ease in )om#ensation% In s/)h )onditions( a s/3'e)ti+e a## oa)h athe than an o3'e)ti+e one 3ased on n/m3e s is needed to e+al/ate 21 sales fo )e #e fo man)e% Alte nation an0ing and #ai ed )om#a ison an0ing a e the most )ommonl2 /sed an0ing methods% In alte nation an0ing( the sales #e sonnel a e listed andoml2 on the lefthand

side of the e+al/ation sheet% The names a e sele)ted 3ased on the ) ite ia )hosen fo an0ing% Fo e"am#le( the sales manage )hooses the 3est sales#e son f om the list <if the an0ing is done to in) ease the )om#ensation= and , ites the name on the to#; ight hand )o ne % The name of the least +al/ed sales#e son is #la)ed on the 3ottom ight;hand )o ne % No, the sales manage alte nati+el2 0ee#s , iting the names /ntil the list is )om#lete% The ne, list is the an0ing # ofile of the sales #e sonnel fo in) ease in )om#ensation% In *ai ed Com#a ison an0ing( the list of sales #e sonnel is , itten on the left;hand side of the a## aisal sheet% No, 3ased on the ) ite ia sele)ted( ea)h sales#e son is )om#a ed ,ith the est in the list% Fo ea)h )om#a ison( a tall2 is gi+en% The sales#e son ,ith the highest tall2 is an0ed n/m3e one and the sales#e son ,ith the lo,est is an0ed last% Anothe method of an0ing is the m/lti#le an0ing method( ,he e the list of sales #e sonnel a e an0ed 32 mo e than a single indi+id/al and the a+e age is ta0en% Alte nation an0ing and *ai ed Com#a ison an0ing a e # efe ed ,hen an0ing sales #e sonnel fo sala 2 in) eases% The disad+antage of an0ing is the diffi)/lt2 in de)iding the ) ite ia 3ased on ,hi)h the sales #e sonnel a e to 3e an0ed% Anothe disad+antage is the #ossi3ilit2 of o+e em#hasis on a #a ti)/la ) ite ion li0e 3eha+io o #e sonalit2 t aits to an0 the sales #e sonnel% Ran0ings a e ,idel2 /sed to e+al/ate the sales fo )e% At GE( s/#e +iso s identif2 the to# 2B #e )ent and the 3ottom 1B #e )ent of the sales fo )e 32 an0ing them% The to# 2BX a e ,ell e,a ded ,hile the 3ottoms 1BX a e /s/all2 fi ed% @o,e+e ( an0ings ha+e ) eated # o3lems fo o ganisations also% Fo instan)e( in Fo d Co #o ation( some em#lo2ees s/ed the )om#an2 stating that the A( B( and C g ade an0ings gi+en 32 the s/#e io s dis) iminated against olde em#lo2ees and that the ) ite ia fo diffe entiating 3et,een B and C g ades ,e e not o3'e)ti+e and

la)0ed )la it2% Mi) osoft also fa)ed simila la,s/its f om its em#lo2ees% 93 Ne+ Met(od" o. E1a$!atio O ganisations ha+e 3een t 2ing to de+elo# ne, methods fo e+al/ating sales fo )e #e fo man)e in o de to o+e )ome the limitations asso)iated ,ith the t aditional methods% Some of the ne,e methods of sales fo )e e+al/ation in)l/de ) iti)al in)ident a## aisal( management 32 o3'e)ti+es( ,o 0 standa ds a## oa)h and assessment )ente s% The 7DB;deg ee #e fo man)e e+al/ation is also one of the Co tro$$i g t(e Se$$i g E..ort 22 Co tro$$i g a d Ma agi g Sa$e" For%e ne, methods of e+al/ation% Ce tain methods of e+al/ation /se histo i)al #e sonnel and a))o/nting data to ad+o)ate a long; /n a## oa)h to e+al/ating the sales fo )e( ,hile othe methods li0e m/lti+a iate anal2sis and m/lti#le eg ession anal2sis ma0e /se of ?/antitati+e methods% F Criti%a$ I %ide t Apprai"a$- In a ) iti)al in)ident a## aisal( the sales manage 0ee#s note of the #ositi+e and negati+e 3eha+io s of the sales #e sonnel% $/ ing the time of #e fo man)e e+al/ation( he dis)/sses the a)t/al 3eha+io s ,ith the sales#e son instead of de3ating on the #e sonal t aits and thei inte # etations% The disad+antage of this method is that the sales manage has to maintain a e)o d of the sales#e son:s 3eha+io )onstantl2( and this ta0es /# a lot of time% The )osts in s#ending so m/)h time in monito ing the sales #e sonnel a e also not feasi3le%

