This document discusses key concepts in sales and distribution management. It covers: - Types of sales managers such as administrative, field, and product line sales managers. - Theories of personal selling such as AIDA, right set of circumstances, and behavioral equation theories. - Steps in personal selling like prospecting, pre-approach, approach, presentation, objection handling, and follow up. - Methods of sales forecasting including survey, expert opinion, market studies, sales force opinion, and statistical methods. - Key considerations for territory management and design like market potential, account coverage, salesperson abilities, and ensuring optimal customer service.

1. Sales & Distribution Management

2. Sales Management
• “Planning, direction and control of personal
selling, including recruiting, equipping, assigning,
supervising, paying and motivating as these tasks
apply to the personal sales force” (AMA)
• Management of sales personnel, in a broad sense
it covers advertising, distribution, pricing and
product designing, all elements of marketing
management.

3. Scope & Importance
• It is DAGMAR of the marketing system (awareness,
comprehension, conviction, action)
• It manages the sales force.
• Sales management inspires sales.
• To give training to the salespeople.
• To establish brand image and goodwill.
• To manage sales data.
• Important aspect of income.
• To evaluate the performance.
• The motivation of sales force.

4. Skills of sales personnel
• Product Knowledge
• Strategic prospecting skills
• Rapport building on the call
• Buyer-seller agreement
• Active listening
• Communication: Qualification questioning, Time management
• Objection Prevention
• Objection Handling
• Demo skills
• Gaining commitment
• Closing techniques

5. Types of Sales Managers
• Administrative sales manager
 Highly integrated sales organizations selling multiple lines of products in
national and international markets.
 Vice president, in charge of sales, director of marketing, general sales
manager, marketing manager
 Concerned with coordination and integration of all company activities. He
is an authority on sales & profits.

6. • Field Sales Manager
 Also called operating sales manager.
 Line sales executive directly reporting to administrative sales manager.
 Responsible for effective implementation of sales plans and policies
developed by ASM.
 Provide personal direction and control of sales personnel.
 Maintenance of manpower is the basic task. Recruit, select, train,
supervise, stimulate, evaluate, control and route the sales force.

7. • Administrative-cum-field sales manager
 small organization, combines the functions.
 As an administrator, he plans, organizes, directs and
coordinates.
 As a field operator, he guides, supervises and control the
activities.
 He is a thinker and a doer.

8. • Assistant Sales Manager
 The Administrative sales manager is assisted by assistant sales manager in
the administrative functions of planning, analysis, direction and
coordinating.
 Coordinates the work of sales staff that is specialized in advertising, sales-
promotion, research, merchandising and dealer relations.
 Acts as a link between the head quarters and the field sales manager.
 Acts as both line and staff officer in sales organization.

9. • Product Line Sales Manager
 Company with variety of products.
 Responsible for one or group of products in the product line. Known as
product or brand manager.
 Not only solely responsible for sales but also for production, research,
product development, planning, advertising and profit for the product.
 Report to marketing manager who coordinates the work of several
product sales managers.

10. • Marketing staff manager
 Not a line officer. Staff specialist who are delegated some
responsibilities of administrative sales manager.
 Specialists in the area of marketing research, sales promotion,
merchandising, advertising, sales planning, sales personnel, costs
etc.
 Accountable for analyzing the needs of the marketing organization
in respect of their specific areas of specialization, developing plans,
recommending solutions to the problems encountered.

11. • Divisional/Regional sales manager
 Known as district sales managers who are responsible for the
delegated sales operational duties on a territorial basis.
 They report to assistant sales managers or field sales
managers who act as the liaison officers.
 They are in charge of several divisions or regions.

12. • Branch sales manager
 In case of sales organization that operate branches or local sales offices in
major cities of the country, then come across branch sales manager.
 Line executive responsible for the direction of a small group of salesmen
calling on consumers or dealers in the branch area.
 Recruits, selects and trains sales people with the guidance of
divisional/regional sales manager to whom he reports.
 Holds periodic sales meetings, evaluates sales performance and helps in
key accounts.

13. PERSONAL SELLING
• Enhances customer’s confidence in the seller.
• Promotes long term business relations.
• Human touch to business transactions.
• Helps facilitate the seller to understand each customers’
needs and preferences.
• Satisfy a customer by modifying the product.
• Powerful and effective tool for convincing the customer about
the product.

