Biyani''''s Think Tank Concept based notes Sales Promotion docx

Biyani's Think Tank Concept based notes Sales Promotion B.Com Part-II Ms Nandita Sarsar Lecturer Deptt of Commerce (Mgmt) Biyani Girls College, Jaipur Fore more detail:- http://www.gurukpo.com PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com Preface I 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 Fore more detail:- http://www.gurukpo.com PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com SECTION -A Q.1 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 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 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 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 activity- Sales promotion is an irregular & non recurring Fore more detail:- http://www.gurukpo.com activity to increase the sales & this technique is used for specific situations only PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com such as decline in demand, fall in profit, acute competition in the market or during the introduction of new product in the market 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 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 Acceleration tool- sales promotion is designed to speed up the selling process & maximize sales volume Immediate impact- Sales promotion can be implemented quickly & gets sales results sooner than advertising sales promotions offers an incentive to buy now 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 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 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 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 PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com Role of sales promotion:1 To popularize goods and services of the producer among the potential consumers & to motivate them towards larger purchases To motivate the existing customers for maximum purchase To maintain the sales up to normal level even during seasonal vacations & during the declining stage of PLC To increase goodwill of the firm To educate customers/dealers & salesmen about the techniques of sales promotion To simplify the efforts of sales force & motivate them for larger purchase To stimulate maximum sales on special occasions such as Diwali, religious festivals & other such occasions To search for a new market & to introduce new products in to the market 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 Importance to producers Importance to middlemen Importance to society & nation 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 Fore more detail:- http://www.gurukpo.com PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com (ii) Various rebates & free discounts- Sales promotions offers various incentives like rebates & free discounts, free samples which helps to stimulates sales & purchase (iii) 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 (iv) Low price- Sales promotion increases sales volume and reduce the unit cost of production & thus the prices reduce & it benefits consumers (v) Increase knowledge- Sales promotion increases the knowledge of the consumers with regard to the uses, operation & maintenance of the product (vi) Provide higher standard of living (vii) 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 (viii) 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 Importance to producers:(i) Increase in sales- Sales promotion attract consumers & stimulate them to make larger purchaser (ii) 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 (iii) 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 PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com (v) Increase regular sales & seasonal products (vi) It helps in increasing goodwill of the firm (vii) The various promotional incentives offered to the dealers help to achieve cooperation from them to sale the products & to maintain maximum stock with them (viii) It is an effective step to face the competition (ix) It helps in increasing the demand of new products (x) It helps in maintaining existing customers (xi) It creates a trusting attitude among customers Free sample & functional demonstrations creates a faith in the use of merchandise which results in longer sales Importance to middlemen / dealers:(i) Facilitates longer sale (ii) By operating various sales promotional plans, manufacturers provide various type of helps such as rebates, trade discounts, gifts, rewards to dealers & resellers (iii) A direct relationship between the dealers & the customers are established through the sales promotion techniques which will continue for a long term (iv) As the cost of each deal is reduced the profits of dealers are also increased Q.2 What are the functions performed by a sales promotion department? Ans 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 ways: To establish coordination with other departments Assisting functions towards dealers 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:PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com Assistance to top executives- The sales promotions department provides various information to top executives & give assistance in related matters for decision making 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 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 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 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 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 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 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 Limited time period:-Advertising is for long term effect & is for longer periods, whereas sales promotion is for a limited time period only Easy evaluation:-The impact of sales promotion can be easily measured in comparison to advertising Fore more detail:- http://www.gurukpo.com PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 Creating action:-Advertisement builds long term brand awareness & sales promotion is used for creating action Distinction of sales promotion & personal selling Role:- Sales promotion helps to increase the effectiveness of personal selling & personal selling creates desire for a product thereby effecting sales Motivation:-Sales promotion provides physical motivation to customers personal selling provides physical and emotional motivation to customers Personal presence:-Personal presence of salesmen is not necessary in sales promotion whereas in personal selling salesmen is required for selling 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 Compumentary function:- Sales promotion is complimentary to personal selling whereas personal selling does not complement to the sales promotion program Continuity:- Sales promotion is not used as a securing activity whereas personal selling is a routure activity which regularly operates Orientation:- Sales promotion is oriented largely towards the firms or its product , personal selling in customer oriented 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 Natural resources remain untapped Restricted development of industrial activities Lower standard of living of people Shorter supply of product & resources Slow growth of capital formation Limited opportunity for employment Economists say that development of economy is possible only when there is increased sale Therefore sales promotion isdetail:- http://www.gurukpo.com the sales Fore more considered to be tool for stimulating PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.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? Ans 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 Fore more detail:- http://www.gurukpo.com brand PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 It develops efforts and will to work It is a goal oriented behavior It is related with satisfaction of needs motives and desires motivation can be financial or non financial It provides rewards in line with the goal It is only one component of successful sales performance It is a psychological help given to salesmen Objectives of sales motivation:1 To stimulate the salesmen to reach and maintain satisfactory performance levels To improve the working efficiency of salesmen To establish cordial situation between the managers and salesmen To maintain high morale among the salesmen To satisfy the economic social, human needs of salesmen To implement sales management program 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 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 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 PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 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 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 Helps in building morale- motivation helps willingness to to work , when the need of the salesmen are satisfied, he is stimulated to more work , therefore motivation is driving force for the development of morale 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 To improve mutual relations- motivators encourage salesmen to improve their work performance This results in increased sale