Sales and Distribution Management, MBA, pdf

Sales and distribution management

1. Sales Management
Personal Selling Process
Prof. (Dr.) Biswajit Roy
FIEM
1B R

2. Selling
•Sellingisofferingtoexchangesomethingof
valueforsomethingelse.Thesourcingof
valueofferedmaybetangibleorintangible.
Sellinghasaproductfocus&ismostlydriven
byproducer.Itistheactionpartofmarketing
andhasashort-termgoalofachievingmarket
share.
2B R

3. Selling vs. Marketing
Selling:
•Emphasizes product
•Company manufacture the
product first & then decides
to sell it.
•It is sales-volume oriented.
Marketing
•Emphasizes consumer
needs and wants.
•Company decides on what
are customers’ needs &
wants and then decides on
how to deliver a product to
satisfy these wants.
•It is profit-oriented.
3B R

4. Selling vs. Marketing [contd…]
Selling:
•Planning is short-term
oriented, in terms of
today’s products &
markets.
•Cost determines price.
Marketing
•Planning is long-term
oriented and , in terms of
new products,
tomorrow’s markets &
future growth.
•Consumers determine
price & price determines
cost
4B R

5. Selling vs. Marketing
Selling:
•Stresses need of a seller.
•Viewers business as a
goods-producing process.
•Ideal is to just sell the
product.
Marketing:
•Stress need of a buyer.
•Views business as a
consumer-satisfying
process.
•Ideal is to provide better
value to consumer.
5B R

6. Difference between
“Personal selling” and
“Salesmanship”
6B R

7. Salesmanship
Salesmanshipissellerinitiatedeffort,
thatprovidesprospectivebuyerswith
informationandmotivatesthemtomake
favorabledecisionsconcerningthe
seller’sproductsorservices.
7B R

8. Personal Selling:
•PersonalSellingisahighlydistinctiveformof
promotion.
•Itisbasicallyatwowaycommunication
involvingnotonlyindividualbutsocial
behavioralso.
•Itaimsatbringingtherightproductstothe
rightcustomers.
8B R

9. Personal Selling [contd…]
•Ittakesseveralformsincludingcallsbycompany’s
salesrepresentative,assistancebyasalesclerk,
aninformalinvitationfromonecompany
executivetoanother.
•Itisemployedforthepurposeofcreating
productsawareness,stimulatinginterest,
developingbrandpreference,negotiatingprice
etc.
•Diversifiednatureofpersonalselling
9B R

10. Importance of Personal Selling
•Theincreaseincomplexityofproductshas
increasedtheimportanceofpersonalselling.
•Evergrowingcompetitionfromdomesticand
foreignsourceshavealsoincreasedthe
importanceofsalespersons.
•Salespersonactascatalystinthemarket
place.
10B R

11. Importance of Personal Selling [contd…]
•Whenthenatureoftheproductissuchthat
thebuyerneedsspecialinformationinorder
touseitproperly,salesrepresentativeactsas
aconsultanttoconsultanttoconsumer,to
apprisethemofproductstechnicalitiesand
usage.
•Salespersonsalsoworkoutthedetailsof
mannerandtimingofgivenphysical
possession.
11B R

12. Importance of Personal Selling [contd…]
•Incaseofindustrialproducts,thepromotion
mixmostlyconsistsofpersonalsellingrather
thanadvertising.Beinghighvalueand
complexproduct,personalcontactwiththe
customerisessentialtoconvincehimof
product’squalityandutility.
•Consumerproductcompaniesusepersonal
sellingtogetherwithadvertising,toinfluence
prospecttotrytheirbrand.
12B R

13. Importance of Personal Selling [contd…]
•Personalsellingcannotsubstitutefor
advertising,itcanonlybeusedtacticallyto
intensifymarketingeffort,mainlybecauseitis
expensive.
•Personalsellingismoreeffectiveduring
productlaunchingstage.
•Example:McDowell,usedpersonalselling
tacticsduringlaunchingofsoftdrink“SPRINT”
inDelhi.
13B R

14. Importance of Personal Selling [contd…]
•EurekaForbesdidthesamethingforvacuum
cleanersinceitisofhighvalueproductand
theconceptisfairlynewtotheIndianmarket.
•Harpic,SurfandDaldaalsoutilizedpersonal
sellingeffort.
•InIndia,absenceoftheavailabilityofallIndia
media,manycompaniesfinditconvenientto
extensivelyusepersonalsellingtoachieve
theirpromotionalobjectives.
14B R

