Sales Management in the Tourism Sector

Sales Management in the Tourism Sector

Introduction

The department of sales acts as a direct link between the company's products or services and its customers (Hase and Busch, 2018). With being responsible they are also in the position of leadership. They need to recognize the strengths and weaknesses of the team and come up with ways to overcome them. TUI has its roots backing up to the 1800s and employees more than 12,500 employees in the UK and plans holidays to more than 30 countries providing all the services from flights to hotels (Tui.co.uk 2021). The current study is going to cast light on the understanding of sales management and finance of selling at TUI.

Activity 1: Written Report on the principles of sales management

An evaluation of differences of principles of sales management

Figure 1: Principles of sales management

(Created by the learner)

Some of the principles of sales management are:

Instilling discipline within the organisation: One of the most important principles to be adopted is this irrespective of the philosophy of management they need to ensure that the employees are consistent in following the set rules and the additional guidelines (Thiess et al., 2020). But they should also be flexible as there will be times when flexibility is needed to maintain the team’s morale. They need to know the justification and the reason behind the various rules and regulations. They should be able to ensure that the rules are being enforced and also take disciplinary actions to maintain discipline.

Leading by setting an example: It is not possible for the sales manager to do everything himself but he should always strive to have higher standards and should follow all the company's policies, procedures as well as standards. The staff will follow the manager if they are the hardest worker and always do things the right way. A great team is essential for the success of the organisation and this is only possible with a great leader. So, the manager needs to lead and set examples for the employees.

Manage the people individually: To be a successful sales manager they should be able to manage all the people individually and not only in groups. The praising can be done in front of the team but when it comes to giving any constructive criticism, taking any disciplinary action should always be done in a private setting so that the confidence of the employees does not go down.

Manage on objective information: The training, coaching and discipline should all be based on the objective of the organisation. All the decisions should be taken based on facts and not emotions. Personal opinions should not interfere the corporate decision making.

Being goal-oriented: One of the most important roles of the sales manager is to set goals for the team as well as the individuals and also to come up with ways to achieve them. A great way to build the relationship between the manager and each member of the team is by setting goals as there is a goal-oriented environment that is maintained. There is a constant discussion about the goals and ways of tracking them between the manager and the members of the team which ensures that they are on track.

Getting on the field: The best way a sales manager can effectively manage a team is by getting involved in everything rather than managing from behind a desk. They need to get on the floor and listen to the presentation of the salesperson in the real environment providing them with the improvements they can make to it.

Importance of sales planning, methods and reporting

Figure 2: Factors of sales management

(Created by the learner)

The important elements of sales management are:

Sales planning: It is one of the key functions in the sales management process. It includes coming up with effective strategies taking into consideration the sales forecasting, management of demand, the setting of profit-based sales target and planning the steps of a sales plan (Oliinyk et al., 2018). It organizes the activities that are essential to achieve the targets of the organisation. Formation and maintenance are the two main steps involved in sales planning.

Sales staff selection: The sales manager needs to understand the organisational needs and ensure that the right person with the relevant skills is being recruited. They need to be able to explain the job role and the job description to the recruits.

Methods of selling: Various methods of selling are used by the sales team which are as follows:

• One-off selling: In this method of selling the relationship is not important. It is the type of sale that is seen in retail shops.

• Relationship selling: This method involves B2B se3lling in which one company sells the products to another company.

• Customer-centric selling: This method is used by organizations to add value and gain a competitive edge. This involves making a positive environment for the customer at the point of sale and the after-sales period.

Sales reporting: To improve the efficiency and productivity of the team it is important to analyse the condition by using key performance indicators. The reports made by them are passed on to higher management to examine the overall performance of the sales team.

Activity 2: Written Report

Critically evaluate the implementation of different types of sales structures

Sales structures organisation and the importance of selling through others

The nature and size of the corporation decide the organisation of the sales department. This is the reason why the sales department of every company is unique and different. The various structures of the sales organisation based on various factors are as follows:

• Consumer-based structure

In this structure, various departments are formed based on the nature of the consumer, the nature of the department and the nature of the product. In this method, sufficient attention can be given to all the categories of customers. Customer satisfaction can be guaranteed by providing maximum services. Taking into consideration the view of each category of customer effective sales plans and policies can be formed (Wang and Chen, 2017). The drawback of this structure is that the establishment's costs are very high and it is too market-oriented. Being too market-oriented this structure cannot be used by a global brand like TUI which is in multiple markets.

• Market-based structure

When the structure is based on the market better services according to the marketing condition can be made available. The identification of the new products that are needed can be done and plans are made accordingly to fulfil them. The cost of transportation can be reduced by making modifications to the product according to the requirement. The strategies can be made to deal effectively with the competition. There can be conflicts in the allocation of resources and other facilities between all the departments. This structure is not preferred by TUI as the markets that the organisation serves to is very versatile and a fixed structure made considering this would not be optimal.

• Product sales force structure

When the organisation markets several products, the departments are made based on the nature of the products. Every department is assigned a specific product and is led by a manager. The general manager looks after the overall working of all the departments and ensures there is proper coordination as well as control over all of them (Bai et al., 2017). The Advantage of this structure is that each product gets equal importance in the sales and there are specialized departments to focus on them. The interference of unnecessary functions stops. As the entire department focuses on all the aspects of the products, they also ensure maximum customer satisfaction. The demerit is that the operational costs are higher because of the larger number of employees needed in the structure. This is the structure used by TUI as the products being offered are the various packages which need a lot of resources to plan the trip effectively.