Utilization skill- Most of the salesman 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:1 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 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 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 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 communication – To make motivational plan successful it must be communicated Fore more detail:- http://www.gurukpo.com to salesmen and concerned person PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com integration interests – The interest of salesmen and the firm must be integrated in motivational program 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 developing team spirit – individual efforts should be directed towards developing team spirit among sales men 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 Correlate efforts results and rewards of salesmen Help attract and keep competent salesmen Stimulate the salesmen in their best efforts Help control a salesmen activities enthuse efficient salesmen and help remove the inefficient once Preferably provide & components of income, an assured income and additional reward for superior program Be fair and just to the firm and to the salesmen 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 consider the overall competition structure of firm Make industry compressions Select suggestions from sales force (sales manager) Aside the compensation level decide the compensation mix Fore more detail:- http://www.gurukpo.com PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 Decide the highlights of the different elements 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 Straight salary plan Straight commission plan Salary plus commission combination plan Salary plus group commission plan Commission plus approved expenses plan Straight salary plan:Merits1 Simple to design and easy to administer provides a sense of security and basic motivation help the firm control the salesmen better Ensure salesmen attend to the long term marketing concerns of the firm Help avoid unhealthy industry among salesmen 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 salary is a fixed cost unrelated to sales volume or margin Straight commotion plan:Merits – Provides incentive to perform better as it rewards the salesmen according to their performance 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 in particularly useful – PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com • • 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 Fore more detail:- http://www.gurukpo.com PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com SECTION- C Q What 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 – presale preparation prospecting or locating customers Pre- Approach before interview approaching presentation of sales sales calls and closing the sales 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 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 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 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 more detail:- http://www.gurukpo.com before approach salesmen should get an appointment fixed with the customer PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 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 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 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 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 Forethe salesmen http://www.gurukpo.com more detail:• When he wants to testify the statement made by salesmen PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com • 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 Q 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 – it is the foundation of planning Companies uses the sales forecast to allocate resource across different functional areas It is the key factor in all operational planning throughout the company It serves as a base for sales force planning It plays a major role in the success of the organization It is the key to sales management It helps in profitability of the firm It helps in facilitating production planning 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 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 Fore more detail:- http://www.gurukpo.com & advertising policy, organization structure etc & the non controllable factors like political & social systems, seasonal fluctuations etc must be determined PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 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 executives or the differences are one forecast for all detail:- http://www.gurukpo.com reconciled through discussion PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 It determines and Fore more detail:- for each past time period measures the associations between the sales & other variables PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 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 To provide performance standards To maintain a check on sales & expenses To motivate deserted performance Serves as a basis o sales contests It reflects overall sales plan To make goals obtainable It gives a sense of direction to salesmen 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 a) quotas derived from territorial sales potential b) Fore more detail:- http://www.gurukpo.com Quotas derived from total market estimates PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com 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 Past experience method – Some companies take the past year sales for each geographic unit & use result as their sales volume quotas Executive judgment method – This method is useful when little information exists Manages sely on their judgments to make failure predictions 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 enhances customers courage Matches selling efforts & opportunities Helps in realistic sales planning Controls sales operations Controls selling expenses Helps in evaluating sales personnel Contributes to high morale 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 Selecting basic control units or bases for territorial boundaries On the bases of geography, trading, areas, portals, serving, requirements, workload, product lines customers & prospects Determining sales potential present in control units Analyze sales people workloads- on the basis of nature of the job, intensity of market coverage, type of product sold Combining control units in to tentative territories Determining basic territories http://www.gurukpo.com Fore more detail:7 Assigning sales people to territories PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com Preparing customer contact plan 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 To make aware the customers about various promotion techniques used by produces To study buying motives vision & thoughts To conduct market research more efficiently To take appropriate definition regarding product development, product lines, product differentiation To facilitate effective market segmentation 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 Interview method - The interviewer directly interviews the consumers and records various information relating to consumers attitudes, Like & dislikes, lifestyles, income, paying capacity, perception etc 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 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 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 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, customer http://www.gurukpo.com are determined Fore more detail:- interests and buying motives PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.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 Acquired & inherent buying motives- Level of education, information, beauty and fashion social prestige, work efficiency acceptance etc Primary & selecting buying motives Conscious & dormant buying motives Rational & Emotional buying motives Product and patronage buying motives Q What 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 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 Coordinating the effort of sales functions & results Sales control process:1 Establishing sales performance standards Recording actual performance Evaluating performanceagainst standards 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 PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com These are various types of sales reports:1 Progress reports Expenses report Sells planning report New business report Lost sales report Complaint and adjustment report Essential of a report :1 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 Salesmen suggestion should be given in the report Should be free from any person bias □□□ Send your requisition at info@biyanicolleges.org Fore more detail:- http://www.gurukpo.com PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com ... 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... Q.1 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. .. 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