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Sales & distribution management

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Sales & distribution management

  1. 1. Sales and Distribution Management
  2. 2. SALES MANAGEMENT The only business function that generates revenue.
  3. 3. LEARNING OBJECTIVES  To understand evolution, nature and importance of sales management  To know role and skills of modern sales managers  To understand types of sales managers  To learn objectives, strategies and tactics of sales management  To know emerging trends in sales management  To understand linkage between sales and distribution management
  4. 4. EVOLUTION, NATURE AND IMPORTANCE OF SALES MANAGEMENT Evolution of Sales Management  Situation before industrial revolution in U.K. (1760AD)  Situation after industrial revolutions in U.K., and U.S.A.  Marketing function splits into sales and other functions like market research, advertising, physical distribution
  5. 5. WHAT IS SALES MANAGEMENT? definition: “The management of the personal selling part of a company‟s marketing function.”  One definition: “The process of planning, directing, and controlling of personal selling, including recruiting, selecting, equipping, assigning, supervising, paying, and motivating the personal sales force.  Another
  6. 6. 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 Relationship Selling Value – added Collaborative / Relationship / Partnering Selling Relationship Selling / /
  7. 7. RELATIONSHIP SELLING  Salespeople concentrate their team selling efforts on building trust and service on a few carefully selected customers over a long period with a aim of becoming a preferred or sole supplier
  8. 8.    Transactional Relationship / Selling:- one type of relationship marketing in which salespeople make onetime sales to price-oriented customers ,who are not contacted again Value – added Relationship / Selling:- understanding current and future needs of customers and meeting those needs better than competitors with value – added solution to their problems Collaborative relationship :- a type of relationship marketing in which a selling organization works continuously with its large customers to improve the customer performance in terms of operations , sales and profit
  9. 9.  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 • Pharma products’ orders from nursing homes. • Telemarketing salesperson takes orders over telephone • Food, clothing products’ orders • Outside order taker. Also from retailers performs other tasks • Sales support • Missionary selling • Technical selling • Provide information, build • Medical reps. in pharma industry goodwill, introduce new products • Technical information, assistance • Steel, Chemical industries • 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
  10. 10. 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
  11. 11. 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
  12. 12. SKILLS OF A SUCCESSFUL SALES MANAGER  People skills include abilities to motivate, lead, communicate, coordinate, teamoriented 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
  13. 13. 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 Sales Trainee / Sales Person / Sales Representative Middle-Level Sales Managers First / Lower Level Sales Managers
  14. 14. SALES TERRITORIES  Definition : A sales territory consists of existing and potential customers assigned to a sales person. The territory may or may not have geographic boundaries.
  15. 15. REASONS FOR TERRITORIES  Increase / improve customer coverage  Control selling expenses  Effective evaluation of salesman‟s performance.  Improve customer relations
  16. 16. TERRITORY DESIGN  1. 2. 3. 4. Main procedural steps: Selection of a basic geographical control unit Determination of sales potential present in each unit Combining the basic units into tentative territories Adjust for differences in coverage difficulty and readjust the tentative territories ( build up / break down method )
  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.
  18. 18. TO ILLUSTRATE THE RELATIONSHIP BETWEEN SALES OBJECTIVES, STRATEGIES AND TACTICS, CONSIDER: Sales Goals / Objectives Increase sales volume by 15 percent Marketing Strategy Enter export markets Sales and Distribution Strategy Identify the countries Decide distribution channels Penetrate existing domestic markets Review and improve salesforce training, motivation and compensation Use effective and efficient channels Tactics / Action plans 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
  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
  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 
  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
  22. 22. SALES MANAGEMENT  Planning, direction and control of personal selling including recruiting, selecting, training, equipping, assigning, supervising, compensating and motivating as these tasks apply to the personal sales force. 22
  23. 23. SALES MANAGEMENT Management of the personal selling task.  Is there anything like „impersonal selling‟ or „nonpersonal‟ selling?  Selling is an exchange transaction. Exchange of Product or service for money  Money is the revenue or the earnings of an enterprise often called „turnover‟ or „top line‟  Sales therefore is the only revenue generating function in an enterprise.  23
  24. 24. Line Sales Organization structure Head –Marketing Sales Manager Area Sales Mgr Area Sales Mgr Area Sales Mgr Area Sales Mgr Sales Force Sales Force Sales Force Sales Force     Clear authority & Responsibility Quick response & Decision, Low Cost Weak on marketing inputs Sales manager controlled
  25. 25. Functional Sales Organization Head -Marketing Marketing Services Sales Promotion Brand Area Sales Managers Sales Force     Administrative Simplicity Access to Specialists Multiple reporting HOD is Pressures to co-ordinate Market Research
  26. 26. DEFINITION Value  The Delivery Network network made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system.
  27. 27. NATURE & IMPORTANCE OF MARKETING CHANNELS Channel choices affect other decisions in the marketing mix  A strong distribution system can be a competitive advantage  Channel decisions involve long-term commitments to other firms 
  28. 28. How Channel Members Add Value
  29. 29. Consumer Marketing Channels
  30. 30. Figure 13-2b: Business Marketing Channels
  31. 31. NATURE & IMPORTANCE OF MARKETING CHANNELS  Number  of Channel Levels The number of intermediary levels indicates the length of a marketing channel. Direct Channels  Indirect Channels   Producers lose more control and face greater channel complexity as additional channel levels are added.
  32. 32. CHANNEL BEHAVIOR AND ORGANIZATION  Channel Conflict Occurs when channel members disagree on roles, activities, or rewards.  Types of Conflict:  Horizontal conflict: occurs among firms at the same channel level  Vertical conflict: occurs among firms at different channel levels 
  33. 33. Figure 13-3: Conventional Versus Vertical Marketing System
  34. 34. Figure 13-4: Multichannel Distribution System