Selection Sales Force: Meaning, Process and Stages Selection

 Q. What do you understand by selection of sales-force ? Explain various stages involved in the selection of sales force.

Ans. Meaning of Selection of Sales Force: Selection is the process of determining whether an applicant meets the qualification for a specific job and choosing the applicant who is most suitable to the organisation. Selection is a process by which qualified personnel are chosen out of applicants who have offered their services to the organisation for seeking employment. It is a negative process of employment by which few are selected and others are rejected. A well organized selection procedure involves many steps and a decision to reject a candidate can be made at any of these steps. Selection process attempts to reject unsuitable candidates, leaving only the best to be taken in the organisation.

In the words of Dale Yoder, “Selection is the process in which candidates for employment are divided into two classes those who are to be offered employment and those who are not.”

In brief, selection is the process of rejecting unfit candidates from the large number of candidates provided by recruitment process.

Selection Process – Selection process may have following steps: 

(1) Receiving Applications: The first step in the selection process is receiving applications from prospective candidates. The application form usually contains information like name of applicant, date of birth, sex, address, educational qualifications, experience, minimum acceptable salary, marital status, references etc. (References – for character viewpoint. References should not be in blood relations.) Application form gives a preliminary idea of the candidate and helps the interviewer in formulating questions. Application form should be simple and it must have all such points for which preliminary information is needed. On the basis of such information, the management screens out the undesirable applicants.

(2) Selection Tests: After eliminating undesirable applicants, the selection tests are conducted to evaluate different types of skills and qualities of applicants.  Basic assumption of these tests is that individuals differ in their abilities and skills and these skills can be accurately measured by various tests such as mental ability test, aptitude test, achievement test, interest test, etc. At this stage, the candidates with poor performance in the tests are eliminated. These tests help to know applicant’s mental ability, word fluency, speed of perception, ability to learn new jobs, etc.

(3) Interview: The main objective of interview is to obtain additional information which is not available in application form or selection tests. The purpose of the interview is to determine the suitability of applicant for job and of the job for the applicant. For recruiting sales personnel, interview is a very important step of selection process as we come to know the conversation capabilities, speech fluency, confidence and personality of candidates. Interview must be conducted in a friendly atmosphere and candidate must be made to feel at ease. Unwanted questions should be avoided. It is better to ask questions mainly based on job-specification. The interviewer should also verify the information supplied by the interviewee in the application form. The place of the interview should be comfortable and free from interruption. After all the candidates have been interviewed, a panel of selected candidates is prepared according to their merit. In this stage also undesirable candidates are rejected. The interview can be of following types:

(a) Structured Interview: Interviewer prepares a list of questions to be asked in advance on the basis of job specification.

(b) Unstructured or Free Interview: In this method, no list of specific questions is prepared in advance. The applicant is encouraged to talk freely. Experts opine that this technique is better for probing individual’s personality in depth. 

(4) Reference Check: Generally candidates are asked to give names of two or three references in their application forms. The references are contacted to know the character, conduct, behaviour of prospective candidates. The reference should be reputed persons holding reposible position. Moreover certificates/degrees are also checked from the records of colleges/universities/professional institutes. The experience of candidates can be checked by contacting previous employers. This step also helps to drop unsuitable candidates supplying wrong information or employees of doubtful character and conduct.

(5) Medical or Physical Examination: Certain jobs require more strength, travelling and involve tough working conditions. Physical examination reveals whether or not a candidate possesses these qualities. Those who are physically unfit are rejected. Medical examination prevents the employment of those candidates who suffer from some type of contagious disease. The medical examination tests can be with regard to weight, height, heartbeat, blood pressure, mental-balance, ENT, eyesight, etc. A person with poor health remains absent more frequently than a healthy person. It is important to select salesman possessing good health because he has to travel for long periods and has to make numerous sales calls.

(6) Selection and Placement: If the candidate is found suitable in above stages, then he will be selected, first on probation basis, and if his performance remains satisfactory in that period then either his probation period is extended for future review or further training is provided or he may be dropped. 

