Sales and Distribution

Management

MR. ANKIT BAJPAI

ANKITBAJPAIS@GMAIL.COM

By: Ankit Bajpai www.uptunotes.com

 Nature of Personal Selling

Most salespeople are well-educated, well-trained

professionals who work to build and maintain
long-term relationships with customers.
The term salesperson covers a wide spectrum of
positions from:
 Order taker (department store salesperson)
 Order getter (someone engaged in creative selling)

 Missionary salesperson (building goodwill or

educating buyers)

By: Ankit Bajpai www.uptunotes.com

 What is Personal Selling?

Involves Two-Way, Personal

Communication Between Salespeople
and Individual Customers Whether:
face to face,
by telephone,
through video conferencing,
or by other means.

By: Ankit Bajpai www.uptunotes.com

 The Role of the Sales Force

Personal selling is effective because salespeople can:

 probe customers to learn more about their problems,
 adjust the marketing offer to fit the special needs of each
customer,
 negotiate terms of sale, and
 build long-term personal relationships with key decision
makers.

By: Ankit Bajpai www.uptunotes.com

 The Role of the Sales Force
Represent the Company
to Customers to Produce
Company Profit

Sales Force
Serves as a Critical Link
Between a Company and its Customers Since They:

Represent Customers to
the Company to Produce
Customer Satisfaction

By: Ankit Bajpai www.uptunotes.com

 Characteristics of Personal Selling

Flexibility Builds Relationships

Identify best prospects Long term
Adapt to situations Assure buyers receive
Engage in dialogue appropriate services
Solves customer’s
problems

By: Ankit Bajpai www.uptunotes.com

 Personal Selling Limitations

Can not reach mass

audience
Expensive per contact
Numerous calls
needed to generate
sale
Labor intensive

By: Ankit Bajpai www.uptunotes.com

 Personal Selling Tasks

Order taking
Routine
 writing up orders
 checking invoices

 assuring prompt order

processing
Suggestive selling

By: Ankit Bajpai www.uptunotes.com

 Personal Selling Tasks

Order getting
Seeking out customers
Creative selling
Pioneering
Account management

By: Ankit Bajpai www.uptunotes.com

 Personal Selling Tasks
Missionary
 Detailer
 Goodwill
 “Closers”

• Cross-functional
• Account service rep

By: Ankit Bajpai www.uptunotes.com

 Some Traits of Good Salespeople

By: Ankit Bajpai www.uptunotes.com

 Steps
Steps in
in the
the Selling
Selling Process
Process
Step
Step1.1. Prospecting
Prospectingand
and Identifying and Screening For
Qualifying
Qualifying Qualified Potential Customers.

Learning
LearningAsAsMuch
MuchAsAsPossible
Possible
Step
Step 2.
2. Pre-approach
Pre-approach About
AboutaaProspective
ProspectiveCustomer
Customer
Before
BeforeMaking
MakingaaSales
SalesCall.
Call.

Step Knowing
KnowingHowHowtotoMeet
Meetthe
theBuyer
Buyer
Step3.
3. Approach
Approach to
toGet
Getthe
theRelationship
RelationshipOff
Off
to
toaaGood
GoodStart.
Start.
Step
Step4.
4.Presentation/
Presentation/ Telling
Tellingthe
theProduct
Product“Story”
“Story”
Demonstration
Demonstration to
tothe
theBuyer,
Buyer,and
andShowing
Showingthe
the
Product
ProductBenefits.
Benefits.

By: Ankit Bajpai www.uptunotes.com

 Steps
Steps in
in the
the Selling
Selling Process
Process
Seeking Out, Clarifying,
Step
Step5.
5. Handling
HandlingObjections
Objections and Overcoming
Customer Objections to
Buying.

Step Asking the Customer

Step 6.
6. Closing
Closing
for the Order.

Step Following Up After the Sale to

Step7.
7. Follow-Up
Follow-Up
Ensure Customer Satisfaction
and Repeat Business.
By: Ankit Bajpai www.uptunotes.com
 Alternative Steps:

Find ’em
Find ’em
Grab ‘em
Grab ‘em

Show ‘em
Show ‘em

Answer ‘em
Answer ‘em

Sell ‘em
Sell ‘em
Keep ‘em
Keep ‘em
By: Ankit Bajpai www.uptunotes.com
 Creative Selling Process

Identify
Identify and
and Qualifying
Qualifying Prospects
Prospects
Prospecting:
 Prospecting: Identifying
Identifying likely
likely
new
new customers
customers
 Leads
 Leads
Qualifying:
 Qualifying: Evaluating
Evaluating aa
prospect’s
prospect’s potential
potential

By: Ankit Bajpai www.uptunotes.com

 Creative Selling Process

Approaching
Approaching the the Prospect
Prospect
Contact
 Contact
Rapport
 Rapport
“Only
 “Only oneone chance
chance to
to make
make aa
first
first impression”
impression”

By: Ankit Bajpai www.uptunotes.com

 Creative Selling Process
Sales
Sales Presentation
Presentation
Persuasive
 Persuasive communication
communication
Attention
 Attention
Interest
 Interest
Desire
 Desire
“Tell
 “Tell the
the product’s
product’s story”
story”

By: Ankit Bajpai www.uptunotes.com

 Creative Selling Process
Handling
Handling Objections
Objections
 Questions
 Questions
 Reservations
 Reservations
Understand
 Understand Concern
Concern
Counterarguments
 Counterarguments
Acknowledge
 Acknowledge concern
concern
Clues
 Clues to
to process
process

