Sales And Promotions Management DMGT507 SALES AND PROMOTIONS MANAGEMENT Copyright © 2011 S L Gupta and SHH Kazmi All rights reserved Produced & Printed by EXCEL BOOKS PRIVATE LIMITED A-45, Naraina, Phase-I, New Delhi-110028 for Lovely Professional University Phagwara SYLLABUS Sales and Promotions Management Objectives: The course aims at developing sales management skills. Moreover the course aims to develop a strong foundation of concepts of IMC so that they will be able to apply these concepts in the industry. S. No Description 1. Sales management and control, Buyer seller dyads, Diversity of personal selling situations, AIDAS theory of selling, Selling process. 2. Recruiting and Selecting sales personnel, Executing and evaluating sales training program. 3. Motivating and compensating sales personnel 4. Sales meetings and sales contests, The sales budget 5. Types of sales quota and Quota setting procedure, Sales territory concept, Reasons and Procedures for setting up and revising sales territories, Assignment of sales personnel to territories and routing and scheduling of sales personnel. 6. Integrated Marketing Communication, Advertising Strategy: Fundamentals of an advertising campaign, Finding the Big Idea, Creative execution in advertising 7. Sales promotion: Types of sales promotions, budget allocation, designing sales promotion program. 8. Direct marketing, Public relations, Publicity and Corporate Advertising. 9. The Print Media, The Broadcast Media, Out of home media, Steps involved in media planning 10. DAGMAR approach to setting objectives and measuring advertising effectiveness. CONTENTS Unit 1: Introduction to Sales Management 1 Unit 2: Recruitment, Selection and Training of Sales Personnel 24 Unit 3: Motivating and Compensating the Sales Force 49 Unit 4: Sales Meetings, Sales Contests and Sales Budget 75 Unit 5: Organising Sales Effort 92 Unit 6: Introduction to Integrated Marketing Communication 108 Unit 7: Advertising Strategy: Fundamentals 118 Unit 8: Advertising Strategy: Creative Execution 140 Unit 9: Sales Promotion 159 Unit 10: Managing other Promotional Tools 174 Unit 11: Unconventional Promotional Media 187 Unit 12: Media Planning and Strategy 202 Unit 13: Broadcast Media and Media Planning 219 Unit 14: Measurement of Advertising Effectiveness 240 Corporate and Business Law 6 LOVELY PROFESSIONAL UNIVERSITY Unit 1: Introduction to Sales Management Unit 1: Introduction to Sales Management Notes CONTENTS Objectives Introduction 1.1 Overview of Sales Management 1.2 Sales Management and Control 1.3 Buyer Seller Dyads 1.3.1 Advantages of Personal Selling 1.3.2 Disadvantages of Personal Selling 1.3.3 New Approaches in Selling 1.4 Diversities of Personal Selling Situations 1.4.1 Service Selling 1.4.2 Developmental Selling 1.5 AIDAS Theory of Selling 1.6 Selling Process 1.6.1 Prospecting 1.6.2 Pre-approach 1.6.3 Approaching 1.6.4 Presentation and Demonstration 1.6.5 Handling Objections 1.6.6 The Close 1.6.7 Follow up 1.7 Summary 1.8 Keywords 1.9 Self Assessment 1.10 Review Questions 1.11 Further Readings Objectives After studying this unit, you will be able to: State the concept of sales management and control Identify the relevance of buyer seller dyads Realise the diversity of personal selling situations Explain AIDAS theory of selling Discuss Selling Process LOVELY PROFESSIONAL UNIVERSITY 1 Sales and Promotions Management Notes Introduction Before the industrial revolution the marketing task was relatively simple because the economic scene was dominated by small scale enterprises. The only problem was to produce goods for consumers which were sold out without any difficulty. Selling the goods was no problem. In fact all phases of the business operations, including manufacturing and selling, were generally supervised by one individual and more attention was paid to manufacturing problems rather than the marketing problems. The importance of marketing problems was realised only after the industrial revolution which started in England in 1760 and immediately thereafter in United States. The American Revolution necessitated the need for finding out untapped markets because the nearby markets were unable to absorb the increased quantities of manufactured goods. This gave a lot of importance to marketing activities. With the increase in production more land, labour and capital was required which gave rise to corporate form of organisations. There were bigger organisations which required more delegation of powers in manufacturing and administration. Thus the sales department was given importance and it became a separate functional department. As the business activity became more complex and dynamic, the term “sales management” changed due to the changes in business