Role of IT in Sales & Marketing

1. Professionals who have contact with customers are now "touching" with
technology. With each passing day, sales, marketing, and even customer service
positions are becoming increasingly focused on technology.
2. Over the next ten years, rapidly changing technology will impact most aspects of
sales and marketing strategy and management. In particular, the rush to deploy ebusiness, Web marketing and CRM solutions will transform the role of the sales
and marketing professional.
3. In order to accomplish these points, management must reallocate the sales and

marketing investment mix to fund more high-performance Web marketing tools.

7 ways technology is changing the sales and marketing job:
1. Collaborative customer relationship management (CRM): Organizations must
assemble and integrate customer relationship management (CRM) systems that
enhance customer collaboration and build customer loyalty and exit barriers.
2. Outsourcing sales and marketing functions: Organizations must strategically
outsource sales and marketing budgets to a new generation of businesses,
including marketing agencies, e-commerce utilities and service providers, and echannel partners to obtain talent, technical expertise, and cost efficiencies.
3. Hybrid distribution systems: Organizations must build multi-channel, hybrid
distribution systems that leverage low-cost, high-touch technologies to improve
cost efficiency, market coverage, and overall selling performance.
4. Value-added direct sales: Organizations must migrate the role of direct sales to
better align high-touch, face-to-face selling interactions with high-value and highmargin products and services
5. Customer interaction centers: Organizations must consolidate and integrate call
center, Web, e-mail, fax, and marketing technology assets to better manage selling
resources, technology infrastructure, and customer interactions.
6. Changing role of branding: Organizations must aggressively build brand equity in
e-channels, in virtual communities, and across multiple selling partners, channels,
and points of interaction (POI).
7. Interactive direct marketing: Organizations must deploy new tools, approaches,
and strategies for anticipating or influencing the way customers buy.

Sales Audit
1. It refers to a systematic, comprehensive, independent & periodic examination of a
company's environment, objectives, strategies & activities to determine problem
area & opportunities to recommend a plan of action for improvements in
company sales.
2. It is done by a sales auditor that can be an external auditor(chartered accountants,
consultants) through an agency, or industry or an internal auditor(Internal staff)
3. It is an instrument of further control
4. Timely sales audit at regular intervals & follow ups of the recomendations given
by the auditors can bring excellent results for future and devise timely safeguards.
Objectives of Sales Audit
1. find out the true & actual position of sales of a company
2. to exercise control over future planning & over the results of the company
3. to analyse the past performance or shortcoming, if any, in a sales department
4. to bring alertness to the company as the staff must know that their activities are
underthe watchful eyes of the company
5. to award incentives, promotions, rewards in case of exceptional performance or to
penalise to those whose activities caused loss to the company
6. To srutinize & improve the performance of the sales team
Metrics or the Check list required for a sales audit
1. Strengths, weaknessess, threats & opportunities in the current environment
2. Probable changes in consumer behavior
3. Major changes found in market segmentation
4. Probable changes in competitor strategy and pricing policies
5. Major channels of distribution
6. No. of marketing objectives already achieved and how many in the pipeline
7. Channels of promotion used

Ethical issues involved in sales management

Ethics is the set of rules or standards that govern the conduct of a person or members of
a profession. Ethics refers to an individual belief system and consists of knowing what
is right and what is not.
Various ethical issues are involved in sales management such as:1. Companies doing business with no regard to social responsibility run the risk of
attracting the attention of environmental groups, earning negative publicity, and
losing the goodwill of society.
2. A code of sales ethics is fundamental to sales success. It is the foundation on
which sales techniques and strategies are built, and provides solid footing on
which long-term, profitable businesses are built.
3. Ethical selling is developing trust: teaching individual sales people to act rightly,
to say and print the right things; to not over-promise and make sure that buyers
and sellers are fully informed.
Common Ethical Issues for Salespeople
Many of the most common situations you could face as a salesperson involve issues
such as the following:
1. A customer asking for information about one of their competitors, who happens to
be one of your customers
2. Deciding how much to spend on holiday season gifts for your customers
3. A buyer asking for something special, which you could easily provide, but arent
supposed to give away
4. Deciding to play golf on a nice day, since no one knows if you are actually at
work or not
Ethical Dilemma -There is no uniform codification of ethics so differences and
dilemmas about proper behavior can occur. A situation when all of the choices for a
solution to a problem have some element that could create negative ethical or personal
consequences.
Sales people perform under the convergence of three demanding masters: employer,
customer and self. Each party has their own agenda and the sales person, who clearly
has a personal agenda, is the arbitrator.

