Sales & Distribution Management

1. Dr. ANANDA KUMAR Professor, Department of Management Studies, Christ College of Engg. & Tech., Puducherry, India. Mobile: +91 99443 42433 E-mail: searchanandu@gmail.com Sales & DistributionManagement

2. A. ANANDA KUMAR Department of Management Studies, Christ College of Engg. & Tech., Puducherry, India. Mobile: +91 99443 42433 E-mail: searchanandu@gmail.com Sales & DistributionManagement

3. MARKET & MARKETING total demand of potential buyers all activities aimed consumer satisfaction place or area (covers exchange functions) where buying & selling take place other facilitating functions (financing, risk bearing, after sales services etc.)

4. Factory Product Selling & Profit through Promotion Sales Volume SELLING & MARKETING Starting Focus Means Objectives point Selling Concept Market -ing Concept Target Customer Integrated Profit through Market needs market customer satisfaction

5. SELLING & MARKETING

7. MARKETING MIX – 4 P’S Product Price Marketing Mix Promotion Place

8. The Marketing Mix

9. PRODUCT 1. Brand 2. Style 3. Color 4. Design 5. Product Line 6. Package 7. Warranty 8. Service

10. PRICE 1. Price Strategy 2. Pricing Policy 3. Basic Price 4. Terms of Credit 5. Discount 6. Allowances

11. PLACE 1) Distribution Channels 1. Wholesalers 2. Retailers 3. Mercantile Agents 2) Physical Distribution 1. Transport 2. Warehouse 3. Inventory

12. PROMOTION MIX 1. Personal Selling 2. Advertising 3. Publicity 4. Sales Promotion

13. Personal Selling Personal selling is the process in which a salesperson has a face-to-face interaction with the customer for the purpose of selling a product or service. Personal selling is one of the tools in a company’s promotional mix. It has greater significance than any other form of promotion as it allows the sales person to converse in detail with the customer about the product or the service.

14. Personal Selling “Personal Selling is oral presentation in a conversation with one or more prospective purchasers for purpose of making sales. It includes in-person sales presentations and telesales, sales meetings, samples. We have already referred to personal selling as a tool of marketing communication. Personal Selling is communicating directly with the target audience through paid personnel of the company or its agents.” - American Marketing Association

15. Personal Selling “Personal Selling is the process effecting the transfer, with the profit to buyer and seller, of goods & services that gives such lasting satisfaction that the buyer is predisposed to come back to the seller for more of the same.” - E.F. Schumakar “Personal Selling consists of contracting prospective buyers of a product personally.” - Richard Buskirk

16. Objectives of Personal Selling To keep customers informed to changes in the product line. To assist customers in selling the product line. To serve the existing customers. To secure and maintain customers’ co-operation in stocking and promoting the product line. To handle the sales personnel of middlemen.

17. Objectives of Personal Selling 6. To collect and report market information on interested matters to company management. 7. To provide advice and assistance to middlemen whenever needed. 8. To provide technical advice and assistance to customers. 9. To search out and obtain new customers. 10. Its goal is to actually make a sale.

18. Advantages of Personal Selling Personal Selling reduces the cost of production It minimizes waste It helps to reduce marketing costs. It carries the advantage of flexibility It facilitates consumption It provides immediate & clear-cut feedback It is a two-way communication It helps to introduce new products & innovation to the market.

19. Limitations Of Personal Selling Personal selling accommodates only a limited number of consumers at a given time. It is quite expensive. It is especially on retail level, has poor image in the eyes of a number of customers. It is not an effective tool for obtaining consumer awareness about a product. Good and competent sales persons are not easily found.

