SALES AND DISTRIBUTION MANAGEMENT PPT.pptx

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1. SALES AND DISTRIBUTION MANAGEMENT By: Dr. Bhawna Singh

2. DefiNING SALES Sales refers to the exchange of goods/ commodities against money or service. It is the only revenue generating function in an organization. It has formed an important part in business throughout history. Even prior to the introduction of money, people used to exchange goods in order to fulfill the needs, which is known as the barter system. Example of Barter System A has 100 kg of rice and B has 50 kg of wheat. Here, A needs wheat and B needs rice. They agree to exchange 50 kg of rice and 25 kg of wheat upon mutual understanding.

3. Conditions of Sales  There are two parties involved in the transaction, the seller and the buyer.  The seller is the provider of goods or services and the buyer is the purchaser in exchange of money. The seller of goods has to transfer the title of ownership of the item to the buyer upon an agreed price. A person who sells goods or services on behalf of the seller is known as the salesman/woman.

4. Distribution is the process of making a product or service available for use or consumption to the end consumer or business. Distribution could be of the following two types: Direct Distribution It can be defined as expanding or moving from one place to another without changing direction or stopping. For example, Bata has no distribution channel; it sells its products directly to the end consumers. Indirect Distribution It can be defined as means that are not directly caused by or resulting from something. For example, LG sells its product from the factory to the dealers, and it reaches the consumers through dealers. DISTRIBUTION

5. DEFINING SALES MANAGEMENT Sales management in an organization is a business discipline, which focuses on the practical application of sales techniques and the management of a firm’s sales operation. It is done in an efficient and effective manner through planning, staffing, training, leading and controlling organizational resources. Sales management is done by Sales Managers and they are responsible for generating sales, profits and customer satisfaction .

6. Importance / significance of sales management Sales management is very crucial for any organization to achieve its targets. In order to increase customer demand for a particular product, we need management of sales. The following points need to be considered for sales management in an organization:  The first and foremost importance of sales management is that it facilitates the sale of a product at a price, which realizes profits and helps in generating revenue to the company.

7.  It helps to achieve organizational goals and objectives by focusing on the aim and planning a strategy regarding achievement of the goal within a timeframe.  Sales team monitors the customer preference, government policy, competitor situation, etc., to make the required changes accordingly and manage sales.

8.  By monitoring the customer preference, the salesperson develops a positive relationship with the customer, which helps to retain the customer for a long period of time.  Both the buyers and sellers have the same type of relationship, which is based on exchange of goods, services and money. This helps in attaining customer satisfaction.

9. Objective of Sales Management Every organization has an objective before initializing functions. We need to understand the goal of managing sales. Here we are discussing Sales Management in terms of its objectives. Sales Volume - It is the capacity or the number of items sold or services sold in the normal operations of a company in a specified period. The foremost objective of sales management is to increase sales volume to generate revenue.

10. Contribution to Profit - The sales of the organization should contribute to profit, as it is the only revenue generating department. It can be calculated as the percentage or ratio of gain in total turnover. Continuing Growth - One of the main objectives of Sales Management is to retain consumers to continue growth of the organization. There should be regular expansion of sales and demand for an item in the market with new advanced formulation.

11. Skills of a Sales Executive Sales management is an art where the sales executive or the salesperson helps the organization or individual to achieve its objective or buy a product with their skills. The following are some skills that a sales executive needs to possess: Conceptual Skills : Conceptual skill includes the formulation of ideas. Managers understand abstract relationships, improve ideas, and solve issues creatively. The sales executive should be well versed with the concept of the product he/she is selling.

12. Technical Skills : Technical skills are the abilities captured through learning and practice. They are often job or task specific. In simple words, a specific skill set or proficiency is required to perform a specific job or task. As a part of conceptual skills, a sales executive sho Decision Skills : Decision skills are the most important because to tackle the questions from consumers, sales executive should always have the knowledge of competitors’ products and take a wise decision.uld also have a good grasp on the technical skills of the product.

13. People Skills : People skills involve the ability to interact effectively with people in a friendly way, especially in business. The term ‘people skills’ involves both psychological skills and social skills, but they are less inclusive than life skills. Every person has a different mindset, so a sales executive should know how to present the product depending on the customer’s mindset. Technical Skills : Technical skills are the abilities captured through learning and practice. They are often job or task specific. In simple words, a specific skill set or proficiency is required to perform a specific job or task. As a part of conceptual skills, a sales executive should also have a good grasp on the technical skills of the product.

14. Decision Skills : Decision skills are the most important because to tackle the questions from consumers, sales executive should always have the knowledge of competitors’ products and take a wise decision. Monitoring Performance : Sales executives should monitor the performance of the employees and report to higher management to improve the performance and fill the loop holes.

