Definition
Sales management (or sales force administration) is the planning, direction, and control of the personal selling activities of a business unit, including recruiting, selecting, training, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the sales force.
Sales management involves three interrelated processes:
- formulation of a strategic sales program;
- implementation of the sales program; and
- evaluation and control of sales force performance.
A centralized sales organization has a sales force, reporting to corporate or group management, that sells the products of two or more divisions. This may be appropriate when the products of the divisions are distributed through the same channels.
In a decentralized sales organization, each division has its own sales force. This is appropriate when company divisions sell different products to different markets through different channels, and when the divisions are large enough to afford their own sales forces.
A decentralized adjustment system is one in which customers take their complaints directly to the selling department involved. Salespeople may make most of the adjustments, although the final approval of the department head or selling supervisor is often a requirement.
Decentralized management is the practice of delegating decision-making authority to lower levels of management and, in some cases, to non-managers authorized to make decisions, such as salespeople. Note: It is particularly important in marketing that decisions are made by managers or others close to the company’s markets.
In a full-line sales organization, each company or division salesperson sells all products to all accounts in a geographic sales territory. This is an appropriate strategy when the product line is not large, is nontechnical, and is sold through one channel of distribution. It is a lower cost strategy than specializing by product, market, or type of account.
Management by exception is a leadership style in which sales managers intervene only when their salespeople have failed to meet their performance standards (e.g., a sales quota). If sales personnel are performing as expected, the sales manager will take no action.
References
- American Marketing Association, AMA Dictionary.