Biyani's Think Tank
Concept based notes
Ms. Nandita Sarsar
Lecturer Deptt. of Commerce (Mgmt) Biyani Girls College, Jaipur
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am glad to present this book, especially designed to serve the needs of the students. The book has been written keeping in mind the general weakness in understanding the fundamental concepts of the topics. The book is self-explanatory and adopts the “Teach Yourself” style. It is based on question-answer pattern. The language of book is quite easy and understandable based on scientific approach.
I any further improvement in the contents of the book by making corrections, omission and inclusion in keen to be achieved based on suggestions from the readers for which the author shall be obliged. I acknowledge special thanks to Mr. Rajeev Biyani, Chairman & Dr. Sanjay Biyani, Director (Acad.), Biyani’s Group of Colleges, who are the backbones and main concept provider and also have been constant source of motivation throughout this endeavour. I also extend my thanks to M/s. Hastilipi, Omprakash Agarwal/Sunil Kumar Jain, Jaipur, who played an active role in coordinating the various stages of this endeavour and spearheaded the publishing work. I also want to thank Ms. Shivani Singh and Ms. Swati Singh for her support and guidance during my writing work. I look forward to receiving valuable suggestions from professors of various educational institutions, other faculty members and students for improvement of the quality of the book. The reader may feel free to send in their comments and suggestions to the under mentioned address. Author
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Define sales promotion? What is the nature, role & importance of sales promotion? OR What is sales promotion? Discuss the nature, role & importance of sales promotion.
Ans.: Sales promotion is a key factor & strategy for marketers within the promotional mix. Sales promotion refers to many kinds of incentives & techniques directed towards consumers & traders with the intention to produce immediate or short term effects. Sales promotion helps in stimulating trial or purchase by final customers or others in the channel. A marketer can increase the value of its product by offering an extra incentive to purchase a product or brand. A few definitions are quoted below:1. American Marketing Association - Sales promotions is media & non media marketing pressure applied for a predetermined, limited period of time in order to stimulate trial & impulse purchases, increase consumer demand or improve product quality. 2. Council of Sales Promotion Agencies – sales promotion is a marketing discipline that utilizes a variety of incentives techniques to structure sales related programs targeted to consumers/trade/ and or sales level, that generate a specific measurable action or response for a product/service. 3. Institute of sales promotion, U.K. – “Sales promotion comprises that range of techniques used to attain sales/marketing objectives a cost effective manner adding value to a product or service either to intermediate or end users, normally but not exclusively within a definite time period”. Sales promotions have 3 distinct characteristics – (a) Communication – They gain attention & usually provide information that may lead the consumer to the product. (b) Incentive – They give certain concession, inducement or contribution that gives value to the consumer. (c) Invitation – They invite a distinct invitation to engage in the tre. Nature of sales promotion:1. Irregular / non recurring promotion is an irregular & non recurring Fore moreactivitydetail:- Sales http://www.gurukpo.com activity to increase the sales & this technique is used for specific situations only
such as decline in demand, fall in profit, acute competition in the market or during the introduction of new product in the market. 2. Target- The target for producer’s sales promotion may be middleman, end users, household or business users or the producer’s own sales force. Middleman sales promotion at their sales people or prospects further down the channel of distribution. 3. Motivation & extra incentive- Sales promotion involves some type of incentives that offer a reason to buy. This incentive is usually the key element in a promotional program & is an effort by which consumers, traders and sales force are motivated towards maximum sales. 4. Acceleration tool- sales promotion is designed to speed up the selling process & maximize sales volume. 5. Immediate impact- Sales promotion can be implemented quickly & gets sales results sooner than advertising sales promotions offers an incentive to buy now. 6. Objective- The objective of sales promotion is to establish a link & coordination between the activities like advertising, personal selling, publicity etc. sales promotion bridges a gap between advertising and personal selling. 7. Non media activity- Sales promotion is referred to as a non media activity as sales promotion is differentiated from advertising & publicity & also includes them as part of the overall promotions mix. 8. Strategic role- Because of the immediate nature of the impact, sales promotion have been thought of as merely this view is changing and the strategic role of sales promotion and their integral role in the promotional mix are being recognized. 9. Planned activity- The fact that sales promotion can be effective throughout the life of a brand shows their strategic role. Sales promotion activities should be planned well to stimulate sale. 10. Versatile- Sales promotion is extremely versatile. The different forms of sales promotion are capable of being used with various groups & designed to achieve different effects. Sales promotion can be useful throughout the product life cycle. 11. Means of marketing communication- It is an important means of communication by which views & ideas of consumers about the products & services are exchanged with the producers regularly. 12. An element of promotion mix- Sales promotion is one of the important elements of promotion mix, other than advertising, personal selling and publicity. 13. Universal activity- It is a universal activity adopted by all the economies of the world in their sales efforts. Fore more detail:- http://www.gurukpo.com
Role of sales promotion:1. To popularize goods and services of the producer among the potential consumers & to motivate them towards larger purchases. 2. To motivate the existing customers for maximum purchase. 3. To maintain the sales up to normal level even during seasonal vacations & during the declining stage of PLC. 4. To increase goodwill of the firm. 5. To educate customers/dealers & salesmen about the techniques of sales promotion. 6. To simplify the efforts of sales force & motivate them for larger purchase. 7. To stimulate maximum sales on special occasions such as Diwali, religious festivals & other such occasions. 8. To search for a new market & to introduce new products in to the market. 9. To counteract competition. 10. To facilitate coordination & proper link between advertising and personal selling. 11. To promote larger sales in certain specified segments of market. 12. To present a counter promotional program against the competitors. 13. To develop patronage habits among customers. 14. To prove the product better in quality & users. Importance of sales promotion:Sales promotion is an important component of the marketing program . It can be a specific tool of the promotion. Quality sales promotion provides advantages to the various groups described below:1. Importance to consumers 2. Importance to producers. 3. Importance to middlemen. 4. Importance to society & nation. 1. Importance to consumers:(i) Availability of new products- It is easy to sell new products with the help of sales promotional tools. Hence the producers are encouraged to bring new products.
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Various rebates & free discounts- Sales promotions offers various incentives like rebates & free discounts, free samples which helps to stimulates sales & purchase. Thrill in life- The various incentives contents samples, demonstrations, fair and exhibitions create thrill and joy in consumer’s life and the relish these beneficial offers. Low price- Sales promotion increases sales volume and reduce the unit cost of production & thus the prices reduce & it benefits consumers. Increase knowledge- Sales promotion increases the knowledge of the consumers with regard to the uses, operation & maintenance of the product. Provide higher standard of living. Buying confidence- Sales promotion tools provide the consumers an opportunity to understand the product. This creates a buying confidence among consumers. They may take better buying decisions which ultimately increases their satisfaction level. Minimize exploitation- The promotional plan creates a better knowledge about the products, their uses & quality. As a result, the seller can’t exploit the consumers. Increase in sales- Sales promotion attract consumers & stimulate them to make larger purchaser. Improve effectiveness of Media Activities- the sales promotions plans make the advertisement & other media activities more effective to achieve the sales largest these give pulling power to ads.
2. Importance to producers:(i) (ii)
Help personal selling- sales promotions supports personal selling process the salespersons can use demonstrations , distributions to free samples , contest methods to push the sales. Sales promotion aimed at company’s own sales force might motivate salesmen to get new costumers, selling a product. Fore more detail:- http://www.gurukpo.com (iv) Able to capture new market.
(v) (vi) (vii)
Increase regular sales & seasonal products. It helps in increasing goodwill of the firm. The various promotional incentives offered to the dealers help to achieve cooperation from them to sale the products & to maintain maximum stock with them. It is an effective step to face the competition. It helps in increasing the demand of new products. It helps in maintaining existing customers. It creates a trusting attitude among customers. Free sample & functional demonstrations creates a faith in the use of merchandise which results in longer sales. Facilitates longer sale. By operating various sales promotional plans, manufacturers provide various type of helps such as rebates, trade discounts, gifts, rewards to dealers & resellers. A direct relationship between the dealers & the customers are established through the sales promotion techniques which will continue for a long term. As the cost of each deal is reduced the profits of dealers are also increased.
(viii) (ix) (x) (xi)
Importance to middlemen / dealers:(i) (ii)
What are the functions performed by a sales promotion department? The success of modern business largely depends on the functions of sales promotion department. Sales promotion department becomes more important as there exist a buyers’ market in place of a seller’s market. The functions & responsibilities of sales promotions department have been described by Alfered Ghoss & Haughten in 3 ways: To establish coordination with other departments. 1. Assisting functions towards dealers. 2. To motivate the customers.