15. TYPES OF SALES MANAGERS 1. Administrative sales manager: Administrative sales managers are found normally in highly integrated sales organisations selling multiple lines of products in national and international markets. He is known by alternative titles such as ‘vice president’, ‘in-charge of sales’, ‘director of marketing’, ‘general sales manager’ and ‘marketing manager’. He is primarily concerned with coordination and integration of all the company activities relevant to marketing. 

16. 2. Field sales manager: The field sales manager or operating sales manager is a line sales executive reporting directly to the administrative sales manager. Operative sales manager works under the direction, guidance and supervision of the general sales manager. He is mainly responsible for the effective implementation of sales plans and policies developed by the administrative sales manager.

17. 3. Administrative-cum-field sales manager: In case of smaller organisations , we come across such sales manager who combines the functions of administrative and executive sales officer. Generally speaking, administration and field operations cannot go together. However, size and economy points force many units to combine the distinct roles of administration and field operation.

18. 4. Assistant sales manager: Generally, the administrative sales manager is assisted by Assistant sales manager in the administrative functions of planning, analysis, direction and coordination. He coordinates the work of sales staff that is specialized in advertising, sales-promotion, research, merchandising and dealer relations.

19. 5. Product-line sales manager: A company that markets variety of products has such product-line sales manager responsible for one or group of products in the product- line. He is also known as product or brand manager.

20. 6. Marketing staff manager: As the title suggests, the Marketing staff manager is not a line-officer. He is one of the staff specialists who are delegated some of the responsibilities of administrative sales manager. These are the specialists in the areas of marketing research, sales-promotion, merchandising, advertising, sales planning, sales personnel, distributor/dealer relations, sales costs, budget sales finances, traffic, sales office administration and service and the like. These staff managers being non-line officers have no field tasks.

21. 7. Divisional/regional sales managers: In all the national organisations , one comes across these Divisional or Regional sales managers. These are also known as District sales managers who are responsible for the delegated sales operational duties on a territorial basis.

22. 8. Branch sales mangers: In case of sales organisations that operate branches or local sales offices in major cities of the country, one is to come across such Branch sales managers. Branch sales manager is a line executive responsible for the direction of a small group of salesmen calling on consumers or dealers in the branch area.

23. 9. Sales supervisor: A sales supervisor is a line sales manager who supervises normally eight to fourteen salesmen. He is seen in branch sales office of a national sales organisation having branches all over the nation.

24. PERSONAL SELLING Personal selling is also known as face-to-face selling in which one person who is the salesman tries to convince the customer in buying a product. It is a promotional method by which the salesperson uses his or her skills and abilities in an attempt to make a sale.

25. IMPORTANCE OF PERSONAL SELLING 1. Two-Way Communication: 2. Personal Attention: 3. Detail Demonstration: 4. Complementary to other Promotional Tools: 5. Immediate Feedback:

26. ADVANTAGES AND DISADVANTAGES OF PERSONAL SELLING

27. PSYCHOLOGY IN SELLING Sales psychology is a type of process that involves considering the psyche of your target market to  sell your products and services . Following are the principles : Reciprocity Commitment Liking Authority Social Scarcity Unity

28. Theories of personal selling The process of influencing others to buy may be viewed from four different angles on the basis of different theories 1. AIDAS theory of personal selling 2. “Right Set of Circumstances” theory of selling 3. “Buying Formula” theory of selling 4. “Behavioral Equation” theory

29. AIDAS THEORY 1. Attention Getting: 2. Interest Creating: 3. Desire Stimulating: 4. Action Inducing: 5. Satisfaction:

30. “Right set of circumstances” Theory of Selling: It is also called the “situation-response” theory. It has its psychological origin in experiments with animals. The major emphasis of the theory is that a particular circumstance prevailing in a given selling situation will cause the prospect to respond in a predictable way. The set of circumstances can be both internal and external to the prospect. This is essentially a seller-oriented theory and it stresses that the salesman must control the situation in such a way as to produce a sale ultimately.

31. “Buying Formula” Theory of Selling: The buyer’s needs or problems receive major attention, and the salesperson’s role is to help the buyer to find solutions. This theory purports to answer the question: What thinking process goes on in the prospects’s mind that causes the decision to buy or not to buy? The name “buying formula” was given to this theory by strong.

32. Behaviour Equation Theory of Selling: This theory is a sophisticated version of the “right set of circumstances” and this theory was proposed by Howard, using a stimulus response model and using large number of findings from behavioural research. This theory explains buying behaviour in terms of purchasing decision process, viewed as a phase of the learning process, four essential elements of learning processes included in the stimulus response model are drive, cues, response and reinforcement

33. BUSINESS BUYING PROCESS / BUYING SITUATION Business Buying Process The business buying process is quite different from the consumer buying process. Because in this case the business market is involved in a different set of characteristics and demands. The companies doing business in business markets adopt separate marketing strategies. The following are the three types of business buying situations: 1. Straight Re-buy In this situation, the previous routine order is made by one business without any modifications.