15. Importance of Personal Selling [contd…]
•Companieswhichcannotaffordalargeoutlay
foradvertisingonaregularbasisalsofind
personalsellingamorereliablemethod.
•Thevastnetworkofourdistributionsystem
needsthesupportofthemanufacturersales
forceformarketcombiningaswellas
development.
15B R

16. Importance of Personal Selling [contd…]
•Lowlevelofliteracyandlackofadequate
customereducationregardingvarious
products,makepersonalsellingveryeffective
methodinproductadoptionparticularlyinthe
ruralmarkets.
•OrientationofIndiancustomersaresuchthat
theywantthebestvaluefortheirmoney,
owingtohighmarginalvalueofrupee,which
necessitatespersonalselling.
16B R

17. Importance –Product situation
•Whenaproductisofahighvalueunitlike
computers,Mobiles,Tabs,Photocopying
machine.
•Whentheproductisinintroductorystateof
itslifecycleandrequirescreationofcore
demand.
•Aproductrequirespersonaltomatchspecific
consumerneedse.g.insurancepolicy.
17B R

18. Importance –Product situation
•Productrequiresdemonstratione.g.mostof
theindustrialproducts.
•Productrequiresaftersalesservice.
•Producthasnoorverypoorbrandloyalty.
18B R

19. Importance-Market Situation
•Whenacompanyissellingtoasmallnumber
oflarge-sizebuyers.
•Acompanysellsinasmall-localmarketorin
governanceorinstitutionalmarket.
•Desiredmiddlemenoragentsarenot
available.
•Anindirectchannelofdistributionisusedfor
sellingtomerchant-middlemenonly.
19B R

20. Importance-Company Situation
•Whenthecompanyisnotinapositionto
identifyandmakeuseofsuitablenon-
personalcommunicationmedia.
•Acompanycannotaffordtohavealargeand
regularadvertisingoutlay.
20B R

21. Importance-Consumer Behavior Situation
•When purchases are valuable but infrequent.
•Consumer needs instant answers to his/her
questions.
•Consumer requires advice and follow-up in
the face of competitive pressures.
21B R

22. Qualities of a Good Sales Personnel
•Philip Kotlerhas identified two basic qualities
of a good sales person namely, empathy and
persuasion. But others have listed more.
1.Ability to estimate customer’s needs and
desires
2.Ambition
3.Appearance
4.Business sense
22B R

23. Qualities of a Good Sales Personnel
5. Courtesy
6. Creativeness
7. Curiosity
8. Enthusiasm
9. Figure Sense
10. Flexibility
11.Friendliness
12. Handwriting
23B R

24. Qualities of a Good Sales Personnel
13. Health
14. Integrity
15. Interest in his job
16. Knowledge
17. Loyalty
18. Mental abilities
19. Motivation
20.Originality
24B R

25. Qualities of a Good Sales Personnel
21. Persuasiveness
22. Poise
23. Self-control
24. Self-starter
25. Speech
25B R

26. Personal Selling:
Preparation and Process
Stimulus(sales
presentation)
Buyer’s
decision making
process
Response (buy
or no buy)
Buyer Behavior Model
26B R

27. Buying Decision Maker’s Role
Initiator(one or
more)
Influencer Gate keeper Decider/buyer User/Consumer
27B R

28. Buying Decision Process: Five-Stage
Model of the Consumer Buying Process
Post-purchase behavior
Purchase decision
Evaluation of alternatives
Information search/ collection
Problem/Need recognition
28B R

29. Problem/Need recognition
•Starts when the prospective consumer recognizes a
problem or need.
•The need can be caused by internal or external need.
•Internal stimulus could be physiological like hunger or thirst
or psychological like desire for the prestige of owing a BMW
car.
•External stimulus may be for a person who sees a fresh
pizza at dominos’ pizza that stimulates his hunger.
•Sales person must identify the buyer’s needs to know what
type of information to be provided about the product
benefits to satisfy the buyer’s need.
29B R

30. Information Search (or Collection)
•Forneedproducts,informationsearchmaybe
milder.
•Forwants,andproductsofhighinvestment,
buyerswantmoreactiveinformation.
•Processinvolvesvisitingretailstores,asking
familymembersandfriends,andtakingtosales
peopleaboutproduct’sprice,benefits,sizesor
models,warrantyserviceandsoon.
30B R

31. Evaluation of Alternatives
Factors involved in evaluation process:
•Theconsumeristryingtosatisfyaneedorsolvea
problem.
•Theconsumerislookingforcertainadvantagesor
benefitsfromtheproductorservicethatsatisfiesthe
needorsolveshis/herproblem.
•Theconsumerknowsthateachalternativeproduct
orbrandhasasetofcharacteristics,(orattributes)
thattrytosatisfyhis/herneed.
•Theimportanceandrelevanceofattributesvary
fromproducttoproduct.
31B R