operations. Earlier the sales management was solely concerned with the direction of the sales force personnel. However, at present the term “sales management” has a broader significance and includes all such marketing activities as advertising, sales promotion, marketing research, physical distribution, pricing and product merchandising. We can safely say that sales is the “cutting edge” of any business operations. It is that part of a company, however big or small, that meets the firm’s customers, from whom the business is derived. The people, who are engaged in this activity, meet customers and get information about the products or services which are being sold and provide feedback to the firm. This information is then understood and interpreted by the firm and the firm reacts accordingly. It then translates the marketing plan into marketing performance and action. American Marketing Association has defined sales management as “the planning, direction and control of selling personnel including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to personnel sales force”. 1.1 Overview of Sales Management Managing the sales function is a critical skill for the success of distributors and manufacturers in the power transmission/motion control industry. Sales management entails: 1. Defining desired corporate results. 2. Working with business partners to ensure goals of both organizations complement one another. 3. Determining the specific activities required to achieve company and partner objectives. 4. Implementing a compensation plan that motivates salespeople to achieve corporate objectives. 5. Providing needed training and coaching to enable salespeople to meet their goals. 6. Establishing appropriate monitoring systems to ensure activities are taking place. 7. Measuring results. Sales management is attainment of an organization’s sales goals in an effective & efficient manner with the help of other management functions of planning, staffing, training, leading & 2 LOVELY PROFESSIONAL UNIVERSITY Unit 1: Introduction to Sales Management controlling organizational resources. Revenue, sales, and sources of funds fuel organizations Notes and the management of that process is the most important function. Sales Management, however, is concerned with the process of encouraging customers to exchange their funds for your services or goods. An essential sales leadership role is to establish a sense of purpose or vision and clear direction to get there. A key element of a business’ strategic 12-month plan is to answer the question: “Where will all the sales come from?” The sales plan isn’t a guesstimate. It takes its direction from the marketing strategy and is based on thorough research and a considered positioning of the company within the market place. Sales planning involves predicting demand for the product and demand on the sales assets (machines, people, or a combination of both). Failure to plan always means lost sales. Planning insures that when a consumer wishes to purchase the product, the product is available, but it also means opportunities for additional sales are presented and the sales assets are available to exploit these opportunities. Planning should allow for meeting increasing customer demand for more products, services and/or customization as the business is growing, but also react quickly when demand decreases. Sales planning improves efficiency and decreases unfocused and uncoordinated activity within the sales process. Sales goals are an essential tool. The goals can be very simple (sell so many orders of product A) or more involved, depending upon how involved the sales process is. Ideally, the sales goals should involve encouraging the sales process to be performed and not focus simply on the end result. Example: If the sales process involves a walk-in customer, the sale is important, but the up-sell may be as important. Consequently, the sales goal would involve both metrics. Sales tracking is an integral part of ongoing planning and development in sales management. Ideally, sales information should be gathered on the sales process and not on the end result. The fact that you sold ten widgets is valuable for accounting purposes, but the fact that so many were walk-ins, so many were out-bound phone sales, and so many were up-sells, and which sales person or asset did what, would be better information. The most difficult part of tracking selling activities is ascertaining whether or not the activities can be tracked effectively and economically. In the end, management must have measurable methods of knowing if sales representatives are correctly engaging in the activities that produce revenue. This leads to three key metrics: the right activities, the right way, the right