Usually the sales promotions department undertakes the following functions:1. Planning for sales promotion company-The primary function of the sales promotions department is to make long term & short term planning for undertaking promotional programs. This is done by evaluating the various factors such as market condition , level of competition , demand & supply situation , advertising , personal selling , etc. http://www.gurukpo.com Fore more detail:-
2. Assistance to top executives- The sales promotions department provides various information to top executives & give assistance in related matters for decision making. 3. Coordination & liaison with other departments- The sales promotion department regularly coordinates with other departments such as advertising, sales force management, packaging, publicity etc. The value promotion is coordinated in view of the travelling schedule of salesmen, sales presentation etc. Sales promotion department is also associated with production, finance, traning departments of the organization & established coordination with these departments from time to time. 4. Sales promotion research- In order to make sales promotion program more effective , the S.P. department undertakes surveys & evaluates the information gathered to know about the changing values, traditions, culture , consumers behavior & public opinions. 5. Execution of sales promotion program -The sales promotion department also execute programs design for consumers, dealers & the various advertising & promotional agencies, PR officers, distributers & exchange ideas with them. It organizes sales exhibitions, trade fairs, contests etc, from time to time. 6. Provides training to the sales lesson -The sales promotion department trains the salesmen about the company , its products , promotional incentives being gives to buyers. The department also gives introduction about company’s policies & plans. Customers-salesmen relationship. 7. Evaluation of sales promotion - sales promotion department evaluates the planned promotional program & with the help of these promotional plans, data are collected & it is analyzed to find out the effectiveness of the program. Consumes survey, consumer panels gives a clear picture of the various sales promotional tools. 8. Assisting dealers / middlemen to make advertising more effective-dealers also deal with advertising of the various products. The sales promotion department helps in producing training to the salesmen , to promote dealer interests etc. The sales promotion department also decides on with best advertising messages, copies & media for their products. 9. Coordination between advertising & personal selling. Q.3 what is distinction with advertising & personal selling? OR Discuss the points which make sales promotion distance with that of Advertising & personal selling. Ans. Sales promotion can be differentiated from advertising in the following ways:1. New media activity:- Sales promotions a non-media or below the line activity & advertising is the media related activity. 2. Limited time period:-Advertising is for long term effect & is for longer periods, whereas sales promotion is for a limited time period only. 3. Easy evaluation:-The impact of sales promotion can be easily measured in comparison to advertising. Fore more detail:- http://www.gurukpo.com
4. Faces on immediate purchase:- Advertising is designed to have awareness , interest & preference building effects over a long run. Sales promotion simulates quick & immediate purchase or sales promotion offers a reason to buy now. 5. Creating action:-Advertisement builds long term brand awareness & sales promotion is used for creating action. Distinction of sales promotion & personal selling. 1. Role:- Sales promotion helps to increase the effectiveness of personal selling & personal selling creates desire for a product thereby effecting sales . 2. Motivation:-Sales promotion provides physical motivation to customers personal selling provides physical and emotional motivation to customers 3. Personal presence:-Personal presence of salesmen is not necessary in sales promotion whereas in personal selling salesmen is required for selling. 4. Media:-Sales promotion can be presented through any media like vocal, written or audio visual personal selling it can be presented through vocal media only. 5. Compumentary function:- Sales promotion is complimentary to personal selling whereas personal selling does not complement to the sales promotion program. 6. Continuity:- Sales promotion is not used as a securing activity whereas personal selling is a routure activity which regularly operates. 7. Orientation:- Sales promotion is oriented largely towards the firms or its product , personal selling in customer oriented. 8. Object:-The objective of sales promotion is to feel a gap between advertising & personal selling & the objective of personal selling is to solve the problems of customers & to get more sales Q.4 Ans. What are the roles of sales promotion in an company or shortages? There are three types of world economy:- developed, developing & under developed (Shortage economy) . In an economy of shortages, the availability of goods & resources are shorter or lesser than their demands.
Limitations of a shortage economy1. Under developed in economic aspects. 2. Natural resources remain untapped. 3. Restricted development of industrial activities. 4. Lower standard of living of people . 5. Shorter supply of product & resources. 6. Slow growth of capital formation. 7. Limited opportunity for employment. Economists say that development of economy is possible only when there is increased sale. Therefore sales promotion isdetail:considered to be tool for stimulating the sales. Fore more http://www.gurukpo.com
Also, in a shortage economy, seller’s market is dominant whereby seller takes the advantage of the situation & creates situations of unfair trade practice. Thus, sales promotion can stop this situation of unfair trade practice & thus the economy will grow through the production of new items copy setting products of new industries & industrial units & this way the wheel of economy development might move faster & can create a surplus situation in an economy of shortage. Q.5 What are the Promotions? commonly used tools & techniques of dealer?
OR What are the different sales promotional tools useful for traders? These promotional tools are targeted to marketing intermediaries such as wholesalers, retailers, distributers or agents who stock the manufactures products for sale sales promotion directed at the trade helps push a product into the distribution channel until it reaches customers.
Here are the most common types of trade promotion tools:1) Point of purchase displays:- A manufacturer designed display distributed to retailers who use it to draw the customers attention to product promotions is called as pop displays. Pop includes passion racks, display cartoons, banners, signs, price cards, mechanical product, dispenses etc. 2) Incentives: - Incentives to members of trade include awards in the form of travel, cash bonus, gifts etc. another form of trade incentive is referred to as push money. Push money is carried out through a program in which retail sales people are offered a monetary reward for featuring a marketers brand with shoppers. 3) Trade allowance:- Trade allowance is probably a discount or deal offered to retailers or whole sales, to eucauage then to stock display the manufacturers product Types of allowances offered(i) Advertising allowance:In this method, actual expenses or certain percentage to purchases made, are not met by the producer. Instead an allowance is paid to the dealer toward advertising expenses. (ii) Promotional allowance:- Certain items which helps in advertising and publicity are distributed to retailers free of cost. Such novelties include pens, calendars, paper weights, bill books, bags, diaries, memo pads etc. (iii)Display allowance:- The producers who don’t provide display material to dealers, provide them with display allowances. (iv) Buying allowance/Price off allowance:- The price of allowance is given on purchase made during a specified period of time directly from the producer. This encourage larger purchase from the producer. (v) Brand deal allowance:- Such allowances are given to those middlemen who deal exclusively with a single brand. Fore more detail:http://www.gurukpo.com
(vi) Buy back allowance:- It is a sum of money given to the reseller for each unit brought after an initial deal is over. 4) Sales training program:- Another form of dealer promotional tool is sales training program. Salesmen at the retail level need to be trained about the features of the product, benefits, advantages of different models/brands etc. cosmetics, appliances, computers, electronic products are examples for which consumer rely on trained sales staff. 5) Trade shows:- Trade shows are certain activities designed where manufacturer can display their products to current as well as prospective buyers. They are attended by retailers to distributers and involve demonstrating products, identifying prospectus and gathering customers. Trade shows are particularly valuable when a new product is introducing in to the market many companies use trade shows to entertain key customers and to develop and maintain relationship with them. 6) Cooperative advertising:- In this method the dealer and the producer both jointly share the expenses of advertising. Either the producer may bear a fix amount of the advertising expenses or certain percentage to the purchase made by the dealer in a year. 7) Free merchandise:- Free merchandise is sometimes offered to resellers who purchase stated quantities of the same or different products. 8) Sales contests:- Sales contests are organized for dealers also on the basis of highest sales achieved by dealers during a specific time period. Prizes, certificates are issued to such dealers and such contest hence motivates the dealer for longer purchases. 9) Retailer kits:- Materials that support retailers selling efforts are retailer kits. The kits contain supporting information such as detailed product specification, ad slicks- print ads that are ready to be sent to the local print media. 10) Advertising and display aids:- Some of the aid are – (i) Local news paper advertising:- Advertisements in local news paper specifying name, contact no. and address of dealers, helps the people to know about the dealers in town. (ii) Direct mail advertising:- In this the producer sends various advertising and publicity material to dealer by mail. This includes reply cards, calendars, diaries, folders, house magazines, order book, hand bills etc. (iii)Outdoor advertising:- Producers provide banners, sign boards, posters, bill boards, holdings to dealers at their own cost. (iv) Organizing fashion shows:- Some companies organize fashion shows in big cities to promote their products. This is also an encouragement to dealers. 11) Sales assistance:(i) Building up sales plan:- Producers extend help and express knowledge to wholesalers and retailers in building up sales plan, formulating strategies and sales programs. This help the dealers Fore more detail:http://www.gurukpo.com to increase their selling skills.
