SALES MANAGEMENT AND MARKETING

 ORGANISATION OF SALES DEPARTMENT

v  The effectiveness of the sales organisation is a most important factor in the progress of a firm, because the final figures of profit ultimately depend on the efficiency of this department.

v  The whole operation of an industrial concern depends upon ability of the sales department to obtain orders for the sale of its products, and dispose of them immediately as they are manufactured, so that there should be least problem of stocking or blocking and it will also affect the cost of product.

v  Depending upon the size of factory, the organisation of the sales department is made.

v  For large size factory, this works as a separate department but for medium and small size factory, it works with the cost of department.

v  The functions of sales department for a large scale factory are shown below: 

ORGANISATION OF MARKETING

v  The actual organisation of the sales department is largely determined by function, area, product group and customer category and end-user category.

(1) Functional Organisation:- The functional organisation is usual for the small or medium sized company with a limited range of related products.

v  The functional organisation has various functional departments or specialists reporting to a sales or a marketing director.

v  It has the advantage of administrative simplicity, but it suffers from certain disadvantages such as

(a)    Inadequate detailed planning for specific products and markets, since nobody is assigned full responsibility for any product or market.

(b)   Products that are not favourites with various functional specialists tend to get neglected.

(2)  Area based Organisation:- 

v  The area based organisation is one of the more common one in use for concerns with a relatively limited range of products requiring selling and distribution to be on a more or less nationwide scale through many outlets.

(3) Product Group Organisation:- 

This type of sales organisation is employed when there is a wide range of relatively unrelated product groups which require different selling methods and the company sales forces require their own particular market and technical knowledge.

(4) End use and customer class sales organisation:-

v  If an enterprise is selling a substantial range of products to dissimilar types of customers or for different uses, the selling operations are split up by type of customer or end use.

v  Here separate sales forces are necessary. However, marketing services may either be kept centralised or again split up as per the particular division of the selling operations.

v  Fig. (1) shows the end use sales organisation and Fig. (2) the customers class sales organisation.

 

MARKETING FUNCTIONS

ð  Marketing is the basic function of a business unit. Its organisation is therefore highly developed and in most cases highly sophisticated.

ð  The sales department is usually under the charge of a sales manager who is directly under the general manager under him is the assistant sales manager who is in charge of either a product or an area or both assistant sales managers have been them the salesmen at the spot.

ð  The sales manager is the top marketing officer. The duties of sales manager as under:-

(a)    He must try to keep maximum sales efficiency at maximum disposal of products.

(b)   He must always be on the lookout for new and profitable markets.

(c)    He must always try to improve sales methods.

(d)   Where the sales are affected through retailers, he should receive the suggestions and provide them every possible help in the extension of sales.

(e)    He must exercise his full efforts to ensure that the goods reach the customers by the most economical route.

(f)    With the view to obtain collective efficiency from his staff, he must inspire a spirit of friendliness amongst the members.

(g)   He must keep in touch with the essential requirements in order that necessary supplies may be made available at the time, they are wanted.

(h)  He must keep constant watch towards comparative study of the competitor products, their marketing efforts, packing methods and modes of transport. These will provide most valuable information as to how to meet competition.

(i)     He must inspire complete co-ordination between the advertising and sales policies.

(j)    He must always encourage and welcome suggestion from sales force as also the dealers, in regards to the quality, appearance, price or methods of packing and despatch of products. 

 

FUNCTIONS OF SALES DEPARTMENT

v  The various functions of sales department are:-

(1)   Market Research:- It means study of market, which includes forecasting, intelligence and statistics. It is an important factor for the sale of products.

ð  Failure to do this accurately may lead to the production of more goods that the market can absorb.

ð  This may mean financial losses to the firm. It may also lead to under production, the results of which are equally unpleasant.

(2)   Advertising:- It is the publication of information regarding products put up for sales and is a method to bring the producer into touch with customers.

ð  This informs the customers about the product and the place from where they can get it

ð  It promotes trade and creates demand and hence it is the pivot of modern trade commerce and business.

(3)   Sales:- All the activities of the sales department are for selling to earn maximum profit. For this purpose continuous search is made for profitable markets.

ð  Various agencies are opened throughout the country and if possible in foreign markets

(4)   Sales Correspondence:- Any incoming letter must be replied in a short time. The letter should be tactful, simple in language, helpful and every customer must feel that his enquiries are being considered.

ð  Quotation for the supply of products should be sent to large number of customers and try to capture large markets.

ð  If the promises cannot be kept with regards to delivery date or other matters the customers should be informed immediately and whenever practicable reasons for the delay should be given.

(5)   Service:- Industry is rapidly adopting the principle that service is an essential part of the sales itself. Manufacturers often find it essential to see that their products are properly installed.

ð  This is not only a service to the customers but also a protection against complaints and general dissatisfaction of the customers.

ð  The manufacturers, therefore, maintain a staff of skilled engineers and mechanics, which carry out tests at the customer works, give technical help and advice and see that everything is functioning properly.