14. STEPS IN PERSONAL SELLING
Pre-
approach
Prospecting
Presentation and
demonstration
Handling
Objections
Closing
Approach
Follow Up

15. Prospecting
• Process of identifying prospective buyers of the product
• Those who have a need or will to buy and the power to pay.
• May be individuals or organizations.
• Ways to identify prospects:
- Acquaintance references
- Cold calling (random prospecting)
- Centre of influence method (eminent people of society)
- Personal observation
- Direct mail/telephone
- Company records
- Newspapers
- Retailers

16. Pre-approach
• Second step in selling process where after identifying the prospect in the
prospecting stage, the prospect’s likes/dislikes, preferences, habits, nature,
behavior, economic and social status is known.
• Based on this information, the salesman has the necessary tools to plan his
visit/interview the prospect.
• Significance of pre-approach
- Method by which a salesman concentrates only on the prospects, thus
saving time and energy.
- Salesman gain all the possible information about the prospect. Hence can
avoid any serious mistake.
- Because of the pre approach method, the salesman gains ample knowledge
about the prospect before approaching.

17. Approaching
• The prospect and the salesman come in contact with each other face to
face.
• Opportunity to understand and interact with the prospect.
• Gain attention and persuade him to buy are the objectives.
• Guidelines for successful approach:
- Prior appointment
- Timing
- Command
- Relaxed environment
- Open mindedness
- Effective presentation
- Follow up

18. • Methods of Approach
- Cashing in on Brand Name or the Company’s Reputation
- Customer Benefit Approach
- Innovative Product opens the door to the salesmen
- The premium approach (small incentives, gifts)
- The shock approach (rising crimes, risks, old age)
- The approach of “making the prospect feel important”
- The survey approach
- Interactive approach

19. • Handling objections
• Presentation & Demonstration
• Closing the sale
• Follow up

20. THEORIES OF PERSONAL SELLING
• AIDAS Theory 5 stages: Attention, Interest,
Desire, Action and Satisfaction
• Right Set of Circumstances Theory
• Buying Situations Theory
• Behavioral Equation Theory

21. Right Set of Circumstances Theory
• “Everything was right for that sale”.
• The advocates of this theory opine that all the circumstances,
which led to the sales were appropriate or “right” for the sales to
have taken place.
• If the salesperson is successful in securing the prospect’s
attention, maintaining his interest and inducing his desire to buy
the product, sales will result.
• The set of circumstances, includes factors internal and external
to the prospect.

22. Buying Situations Theory/ “Buying Formula” Theory of Selling
The emphasis is laid on the buyer. His problems and needs.
• This theory purports to answer the question: What thinking process goes on
in the prospect’s mind that causes the decision to buy or not to buy?
• The salesperson assist the buyer in finding an appropriate solution to the
problem.
• The theory emphasis on the factors internal to the prospect and the factors
external.
• The theory is based on the presumption that the salesperson will take care of
the external factors.

23. Buying Situations Theory/ “Buying
Formula” Theory of Selling
NEED SOLUTION PURCHASE SATISFACTION

24. “Behavioral Equation” Theory
• Using a stimulus-response model, buying behavior in terms of
purchasing decision process is viewed as phases of learning
process.
• Four essential elements are: drive, cue, response and
reinforcement:
- Drives are strong internal stimuli that impel the buyers’
response. 2 types: Innate drives stem from physiological
needs. Learned drives are serving as dominant in
economically advanced societies.
- Cue are stimuli that determine when the buyer will respond:
trigging cues (activate the decision process) and non trigging
cues (influence the decision process but does not activate).

25. “Behavioral Equation” Theory
• Response is what the buyer does.
• A reinforcement is any event that strengthens the buyer’s tendency to
make a particular response.
• Howard incorporates these four elements into an equation:
B = P × D × K × V
where
• B = response or the internal response tendency, that is, the act of
purchasing a brand or patronizing a supplier
• P = predisposition or the inward response tendency, that is, force of habit
• D = present drive level (amount of motivation)
• K = “incentive potential,” that is, the value of the product or its potential
• satisfaction to the buyer
• V = intensity of all cues: triggering, product, or informational

26. Psychology in Selling
1. The Framing effect
- A cup half empty is often interpreted differently from a cup
half full.
- In case of promoting yourself as a healthier choice,
remember to say 75% lean and not 25% fat.
- Framing/phrasing of words can make a lot of difference, be
sure to do it!

27. Psychology in Selling
2. The Halo Effect
- As marketers, job is to reduce dissonance.
- Sales people tell dress looks good. Besides this, warranties,
exchange and refund policies, positive reviews can help ease
the mind of customers.
- Don’t neglect the after purchase period.

28. Psychology in Selling
3. Attribution Theory
- Attribution theory assumes that people try to determine why
people do what they do, i.e., attribute causes to behavior.
- A person seeking to understand why another person did
something may attribute one or more causes to that
behavior.

29. Psychology in Selling
4. Foot in the Door/ Door in the Face
- Foot in the door- small favors that lead to big ones. Gain
attention, and request bigger later on.
- Door in the Face- Met a boy who asked for Rs 10 whom you
politely rejected? Later on, he said “If you do not wish to
donate, how about buying me some brownies?

