Sales Management
Sales Management
Sales Management
Set of flashcards Details
| Flashcards | 149 |
|---|---|
| Language | English |
| Category | Marketing |
| Level | University |
| Created / Updated | 19.04.2016 / 21.02.2020 |
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Explain Functional Organization (1)
Staff specialists have line authority
for example: a sales manager directs salespeople, but the sales training director also has authority over the sales force for training
Explain Matrix Organizations (3)
- revolve around projects and encourage teamwork
- team leaders are viewed as coordinators rather than as bosses
- supported by enterprise software applications (e.g. Matrix Manager)
What does efficiency mean considering the sales force?
Efficiency reflects the rate at which the sales force converts its money investments into calls (relation of input and output)
What does effectiveness mean considering the sales force?
Effectiveness represents the buyer's response to the calling level of the selling organization.
What 3 different types of sales organizational structures are there?
- Product-based Organization
- Customer-based Organization
- Functional Organization
Explain Geographic Organization of the Sales Force (3)
- Simplest and most common method
- Individual salespeople assigned to seperate geographic territories
- responsible for performing all activities necessary to sell all products
Geographic Organization of a Sales Force: Pro's (4) and Con's (2)
Pro's
- lowest costs
- sales administraion and overhead costs kept low
- travel time and expenses minimized
- no geographic/customer overlap
cons:
- does not provide benefits associated with specialization of labor
- lack of management control over product or customer emphasis
Explain Product Organization of a Sales Force (1)
Seperate sales force for each product (or category) in the line
Product organization of a sales force: Pro's (3) and con's (3)
Pro's
- salespeople master effective selling methods for single or related products
- closer alignment of sales and production
- sales management controls allocation of selling effort across the line
con's
- duplication of effort (regarding customer and geography)
- low geographic efficiency
- lack of cross selling
Sales Force Organized by Customer Type: Pro's (4) and con's (3)
Pro's
- better understanding of customer needs
- increased familiarity with certain businesses
- increased control over allocation of selling effort
- enhanced cross selling efforts
con's
- possible higher selling and administrative costs
- duplication of effort
- less product knowledge
Explain Selling Function Organization as Organization of a salesforce
Salespeople specialize in performing different selling functions, e.g. prospecting and developing new accounts vs. maintaining and servicing existing customers
Selling Function Organization as Organization of a salesforcs: Pro's (2) and Con's (3)
Pro's
- skills matched to sales function
- developmental salespeople often a successful alternative
con's
- coordination
- duplication of effort
- customer objections to switch to maintenance salesperson
- feelings of rivalry between the sales forces
Types of Specific Team Selling Structures (4)
- Core Selling Team
- Selling Center
- Matrix Organization
- Multi-level selling
What does team selling do (1) and what are its benefits (2)?
- Team selling integrates functional specialists with customer relationship specialists
- Benefits:
Customer questions answered faster
Customers can speak directly with desired specialist
Core Selling Team: Definition
Core selling Team is permanently assigned to specific customer (e.g. Key Account Team)
Selling Center: Definition
Selling center brings together individuals from around the organization to help salesperson on a temporary basis (project)
Matrix Organization: Definition
Matrix organization employs direct-reporting salespeople who support internal consultants with specialized expertise
Multi-level selling: Definition
sales team consists of personnel from various managerial levels who call on their counterparts in the buying organization
Pro's (2) and Con's (2) of a larger Span of control in the vertial organization of a sales force
Pro's
- greater control/responsiveness due to fewer management layers
- lower admin costs
con's
- reduced one-to-one communication due to larger number of subordinates
- management may be less effective
When should the span of control be reduced? (4)
- sales task is complex
- profit impact of each salesperson's performance is high
- salespeople are well paid and professional
- at higher levels in the organization
Explain: Qualitative Sales Forecasting (3)
- Little numerical data & information
- predict sales revenues for new products
- utilized when markets have been disrupted by strikes, wars, natural disasters, recession etc.