(ii) Sales meetings:- Producers organize sales meeting for distributers to provide knowledge about new products, sales policies and sales plan. (iii)Buy back guarantee:- Producers sometimes gives buy back guarantee to dealers for the goods that have not been sold by them. Thus goods are sold to dealers on sell or return condition. (iv) Special trade terms:- Middlemen/Dealers are encouraged by special trade terms which may be related to price, payment, credit, allowance, financial assistance balance of stock etc. (v) Special services:- Producers also offer special services to dealers which include packaging, categorization of products, dealer listing. (vi) Credit facilities:- Producers provide short term credit facility to dealers to motivate them to have maximum stock of the goods. 12) Management assistance:- It includes – (i) Providing knowledge about management techniques. (ii) Advice towards policy matters. (iii)Guidance in setting up internal organization. (iv) Sales management process. Q.6 Ans. What are the different tools of sales promotion for consumer promotion? This sales promotion is aimed at final consumer or users. Consumer sales promotion used by retailers are aimed at attracting customers to specific locations. The consumer promotion tools are1) Sample-Samples are offer of a trial amount of a product generally 84% consumer package goods marketers use sampling as part of their promotion strategy. by offering free samples , a company gains entry into that market , soaps , detergents , toothpastes, shampoos, conditioners are examples of few products that are normally popularized through free samples. Free samples are distributed for several reasons: To stimulate tral of a product to increase sales volume in the early stages of PLC, to obtain desirable distribution. The samples can be distributed through in store sampling (food products and cosmetics), door to door sampling, mail sampling, (through postal service), news paper sampling, mobile sampling, on package sampling, professional sampling(drugs). 2) Premiums:- Premiums are goods offered either free or at low cost or an incentive to buy the product. Premiums are offered as bonus, prize, gifts or other free offers. Premium can be used to boost sales to attract competitor’s customers, introduces different products. E.g. :- A quafresh toothpaste- At the launching of Aquafresh toothpaste offered two tubes at the price of one. Colgate offered 125gm. tube for the price of 100 gm. Santro- book year santro today & take home a worldspace Hitachi digital radio receiver worth Rs. 4990/- free. Pepe- Buy worth http://www.gurukpo.com Rs. 4000/- & get a bag worth Rs. 888/- free. Foreproducts more detail:Adidas- Buy product worth Rs. 2800/- and get a Adidas bag free.
3) Contests:- Contests of various kinds constitute widely used sales promotion tools. There are consumer contest which are open for all, consumer contest are given wide publicity to attract the participation of the widely scattered consumer base. consumer contest take a variety of forms- Quiz contests, beauty contest, car rallies, scooter rallies, suggesting a logo etc. Contests can be divided in to 2 broad categories- Skill competition & sweepstakes. One form of sweepstakes is a game & scratch off cards with instant winners & prizes are an important promotional tool. E.g. : (i) Nescafe shake contest – Nescafe shake contest offered Rs. 5 lacks as total prize money with Rs. 1 lack for the first prize. The total number of prizes ran to 21000. The contest had a specific objective to make consumers aware of Nescafe as a cool summer drunk in addition to this traditional image of a hot beverage. (ii) Cadbury’s family contest- Cadbury announced fabulous prizesround the world, economy class are ticket for two adults & two children plus Rs. 1 lack in prize money. The participant has to submit a minimum no. of cadbury’s wrappers & coin a jingle to participate in the contest. The campaign helped to increase the sales. (iii)Lakme – Create your own shade contest – Lakme lever held the to elle 18, Create your own shade contest for the target audience of elle 18 range of colors cosmetics & fragnances. The participants were required to create own shades. The winner created a sparkling blue shade & later Lakme launched the new shade in the market. (iv) Pepsi contest for children – Pepsi ran a contest among children to promote its potato chips brand ruffles. Nearly 500 children from a school were collected 30 of them were picked to speak for a minute the winners were given ruffles. Pepsi had covered 250 schools and 125000 students across the country spending Rs. 2 lacks only. 4) Demonstration:- Companies resort to product demonstration for sales promotion especially when they are coming up. With a product new to the market. In India products like beverages, washing powders, electronic product have utilized product demonstration as a tool of sales promotion. it may be(i) Demonstration at retail store. (ii) School demonstration. (iii)Door to door demonstration. (iv) Demonstrations to key people. 5) Coupons:- Coupons are certificates which offer reductions to consumers for specified items. Coupons distributed through newspaper, magazine advertisement or by direct mail. Coupons enchoose the customer to exploit the bargain and they also serve as an inducement to the trade for stocking the items. Fore more detail:- http://www.gurukpo.com
Types of coupons(i) Instant redemption coupon- Consumers can immediately redeem the coupon. (ii) Bonus back coupon- Coupons can be placed inside packages so that customer can’t redeem them quickly. (iii)Scanner delivered coupon- Firm can issue coupons at the cash register. These are triggered by an item being scanned. (iv) Cross ruffling- It is the placement of a coupon for one product on another product. E.g. a coupon for an onion sauce placed on a package of potato chips is a cross scuffling coupon. (v) Free standing inserts coupons can be delivered to consumers through news paper. (vi) In store couponing- Coupons are distributed in a retail environment. Trade fairs and exhibitions They form one of the oldest practices of sales promotion. Trade fair & exhibition provide companies with the opportunity for introducing and displaying their products. This brings the company’s product and the consumers direct contact with each other. Trade fairs have become a handy and effective tool of sales promotion. Orders and enquiries worth billions get generated at international trade fairs. Discounts and price of E.g. 20% off on levis 10% on Tanishq Free gifts/Gift cards- Companies also give gifts to consumers, dealers and key people. These gifts include pens, diaries, table, decoration. Gifts normally carry the company’s name and logo. The gifts are intended to create goodwill towards the company. Exchange schemes/Money back offers- This is the latest sales promotion tool in consumer disables market. E.g. Akai exchange scheme- Bring in your old color TV with remote. Videocon money back offer. Philips- 5 in 1 offer.- Philips TV, 2 in 1, Mixer, grinder, rice cooker at an attractive price. Sponsoring the games and teams- Many companies like reliance, Pepsi, Pentaloons, Maruti sponsor different games and sports in the country and abroad.
Q.7 What are the tools of sales promotion used for business and industrial goals? Ans. Sales promotion is targeted for business and industrial goods also Industrial products differ with that of consumer goods. The tools which are used are1) Trade shows:- The industrial products are displayed and demonstrated to the members of trade and industry. The representatives explain about the products. The trade shows can be useful for smaller firms which can’t much in advertising and also salesman can make for more contacts. Trade shows are important rules for reaching potential wholesalers & distributers for a company’s brand. Fore more detail:- http://www.gurukpo.com
2) Business gifts:- These gifts are given as a part of building and maintaining a close working relationship with suppliers business gifts may include small items of jewellary, watch, electronic items, expensive trips. 3) Trial offers:- Trial offers are particularly well suited to the business and industrial market. Trial offers provide a way for buyers to lower the risks of making a commitment to one brand over another. Trial offer is a good way to attract new customers who need a reason to try something new. 4) Frequency program:- high degree of travel associated with many business professionals make frequency programs and an ideal form of sales promotion for the business and industrial markets. This can be used in airline, hotel and other industries. 5) Coupons:- Coupons are used in business to business sector. Coupons must reach the hands of a purchasing against or someone who has the authority to make decision. 6) Contest and sweepstakes:- As like in consumer promotional methods. Customer methods. Business buyers are also interested in winning prizes as are customers in other situations. 7) Sampling:-- Sampling is an excellent method to encourage a business to buy a product. E.g. producing a sample in the area of process materials has the advantage of giving the engineers an opportunity to analyze the materials to see if it meets their standards. Through analysis they may find that the material is actually superior to the product they currently use. 8) Bonus picks:- offering a prospective a bonus pack may attract new users as price is a negotiated item in our B2B sector price of discount can be offered by vendors seeking to obtain a new business contract. 9) Other tools:- They may include demonstrations, free training, warranties, credit faculties maintenance services, films, publicities and audio visual aids. Q.8 Discuss the promotional tools aimed at internal organization? Ans. Promotional of internal organization concern with the steps to be taken for a sound promotional programs. The elements of internal promotion are as follows1) Approval of promotional philosophy:- The success of a promotional program depends on the attitude of the top management. There for a promotional program requires the approval of the top management. The manager has to make a cost profit analyses so that top management appraise him about the profitability of program. 2) Product department for marketing:- Quality of a product is responsible for the success of sales promotion program. As the customers are quality conscious and he always makes a comparison with that of competitors product before taking the final decision of purchase. Therefore the product manager should continuously work on improving the features of the product. 3) Coordination with advertising department:-It is the advertising department that make the ground for the sales by giving product knowledge among the distributers as well as potential customers. When the frequency of the advertisement is reduced then Fore the more sales detail:promotion’s frequency start increasing. Therefore a http://www.gurukpo.com coordination has to be made with the advertising department.