30. BUYING SITUATIONS
• The New Task
• The Modified Rebuy
• Straight Rebuy
- These three situations could be significantly different.
- Every time when the buyer makes the purchase decision,
buying situation can be different. The difference between the
buying situations may be caused due to the following factors:
• Awareness about competing brands in a product group.
• Customer has a decision criterion.
• Customer is able to evaluate and decide on his choice.

31. New Task
• Extensive problem solving situation.
• No past experience, new to product and extensive
efforts.
• Longer time than usual.
• Greater risk/cost and time.

32. Modified Rebuy
• Limited problem solving situation but comes with
new experience and preference.
• Could require a change in the customer’s decision
criterion.
• Might lead to a trial purchase.

33. Straight Rebuy
• Extensive problem solving situation.
• Characterized by presence of all three criterion for
differentiation.
• Customers are aware of their choices, they know what
they are searching for, what exactly their need is.
• Very little time is spent in choosing alternatives. Brand
loyalty is relatively higher.
• Customers perceive low risk in buying the good.

34. Important terms:
• Market potential - an estimate of the maximum possible sales
opportunities present in a particular market segment and open to all
sellers of a good or service during a stated future period.
• Sales Potential- 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.
• Sales Forecast- an estimate of sales, in dollars or physical units, in a
future period under a particular marketing program and an assumed
set of economic and other factors outside the unit for which the
forecast is made.
- A sales forecast may be 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.

35. Sales Forecasting
• According to Cundiff and Still, is “an estimate of sales
during a specified future period which is tied to a
proposed marketing plan and which assumes a
particular set of uncontrollable and competitive
forces.”

36. Steps in Sales Forecasting
• Defining objectives to be achieved.
• Dividing various products into homogeneous groups.
• Analyzing the importance of various factors to be studied for
sales forecasting.
• Selecting the method.
• Collecting and analyzing the related information.
• Drawing conclusions from the analysis made.
• Implementing the decisions taken.
• Reviewing and revising the sales forecasting from time to
time.

37. Methods of Sales Forecasting
• Survey Method
- Based on the opinion of buyers and consumers.
- Useful in context of industrial products.
- Company selects potential consumers and collects
their opinions for forecasting.

38. Methods of Sales Forecasting
• Expert Opinion
-company invites the opinions of executives and
consultants who are acknowledged experts in
studying sales trends.
-on the basis of their opinions and past performance,
future sales is forecasted.
-this method suffers from drawback of not considering
changes in the future business environment.

39. Methods of Sales Forecasting
• Market Studies Method
-commonly used method by marketers for consumer
goods.
-also known as market test method.
-market test method provides data about consumers
and marketing mix.
-market experiments are conducted on changing
consumer behavior, prices, advertising expenditure,
etc.

40. Methods of Sales Forecasting
• Sales Force Opinion Method
- Estimates the buyers intentions from experienced
personnel in the sales force.
- The personnel can easily forecast for their respective
territories.
- Territory wise forecasts are consolidated at the
branch level and branch level forecasts are
consolidated at the corporate level.
- This method is most appropriate when firm has
competent high calibre sales personnel.

41. Methods of Sales Forecasting
• Statistical Methods
- Trend Method
- Graphical Method
- Time Series Method
- Regression

42. Territory Management
• Includes the market potential, number of customer accounts,
the firms experience and market share in the territory, the
capability of the salesperson assigned and the frequency of
sales calls made.
ACTIVITIES OF TERRITORY MANAGEMENT
Trade Relations
Potential Business
Coverage
Reports
Territory Size
Portfolio of accounts
Selling Techniques
Customer Satisfaction
Selling Abilities

43. Why establish Sales Territory?
• To obtain entire coverage of the market
• To establish a salespersons’ responsibility
• To evaluate performance
• To improve customer relations
• To reduce sales expenses
• To allow better matching of salesperson to customer
• To benefit the salespeople and the company

44. • Follow these steps while designing territories:
- select a basic geographical control unit
- Determine sales potential in control unit
- Combine control units into tentative territories
- Adjust for coverage difficulty and reallocating
tentative territories.

45. Approaches to design territories
• Market Build-Up Approach
Estimation of the present and potential
products/services demand is made by considering
how the market is built up, who are the potential
users and how much do they consumer and at what
frequency.

46. Approaches to design territories
• The Workload Approach
Approach designed by WJ Talley on the basis of workload
performed by salespersons. Follow these steps:
- Customers are grouped into class size according to the sales
volume.
- Optimum call frequencies for each class of customers are
estimated.
- Present and potential customers are then located geographically
and arranged volume wise and value wise.
- The number of present and potential customers in each
volume/value group is then multiplied by the desired call frequency
to get the total number of planned calls required for each
geographical control unit.

47. END OF UNIT 1