Pricing decision and Sales people

Absolutely not. Most of the companies have sales force in the front, which are not fit to be in sales at all. They understand only one thing that they have close a deal at any cost and in this process, they make lot of false commitment or hide informations which could have changed the consumer's opinion. With pricing in their hand, they will make company's balance sheet look completely red.    

Pricing plays an important role in an organization financial and is a tool derived with various parameters kept in mind. In line with competition, quality of the product, market adaptability and variuous factors which are taken into consideration be a team of professionals and then fixed as a basic price. It also plays an important role for the uniformity reach of the customer support like wise in developed countires and under development companies.

Sales team is highly competent to make their product move let what ever may be the price so the decision of pricing is purely on hands of management & team which also included the feedback of Sales team reflecting their role in positioning the products in the most competitive platform.

Industrial product, Service product, Hospitality and many more countless products and servces has a core team to decide the price which make the success story of any products. So it has tobe a part of management core team or else if the company is so small also then also the pricing is from the Owner's perception or stake holders perception as he is the one who has to survive the company and make every one live up to the expectation in line with consumer satisfaction and many more variants.

Sales force can be given a bouquet of value added services apart from the basic price list to enhance the productivity and reach to the consumer based on the segment of the customers which invariably help in company performance as well as the complete group servicing for the organization.

Everyone in the organisation needs support to deliver on his/her target. For sales team, they can be given some empowerment to decide on discount within a limit so that they can finalise the deals quicker. However if this limit is not sufficient for them to deliver, they can ask for marketing support in terms of promotions etc... But they can not be given complete authority to decide the price, which in some cases may have a negative ROI...

A company spends lot of money in production. A price of a product contains all cost, labour cost, profit, time cost, tax, everything. A salesman is unaware of that. Still he is been given a margin of negotiation. Not beyond that. So, I believe its better that cost decision should be in the hands of company people only.

A good sales guy can sell even a reynolds pen for 500rs. It just depends on how enthusiastic he is about his product. Besides, price is a small part of the information needed to make an intelligent buying decision. Enthusiasm sells. Enthusiasm is contagious. Enthusiastic salespeople radiate confidence and trust!

Pricing is an important criteria for firms revenue. It should be done taking into account a lot of factors like consumer budget line, consumer willingness to pay and the demand for the product. In a oligopoly market its difficult acoount for what i have mentioned. The reason behind is market is flooded with competitors and sales people face cut-throat competetion and therefore the sales people resort to excuses that price was not flexible to the competitors.

But to change price is the easiest one, becoz it takes no time to change. But changing or rather reducing price affects the profitability of a firm, which leaves no room for further price increase.

Its very simple. Sales people's realm of activities are making more sales, monitor distribution, give market feedback and collecting money on time. Therefore pricing decision should be the prerogative of marketing department considering all factors and goal of the company. Period.

Arun Chattopadhyay

Head - Upcountry Marketing, Jindal Worldwide Ltd., Ahmedabad

http://indian-textile-industry-blog.com

The issue about who should control sales should be clear to everyone. The department of Sales is there to  sell. What to sell, how to sell, for how much to sell etc. shall be their decisons.  In the rule book of every good company, it is the consolidate effort of different departments that culminate in Sales. There are clear procedures, starting from Market study, Technology readiness, Competitor positions, Mode and level of pricing, Business strategy etc.,  to be taken into consideration for Sales decisions. In fact in many companies, the Sales persons only carry / handover to the customer, the fine prints prepared by the Marketing department with the help of the technical and other wings.  

Problem seen of late is that Sales persons, often do not follow the rule books, tend to put the cart before the horse and act independently with their half knowledge of the product,  in overselling it, without following the right procedures in their urge to maximize sales target and get credits for that.  

Due to this tendency one may notice that transparency is missing in many of the Supplier - buyer deals. The onus of execution of contract then pushed to others Most of the sales persons escape by then, as the trend is to make some quick sales volume by hook or crook in an year or two in the company, and move to another company, show casing it.

A typical example is the Sales push of  3 G sales in telecom Industry in 2000-2002 era. High speed data on Wireless Technology on GPRS / 2.5 G EDGE were not fully ready, user terminals were yet to be developed, the investment cost was too high for anyone to have a viable business case at that point of time. 

Availability of high bandwidth anywhere, anytime were only in sales talks, because for anything around 2Mbps and beyond, the area that can be covered by a cell using WCDMA technology,  was only about 10 meters radius and the speed of movement of user terminal limited to 10 meters per second, no body knew how hundreds and thousands of cells needed to cover large user areas and roads. Even now the situation is not much different manyexcept that  WiMax and WiFi would be able to boost HSPDA, of course, with attendant problems yet to be resolved regarding security issues etc.  

The technocrats who were knowledgeable and bold enough to point out these to the company at that time were shown the door. Later all those 2.5 G /3G buyers who fell for peppy sales talk, had to bite dirt and entire industry had to suffer.

Salespeople are not decision-making persons. Pricing is to be decided by the marketing department.

Am sorry gentlemen, The sales person should have only the selling price and MRP and a last figure at what price (maximum discount he can offer) he can sell.There is no need for a sales person unless the top management and decision making authority to decide the selling price of the product, One can ask the sales person at what best price he can sell the product, that's all. If the decision  making power is given to the sales person one thing is sure the company will soon run in to losses.

NO, the sales persons views to be considered but ultimately the pricing is decided based on manufacuring cost, taxes duties, marketing over heads and then the profit. a sales person may not be able  analyse these things, interestingly how many sales people know the expenditure incured for making one call? it's not his salary or conveyance he has to consider the total expenditure of the company and they will be amazed to to see that their one call is costing any where between 800 to 8000 per call depending on the size of the company. Interesting? 

Absolutely Not. It should be the jurisdiction of the expert departments like Manufacturer,Marketing, at least when the sales target is not achieved, you have the final execuse of pricing, to cast the blame on the experts.