Sales And Distribution Management

1. Sales and Distribution
Management
Dr. Prashant Mishra
[email protected]

2. Nature of Personal Selling
•Most salespeople are well-educated, well-
trained professionals who work to build and
maintain long-term relationships with customers.
•The term salesperson covers a wide spectrum
of positions from:
–Order taker (department store salesperson)
–Order getter (someone engaged in creative selling)
–Missionary salesperson (building goodwill or
educating buyers)

3. What is Personal Selling?
Involves Two-Way, Personal
Communication Between Salespeople
and Individual Customers Whether:
face to face,
by telephone,
through video conferencing,
or by other means.

4. The Role of the Sales Force
•Personal selling is effective because
salespeople can:
–probe customers to learn more about their
problems,
–adjust the marketing offer to fit the special
needs of each customer,
–negotiate terms of sale, and
–build long-term personal relationships with key
decision makers.

5. The Role of the Sales Force
Sales Force
Serves as a Critical Link
Between a Company and its Customers Since They:
Represent Customers to
the Company to Produce
Customer Satisfaction
Represent the Company
to Customers to Produce
Company Profit

6. Characteristics of Personal Selling
Flexibility
•Identify best
prospects
•Adapt to situations
•Engage in dialogue
Builds Relationships
•Long term
•Assure buyers
receive appropriate
services
•Solves customer’s
problems

7. Personal Selling Limitations
•Can not reach mass
audience
•Expensive per contact
•Numerous calls
needed to generate
sale
•Labor intensive

8. Personal Selling Tasks
Order taking
•Routine
–writing up orders
–checking invoices
–assuring prompt order
processing
•Suggestive selling

9. Personal Selling Tasks
Order getting
•Seeking out
customers
•Creative selling
•Pioneering
•Account management

10. Personal Selling Tasks
•Missionary
–Detailer
–Goodwill
–“Closers”
•Cross-functional
•Account service rep

11. Some Traits of Good Salespeople

12. Step 1. Prospecting and
Qualifying
Step 1. Prospecting and
Qualifying
Identifying and Screening For
Qualified Potential Customers.
Steps in the Selling ProcessSteps in the Selling Process
Learning As Much As Possible
About a Prospective Customer
Before Making a Sales Call.
Learning As Much As Possible
About a Prospective Customer
Before Making a Sales Call.
Step 2. Pre-approach
Step 2. Pre-approach
Step 3. Approach
Step 3. Approach
Knowing How to Meet the Buyer
to Get the Relationship Off
to a Good Start.
Knowing How to Meet the Buyer
to Get the Relationship Off
to a Good Start.
Step 4. Presentation/
Demonstration
Step 4. Presentation/
Demonstration
Telling the Product “Story”
to the Buyer, and Showing the
Product Benefits.
Telling the Product “Story”
to the Buyer, and Showing the
Product Benefits.

13. Steps in the Selling ProcessSteps in the Selling Process
Step 5. Handling Objections
Step 5. Handling Objections
Step 6. Closing
Step 6. Closing
Step 7. Follow-Up
Step 7. Follow-Up
Seeking Out, Clarifying,
and Overcoming
Customer Objections to
Buying.
Asking the Customer
for the Order.
Following Up After the Sale to
Ensure Customer Satisfaction
and Repeat Business.

14. Alternative Steps:
Find ’emFind ’em
Grab ‘emGrab ‘em
Show ‘emShow ‘em
Answer ‘emAnswer ‘em
Sell ‘emSell ‘em
Keep ‘emKeep ‘em

15. Identify and Qualifying
Prospects
•Prospecting: Identifying
likely new customers
–Leads
•Qualifying: Evaluating a
prospect’s potential
Identify and Qualifying
Prospects
•Prospecting: Identifying
likely new customers
–Leads
•Qualifying: Evaluating a
prospect’s potential
Creative Selling Process

16. Approaching the Prospect
•Contact
•Rapport
•“Only one chance to
make a first impression”
Approaching the Prospect
•Contact
•Rapport
•“Only one chance to
make a first impression”
Creative Selling Process

17. Sales Presentation
•Persuasive
communication
•Attention
•Interest
•Desire
•“Tell the product’s story”
Sales Presentation
•Persuasive
communication
•Attention
•Interest
•Desire
•“Tell the product’s story”
Creative Selling Process

18. Handling Objections
–Questions
–Reservations
•Understand Concern
•Counterarguments
•Acknowledge concern
•Clues to process
Handling Objections
–Questions
–Reservations
•Understand Concern
•Counterarguments
•Acknowledge concern
•Clues to process
Creative Selling Process

19. Closing the Sale
•Closing signals
•Trial close
•Ask for the sale
Closing the Sale
•Closing signals
•Trial close
•Ask for the sale
Creative Selling Process

20. Following Up
•Commitments met
–Shipment
–Performance
•Reinforce relationship
•Satisfied customers
rebuy & recommend
Following Up
•Commitments met
–Shipment
–Performance
•Reinforce relationship
•Satisfied customers
rebuy & recommend
Creative Selling Process