4) Coordination with sales department:- Sales promotion program can be successful if a proper exhibition is established with the sales department. Its includes arranging and organizing sales meetings and conferences, organizing contest, sales exhibition, traveling to sales personal etc. Q.8 Discuss in details the export- sales promotion. Ans. Export sales promotion is the special selling efforts, motivations and aids which are designed to serve the foreign customers and dealers to stimulate and maintain sales in the foreign market. Export sales promotion for a foreign market follows push and pull strategies. In push strategy the sales wrap recentlves and distributers are stimulated for large sales and in pull strategy the buyers of goods and customers are stimulated directly by the various customers promotional techniques. Objectives of export sales promotion:1) To stimulate larger sale in foreign market. 2) To enter in to the foreign market with a new product. 3) To attract the customers at retail level and develop the foreign market. 4) To compensate the loss of one market by earning from the other. 5) To undertake market research. 6) To establish coordination between personal selling and advertising. 7) To test the product in over sales market. 8) To expand a PLC. 9) To establish an image in the mind of target market. Types of export sales promotion:The various methods used for export sales promotion are – 1) Classification on the basis of functions to be performed & target to be reached. (i) Introducing a new product-New product can be promoted in the foreign market with promotional tools such as free samples, refunds, fairs & exhibitions etc. (ii) Increasing the use of product-Tools like price off deals, distribution of premiums, contests are used in business market. (iii)Direct enticement of customers at retail level-Export promotional plans can be operated with the help of retailers tools like trading stamps , retailer coupons , point of purchase , free training etc. are used. 2) Classification on the basis of target audience. (i) Customers oriented tools-Free gifts , samples , premiums , offers , contests, refund offers , fairs & exhibitions , stage shows , pop displays , coupons & trading stamps patronage rewards & special sales techniques are used in the overseas market. (ii) Distributions oriented tools-Sales contests dealers sales training , pop displays , money & merchandise , allowances , advertising aids & cooperative advertising , managerial assistant in accounting & inventory , Fore more detail:http://www.gurukpo.com formation of sales strategies are the tools for distributor promotion
analysis of international market information , foreign trading materials etc. can also be need. (iii)Foreign market centered sales men techniques-The important sales promotional tools for foreign salesmen are-Sales meeting , sales men, contests costumers product models, samples & visual aids , sales literature & sales training manuals, briefs of foreign trade low is foreign marketing & sales portfolios foreign market research information. 3) Factors affecting export sales promotions-domestic marketing is different from international market. there are differences in consumer behavior , consumer tastes and preferences, consumption habits , business traditions, cultural values etc. Certain factors which effect the sales promotions in foreign market are(i) Govt. interference-In some countries, the govt. may impose restridions on the use of certain kinds of sales promotion techniques used by organizations. (ii) National opinion- The opinions may differ from country to country. And in European countries, door to door selling of cosmetic is considered as interference with personal affairs. (iii)Problem of translation- languages used in sales promotion might pose problems in the sales promotion program. (iv) Statuary condition- Statuary conditions in many foreign countries inculcate certain changes or modification in the promotional techniques. (v) Marketing environment – Consumer needs preferences, interests, livings, conditions buying & consumption habits shopping habits , necessitates suitable improvements in the sales promotions techniques. (vi) Political views- Political conditions outlook of political leaders exercise control over the promotional techniques upto certain limit in foreign markets. (vii) Structure & behavior of wholesaler & retail traders- Certain sales promotions tools are executed by the cooperation of wholesalers & retail traders & there for the structure & behavior of wholesales & retailers have to be kept in mind as the functioning & practices of these traders may be different in foreign markets. (viii) Consumption patterns-Consumption pattern in different countries may differ therefore sales promotions techniques should be used keeping in view the foreign market. (ix) Cultural values & traditions- Sales promotions techniques should be culturally accepted by the people in the foreign market. As the culture of different countries differ. Q.9 What are the needs for evaluation of sales promotion program? Discuss the methods of evaluations of sales promotion program. OR Fore more detail:- http://www.gurukpo.com Discuss the needs for evaluations of sales promotion program.
OR Why the need arises for evaluations of sales promotion program? Explain. Ans.- Though almost all companies resort to sales promotion techniques , only some of them follow it in a planned way. The conditions for the success of sales promotion program are as follows:1. Identify the requirement – The firm needs to find out. It is to bring in substantiate extra sales immediately. It is to offered accumulated stocks ? It is to regain loosing consumer interest in the product etc. 2. Identifying the right promotion program-The firm has to select the program suitable for current need & situation the choice of the firm should be deducted according to the resources available with the firm. 3. Enlisting the involvement of salesmen- Often sales promotion program are conceded & planned at the head office . But for the campaigns to succeed, it is essential that the salesmen be briefed on the contest & contest of the program. They have to be informed of their roles in the conduct of the program. 4. Enlisting the support of the dealers:- It is also essential to enlist then support of the dealers in any large scale sales promotion venture. Since the major part of the activity is around the dealer shop, the pop material and the product under campaign will get the required prominence. Only if the leader so dealers. 5. Enlisting the advertisement agency’s support:- The adevertising agencies support is also essential for the successful working of a sales promotion campaign. carrying out a sales promotion campaign is as challenging as conditioning an advertising campaign. So companies while commetting heavy finds for sales promotion make it a point ensure that that they benefit from the experience and experlise of their agency. 6. Timing of the campaign:- The sales need of the company is the prime factor that desides the timing. But the firm has to eansider factors like seasonality of purchase of product. Need for evolution:- The need for evaluating the sales promotion programs are1. Identifying growth and development opportunity. 2. Taking correction steps in case of any draw back. 3. To measure the effectiveness and achievements of objectives. 4. Facilities for future planning. 5. To encourage for research & innovations. 6. To motivate the employees into have contributor. 7. to know the maturity limit of sales promotion program. 8. To study new & modern tools of promotion. 9. To get allocated maximum budget for sales promotion.
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Methods of evalution:1. Sales data method- This method is a widely a accepted practice. In this method , sales volume or market share prior to any sales promotion techniques are measured . Eg. If market share of a product before the introduction of sales promotion is 4% , during the period 10% & immediately after the program 6% , Thus giving an increase of 8%. Showes that new customers are created by the sales promotion program. 2. Consumer panel data- This technique help to identify that how the customers have been motivated by the sales promotion technique for longer purchase . How much quality have the customers purchased & What were the charges of their buying behavior after the sales promotion program. This technique help to identify the various classes of customers on new or old customers / women / men / industrial / general customers etc. 3. Consumer surveys- This method collects various kinds of information about the customers so as to analysis the effectiveness of sales promotion. The analysis of suchinformation help to know following things1) The numbers of customers who have remembered the techniques used. 2) The views opinion about these techniques. 3) How these technique have been helpful in influencing the buyer’s behavior & brand chore of customer? 4) Do the customer require any innovation to be differed in the product? 5) Do these techniques improve the image of the firm? 6) Do they feel like using these techniques through the year? 4. Experiment methods- The effectiveness of sales promotion technique may be measured by experimenting them in selected markets. However there can be certain difficulties. They are as follows1) The consumer always looks for deals customers are interested only in the purchase in the items Which offer certain additional incentive with that of the product. 2) The promotional tools at times can be very costly as, if the organization does not get expected results. Then the price of product may be increased. 3) The cooperation from middlemen might not be smooth.
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SECTION - B Q.1 What do you mean by recruitment of sales men ? What are the sources through which salesmen are recruited : Discuss the merest & demerits of each. In context of selection procedure Discuss this statement –“The fortune of a consumer depends on sales which intern depends on salesmen.” Ans. Recruitment is the process of identifying key people in the organization & a process to discover the source of manpower to meet the requirements of staffing schedule & to employ effective measure for attracting the manpower in adequate numbers to facilitate effective selection requirement is the first part of building a top notch sales free. Some of the definition of requirement are1. Edwin & Flippo – “Recruitment is the process of searching of prospector employees & stimulating them to apply for jobs in the organization.” 2. Victor P. Bull- “Recruitment is the search for the best equitable candidate for a sales position . ” 3. Byars & Rue- “Recruitment involves seeking & attracting a pool of people from which qualified candidates for job vacancy can be chosen .” 4. Spiro & Stantion- “Recruitment includes identifying source of recruits that are consistent with the type of person desired selecting the source to be used & contacting the recruits.”
Process of Recruitment:The Process of Recruitment Involves:1) Establishing responsibility for Recruitment- The management must give responsibility as to who will make the recruitment & the selection decision. this responsibility might be given to the top sales manager , the HR department or the sales manager. 2) Determining sales force needs- The no. of new sales people depends on factors such as sales growth targets, distributions strategies, sales force turn over. The sales force turn over can be because of poor performance, retirement, resignation for another job etc. 3) Considering company nature- A specific definition of the organization’s culture is necessary for planning cycle validity. The process of aligning a company’s recruiting strategies to its case culture should help attract and retain higher programming sales people as complained to those companies whose recruitment process are reactive. 4) Determination of the number of sales personnel required – The number of salesmen is determined by keeping in view the following facts like- Present sales activities of the firm, future prospectus for expression of sales, estimated sales by each salesman, no. of present salesman to be promoted for higher posts, expected no. of persons to leave the firm in the future, the usual turnover rate of the salesman. Fore more detail:- http://www.gurukpo.com
The formula used for calculating the no. of requirement of salesman isN= S/P (1+T) Where N= Number S= Sales forecast P= Present average sales T= Turnover rate of sales personnel. 5) Developing a profile of the type salesman needed- The profile and nature of salesmen is determined on the basis of the job requirements. Salesmen may be of different nature and the nature of salesmen be determined on the basis of job requirements. Two functions are mainly involved in determining the nature and suitability of the salesmen(i) Job analysis – It refers to the process of studying the operations, duties and organizational aspects of jobs in order to derive specification, for analyzing the job being carried out by salesmen, following two activities involveda) Job description- In this process first of all analysis of sales activities are made and then job description is prepared. The following points are usually covered likeTitle of job. Organizational relationship. Types of products & services sold. Types of customers called on. Duties and responsibilities related to the job. Job demands. Hiring specifications.
