Introduction to Sales Management – The Sales Organization – Determining Sales Related Marketing Policies – Sales Functions and Policies – International Sales Management – Personal Selling. Sales Planning – Sales Budgets – Estimating Market Potential and Forecasting Sales – Sales Quotes – Sales & Cost Analysis, Sales Force Management: Hiring and Training Sales Personnel – Time and Territory Management –Compensating Sales Personnel – Motivating the Sales Force – Leading the Sales Force – Evaluating Sales Force Performance. Marketing Logistics - Distribution as Marketing Mix Element – Distribution Resource Planning – Marketing Channel Integration – Channel Management – Nature of Marketing Channels – Evaluating Channel Performance- Specialized Techniques in selling – Tele Marketing – Web Marketing Distribution Cost Analysis: Managing Channel Conflicts – Channel Information Systems – Wholesaling – Retailing – Ethical And Social Issues in Sales and Distribution Management.

1. DEPARTMENT OF BUSINESS ADMINISTRATION & RESEARCH
Shri Sant Gajanan Maharaj College of Engg., Shegaon
Sales and Distribution Management
Unit-4
Marketing Logistics

2. Marketing Logistics
Management

3. What is distribution channel?
• A set of interdependent organizations involved
in the process of making a product or service
available for use or consumption by the
consumer or business user.

4. How a Distributor Reduces the
Number of Channel Transactions
= Customer= Manufacturer
A. Number of contacts
without a distributor
M x C = 3 X 3 = 9
1
3
2
4
5
6
7
8
9

5. How a Distributor Reduces the
Number of Channel Transactions
= Distributor= Customer= Manufacturer
B. Number of contacts
with a distributor
M x C = 3 + 3 = 6
Store
1
2
3
4
5
6

6. Distribution Channel Functions
Ordering
Payments
Communication
Transfer
Negotiation
Financing
Risk Taking
Physical
Distribution
Information

7. Consumer Marketing Channels
Wholesaler Jobber Retailer Consumer   
Consumer
Retailer Consumer
Manufacturer
0-level channel
Wholesaler Retailer Consumer Mfg
2-level channel
Mfg
3-level channel
1-level channel
Manufacturer

8. Industrial
distributors
Manufacturer
Consumer
Manufacturer’s
representative
Manufacturer’s
sales branch
Industrial Marketing Channels

9. Customers’ Desired Service Levels
• Lot size
• Waiting time
• Spatial convenience
• Product variety
• Service backup

10. Why are marketing intermediaries used?

11. Distribution channel function
• Information
• Promotion
• Contact
• Matching
• negotiation

12. Channel level

13. Channel behavior and organization
• Channel conflict
• Vertical marketing system
• Horizontal marketing system
• Hybrid marketing systems

14. Types of Vertical Marketing Systems
Corporate
Common Ownership at Different
Levels of the Channel
Contractual
Contractual Agreement Among
Channel Members
Administered
Leadership is Assumed by One or
a Few Dominant Members

15. Conventional Distribution Channel vs. Vertical Marketing Systems
Vertical
marketing
channel
Manufacturer
Retailer
Conventional
marketing
channel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
Wholesaler

16. Channel conflict
• Horizontal conflict
• Vertical conflict

17. Vertical marketing systems
• Conventional distribution
• VMS
• Corporate VMS
• Contractual VMS
• Administered VMS
• Franchise organization

18. Innovations in Marketing
Systems
Horizontal Marketing
System
Hybrid Marketing
System
Two or more companies
at one channel level join
together to increase
coverage
Example: Banks in
Grocery Stores
A single firm sets up two
or more marketing
channels to increase
coverage
Example: Retailers,
Catalogs, and Sales
Force

19. 2.channel design decision
• Analyzing consumer service needs
• Setting channel objectives and constraints
• Identifying major alternatives
• Evaluating the major alternatives

20. Identifying major alternative
• Types of intermediaries
• Number of marketing intermediaries
• Responsibilities of channel members