F 0or&=Sta dard" Met(od- This method is /sed # ima il2 to im# o+e the # od/)ti+it2 of the sales #e sonnel% The sales manage # e#a es a )om# ehensi+e list of all the a)ti+ities and 'o3 d/ties that the sales#e son m/st #e fo m% The manage then monito s and e+al/ates the sales#e son 3ased on this list% Sin)e the a)ti+ities ma2 +a 2 f om sales#e son to sales#e son( it is diffi)/lt to )om#a e and e+al/ate them on a )ommon 3ase% F Ma ageme t ,' O,?e%ti1e" @M#OA- This method is diffe ent f om the t aditional methods 3e)a/se it is tied to es/lts and not 3ased on the #e sonalit2 o 3eha+io t aits of the sales fo )e% MBO has 3een ,idel2 /sed 32 o ganisations d/e to its fo)/s on es/lts% In this method( sales #e sonnel a e e+al/ated on the 3asis of ho, ,ell the2 attain the gi+en o3'e)ti+es% These o3'e)ti+es( ,hi)h a e s#e)ifi) and meas/ a3le( a e gene all2 # e#a ed at the time of sales #lanning% The sales manage fo m/lates them 3ased on the )o #o ate and st ategi) ma 0eting #lan afte dis)/ssions ,ith the sales #e sonnel% The o3'e)ti+es a e set ,ith m/t/al )onsent fo a fi"ed #e iod% Us/all2 the o3'e)ti+es and a))e#tan)e a e #/t in , iting in the fo m of a statement% Afte the o3'e)ti+es a e set( the sales#e son )hal0s o/t st ategies and #lans to a)hie+e ea)h of them% The sales manage eg/la l2 monito s the im#lementation of the a)tion #lans and # og ams% *e iodi) e+ie, is done to st/d2 the # og ess made and to identif2 an2 de+iations f om the o iginal #lan% At the end of the sti#/lated time( the sales #e sonnel a e e+al/ated 3ased on the e"tent to ,hi)h the fi"ed o3'e)ti+es ha+e 3een attained% Re,a ds a e gene all2 atta)hed to f/lfillment of the o3'e)ti+es% The a3o+e # o)ess is e#eated on)e the sales fo )e is e+al/ated and ne, o3'e)ti+es a e set% 27 The disad+antage of this method of e+al/ation is the la)0 of a logi)al

f ame,o 0 to de)ide on the standa d of o3'e)ti+es and the ) ite ia to 3e /sed to meas/ e them% This method also o+e loo0s the fa)to s that infl/en)e the a)hie+ement of the o3'e)ti+es% 8ith in) easing )hanges in )/stome tastes and demands( )om#anies ha+e 3eg/n to fo)/s on fa)to s othe than selling( li0e )/stome satisfa)tion and elationshi#% To meas/ e these as#e)ts( it is ne)essa 2 to get to 0no, the means of a)hie+ing these o3'e)ti+es% This has led to MBO losing its im#o tan)e in #e fo man)e e+al/ation s2stems in man2 o ganisations% E"hi3it 1D%9 des) i3es some of the # o3lems that a ise ,hile im#lementing MBO% F #e(a1iora$$' A %(ored Rati g S%a$e @#ARSA- This is one of the e)ent a## oa)hes in #e fo man)e e+al/ation% BARS is a )om3ination of a ) iti)al in)ident method and a g a#hi)al ating s)ale ,hi)h hel#s in in) easing the a))/ a)2 of sales fo )e e+al/ation 32 em#hasising o3'e)ti+e meas/ es athe than s/3'e)ti+e ones% In this method( the most s/ita3le 3eha+io needed in )a 2ing o/t a #a ti)/la t2#e of 'o3 is identified and an)ho ed on a ating s)ale% The sales manage has to sele)t a 3eha+io that is most simila to the 3eha+io # ofile on the ating s)ale% De1e$opi g #ARS i 1o$1e"- a= #/tting togethe a list of the most a## o# iate 3eha+io s needed to 3e s/))essf/l in a #a ti)/la 'o3> 3= g o/#ing simila 3eha+io s into C;1B 3eha+io al sets o dimensions 32 those a,a e of the 'o3( li0e sales manage s% Fo e"am#le( all the 3eha+io s )ont i3/ting to )/stome satisfa)tion a e g o/#ed /nde a single 3eha+io dimension )= gi+ing the list of a## o# iate 3eha+io s o ) iti)al in)idents to e"#e ts ,ho eg o/# them% Onl2 those dimensions that a e simila to the g o/#ing made in the ea lie ste# 32 sales manage s a e etained d= as0ing the e"#e t g o/# to s)ale the dimensions on the 3asis of thei deg ee of infl/en)e on the s/))ess of the 'o3> e= # e#a ing the final

ating s)ale 32 sele)ting some of the most ele+ant 3eha+io s /nde ea)h dimension% T(e ad1a tage" o. #ARS are a" .o$$o+"- it is +e 2 o3'e)ti+e and a))/ ate in meas/ ement and hel#s to de+elo# )lea standa ds> it gi+es # o#e feed3a)0 to sales #e sonnel a3o/t in)onsistent 3eha+io > it gi+es the feed3a)0 in )lea e te ms than t aditional e+al/ation methods% The disad+antages a e its highe )ost and the g eate e"tent of time ta0en% Sometimes it is diffi)/lt fo the sales manage to identif2 3eha+io s that a e most simila to those gi+en in the list of dimensions% Co tro$$i g t(e Se$$i g E..ort 29 Co tro$$i g a d Ma agi g Sa$e" For%e F Fami$ie" o. Mea"!re" @FOMA as a method of sales fo )e #e fo man)e e+al/ation6 FOM is a ne, tool de+elo#ed to t a)0 em#lo2ee #e fo man)e in an o ganisation% It diffe s f om the t aditional e+al/ation methods in that it hel#s meas/ e the # og ess made 32 a sales#e son o g o/# indi+id/all2( and not 32 gi+ing atings% The method is /sef/l to meas/ e indi+id/al as ,ell as g o/# #e fo man)e% FOM does not )om#a e the es/lts o3tained ,ith those fo othe mem3e s of the sales fo )e> it )om#a es the es/lts ,ith the # e+io/s es/lts o+e a time #e iod% The method is a )ontin/o/s e+al/ation # o)ess and the es/lts a e not lin0ed to the sales fo )e #a2% FOM is fle"i3le in a## oa)h 3e)a/se it allo,s sales #e sonnel to assign ,eights to ea)h a ea 3ased on the diffi)/lt2 of ,o 0 and the e"#e ien)e of the sales#e son%