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b) Man specifications- It gives light on the employee needs. It contains information on physical, features, health, voice, mental qualities like education, mental balance, etc. social & moral qualities like obedience , encouragement , friendship , sincerity , capacity to bear the heights & responsibilities , work experience etc. (ii) Review of the present salesmen- The existing salesmen are received to as certain how many of them have been successful in their functions. As a result of review, some changes may be interfused for them also. 6) Evaluating introduced recruitment- The company should continuously evaluate the effectiveness of recruitment process. It will enable the management to determine which sources produced the best results. Source o recruitment – The source of recruitment can be categorized into1. Internal sourcesa) Company sales personal. b) Company executives. c) Internal transfers. 2. External sourcesa) Unsolicited applications - All companies receive unsolicited walk in & write in applications directly for sales job . The most logical policy is to create volunteer applications the same as solicited applications. b) Employment agencies. c) Educational institutes. d) Sales people making calls on the company. e) Sales executives club. f) Employees of customers. g) Older persons. h) Other industries . i) The internet. SELETION PROCESS— Selection is a process to determine whether an application meets the qualifications for the specific job &to select the applicant who is most likely to perform well in job. A proper selection of sales persons makes the base for success of a sales organization as it increase per capita sales & the moral of the sales organization. A sound selection process also increases the goodwill of the firm because the salesmen represent the company. If he makes a poor impression , the company is likely to have a poor reputation among its customers. SELETION PROCESS— The selection process consists of following steps1. Pre-interview screening- Pre-interview screening is done for the purpose of climinatino unqualified candidates , this pre interview can be handled by a clerk or secretary. This pre interview screening is required as when there Fore are large of applications , it is desirable to rest out the moreno. detail:http://www.gurukpo.com
prospective applications who have given information about the nature of job , salary , responsibility etc. 2. Formal application form- Formal application serves as a record regarding the information collected during the selection process. A formal application is filled up after preliminary interviewer who records the responses of applicant. 3. Selection Tests-The selection tests are important part of the selection process. Different types of selection tests are as followsa) Mental ability test- Mental test measure the overall intellectual capacity of a person &enable the person to know whether he has mental ability to deal with every new problem. The learning capacity, Inductive reasoning, ability to take decision can be tested. b) Aptitude tests- These tests are used to measure. The ability of an application to learn new jobs or skills. these tests help to find out whether a candidate will be appropriate for the job of salesmen or not.. They focus attention on a particulars type of talent such as learning & reasoning. c) Achievement tests + Proficiency tests- These tests measure the skill of knowledge which is acquired as a result of training program & on the job experience . These lists can be helpful when an experienced person is to be promoted to higher job or when a person is to be transferred from one job to another. d) Personality tests-These tests aim in measuring those characteristics of an individual , which are non intellectual in nature. They assess his motivation interests, his ability to adjust himself to the stress & his capacity for inter personal relations & self image. e) Interest tests- These tests aim at finding out types of work in which an applicant is interested. They are inventories of the likes & dislikes of people in some occupation, hobbies etc. f) Temperament tests- These tests help to evaluate the various factors of temperament such as likes, dislikes, flexibility , habits etc. g) Attitude tests- These tests measure the attitude of applicants towards business conditions, employment, salaries , promotions , labor , social & political charges govt. policies etc. h) Situational tests- These tests measure the applicants capability to work in the real situation , under this cost, the capacity of the salesmen to work in different sales areas & with different customers is tested. 4. Interview- Interview is the most widely used selection step & helps in judging an individual as to ability in oral communication, personal appearance, attitude toward sales & company etc It is a meeting between two persons sothal they can know about each other. a) Fore Patterned or structured interview- Here the interviewer uses a more detail:http://www.gurukpo.com prepared outline of questions designed to get specific answer from
the interviewer. The interviewer may record the answer as they are given. b) Non directive or free interview- It is an unstructured interview. In this type of interview, the applicant is encourage to speak about his experiences freely. The interviewer might ask few questions & speaks only enough to keep the interviewer speaking. Experts feel that this technique is best for getting into individual’s personality in depth. c) Stress interview- In stress interview, the interviewer assumes an unfriendly behavior towards the applicant . He asks such questions which can be quiet embarrassing for him & asks questions rapidly, criticizes the answer & interrupts him frequently. d) Rating sales- One draw back of a personal interview is the tendency to lack objectivity a defect that can be reduced through rating seales. sating are channeled into a limited choice of response . experiences indicate that these results in more comparable ratings of the same individual by different interviewers. Reference check- This check is made by personally contacting school, institutes, present or previous employer on the basis of certificates, degrees, references provided by the appointments. The purpose of reference checks to find out his character, conduct, behavior & morality. Physical examinations- Most of the companies go for physical examination & following examinations can be carried likeExamination of physical fitness, heights , weights , stomach , waist etc. Test of blood pressure , blood & urine tests , Neuro-psychiatric lists, Medical treatment history etc. Determining terms of service- Terms of service are determined after the selection process Terms of service include the matters related to salary, commission, allowances, housing facility etc. Appointment- The appointment letter contains the terms & conditions of appointment with regard to pay , allowances , conditions of service probationary period , the last date of joining duty etc. , duty signed by the appointing authority. Induction / orientation- Induction gives the following information to the salesmen –about history of firm, policies & rules of firm. information about sales department , products & services , social welfare schemes, policies towards promotions & transfers , disciplinary measure, rights , duties & responsibility of a salesperson.
Define sales training, state various methods of providing training to the salesmen. OR Explain the various aspects of sales training. OR Fore more detail:- http://www.gurukpo.com How will you plan and build a sales training program?
Sales training has been recognize as one of the vital factors in the success of the sales person. The essence of training in the belief that performance of people can be improved through the training. Training of the sales men is a process of selling skills development so as to increase the ability, knowledge and experience of the salesmen to perform well on the job. OR “Sales training is an organized activity involving fact finding, planning, coaching, placing and purposive attempt to develop selling skills and to add these skills to selected nature ability, causally acquired knowledge and experience.”
Aim of sales training/advantages:1) Increasing sales. 2) Getting new accounts. 3) Factor turn round of stocks. 4) Selling a complete product line instead of just fast selling items. 5) Better merchandising and sales promotion. 6) Better product knowledge. 7) Improving sales presentation and sharpening sales skills. 8) Improving clinching skill in particular. 9) Customer education on products, their use and benefits. 10) Improving customer and dealer relations. Successful training program consist 4 phases:1) Training assessment- In this phase a messenger must discuss the following points:a. Training objective-The major objective of training is to improve the productivity of salesmen. Training programs also lower live employee turnover rates, leads to better morale, more effective communication & better self management. b. Who should be trained- It is the newly recruited salesmen Who needs training, but the existing sales force also needs training as things keep on changing. New products are introduced , buyers performance charges , so it becomes important to train dealers , distributers & sales manager. c. Training needs- Assessment of training needs provides the starting point for getting training goals & designing the program. Setting the objectives also helps to trainer & the trainee focus on the purpose of training as well as provides the standard for measuring training effectiveness. d. How much training is needed- the amount of training required depends on the training objectives . for a new promotional program, only one day training might be sufficient. 2) Training program design- In this phase , the following questions need to be answeredFore more detail:- http://www.gurukpo.com
a. Who should do the training?- Regular line executives, staff personal , field specialist may serve as trainers. Any one of them or even a combination of persons can be used. b. When should the training take place?- Training should be continual function as manager believes that every one placed in the field should be fully trained, not only in company & product knowledge , but also in selling techniques. c. Where should the training take place?- The decisions of training program’s location involve the extent to which it should be centralized. There can be 2 types of trainingi. Decentralized- It takes several forms like- field sales office, use of senior salespeople, on the job training etc. ii. Centralized- It may take place in organized or in period sales meeting at a central location. d. What should be the content of the training?- The basic topics on which salesmen are gives training can beKnowledge about market. Knowledge about customers. Knowledge about products. Knowledge about competitions. Knowledge about company. Salesmanship. Team building skills. Relationship building skills. e. What training methods should be used?- Several different teaching methods may be used to present material in a sales training program. It is important to select those teaching methods that most effectively convey the desire contest. 3) Reinforcement- Most sales people would not change their behavior as a result of training unless there is same reinforcement. There can be many ways to reinforce training. 4) Training evaluation- Sales manager must assess the effectiveness of the training. This evaluation helps to determine the value of training & to improve the design of the future programs. Methods of sales training- The training methods can be categorized into1. Group training methodsa) Lectures / class room instructions- They are regarded as one of the most simple ways of importance knowledge to the trainees, especially when facts, attitudes, theories & problem solving abilities are to be taught. The lecture method may be used for a group containing good number of trainees, audio-visual equipments; VCR’s, projectors also increase the effectiveness of lectures. b) Group discussion methods-In this method, different groups are formed by limited numbers of persons. Each group seeks guidance under the leadership of a senior officer. The group discusses the sales problems with Fore more detail:http://www.gurukpo.com
the leader & efforts are to be made to find out a commonly agreed solution to each problem. Sales conference methods- It is a formal meeting conducted in accordance with an organized training plan. It lays emphasis on small group discussion, on specific subject matter. Three types of conference. such as 1)Directed conference 2)Problem solving conference 3) Leadership discussions . This method is used for training the persons holding managerial position. Case study method- The trainees are given cases to analysis. They are asked to identify any sales problem & to recommended tentative solution for it. This method is useful for the manager to improve their decision making skills. Role playing method- In role playing, trainees act as given role as in a stage play. Two or more trainees are assigned parts to play before the rest of the members. The role players are informed of a situation & of the respective roles they have to play. The idea of role playing involves action, doing & practice. Gaming methods- Gaming method is a technique which duplicates, as nearly as possible & this method develops the decision making capacity of the trainees. The knowledge about various decisions methods such as selling efforts, advertising, sales force management, size of the orders time for getting orders are learnt through such training.
