Some of the frequently asked exam questions on sales promotion and management are as follows:
Q.1. “Salesman are Born. They are not made.” Discuss.
Ans. In India sales management has been gaining importance only in recent years. This apathy is due to ‘production-oriented’ marketing policy adopted by the business firms. The conditions are changing and the marketing-guided sales management has come to play.
Sales management has became an important marketing function already in the pharmaceutical industry, paints, T.V., electronic goods, home appliances, and advanced level text books in different branches of knowledge.
In order to comment on the statement “salesmen are born, they are not made,” one must realise the vital importance of recruiting salesman because only then it is relevant to say whether they are born of whether they are trained, developed, and properly led.
Philip Kotler observes, “at the heart of a successful sales-force operation is the selection of effective sales representatives. The performance levels of an average and a top sales representative are quite different. A survey of over 500 companies revealed that 27% of sales force brought in over 52% of the sales”.
The recruitment of the right type of salesmen is or greatest importance and everything in sales management depends on this. If Salesmen are born and not made, there is no need for motivation, training, development, leadership, etc.
The truth is that the salesmen are trained and developed like all other managers and executives. This does not mean that they need not possess certain interest or in-born qualities.
Qualities of Salesmen:
Salesmen must have certain qualities such as good appearance, good health and stamina, good voice and communication skills, capacity to work hard and to travel long distances, patience, empathy for customers’ problems, honesty and sincerity, chronic hunger for money, and ego drive for making success of sales.
Recruitment and selection procedures are the same as those of any other employee. It will be totally wrong to send the salesmen to the field work immediately after recruitment because they are new to the job and in the field.
A better policy would be to train than in the company’s staff college for a short period and then put than ‘under study’ i.e. to work under an experienced person for a few weeks and then to post them to the field work.
It is here that the salesmen are trained and developed properly. In recent years, ‘investment in human capital’ has assumed great importance in the sense that training and development is as profitable and productive as capital and technology.
During training, the trainer should emphasise the following among others:
(1) Sales representatives know the market and the company’s products- its features and qualities.
(2) They are made aware of the company history/background/policy, and of the competitor’s policies and methods of selling and distribution.
(3) They know the field procedures, develop the art of salesmanship and assume responsibilities.
Directing and guiding the sales force in the field must be given a great deal of attention.
(1) Setting of selling targets in terms of sales volume and sales revenue,
(2) Number of calls per day,
(3) Bringing new customers,
(4) Determining sales territories, and
(5) Attending to the customers’ complaints, etc.
While salary and incentives are important for the salesmen and sales executives, they must be supported by non-economic factors like human relations, leadership, communication and motivation. The organisational climate including the superior-subordinate relationship must be congenial.
While evaluating the performance of sales force, there must be a new approach associated with the principles outlined by McGregor and Peter Drucker. The management by objectives (MBO) rather than traditional approach must be adopted whereby the sales force are motivated to set their own targets which are approved after revise by the superior.
Development of sales force takes years. This again depends on the philosophy of management, and on the qualities of the Chief Marketing Executive his attitude and style of management. Hence, developing sales force is a long term programme and must match the marketing strategic planning and programmes.
Above all sales training must focus on the act of persuasion, because it goes a long way in convincing even the adamant customers and to get orders. Salesmanship will be bankrupt without mastering the art of persuasion. This can be learnt. It is not a born quality. However, there must be a will to learn and practice it over a period. That is why sales training occupies a special place in development programme.
In this sense salesmen are made, that is, trained and developed. In the past, it was used to be said that salesmen were born and that they had a flair for selling using very high-sounding language at the customer. But today, a salesman is a professional man.
The companies producing electronic products, T.V., Computers, etc. can survive only when they know how to recruit, train, and develop the sales force, and guide and lead them as a ‘team’ and enable them to achieve what is called ‘goal congruence’.
That is why, in recent years, increasing attention is paid to the aspects of human resources development, organisation development, sensitivity training, communication and leadership and so on.
