Sales & Distribution Mgmnt

8/4/2019 Sales & Distribution Mgmnt

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SALES&

DISTRIBUTIONMANAGEMENT

Class: MBA-III(2010-12)

By:

Madhavendra N Jha

TIAS


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INTRODUCTION

Sales Executives------True ProfessionalsOBJECTIVE OF SALES MANAGEMENT:

Basically Top Management is

accountable/responsible for meetingsupplying sufficient product or services atsocially responsible manner to satisfy theneed & want of the customer by ensuringprofit to the company


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INTRODUCTION

Authority is delegated to MarketingDepartment. Which further delegatesto Sales Department to achieve the

objectives by setting goals at differentlevels.


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INTRODUCTIONOn the basis of above, the Sales

Management is responsible towardsOrganisations, Customers & Society.

Towards top management------1.Obtaining Sales Volume 2.

2.Providing Profit Contributions

3.Continuing Business Growth


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INTRODUCTIONToward Customers------

1.Supplying easily salable/acceptableproducts & services

2.Backed by Supporting Activities

3.Assurance that it is a wiseinvestment in competitive market


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INTRODUCTIONTowards Society------1. Delivery of

Products & Services which theconsumers want & can afford as

well(Needed & Accepted)2. Todevelop & market products whosepotentials for damaging the

environment is minimal(SociallyResponsible)


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EVOLUTION

Before Industrial Revolution 1760 in UK &American Revolution in USA:

Mostly Small & Cottage Industries were

operating.Manufacturing received most of the attention,

because that was the major problem.

Selling to nearby customers was donewithout any problem.


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EVOLUTION

Post Industrial Revolution 1760 ADin UK & American Revolution inUSA:

New Built factories were turning outhuge quantities of good of everydescription.

Even under these circumstances otherbusiness problems took precedenceover selling.


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EVOLUTION

Still Manufacturing A Major Attention

Next Attention Area Finance

Problems were.hiring large numbers of

workers & acquiring land, building &machinery.

Large amount of capital had to be raised.

Resulting above, more & more businessadopted the corporate form of organisation.


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EVOLUTION

Large scale manufacturingorganisations starteddominating.First hand administration of allphases of operation beingbeyond the capabilities of most

individuals. Authority started tobe delegated toothers..managers.


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EVOLUTION

Separate Functional depts. wereestablished, which includedmanufacturing & finance. & in later

phase sales also.

Colonial Rule for Market

Market Expansion took place butproblem like Communication with

customers remained unsolved.


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EVOLUTION

Manufacturers shifted some ofthe functions to middlemen.

Distant market was targeted byappointing retailers, who resoldthem directly to consumers.

Time passed.. many of thelarge retailers evolved intowholesalers.


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EVOLUTIONIn the meantime, other marketing activities

like advertisement, sales promotion,marketing research, customer service,shipping etc became not only important butcomplex as well.(After WW-II)

So, it became essential to split marketingfunctions into Sales & other functions.

It is the revenue producing department.

Marketing function being split-off a trend


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WHATIS PERSONAL SELLING?

Personal selling is a promotional method inwhich one party (e.g., salesperson) usesskills and techniques for building personalrelationships with another party (e.g., those

involved in a purchase decision) that resultsin both parties obtaining value.

The "value" for the salesperson is realized

through the financial rewards of the salewhile the customers "value" is realized fromthe benefits obtained by consuming theproduct.


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WHATIS PERSONAL SELLING?

Because selling involves personalcontact, this promotional method oftenoccurs through face-to-face meetingsor via a telephone conversation,though newer technologies allowcontact to take place over the Internetincluding using video conferencing or

text messaging (e.g., online chat).


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SALES MANAGEMENTOriginally---exclusively to the direction of

sales force personnel.Later---taking a broader significance---

Sales Management meant management ofall marketing activities, including advertising,sales promotion, marketing research,physical distribution, pricing, & productmerchandising.

Latest---business adopted academicpractice, marketing management emergedas a broader concept rather salesmanagement.


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SALES MANAGEMENT

Simply---Management of an organization'spersonal selling functionInvolves Planning & Implementation of

Personal Selling Aspects & Evaluating &

Controlling Personal Selling ActivitiesIt is a management of Personal Sales

Force.