(6)   Packing:- Packing to be used for products depends upon the type of product to be packed. Following are the few types of packing of industrial products:

·         Paper wrapper

·         Tin container

·         Cloth packing

·         Card board packets

·         Plywood boxes

·         Plastic packing

·         Wooden packing

ð  With the help of good packing, the products can reach to the customer in same form and quality as they were before despatch.

ð  Good packing also helps in advertising and attracts more number of customers.

(7)   Warehouse:-These are the godowns, for storing finished products after they are packed in s systematic manner.

ð  These are built in such a way that materials can be kept in them for a period till they sold. For easy transportation, these generally situated near the factory main gate.

 

IMPORTANCE, ADVANTAGES AND ECONOMIC IMPLICATION OF ADVERTISING

ð  The most appealing definition of advertising is –“advertising bring to the greater number of people, actual knowledge concerning useful things, thus it essentially a form of education of the people about the product.”

Function of Advertising

ð  Following are the main important functions of advertising:

(1)   Advertising is the powerful media of demand creation by reaching to the customers and telling them about good qualities of the product.

(2)   To prepare ground for a new product by way of introducing its product to the public.

(3)   It enhances the goodwill of the company among customers.

(4)   Advertising helps the product to stand against its competitor products.

Advantages of Advertising

(1)   To Manufacturers

ð  It increases sales by way of increasing demand.

ð  Helps salesmen by preparing ground for them.

ð  Creates good will by telling customers about the quality and service.

ð  Lower costs can be achieved by way of increasing the turnover due to advertising.

(2)   To Customers

ð  Facility in purchasing a product is felt by the consumer because he can decide that what he should purchase.

ð  Better quality is available to the customers.

ð  Because of the direct contact between manufacturer and the customer, middlemen cannot charge more profit.

(3)   To Society

ð  Advertisements help the newspapers in keeping their rates low, so that the newspapers are well within the reach of common men.

ð  These, by way of increasing the production, raise standards of living.

ð  Provides employment, encourage artists etc.

ð  To remain in the market and to advertise specialities of the product, manufacturer has to pay attention on research so as to get new improved and better products.

Economic Implications of advertising

ð  Advertising has following main economic implication:

(a)    Informing Consumers:- An advertisement informs the consumer about the market condition, namely, the goods available in the market, their characteristics, the model best studied to the needs of the consumer and so on.

(b)   Broadening the Market:- Advertising broadens the market by familiarising the consumer with new products, increasing the number of dealers. All these tend to increase the production and hence lower the cost due to mass production. Advertising reduces the scope for earning local monopoly profits.

(c)  Lowering Selling costs:- Its main advantage is to lower the cost per contact. e.g. one newspaper advertisement places the product before the eyes of many more prospective buyers that the equivalent expenditure on salesmen. Thus efforts for retail sales are reduced, which reduces per unit expenditure on sales.

(d) Encouraging Competition:- With the help of advertising new firms can introduce their products, more rapidly than would be possible without advertising.

(e) Criticism:- Advertisement has been criticized for (1) misinforming the consumers (2) concentrating the market in the hands of few, who can invest heavily on the advertisements, this creates problems in establishing new business with limited resources, even if the product is good.

 

 ADVERTISING MEDIA

ð  Large number of advertising media are available to the advertiser, but following are the basic and commonly used advertising media:

(a)    Newspapers:- With this media, message can be conveyed to people through large circulation, economically, at a repetitive frequency.

(b)   Magazines:- Advertisements can be given through specialised periodical magazines. Articles giving detailed speciality about the product can be given in the trade and technical journals. The articles related to fashion and house use can be advertised through and fashion magazines which are read by ladies.

(c)    Radio.

(d)   Television.

(e)    Catalogue and descriptive leaflets and samples.

(f)    Exhibits and displays.

(g)   Slides in cinemas.

(h)   Goodwill gifts like pencils, calenders, shopping bags, pen-stands etc. bearing names of the company and its products.

(i)     Prize contest.

(j)     Discounts.

(k)   Direct mail:- with this method message is conveyed directly to the persons, for whom it is meant, rather than spending lakhs of rupees in advertisements through press. This message is conveyed secretly from competitors.

 

SALES PROMOTION

ð  All the activities that go into the development of sales or these that are intended to raise the demand level for a product very quickly can be grouped under the title sales promotion.

ð  It includes those marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and exhibitions, demonstration and various non-recurrent selling efforts not in the ordinary routine.

ð  It focuses the attention of the customers at the actual point of sales in the shops with such effectiveness that both the advertiser and the dealer are benefited. The main purpose is to increase sales.

ð  It plays a critical role in introductory and maturity stages of the product life cycle and also appears to be especially effective during periods of rapid inflation.

ð  Sales promotion, intended to educate the consumers better and to bring about an increase in sales is used more extensively in highly competitive business.

ð  The whole idea behind sales promotion is to bring the name of product and that of the manufacturer constantly before wholesalers, retailers and consumers in order to stimulate their interest in the product.

ð  Function of sales promotion department:-

(1)   Product package detailing

(2)   Service to salesmen

(3)   Service to dealers

(4)   Making displays

(5)   Helping the dealers in demonstrations, door to door conversing etc.

      (6) Publicity