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1. WHAT
IS THE CONNECTION BETWEEN MARKETING MANAGEMENT
AND SALES MANAGEMENT
Sales
management represents one of the most critical
functions in many organizations.
Sales
Management is, in essence, a pro-active extension
of Marketing Management and the connection
between both functions is
illustrated below.
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THE
COMMUNICATION MIX
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Implementation of Marketing Mix Strategies
related to products, pricing, promotion, and
distribution represents a central part of a
sound marketing plan. This plan requires further
development of Promotional Strategy and
control of Communication Mix. The
communication mix consists of five components,
as illustrated below.
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THE
COMMUNICATION MIX COMPONENTS
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Advertising
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Personal
Selling
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Packaging
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Public
Relations
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Sales
Promotions
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WHERE
DOES THE SALES PROCESS BEGIN?
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Personal Selling and Sales Promotion,
the two components of the communication mix,
create an underlying need for establishing a
sales organization to meet the company's marketing
objectives. This, in fact, is the beginning
of the Sales Management Process, as illustrated
below.
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THE
MARKETING MANAGEMENT PROCESS
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Implementation
Of The Marketing Mix Strategies
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Product
Strategies
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Pricing
Strategies
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Promotional
Strategies
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Distribution
Strategies
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Development
And Control Of Communication Mix
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Advertising
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Personal
Selling
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Packaging
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Public
Relations
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Sales
Promotions
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THE
SALES MANAGEMENT PROCESS
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2.
WHAT ARE THE STEPS IN THE SALES MANAGEMENT PROCESS?
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THE
SALES MANAGEMENT PROCESS
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The Sales Management Process, established
as the direct result of personal selling and
sales promotion requirements imposed by the
marketing management process, entails a number
of steps, as outlined below.
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STEPS
IN THE SALES MANAGEMENT PROCESS
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Step 1:
Preparation Of Sales Plans And Budgets.
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Step 2:
Building An Efficient Sales Organization.
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Step 3:
Sales Force Recruitment, Selection, And Training.
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Step 4:
Sales Force Compensation And Motivation.
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Step 5:
Selection And Design Of Sales Territories.
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Step 6:
Sales Force Allocation And Sales Quotas.
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Step 7:
Sales Force Performance Evaluation And Control.
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3.
STEP 1: PREPARATION OF SALES PLANS AND BUDGETS
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PREPARATION OF SALES PLANS AND BUDGETS
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The sales management process starts
with the preparation of detailed Sales Plans
and Sales Budgets for the forthcoming
fiscal period. These must be carefully
prepared by the sales manager in accordance
with the company's overall marketing objectives,
strategies, and plans.
Accurate sales plans and budgets provide the
company with a key to effective guidance of
the sales force and control of their performance.
Preparation of sales plans and sales budgets
entails a certain number of activities, as outlined
below. Additional details related
to Sales Planning And
Budgeting are provided later in
Tutorial 5.
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SALES
PLANNING AND BUDGETING ACTIVITIES
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No.
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Details
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1
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Analysis of
relevant markets.
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2
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Measurement
of sales potential
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3
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Sales forecasting.
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4
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Development
of sales strategies.
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5
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Formulation
of sales objectives.
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6
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Evaluation
of sales force requirements.
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7
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Evaluation
of sales force requirements.
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8
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Completion
of the sales budget.
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4.
STEP 2: BUILDING AN EFFICIENT SALES ORGANIZATION
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BUILDING AN EFFICIENT SALES ORGANIZATION
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Once the sales plans and budgets are
approved, the sales manager must begin or continue
with the process of building an efficient Sales
Organization.
The prime purpose of a sales organization is
to attain the company's marketing objectives
by selling its products or services, and thus
satisfy customer needs. The process of
building the sales organization entails a number
of activities, as outlined below.
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ACTIVITIES
RELATED TO BUILDING A SALES ORGANIZATION
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No.
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Details
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1
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Determining
the tasks that must be performed to implement
the sales plan.
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2
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Classification
of tasks and grouping them into related sets
of activities on the basis of product, customer,
or sales territory requirements.
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3
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Assigning
a set of activities to individual positions
within the sales organization.
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4
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Establishing
supervision and reporting relationships between
positions within the sales organization.
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5
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Developing
a specialized sales organizational structure
in accordance with the overall sales plans
and objectives.
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IMPORTANCE
OF UNDERSTANDING THE BUYING BEHAVIOR
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Since the sales organization is geared to meet
customer requirements, it is essential to
understand their Buying Behavior. This,
in turn, helps the sales manager to utilize
the sales force in the most effective manner.
Additional details related to the development
of the Sales Organization
are provided later in Tutorial 5.
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5.
STEP 3: SALES FORCE RECRUITMENT, SELECTION, AND TRAINING
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SALES FORCE RECRUITMENT, SELECTION, AND TRAINING
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Sales Force Recruitment And Selection
represents the next phase in the sales management
process. This process entails a number
of activities, as outlined below.
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THE
SALES FORCE RECRUITMENT
AND SELECTION PROCESS ACTIVITIES
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No.
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Details
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1
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Analysis of
sales jobs in accordance with the particular
market requirement
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2
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Determining
the qualifications and preparing job descriptions
and for each sales position.
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3
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Recruiting
a pool of potentially suitable candidates.
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4
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Selecting
suitable sales people.
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5
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Providing
orientation to every new sales person.
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THE
SALES FORCE TRAINING PROCESS
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Subsequent to their selection, all
new employees must undergo a thorough training
process. One of the prime objectives of
Sales Force Training is to ensure effective
implementation of personal selling techniques
and sound understanding of industrial buying
behavior.