2. Individual training methodsa) On the job training- The salesmen are appointed to do their duties under the guidance of experienced salesmen. This method is also known as training within industry. b) Job rotation training- This method is used to provide knowledge to the trainees in respect of functions of different departments such as research department, accounts, advertising, packaging & public relations etc. This type of training develops the practical knowledge of the trainees. c) Personal discussions- The salesmen contact his sales managers & senior manager from time to time & discuss with them the individual problems. The manager gives good advice & suggestions on the basis of their experience & their helps in improving the efficiency of salesmen. d) Correspondence- When the sales trainee are at distant places, it becomes difficult for them to assemble every time for training. In such cases, training is imparted through correspondence. The training materials are printed & circulated to the sales trainee at different places where they are working . The trainees read the material carefully & learn to adopt or fallow the guidance & instructions received through the study material. Q.3 What do you understand by the term motivation? What is the need for motivating sales personnel? OR Fore more detail:- http://www.gurukpo.com Discuss steps in motivation process.
OR Define motivation. Explain the different methods of motivating salesmen? Ans. Motivation is a goal directed behavior and creating and maintaining a well motivated sales force is a challenging tasks. Motivation is the amount of effort the sales person desires to expand on each of the activities or tasks associated with the sales job. The desire to expand effort to fulfill a need is called motivation or motivation can also be defined as an individuals willingness to exert to achieve the organization’s goals while satisfying individual needs. OR Motivation is an inner state that energizes, activates or moves channels behavior towards goals. Characteristic:1. Motivation is a psychological concept. 2. It develops efforts and will to work. 3. It is a goal oriented behavior. 4. It is related with satisfaction of needs motives and desires. 5. motivation can be financial or non financial. 6. It provides rewards in line with the goal. 7. It is only one component of successful sales performance. 8. It is a psychological help given to salesmen. Objectives of sales motivation:1. To stimulate the salesmen to reach and maintain satisfactory performance levels. 2. To improve the working efficiency of salesmen. 3. To establish cordial situation between the managers and salesmen. 4. To maintain high morale among the salesmen. 5. To satisfy the economic social, human needs of salesmen. 6. To implement sales management program. 7. To expand efforts of salesmen on each activity making of the sales job. Need of motivation :The need of motivation arises because of following reasons. 1. Nature of sales job - The nature of sales job is for different from other jobs. Salesmen have to put hard work to obtain a sales order as every sales job involves ups & downs and feelings of joys and depressions. Salesmen also interact with many unpleasant and rude people the connections cause sales persons to become discowage to achieve low performance levels, So therefore additional motivation is required. 2. Role conflicts - The sales person must try to satisfy the expectations of people both within the company in customer’s organizations. There is a linkage with four groups a) Sales management b) Company or Organizations that handles order fulfillment c) Customer d) Company sales person. Each group imposes behavioral expectations and in playing these roles the sales person faces role conflicts. Fore more detail:- http://www.gurukpo.com
3. Domestic problems - Travelling salesmen mostly remain away from their homes and due to these extensive travels, they cannot lead a family life. This leads to demoavatoin among the employees and all these factors may influence adversely in their proper functioning. They are given special leaves and monitory benefits by certain companies to motivate them in this respect. 4. Development of team spirit – Most of the salesmen serving with big sales organization work much away from the head office. they remain busy in the fields at distance places throughout the year, So by organizing seminars and conferences from time to time, such salesmen are given opportunity to meet at one place to share group feelings and also for the betterment of the relationship. 5. Changes in market environment – Changes in market environment can be one of the factors for motivation as what motivates salesmen today may not work for the next month because of changes in market conditions. 6. Helps in building morale- motivation helps willingness to to work , when the need of the salesmen are satisfied, he is stimulated to do more work , therefore motivation is driving force for the development of morale. 7. Proper use of human resources- motivation is also essential for the effective use of human resources as the inborn qualities of each salesmen can be developed through better motivation tools so as to utilize the human resources for maximum benefits of the organization . 8. To improve mutual relations- motivators encourage salesmen to improve their work performance. This results in increased sale. 9. Utilization skill- Most of the salesman do not make efforts to utilize their full work capacity. Motivational tools stimulate them to expand their full energies & to develop latent qualities. Process of sales motivation:Determination of objective – A sales manager has to determine the reason & the stage at which the salesmen has to be motivated. Objectives decide the levels resources & tools of motivation. 2. Studying the unfulfilled needs – The motivational process starts with an assured need. For this purpose, it is necessary to recognize the individual differences between persons. The differences of mental conditions, expectations, positions, aspiration, personal goals & their attitudes must be studied & hence the sales manager should take step to study those unfulfilled needs. 3. Existence of motivation conditions- Three conditions must exist before an unfulfilled needs lead to enhance sales performance . 1) Salesmen must feel that the reward are desirable that is they will satisfy some needs . 2) They must believe that the reward are tied to performance finally salespeople must believe that the performance goals on which rewards are based are attunable. 4. Selecting motivation tools- The sales manager must design effective motivation tools. Every motivational program should have some elements within it that can be Toulouse to the individual needs. 5. communication – To make motivational plan successful it must be communicated Fore more detail:http://www.gurukpo.com to salesmen and concerned person. 1.
6. integration interests – The interest of salesmen and the firm must be integrated in motivational program. 7. certain of auxiliary environment – physical environment and working conditions play an important role in motivating sales personal. this environment may be created within company by producing various ways and means for good working. 8. developing team spirit – individual efforts should be directed towards developing team spirit among sales men. 9. feedback- the results achieved for the motivational plans should be compared with the goals decided in the program in order to identify any deviation. Q.4 What are the characteristics of a good sales compensation plan and discuss the main steps involved in designing a sales plan? Ans. To motivate the salesmen and for retaining the salesperson a good sales compensation plan is the first requisite. Basically a good sales compensation plan is that directs the salesmen activities towards the objectives of the firm. It should stimulate the salesmen to put in their best efforts both qualitatively and quantitatively towards achieving the plan sales and other goals. It should assure a minimum income and appropriate additional reward for above average performance. In many cases a good sales compensation plan also helps ensure the right treatment of customers. A poor sales compensation plan invariable Leads to poor quality of sales force. A good compensation plan must :1. Direct salesmen activity towards companies objective . 2. Correlate efforts results and rewards of salesmen. 3. Help attract and keep competent salesmen. 4. Stimulate the salesmen in their best efforts. 5. Help control a salesmen activities. 6. enthuse efficient salesmen and help remove the inefficient once. 7. Preferably provide & components of income, an assured income and additional reward for superior program. 8. Be fair and just to the firm and to the salesmen. 9. Reflect the current needs of the firm. 10. Be flexible and also stable. 11. Be simple and easy to administer. 12. Be economic and competitive. Designing a sales competition plan :- The steps involved in designing a sales compensation plan are as follows1. Describe the job. 2. consider the overall competition structure of firm. 3. Make industry compressions. 4. Select suggestions from sales force. (sales manager) 5. Aside the compensation level. 6. decide the compensation mix. Fore more detail:- http://www.gurukpo.com
7. Financial compensation- a) Direct payment of money. b) Indirect payment of money. Non financial compensation – a) Importunately for advancement b) reorganization and fulfillment of esteem needs. 8. Decide the highlights of the different elements. 9. Put the plan in to operation, watch, review and improve. The compensation level- In fixing the level of sales compensation plan many firems go by the going market rate. Higher starts are given for more competent and more experienced salesman who can bring in larger sales. Detailed job description through job evaluation and intercompany as well as inter compensations should be the basis for fixing the compensation level. Compensation level offered to the sales men has to be suitable related to the level provided to others in the field sales outfit like sale supervisor and branch manager. The compensation mix – Different firms follow different practices in the regard. A few attractions are listed below. 1. Straight salary plan. 2. Straight commission plan. 3. Salary plus commission combination plan. 4. Salary plus group commission plan. 5. Commission plus approved expenses plan Straight salary plan:Merits1. Simple to design and easy to administer 2. provides a sense of security and basic motivation 3. help the firm control the salesmen better 4. Ensure salesmen attend to the long term marketing concerns of the firm 5. Help avoid unhealthy industry among salesmen 6. is particularly useful when the firm• Has chosen the pull strategy for certain sales • has a set of fresh salesmen • goes in to fresh territories • Sells a technical product involving long negotiation and a long purchase cycle • Sells in a market that is yet to be developed Demerits1. it does not offer incentive for salesmen to increase sales. 2. salary is a fixed cost unrelated to sales volume or margin. Straight commotion plan:Merits – 1. Provides incentive to perform better as it rewards the salesmen according to their performance 2. commotion is a variable cost related to the sales volume or the margins brought by the sales men Fore more detail:- http://www.gurukpo.com 3. in particularly useful –
the firm has chosen a push strategy for creating sales. high incentive is needed to get the sales.