1. The employer/seller is seeking sales, profit margin and correctly consummated

closings.
2. The customer/buyer is seeking solution, value and correctly consummated
closings.
3. The salesperson has the above objectives in mind and also their own income
potential.
Salespersons Ethical Responsibilities
1. Misuse of Company Assets such as Automobiles, Expense Accounts, Samples or
Damaged merchandise credits
2. Moonlighting- selling a product/service not concerned with the company or industry
3. Cheating in events such as Contests, Holding Sales or Overloading Customer
4. Affecting Fellow Salespeople by Taking Customers
5. How to Treat The Customer using Bribes or Gifts, Misrepresentation and Price
Discrimination-Customers who buy similar quantities should receive same pricing
Salespeople, as well as sales managers, may occasionally misuse company assets, moonlight, or cheat.
Such unethical practices can affect co-workers and need to be prevented before they occur.

Misusing Company Assets

Company assets most often misused are automobiles, expense accounts, samples,
and damaged-merchandise credits. All can be used for personal gain or as bribes and
kickbacks to customers. For example, a credit for damaged merchandise can be given
to a customer when there has been no damage, or valuable product samples can be
given to a customer.

Moonlighting
Salespeople are not closely supervised and, consequently, they may be tempted to
take a second jobperhaps on company time. Some salespeople attend college on
company time. For example, a salesperson may enroll in an evening MBA program
but take off in the early afternoon to prepare for class.

Cheating
A salesperson may not play fair in contests. If a contest starts in July, the salesperson
may not turn in sales orders for the end of June and lump them with July sales. Some
might arrange, with or without the customers permission, to ship merchandise that
is not needed or wanted. The merchandise is held until payment is due and then returned
to the company after the contest is over. The salesperson also may overload
the customer to win the contest.

Affecting Other Salespeople

Often, the unethical practices of one salesperson can affect other salespeople within
the company. Someone who cheats in winning a contest is taking money and prizes
from other salespeople. A salesperson also may not split commissions with coworkers
or may take customers away from co-workers.

Technology Theft
A salesperson or sales manager quits, or is fired, and takes the organizations
customer records to use for her or a future employers benefit.
How is that possible? Well, its getting easier to do these days because more
and more companies provide their sales personnel with computers, software, and data
on their customers.

Many ethical questions can arise in the activities of professional salespeople. It is

important that companies develop and implement business conduct guidelines to provide
their sales personnel with the tools necessary to avoid being implicated in an unethical
or illegal activity.

Bribe

A salesperson may attempt to bribe a buyer.11 Money, gifts, entertainment, and travel

opportunities may be offered. At times, there is a thin line between good business and
misusing a bribe or gift.
Many large organizations such as the Northern Alberta Institute of Technologys
purchasing department publish internal policies to the public. NAITs policies are
available on the Institutes Web site. They provide policy guidelines within which the
purchasing function of the organization conducts its business. Sellers to this organization
would be expected to abide by the policies. Although much of the information
focuses on procedural issues for internal users of the purchasing department, there is
an ethical overtone in many of the policies that reflects the fact that the Institute is
publicly funded, and appropriate procedures must be followed to ensure impartiality
and stewardship when making buying decisions.

Misrepresentation

Today, even casual misstatements by salespeople can put a company on the wrong
side of the law. Most salespeople are unaware that they assume legal obligations
with accompanying risks and responsibilitiesevery time they approach a customer.
However, we all know that salespeople sometimes oversell. They exaggerate the capabilities
of their products or services and sometimes make false statements just to
close a sale.
Often, buyers depend heavily on the technical knowledge of salespeople, along
with their professional integrity. Yet, sales managers and staff find it difficult to
know just how far they can go with well-intentioned sales talk, personal opinion,
and promises. They do not realize that by using certain statements they can embroil
their companies in a lawsuit and ruin the business relationship they are trying to establish.
When a customer relies on a salespersons statements, purchases the product or
service, and then finds that it fails to perform as promised, the supplier can be sued
for misrepresentation and breach of warranty.
You can avoid such mistakes, however, if youre aware of the law of misrepresentation

and breaches of warranty relative to the selling function, and if you follow
strategies that keep you and your company out of trouble. Salespeople must
understand the difference between sales puffery (opinions) and statements of
factand the legal ramifications of both. There are preventive steps to follow;
salespeople must work closely with management to avoid time-consuming delays
and costly legal fees.