Explain :Quantitative Forecasting
- Best used when access to historical data
- helpful if time series is stable and does not frequently change direction
- advantageous in situations where you must make frequent forecasts for hundreds or thousands of products
Signs that your sales force is undersized (3)
- Current customers are considering switching suppliers
- new customer development is down
- your salespeople feel overworked, but costs seem under control
Signs your Sales Force is oversized (3)
- Overall, your customers seem to be getting plenty of attention
- your salespeople seem to have considerable free time
- your salespeople don't seem to be sufficiently stimulated
How do you calculate the Percent of Sales Approach to determine the Size of a Sales Force?
1) Expected Sales * Field sales expense ratio = Sales budget
2) Sales budget * Percent of budget for sales force = Budget available for Salespeople
3) Budget Available for Salespeople / Wages & expenses per person = # salespeople
Explain Incremental Approach to determine Sales Force Size
- Most rigorous approach
- compare the marginal profit contribution with the marginal selling costs for each incremental salesperson
Incremental Approach to determine Sales Force Size: Advantages and Disadvanatages
Advantage: it quantifies the relationships between salesforce size, sales and costs
- possible to assess the potential sales and profit impacts of different salesforce sizes
Disadvantage:
- difficult to develop (complex response functions to predict sales)
- requires historical data or management judgement
--> approach cannot be used for new salesforces
Formula for the Workload Approach to determine Sales Force Size
Number of Salespeople = Total selling effort needed / average selling effort per salesperson
The Workload Formula (lange Version)
Number of Salespeople = (number of accounts * frequency of sales calls * length of a sales call) / selling time available for one salesperson
Optimality Condition for Salesforce Size
\( n_{opt} = {{g * S_{opt} * \beta} \over C}\)
g= gross margin
Sopt = sales volume in the optimum
nopt = number of salespersons in the optimum
C = average renumeration costs for a salesperson
Explain the Carryover Effect
The carryover is the amount by which sales will rise in the future due to efforts made in the present.
Conditions that Affect Carryover: High Carryover (5)
+ example product for high carryover
- high switching costs
- long selling cycles
- mature products
- strong brand and/or company loyalty
- many promotion vehicles in addition to the sales force
example product: car
9) Motivation of Salespersons
Motivation is an individual's choice to: (3)
- Initiate action on a task
- Expend a certain amount of effort on the task
- Persist in expending effort over time
9) Motivation of Salespersons
Reasons for motivating salespeople (4)
- frequent rejection
- physical separation from company support
- direct influence on quality of sales presentation
- indirect influence on performance
9) Motivation of Salespersons
Maslow's Hierarchy of Needs (5)
Self-actualization needs
Esteem needs
Social needs
Safety needs
Physiological needs
9) Motivation of Salespersons
Which 2 factors are included in Herzberg's Dual Factor Theory?
- motivation factors
- hygiene factors
9) Motivation of Salespersons
Herzerg's Dual Factor Theory: Explain Motivation factors
- what are they?
- what do they include?
- what happens if they are present or absent?
- Sources of satisfaction are called motivators, becuase they are necessary to stimulate individuals to superior efforts
- they include responsibility, achievement, recognition, and opportunities for growth and advancement
- when present, they motivate salespeople, if absent, they demotivate them
9) Motivation of Salespersons
Herzberg's Dual Factor Theory: Explain Hygiene Factors
- What are they?
- What happens when they are present or absent?
- Hygiene factors are extrinsic aspects of the job, such as company policies, pay level, finge benefits, working conditions and job security.
- When present, hygiene factors do not actually induce positive motivation, their absence, however, leads to salesperson dissatisfaction and demotivation.
9) Motivation of Salespersons
Explain the Expectancy Theory System
Effort --> Performance --> Reward
from Effort to Performance: Expectancy: Likelihood that increased effort will lead to greater performance
from Performance to Reward: Instrumentality: Likelihood that greater performance will lead to more rewards
Reward: Valence: Importance of receiving more of certain awards
9) Motivation of Salespersons
Why is the Expectancy Theory System better than Herzberg & Maslow? (5)
- a more complete theory
- focuses on the process of motivation
- maslow & herzberg focus only on one aspect of the process: reward importance
- systematic approach with multiple reasons for a lack of greater effort
- indicate where management should direct its attention to sales force as a whole or to an individual