This method e+al/ates sales #e sonnel on a monthl2 3asis in fi+e ma'o a eas and gi+es the #e fo man)e to;date fo the month as ,ell as fo ea lie #e iods% These a eas a e ?/alit2 as#e)ts( ?/antit2 as#e)ts( timel2 se +i)e( a)t/al time s#ent in selling a)ti+ities and )/stome satisfa)tion a)hie+ed% The ?/antit2 as#e)ts in)l/de the n/m3e of t ansa)tions done% T/alit2 as#e)ts in)l/de meas/ ing #e fo man)e 3ased on )omm/ni)ation( a))/ a)2 and # od/)t 0no,ledge% C/stome satisfa)tion is meas/ ed th o/gh the es/lts of a )/stome s/ +e2% Famil2 of Meas/ es is /sed to de+elo# the #e fo man)e of the sales #e sonnel on a )ontin/o/s 3asis 32 identif2ing ,ea0 a eas and im# o+ing on them ,ith the hel# of s#e)ial t aining and )oa)hing gi+en 32 sales manage s% The )om#an2 gi+es s#e)ial e)ognition to those em#lo2ees ,ho ha+e sho,n signifi)ant im# o+ement in thei #e fo man)e% A #e fo man)e e+al/ation method m/st 3e a3le to fa)ilitate e,a ding the 3est #e fo me a## o# iatel2( identif2ing the indi+id/als eligi3le fo # omotion o those ,hose se +i)es ha+e to 3e te minated( identif2ing the t aining needs and hel# needed in h/man eso/ )e #lanning( and # o+iding a## o# iate feed3a)0% The a## aisal m/st 3e a3le to ) eate a set of # efe a3le dimensions fo diffe ent 'o3 t2#es so that ne, #eo#le )an 3e easil2 hi ed ,hene+e a need a ises 32 )om#a ing # ofiles ,ith the fi"ed dimensions% No single method of #e fo man)e a## aisal )an a)t as an a))/ ate 3ase fo sales fo )e e+al/ation and f/lfill the a3o+e e?/i ements% Ea)h method has its o,n ad+antages and disad+antages% So sales manage s ha+e to /se a )om3ination of these methods to e+al/ate the sales fo )e% Fo e"am#le( sales #e sonnel engaged in missiona 2 selling )an 3e e+al/ated 32 /sing BOS and the Fo )ed Choi)e Rating method% I es#e)ti+e of the )osts( time( and in)om#leteness of the diffe ent

2C methods of sales fo )e #e fo man)e( the a)ti+it2 is +e 2 im#o tant and )annot 3e igno ed%

C(e%& 'o!r progre"" <


1% 8hat a e the old methods of e+al/ation of sales fo )eG 2% E"#lain the ne, methods of e+al/ations% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

13B MONITORING AND RE6IE0ING SALES FORCE PERFORMANCE


The #e fo man)e of sales #e sonnel has to 3e monito ed at eg/la inte +als to ens/ e that the2 a e not de+iating f om thei assigned d/ties and es#onsi3ilities% Monito ing also hel#s sales manage s 0ee# t a)0 of the # og ess made 32 the sales fo )e to,a d esta3lished o3'e)ti+es% The sales fo )e #e fo man)e )an 3e monito ed ,ith the hel# of sales e#o ts( in+oi)es( o de fo ms( a))o/nting e)o ds and di e)t inte a)tion% Contin/o/s monito ing hel#s the sales manage to easil2 ma0e the ne)essa 2 ad'/stments f om time to time ,itho/t /nde ta0ing a ma'o eo ganisation of the o ganisational st /)t/ e( # o)esses and #oli)ies% In#/t;3ased meas/ es e?/i e )onside a3le monito ing and di e)ting than o/t#/t;3ased meas/ es% Sales a/tomation # od/)ts and ,e3;3ased te)hnologies ha+e made #e fo man)e monito ing less )/m3e some 32 ma0ing the ele+ant info mation a+aila3le on time at signifi)antl2 lo,e )osts%

The final ste# in the #e fo man)e e+al/ation # o)ess( afte monito ing sales fo )e #e fo man)e( is to e+ie, the #e fo man)e of the sales #e sonnel 32 )ond/)ting an e+al/ation inte +ie,% This hel#s the sales manage )omm/ni)ate to the sales #e sonnel the diffe en)es 3et,een thei a)t/al #e fo man)e and the #e fo man)e standa ds% A one;to;one e+ie, hel#s # o+ide feed3a)0 and allo,s sales #e sonnel to dis)/ss as#e)ts fo im# o+ement( )la if2 do/3ts and hel# in the o+e all de+elo#ment of the indi+id/al% Most o ganisations )ond/)t #e fo man)e Co tro$$i g t(e Se$$i g E..ort 2D Co tro$$i g a d Ma agi g Sa$e" For%e e+ie, on)e a 2ea % This is not s/ffi)ient in the # esent )om#etiti+e s)ena io ,he e the e+ie, m/st 3e )ond/)ted at eg/la inte +als ,itho/t an2 3ias to,a ds an2 sales#e son% At *e#siCo( the e+ie, # o)ess is lin0ed to )o #o ate st ateg2% The )om#an2 ma0es /se of a timeta3le too% Integ ate the )o #o ate st ateg2 ,ith the #e fo man)e a## aisal% The )o #o ate #lan fo the )oming 2ea is # e#a ed in No+em3e and $e)em3e of the # e+io/s 2ea and the a## aisal ta0es #la)e in 1an/a 2AFe3 /a 2% *e fo man)e e+al/ation is done 0ee#ing in +ie, the e?/i ements of the f/t/ e 3ased on the )o #o ate #lan% Sales manage s and sales #e sonnel in o ganisations fa)e se+e al # o3lems in the im#lementation of s/))essf/l #e fo man)e a## aisal # og ams%