34. 2. Modified Re-buy In this case, a certain business wants to modify its order in respect of specification of the product. Along with its price or terms, etc. Hence this requires more participants in the decision-making process. 3. New Task When a business buys a specific product or service for the first time. Then this case is called new task buying.

35. SALES PROCESS What is a sales process? A sales process is a set of important steps that your sales team can follow to complete a sales cycle. By following a sales process, your sales reps can take prospects from the stage of being aware or unaware of their needs, to paying for your offerings to meet these needs. Well-defined sales processes also provide the right actions to be performed at every stage to ensure deals do not fall through the cracks.

36. SALES PROCESS

37. 1. Prospecting To identify the right prospects, create buyer personas and ideal  customer profiles  based on people who have already bought from you in the past, and articulate why they did. Understand the challenges prospects face, and how you can position your offerings as a solution for their most pressing pain points. Salespeople can use various online and offline tools for prospecting. Online tools include emailing, and social selling through platforms like LinkedIn. Offline tools include cold calling, conferences or webinars, trade expos, and industry events. Savvy sales reps also try to generate referral leads through current customers.

38. 2. Qualifying The next step in the sales process should be connecting with prospects and figuring out whether your offerings are a good fit for them or not. Also, determine if it would be fruitful to take them through the rest of the  sales process . A sales rep can connect with a lead over a discovery call or email to find out:  What role they play in their company  What their day-to-day responsibilities include What problems they are looking to solve Why solving the problem is important for their business Other solutions they are considering

39. 3. Research At this stage, the sales rep must learn more about the prospect. Such research allows them to put themselves in the prospect’s shoes and understand their problems and needs better. This, in turn, allows reps to tailor their sales pitches – positioning their offerings as the solution. The research a sales rep conducts must be deep and multifaceted. 

40. 4. Pitching Once the salesperson is confident that they know enough to truly understand the prospect’s needs, they can run a formal demonstration of the offerings for the prospect. Each demonstration or pitch must be tailored to satisfy the prospect’s particular use case. For certain types of offerings, such as technological solutions, a salesperson might also consider collaborating with an engineer who can answer any technical questions on the pitch.  Pitching is a time-consuming step, which is why the step of qualifying leads is so important. Salespeople’s precious time shouldn’t be spent on pitching to prospects that are unlikely to convert to actual sales.

41. 5. Objection handling It is natural for prospects to have questions and concerns about your offerings. This is an important step in the sales process that can make or break a deal. If your reps can successfully answer all the questions and allay prospects’ fears, it’s easier to close the deal without any hiccups. Reps should anticipate and prepare for common objections such as:  We don’t have the budget currently. Is there a more economical version of your product we can buy? Your competitor is offering more features at a lower price. I don’t understand how your offering can help me achieve my business goals.

42. 6. Closing This is the stage every sales rep hopes to cross. Closing a sale depends on various processes that need to be completed for a sale to be considered closed –  submitting a quote , final negotiations, signing the contract and other important documents, etc. If the close does not go as planned, sales reps should put the prospect on a nurturing program to re-engage them in the future.

43. 7. Nurturing and continuing to sell The sales process does not end with closing a sale. Once the prospect turns into a customer, they can be passed on to an account manager or customer success representative to initiate the onboarding process.  A salesperson should continue to communicate with the customer about things like post-sales assistance that they may need. Nurturing a relationship with the customer will give the salesperson opportunities to cross-sell and upsell, as well as get qualified referrals through the customer.

44. SALES FORECASTING Sales Forecasting  is the process of using a company’s sales records over the past years to predict the short-term or long-term sales performance of that company in the future. This is one of the pillars of proper financial planning. As with any prediction-related process, risk and uncertainty are unavoidable in Sales Forecasting too. Hence, it’s considered a good practice for Sales forecasting teams to mention the degree of uncertainties in their forecast. Sales Forecasting is a globally-conducted corporate practice where a number of objectives are identified, action-plans are chalked out as well as budgets and resources are allotted to them.

45. Sales Forecasting - Factors to Consider For a successful and accurate Sales Forecasting, it’s necessary to take into consideration the direction from significant departments of the organization, comprising of seniors, managers, sales teams and finally −  your own gut feeling . Let’s list down these sources of instructions and how they contribute towards designing a reliable sales forecast. Directions from Top-level Seniors  − It may be initially necessary for you to increase your sales by 10%, however your seniors, being wiser, may ask you to reconsider your target depending on promises made to outside investors as well as stockholders.