32. Purchase Decision
Two factors are influential
•Attitude of others
•Unanticipated situational factors
32B R

33. Purchase Decision
Purchase decision include:
•Brand
•Timing to purchase(festive/weekends etc)
•Quantity
•Choosing retailers or dealers
•Payment mode (cash, debit/credit card, EMI
etc)
33B R

34. Post-purchase Behavior
•Satisfaction/dissatisfaction
•Buying Decision Process of Business Buyers
Involves 3 extra steps:
•Determination of characteristics and quantity of
needed product or service
•Development of specifications of product or service
needed
•Obtaining and analyzing supplier proposals.
34B R

35. 35B R

36. Buyer-Seller Dyad
•Thebuyer-sellerdyadrepresentstheinteractionbetweenthe
salesman(seller)andcustomer(buyer)duringtheentire
sellingprocess.
•Thebuyeraswellasthesellerhavecertainneedsand
expectationsderivedfromtheirpersonalcharacteristics,roles
andrequirements.
•Theycometogethertoadjusttheirrespectiveneeds&
expectationsinaccordancewiththatoftheotherparty.
•Eachpartyfeaturesitsownstrategiesbasedonitsneeds&
expectationstonegotiateadeal.
•Thesestrategiesfromsellers’sidesareinlinewiththe
company’sobjectivesofsalesandprofitandthesalesman’s
target.
36B R

37. Buyer-Seller Dyad
•Thesellerusesalltacttopersuadethebuyertocrackthedeal
ontheseller’sterms.
•Similarly,thebuyerhashisownneedsforwhichheadopts
differentstrategiestoreduceprice,getdesiredbenefits,
receiverequiredafter-saleservicesetc.
•Finally,afterbargainingwitheachother,atonepoint,the
seller&thebuyeradoptthemselvesalittletotheneedsof
theotherandthentheexchange(theactualtransaction)
takesplace,wheretheproductisdeliveredandinstalledby
theseller&thepaymentforthesameismadebythebuyer.
•Thedyadstopsatthispoint.
•Hence,itcanbesaidthatbuyer-sellerdyadisatwo-way
communicationprocessofsellingaproduct/servicetoa
customerthroughnegotiation.
37B R

38. Buying Situations or Types of
Purchase
•For Household and Individual Consumers
Routine decision–making
Limited decision-making
Extensive decision making
•Buying Situations for Business Buyers
New purchase (or new task)
Change in supplier (or modified re-buy)
Repeat purchase (or straight re-buy)
38B R

39. SALES KNOWLEDGE AND SALES
RELATED MARKETING POLICIES
•Company Knowledge
•Product knowledge
•Customer and Customer Knowledge
•Sales-Related Marketing Policies
Pricing policies
Distribution policies
39B R

40. SALES KNOWLEDGE AND SALES
RELATED MARKETING POLICIES
[contd…]
•Promotional policies
•Product policies
Product mix
New product ideas
Product information, quality and service policy
40B R

41. THE SALES PROCESS
Follow-up and Service
Trial Close/Closing the Sale
Overcoming Objections
Presentation and Demonstration
Approach
Pre-approach (Pre-call Planning)
Prospecting and Qualifying
41B R

42. Prospecting and Qualifying
•Referrals from existing customers
•Referrals from internal company sources
•Referrals from external sources
•Networking by salespersons
•Industrial directories
•Cold canvassing
42B R

43. Qualifying
CRITERIA
•The probable prospect has a need for the
product / service being sold.
•The probable prospect (individual/ family/
organisation) can afford (or has an ability) to
buy the product or the service.
43B R

44. Qualifying [contd…]
Prospects after qualifying, are placed in three groups:
•Hot prospects: Good requirement, financially sound
customer, taken care by salespersons.
•Warm prospects: medium/average requirement,
financially sound customer, taken care by
telemarketing team.
•Cool prospects: low requirement, financially may or
may not be good, handled by dealers/distributors, or
pending listed for future follow-ups.
44B R

45. Pre-approach
Two tasks..
•Information gathering in greater depth about
the prospect.
•Planning the sales call on the prospect.
45B R

46. Information gathering
About
•Prospects business
•Its product and services
•Purchasing practices
•Location of plants
•Names and background of people who make buying
decision
•Purchasing orientation and practices
•The major problems or issues faced by the prospect
•The industry on which it is operating
The more information about the customer, the more
confident you are.
46B R