C(e%& 'o!r progre"" >

1% 8 ite a note on monito ing( e+ie,ing( and sales fo )e #e fo man)e% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

13C LET US SUM UP


I t(i" ! it7 +e-

F E"#lained the sales #oli)2 F $is)/ssed the Management and )ont ol of sales fo )e F E+al/ated methods of sales fo )e F $es) i3ed ho, to monito and e+ie, sales fo )e #e fo man)e 2E

C(e%& 8o!r Progre""- Po""i,$e A "+er"


C(e%& 'o!r progre"" 1 A "+er"- See "e%tio 132 C(e%& 'o!r progre"" 2 A "+er"- See "e%tio 13/ C(e%& 'o!r progre"" / A "+er"- See "e%tio 134 C(e%& 'o!r progre"" 4 A "+er"- See "e%tio 139 C(e%& 'o!r progre"" 9 A "+er"- See "e%tio 13< C(e%& 'o!r progre"" <

A "+er"- See "e%tio 13> C(e%& 'o!r progre"" > A "+er"- See "e%tio 13B Co tro$$i g t(e Se$$i g E..ort 2! Co tro$$i g a d Ma agi g Sa$e" For%e

UNIT 2 MANAGING SALES FORCE


Str!%t!re
2%B O3'e)ti+es 2%1 Int od/)tion 2%2 Cent alised and $e)ent alised O ganisations 2%2%1 Cent alised O ganisation 2%2%2 $e)ent alised o ganisation 2%7 Line and Staff O ganisations 2%9 T2#es of Sales Fo )e St /)t/ e 2%9%1 * od/)t;3ased Sales Fo )e St /)t/ e 2%9%2 Geog a#hi);Based Sales fo )e St /)t/ e 2%9%7 C/stome ;3ased Sales Fo )e St /)t/ e 2%C Let Us S/m U#

234 O#5ECTI6ES
In this /nit( ,e ha+e dis)/ssed )ent alised and de)ent alised o ganisations(

line and staff o ganisations and t2#es of sales fo )e st /)t/ e% A.ter +or&i g t(ro!g( t(i" ! it7 'o! "(o!$d ,e a,$e toF E"#lain )ent alised and de)ent alised o ganisations F $is)/ss line and staff o ganisations F En/me ate the diffe ent t2#es of sales fo )e st /)t/ e F $es) i3e the )/stome ;3ased sales fo )e st /)t/ e 2J

231 INTRODUCTION
The sales manage is es#onsi3le fo )o;)oo dinating and )ont olling all the a)ti+ities of the de#a tment ,ith the hel# of )om#etent e"e)/ti+es% A sales o ganisation is li0e a #o,e station sending o/t ene g2( ,hi)h is de+oted to the ad+e tising and selling of #a ti)/la lines and the e is t emendo/s loss of ene g2 3et,een the #o,e station and #oints ,he e it ea)hes the )ons/me s% The efo e( the e a ises the g eat ne)essit2 of #lanning o ganising and )ont olling all sales effo ts th o/gh a so/nd sales o ganisation K to # e+ent ,astage in dist i3/tion% Sales manage m/st 3e s0illed in #lanning o ganising( )o;)oo dinating and )ont olling all sales o#e ations and m/st ass/ e the o#tim/m )ont i3/tion of #e sonal selling effo ts to the o+e all ma 0eting o3'e)ti+es of the )om#an2

232 CENTRALISED AND DECENTRALISED ORGANISATIONS


O ganisation st /)t/ es )an also 3e )lassified on the 3asis of delegation of a/tho it2 into )ent alised and de)ent alised o ganisations%

23231 Ce tra$i"ed Orga i"atio


A )ent alised sales o ganisations is one ,he e the e is a )ommon sales

fo )e to sell the # od/)ts of mo e than one di+ision of the )om#an2% A )ent alised o ganisation t2#i)all2 )onsists of a )o #o ate head?/a te s and +a io/s di+isions /nde it% The a/tho it2 and de)ision ma0ing #o,e lies enti el2 ,ith the to# management( ,hi)h )ont ols all o ganisational a)ti+ities li0e e) /itment( t aining and #e fo man)e e+al/ation% This t2#e of st /)t/ e is )ommon in small fi ms 3e)a/se the si5e ma0es it eas2 fo the to# management to s/#e +ise( )ont ol and ens/ e smooth flo, of o#e ations% A )ent alised o ganisation st /)t/ e is ,ell s/ited ,hen the # od/)ts too a e sold in simila ma 0ets% In )ent alised sales o ganisation( the sales fo )e ma2 not 3e gi+en the a/tho it2 to ta0e de)isions% This ma0es it diffi)/lt to fo them to a)t inde#endentl2 and )on+e t ne, # os#e)ts into )/stome s% The2 also la)0 the f eedom to ma0e )on)essions to )/stome s in the fo m of highe dis)o/nts to etain them and ind/)e them to ma0e e#eat #/ )hased% Let /s no, loo0 at the ad+antages and disad+antages of this t2#e of st /)t/ e% Ma agi g Sa$e" For%e 7B Co tro$$i g a d Ma agi g Sa$e" For%e Ad1a tage" o. %e tra$i"ed orga i"atio "tr!%t!re1% Sin)e de)ision;ma0ing is est i)ted to the to# management( it is easie to align sales fo )e a)ti+ities ,ith the )o #o ate mission and o3'e)ti+es% 2% A )ent alised o ganisation st /)t/ e is s/ited to small;si5ed o ganisations as it allo,s the to# management to monito and )ont ol all a)ti+ities and o#e ations%