21. PlanningPlanning OrganizingOrganizing
DirectingDirectingControllingControlling
Setting
objectives
Organizing
activities
Recruit,
select,
train,
develop,
manage, &
motivate
Motivate,
evaluate,
& control
Sales Management

22. Organizing Sales ActivitiesOrganizing Sales Activities
Sales Territory:
•Geographic divisions
•Customer types
•Product lines
•Selling task
Sales Territory:
•Geographic divisions
•Customer types
•Product lines
•Selling task

23. Geographic DivisionGeographic Division
Sales Rep
California
Sales Rep
Pacific NW
Sales Rep
Southeast
Sales Rep
Northeast
District Sales
Manager
District Sales
Manager
District Sales
Manager
District Sales
Manager
Regional Sales
Manager
Regional Sales
Manager
Vice-President
Marketing

24. Customer TypeCustomer Type
New Account
#1
New Account
#2
Existing
Account #1
Existing
Account #2
New Accounts
Manager
Existing Accounts
Manager
Vice-President
Sales

25. Product LineProduct Line
Sales Rep
Eastern Region
Sales Rep
West’n Region
Sales rep
Eastern Region
Sales Rep
West’n Region
Snack Foods
Sales Manager
Beverages
Sales Manager
Vice-President
Sales

26. Directing the Sales Force
•Recruiting and selecting
•Training & develop
•Compensating
•Motivating

27. Compensation MethodsCompensation Methods
Straight Straight
salary orsalary or
wagewage
Straight Straight
salary orsalary or
wagewage
Salary plusSalary plus
commissioncommission
Salary plusSalary plus
commissioncommission
StraightStraight
commissioncommission
StraightStraight
commissioncommission
CommissionCommission
with drawwith draw
CommissionCommission
with drawwith draw
Quota-bonusQuota-bonus
planplan
Quota-bonusQuota-bonus
planplan

28. Evaluation and Control
•Required reports
•Measurement against
plan or sales
standards
•Expense control
•Productivity
•New account
development

29. Ethical Issues
•Kickbacks, bribes and
“gifts”
•Price discrimination
•Cheating on expense
accounts
•Misrepresentation

30. Distribution Channel Design
and Management

31. Distribution’s Function
•The major purpose of marketing is to satisfy
human needs by delivering products of various
types to buyers when and where they want them
and at a reasonable cost.
•The “when and where” is the function of
Distribution

32. What is a Distribution Channel?
•A set of interdependent organizations
(intermediaries) involved in the process
of making a product or service available
for use or consumption by the consumer
or business user.
•Marketing Channel decisions are among
the most important decisions that
management faces and will directly
affect every other marketing decision.

33. Why are Marketing Intermediaries
Used?
•The use of intermediaries results from their
greater efficiency in making goods available to
target markets.
•Offer the firm more than it can achieve on it’s
own through the intermediaries:
–Contacts,
–Experience,
–Specialization,
–Scale of operation.
•Purpose: match supply from producers to
demand from consumers.

34. Distribution
P
R
O
D
U
C
E
R
C
O
N
S
U
M
E
R
DISTRIBUTION

35. Distribution Channel Distribution Channel
FunctionsFunctions
Distribution Channel Distribution Channel
FunctionsFunctions
OrderingOrdering
PaymentsPayments
CommunicationCommunication
TransferTransfer
NegotiationNegotiation
FinancingFinancing
Risk TakingRisk Taking
Physical
Distribution
Physical
Distribution
InformationInformation

36. Typical Channels of Distribution
ANUFACTURE
R
ONSUME
R
HOLESALER
ETAILER
GENT

37. Business-to-Business Channels
Direct
Wholesaler
Agent

38. Business-to-Business Channel Trends
Infomediaries & Vertical Exchange

39. Conventional Distribution Channel vs.
Vertical Marketing Systems
VerticalVertical
marketingmarketing
channelchannel
Manufacturer
Retailer
ConventionalConventional
marketingmarketing
channelchannel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
W
h
o
l
e
s
a
l
e
r

40. Types of Vertical Marketing SystemsTypes of Vertical Marketing Systems
Corporate
Common Ownership at Different
Levels of the Channel
Corporate
Common Ownership at Different
Levels of the Channel
Contractual
Contractual Agreement Among
Channel Members
Contractual
Contractual Agreement Among
Channel Members
Administered
Leadership is Assumed by One or
a Few Dominant Members
Administered
Leadership is Assumed by One or
a Few Dominant Members

41. Vertical Marketing Systems
•Corporate systems - total ownership
•Administered - strong leadership
•Contractual - legal relationships

42. Planning the Channel of
Distribution
•Determining the structure
–Marketing mix strategy
–Organizational resources
–External environmental factors
–Market characteristics
–Consumer preferences and behavior
–The nature and availability of Intermediaries
–Other environmental factors