Not must non selling work is involved . the company is financially weak & has to relate its compensation expenses directly to sales . The market is highly competitive & sales are closely related to the sales efforts. Demeritsa) Different to design & administer commission plans can become complex involving complicated formula. b) May not be of much use when the salesmen are absolutely new. c) It is difficult to control straight commission people & is difficult to make them perform tasks for which no commission is paid. d) Difficult sales territories may suffer under such a plan e) May result in excessive pushing of products without caring for the value satisfaction to the customer. f) similarly if the market becomes unduly depressed due to some reason, the income of the salesmen would go down directly.
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SECTION- C Q. What do you mean by prospective customers? Discuss the steps involved in prospecting the salesman identify or locate the prospecture customers. Ans. Planned selling process is a process under which approach them and make an effort to creat contests, desire, events among them. Selling process can also been defined as an orderly progression that leads the prospect to make certain decisions, is the frame work on which your sales presentation is build. Steps in selling process:- Selling process involves the various stages – 1. presale preparation 2. prospecting or locating customers 3. Pre- Approach before interview 4. approaching 5. presentation of sales 6. sales calls and closing the sales 7. post sale/ follow up activities Pre sale preparation:- In the pre sale preparation a salesmen prepare about certain things like the product, knowledge about the firm, market information, knowledge about sales techniques. Prospecting customer:1. Defining the prospects- a prospective customer is in need for the product have ability to pay and authority to buy the product & a good personality to present the salesman for contacting him frequently. 2. Searching out potential accounts- the salesmen can use two types of sources for selling potential customers. The secondary sources include friends and relations of existing customers , self observation , field survey, by contrasting, advertisement, govt. and nom govt. agencies, magazines, social contacts. The primary include family friends, relatives. 3. Qualifying products and determining probable requirements- it is necessary to determine the probable requirement of customers and this function may be performed on the basis of following indicators of need, indicators of ability to pay , indicators of authority to pay, indicators of accessibility. 4. Relating companies products to each customers requirement- The salesmen on the basis of collected information tries to satisfy the specific requirements of prospector customers Pre approach:- Before approaching the customers there is anteed to cullet full details about the customer. This approach involves collecting the details about the potential customers such as age, sex , source of income, education, friends and relation, present buying, buying object. The personality treats of customers are also studied to get himself prepaid to face different types of customer. Approaching:- In this stage the salesmen comes in contact with the potential customers vat Fore before approach salesmen should get an appointment fixed with the more detail:http://www.gurukpo.com customer.
Contacts with the customers without any period appointment is called as cold calls. In such cold calls the salesmen should try to influence the customers by his well manners. Presentation of sales:- Presentation is the most important step in selling as in this stage the salesmen presents his product to the prospective customer. The presentation may be made by Type of customers while presenting the product, the salesmen should follow the AIDA approach. A- Attention – The presentation should be able to gain attention of the customer towards the product or company. I- Interest- The prospective customer should be interested in the product by the company. D- Desire- He should have a desire to buy a product. A- Action- The customer takes an action in buying the product. 1. Attracting attention- Attracting the customer’s attention is the first step in presentation. There are certain factors which help in attracting attention like showroom, lights, interest to customers, their expectations and their personal problem. 2. Creating interest- Here an interest is created among the customers toward the products. Interest can be created by benefit approach in telling the customers about the benefits of a product or seriously approach or aromatic approach or factual approach or “I am here to help you “ approach or problem solving approach and service approach or information and visualization approach. 3. Arising desire and building conviction- It is necessary to convert the interests of the customers in to desires. Which is turn generally demand for a product. The desire can be generated by making the customer clear how the product will satisfy the needs and making clear the advantages the customers will receive using by the product. The salesmen will be able to build coonvietion when the customer is convinced from the talks, such a situation can be build only when the salesmen can give the satisfactory answers, to the objections raised by customer. 4. Handling/Meting objections- Objections are excuses for not buying the product. objections block the sale that comes as the prospect either does not understand the salesmen’s propositions or does not agree with him. There are various causes for objection• It is human nature to cause doubts when decision has to be taken for buying new product • When the customer is unable to judge the advantage of the product • When he fails to understand the personality and the language of salesmen Forethe more detail:- http://www.gurukpo.com • When he wants to testify the statement made by salesmen
when he disagree with the utility of the product
Sales calls and closing sales:- Whenever the customer’s interest is created and the customer is fully satisfied with the product then it is the time to close the sale. This is the end point of selling process and during this time the customers is ready to place the order. Post sale activities and follow up:- The purpose of follow up is to evaluate the complete selling process and to ensure everlasting relations with the customers. The sale process does not end up immediately after orders, but has to continue even after that. Define sales forecasting? Discuss the produce & the methods of sales forecasting. Ans. Sales forecast is the basis of corporate planning forecasting is a systematic attempt to product the future on the basis of known facts. It is the result of numerous assumption made about the external and internal environment of firms. Sales forecasting is the estimate level of the company sales based on chosen marketing plan and assumed marketing environment. OR Sales forecasting is the climate of sales during some specific future period time & under a pre determined marketing plan of the firm. Important – 1. it is the foundation of planning. 2. Companies uses the sales forecast to allocate resource across different functional areas. 3. It is the key factor in all operational planning throughout the company. 4. It serves as a base for sales force planning. 5. It plays a major role in the success of the organization. 6. It is the key to sales management. 7. It helps in profitability of the firm 8. It helps in facilitating production planning 9. It helps in better financial planning. 10. It is developing sales strategies and promotional plans 11. It helps in suggesting R & D. 12. Also helps in better inventory control & sales quota determination. Q.
Process of sales forecasting :Determination of goals – The sales manager should decide the goals for sales forecasting. The objectives may include determination of sales publicity programme, marketing methods , sales quota determination, estimation of working capital etc. Determining the factors affecting sales – The controllable factors are like marketing Foreorganization more detail:http://www.gurukpo.com & advertising policy, structure etc. & the non controllable factors like political & social systems, seasonal fluctuations etc. must be determined.
Selection of techniques – Suitable methods for sales forecasting must be selected keeping in view the objective time intervals resources and nature of the firm. Correction of data – This is the step of collecting various kinds of information’s & data related with future demands of products. Analysis of market potential – The next step is to analyze the data of market potential . Analysis requires two steps>> a) Select the market associated with product demand. b) Eliminate those market segments that do not contain prospective business. Forecasting of future sales:Sales projection should be made for an entire product line or for an individual Product or for companies total market or individual market segment. Making operational programme & the budget :The firm determines the requirements for various operational activities such as production purchasing marketing capital assets. On the basis of forecast the related plans such as sales budget sales quotes sales publicity and material acquirement are formulated Derivation of a sales volume objectives:A sales volume objectives for the coming operative period is hoped for the outcome of a company’s short range sales forecasting procedure, The sales volume should be consistent with managements profit aspirations and the companies market capabilities. Evaluation & revision of forecasts:The sales executives should evaluate the forecasts carefully. The company should examine all the assumption on which it is based. The company should the forecasting process periodically. The first step in the review is to determine the accuracy of past forecasts to learn if changes are needed in the way forecasts are made if the company finds that sales forecasts are significantly different from actual sales in the period it should undertake a review of the sales forecasting process.
