Selling and Sales Management

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By :
Prof. Amit Kumar

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“A student pursuing management education from IILM-
Graduate School of Management, for example may find
himself or herself placed in a firm as a Sales Manager.
Our goal is to prepare the student for the exciting
challenges related to leading sales organizations in
today’s hyper-competitive global economy”.
IILM-GSM
Importance of this course
Selling & Sales Management

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Selling & Sales Management
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Contents
• Definition of Direct Selling
– Operational Perspective
– Tactical Perspective
– Strategic Perspective
• Problems in Direct Marketing
• Designing a Direct Marketing Channel
• Case: Growth of Amway India
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Definition of Direct Selling
• A Method of distribution of consumer goods and services
through personal (sell to buyer) contract away from fixed
business locations, primarily in a home.
---- Industry Trade Association in Washington DC
• A form of selling without retail outlets, distributors, wholesalers
or any type of middlemen.
---- Baker (1984)
• The marketing of consumer goods and services directly to
consumers in their homes by way of explanation and/or
demonstration through a salesperson. The location can also be
a friend’s home, the workplace of the customer during breaks or
other places away from shops –
----Federation of European Direct Selling Association
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What is Direct Selling?
Direct selling is a dynamic, vibrant,
rapidly expanding channel of
distribution for quality products
through independent business people
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Definition: Direct Selling
The sale of a consumer product or
service, in a person-to-person
manner, away from a fixed retail
location, where the company offers
opportunities to an independent
contractor sales force
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Definition: Multilevel Marketing/
Network Marketing
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Selling & Sales Management Direct Selling System
A compensation system within direct selling,
where a distributor/salesperson can earn
money not only on their own personal
sales, and not only on the sales of a person
personally recruited by them, but also on
sales of persons recruited by their personal
recruits

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Multilevel Marketing / Network Marketing
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• A marketing system where individual direct sellers
recruit, train and develop a team of product users
• These new direct sellers also recruit, train and develop
their own team of product users, who also recruit, train
and develop their own team …
• BASIC CONCEPT is that any individuals sales
performance can be multiplied by using the efforts of
others through a network of people who work directly
for themselves and indirectly for the person who
introduced them into the network

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Direct Selling Systems
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Selling & Sales Management Direct Selling System
• Classical Direct Selling, Multi-Level Marketing
(MLM), Network Marketing and Referral Marketing
are selling systems
• Variety of compensation plans (financial reward) and
administrative systems
• Main difference between Multi-Level Marketing and
Network Marketing - structure and benefits of the
COMPENSATION PLAN

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Face-to-face selling
Away from a fixed retail location
Direct selling is distinct from direct marketing in
that at an operational level it does not involve
mailed catalogs, telemarketing, direct response
advertising, infomercials, or the like.
Operational Perspective
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Direct Selling can be characterized by
The type of salesperson used.
Whether selling agents are part-time or fulltime.
Whether the selling effort occurs in a home or elsewhere.
Whether it is transaction-oriented or relationship-oriented.
Whether it follows a party plan format.
Whether personification is used.
Whether it is multi-level.
The extent to which selling agents are customers.
Whether selling agents take physical possession of products
The manner in which purchases are delivered and payment
is obtained.
Tactical Perspective
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Direct Selling as a Distribution Channel
Strategic Perspective
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Direct Selling as a Means of Gaining Access to a market
◆Direct selling is a push marketing strategy
Direct Selling as a Way of Doing Business
◆ Direct selling is the preferred channel of distribution
because it is “ invisible” .There are no products on
shelves that competitors can monitor.
◆ Direct selling can be undertaken by a firm with
relatively little start-up capital, especially capital for
marketing and distribution purposes.
Strategic Perspective
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What can be sold through Direct Selling ?
Vacuum cleaners
Encyclopedias
Cosmetics
Nutritional items
Kitchenware
Who buys from Direct Sellers ?
In the United States are more likely to be female, younger,
and possess more education and higher incomes than
individuals who have not purchased from a direct selling
company .
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What are the characteristics of Direct
Sellers ?
72% of direct salespeople are married
90% are women. 8%are under age 25. 63% between 25
and 44 and 24%between 45 and 64.
To be a successful direct selling agent, an individual
must be a good communicator and be highly motivated.
Sales performance and job satisfaction were
independent but higher levels of effort led to higher
levels of performance and satisfaction.
Persistence and initiative are major characteristics of
success in direct selling.
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