13
The Promotion
Strategy: Developing
and Managing Sales
Section
13.1
Organizing and Preparing a Sales Force
Section
13.2
Planning, Directing, and Evaluating
Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
Section Objectives
•
•
•
Explain the role of personal selling in businesses.
Define the two types of selling situations.
Describe the kinds of training needed by salespeople.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
The Main Idea
By thoroughly preparing the salespeople you hire, you can maximize
their effectiveness.
This is true no matter what background and experience they bring to the
job.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
Content Vocabulary
personal selling
prospect
sales force
order getting
order taking
rational buying motive
emotional buying motive
customer benefits
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
buying process
prospecting
preapproach
approach
objections
suggestion selling
sales check
SECTION
13.1
Organizing and
Preparing a Sales Force
Personal Selling
Personal selling is
important because it
involves the human aspect
of promotion.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
personal selling
selling conducted by direct
communication with a prospective
customer
SECTION
13.1
Organizing and
Preparing a Sales Force
Personal Selling
Personal selling relies on
direct contact with a
prospect, which is critical
to companies whose
customers need detailed
information.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
prospect
a potential customer
SECTION
13.1
Organizing and
Preparing a Sales Force
Staffing the Sales Force
Businesses use their sales
force to help customers
make buying decisions.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
sales force
a group of employees involved in
the selling process
SECTION
13.1
Organizing and
Preparing a Sales Force
Staffing the Sales Force
Sales are classified into two
groups: order getting and
order taking.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
order taking
getting
the completion
seeking
out buyers
of a and
sale giving
to a
them a well-organized
customer
who has sought out a
presentation; sometimes referred
product
to as “creative selling”
Traits of Successful Salespeople
knowledge
empathy
organization
promptness
follow-through
ability to
solve problems
punctuality
willingness to
work hard
energy
honesty
9
SECTION
13.1
Organizing and
Preparing a Sales Force
Proving Sales Training
When hiring new or experienced salespeople, businesses must provide
training.
They must prepare their salespeople to sell their products or services,
and teach or reteach the principles of selling, including the mechanics
of selling.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
Preparing to Sell
Before a salesperson is ready to sell, he or she must be trained in the
following selling skills:
•
•
•
•
•
•
company knowledge
product knowledge
customer knowledge
readiness and disposition
foundational skills for selling
Internet skills for selling
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
Preparing to Sell
Salespeople should be
trained to interpret whether
a customer has a rational
buying motive for making
a purchase or an
emotional buying motive
that prompts a purchase.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
rational buying
emotional
buying
motive
motive
a feeling
conscious,
a buyer
logical
associates
reason towith
make
a
product,
a purchase,
such as such
recognition
as
or
convenience or comfort
prestige
SECTION
13.1
Organizing and
Preparing a Sales Force
Preparing to Sell
There are three levels of product knowledge:
1.
2.
3.
benefits to the customer
details about the company and its products
information about the competition’s products
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
Preparing to Sell
Knowing a product’s
customer benefits is
essential for success in
selling because people buy
products for their benefits.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
customer benefits
the advantages of personal
satisfaction that a customer will
get from a product
SECTION
13.1
Organizing and
Preparing a Sales Force
The Buying Process
In preparation for selling,
the sales trainee must also
understand the buying
process.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
buying process
a series of steps a customer goes
through when making a purchase
The Buying Process
The Stages of Selling (AIDA)
Attention
Getting the prospective buyer’s attention
Interest
Developing an interest in the product
Desire
Creating a desire for the product
Action
Getting the customer to buy
16
The Selling Process
The Ten Steps of the Selling Process
1
prospecting
6
overcoming
objections
2
preapproach
7
closing the sale
3
approach
8
suggestion selling
4
determining
needs
9
closing
mechanics
5
presentation
10
follow-up
17
SECTION
13.1
Organizing and
Preparing a Sales Force
The Selling Process
Prospecting is seeking out
new leads.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
prospecting
a systematic approach to
developing new sales leads or
customers, who are identified
through referrals, public records,
or surveys
SECTION
13.1
Organizing and
Preparing a Sales Force
The Selling Process
Prior to sales contact, the
salesperson should prepare
a preapproach and gather
information about
prospective customers’
needs and wants.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
preapproach
the marketing activities that
precede a salesperson’s
approach to a prospective
customer that are intended to
help achieve a successful sale
SECTION
13.1
Organizing and
Preparing a Sales Force
The Selling Process
The steps in a
salesperson’s approach,
such as establishing a
friendly and professional
relationship, should be
carefully planned to get the
customer’s attention and
interest.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
approach
a salesperson’s first contact with a
customer
SECTION
13.1
Organizing and
Preparing a Sales Force
The Selling Process
When customers voice
objections during the
presentation of the product,
a good salesperson selects
appropriate methods to
respond to the customers’
worries.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
objections
any concern, hesitation, doubt, or
other reason a customer has for
not making a purchase
SECTION
13.1
Organizing and
Preparing a Sales Force
The Selling Process
If a customer is purchasing
a dress shirt, for example,
the salesperson may use
suggestion selling and
offer a tie to go with it.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
suggestion selling
selling additional goods to a
customer to go along with a
product or products the customer
is purchasing
SECTION
13.1
Organizing and
Preparing a Sales Force
Selling Mechanics
The basics of selling mechanics involve understanding:
•
•
•
•
order forms and proposals
cash register operation
sales checks
sales tax
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
The Selling Process
A sales check provides
valuable information to the
business, such as the date,
items purchased, and
purchase price.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
sales check
a written record of a sales
transaction
SECTION
13.1
Organizing and
Preparing a Sales Force
After You Read
1.