Techniques of sales forecasting:I. Survey methods:a) Executive opinion b) Prudent manager forecasting c) Delphi method d) Sales force composite e) Detecting differences in figures f) Survey of buyer intention g) Product testing and test marketing. a) Executive opinion – It consists of obtaining the views of top executives regarding future sales. The forecasts made by executives are arranged to yield Fore more http://www.gurukpo.com one forecast for all detail:executives or the differences are reconciled through discussion.
b) Product manager forecasting – In this method the company personnel are asked to assume the position of purchasers in customer companies. They must then look at company sales from a customer’s view point & prudently evaluate sales. c) Delphi method – This method begins with a group of knowledgeable individuals estimating future sales. Each person makes a prediction without knowing others in the group have responded. these estimates are summarized. Now knowing how the group responded. They are asked to make another production on the same issue. This process of estimates & feedback is continued for several rounds. In final round involves face to face discussions among the participants. d) Sales force composite – This method is based on collecting an estimates from each salesperson of the products they expect to sell in the sale forecast period. The estimate may be made in consultation with sales executives and customers. e) Detecting differences in figures method – In this method the sales person produces figures broken down by product & customers and the area manager produces figures for the sales persons territory. They then meet & must reconcile any differences in figures. the process proceeds with the area manager producing territory by figures. f) Surveys of buyer’s intentions – This method consist of contacting potential customers & questioning them about whether or not they would purchase the product at the price asked. g) Product testing & test marketing – This technique is of value for new or modified products for which no previous sales figures exists & where it is difficult to estimate. Likely demand. It involves placing the pre production model with a sample of potential users beforehand & noting their reactions to the product. Test marketing involves the limited launch of a product in a closely defined geographical test area. II. Mathematical methods :a) Moving average technique – Simplest way to forecast sales is to predict that sales in the coming period will be equal to sales in the best period. This forecasts assumes that conditions in the last period will be same as the conditions in the coming period. SALES t+1 salest + salest-1 + sales + s………………… salest-n SALESt+1 = Forecasted sales SALESt = Sales in the present period.SALESt+1 = Sales in the period immediately past. b) Exponential smoothing models – It is a type of moving average that represents a weighted some of all past numbers in a time series. with the heaviest weight placed on the most recent data. c) Regression analysis – This technique is used to project sales trends in the future. The sales plotted are http://www.gurukpo.com for each past time period. It determines and Fore more detail:measures the associations between the sales & other variables.
d) Projection of past sales – It takes a variety of forms. • To set the sales forecasts for the coming year at the same figure. • May be moving average of the sales figures for several past years. e) Time series analysis – It is a statistical procedure for studying historical sales data this process involves measuring 4 types of sales variations – long term trends, cyclical changes, seasonal variations & regular fluctuations. Then a mathematical model about the past behavior of the series is selected assumed values for each types of sale variation are insisted and sale forecast is made. f) Market factor analysis – Market factor analysis determines market factors & measures their relationships to sales activity. g) Correlation analysis – This method takes in to account the association between potential sales of the product and market factor affecting its sales. h) E-charts – this technique is furtherance of moving average technique . It also shows the monthly sales & cumulative sales. Q. Define sales quotas . What are the objectives & methods of sales quotas? Ans. A sales quota is a quantitative goal assigned to a sales unit relating to a particular period of time. A sales unit may be a territory, branch, office, region, distributor or a person. A sales quota is a sales set for a product line, company division or sales representative. A sales quota is sales goal assigns to a marketing unit for use in the management of the sales efforts. Sales quota is sales performance goal. Objective of sales quota:1. Life blood of business. 2. To provide performance standards. 3. To maintain a check on sales & expenses. 4. To motivate deserted performance. 5. Serves as a basis o sales contests. 6. It reflects overall sales plan. 7. To make goals obtainable. 8. It gives a sense of direction to salesmen. 9. It serves a basis of compensation. 10. Helps in evaluating performance. 11. It provides change of direction. 12. It helps in balancing growth of market. 13. It helps in proposing promotional budgets. 14. Equals the workload & estimating the future needs. 15. Avoid repetition of work. 16. Coordinates with other departments. Methods for setting sales quotas:1. Forecasts & potentials based methods – The company makes a total volume or unit sales forecast for the company, product lines & individual products this methods includes quotas derived from territorial sales potential b) Fore more a) detail:http://www.gurukpo.com Quotas derived from total market estimates.
2. Only forecasts based methods – This method is common for the large scale companies, some companies determines sales potential for individual sales territories. This is especially true for companies that sale in small geographical areas. 3. Past experience method – Some companies take the past year sales for each geographic unit & use result as their sales volume quotas. 4. Executive judgment method – This method is useful when little information exists. Manages sely on their judgments to make failure predictions. 5. Salesmen judgment method – It is used in companies expanding in to new geographic areas or starting up a sales force. no past sales exists on which to base future estimates. Q. Write short note on sales territories. Ans. A sales territory represents a group of customers or markets or geographical areas A sales territory is a configuration of current and potential accounts for which responsibility has been assigned to a particular sales. Objective :1. Maximizes sales and profits. 2. enhances customers courage. 3. Matches selling efforts & opportunities. 4. Helps in realistic sales planning. 5. Controls sales operations. 6. Controls selling expenses. 7. Helps in evaluating sales personnel. 8. Contributes to high morale 9. Promotes productive salesmen. 10. Establishes salesmen responsibilities. 11. improves customer relations. 12. better matching of salesmen to customer. 13. Ciduabtes personnel selling and advertising. 14. Benefits salesmen & company. 15. Provides more equitable rewards. Designing sales territories:1. Deciding objectives & allocation criteria of territory formation. 2. Selecting basic control units or bases for territorial boundaries. On the bases of geography, trading, areas, portals, serving, requirements, workload, product lines customers & prospects. 3. Determining sales potential present in control units. 4. Analyze sales people workloads- on the basis of nature of the job, intensity of market coverage, type of product sold. 5. Combining control units in to tentative territories. 6. Determining basic territories. Fore more detail:- http://www.gurukpo.com 7. Assigning sales people to territories.
8. Preparing customer contact plan. 9. Evaluation & revision of sales territories. Q. Define consumer psychology. What are the reasons for studying consumer psychology? Ans. Consumer psychology is concerned with the study of consumer mind. It is the study of thought process going on in the consumer mind, their reactions, desires, values, perceptions, altitudes etc. OR It is the study of consumer mind and his behavior particularly his perceptions learning experiences, personalities, attitudes and self image. Objectives:1. To develop effective marketing strategy to compete. 2. To make aware the customers about various promotion techniques used by produces. 3. To study buying motives vision & thoughts. 4. To conduct market research more efficiently. 5. To take appropriate definition regarding product development, product lines, product differentiation. 6. To facilitate effective market segmentation. 7. To design marketing mix elements based on consumer needs, buying patterns. Methods for studying consumer behaviors:1. Observation method – The salesmen observes behavior pattern of consumers & make a note of it. Certain mechanical devices like molding, cameras, close circuit TV etc. are used for appointment & observation. 2. Interview method - The interviewer directly interviews the consumers and records various information relating to consumers attitudes, Like & dislikes, lifestyles, income, paying capacity, perception etc. 3. Questionnaire method – A questionnaire is prepared related to psychological behavior of customers. This is mailed to certain selected customers & then the received information is tabulated & analyzed. 4. Experimental method – The researcher conducts experiments on consumer behavior on a selected number of customers & the conclusions thus arrived are given effects or a large group of customers. 5. Consumer panel method – The researcher makes a list of customers and these are contacted at different occasions & collects various kinds of information and data relating to these behavior on the basis of which conclusions are worked out. 6. Case study method – Certain facts and figures of selected customers relating to their family background social & individual life styles are gathered and on the basis of analysis, interests and buying motives are determined. Fore morecustomer detail:- http://www.gurukpo.com
Q. Write short notes on buying motives. Ans. A motive may be defined as a derive for which on individual seeks satisfaction buying motives are those influences or considerations which provide the impulse to buy, induce action or determine choice in the purchase of goods & services. Classification of buying motives:1. Physical psychological and sociological buying motives. 2. Acquired & inherent buying motives- Level of education, information, beauty and fashion social prestige, work efficiency acceptance etc. 3. Primary & selecting buying motives. 4. Conscious & dormant buying motives. 5. Rational & Emotional buying motives. 6. Product and patronage buying motives. Q. What do you mean by sales control. Discuss its importance and process. Ans. Sales control is to identify weaknesses in sales efforts to determine their causes & to correct them quickly with the objectives of servicing the greatest possible amount of profitable business. The primary purpose of sales control is to discover weak spots in sales performance and to maintain & improve the efficiency of sales operations. Importance:1. 2. 3. 4. 5. To implement sales planning in an effective way. Control of unnecessary expenses. To evaluate the performance of sales force. To determines the various requirements related with sales promotion. To concentrate on the sales of maximum profitable products at profitable territories and customers. 6. Coordinating the effort of sales functions & results. Sales control process:1. Establishing sales performance standards. 2. Recording actual performance. 3. Evaluating performanceagainst standards. 4. Taking appropriate actions. Q. What are sales reports. Discuss the essentials of sales report.
Ans. Sales reports provide the sales manager with an basis for discussion with sales personnel. They indicate the manners on which the sales people need assistance. They also assists in determining how to secure more & larger orders. Field sales reports provide the raw material that sales management process gain insights on giving needed direction to field sales personnel. Fore more detail:- http://www.gurukpo.com
These are various types of sales reports:1. Progress reports 2. Expenses report. 3. Sells planning report. 4. New business report 5. Lost sales report 6. Complaint and adjustment report. Essential of a report :1. 2. 3. 4. 5. 6. Should be simple. irrelevant information should not be included. Brief and object oriented . Should be useful to make an easy assessment of performance of salesmen. Should be of optimum size. case should be given to make different types of reports in the format prescribed for the purpose. 7. Salesmen suggestion should be given in the report. 8. Should be free from any person bias.
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