7% The e is no )onfli)t 3et,een diffe ent f/n)tions 3e)a/se de)ision;ma0ing is )ent alised and the e is no #ossi3ilit2 of diffe en)e o#inion% 9% An o ganisation ,ith a )ent alised st /)t/ e has a )ent alised sales fo )e% This is e)onomi)al as it eliminates the need fo a se#a ate sales fo )e fo e+e 2 # od/)t( te ito 2 o ma 0et% Di"ad1a tage" o. a %e tra$i"ed orga i"atio "tr!%t!re1% The etention of all a/tho it2 32 the to# management inhi3its s0ills de+elo#ment in sales #e sonnel% 2% In this st /)t/ e( to# management a## o+al is ne)essa 2 fo all a)tions% This in) eases the es#onse time of the o ganisation( ,hi)h ma2 i itate the )/stome % 7% The de)ision;ma0ing a/tho it2 ests ,ith the to# management% The efo e( de)ision might 3e ta0en ,itho/t )ons/lting sales #e sonnel o ta0ing thei o#inion% This )o/ld affe)t the latte Is mo ale and fail to add ess # o3lems at the sales f ont%

23232 De%e tra$i"ed Orga i"atio


A de)ent alised sales o ganisation is one in ,hi)h ea)h di+ision ,ithin the o ganisation has its o,n sales fo )e to sell the # od/)ts of the di+ision alone% The to# management delegates a/tho it2 and eso/ )es to lo,e le+els of the o ganisation% The sales de#a tment f/n)tions as an inde#endent entit2 and the sales fo )e has the f eedom to inde#endentl2 ta0e de)isions #e taining to sales a))o/nts% This st /)t/ e is s/ited fo la ge o ganisations ,he e it is not #ossi3le fo the to# management to s/#e +ise all a)ti+ities and fo ma 0ets that diffe f om ea)h othe )onside a3l2% Ad1a tage" o. De%e tra$i"ed Orga i"atio Str!%t!re1% $e)ent alisation allo,s the sales fo )e to ta0e de)isions on its o,n( 3ased on

the info mation it #ossesses( e"#e ien)e and '/dgment% $e)ent alisation leads to 3ette /tilisation of info mation and #e sonnel s0ills at the lo,e le+els of 71 the o ganisational hie a )h2% 2% This st /)t/ e #la)es the es#onsi3ilit2 of fo m/lating st ategies on those ,ho a e )lose to the s)ene of a)tion% It hel#s in) ease the mo ale and 'o3 satisfa)tion of these #e sonnel and moti+ates them to f/n)tion ,ith g eate enth/siasm and 5eal% 7% The st /)t/ e allo,s o ganisations to )a#italise on the e"#e tise and 0no,ledge of di+isional manage s o manage s of 3/siness /nits ,ith ega d to # od/)ts( ma 0ets( )om#etito s and )/stome s in the lo)al ma 0et% 9% The e is g eate fle"i3ilit2 and the o ganisation )an ada#t itself a))o ding to e?/i ements and )hanges in the lo)al 3/siness en+i onment% C% The to# management fo)/ses on mo e st ategi) iss/es instead of monito ing o/tine matte s% D% As de)isions )an 3e ta0en at the di+isional le+el athe than efe ing e+e 2thing to the to# management fo a## o+al( the es#onse time of the o ganisation is ed/)ed% S/)h o ganisations )an es#ond to en+i onmental )hanges( )o/nte th eats and sei5e o##o t/nities m/)h faste % E% A de)ent alised o ganisation st /)t/ e en)o/ ages inno+ation and is0;ta0ing in di+isional manage s than0s to g eate eso/ )e a/tonom2 and fe,e eg/lato 2 )ont ols% The manage s feel )onfident( as faith has 3een #la)ed in them% Di"ad1a tage" o. De%e tra$i"ed Orga i"atio Str!%t!re1% A de)ent alised st /)t/ e in) eases the o ganisationIs )osts% Maintaining a sales fo )e fo e+e 2 di+ision hi0es o+e head )osts%

2% This st /)t/ e #la)es the es#onsi3ilit2 fo a)hie+ing o ganisational goals on di+isional manage s athe than on to# management% This )an lead to o ganisational ineffi)ien)ies 3e)a/se of )om#etition 3et,een +a io/s di+isions% Com#etition )an also )a/se non;)oo#e ation 3et,een di+isions( ,hi)h ,ill ha m the o ganisation% 7% The e ma2 3e a loss of )ont ol o+e di+isional manage s 32 the to# management% The fo me ma2 tend to mis/se hei a/tonom2 32 #la)ing mo e im#o tan)e on the o3'e)ti+es of thei o,n di+ision athe than on o ganisational aims% 9% The to# management in a de)ent alised o ganisation st /)t/ e might often 3e /na,a e of g o/nd ealities on the sales f ont% This ma0es it diffi)/lt fo the Ma agi g Sa$e" For%e 72 Co tro$$i g a d Ma agi g Sa$e" For%e to# management to add ess # o3lems fa)ed 32 the sales #e sonnel%

C(e%& 'o!r progre"" 1


1% $es) i3e )ent alised o ganisation and e"#lain its ad+antages and disad+antages% 2% E"#lain de)ent alised o ganisation and e"#lain its ad+antages and disad+antages% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

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23/ LINE AND STAFF ORGANISATIONS