• Functional structure

The activities of selling are divided in this structure according to the functions that are to be performed such as planning sales, advertising, distribution, market research, analysis of sales, etc. (Rangarajan et al., 2018) Special attention is given to each aspect of the sales to increase profits. The advantage is that we can reduce or increase the number of departments according to the requirement. This is the least expensive of all the methods but special attention cannot be given to every product. It is difficult to apply this to the sales structure of TUI as the primary function of all the departments is the same.

Evaluation of the benefits of sales structures and how they are organised

When you are confident about a product the next step is to take the product to the consumers. There are various advantages of selling through others which are as follows:

• They are quick: Unless the product is premium with the prime focus on being exclusive. The fastest way of moving products is by taking them to travel agents. They have a huge network of all the travel resources and also know the fastest way to reach them. They are the most efficient way for any corporation to move products in a short period. TUI is expanding in new markets using the local travel agents helps them in gaining quickly established resources.

• Wide customer base: The agents have built up a variety of market and know the ways to promote a product. They have a wide customer base as well as they have the information that is highly valuable and it is not worth the effort on time to try to establish this base by yourself.

• Financial savings: All the factors help TUI in saving money. As the money that is not spent in business is considered as money saved. The money that is saved can be used for research and development of new products and packages.

Activity 3: Briefing Note on principles of successful selling

Critically analyse the application of successful selling principles and techniques

The trends and patterns in sales keep changing all the time hence they need to be updated and change according to the requirements. The key principles for successful sales are:

Customer retention: One of the most essential principles of becoming successful in sales in the modern market is by customer retention. This is because as compared to finding a new customer it is easier to keep the acquired customers happy. The goal is to create a healthy client base of loyal consumers as they support the organisation and also help in promoting them. To show appreciation for the loyal customers the company should offer those discounts and referral bonuses this also turns out to be a cost-effective way for promoting (Ascarza et al., 2018). TUI makes sure to provide the best experience to all their guests so that the next time they plan a trip they will choose them again (Tuigroup.com 2021). By providing a value for money experience it also makes it highly likely that they will recommend it to others and in turn increasing the client base.

Social media: In modern times social media is the most powerful resource for an organisation to succeed as everyone is present on one platform or another. Hence to reach a bigger audience, it is important to use social media to promote a business. Social media has become a key principle in successful selling for any business. The ultimate goal is the creation of content that will engage the readers, helping in the promotion of the brand and lead the customers to buy products through the website (Mariani and Baggio, 2020). Social media can be used to gain valuable customer feedback and work on them to improve sales. The website of TUI is the most important resource of the organisation that is used for attracting and providing services to the customers.

Making sense of data: Information is essential for the sales professionals to be competent to a client and to gain credibility. It is essential to study the market and have the right information regardless of the business. To ensure the closing of a deal it is important to interpret sales figures and other important data. Most of the data in TUI is gained from the website as well as the customer feedback taken after every trip to maintain a database and identify the places of improvement.

Utilization of technology: The integration of modern technology with sales methods is important for a successful sales strategy (Singh et al., 2019). The tools that can be used are electronic signing apps, CRM solutions and meeting software. To understand the problems faced by the customers the sales professionals should be able to transform dense data into a visually appealing representation. The website of TUI is constantly updated and new features are added to make the site more user friendly.

Positive sales culture: Compared to the other areas of business the sales department operates differently and it is essential to build an environment that motivates and inspires the employees (Fantazy and Athmay, 2019). In the operations of the sales, it is essential to have effective sales leadership as the sales professional look up to the higher management to set a clear path of success for them. TUI believes that a positive culture of the team attracts more customers as to when they think of a vacation the emotion that should be portrayed is happiness and positivity.

Activity 4: Briefing Note on the finance of selling

The primary aim of any organisation is to maximize the profitability using the present resources effectively this can only be done when there is a strategy of sales in place aligning the work with the target of the company (Rapp and Beeler, 2021). One of the main strategies used by TUI is trying to increase individual sales. TUI also focuses on being updated and following the current trends in the tourism market to attract more customers. To get maximum benefit it also makes use of seasonal pricing.

Evaluation of how core finance principles and successful portfolio management

The principles of financing and portfolio management that are used to increase profitability as well as gain a competitive edge are:

Principle of diversity: To minimize the risk involved in a business is diversification. Investing is more sectors is a better choice than investing in one sector. As the leisure travel market is consistently growing TUI is investing in all the sectors related to travelling and has been acquiring flights and hotels all over the globe. TUI is operating 380 hotels and 16 cruise ships globally. There is continuous investment being made to make the portfolio of TUI more diversified leading to a more seasonally robust business mix that will deliver superior margins (Tuigroup.com 2021).

Risk and return: The risk of the business should always be maintained under limits as compared to the return. When we consider the reward of the risk it enables us to decide if the investment is worth it. Strong and fully digitalized risk management tools are used by TUI within the distribution and purchasing helps in optimizing occupancy and yield.

Liquidity: This is maintained as the company invest in assets that can be easily liquidated when it is going through a rough patch. The assets like hotels and the cruises are always in demand and can be sold whenever there is a cash crunch faced. This ensures that the company does not need constant external funding.

Conclusion

The sales manager has to consider the needs and ambitions of the company and make strategies. In an organisation, the coordination of the resources and people effectively and efficiently to attain the goals is known as sales management (Donaldson, 1998). The target can be to increase sales, profitability or continuous growth.

Reference List

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