47. Sources of information
•Internet or online information services
•Trade magazines
•Industrial directories
•Chambers of commerce
•Annual reports of companies
•Existing customers and suppliers
•Government publications
47B R

48. Planning the sales call
Consists of..
•Setting call objectives
•Planning the sales strategy
48B R

49. Setting call objectives
•Gathering information about needs from the
prospect
•Understanding buying orientation and
practices
•Checking merchandise and making a reorder
from the existing distributor
•Making a sales presentation
49B R

50. Planning the sales strategy
Consists of…
•Finding out when and whom to approach by phone
call, followed by personal visit.
•a tentative judgment about which of the company’s
products best meet the customer’s needs.
•A tentative plan for presenting the specific features
and benefits.
•A tentative planning or strategy may have to be
changed later on after gaining information based on
the actual calls made by the sales person. This type of
modification to selling objectives or plans is called
adaptive selling.
50B R

51. Approach
•Appointment to see the prospect
•First time a salesperson meeting a customer.
•Qualities of a salesperson plays an important role
here.
Technique used are:
•Introductory approach
•Customer benefit approach
•Product approach
•Question approach
•Praise approach
51B R

52. Presentation and Demonstration
•Understanding the buyer’s needs
•Knowing sales presentation methods
•Developing an effective presentation
52B R

53. Understanding the buyer’s needs
•Situational questions
Ex –who are involved in buying decisions/are you
buying this product first time?
•Problem Identification Questions
Ex-have you experienced any problem?
•Solution value questions
Ex-How would an error free system helps
•Confirmations questions
Ex –Would you be interested to know about our
product?
53B R

54. Knowing sales presentation
methods
Various methods used for making sales
presentation
•Stimulus response method
•Formula method
•Need-satisfaction method
•Team selling method and
•Consultative selling method
54B R

55. Stimulus response method
•Amemorizedsalespresentationoraprepared
salespresentation.
•Thismethodassumesthatifasalesperson
makestherightstimulihecangetafavorable
responsefromtheprospect
•Thesalespersondoesmostofthetalking
•Thesalespersonexplainsallthe
product/servicefeatureswithoutknowingthe
needsoftheprospectandthenasktobuythe
product
55B R

56. Stimulus response method [contd..]
•Usedbytelemarketingpeople,door-todoor
salesman,salestrainees
•Usedwhen
Timeisshortformakingasalespresentation
Theproductisnon-technical
Drawbackoftheprocessincludes
Itisnoteffectiveforsophisticatedbuyers
Salespersonsdoesnotfindtheneedofthe
prospect
Productfeaturesandbenefitsmaynotbe
importantforprospects
56B R

57. Formula method
AIDA model:
It is assumed that most buyers can be led
through mental states or steps in buying
process
Attention
Interest
Desire
Action
57B R

58. Need-satisfaction method
•Interactivesalespresentationmethod
•Salespersontriestounderstandthebuyer’s
needbyaskingquestions
•Afterunderstandingbuyersneed,thesales
persongivesawrittenproposalormovesinto
salespresentationtoshowhowhis/herproduct
orservicecansolvethebuyers’problem
•Doneinthreeways:
Features
Advantages
Benefits
58B R

59. Team Selling Method
•Multi-personsalesteamtodealwithmulti-
personbuyingcentersoftheircustomers.
•Teamsellingshouldnotbeusedforlowsales
andprofitcustomers
•Routinesituationscanbeservedbyasales
personwithoutanyneedforasalesteam
•Ex-atIBMsalesteamconsistsofclient
executive,systemsengineer,consultant,and
productrepresentatives.
•Theemphasisinteamsellingisonbuildinga
long-termrelationship 59B R

60. Team Selling Method [contd..]
Group presentation guidelines:
•Need Analysis
•Introduction
•Convincing
•Specific-benefits
•Well prepared
60B R

61. Consultative selling method
•Problem-solution presentation
61B R

62. Developing an effective
presentation
•Planning
•Use technology
•Adapt presentation
•Benefit plan
•Don’t Overload
•Prospect’s language
•Convincing
62B R

63. Demonstration
•Planning and conducting presentation
•Matching presentation methods with
situations
63B R

64. Overcoming objections
•Ask questions
•Turn an objection into a benefit
•Deny objections tactfully
•Third party certificate
•Compensation
64B R

65. Trail close / closing the sale
•Alternative choice close
•Minor point close
•Assumptive close
•Summery of benefit close
•Balance sheet close
65B R