Line f/n)tions in+ol+e all a)ti+ities that di e)tl2 )ont i3/te to ) eating( de+elo#ing and deli+e ing an o/t#/t% The2 a e di e)tl2 elated to the a)hie+ement of o ganisational o3'e)ti+es% * od/)tion( ma 0eting( sales and finan)e a e e"am#les of line f/n)tions% Staff f/n)tions on the othe hand( a e of a s/##o ti+e and )ons/ltati+e nat/ e% The2 s/##o t line f/n)tion and( thei )ont i3/tion to ea)hing o3'e)ti+es is indi e)t% @/man eso/ )es a)ti+ities s/)h as hi ing( staffing( t aining and )om#ensating sales fo )e a e e"am#les of staff f/n)tions% 8hile de)iding the sales o ganisational design( a,a eness of line and staff elationshi#s is ne)essa 2 to a+oid )onf/sion and dis /#tion in selling a)ti+ities% In a sales o ganisations( all # ima 2 a)ti+ities elated to selling( s/)h as #e sonal selling( sales #lanning( sales fo e)asting( 3/dgeting and assigning sales te ito ies( )ome /nde the line f/n)tion% All elated non;selling a)ti+ities li0e gathe ing info mation( sales t aining and sales ad+e tising a e s/##o ting o staff f/n)tions% A line o ganisation is the sim#lest fo m of o ganisation( in ,hi)h a/tho it2 flo,s f om to# to the lo,e le+els% The field sales e#o ts to a sales manage ,ho e#o ts to the salesAma 0eting di e)to % This a angement is 0no,n as line a angement% A line o ganisational st /)t/ e )an e"ist in +e 2 small )om#anies o ,ithin smallsi5ed sales de#a tments ,ithin la ge o ganisations% 77 Ad1a tage" o. a $i e orga i"atio "tr!%t!re1% A #/ el2 line sales o ganisation is less e"#ensi+e and fa)ilitates easie )oo dination of a)ti+ities as it has a +e 2 sim#le st /)t/ e ,ith )lea ;)/t dema )ation of #ositions( a/tho it2 and es#onsi3ilities%

2% It hel#s ?/i)0 de)ision ma0ing 3e)a/se of a ,ell;defined hie a )h2% 7% It # e+ents )onfli)ts f om a ising d/e to diffe en)es in thin0ing 3et,een #e sonnel in )ha ge of diffe ent f/n)tions% Di"ad1a tage" o. a $i e orga i"atio "tr!%t!re1% $e)isions made 32 sales manage s m2 la)0 the staff #e s#e)ti+e% This )an )a/se # o3lems li0e /ns/ita3le e) /itment and t aining of #e sonnel( ina## o# iate )om#ensation and othe h/man eso/ )e # o3lems% $e)isions on s/)h things sho/ld 3e left to @R #e sonnel ,ho a e s#e)ialists in this field% 2% It is +e 2 diffi)/lt fo a line manage to handle m/lti#le a)ti+ities 3e)a/se of thei inhe ent )om#le"it2% 8hile handling m/lti#le a)ti+ities( the line manage ma2 get too in+ol+ed in o#e ational matte s and lose the st ategi) o )om#etiti+e fo)/s% No,ada2s sales o ganisations do not o#t fo a #/ el2 line st /)t/ e d/e to man2 easons% Fi st( f ont;line sales #e sonnel ha+e too m/)h es#onsi3ilit2% Ne"t( sin)e the e is no staff f/n)tions to assist them( sales manage s ha+e to o+e see a)ti+ities othe than selling( li0e ma 0et esea )h( ,hi)h )an ta0e a,a2 fo)/s f om thei )o e )om#eten)e% The line and staff t2#e of o ganisational st /)t/ e is # o3a3l2 the most )ommon and #o#/la fo m of sales o ganisation st /)t/ e toda2% It has the added ad+antage of staff s#e)ialisation ,he e a)ti+ities not di e)tl2 elated to selling s/)h as ma 0et esea )h and ad+e tising( a e handled 32 ?/alified #eo#le% Gene all2( )om#anies ha+ing a la ge sales fo )e( a ,ide ange of # od/)ts to 3e sold and o#e ations in +a io/s ma 0ets ado#t this t2#e of st /)t/ e% Unli0e in line o ganisations( ,he e the field fo )e e#o ts to a sales manage ,ho( in t/ n( e#o ts to the salesAma 0eting di e)to ( in a line and staff o ganisation( e#o ting elationshi#s +a 2 a))o ding to the im#o tan)e of staff a)ti+ities% Fo e"am#le ( in a )on+entional sales o ganisation( the sales #e sonnel

e#o t to the sales manage % In a sales o ganisation ha+ing line and staff #e sonnel( sales #e sonnel sales #e sonnel ma2 e#o t to an AGM <Assistant Gene al Manage = o a Regional manage ( ,ho ma2 not 3e asso)iated ,ith the sales de#a tment% Ma agi g Sa$e" For%e 79 Co tro$$i g a d Ma agi g Sa$e" For%e Ad1a tage" o. a $i e a d "ta.. orga i"atio "tr!%t!re 1% The # esen)e of staff #e sonnel adds e"#e tise and a staff #e s#e)ti+e to st ategi) de)isions made 32 sales manage s% This im# o+es the ?/alit2 of de)isions% 2% This t2#e of st /)t/ e is 3est s/ited fo o ganisations ,ith fe, # od/)ts% This is 3e)a/se( ,ith a la ge n/m3e of # od/)ts( the e is #ossi3ilit2 of )oo dination going ha2,i e and an in) ease in )onfli)ts 3et,een +a io/s f/n)tions% 7% This t2#e of st /)t/ e is also s/ited fo o ganisations o#e ating in a sta3le en+i onment 3e)a/se an2 )hange that is initiated ,ill ta0e #la)e +e 2 slo,l2% Di"ad1a tage" o. a $i e a d "ta.. orga i"atio "tr!%t!re1% In a line and staff o ganisation st /)t/ e( the # o3a3ilit2 of # o3lem a ising is high 3e)a/se of )onfli)ting o3'e)ti+es of line and staff #e sonnel% 2% La)0 of )oo dination 3et,een diffe ent f/n)tions ma2 lead to dil/tion of fo)/s on the )/stome % 7% Ea)h f/n)tion ma2 t 2 to f/ the its o,n o3'e)ti+es( es/lting in o ganisational goals 3eing igno ed%