Price discrimination

Price discrimination is covered by the Competition Act and exists when the following
conditions can be proven:
A discount, rebate, allowance, price concession, or other advantage was
granted to one customer and not to another.
The customers are competitors.
The price discrimination occurred in respect of articles of similar quality and
quantity.
The act of discrimination was part of a practice of discrimination.
An interesting aspect of price discrimination in Canada is that the buyer is seen as
liable along with the seller in price discrimination cases. The law was structured intentionally
to restrain large volume buyers from demanding discriminatory pricing.
.
Tied-selling

A firm engages in tied selling when it makes the purchase of one or more goods or
services conditional on the purchase of others. This can be accomplished either
through making the tied selling an overt condition of purchase or through some form
of inducement such as a price for the bundle of tied goods lower than the sum of the
individual prices of the goods if purchased separately. The two most common types
of tied sales are bundling and requirements tying. Bundling (or package tie-in) occurs

when a product is sold only on the condition that some specified number of units of
some other product is purchased from the same supplier (for example, in order to
purchase a unit of B from a supplier, a consumer must also purchase two units of A
from the same supplier); with a requirements tie, consumers must make all of their
purchases of product A from a firm if they want to purchase product B from that firm.

SALES BUDGET
1. It is a program designed for a stipulated time frame that highlights the selling
expenses and anticipated sales, quantitatively and in value terms.
2. It is a statement aimed at comparing the revenue, net profit, sales
3. volume & selling expenses relating to particular product.
4. Once the sales volume is defined, the likely selling expenses that would be
incurred is estimated on the basis of quantities of product to be sold, sales
districts, prospective buyers, time period of selling, etc.
5. Amount of money assigned for a definite period
6. Sales budget is used as a mechanism of control to measure sales expenses, profit
goals for various sales units as well as to measur the progress of sales personnel.
SALES BUDGET
A sales budget is simply a tool, a financial plan, that depict how resources
should best be allocated to achieve forecast sales. In other words, sales
budget is a blueprint for making profitable sales. It details who is going to sell
how much of what during the operating period, and to which customers or
class of trade and the likely selling expenses. It is a projection of what a given
sales programme means in terms of sales volume, selling expenses, and net
profits. The purpose of sales budgeting is to plan for and control the
expenditure of resources (money, material, people and facilities) necessary to
achieve the desired sales objectives.
The sales forecast is the source for the sales volume portion of the sales
budget. The sales volume objective derived from the sales forecast is broken
down into the quantities of products that are to be sold, the sales personnel or
sales districts that are to sell them, the customers or classes of trade that are
to buy them, and the quantities that are to be sold during different time
segments in the operating period. After these breakdowns are made, the
selling expenses that will be incurred in implementing the sales programme
are estimated. Sales forecast and sales budget are therefore, intimately
related as much as if the sales budget is inadequate, the sales forecast will not
be achieved, or if the sales forecast is increased the sales budget must be
increased accordingly. Sales budget by relating sales obtained and resources
deployed also acts as a means for evaluating-sales planning and sales effort.
It aims at attaining maximum profits by directing the emphasis on most
profitable segments, customers and products.

PURPOSE/OBJECTIVES OF THE SALES BUDGET

A sales budget generally serves three important purposes.
(i) Instrument of Planning : The budgeting process requires complex
sequences of planning decisions. In order to achieve goals and objectives
of the sales department, the managers must outline essential tasks to
be performed and compute the estimated costs required for their
performance. The planners show how the targeted volume can be
reached, while keeping selling expenses at a level that permits attainment
of the targeted profit. Sales budgeting, hence, helps in profit planning
and provides a guideline for action towards achieving the organisational
objectives. The alternative sales plan are drafted so that selection of
the most appropriate may serve the companys sales volume and net
profit objectives.
(ii) A tool of coordination : Sales department is a sub-system of marketing
division and selling is one of the most important functions of marketing.
To be effective, it needs support from other elements of the marketing
mix. The, process of developing realistic sales budget draws upon
backward and forward linkages of selling with marketing and in turn
brings about necessary integration within the various selling and
marketing functions, and coordination between sales, finance, production
and purchase function. The sales budget enables sales executives to
coordinate expenses with sales and with the budgets of the other
departments.
(iii) Mechanism of Control : Control is the prime orientation in sales
budgeting. The budget, which is a composite of sales, expense, and
profit goals for various sales units, serves as a yardstick against which
progress is measured. Comparison of accomplishments with relevant
breakdowns of the budget measures the quality of performance of
individual sales personnel, sales regions, products, marketing channels,
and customers. These evaluations identify specific weaknesses in
operating plans, enabling safes management to make revisions to,
improve performance. The sales budget itself, since it is a master
standard against which diverse aspects of performance are measured,
then serves as an instrument for controlling sales volume, selling
expenses, and net profits.
METHODS OF SALES BUDGETING
Methods of sales budgeting differ from company to company. There are a