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SALES MANAGEMENT

As per AMA: SM meant the planning,direction, and control of personalselling, including recruiting, selecting,equipping, training (job related culture,skill, knowledge & attitude) assigning,routing, supervising, compensating(salary, bonus, incentive),

and motivating personal salesforce to become problem solver.


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SCOPE

Dealing all the activities related to thePersonal Selling & managing

personal sales force.


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SCOPE

Sales Management is Sales effortsboth within and outside thecompany.

Within the company.Buildingformal & informal organisationalstructures that ensure effective

communication not only inside thesales department but in relationswith other organisational units.


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SCOPEInvolved in key marketingdecisions.budgeting, quota,territories.

Also influence---advertising,distribution policy, otherpromotions & pricing.Outside the company---contactwith customers, other publics& distribution network.


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IMPORTANCE

1. GOAL SETTING:To achieve sales goals, your company

needs to set sales numbers or goals

for the staff.One way for a company to achieve

and maintain growth is to increase itssales numbers.

Sales managers can set sales goalsthat will promote growth and areattainable by the sales staff.


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IMPORTANCE

Many sales managers use cashbonuses or other incentives tomotivate staff to achieve the goals.

Sales goals for staff can also be set tomatch the strengths of each staffmember.


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IMPORTANCE2.TRACKING:

Sales management enablesmanagement to track the overall sales ofthe company as well as the individual

sales of each employee.Using sales tracking, management is able

to tell if the company is on track to meetits goals or if individual members of thesales team are not producing enoughsales.


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IMPORTANCE

By keeping the sales force constantlyup to date on the status of their sales,you can help them to adjust their sales

techniques and productivity to achievethe company's sales goals.


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IMPORTANCE

3.REPORTING: Using sales management, a company can

produce sales reports that can be used totrack the performance of its sales force

over different periods.For example, you can use sales reports to

compare the sales of the company ondifferent years over the same period.

The sales reports can determine thedirection your company must take basedon the results.


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IMPORTANCE

For example, if the sales reportsdetermine that your company isexperiencing substantial growth year

after year, it may indicate thatexpansion is a possible direction forthe company.


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IMPORTANCE

4. SALES SYSTEM:As a company grows, it can become more difficultto track and manage the sales process without asystem in place.

Sales management provides companies with asystem to train and manage employees whilestreamlining the sales process from the individualsales employee to the customer.

This is beneficial because if there is a problem atany point of the sales process that may affect thecompany's bottom line, it can be quickly identifiedand corrected.


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IMPORTANCE

5. CAREER: Highly rewarded,challenging, Most of the top/seniorexecutives are from Sales, True

professionalism, Fastest growing field.

6. REVENUE GENERATING: Onlydepartment which generates Revenue.

THE EVOLVING FACE OF


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THE EVOLVING FACEOFPERSONAL SELLING

Earlier role was to persuadeprospective customers to buyproducts.

Now, its scope has widened.

Efficacy of personal selling is beingexplored beyond the erstwhile sole

objective of promoting sales.

The evolving face of personal selling ishaving following parameters:

T E O G F C O


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1. Value Sharing & Creating: Value=Benefit-Cost

Offering of customised products/services.

The sales people share the same valuesthat their customers want to have.

Thinks with the customers perception with

the sole view to serve them better. Helps sales people to study the changing

needs & preferences of their customers.



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2. Relation Building:

A value based relationship helps thesales people to constantly mobilise

resources & modify the end productcatering to the specifics of the buyer.

This culminates in building long-term

relationships.



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3. Role Playing: Sales people go beyond realising sales

volumes.

They act as consultant to theirperspective customers.

Constantly advising them for newproducts.

Updating & imparting knowledge withrespect to the product adaptation,training, installation, trouble shooting etc.



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4. Changing Approach: With a view to customer satisfaction, a co-

ordinated approach of sales people with

their colleagues, who are specialist in theirrespective area, is required.

So, personal selling is the inputs of the

experts from different areas such asmaintenance, installation, delivery, troubleshooting, accounting, delivery staff, salespersonal etc.


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BUYERS BEHAVIOURMODEL

Marketing Buyers Buyers& other stimuli Black Box Response

Sales Presentation Buy or no buy

Marketing Mix+

ExternalEnvironment

(Cultural, Social,Political,

Technological etc.)