21. Selling
costs
(dollars)
Level of sales (dollars)
Break-Even Cost Chart
Company
sales force
Manufacturer’s
sales agency
SB

22. Number of marketing intermediaries
• Intensive distribution
• Exclusive distribution
• Selective distribution

23. 3.Channel management Decision
• Selecting channel members
• Motivating channel members
• Evaluating channel members

24. Channel Management Decisions
Selecting
FEEDBACK
Motivating
Training
Evaluating

25. Goals of Logistics
system
• Provide a Targeted Level of Customer Service at
the Least Cost.
• Maximize Profits, Not Sales.
Higher Distribution Costs/
Higher Customer Service
Levels
Lower Distribution Costs/
Lower Customer Service
Levels

26. physical distribution and logistics
management
• Physical distribution(marketing logistics)
• major logistics function
• Integrated logistics management
• Third-party logistics

27. Major logistics function
• Order processing
• Warehousing
• Inventory
• transportation

28. Integrated logistics management
• Cross-functional teamwork inside the
company
• Building channel partnerships

29. Third-party logistics
• An independent logistics provider that
performs any or all of the functions required
to get their clients’ product to market.

30. Integrated Logistics Management
Concept Recognizes that Providing Better Customer
Service and Trimming Distribution Costs Requires
Teamwork, Both Inside the Company and Among All
the Marketing Channel Organizations.
Cross-Functional Teamwork inside
the Company
Building Channel Partnerships
Third-Party Logistics

31. What is DRP ?
Distribution resource planning (DRP) is a method used in business
administration for planning orders within a supply chain. DRP enables the user to
set certain inventory control parameters (like a safety stock) and calculate the
time-phased inventory requirements. This process is also commonly referred to as
Distribution Requirements Planning

32. Emergence of Distribution Resource Planning
The need for more detailed distribution planning led to the emergence of
distribution requirements planning (DRP) during the 1970s.
 DRP is a widely used and potentially powerful technique for helping outbound
logistics systems manage and minimize inbound inventories.
This concept extended the time-phase order point found in material requirements
planning (MRP) logic to the management of channel inventory.
 By the 1980s DRP had become a standard approach for planning and controlling
distribution logistics activities and had evolved into distribution resource planning.
The concept now embraces all business functions in the supply channel, not just
inventory and logistics, and is termed DRP .

33. DRP is usually used with an MRP system, although most DRP models are
more comprehensive than stand-alone MRP models and can schedule
transportation. The underlying rationale for DRP is to more accurately fore-
cast demand and then use that information to develop delivery schedules.
This way, distribution firms can minimize inbound inventory by using MRP
in conjunction with other schedules.

34. Forecast demand for each stock-keeping unit (SKU)
Current inventory level of the SKU
Target safety stock
Recommended replenishment quantity
Replenishment lead time
One of the key elements of DRP is the DRP table, which includes the following elements:

35. The on-hand inventory at the end of a period.
The backordered demand at the end of a period.
The required quantity of product needed at the beginning of
a period.
The constrained quantity of product available at the
beginning of a period.
The recommended order quantity at the beginning of a
period.
DRP uses several variables:

36. DRP needs the following information:
The demand in a future
period.
The scheduled receipts at
the beginning of a period.
The safety stock
requirement for a period.
The on-hand inventory at
the beginning of a period

37. Reduces freight costs.
Reduces inventory level.
Decreases warehousing space.
Reduces customer freight cost.
Enhances budgeting
capitability.
Logistical Benefits of DRP

38. Figure 8.1: DRP links to internal MPC system

39. Figure 8.2: Distribution requirements planning
and the logistic system

40. Figure 8.3: Field warehouse DRP record

41. Figure 8.5: Field warehouse to central
warehouse records for DRP

42. Management Issues with DRP
• Data integrity and completeness
• Organizational support
• Problem solving

43. Data Integrity and completeness
• A key issue is the use of aggregate forecasts
which are later on broken down into detailed
forecasts.
• Forecast errors should be avoided especially
biased errors.
• Management programs should be established
to monitor the process.
• Inventory accuracy depends on transaction
process routines and discipline.

