Page 141 - DMGT205_SALES_MANAGEMENT

Unit 9: Motivating and Compensating Sales Personal

Growth Stage Notes

In this stage the motivation of the sales force has to be maintained. Indirect incentive schemes
have to be introduced. Incentives can be linked with achieving targeted quarters. This will help
in the growth of the product.
Maturity

When the product firmly establishes itself the sales force needs a break. The indirect benefits
like training programmes in good environmental locales foreign trips, promotions, basic increase
in salary are given. This increases their knowledge and motivates them and gives them a new
direction to do the job.

Decline Stage

When the sales of the product starts declining then added incentives may be given to generate
fresh interest in the product. Efficient product managers who may be concentrating on different
products are given added incentive to service the sales of the declining product.

Compensation Related with Demographic Characteristics

Different compensation packages are preferred by different sales persons depending upon their
demographic characteristics, i.e., age and family life cycle. A bachelor can take high risks, is
more enterprising and with high risks high awards are also promised. He can work on a straight
commission or incentive scheme only. As one gets married he prefers stability with high basic
component. When one gets older one wants more stability and preferably a direct salary.

Role of Selling in Marketing Strategy of the Company

By this we mean how much importance is being given to the sales in marketing mix of the
company and what pattern is being followed.

Competitor's Practices

A lot depends on the competition that is existing in the market. The competition may be pure,
monopolistic, oligopolistic or no competition. Accordingly, these factors are also considered
and compensation plan may be designed to suit these factors.

9.12 Use of Bonus

A bonus is an amount paid for accomplishing a specific sales task. Bonuses are paid for reaching
a sales quota, performing promotion activities, obtaining new accounts, following up leads,
setting up displays or carrying out other assigned tasks.
Bonuses are never used alone – they always appear with one of the main sales compensation
methods. If used with the straight salary, the plan resembles the combination plan. If used with
the straight commission plan, the result is a commission plan to which an element of managerial
control and direction has been added. If used with the combination salary that is calculated from
the commission.

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