Q.2. Explain the main elements of personal selling.
Ans. American Marketing Association defines the term ‘Personal Selling’ as “oral presentation in conversation with one or more prospective purchaser for the purpose of making sales”. It, therefore, consists of contacting and contracting prospective buyers of a product personally.
The main elements of personal selling are contained in the expression: “the exercise of salesmanship involves the use of personal communication with the prospective customers”, according to Y.K. Bhusan.
These are discussed below in brief:
1. Personal Communication:
This involves observation of the characteristics of the persons who come in direct contact or relationship and adjustments on the spot so as to make the encounter successful. Here, the communicator has to understand the other party deeply and sensitively with the object of selling an idea or a proposition.
Personal selling requires all kinds of relationships—deep personal friendship and rapport apart from the material aspects of selling relationship with the buyers and customers.
3. Creating Interest:
The customer’s attention when properly drawn, in course of communication, is half work done. The other half is ‘interest’, the other name of sustained attention. While marketing for a company’s product, creating interest in the prospective buyers is important.
A few of the steps, according to the need of the product and type of prospects, include process description, free samples, demonstrations, etc. The interest created should be such that it keeps on rolling till the prospect has made up his mind.
4. Arousing Desire:
Desire is the resultant outcome of interest created in the mind of the prospect. It is the prospect’s longing for possession or enjoyment of something. Personal selling action has to wait for this element.
This denotes a feeling of peculiar obligation on the part of the prospect for having listened to the sales talk.
6. Closing of Sale:
Having known the prospect and his interest, desire and response, personal selling moves on to the actualisation of a transaction.
Q.3. A marketing manager, in order to maximise the profits of a company, has to make two separate but inter-related decisions:
(1) How many sales representatives to be engaged in each sales territory?
(2) Which salesman to assign which territory? Discuss how should the marketing manager proceed.
Ans. (1) Optimum Number of Salesmen:
The decision on how salesman to be placed in each territory is based on cost-benefit calculations. The benefit of selling one extra unit through a salesman’s efforts equals the difference between the price and the cost of producing and despatching the goods to the buyer.
If we ignore salesman’s commission:
The cost-minded marketing manager can maximise the profit by allocating his salesmen such that the benefits of selling one more unit through a salesman equals the cost of selling one more unit through a salesman.
So, the marketing manager should-take into consideration:
(i) Territorial differences in the selling price,
(ii) Marginal cost of production and distribution,
(iii) Salesman’s wage rate, and
(iv) Productivity of salesman, when he decides on the size of the sales force in each territory.
Other things being equal, he should allocate more salesmen to the territories with a ‘high profit per unit’ (that is, large difference between the selling price and the marginal cost of production and shipping the goods) than to the territories with ‘low profit per unit’.
Because of compensating wage differentials, wage rates are higher in those areas which appear to be less attractive to salesman, and on account of this, the selling cost of a product will be higher in those areas.
Naturally, the sales manager should place fewer salesmen in those areas than in others. In the like manner, more salesmen should be allocated to area where it is easy to sell the product than to areas where it is difficult to sell the product.
The profit is maximised by selecting the appropriate number of salesman in each sales area. This can be found out by trial and error method; that is, by adjusting the number of salesmen in each territory until the change in profit from any further transfer of salesmen from ere area to another is zero.
So, the marketing manager should allocate Seven Salesmen in Area 1 and four Salesmen in Area 2.
(2) Optimum Assignment of Specific Sales Representatives:
So far, it was assumed that all salesmen are equal in skill, efficiency, and productivity. But people differ in ability and talent. Some salesmen are more effective in one part of the country than in another because of background and temperament, etc.
The problem before the marketing manager, thus, remains the same— the problem of allocation of the salesmen in different sales areas to maximise the overall profit.
The profit of the firm by assigning a salesman A to territory 1 equals to:
where P1 is the price of the product in area 1, MC1 is the marginal cost of production, and distribution of the product-to area 1, QA1 is the number of units sold by salesman A in area 1 and WA1 is the wage paid to Salesman A in area 1. Thus, total profit in area 1 equals the ‘profit’ per unit (p1 – MC1) times the number of units sold, less by wage that is paid.