46. Directions from one’s own manager  − These kind of directions are mostly integrated along with the direction from the top level, but their expectations are generally little more conservative and realistic. If the top management gives you a target of 15% sales growth, your manager will tell you what the real expectations are. Direction from Sales Teams  − For instance, if the Sales Teams may project a growth of 10% over the management's forecast figure of 20%; this extra-conservative number is a cushion, so that they could increase their chances to beat the sales forecast. Direction from other Entities  − Many other entities also take part in Forecasting. Chief among them are the Research and Development department, Human Resource department, Marketing department finance team, manufacturing unit, etc.

47. SIGNIFICANCE OF FORECASTING 1. A sales forecast is a planning tool. The act of planning is always one of the best ways to ensure adaptability to your business’ ever-changing ecosystem. It reduces uncertainty and leads you to increased responsiveness and improved services. 2. A sales forecast is a mitigating measure. Because sales forecasts enable you to see potential problems before they actually occur, it gives you ample amount of time to prepare for the potential problems, making it easier for you to avoid them

48. 3. A sales forecast is a decision-making tool. Sales forecasts are remarkable decision-making tools since it gives you a better perspective of all the elements in place that can affect your sales. 4. A sales forecast is a performance assessment tool. Sales forecasts can be an effective measuring tool where you gauge the efficiency of your sales team or the organisation as a whole.It presents targets that all departments can base their respective action plans on to support the sales team and generate better results

49. Methods of Sales Forecasting 1. Sales Force Opinion This is a method where the salespeople or intermediaries are the ones responsible for making their estimate sales goals specific to their respective scope at a given period. This method takes advantage of the specialised knowledge of your salespeople about your customers since they are the ones in direct contact with them. It, therefore, facilitates the breaking down of the sales forecast into specific products and markets and gives the sales team more confidence in meeting their quota.

50. 2. A Jury of Executive Opinion This is known to be the oldest method of sales forecasting. In this method, the executive committee is the one responsible for coming up with the sales forecast presumably based on the committee members’ knowledge and experience of the market factors. 3. Consumer’s Buying Plan This is when information is gathered directly from the consumers by administering a survey to ask them about their likely purchases given certain conditions at a given time. This method is best for products with few customers like the industrial goods.

51. 4. Test Marketing Result This is a method where you introduce your product (or products) to a group of people from a geographical test area. The results are then studied and made as a basis for sales forecasting.

52. 5 . Market Factor Analysis This sales forecasting method is done by determining and studying the principal market factors that affect the sales and drawing a sales forecast from the results of the study. This method uses statistical analysis (correlation and regression) to establish the relationship of certain market factors.   6 . Historical Method As the name suggests, this method uses past sales records to come up with a sales forecast. This is the simplest and quickest way of predicting sales by matching records of previous sales to a future period and assuming a certain percentage of addition or deduction to the sales results depending on set conditions.

53. 7 . Statistical Method There are several Statistical methods you can use for sales forecasting- The Trend method, The Graphical method, The Time Series method, Etc. Choosing which statistical method to use for a product can be quite challenging considering how there are several options available, let alone the fact that there are different types of products as well (e.g., stable mature products, slow-moving, new products, etc.). If you can’t figure out which method to use, then you can bring in a sales forecasting expert so they can analyse the data themselves , and be able to pick the appropriate method to use.

54. 8 . Econometric Model Building This method uses a mathematical approach to studying the factors affecting sales. Similar to Market Factors Analysis, this method also uses statistical analysis to establish a relationship between market factors. This method, however, employs more than just correlation and regression analysis, therefore requiring the availability of complete information.

55. SALES TERRITORY : Meaning A sales territory is defined as a group of present and potential customers assigned to an individual salesperson, a group of salesperson, a branch, a dealer, a distributor, or a marketing organization at a given period of time. For a firm, a profitable sales territory is one which has a number of potential customers that are willing to buy the category of products sold under the firm’s brand name. S ales territory is a geographical area that identifies and serves a category and a certain number of customers , but there are some situations where companies decide to build sales territories on the basis of the urgency and frequency of customer requirements rather than geographic coverage.

56. Characteristics 1. Sales territory is a geographical area containing a number of present and potential customers. 2. Different groups of customers are formed by a firm through allotment of territories. 3. It is a group of customers or geographical area assigned to a salesman. 4. It is the area that can be effectively and economically served by a single salesman.

57.  Factors to be Kept in Mind while Allocating Sales Territories 1. Even distribution coverage (uniform distribution) 2. Elimination of duplication of activities 3. Equal opportunity 4. Flexibility in allocation  5. Controllable  6. Capable of comparative study 7. Uniformity in income 

58. 8. Economical  9. Efficient performance 10. Allocation to new salesmen