Sales Strategies and Corporate Objectives, Recruitment and Selection, and Remuneration - Assignment Example

Sales Management Sales strategies and corporate objectives Sales strategies are formulated with reference to the corporate objectives. All functionalstrategies such as production, human resources management, sales, etc., must be in tune with the corporate objectives for the optimum results. Both the objectives and strategies should be specific and have the characteristic of measurability. The time frame is very important especially in the case of strategy. The objectives and the strategies should be realistic and achievable with reference to the targets. Corporate objectives are devised on the broader level and there are various factors involved in the process. When there are changes necessitated in the corporate objective on account such factors, the sales strategies are suitably revised to fit in the overall corporate objectives. For example change in production strategy may be warranted by reason of shortage of raw materials for a particular product. On account of controls on imports imposed by the government, demand for an import substitute manufactured by the company may rise. In such cases the decrease or increase in production is reflected in the revision in the sales strategies. Recruitment and selection The ideal condition of putting the right person on the right job is always a challenge to the Human Resources Department. The HRD should finalise the description of the job, and decide upon the qualification, experience, aptitude that would be required on the part of the employee to be recruited to fill up the vacancy. Employees in marketing and sales should possess persuasive abilities, negotiating skills, flair for language and pleasing personality, which will assist the basic qualities enumerated above in his sales job. More and more employees are appointed on temporary basis before making their jobs permanent based on the performance. Many a times, the salary itself is paid based on performance; that is, salary is linked to output. However, a proper mix should be achieved after carefully taking into consideration various factors such as employment market, nature of the job in relation to the level of skills required, previous experience in the industry, the background of the employee such as local or foreign, etc. Grading of the employees offer scope for promotion to the employees recruited, and the employees are willing to prove themselves to go to the next level considering the benefits and status attached to it. If the labour turnover is at the acceptable level, it is also good for any organisation, since new blood is infused into the business. The HRD is required to be on constant search for talent under these circumstances. Therefore, they should evolve standard procedures for recruitment and selection to avoid difficulties in implementation of the strategies due to shortage of manpower. Motivation in sales performance There are monetary as well as non-monitory considerations of motivating factors in sales performance. “What sales people can do is to adopt a positive and creative attitude, and carry out more productive and efficient activity, directed on higher-yield strategic opportunities. By doing these things sales people and sales teams will improve their results.” (businessballs.com, 2009). Monetary considerations include incentives or bonus linked to performance. There are several methods and different ways of calculations involved in this type of motivation. This would be greatly effective in the case of field staff with the responsibility of achieving the targets. However, non monetary considerations play and important role in the next level where the people are guided by the recognition factor. I has been succinctly pointed out that, “Sales teams generally comprise people who seek greater responsibility. They also seek recognition, achievement, self-development and advancement.” ((businessballs.com, 2009). Remuneration Remuneration encompasses salary and other perquisites such as rent free accommodation, car, phone, etc., retirement benefits such as gratuity, provident fund, pension etc. The remuneration is also linked to performance for example overtime payment for night shift work, commission on sales, etc. There are bonus and profit sharing schemes as well in the organisations. Commission on sales is a very common method adopted by various companies to enhance the sales performance of the employees. In many companies where the results could be accounted for simply by volume or turnover based on the quantity sold by the field sales man, the remuneration or a major portion of the remuneration is linked to performance. For example a ‘hurdle point’ in terms of sales is fixed for the basic salary and, sales over and above this level, attracts commission. Here again from the long term point of view, non monetary considerations play an important role. For examples young persons in the sales force would like to grow in stature over a period of time. If there is no scope for promotion, their involvement in the work would be limited. Likewise, where there is scope for permanent employment for the temporary employees in due course of time, they would be encouraged to perform more to become a permanent employee of the company. This view is also strengthened by the fact that a person can’t as effectively work in the field for a longer time as he works when he is young. He would like to settle in his job with some other responsibility in the company. Therefore, it is important to encourage honest and hard working staff by promoting them to a suitable post at an appropriate time. Training Constant training to the employees through various programs to upgrade their skills, learn the latest techniques in marketing and sales, to learn about the new products, etc. These training programs also give opportunities to the employees for sharing their experiences. Most importantly, the staffs need special training in the policies and procedures of the company and they should be well versed in the communication methods and strategies which are constantly undergoing changes in the organisations on account of technological advancements. The employees are required to understand the philosophy and objectives of the company to improve their performance in line with the requirements. Techniques used to co-ordinate and control sales output Coordination involves organisation of people and things to achieve the desired goals or objectives by working in harmony with each other. Control with reference to an organisation involves setting up of standards of performance in relation to the objectives, so that actual performance can be compared with the standards to ascertain the deviations from the standards and take action to bring up the actual performance to the desired level. Therefore coordination and control involves planning in sales management at all levels. Collection and analysis of data with reference to the business or any functional area such as manufacturing, sales, etc., for efficiency in the use of resources to achieve the objective set by the organisation is called planning. Therefore, proper planning is the prerequisite for coordination and control, and the standards are set after careful planning. Lack of proper coordination results in working of the various groups, often with cross purposes. The size of the company is very important in this connection. The diversified nature of an organisation in terms of geographical area, number of manufacturing facilities, regional/branch offices, etc. calls for more interaction among the various working groups and effective communication at all levels for the implementation of the strategies evolved in connection with the objectives. Planning and control are interrelated, because standards and targets are borne out of planning and the control mechanism aims at comparison of the actual performance with the standard or budget estimates for taking corrective measures to keep the deviations or variances at the minimum possible level. The important techniques such as budgetary control and cost control, used for