44. Organizational support
• Where does DRP fit within the Supply Chain
Management?

45. Problem Solving
• Sales promotion
• Closing a warehouse
• Monitoring stock aging

46. Channel Management
•Selecting channel members.
•Training channel members.
•Motivating channel members.
•Evaluating channel members performance.

47. Selecting Channel Member
Manufacturer has to ensure that the channel members
possess certain essential qualifications. Some of the common
qualifications irrespective of the product lines involved are
• Business reputation.
• Business capacity.
• Salesmanship.
• Experience in the line.
• Financial capacity.
• Creditworthiness.
• Capacity to provide storage facilities, showrooms, shops,
service workshops .
• Positive attitude towards the company.
• Capacity to offer assortment of products and services
required by the customers.
• Good relations with consumers, opinion leaders, government
officials and others.

48. Selection Process
• Giving ‘Dealer Wanted’ Ad.
• Conducting interviews.
• Selecting the highly qualified members.

49. EXAMPLE:
Ford ‘Dealer Wanted’ Ad
Ford is a big name. In fact it’s the largest selling brand of automobiles
worldwide.
A name with a 90-year heritage, responsible for creating the
automobile industry.
With the imminent tie-up of the Ford Motor Company with Mahindra &
Mahindra, there exists an opportunity for dealers who can think big.
The people we are looking for are dynamic entrepreneurs and previous
experience is not a necessary qualification.
If you are already a car dealer, you will receive substantial company
support, including comprehensive training for your sales and service
staff.
We are committed to long-term relationships, so you will ultimately be
marketing a full range of Ford vehicles, from small cars to tough trucks.
So, if you’re prepared to think really big and if you wish to join the
fraternity of 10000 successful Ford dealers, apply to…

50. Managing the Dealer Network
Territory of operation, Trade margin, Functions which the
dealers have to perform, Functions which the firm has
to perform
•Fixing the trade relations mix
•Servicing the dealer.
•Securing shelf space and merchandising support from
dealers.
•Dealer motivation.
•Performance appraisal of dealers.
•Dealer training and development.

51. TRAINING CHANNEL MEMBERS
EXAMPLE:
Ford Motor Company beams training programs and
technical information via its satellite based Fordstar
Network to more than 6000 dealer sites. Service
engineers at each dealership sit around a
conference table and view a monitor on which an
instructor explains procedures such as repairing
onboard electronics and asks and answers
questions.

52. MOTIVATING CHANNEL MEMBERS
A company needs to view its intermediaries in the same
way that it views its end users. The company should
provide training programs, market research programs
and other capability-building programs to improve
intermediaries performance. Producers use the
following types of power to elicit co-operation
•Reward power
•Coercive power
•Expert power
•Legitimate power

53. Intermediaries can aim for a relationship based
on co-operation, partnership or distribution
programming. They often use positive
motivators such as
•Higher margins.
•Special deals.
•Premiums.
•Display allowances.
•Co-operative advertising allowances.
•Sales contests.

54. NEGATIVE SANCTIONS
•Threatening to reduce margins.
•Slowdown delivery.
•Terminating the relationship.
Distribution programming i.e., supplier – distributor
arrangement can be defined as building a
planned, professionally managed, vertical
marketing system that meets the needs of both
manufacturer and distributors. The manufacturer
establishes a department within the company
called Distributor-Relations Planning.

55. EVALUATING CHANNEL MEMBERS
PERFORMANCE
Producers must periodically evaluate intermediaries’
performance against such standards as:
•Sales-quota attainment.
•Average inventory levels
•Customer delivery time
•Co-operational promotional and training programs.

56. THANK YOU