20. Personal Selling Tools 1. Sales presentations 2. Sales meetings 3. Incentive programs 4. Samples 5. Fairs and trade shows

21. Pre-sale Preparation Prospecting and Qualifying Pre approach Personal Selling Process Handling Objections Presentation & demonstration Approach Closing Follow up and Maintenance

22. A) Pre-sale Preparation It involves all the preparations for getting ready for the selling process by the salesmen. The salesman has to be familiar with the product, the market, the techniques of selling and organization. He would be successful if he is aware of the unsatisfied needs and problems of the customers. He should prepare himself by knowing himself and his company, competition and market environment.

23. B) Prospecting and Qualifying The potential customer is known as a prospect and the method of finding he potential customer is known as prospecting. Prospecting involves a significant amount of time, effort and money. Although the company will give the leads, the salesmen have to develop their own leads.

24. C) Pre Approach It involves finding out the needs, problems, preferences habits, attitudes, nature and interests of the prospects. The salesman should set best approach, which might be a personal visit, a phone call, or a letter. The best timing should be thought out because many prospects are busy at certain times and finally the sales presentation strategies are planned.

25. d) Approach The initial few minutes of the sales talk are known as the ‘approach’ to the prospect. The purpose of the talk is to arouse and sustain the customer’s attention. Before the talk, the salesman should introduce himself by using the telephone, by obtaining introduction from a customer and by handling his business card. In the first contact, he should attract the attention of the customers.

26. d) Approach Reference approach that involves reference of the product by the friends of the prospects, 2) Benefit approach that indicates the benefits of the products, 3) Sample approach that involves giving samples to the prospect and 4) Mutual approach that considers the prospect supreme.

27. E) Presentation and Demonstration It refers to the presentation of the product to the customer or prospect, a demonstration of its features and benefits to the prospect and showing how the product meets the customer’s needs. It stimulates the buyer by using right stimulus words, pictures, terms and actions. Sales demonstrations can be improved by using demonstration aids such as booklets, flip charts, slides, movies, audio, video and actual product samples.

28. F) Handling Objectives The customers almost always pose objections during presentations or when asked for the order. The resistance can be psychological such as interference, preference for established supply or brands, relevance to give up something. The resistance can also be logical such as objections to price, delivery schedule or certain product or company characteristics. To handle these objections, the salesman has to maintain a positive approach, by classifying the objectives with valid reasons and turning objectives into reasons for buying.

29. G) Closing The sales person should try to close the presentation at the earliest possible moment to avoid the emergence of any reaction to the product. He should be expert enough to close the sales talk at the right moment and including physical actions, statements and comments.

30. H) Follow up and Maintenance Follow up action begins when the prospect signs the order and asks for delivering the salesman arranges for the dispatch and delivery of the product, facilitates grant of credit and reassures the buyer about the wisdom of his decision. This step is necessary to ensure customer satisfaction and repeat business. The sales person has to develop an account maintenance plan to make sure that the customer is not forgotten or lost.

31. Personal Selling – Classification 1. Industrial Selling a. Resellers b. Selling to Business users c. Institutional Selling d. Selling to Government 2. Retail Selling 3. Service Selling

32. Personal Selling – Types 1. Relationship Selling 2. Tele Marketing 3. Team Selling 4. System Selling

33. 1. Relationship Selling Developing a mutually beneficial relationship with selected customer on a regular basis over time is relationship selling. It may an extension of team selling or it may be developed by individual sales representative in their dealing with customer. In relationship selling, a seller discontinues the usual territorial practice of covering many accounts. Instead the seller attempts to develop a deeper, long lasting relationship built on trust with key customers usually large buyers.

34. 2. Telemarketing Telemarketing is the innovative use of telecommunication equipments and systems as part of the “going to the customer” category of personal selling. Both field selling and over the counter selling sometimes utilize the telephones in such activities as prospecting for new customers and following up with existing customer. The telephone is also the basis for a third approach to personal selling that is “telemarketing” in which selling is conducted entirely by telephone.

35. 2. Telemarketing (a) Outbound Telemarketing: It involve a sales force that use only the telephone to contact customer. This approach is designed to reduce the substantial cost entitled in making personal visits to customers’ home or business. (b) Inbound Telemarketing: It typically involve toll free hundred of number that customer can call to obtain information and make purchases.