9% If the e is #oo )oo dination 3et,een de#a tments( the )han)es of inno+ation of # od/)ts and # o)esses is ed/)ed%

C(e%& 'o!r progre"" 2


1% $es) i3e line o ganisation and e"#lain its ad+antages and disad+antages% 2% $es) i3e line and staff o ganisation and e"#lain its ad+antages and disad+antages% 6%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

234 T8PES OF SALES FORCE STRUCTURE


$e+elo#ing a s/))essf/l sales o ganisation in+ol+es ada#ting o ganisational # o)esses and st /)t/ e to meet the demands of the e+e ;)hanging ma 0et #la)e% A )om#an2 de)ided on a #a ti)/la t2#e of sales fo )e st /)t/ e de#ending /#on fa)to s s/)h as t2#e of ma 0et <de+elo#ing o f/ll2 de+elo#ed=( 7C egion o )o/nt 2( t2#e of ind/st 2 3eing o#e ated in( )/stome s to ,hi)h it )ate s( le+el of sales desi ed( si5e of the sales fo )e and the ,idth and de#th of the # od/)t mi"% Based on these fa)to s( the e )an 3e fo/ t2#es of sales fo )e st /)t/ e R # od/)t R 3ased st /)t/ e( geog a#hi) st /)t/ e( )/stome ;3ased st /)t/ e and )om3ination st /)t/ e% Us/all2 o ganisations sele)t the t2#e 32 ,eighing the # ofits that )an 3e a)) /ed f om ea)h st /)t/ e against the )osts in+ol+ed in )oo dinating the sales effo t /sing the st /)t/ e% The2 then )hoose the 3est o#tion%

23431 Prod!%t=,a"ed Sa$e" For%e Str!%t!re

In a # od/)t;3ased st /)t/ e( sales fo )e es#onsi3ilities and a)ti+ities a e di+ided a))o ding to the t2#e of # od/)t sold The e )an 3e a single <# od/)tA# od/)t line= sales fo )e o a m/lti#le <# od/)tA# od/)t line= sales fo )e% This st /)t/ e is s/ited fo )om#anies that man/fa)t/ e a +a iet2 of )om#le" te)hni)al # od/)ts o # od/)ts that a e dissimila and /n elated% 7M Co #o ation /ses se#a ate sales #e sonnel to sell its ,ide ange of # od/)t lines% IBM and -e o" ha+e also s,it)hed o+e f om a di+isional t2#e of sales fo )e st /)t/ e to the # od/)t t2#e% @o,e+e ( ,hile ado#ting this t2#e )a e sho/ld 3e ta0en to a+oid d/#li)ation of the sales effo t% Ad1a tage" o. a prod!%t=,a"ed "a$e" .or%e "tr!%t!re1% In this t2#e of st /)t/ e( sin)e the sales #e son sim/ltaneo/sl2 handles mo e than one # od/)t and )an # omote man2 # od/)ts in a single sales )all( it ed/)es the f e?/en)2 and n/m3e of )alls the sales #e son needs to ma0e on a )/stome % 2% This st /)t/ e is s/ita3le ,hen #/ )hase ates and f e?/en)2 of 3/2ing a e high and )/stome s 3/2 f om a set of )losel2 elated and )om#lementa 2( )om#eting # od/)ts% 7% 8hen the te ito 2 assigned to sales #e sonnel is la ge and a lot of time is s#ent t a+eling to )lients( a m/lti;# od/)t 3ased sales fo )e st /)t/ e ed/)es )osts and sa+es time% Di"ad1a tage" o. a prod!%t=,a"ed "a$e" .or%e "tr!%t!re1% The e is a #ossi3ilit2 of d/#li)ation of a)ti+ities at the )o #o ate and egional le+els in the o ganisation d/e to sales #e sonnel handling m/lti#le # od/)ts% If the # od/)ts to 3e sold 32 the sales #e sons a e not )lea l2 defined( the e is a )han)e that mo e than one sales #e son ma2 a## oa)h the same )/stome ,ith a #a ti)/la # od/)t%

Ma agi g Sa$e" For%e 7D Co tro$$i g a d Ma agi g Sa$e" For%e 2% The e is also the #ossi3ilit2 of )lash of o3'e)ti+es 3et,een the # od/)t di+ision and the management% Sometimes the fo me Is aims ma2 not 3e in the st ategi) inte est of the o ganisation% Fo e"am#le( the e )an 3e )onfli)t of o3'e)ti+es if the # od/)t di+ision follo,s a ma 0et s0imming st ateg2 to ea n a#id # ofits at a time the o ganisation is #lanning a f ontal atta)0 th o/gh a # i)e ,a %