1. BuyersCharacteristics

2. Buyers

DecisionMaking

Process

1. Product

Choice2. BrandChoice

3. DealerChoice

4. Purchase

Timing5. PurchaseAmount


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BUYING DECISION PROCESSFor both Industrial Buyers & Only for Industrial

Consumer Buyers Buyers

Problem/Need

Recoginati

on

InformationSearc

h/Collection

Evaluation

of

Alternatives

Purchase

Decision

Development of

Specification of

Products orServic

eNeed

ed

Deter

mination ofCharacteristics &

Quant

ity ofNeed

edProducts orSrvice

s

PostPurchase

Behaviour

Obtaining &Analysing

Suppi

ersProducts orServic

es


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BUYING DECISION PROCESS

1. Problem/Need Recognition:The first stage of the buyer decisionprocess, in which a consumer

recognises a problem or need. Triggered by Internal Stimuli(hunger,

thirst, stress)drive.motive &

External Stimuli (advertisement &friends suggestion )


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BUYING DECISION PROCESS2. Information Search/Collection:

2nd stage of the buyer decision process, inwhich the consumer be in search for moreinformationmay go for heighteningattention or may go into active information

search. Consumers knowledge & awareness about

the brand & features are increased by suchinformation.

Reading material, Phone friend, Catalogue,Brochure, Advertisement, Existingusersetc.

B D P


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Sources of information

1. Personal Sources

2. Commercial Sources

3. Public Sources4. Experimental Sources.

Most of the information from

Commercial Sources..but PersonalSource is the most effective.


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Personal Sources legitimise orevaluate products for the buyer.

Its rare that an advertising

compaign can be as effective asa neighbour leaning over thefence & saying

B D P


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3. Evaluation of Alternatives: Thestage in which the consumeruses information to evaluate

alternative brand in the choiceset.

Several evaluation processes

are used to arrive at choicebrand


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Careful evaluation..of their

own.friends.sales

people.advices..

Narrowing down choices tominimum brandsthen going

close to preferred attributes.


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4. Purchase Decision:Buyers decision about brand topurchase.

In evaluating stage, the consumerrank brands & forms purchaseintentions.

Purchase Intention.. Attitude ofothers & Unexpected situationalfactors..Purchase Decision.

B D P


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5. Post Purchase Behaviour: Marketers job does not end when the

product is bought.

Satisfied or dis-satisfied or delighteddepends upon GAP.

GAP between Customers

expectations & products perceivedperformance.

B D P


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Seller should promise only what theirbrands can deliver.

Neither more nor much less.

Cognitive dissonance (buyer discomfort

caused by post-purchase conflict) Customer satisfaction is the key of

building customer relationship.

Customer feed-back.toll freecall..complain cell.quick post-purchase service


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6. Determination of characteristics &quantity of needed products/services.

7. Development of specifications of

products or services.

8. Obtaining & analysing supplierproposal.

BUYING SITUATION / TYPE OF


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BUYING SITUATION / TYPEOFPURCHASESFor Household & Individual

Consumers:

1. Routine decision making:

Milk, Bread, Grocery etc. Low Involvement, Low cost, Low risk,

Little thought/ time,

Skip many stages of buying decisionprocess except in case ofunavailability of regular brand.



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BUYING SITUATION / TYPEOFPURCHASES

2. Limited decision making: TV, Washing Machine & other CDG. Get information on prices, features,

benefits of various brands from Retailstores.

It is more a buying decision than routine

purchase decisionless than extensivedecision making.



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For Business Buyers:1. New Purchases(New task)

First time buying

More risk Limited knowledge

Lack of previous experience

Seeking varieties of information aboutProduct, Price, Delivery..

Taking longer time in decision



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2. Change in supplier(modified re-buy)

When not satisfied with theperformance of existing suppliers or a

need for cost reduction or qualityimprovement

Provides opportunity to other

suppliers to get an entry



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3. Repeat purchase (straight re-buy)

In case of requirement of products orservices continuously.

Often automatic re-ordering system tosave the time.

Entry of new suppliers depends

upon either offering somethingnew/better/ or wait for the

dissatisfaction with the existing

suppliers

P S P


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PERSONAL SELLING PROCESS

1. Selling Activities:

Recommended set of Processes orSteps under certain situation

Not essentially to follow under all thecircumstances

P S P


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2. Non-selling Activities:Sales Reports

Collecting Payments

Obtaining Market InformationTravelling, making calls & waiting for

response

P S P


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PERSONAL SELLING PROCESSProspecting & Qualifying

Preapproach (Precall Planning)

Approach

Presentation & Demonstration

Overcoming Objections

Trial Close/Closing the Sale

Follow-up the Service



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PROSPECTING & QUALIFYING:Prospecting:

Step in which the salesperson identifiesqualified potential customers.