After initially selecting a person, he will be inducted in the overall organisational structure, and he is explained regarding history, customs and traditions of the company. He is introduced to his colleagues, he is told about his authority, responsibility, superiors and subordinates. He is also shown the necessary facilities such as canteen, rest-room, etc. The selected employee should be properly inducted before starting his work.

What is Sales budget? Steps in preparing sales budget.

Q. What is Sales budget? Discuss the steps involved in preparing sales budget.

Ans. MEANING OF SALES BUDGET: Sales budget is an estimate of future sale units, sale value, selling expenses and total profits from sale operations. It specifies that how much quantity is to be sold, in what territories goods are to be sold, to what type of customers goods are to be sold, what will be estimated/projected amount of sales and selling expenses and how projected sales and projected selling expenses will affect our profits. Sales budget generally has two parts. These are (i) Revenue part, (ii) Expense part. Revenue part is related to estimating sale units and sale value for a certain future period of time. Expense part is related to estimating selling expenses to be incurred to achieve estimated sales. 

Sales budget is a basic budget which influences budgets of other departments like production budget, purchase budget, labour budget, overhead budget, cash budget, etc. Budgets of other departments can be finalised only after preparing sales budget. Production budget is decided on the basis of anticipated sales volume; purchase budget is decided on the basis of anticipated production; cash budget is decided on the basis of anticipated sales revenue and anticipated expenses. Similarly other budgets like labour budget, overhead budget, plant budget etc. are also based on sales budget. So, sales budget plays an important role in formulating plans, policies, strategies of other departments also. Sales budget is also important in exercising control over sales force as sales budget sets standards before the sales force. Performance of sales force is evaluated by comparing their actual performance with these standards, weak points are identified and necessary remdial measures are taken to overcome such weaknesses.

According to Cundiff and Still, “Sales budget consists of estimates of the probable dollar sales (in monetary terms) and unit sales and expenses of obtaining them.” From this definition, it is clear that sales budget is related to forecasting sales and estimation of selling expenses. 

Sales budget is prepared by sales department with the assistance of other departments under the guidance of top officials.

SALES BUDGET PROCEDURE/SALES BUDGETING PROCESS/STEPS IN FORMULATING SALES BUDGET: Sale budget procedure is generally of two types: (i) bottom up or build up method (ii) top down or break down method. In bottom up approach, sales budgeting process starts at lower level, then these are compiled by top officials. In case of top down method, budget process starts at top level, then it is allocated among different territories and products. Build up method is more commonly used, as salesmen and sales managers are in direct contact with customers, market conditions, regional problems etc. so they are in a better position to estimate sales. Following are the main steps in sales budgeting process:

(1) Preliminary Analysis: Preliminary analysis is done by convening the meeting of sales managers working at different levels and in different regions. In this meeting, past trends of sales are analysed and present sales problems are discussed. Various internal and external factors affecting the future sales viz. level of competition, phase of business cycle, stage of product life cycle, prevailing economic conditions, promotional measures, price policy, government policy, etc. are discussed in this meeting. This discussion helps to analyse and understand the present position of organisation in the market.

(2) Development of Sales Forecast: After analysing the present situation, the sales manager takes up the task of sales forecasting. Sales forecasting is a quantitative estimate of future sales expressed in units and in rupees for a specific time period, under given marketing programme and market environment. In sales forecasting, projections are made about the anticipated level of sales, keeping in view the whole marketing environment. The figures for forecast are expressed in terms of amounts and units. While developing sales forecasts various statistical and non-statistical methods are used for sales forecasting viz. Time Series Analysis, Regression Analysis, Experts Opinion, Sales Force Opinion, etc.

(3) Determination of Sales Activities: For achieving sales targets, various sales activities are determined which are to be performed to achieve sales target. These sales activities can be – total sales call to be made, number of customers to be contacted, number of repeat sales call; if the product could not be sold in the earlier calls, mileage to be travelled to cover various sales territories, contacting the customers to whom products have been sold so as to enquire about their complaints, difficulties with the products and solving such complaints etc. 