23432 Geograp(i%=#a"ed Sa$e" .or%e Str!%t!re


In a geog a#hi) sales fo )e st /)t/ e( the sales fo )e is g o/#ed 32 #h2si)al te ito ies% It is the most ,idel2 /sed s2stem in di+iding es#onsi3ilit2 and a/tho it2 among sales fo )es% Ea)h sales #e son is assigned a se#a ate geog a#hi) te ito 2 and ea)h te ito 2 is headed 32 a egional o a 5onal manage % This st /)t/ e is s/ited fo )om#anies that ha+e mat/ e # od/)t lines ,ith se+e al # od/)ts ta geted at the same ma 0et% It is also ideal fo )om#anies that man/fa)t/ e # od/)ts ,ith a high deg ee of simila it2% Gene all2( #ha ma)e/ti)al( a/tomoti+e and FMCG )om#anies # efe this t2#e of st /)t/ e% Ad1a tage" o. Geograp(i% Sa$e" For%e Str!%t!re1% It ed/)es time and e"#ense on t a+el 3e)a/se sales #e sonnel a e 3ased in thei es#e)ti+e te ito ies and limit thei sales effo ts to that egion% 2% It is the sim#lest method 32 ,hi)h a )om#an2 )an e?/alise te ito ies among sales #e sonnel( in te ms of )/ ent and #otential 3/siness% It hel#s )om#anies to delegate es#onsi3ilit2 among sales #e sonnel e?/ita3l2 and ens/ es

)o+e age of the enti e ma 0et% 7% E+e 2 sales #e son has an assigned te ito 2 and )/stome 3ase% This hel#s the )om#an2 and its sales fo )e to meet lo)al e?/i ements 3ette and ma0e )hanges to s/it lo)al )onditions% This )ont i3/tes to 3ette elationshi# 3/ilding and )/stome satisfa)tion% Di"ad1a tage" o. Geograp(i% Sa$e" For%e Str!%t!re1% The sales #e sonnel la)e s#e)ialised t aining #e taining to the # od/)t and ma2 not 3e as effi)ient as thei )o/nte #a ts in a # od/)t;3ased sales st /)t/ e% As the sales #e sonnel ,ill handle man2 # od/)ts in a te ito 2( the e is less )han)e of thei de+elo#ing )om#eten)2 and te)hni)al e"#e tise fo # od/)ts% 2% In a geog a#hi) st /)t/ e( lo)al manage s la)0 s/##o ting staff fo non;selling a)ti+ities li0e ma 0et esea )h( ad+e tising and sales # omotion%% $/ ing these 'o3s is an additional es#onsi3ilit2 fo the lo)al manage s% This )an lead to loss of fo)/s on s#e)ialised ma 0eting a)ti+ities% 7E 7% Sales #e sonnel a e limited to thei es#e)ti+e te ito ies( leading to #oo )oo dination of sales effo ts a) oss diffe ent # od/)t lines% This ma0es integ ation and standa disation of selling a)ti+ities a) oss # od/)t lines diffi)/lt%

2343/ C!"tomer=,a"ed Sa$e" For%e Str!%t!re


In this t2#e of st /)t/ e( the sales fo )e is di+ided on the 3asis of )/stome needs% This st /)t/ e is # efe ed ,hen s#e)ifi) )/stome g o/#s e?/i e s#e)ial attention d/e to diffe en)es in thei needs% In the #ha ma)e/ti)al ind/st 2( o ganisations ado#t a )/stome ;3ased sales fo )e st /)t/ e to ta get )/stome s in diffe ent ma 0et segments% Fo e"am#le( Me )0 along ,ith Ast a AB has fo med Ast aAMe )0 to sell d /gs% The ne,

o ganisation has a m/)h smalle sales fo )e than a t2#i)al #ha ma)e/ti)al )om#an2% It has onl2 th ee le+els of hie a )h2 3et,een CEO and f ont;line sales #eo#le% Based on )/stome e?/i ements( the sales fo )e sells # od/)ts 3elonging to eithe )om#an2% Asea B o,n Bo+e i <ABB= is anothe e"am#le of a )/stome R 3ased o ganisation% In 2BB1( ABB e)ognised itself a o/nd )/stome g o/#s to in) ease the #a)e of g o,th in a glo3alised ma 0et% It di+ided the 3/siness g o/#s into fo/ )/stome segments R Utilities( * o)ess ind/st ies( Man/fa)t/ ing and Cons/me ind/st ies( and Oil( Gas ` *et o)hemi)als% ABB ,as among the fi st in the ind/st 2 to o ganise itself a o/nd )/stome s athe than te)hnologies% To 3/ild st ong )/stome elationshi#s( man2 o ganisations ha+e ad+an)ed to /sing st ategi) a))o/nt management% In s/)h a sales fo )e st /)t/ e( sales #e sonnel a e allotted a )e tain n/m3e of high #otential )/stome s ,ith the #otential to 3 ing 3/siness to the )om#an2% The sales #e sonnel )on)ent ate e")l/si+el2 on meeting )/stome e?/i ements ,ith tailo ;made sales # og ammes% Ad1a tage o. a %!"tomer=,a"ed "a$e" .or%e "tr!%t!reThis st /)t/ e is ad+antageo/s ,hen the )om#an2 has a ,ide ange of # od/)ts to offe to )/stome s% A )/stome ;3ased sales fo )e ,ill 3e a3le to a))/ atel2 assess )/stome needs and offe those # od/)ts( ,hi)h ,ill meet )/stome e?/i ements% Di"ad1a tage" o. a %!"tomer=,a"ed "a$e" .or%e "tr!%t!re1% In a )/stome ;3ased sales fo )e st /)t/ e( the sales f/n)tion and the finan)e and # od/)tion f/n)tions ma2 ha+e diffe en)e em#hasis( es/lting in la)0 of )oo dination%
2% F/ the ( some sales #e sonnel ma2 # ess/ ise the management fo s#e)ial

Ma agi g Sa$e" For%e

7! Co tro$$i g a d Ma agi g Sa$e" For%e fa+o/ s li0e highe dis)o/nts and ) edits tailo ;made to s#e)ifi) )/stome s% This )an lead to dissatisfa)tion among othe sales #e sonnel% Gi+ing s/)h e"t a )on)essions to some sales #e sons ma0es it diffi)/lt to /nifo ml2 e+al/ate the sales fo )e%

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