36. 3. Team Selling The sales person is joined by specialist from other functional areas of the firms during the selling process. In other words, a sales team (also called selling center) is a group of people representing the sales department as well as other functional areas in firm such as finance production, distribution and research and development.

37. 3. Team Selling Example, i.e., relation to selling washing machine to a large buyer, a firm may assemble a team of sales people an engineers to educate such large buyer’s buying team in order to match the expertise on the buying side especially in industrial market. A growing number of firms on the selling has become the standard for successful selling, especially to large and important customers. Team selling is expensive and is use therefore only when there is potential for high sale volume and profit. Each team is assigned to cover large retailer including a large multinational firm.

38. 4. System Selling The concept of system selling means selling a total package of related goods and services (i.e., system) to solve a customer’s problem. The purpose is that the system (i.e., the total package of goods and services) will satisfy the buyer’s need more effectively than selling individual products separately.

39. Sales Force Structures The sales force strategy will have implications for structuring the sales force. If the company sells one product line to one end using industry with customers in many locations, the company would use a territorial sales force structure. If the company sells many products to many types of customers, it might need a product or market sales force structure.

40. Alternative Structures for the Sales Force a) Territorial structured sales force b) Product structures sales force c) Market structured sales force d) Complex sales force structures

41. a) Territorial structured sales force In the simplest sales organization, each sales representative is assigned an exclusive territory in which to represent the company’s full line. This structure has a number of advantages. First it results in a clear definition of the sales person’s responsibilities. As the only sales person working the territory, he or she bears the credit or blame from area sales. Secondly the territorial responsibility increases. Thirdly, travel expenses are relatively small, since the sales representative travels within a small geographical area.

42. b) Product structures sales force The importance of sales representatives knowing their products, together with development of product divisions and product management has led companies to structure their sales forces along product lines. Product specialization is particularly warranted where products are technically complex, highly unrelated or very numerous.

43. C) Market structured sales force Companies often specialize their sales forces along industry or customer lines. Separate sales forces can be setup for different industries or even for different customers. The advantage of market specialization is that each sales force can become knowledgeable about specific customer needs. The major disadvantages of structured sales forces arise when the various type of customers are scattered throughout the country as this requires extensive travel by each sales force.

44. d) Complex sales force structures When a company sells a wide variety of products to many types of customers over a broad geographical area, if often companies several principles of sales force structure. A sales representative might then report to one or more line managers and staff managers.

45. Market / Sales Potential A sales potential is an estimate of the maximum possible sales opportunities present in a particular market segment open to a specified company selling a good or service during a stated future period.

46. ANALYZING MARKET POTENTIAL Market Identification Market motivation Analysis of Market Potential

47. Sales Forecast A sales forecast is an estimate of sales, in dollars or physical units, in a future period under a particular marketing program and as assumed set of economic and other factors outside the unit for which the forecast is made. A sales forecast may for a single product or for an entire product line. It may be for a manufacturer’s entire marketing area, or for any subdivision of it.

48. Sales Forecast Accurate sales forecasting is essential for a firm to enable it to manufacture the required quantities at the right time and arrange well in advance for the various factors of production e.g., raw materials, equipments, machine accessories etc. Forecasting helps a firm to access the probable demand for its products and plan its production accordingly.

49. Importance of Sales Forecast Helpful in deciding the number of salesmen required to achieve the sales objective. Determination of sales territories. To determine how much production capacity to be built up. Determining the pricing strategy. Helpful in deciding the channels of distribution and physical distribution decision. To decide to enter a new market or not. To prepare standard against which to measure performance.

50. Factors Affecting Sales Forecast 1. Purchasing power of customers 2. Demography 3. Price 4. Replacement demand 5. Credit Conditions 6. Conditions within the industry 7. Socio economic conditions