Introduction to Sales and Distribution Management


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Introduction to Sales and Distribution Management

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Introduction to Sales and Distribution Management

  1. 1. Chapter 1 Introduction to Sales and Distribution Management SDM-Ch.1 1
  2. 2. • “Everybody Lives by selling something Robert Louis Stevenson SDM-Ch.1 2
  3. 3. • Selling is not just for sales people • Personal selling -personal communication of information to unselfishly persuade a prospective customer to buy something a good or a service or an idea SDM-Ch.1 3
  4. 4. Growing importance of Sales • • • • • • • Sales people are a dynamic power in any country’s economy 13% of the US workforce is in sales,more sales than marketing managers ! In a developing economy such as India, companies are building and maintaining large sales forces ( insurance, Telecom, Real Estate) Selling generates revenue (top line) Sales person is a professional manager building long term relationships with customers Sales persons role has become sophisticated, relationship building focus,use of technology team selling Goes by a variety of names Business Development Manager, Client Relations manager, Customer Retention Manager ,Key Account Manager SDM-Ch.1 4
  5. 5. Sales and Distribution Management • Sales and Distribution Management are both components of the marketing mix SDM-Ch.1 5
  6. 6. Sales and Distribution management • Sales Managers are responsible for generating sales, profits and customer satisfaction levels that meet corporate objectives • Sales management is the attainment of sales force goals in an effective and efficient manner through planning, staffing training and controlling organisational resources SDM-Ch.1 6
  7. 7. Sales and Distribution Management • Marketing channels are the pathways through which a product or service is made available to consumers for consumption • Channel Management (Distribution management) is the art and science of designing the channel, selecting and motivating channel members and promoting the product or service through the channel SDM-Ch.1 7
  8. 8. A career in sales • Why choose a job in Sales? SDM-Ch.1 8
  9. 9. Why Sales ? • Autonomy,freedom of action and opportunities • Job Variety,multifaceted • Challenging role • Career growth faster • Financial rewards SDM-Ch.1 9
  10. 10. Salesmen who became CEOS • • • • Sam Palismo IBM Jeff Imelt of GE Anne Mulcahy of Xerox Dirubhai Ambani began his career as a salesperson • Sales person has an all round knowledge of company’s products, customers, competition SDM-Ch.1 10
  11. 11. Nature of Sales Management • Its integration with marketing management HeadMarketing ManagerPromotion Manager – Market Research Manager – Sales Manager – Market Logistics Manager – Customer Service • Relationship Selling Transactional Value – added Collaborative Relationship / Relationship / Partnering Selling Selling Relationship Selling SDM-Ch.1 / / 11
  12. 12. • Varying Sales Responsibilities / Positions / Jobs Sales Position Brief Description Examples • Delivery salesperson • Delivery of products to business • Milk, newspapers to households customers or households. • Also takes orders. • Soft drinks, bread to retail stores. • Order taker (Response selling) • Inside order taker • Sales support • Missionary selling • Technical selling • Provide information, build • Medical reps. in pharma industry goodwill, introduce new products • Technical information, assistance • Steel, Chemical industries • Behind counter in a garment shop • Pharma products’ orders from • Telemarketing salesperson takes nursing homes orders over telephone • Food, clothing products’ orders • Outside order taker. Also from retailers performs other tasks • Order-getter (Creative, Problem- • Getting orders from existing and • Automobiles, refrigerators, solving, Consultative selling) new household consumers insurance policies • Getting orders from business • Software and business solutions customers, by solving their business and technology problems SDM-Ch.1 12
  13. 13. Importance of Personal Selling and Sales Management • The only function / department in a company that generates revenue / income • The financial results of a firm depend on the performance of the sales department / management • Many salespeople are among the best paid people in business • It is one of the fastest and surest routes to the top management SDM-Ch.1 13
  14. 14. Roles and Skills of a Modern Sales Manager Some of the important roles of the modern sales manager are: • A member of the strategic management team • A member of the corporate team to achieve objectives • A team leader, working with salespeople • Managing multiple sales / marketing channels • Using latest technologies (like CRM) to build superior buyer-seller relationships • Continually updating information on changes in marketing environment SDM-Ch.1 14
  15. 15. Skills of a Successful Sales Manager • People skills include abilities to motivate, lead, communicate, coordinate, team-oriented relationship, and mentoring • Managing skills consist of planning, organizing, controlling and decision making • Technical skills include training, selling, negotiating, problem-solving, and use of computers SDM-Ch.1 15
  16. 16. Types of Sales Managers / Levels of Sales Management Positions CEO / President V. P. Sales / V. P. Marketing Top-Level Sales Managers / Leaders National Sales Manager Regional / Zonal / Divisional Sales Managers District / Branch / Area Sales Managers Middle-Level Sales Managers First / Lower Level Sales Managers Sales Trainee / Sales Person / Sales Representative SDM-Ch.1 16
  17. 17. Sales Objectives, Strategies and Tactics The main components of planning in a company are objectives, strategies and tactics. Their relationship is shown below Decide / Set Objectives Develop Strategies Evolve Tactics / Action Plans E.G. A company wants to increase sales of electric motors by 15 percent, as one of the sales objectives. (see next slide) SDM-Ch.1 17
  18. 18. To illustrate the relationship between sales objectives, strategies and tactics, consider: Sales Goals / Objectives • Increase sales volume by 15 percent Marketing Strategy • • SDM-Ch.1 Sales and Distribution Strategy Tactics / Action plans Enter export • markets • Identify the countries • Decide distribution channels • Penetrate existing domestic markets Review and improve • salesforce training, motivation • and compensation Use effective and efficient • channels • • • Marketing / sales head to get relevant information Negotiate and sign agreements in 3-5 months with intermediaries Add channels and members Train salespeople in deficient areas Train field salesmanagers in effective supervision Link sales volume quotas to the incentive scheme of the compensation plan 18
  19. 19. Emerging Trends in Sales Management • • • • • • • • Global perspective Revolution in technology Customer relationship management (CRM) Salesforce diversity Team selling approach Managing multi-channels Ethical and social issues Sales professionalism SDM-Ch.1 19
  20. 20. Linking Sales and Distribution Management • Either sales management or distribution management cannot exist, operate or perform without each other • To achieve the sales goals of sales revenue and growth, the sales management plans the strategy and action plans (tactics), and the distribution management has the role to execute these plans • This will be illustrated by considering some sales management actions and corresponding role of distribution management (in the next slide), as well as by discussing a few integrated cases given at the end of the book SDM-Ch.1 20
  21. 21. Role of Distribution Management for some of the Sales Management Actions / Tasks Sales Management Actions / Tasks Distribution Management Role • Strategy for effective coverage of markets and outlets • Follow call plan / beat plan • Make customer call productive • Use multi-channel approach • Strategy for handling customer complaints • Prompt action at the customer interface level • If the problem persists, involve senior sales and service people • Planning of local advertising and sales promotion • Co-ordination with distribution channels • Responsibility of execution with distribution channels • Expenses are shared between the company and intermediaries 21 SDM-Ch.1
  22. 22. Key Learnings • Sales management is defined as the management of the personal selling part of a company’s marketing function • Selling includes varying sales jobs like delivery salesperson, order taker, sales support person, and order getter • Sales is the only function or department in an organization that generates revenue / income • Skills of a successful sales manager include managing, technical and people • Main components of sales planning are objectives, strategies, and tactics (or action plan) • Either sales management or distribution management can not exist, operate or perform without each other SDM-Ch.1 22