The sales force
training process within a company may be accomplished
be a variety of means, such as specialized in-house
training programs, sales lectures, videotapes,
one-on-one instructions, role playing, case
studies, and self-study courses.
Additional details
related to the Sales
Force Recruitment, Selection, And Training
are provided later in Tutorial 5.
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6.
STEP 4: SALES FORCE COMPENSATION AND MOTIVATION
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SALES FORCE COMPENSATION AND MOTIVATION
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Sales Force Compensation And Motivation
represents another important element in the
sales management process.
Compensation is one of the most important
factors that motivate an employee. It is important,
therefore, to design a suitable Compensation
Plan that may consist of several elements,
as illustrated below.
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TYPES
OF SALES COMPENSATION PLANS
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Straight
Salary
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Sales
Commission
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Salary
Plus
Commission
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Salary
Plus
Bonus
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Salary
Plus Bonus
Plus
Commission
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THE
PRIME PURPOSE OF A SALES COMPENSATION PLAN
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The prime purpose of a sales compensation plan
is to ensure maximum motivation of the sales
force to satisfy the customers' needs in
the most efficient manner. Additional details
related to the Sales
Force Compensation are provided later
in Tutorial 5.
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7.
STEP 5: SELECTION AND DESIGN OF SALES TERRITORIES
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SELECTION AND DESIGN OF SALES TERRITORIES
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The next step in the sales management
process requires evaluation of target markets
selected by the company and Design Of Sales
Territories. This process entails evaluation
of several sales territory planning factors,
as illustrated next.
The selection
and design of sales territories offers a number
of options to the sales manager. These
options are based on four different types of
sales territories, as outlined below.
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SALES
TERRITORY PLANNING FACTORS
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Type
Of
Account
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Marketing
Objectives
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Workload
Allocation
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Time
Allocation
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Sales
Strategies
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TYPES
OF SALES TERRITORIES
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Geographically-
Based
Sales
Territory
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Product-
Based
Sales
Territory
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Customer-
Based
Sales
Territory
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Combined
Sales
Territory
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IMPORTANCE
OF THE SALES TERRITORIES DESIGN
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The design of sales territories is particularly
significant because it will enable the sales
manager to develop an effective and economical
method of servicing all target markets
with the existing sales force. Additional
details related to the Design
Of Sales Territories are provided later
in Tutorial 5.
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8.
STEP 6: SALES FORCE ALLOCATION AND SALES QUOTAS
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SALES FORCE ALLOCATION
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All sales territories should be sub-divided
in the most suitable manner and allocated to
individual sales people. The allocation
of sales people to various sales territories
is based upon specific Sales Force Allocation
factors, as outlined below.
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THE
SALES FORCE ALLOCATION FACTORS
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No.
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Details
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1
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Number of
sales people in the company at present.
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2
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Past performance
of each sales person.
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3
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Company's
specific needs and opportunities in the marketplace.
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4
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Market potential
in a particular sales territory.
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5
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Experience
and preferences of the sales people.
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SALES
QUOTAS
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Subsequent to the sales force allocation, the
sales manager must prepare Sales Quotas,
or Sales Targets, in accordance with
the company's sales budget and allocate them
to each member of the sales team.
Sales people, in turn, will be able to plan
their individual activities in pursuing the
company's commercial interests. Additional details
related to the Sales
Force Allocation and Sales
Quotas preparation are provided later
in Tutorial 5.
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9.
STEP 7: SALES FORCE PERFORMANCE EVALUATION AND CONTROL
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SALES FORCE PERFORMANCE EVALUATION
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Sales Force Performance Evaluation
represents another important element in the
sales management process. The sales manager
is required to analyze and evaluate performance
of the sales force, the level of sales achieved
by various product groups in the marketplace,
and the volume of sales generated by various
customers.
Sales force performance
evaluation entails a number of
tasks, as outlined below.
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THE
SALES FORCE PERFORMANCE EVALUATION TASKS
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No.
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Details
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1
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Preparing
monthly sales reports.
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2
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Analyzing
sales performance results.
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3
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Evaluating
performance of individual sales people.
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4
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Comparing
actual results with the planned objectives
and determining variances.
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5
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Taking corrective
action and adjusting the sales planning process.
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SALES
FORCE PERFORMANCE CONTROL
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Finally, the Sales Force Performance
Control will enable the sales manager to
maintain constant control over sales force performance
to ensure that customers receive all required
products and services on time and in an acceptable
condition.
Additional details related to the Sales
Force Performance Evaluation And Control
are provided later in Tutorial 5.
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10.
WHY IS SALES MANAGEMENT SO IMPORTANT?
The importance of the
Sales Management Process cannot be underestimated.
After all, without sales there is nothing, as illustrated
below.
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CONSEQUENCES
OF NOT HAVING SALES
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No.
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Details
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1
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No customers.
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2
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No revenues.
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3
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No profits.
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4
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No continuity
of the business cycle.
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5
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No money to
pay employees.
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6
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No employees.
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7
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No business.
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8
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No company.
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9 |
No income
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10 |
No money
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11 |
Unhappy wife
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IMPORTANCE
OF A CONTINUOUS SALES MANAGEMENT PROCESS
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It is essential to ensure that the
Sales Management Process is established,
planned, and controlled in a professional manner
to secure the success and continuity of the
company.
All information
pertaining to company sales performance must
be collated on a continuous basis and used as
feedback for future sales plans and budgets.
This feedback helps management to adjust the
planning and budgeting process and ensure
maximum flexibility of operational activities.
In addition, this information is instrumental
in reviewing and modifying the overall marketing
strategy, thus contributing to improved
future organizational performance.
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