The problem of the marketing manager is to assign sales representatives to different areas so as to maximise the sum of profit from all areas. This a special kind of linear programming problem known as the assignment problem.
The nature of the problem is explained below.
Let us assume the territorial profits associated with each salesman as given in the table below:
Here, the consideration is to assign four salesmen to four different territories:
i. It is apparent from the table that Salesman A brings Rs. 9000 in profit if he is assigned to area 1, Rs. 5700 if he is assigned to area 2 and so on. If there were no other salesmen the manager would definitely assign Salesman A to area 1 and thus maximise profit.
In the language of economics, we can say that Salesman A has an absolute advantage in area 1. Likewise, Salesman B has an absolute advantage in area 2, Salesman C in area 2 and Salesman D in area 4. That means, area 3 remains unexplored. So, this is not a feasible proposition.
ii. Transferring Salesman D from area 4 to area 3 results in Rs. 2400 (Rs. 7500 – Rs. 5100) loss of profit. Transferring Salesman B or Salesman C from area 2 to area 3 results in a loss of Rs. 2000 (Rs. 9500 – Rs. 7500) or Rs. 3500 (Rs. 7500 – Rs. 4000) respectively.
On the contrary, transferring Salesman A from area 1 to area 3 results in a loss of Rs. 800 (Rs. 9000 – Rs. 8200) only. Likewise, only Rs. 200 is lost when Salesman C is transferred from area 2 to area 1.
iii. It is seen that assignment A3, B2, C1, and D4 produces the largest total profit (Rs. 32, 500) among all 4 = 24 possible assignments of four salesmen in four territories.
iv. To conclude, there is a tendency to assign productive salesman to lucrative territories and also to the areas where the salesmen have job satisfaction. The marketing manager should identify these areas, assign salesmen there, pay lover salaries under this allocation and still enjoy higher profits.
Q.4. Define the term publicity?
Ans. According to the American Marketing Association, “Publicity is the non-personal stimulation of demand for a product, service or business unit by planning commercially significant news about it in a published medium or obtaining favourable presentation of it upon radio, television or stage, that is not paid for by the sponsor.”
Publicity can be done in a variety of ways such as press conferences, invitation cards, telephone calls, participation in trade and industry fairs, and so on.
Q.5. What steps you should follow when you are appointed as a sales manager of a manufacturing company?
Ans. A market for sales of product is usually organised by adopting various techniques like marketing research, marketing planning and programmes, pricing and branding of products, channels of distribution, personal selling, advertising, promotional activities, packaging and labelling, display and a host of others so that the goods are ultimately sold.
The actual sales are full of various legal and physical complications and policy decisions and their execution become an important task of marketing department and of a Sales Manager of a manufacturing firm.
The legal aspect consists of the application of several Acts like the Contract Act, the Sale of Goods Act, the Negotiable Instruments Acts, etc. The Sales Manager has nothing to decide on his own. But with regard to the physical aspect a lot of decision-making, organising and controlling functions have to be undertaken by him.
Keeping in view the various aspects of sales management, a Sales Manager should follow the undernoted steps:
First of all some basic decisions have to be taken as to the objectives and policy of sales.
The objectives are:
(a) To have larger sales and
(b) To have larger turnover.
Sales will increase as more and more production is done by investing more and more working capital. But this is not really desirable. A small but optimum amount of working capital should be rotated at a fast rate so that the same working capital is again and again put into production. This is possible if realisation of price is quick. Various incentives like high rate of trade discount and cash discount are offered for the purpose.
A policy has to be determined for the methods of sales to be adapted. There are various methods:
(a) Hire-Purchase and Instalment Sale:
In both the cases, the buyer is allowed to pay the price in parts though he gets the full delivery of the goods at a time. In case of hire- purchase the title to goods passes to the buyer only when he has paid all the instalments whereas in case of instalment sale the title passes as soon as the first instalment is paid.