66. Planning, Forecasting and
Budgeting
•Strategicplanningincludesmakingdecisions
aboutthecompany’slong-termobjectives
andstrategies
•Threelevelsofstrategicplanning:
Corporatestrategicplan
Divisional/businessunit’sstrategicplan
Productfunctionalstrategicplan
66B R

67. Corporate Strategic Planning
•Includes four steps
Developing corporate mission and objectives
Defining Strategic Business Units (SBUs)
Allocation of resources to SBUs and
Developing corporate strategies to fill the
strategic planning gap
67B R

68. SBU
•Foreffectiveplanningandoperations,multi-
productormulti-businessorganizationdivides
itsmajormarketsorproductsintoSBUs.
•EachSBUhasaseparatebusiness,asetof
competitorsandcustomersandamanager
responsibleforstrategicplanningandprofits.
•Donebytheheadofthebusinessunit
•Long-termmission,objective,goaland
strategiesinthechangingenvironment.
68B R

69. SBU planning
•Eight steps..
1.Defining the business unit’s mission
2.Scanning the external environment (for opportunities and
threats analysis)
3.Analysis of the internal environment (for assessment of
strengths and weaknesses)
4.Developing long-term objectives and goals
5.Formulating strategies for achieving the objectives and
goals
6.Preparing program or action-plans from the strategies
7.Implementing the strategies and action-plans
8.Monitoring results and taking corrective actions
69B R

70. Product and operational planning
•Doneforeachproductwithinabusinessunit
•Plansforthespecificproceduresandsystems
requiredatlowleveloftheorganization
•Operationalmanagersnormallydevelopplans
forshortperiodoftime(uptooneyear)
•Focusonroutinetasks,e.g,sales,production,
materialpurchase,recruitingpeopleetc.
•Functionalplansbythefunctionalmanagers
ofmarketing,financeHR,production’s
routine,day-to-dayactivities. 70B R

71. Marketing and Personal Selling
Strategies
•Marketing Strategy
1.Target Market Strategy (Long-term)
2.Marketing Mix Strategy (Short-term)
a.Product
b.Price
c.Promotion/ Marketing Communication
d.Place/Distribution
71B R

72. Sales Strategy
•Four parts of sales strategy..
Classification of accounts
Relationship strategy
Selling methods
Channel strategy
72B R

73. •ClassificationofAccounts
Accountsofspecifiedcustomersareclassifiedinto
differentcustomergroup(e.g.Class“A”,“B”,“C”
..High,MediumandLowsalesrespectively)
•RelationshipStrategy
TransactionalRelationship(lessloyalty,lowprice)
Value-addedRelationship(mediumsalesandprofit
potential,preandpostsalesservice)
CollaborativeRelationship(Buildinglongterm,
mutuallysatisfyingrelationshipbetweenbuyerand
seller)
73B R

74. •Channel Strategy
Selecting appropriate channel (marketing
channel/distribution channel/trade channel)
for covering sales efforts
Various sales channels are…
The company sales force
Industrial distributors or dealers
Manufacturer’s representatives/ agents
Telemarketing
Internet
Brokers and commission merchants
74B R

75. Developing Sales Forecast
•Types..
Product Level
All (Total) Sales
Industry Sales
Company Sales
Product line Sales
Product Variant sales
Product Item Sales
Time Period
Long Range (Term)
Medium Range(Term)
Short Range (Term)
Geographical Area
World
Nation
Region
Territory (Branch/ District)
Customer 75B R

76. Basic Terms Used in Forecasting
•MarketPotential/Industrysalesforecasting
Bestpossibleestimatedsalesofagiven
productorservicefortheentireindustryina
givenmarketforaspecificperiodoftime
Ex-Onlineshoppingisexpectedtobe$200
millionfortheyear2014-15
76B R

77. Market forecast (Market Size)
•Expectedindustrysalesofagivenproductor
serviceatonespecificlevelofindustry
marketingexpenditure,inagivenmarket,for
aspecificperiodoftime.
Ex-MarketSizeoftalcumpowderinthe
organizedsectorinIndia,forthecalendaryear
2004,wasRs.700crore.
77B R

78. •Sales Potential / Company sales potential
Bestpossibleestimatedsalesofagivenproductorservicefora
companyinagivengeographicalareaforaspecificperiodof
time.
•Sales forecast
Estimated company sales of a given product or service, under a
proposed marketing plan, in a given market, for a specific period
of time.
•Sales Budget
Estimateofexpectedsalesvolumeinunitsorrevenuesfromthe
company’sproductsandservicesandthesellingexpenses
•Sales Quota
Sales goal set for a marketing unit for a specific period of time.
A company sets sales quota on the basis of the company sales
forecast
78B R

79. Thank You
79B R