evaluation of the performance and reporting of the variances, for taking corrective actions to achieve the objectives, are based on planning in the organisation. Budgetary control and standard costing systems are essentially the important and effective tools used for the purpose of planning, coordination and control. These techniques could be effectively used for coordination and control of sales output. Budgetary control Budget is prepared for a particular time frame, relative to the objectives, indicating the input output levels for various divisions of the company. The budgetary control is related to the responsibilities at various levels. Continuous comparison of the actual with the budgeted results is made for the purpose of securing objectives by individual action at various levels. Otherwise the process provides a basis for its revision, if necessary based on the practical considerations Generally past experience is the basis for preparation of budgets. The estimates are made after taking into account, the changes that are expected to occur during the budget period. The budget for various activities of an organisation are interrelated. For example, cash budget is dependent upon sales budget. The budget estimates in respect of sales are made for various divisions, product categories, and geographical areas based on the demand experienced in the past, extrapolated with the changes expected during the budget period, constraints in production, competition and other factors. The actual performances are compared with the budget estimates on a continuous basis. The variances are analysed with regard to price, volume, etc. to ascertain the reasons for taking corrective measures to achieve the targets which were realistically worked out in the budget. Cost control Cost control aims to reduce cost at various levels by implementing proper strategies. Competition calls for reduction in overhead costs such as selling, distribution, advertisement, etc. related to sales/marketing, in addition to efficiency in other functions. This control involves establishment of standards, measurement of actual costs and comparison of actual costs with the standards to work out the variances for control purposes. The variances in cost are analysed to causes such as price, volume, rejections and the overheads involved in sales, further divided into fixed and variable costs. Fixed overheads are difficult to control in the short run. However, effective control in the case of variable overheads is possible. The underperformance analysed to causes would enable the management to take specific measures to correct the situation for achieving the targets. Organisation structure and procedures Establishment of the sales organisation, for fulfilling the objectives of the company, is dependent upon internal and external factors. The external factors refer to competition, markets expected to be covered, reach of technology in the market and other social conditions prevailing in the market. The internal factors refer to the size, diversity in the products and services, HRD, remuneration and incentive packages to the sales force, system of reporting and type of the system in terms of centralisation or decentralisation, etc. The setup could be based on products, geographical area, types of customers, types of channels such as direct marketing, telemarketing, dealer network, appointment of distributors who in turn deal with retailers, mail order system and so on. The strategy would vary according to the nature of the market conditions, i.e.’ buyers market’ or ‘sellers market’. Procedures Procedures are the step by step method of doing the job in an organisation. The procedures may be operational or administrative. Procedures are written after careful and complete analysis of the system, because failure to follow the procedures would result in chaos. For example procedure in sales department may include reporting, (regular or periodical sales reports, visits to retails shops, etc.), travel expense claims (eligibility, submission of claims on time, etc.), Documentation, preservation and maintenance of things and materials (car, telephone, goods under custody, etc.), in addition to the other regular procedures such as pay and allowances, leave, etc. applicable to all the employees. Simplicity in procedures ensures better compliance. Procedure in writing and available to all for verification at any point of time is another important factor. Removal of redundant procedures is important as upgrading of the procedure due to changes in the circumstances. Feedback on compliance should be encouraged to evaluate the efficacy of the procedures. The well written procedures would serve as a guide to the employees, and avoids ambiguity in interpretation. Sales tasks There are many types of tasks involved in selling. Each type of task demands special skills on the part of the staffs. Success in sales hinges on understanding these basic concepts, while recruiting employees for specific jobs, as explained below with examples. Direct Selling The employees should be healthy with stamina to travel in sun and rain. He should have pleasing manners, neat in appearance and dress, complete knowledge about the product with patience and persuasive skills to deal with the clients. Telemarketing Needless to say the command over language is essential for this task. Agreeable quality in voice, good manners of speaking over phone, patience and tact in hooking the listener to conversation, courteous even on the face of provocation, etc. are the important attributes to the task. Sales representative (Distributors and Dealers) The person who is in charge of sales to distributors or dealers should be knowledgeable in general and the markets in particular, experienced in marketing/sales, persuasive skills to convince the clients about the benefits of the products over the competitor’s products and benefits of the scheme offered, The Sales representative should be in a position to instil confidence in the minds of the clients by giving assurances about the quality, service, dependability, accessibility, etc. within the limit permissible with tact, Exports (International sales) Staffs in the international sales need to possess knowledge in laws of international trade as well as business procedures adopted in international trade practice. A background in law, experience in this line and ability to communicate are preferable in respect of staffs appointed in the export division International sales involve dealing in foreign currencies and rate of exchange. In addition, exports involve various concessions, duty drawbacks and subsidies. The impact of these aspects should be considered properly in pricing of the products, to be competitive in the world market. These benefits should also be claimed and the tax concessions given for exports availed properly. Opening letters of credit, insurance special packaging etc. are very important in international trade. The banks are giving credit facilities against the sale proceeds Also, the products should be properly described and categorised, because the benefits might be lost if the specification is not in accordance with the guidelines. Trade fairs Trade fairs act as a meeting point for the buyers and sellers. The buyers find products manufactured by various companies in one place. Therefore, participation in these trade fairs is a promotional activity on the part of the sales/marketing department. International and national trade fairs are organised in various cities of the world to cater to the needs of different industries. These fairs are generally organised by the industries associations for the benefit of the manufacturers and the customers. Important points to be considered in this regard are, buying space for display/demonstration of the product. Keeping in stock the pamphlets, brochures, product literatures, etc. for distribution at the site, communication arrangements with the headquarters for additional clarifications, if any, needed by the customers References businessballs.com (2009), motivational theory, Available at http://www.businessballs.com/motivation.htm, Accessed on 8 May 2010. Read More