A prospect (potential customer) is anindividual, a family, an organisation whoneeds the products/services asalesperson selling & has the ability tobuy.

A prospect is not the same as a saleslead(obtaining names & addresses ofprobable prospects).



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Sales lead generates the names of probable

prospectsWhen probable prospects want the

products/services, they become prospects.

Earlier Sales people had to find SalesLeads.

Now in most cases, companies are tacking

responsibility of searching & qualifying theleads.

It enables sales person to use their

expensive time on selling activities.



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QUALIFYING:

Lead or probable prospect should bequalified.

Means.should meet the necessary

standards or conditions to receive furtherattention.

These are..

1. The probable prospect has a need for theproduct/service being sold.

2. The probable prospect can afford to buy

the product or the service.



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The prospects, after qualifying, are placed in

three groups:1. Hot prospects:

They have good requirements of

companys products/services & arefinancially sound.

Such prospects are handed over to

salespersons to convert them to thecompanys customers.



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2. Warm prospects:

They have medium or averagerequirements of companys

products/services & are financially sound.

Such prospects are given to the companystelemarketing team for follow-up.



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3. Cool prospects:

They have low requirements & may or maynot have good financial capacity.

Such prospects are handed over to

companys intermediaries likedealers/distributorsorkept in pending

list for future follow-up.

P S P


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Pre-approach (Pre-call Planning):1. Information gathering in details about

the prospects

2. Planning the sales call on the prospects:(i) Setting Objectives for the SalesCalls: Must set objectives of each of thecallGathering information about

needs.understanding buyingorientation & practices.

P S P


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(ii) Planning the Sales Strategy:Finding out dates.person/officer

whom to meetjudgment about the

product which meets the need of thebuyer..This is a tentative planning

of sales strategy.may be changed

after actual calling..So it is calledAdaptive Selling

P S P


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Approach: After collecting theprospects name & other relevantinformation, now it is to make anappointment to see the prospects..

1. Introductory Approach: GoodMorning, Mr. Sen. I am .presentingVisiting Card

2. Customer Benefit Approach: Byconverting your existing insurancepolicy to our.



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3. Product Approach: Newproductshanding over &

4. Question Approach: May I help

you?......starting two-waycommunication.

5. Praise Approach: Praising buyer or

any of histhingsbelongings.knowledge.



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PERSONAL SELLING PROCESSPresentation & Demonstration:

1. Understanding the Buyers Need:

(i) Situational Approach: Knowing aboutthe prospects current situation.who

are involved in buying decision?...areyou buying first time?....are you makingchange from existing suppielier..

(ii) Problem Identification Questions: Areyou experiencing any problem?...whattype of?



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(iii) Problem Impact Questions: What isthe impactconsequences of such

problemto know it from buyer

(iv) Solution Value Questions: If you

control you problemyou cansaveor..enhance

(v) Confirmation Questions: To get the

confirmation from prospects to hearabout your products/service



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2. Knowing Sales PresentationMethod(Strategy):

Stimulus-Response method: CannedApproach..If a salesperson makes

the right stimuli (Sales Presentation),he can get a favourable response.Without knowing the NEEDS of theprospectsused by telemarketing,

door-to-door salesperson.for trainingnew salespeople



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Formula Method: Formulated Approachor Mental State Selling

Approachwithout knowing the

NEEDS of the prospects.

(i) AIDA (four stages)

(ii) Attention is drawn, Interest iscreated, Desire is aroused & Action

(buying) is to be made created



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Need-Satisfaction Method:(i) Most challenging & creative form ofsellingdifferent from above

twobased on the NEEDS of the

prospects.

(ii) Using F(eatures)A(dvantages)B(Benefits) Approach



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Team Selling Method: GroupPresentation.A multi-persons salesteam.to match with buying centre.

Consultative Selling Method:

IntroductionNeed-analysis.Convincing.Specific

benefits.Well preparedness of Sales

Team & its especialisedpersons..experts.



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3. Developing an effective Presentation:



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Overcoming Objections:



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Trial Close/Closing the Sale:

Also called Concluding the sale orgetting the order (purchase)



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Follow-up the Service:



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