variety of methods ranging from the sales managers gut feelings to

application
of computer based management science models for determining the sales
budgets. Some important methods are given below :
(i) Percentage of Sales : This method is also know as rules of thumb.
In this method manager multiplies the forecast sales by various
percentages for each category of expense. The resultant then becomes
the amount budgeted for each of the respective categories. It is
generally based on the managers experience or feelings about what
portion of the sales volume can be spent on each business function
to achieve the desired profit. But, there are no guarantees that setting
the budgets using these percentages will lead to optimal performance.
Mass selling organisations are major users of this method.
(ii) What is affordable : This method is generally used by firms dealing
in capital industrial goods. Also, companies giving low emphasis on
sales and marketing function or having small size of operation make
use of this judgemental method.
(iii) Competitive parity method : This method advocates determining
sales budget comparable to the competitors. The use of this method
presumes knowledge of the competitors activities and resource
allocation. Large sized companies whose products face tough
competition and need effective marketing to maintain profits use this
method.
(iv) Objective and task method : In this method the manager starts with
identifying the objectives of sales department followed by determination
of tasks that must be accomplished in order to achieve the set objectives.
Later, the cost of each activity or task is calculated to arrive at the
total budget. The finalisation of the budget may require adjustment
both in the objectives as well as in the way the task may be performed.
(v) Zero-base budgeting : It is relatively new approach to budgeting. It
involves a process in which the sales budget for each year is initiated
from zero base thus, justifying all expenditure and discarding continuation
of conventions and rules of thumb. This method suffers from practical
limitations which relate to a very elaborate and time consuming process
required by it.

SALES BUDGETARY PROCEDURE

Sales budgetary procedure differ from company to company with most

differences tracing to difference in basic planning styles, i.e., top-down and
bottom up. In top down planning, top management sets the objectives and
drafts the plans for all organisational units. By contrast, in bottom-up planning
different organisational units (generally departments) prepare their own
tentative objectives and plans and forward them to top management for
consideration. Preparation of sales budget is one of the most important
elements of the sales planning process. Mostly sales organisations have their
own specified procedures, formats and time tables for developing the sales
budget. However, the general steps taken in systematic preparation of sales
budget can be identified in the sequence given below :
(i) Analysis of sales volume and expenses : The preparation of the sales
budget normally starts at the lowest level in the sales organisation and
works upward. Thus, each district sales manager estimates district
sales volume and expenses for the coming period. Some of the common
items each sales budget includes are salaries, travel, lodging, food,
entertainment, commissions on sales, office expenses, promotional
material selling aids, contest awards, product sample etc.
These district budgets are submitted to the divisional or regional
office, where they are added together and are included with the divisional
budget. In turn, divisional budgets are submitted to the sales manager
for the particular product or market group. At the end this chain of
subordinate budgets, the top sales executive compiles a companywide
sales budget.
(ii) Handing competition for available funds within the marketing
division : Sales executives at the top level must communicate their
sales goals and objectives to the marketing department and argue
effectively for an equitable share of funds. The chief sales executive of
the company should encourage participation of all supervisors and
managers in the budget process so that, as a part of its development, they
will accept responsibility for it and later enthusiastically implement it.
(iii) Selling the sales budget to the top management : The top sales and
marketing executives must visualise that every budget proposal they
are presenting to the top management must remain in competition
with proposal submitted by the heads of other divisions. Each and
every division usually demand for an increased allocation of funds.
Unless sale managers rationally justify each item in their budgets on
the basis of profit contribution, the item may not get due consideration
of the top management.

Quarterly Sales Budget Format

Q1
Q4

Q2

Q3

Yearly

Budgeted sales in cases

Selling price per case

Total sales

1
$
10000
$
20000

$2000
00

2
$
30000
$
20000

$6000
00

Percentage
of
sales
collected in the period of
the sales
Percentage
of
sales
collected in the period
after the sales

3
$
40000
$
20000

$8000
0

70%

30%
70%

30%

4
$
20000
$
20000

$4000
00

$
100000
$ 20000

$20000
00