(b) Self-Servicing and Auto-Vending:
For retail sales, self-servicing is practised in big retail shops like a department stares where the buyer himself picks up the goods eliminating the need of salesmen.
Under auto-vending, goods come out from an automatic machine as soon as coins of exact amount are inserted into the machine. This also eliminates the need of salesmen,
(c) Sale by sending travelling salesmen approaching the buyers door to door. This method is just opposite to self-servicing or auto-vending.
(d) Some manufacturers prefer to sell only by offering quotations against tenders invited by the potential buyers. Such sales are generally in bulk quantities. Bills for supplies to reputable concerns can be easily discounted from banks.
The Sales Manager should organise his ‘sales force’. He should recruit sales staff consisting of a manager, executives, representatives, salesman at the counter, etc. Selection has to be made with great care. Now-a-days various courses are run by specialised institutions to train sales representatives. Such trained people may be recruited. Recruitment largely depends on the nature of salesmanship required.
There are two types of salesmen:
(i) Creative Type:
Such salesmen as sales representatives have to create customers by moving out in the market,
(ii) Routine Type:
Such salesmen are at the counter and are stationary and have to deal with the customers who have entered the shops.
Older this step, the sales manager should determine the size of the sales force in consideration of the size of the concern itself and also on the area of the market to be covered. He should recruit specialised sales force to handle import-export business. For firms having multiple shops, the sales manager should appoint shop managers in addition to the sales staff.
Duties have to be assigned to the sales force individually, authority has to be delegated an than and they have to be motivated in various ways. Commission on total sales in addition to normal remuneration is common motivator. Marketers vis-a-vis Sales Development officers or group leaders for the sales representations may be appointed. Preparation of tour programmes is another feature.
Controlling in sales management is a difficult task with many aspects.
Control is necessary on the following pertinent factors:
(a) The Credit Sales:
A regular system of accounting has to be maintained with the staff for realising the dues and sending reminders to expedite payments. Bank references or forms of guarantee may have to be demanded from the buyers. The whole system becomes much complicated and very laborious in case of hire-purchase or instalment sale.
(b) The Stock:
There are chances of misuse or misappropriation of the stock. Constant watch has to be maintained on it. It has to be seen that there is regular inflow of goods and a minimum saleable stock is maintained. Control on stock is extremely important for multiple shops.
(c) The Sales Force:
The sales force itself needs control. The manager should regularly watch their performances.
The sales manager should seriously ensure that the wholesalers or the selling agents prepare various kinds of statements and submit them at regular intervals. Proper maintenance of shops is an additional burden for the owner/wholesalers of the multiple shops.
The sales manager should see to their problems. He should institute specialised control system on receipts or payments relating to impart and export trade. He should maintain a constant liaison with the works to ascertain the correct supply position and monitor the dispatching arrangements.
Q.6. “Advertising is a sheer waste. It misleads customers.” Discuss and comment.
Ans. Advertising is an efficient way to reach numerous customers geographically dispersed in numerous markets at a low cost per exposure.
Certain forms of advertising such as T.V. require a lot of money, but certain other forms such as newspapers and periodicals are not so costly. Because of so many forms and uses of advertising, it is difficult to make ‘all embracing generalisations’ about its distinctive qualities as promotional mix.
However, we can emphasise the following qualities in favour of advertising:
Advertising permits pervasive influence as it can be repeated. It permits comparison of several advertising massages.
(2) Amplified Expressiveness:
It permits opportunities for demonstration through colours, sound, and print.
There is no pressure to buy as in the case of personal selling.
(4) It is Highly Public Communication:
Consumers can judge its utility from their experience.
The statement that ‘advertising is a sheer waste’ is highly erroneous and baseless. It is wrong to say that it misleads customers in all cases, though there are some cases where it misleads by exaggerating the benefits of the product.
