Page 9 - DMGT205_SALES_MANAGEMENT

Unit 1: Introduction to Sales Management

Gross Margin – Expense = Net Profit Notes
Sales management ensures the success of this formula. Reduction in cost or expense and increase
in sales or gross margin, both depend upon how efficient the sales department is. Unless its
performance is satisfactory on grounds of efficiency and skills, the company cannot maximise
its profits.

The third objective is experiencing continuing growth. This is very important from the viewpoint
of top management because it formulates plans and strategies. As the sales management remains
directly connected with consumers and markets, it keeps a hand on the market pulse. It can
experience the pace of growth and informs the top management, so that top management can
take corrective actions if necessary.

Example: Volvo has traditionally positioned its products in the automobile market in
North America in order to be perceived as the leader in “safety”, whereas BMW has traditionally
positioned its brand to be perceived as the leader in “performance.”

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Caselet Irregular Supplies

t was the early 1930s, when a physician-turned textile trader in rural Karnataka found
his business getting interrupted for want of regular supplies of cloth from the weavers.
IWhen he enquired with the weavers about the reason for their irregularity, he was
told that there was no working capital available to them. There were no banks in the area.
The one located in the town was not interested in lending to small operators particularly
in the rural area. Local moneylenders used to charge very high rates of interest; borrowing
at those rates had ruined some weavers in the past. The weavers therefore have developed
a habit of working intermittently as and when their own money from sales came in.
The trader, therefore, had to find a way to ensure uninterrupted supply of goods in his
shop, without which his own business was not viable. He thought of bringing the goods
from Bombay, but found that the process would be very expensive and time-consuming,
as the area did not have any direct road/rail links with Bombay. Besides, the transporters
were not at all reliable.
Question

Examine the courses of action available to the trader under the above circumstances. What
are your recommendations?

Different Structures for Sales Management

The organizational structure for sales management varies depending on the firm’s size
and strategy. In field sales management, the structure consists of the unit manager, district
manager, regional manager, general manager and vice president of sales. The unit manager
is often referred to as the manager-in-training with interaction taking place at the customer
level. Key responsibilities for the unit manager include training new salespeople,
recruiting, selling to small accounts, and running district meetings. District managers, a
step up from unit managers, have five to ten years of management experience and generally
manage eight to ten salespeople. District managers typically report to the regional manager,
who is responsible for managing multiple districts in a given geographic area. The general
manager is sometimes referred to as the vice president of sales and marketing. This position

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