Explain the role of personal selling in businesses.
Personal selling, for many companies, is a key ingredient in their
marketing mix. It is particularly important to companies that rely on
direct contact with customers and to companies whose customers
need detailed information.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
After You Read
2.
Define the two types of selling situations.
Order getting is seeking out buyers and giving them a wellorganized presentation. Order taking is completing a sale with a
customer who has sought out a product.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.1
Organizing and
Preparing a Sales Force
After You Read
3.
Describe the kinds of training needed by salespeople.
Salespeople need training in preparation for selling, the buying
process, the selling process, and the mechanics of selling.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Section Objectives
•
•
•
Identify the components of sales planning.
List the elements that are involved in directing sales.
Discuss the procedures used in evaluating sales
performance.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
The Main Idea
Effective sales operations are developed through careful planning,
directing, and controlling.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Content Vocabulary
sales planning
sales forecast
sales territory
sales quota
salary
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
commission
sales call reports
SWOT analysis
morale
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Planning Sales
Before putting the sales
force to work, a business
must complete its sales
planning.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
sales planning
the process that involves
determining the goals, timing, and
budgets of sales efforts
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Forecasting Sales
A company’s sales
forecast is based on the
estimated market share the
company thinks it can
obtain.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
sales forecast
an estimate of sales for a given
period, such as the next quarter
Forecasting Sales
There are several methods for forecasting sales:
market analysis and industry information
surveys
data analysis
operational analysis
33
Budgeting Sales
Three basic budgets are needed for sales activities:
$
sales budget
$
selling expense budget
$
administrative sales cost budget
34
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Establishing Territories
A business that covers a
wide area should establish
sales territories to ensure
market coverage, reduce
selling costs, and improve
customer relations.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
sales territories
geographical areas in which
existing and potential customers
are grouped
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Setting Sales Quotas
A sales quota can be used
to indicate strong and weak
areas in the sales operation,
provide incentives for the
workforce, and improve the
effectiveness of
compensation plans.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
sales quota
a performance goal assigned to a
salesperson for a specific period
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Directing Sales Operations
You must direct your sales activities by providing:
•
•
•
•
•
motivation
incentives
a favorable environment
resources
leadership
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Compensating Your Sales Staff
The following options are available as methods of payment for
salespeople:
•
•
•
straight salary
straight commission
combination of salary and commission
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Compensating Your Sales Staff
A salary ensures a regular,
stable income for the
employee.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
salary
regular wages an employee
receives from an employer
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Compensating Your Sales Staff
A commission plan has an
advantage in the incentive it
provides for employees, but
a disadvantage in the
difficulty in directing
commissioned salespeople.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
commission
a fee for services rendered based
on a percentage of an amount
sold; payment is based on sales
alone
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Supervising Your Sales Force
You can supervise your sales staff using these techniques:
•
•
•
•
personal contact
sales reports
electronic communications
meetings
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Supervising Your Sales Force
Some salespeople account
for their activities in a sales
call report.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
sales call report
an account of sales activities,
including such items as number of
calls made, orders obtained, and
miles traveled
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Adjusting to Sales Environment Changes
By using a SWOT analysis,
a company can assess its
current situation.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SWOT analysis
a strategic planning technique
that analyzes a company’s
internal strengths and
weaknesses, and opportunities
and threats in the external sales
environment
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Maintaining Morale
To maintain high morale, a
business should foster a
positive work climate.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
morale
a state of an individual
psychological well-being based
on a sense of confidence,
usefulness, and purpose
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Evaluating Sales Performance
The final step in managing the sales operation is to evaluate sales
performance.
Sales performance evaluation involves:
•
•
evaluating company-wide sales
evaluating the sales of individual salespeople
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Evaluating the Company’s Sales Performance
To evaluate your company’s sales performance:
1.
2.
Compare your company’s sales volume with its budgeted sales
goals.
Analyze your marketing costs to identify unprofitable marketing
efforts.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
Evaluating Individual Sales Performance
There are five steps involved in evaluating sales staff performance:
1.
2.
3.
4.
5.
Establish guidelines.
Identify factors to be measured.
Set standards for performance.
Compare performance to standards.
Discuss results with salespeople.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
After You Read
1.
Identify the components of sales planning.
The components of sales planning are forecasting sales, budgeting
sales, establishing territories, and setting sales quotas.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
After You Read
2.
List the elements that are involved in directing sales.
The elements involved in directing sales are motivating
salespeople, compensating the sales staff, handling expenses and
transportation, supervising the sales force, adjusting to changes in
the sales environment, and maintaining morale.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
SECTION
13.2
Planning, Directing, and
Evaluating Sales
After You Read
3.
Discuss the procedures used in evaluating sales performance.
To evaluate a company’s sales performance, analyze sales volume
and marketing costs. To evaluate individual sales performance,
establish guidelines, identify factors to be measured, set standards
for performance, compare performance to standards, and discuss
results with salespeople.
Chapter 13 The Promotion Strategy: Developing and Managing Sales
Glencoe Entrepreneurship: Building a Business
13
The Promotion
Strategy: Developing
and Managing Sales
End of
Chapter 13
Section
Section
13.1
13.2
The Promotion
Organizing and Preparing
a Sales Force
Strategy:
and
Planning, Directing, Developing
and Evaluating
Managing Sales
Sales
Glencoe Entrepreneurship: Building a Business