(4) Determination of Selling Expense Budget: After identifying various sales activities to achieve sales targets, cost of various selling tasks/activities to be performed is estimated. The total of such costs will determine selling expense budget. In selling expense budget, amount of selling expense is fixed for each territory. The objective of determine expense budget is to control wasteful selling expenses. Various financial and non financial incentives are given to sale force to control selling expenses. When selling expenses are fixed, sales force operates with more efficiency to reduce selling expenses. The company can use various methods for determining selling expense viz. percentage of sales method, competitive parity method, objective and task method, affordable method, etc. 

(5) Finalisation of Projections at Departmental Level: After fixing sales targets, selling expenses and deciding sales activities, final shape is given to all these projections at departmental level. In final projection, various selling activities are coordinated and reviewed. At this stage, sales budget and selling expense budget are finalised by sales department. These budgets are prepared on month or quarter basis. 

(6) Presentation before Top Management: After the sales budget and selling expense budgets are finalised by sales department, these are presented before top management of the organisation for review and approval. Top management examines such budget proposals in the light of available resources, marketing environment, production capacity, proposed changes in marketing mix, etc. If the top management finds the proposed budget satisfactory and in line with the resources of organisation, then it may approve the budget. Otherwise it may refer back this budget to sales department for further review. The top management may give its suggestions to the sales department in case the budget is referred back for review.

(7) Review: If proposed budget is not approved by top management then sales department will revise the proposed sales budget in the light of suggestions made by top management. Sales department will also review the selling expense budget. 

(8) Approval: Revised budget proposals are submitted before top management for final approval. Top management will analyse various items of sales budget. It may finalise the sales budget as it is or with some modifications. After the approval of top management, proposed sales budget becomes an authorised document, on the basis of which sales department is authorised to incur selling expenses.

(9) Allocation and Assignment: After the approval of sales budget, sales department finalises sales quota and selling expenses quota for each territory, product and for each sale-personnel. In this step, approved sales budget is allocated among various territories, sales force, and products. This division of sales quota and selling expense quota serves as the standards with which actual performance of sales force will be compared to evaluate their performance.

(10) Follow-up: When the budget is being implemented, it is reviewed at different time intervals to ensure that all activities are moving in line with sales budget. This follow up is made by officials of sales department on the basis of progress report of different territories compiled by Field Sales Supervisors. If it is found that sales force is facing some problems, then necessary assistance is given to the sales force. In some cases, they may be allowed extra selling expenses with the approval of top-management.

What is Sales budget? Discuss the steps involved in preparing sales budget. 

Personal Selling: Meaning, Advantages and Limitations

 Q. What is Personal Selling? Explain its advantages and limitations.

A. Meaning of Personal Selling: Personal selling is one of the elements of promotion mix of marketing along with advertising, sales promotion and publicity. In personal selling, direct contact is made between salesman and customer. It is a face to face communication. Personal selling is a process involving face to face interaction between prospective buyer and salesman, where the purpose is to persuade the buyer to purchase the product. Personal-selling makes use of direct personal communication to influence target customers. Personal selling is more flexible than other tools of promotion mix, because salesmen can adjust their message according to the response of prospective customers.

Advantages of Personal Selling: The main advantages of personal selling are as follows: 

(1) Immediate Feedback: Unlike advertising, personal selling is a two-way communication that takes place between buyer and salesman. So, salesman can get immediate feedback from the prospective buyer. 

(2) Flexible: Personal selling is flexible as sales presentation can be adjusted as per the need, reaction, availability of time and response of prospective buyer.

(3) Demonstration: Personal selling is the only component of promotion mix where physical demonstration of product is possible. Salesman demonstrate the product and explain the method of using the product. 

(4) Most suitable for Technical and Industrial Products: Technical and industrial products are marketed through personal selling as their number of customers is small, the producer are costly, requiring personal convincing, products are technical, requiring detailed explanation of technicalities of the product. So, in case of technical and industrial products, personal selling is more suitable than advertising.

