Sale management

1. Sale management

2. Tasks of sale • survey of market needs • planning of sale and regulating of production orientation in order to satisfy required needs (influencing of production programme of enterprise) • influencing of producer `s position on the market (influencing of new needs or new satisfaction of existing needs, acquisition of new markets, realization of activities ensuring good-will of enterprise) • acceptance of orders, management of orders • contacts with customers • management of sale stocks (warehousing, packing…) • sale of products on the market (physical distribution) • analysis of sale

3. Sale strategy The tools of sale strategy: • distribution policy of enterprise, • product policy of enterprise, • contract policy of enterprise, • communication policy of enterprise.

4. Distribution policy • an enterprise solves a question of sale`s method selection, resp. question of organization and channels of sale • method of sale – the way how a product is distributed to consumer (customer) • in the process of sale an enterprise deals with 2 questions: - assignment (executed by sales agreement), - physical transfer of goods (distribution of goods).

5. Types of sale systems • company sale system - created by network of own sale departments, • common sale system - created by interconnection (capital or contract) with other enterprises, • externalsale system – legally and economically separated from producer.

6. Channels of distribution • channel of distribution – a form of products`movement organization from producer to customer • a channel of distribution consists of 2 phases: - phase of expedition – activities required for expeditionlasting till the moment of shipment`s takeover by carrier - phase of transport – starts by takeover of shipment for transport and terminates in the moment of goods delivery to place of destination

7. Channels of distribution • direct (track)channels of distribution (direct sale) • products are delivered directly from producer to customers that enables to shorten time of delivery and decrease costs • suitable especially by sale of piece products, non-standard products, single – purpose products (machines, appliances etc.), products of serial and mass production delivered in higher amounts to small number of customers or products that require providing of advisory services or technical assistance by each delivery • forms: own company shop, sales agent, representatives, commercial traveller, tradefairs, own forwarding business

8. Channels of distribution • indirect (mediate, warehousing)channels of distribution (indirect sale) • products are delivered through sale intermediates (sale organizations, merchandising companies etc.), products usually move through several warehouses of mediators • suitable by sale of standard products of series and mass production that are delivered to higher number of consumers who are usually territorially dispersed, sale of products that are suitable for warehousing in higher amounts, products that require assembling, products delivered to customers in different amount and time than responding to production cycle • forms: wholesale trade (sells to other merchandising companies), retail trade (sells to final consumers)

9. Factors determining selection of sale channels • character of product (standard, non-standard...) • character of consumption (mass, single...) • expedition ability of product (storage ability, handling severity...) • territorial allocation of suppliers (zoning of sale) • the way of transport (air, railway, road, sea...) • system of commercial and technical services connected to sale

10. Factors influencing selection of sale method • frequency of needs appearance (goods satisfying one-shot needs are sold by direct channels - respect extraordinary requirements and orders of customers;goods of mass consumption are sold by indirect channels – anonymous, no need to be in direct touch with customer) • territorial allocation of needs /demand(if customers are concentrated in narrow area – direct channels, if customers are dispersed – indirect channels) • risk of sale (if risk that goods are not sold is high, direct channels are more appropriate) • technical characteristics of product (the higher need for service providing, the higher tendency to direct channels using) • cost structure of sale (fixed and variable costs)

11. Product policy Covers four areas: • development and launching of new products on the market (according to analysing of their utility value that motivates to purchase) • adjusting of offered products quantity to real needs of customers (according to analysing of needs appearance on the market) • „creation of product“ (adjusting of technical characteristics, design, packing, advertisement… to needs and requirements of customers = creation of utility) - basic utility of product is connected to its technical aspect, i.e. functionality of product brings basic utility - additional utility of product is brought by design (the look), packing (suitable size, amount, reuse, look), advertisement (brings to customer appreciation by society)… • analysing of life cycle of products (phase of introduction, growth, maturity, saturation, decrement and elimination of product from production programme)

12. Contract policy = commercial policy • concerns remittances for realised outputs of enterprise and contract (commercial) conditions of enterprise • commercial conditions: • price – the most important condition included in agreement • discounts – used for adjusting of prices, offering of price reductions under certain conditions - natural discounts (an amount of goods that a customer receives in addition free of charge) - functional discounts (for merchandising companies which sell the products and provide various functions for producer) - seasonal discounts (price reduction for a certain time period) - fidelity discounts (provided to regular clients) • delivery conditions (the way of goods delivery, way of transport, possibilities of goods exchange or return, adjustment of delivery`s quantity to requirements of customer)

13. Contract policy • payment conditions (the way of chargingof transport, insurance … costs of delivery, price reductions for fast payments, price reductions from invoice prices by late deliveries) • financing of sale – measures that enable purchase of goods to those customers who are not able to pay at the moment (they do not dispose of quick assets) - buyer`s credit (provided by supplier, postponing of payment under certain conditions), - factoring (supplier sells claims connected to delivered goods to factoring company, i.e. factoring company pays for goods immediately before the date of claim`s maturity and charges for this service certain reduction from value of claim, then the claim is collected by factoring company), - leasing (possibility to purchase goods after expiry of lease term).

14. Communication policy • communication policy covers advertisement and other forms of sales promotion and public relations • advertisement • supports positioning of goods on the market • systematic communication affecting potential customers, focused especially on mediation of information, evocation of certain ideas, image … about products and services • the task is to activate demand by early information about advantages and utility of offered products, to make customers familiar with new products and support higher sales • must be not only creative but must be based on real analysis of market, needs and desires of customers • AIDA

15. AIDA is an acronym which represents the goals of advertisement: Attention – advertisement must first attract the customers’ attention to the product. Customers become aware of a product and know it is available. Interest – then, advertisement must create an interest in the product. Customers will develop an interest in the product. Desire – next, advertisement must develop a desire to own or have the product so that customers actively want to buy the product. Action – finally, advertisement must prompt action to purchase, so that customers take steps to buy the product – for example, by going to the shop or ordering it online.

16. Customer services • communication function but wider than advertisement • influence image creation of enterprise • customer services: • technical services - putting of products in operation (installation), - technical inspections, maintenance, repairs, - providing of spare parts. • commercial services - home delivery, - information and advisory services, trainings, - gift packing, - exchange or return of goods. • from time aspect: - services before delivery (e.g. advisory services), - services during delivery (e.g. installation), - services after delivery (e.g. repairs).