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Chapter
1

Introduction to Sales and
Distribution Management

SDM-Ch.1

1
• “Everybody Lives by selling something
Robert Louis Stevenson

SDM-Ch.1

2
• 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
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
Sales and Distribution Management
• Sales and Distribution Management are
both components of the marketing mix

SDM-Ch.1

5
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
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
A career in sales

• Why choose a job in Sales?

SDM-Ch.1

8
Why Sales ?
• Autonomy,freedom of action and
opportunities
• Job Variety,multifaceted
• Challenging role
• Career growth faster
• Financial rewards

SDM-Ch.1

9
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
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
• 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
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
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
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
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
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
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
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
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
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
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

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Introduction to Sales and Distribution Management

  • 1. Chapter 1 Introduction to Sales and Distribution Management SDM-Ch.1 1
  • 2. • “Everybody Lives by selling something Robert Louis Stevenson SDM-Ch.1 2
  • 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. 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. Sales and Distribution Management • Sales and Distribution Management are both components of the marketing mix SDM-Ch.1 5
  • 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. 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. A career in sales • Why choose a job in Sales? SDM-Ch.1 8
  • 9. Why Sales ? • Autonomy,freedom of action and opportunities • Job Variety,multifaceted • Challenging role • Career growth faster • Financial rewards SDM-Ch.1 9
  • 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. 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. • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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