(5) Minimum Wastage of Selling Efforts: In personal selling, selling efforts can be directed towards target customers, whereas in case of advertisement, message is directed to the mass audience, which may include persons who have no interest in the advertised product.

(6) Clarification of Doubts, Queries and Objections: While making sales call, the prospective customer can raise his doubts, queries and objections. The salesmen can solve his doubts, which is not possible in case of other components of communication mix. 

(7) Performs Entire Selling Job: Personal selling performs all the activities of selling process like informing about the product, persuading the buyer to buy the product, actual selling of product, whereas in advertising, actual selling cannot be done. For example, companies like Amway, Tupperware are selling their products through personal selling.

(8) More Customer Satisfaction: In personal selling, there is face-to-face communication between salesmen and customer. Customer gets his doubts cleared, he also learns about the method of using the product from salesman, hence customer feels more confident in his purchase decision. All this promotes level of customer satisfaction.

(9) Very Suitable for Marketing of Services: Services like banking, insurance can better be marketed through personal selling, because through personal persuasion, the buyer is made to realise the need of services.

(10) Creation of Demand: Pioneering salesmen are helpful in creating new uses of the product, searching new customers, thus creating demand and promoting sales of the organisation. These salesmen create desire in the mind of prospective customer and convert this desire into demand.

(11) Promotes New Products: With the fast changes in technology, various new products are entering into the market. Personal selling is very useful in marketing of such new products. Personal salesmen carry these products and convince the prospects regarding the uses of these new products. It helps the organisation to promote the new products. 

(12) Increases Knowledge of Customers: While making sales calls salesmen display the product, convey its uses, method of handling the product and clarify the doubts, queries of the prospects. Salesmen also provide knowledge about the product viz., how this product can be installed, from where it can be purchased, repaired, etc. All this increases the knowledge of customers.

(13) Collects Market Information: Salesmen are in direct contact with the prospective buyers in the actual market situation. Salesmen collect first hand information about the liking, disliking, desires, doubts, objections, queries, suggestions of customers and send all this information to the top management. This information is very useful in future decision making and sales planning.

(14) Increases Employment: Personal selling provides employment to various persons who are working as salesmen.

(15) Helpful in Facing Competition: Personal selling helps the organisation in facing competition. In case of high competition, personal selling is very useful tool of promotion mix.

(16) Helpful in Relationship Marketing: Through personal selling, organisations can develop and maintain long term relationship with customers. Personalised customer services are provided which improve relations with customers. It, in turn, helps to procure repurchase orders.

Limitations of Personal Selling: Despite its benefits, personal selling has some limitations which are as follows:

(1) Very Costly: For personal selling, business unit will have to appoint a large sales force. If number of customers is large and customers are scattered, then personal selling proves very costly as travelling expenses of sales force will be more.

(2) Turnover of Sales Force: Business unit has to spend large amount on recruitment, selection and training of sales force. But when salesmen leave the job, it is a loss to the business unit. Salesmen turnover also badly affects the image of business unit.

(3) Not Much Useful for Convenience Consumer Goods: Personal selling is not much useful for selling convenience consumer goods like toothpaste, soap, pens, etc as here profit margin is low and it cannot justify the cost of sales call.

(4) Inefficient Sales Force: If sales force is inefficient, untrained, short-tempered, inexperienced, then personal selling will not be effective.

(5) Time Consuming: It takes lot of time to contact prospective customers. If immediate results are required, personal selling is not suitable.

(6) Busyness of Customers: Now-a-days, everyone has very busy life. The target customers often avoid salesman. When a salesman comes to make sales call, people don't even allow him to enter the house on one pretext or the other.

(7) Wrong Tactics Adopted by Some Salesmen: Some salesmen cheat the buyers by stating wrong facts about the product. This affects the profession of salesmanship badly as salesmen lose trust-worthiness.

What is Personal Selling? Explain its advantages and limitations.