In order to reject this criticism, one must compare advertising with personal selling. The latter is also a communication mix. It is more expensive and it needs cultivation of customers and involves personal confrontation. Yet, it may not get results. Personal calls on the customers may be a waste. Also it may involve misleading claims about the product.
It is stated by many that advertising creates awareness and comprehension about the product, but does little to bring about conviction and to get orders. Personal selling achieves these last two factors as it involves face-to-face communication, demonstration of the product, answering objections and persuading the consumer to buy the product.
The studies conducted to measure precisely the effects of advertising do not conclude that it is a waste. Advertising can and will produce long- term results as well as immediate results. It is an organised industry.
The objectives achieved by it can be summed up in the diagram below:
Advertising has a social benefit in that it increases market share and helps customers to adopt ‘modern living’. It helps them improve ways of living, eating, dressing, and attitude towards life. It has a great deal of educational value because it informs people about new products and services.
This is an era of ‘product positioning’. It requires a great deal of advertising so that the product occupies an important place in the target markets.
Some leading writers point out that the effect of advertising on sales is difficult to measure since sales are influenced by many uncontrollable factors like price, distribution channels, competitor’ s policy, technological change, and income of the consumers, etc.
The research by Du Pont Company concluded that advertising expenditure increased sales at a diminishing rate. This does not mean that if the product is good, it will sell even if it is not advertised.
It has been observed by one noted scholar that advertising helps in reducing cost of goods by facilitating mass consumption which in turn facilitates mass production. It is further stated that though advertising increases cost of marketing, it is offset by increase in sales and output of goods.
The real need is that the advertising must be properly planned, must be based on correct media, correct theme, and correct timing, etc. Thus, there is no substance in saying that advertising, as an important element of promotional mix, is a waste.
It is, therefore, relevant to conclude that advertising moves the company forward, turns the wheels of industry, creates millions of jobs, improves the standard of living and contributes vitally to ‘modern living’. It is useful for rural marketing and for industrial and consumer goods.
Q.7. Is advertising different from personal selling ?
Ans. Advertising and personal selling are, in fact, inseparable. The only distinction that could be drawn is that the former is ‘salesmanship in print’ and the latter is an ‘oral advertisement’. Salesmanship or personal selling is direct in its approach, and it is more personal. Advertising, on the other hand, is intended for the masses and it is impersonal. One is not a substitute for the other; the two are in fact complementary. Both are to be simultaneously used. Personal selling calls for a more careful and planned approach than advertising.
Q.8. What is ‘public relations’ ? How does it differ from ‘advertising’ ?
Ans. Public relations (PR) function encompasses fundamentally three areas of performance :
(i) the level of satisfaction with the products and services of the organisation and effectiveness with which it meets the real needs of the potential consumers.
(ii) the policies set by the management aiming at the above; and
(iii) the traditional communicative processes concerning the above two areas including invitation of change when change is desirable.
PR is concerned with helping to ensure that the organisation’s performance and behaviour is good, both as to what it does and what it says, and that what the organisation does is in the public interest. PR evaluates public attitudes, identifies the policies and procedures of an organisation with the public interest and executes a programme of action and communication to earn public understanding and acceptance.
P.R. differs from advertising with respect to:
(i) Advertising persuades people to purchase but P.R. puts only facts before the public and does not arouse any curiosity among the buyers;
(ii) Advertising is a controlled means of communication and involves non- personal presentation of ideas, goods and services, whereas P.R. is a total communication to every public without any influence; and
(iii) Advertising is a part of P.R.
Q.9. What is a teaser advertisement?
Ans. A ‘teaser advertisement’ refers to a series of advertisements given by the advertiser without any sales message over a number of days in the same place in the same newspaper with the object of creating an interest or curiosity in the minds of the readers to watch the last advertisement that contains the advertising message.
Q.10. Write a brief note on ‘advertising agency’.
Ans. There are specialised firms who carry out advertising on behalf of the producers. They have own staff and studio to select proper media and to prepare proper copies. They render lot of services to the advertisers as well as to the society. Advertising has become a profession.