43. Customers’ Desired Service
Levels
•Lot size
•Waiting time
•Spatial convenience
•Product variety
•Service backup

44. Steps in Distribution Planning

45. Intensive
Distribution
Intensive
Distribution
Exclusive
Distribution
Exclusive
Distribution
Selective
Distribution
Selective
Distribution
Distribution
Intensity
Distribution
Intensity
Choosing a Distribution System

46. Intensive DistributionIntensive Distribution
Seeks to obtain
maximum product
exposure at the
retail level
Seeks to obtain
maximum product
exposure at the
retail level
ProducerProducer
RetailerRetailerRetailerRetailerRetailerRetailer
RetailerRetailer
RetailerRetailerRetailerRetailer
RetailerRetailer
RetailerRetailer
RetailerRetailerRetailerRetailerRetailerRetailer
RetailerRetailer
RetailerRetailerRetailerRetailerRetailerRetailer

47. Selective DistributionSelective Distribution
Product is sold Product is sold
in a limited in a limited
number of number of
outletsoutlets
Product is sold Product is sold
in a limited in a limited
number of number of
outletsoutlets
ProducerProducer
RetailerRetailerRetailerRetailerRetailerRetailer
RetailerRetailerRetailerRetailerRetailerRetailer

48. Product is sold in Product is sold in
only one outlet in only one outlet in
a given areaa given area
Product is sold in Product is sold in
only one outlet in only one outlet in
a given areaa given area
ProducerProducer
RetailerRetailer
Exclusive Distribution

49. Developing Distribution Tactics
Selecting Channel PartnersSelecting Channel Partners
Reward or
Coercive
Power
Reward or
Coercive
Power
Legitimate
Power
Legitimate
Power
Economic
Power
Economic
Power
Managing the Channel of Distribution
Channel Leader Power
Managing the Channel of Distribution
Channel Leader Power
Distribution Channels & the Marketing MixDistribution Channels & the Marketing Mix

50. Materials Handling
Moving Products Into,
Within, and
Out of Warehouses
Materials Handling
Moving Products Into,
Within, and
Out of Warehouses
Warehousing
Number Needed
Where
What Type
Warehousing
Number Needed
Where
What Type
Inventory
Control
When to order
How much to order
Inventory
Control
When to order
How much to order
Order Processing
Received
Processed
Shipped
Order Processing
Received
Processed
Shipped
Physical
Distribution
FunctionsTransportation
Rail, Water,
Trucks, Air,
Pipeline, Internet
Physical Distribution

51. Rail
Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
Rail
Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
Water
Low cost for shipping bulky, low-value,
non perishable goods, slowest form.
Water
Low cost for shipping bulky, low-value,
non perishable goods, slowest form.
Truck
Most important carrier for consumer
goods, flexible.
Truck
Most important carrier for consumer
goods, flexible.
Air
High cost, ideal when speed is needed or
distant markets have to be reached
Air
High cost, ideal when speed is needed or
distant markets have to be reached
Pipeline
Carry petroleum based products,
very low cost, requires little energy.
Pipeline
Carry petroleum based products,
very low cost, requires little energy.
Transportation Modes
Internet
Web sites have products available, used
especially for services.
Internet
Web sites have products available, used
especially for services.

52. Channel Relationships
•Cooperation
•Conflict
•Power
–Coercive
–Expert
–Legitimate

53. Decision Making Framework
Prospects
of
Destructive
Conflict
Importance of threatened
channel in terms of current or
potential volume or profitability
High Low
High (FIRE)Act to avert or address
conflict
Allow threatened
channel to
decline
Low
(Smoke)
Look for opportunities
to reassure threatened
channel and leverage
your power
Do nothing

54. Channel Conflict: Identifying
Threats
•First, are the channels really attempting to
serve the same end users?
•Second, do channels mistakenly believe
they are competing when in fact they are
benefiting from each other's actions?
•Third, is the deteriorating profitability of a
griping player genuinely the result of
another channel's encroachment?
•Fourth, will a channel's decline
necessarily harm a manufacturer's
profits?

55. Managing Channel Conflict
WHEN TWO OR MORE CHANNELS
TARGET THE SAME CUSTOMER
SEGMENT
•Differentiate the Channel offer
•Define Exclusive Territories
•Enhance or Change the Channels
Value

56. Managing Channel Conflict
CHANNEL ECONOMICS DETERIORATE
•Change the channels economic formula:
(Grant rebates if an intermediary fulfill certain
requirements; Adjust margins between products
to support different channel economics; and
Treat channels fairly to create level playing field)
•Create Segment Specific Programs (certain
services not available via direct channels)
•Complement value proposition of the existing
channel by introducing a new channel
•Foster consolidation among intermediaries in a
declining channel

57. Managing Channel Conflict
THREATENED CHANNEL STOP
PERFORMING OR RETALIATE AGAINST
THE SUPPLIER
•Leverage Power (eg. Strong Brand) against
the channel to prevent retaliation
•Migrate volume to winning channel
•Back off

58. Other Distribution Management
Issues
•Reverse distribution
One Coca Cola
Distributor
One thousand
retailers
OK
Difficult
•Ethical, Political, &
Legal