By: Ankit Bajpai www.uptunotes.com

 Creative Selling Process

Closing
Closing the
the Sale
Sale
Closing
 Closing signals
signals
Trial
 Trial close
close
Ask
 Ask for
for the
the sale
sale

By: Ankit Bajpai www.uptunotes.com

 Creative Selling Process

Following
Following Up
Up
Commitments
 Commitments met
met
 Shipment
 Shipment
 Performance
 Performance
Reinforce
 Reinforce relationship
relationship
Satisfied
 Satisfied customers
customers rebuy
rebuy
&
& recommend
recommend

By: Ankit Bajpai www.uptunotes.com

 Sales Management

Setting Organizing
objectives Planning Organizing activities

Recruit,
select,
Motivate, train,
evaluate, develop,
& control manage, &
Controlling Directing motivate

By: Ankit Bajpai www.uptunotes.com

 Organizing
Organizing Sales
Sales Activities
Activities

Sales
Sales Territor
Territory:
y:
Geographic
 Geographic divisions
divisions
Customer
 Customer types
types
Product
 Product lines
lines
Selling
 Selling task
task

By: Ankit Bajpai www.uptunotes.com

 Geographic
Geographic Division
Division

Vice-President
Marketing

Regional Sales Regional Sales

Manager Manager

District Sales District Sales District Sales District Sales

Manager Manager Manager Manager

Sales Rep Sales Rep Sales Rep Sales Rep

California Pacific NW Southeast Northeast

By: Ankit Bajpai www.uptunotes.com

 Customer
Customer Type
Type

Vice-President
Sales

New Accounts Existing Accounts

Manager Manager

New Account New Account Existing Existing

#1 #2 Account #1 Account #2

By: Ankit Bajpai www.uptunotes.com

 Product
Product Line
Line

Vice-President
Sales

Snack Foods Beverages

Sales Manager Sales Manager

Sales Rep Sales Rep Sales rep Sales Rep

Eastern Region West’n Region Eastern Region West’n Region

By: Ankit Bajpai www.uptunotes.com

 Directing the Sales Force

Recruiting and selecting

Training & develop
Compensating

• Motivating

By: Ankit Bajpai www.uptunotes.com

 Compensation Methods

Straight
Straight
salary
salaryor
or
wage
wage
Salary
Salaryplus
plus Straight
Straight
commission
commission commission
commission

Quota-bonus
Quota-bonus Commission
Commission
plan
plan with
withdraw
draw

By: Ankit Bajpai www.uptunotes.com

 Evaluation and Control

Required reports
Measurement against
plan or sales standards
Expense control
Productivity
New account
development

By: Ankit Bajpai www.uptunotes.com

 Ethical Issues
Kickbacks, bribes and
“gifts”
Price discrimination
Cheating on expense
accounts
Misrepresentation

By: Ankit Bajpai www.uptunotes.com

 Distribution Channel Design
and Management

By: Ankit Bajpai www.uptunotes.com

 Distribution’s Function

The major purpose of marketing is to satisfy

human needs by delivering products of various
types to buyers when and where they want them
and at a reasonable cost.
The “when and where” is the function of
Distribution

By: Ankit Bajpai www.uptunotes.com

 What is a Distribution Channel?

A set of interdependent organizations

(intermediaries) involved in the process of
making a product or service available for use or
consumption by the consumer or business user.
Marketing Channel decisions are among the
most important decisions that management faces
and will directly affect every other marketing
decision.

By: Ankit Bajpai www.uptunotes.com

 Why are Marketing Intermediaries
Used?

The use of intermediaries results from their

greater efficiency in making goods available to
target markets.
Offer the firm more than it can achieve on it’s
own through the intermediaries:
Contacts,
 Experience,
 Specialization,
 Scale of operation.

Purpose: match supply from producers to

demand from consumers.
By: Ankit Bajpai www.uptunotes.com
 Distribution

P C
R O
O N
D S
U DISTRIBUTION U
C M
E E
R R

By: Ankit Bajpai www.uptunotes.com

 Distribution
Distribution Channel
Channel Functions
Functions
Information
Information

Transfer
Transfer Communication
Communication
Payments
Payments Negotiation
Negotiation
Physical
Physical
Distribution
Distribution Ordering
Ordering

Risk
Risk Taking
Taking Financing
Financing

By: Ankit Bajpai www.uptunotes.com

 Typical Channels of Distribution

ANUFACTURER ONSUMER

GENT

ETAILER

HOLESALER

By: Ankit Bajpai www.uptunotes.com

 Business-to-Business Channels

Direct

Wholesaler

Agent

By: Ankit Bajpai www.uptunotes.com

 Business-to-Business Channel Trends

Infomediaries & Vertical Exchange

By: Ankit Bajpai www.uptunotes.com
 Conventional Distribution Channel vs.
Vertical Marketing Systems
Conventional Vertical
marketing marketing
channel channel
Manufacturer
Manufacturer

Wholesaler
Wholesaler

Retailer Retailer

Consumer Consumer
By: Ankit Bajpai www.uptunotes.com
 Types
Types of
of Vertical
Vertical Marketing
Marketing Systems
Systems
Corporate
Corporate
Common
Common Ownership
Ownership at at Different
Different
Levels
Levels of
of the
the Channel
Channel

Administered
Administered
Leadership
Leadership is
is Assumed
Assumed by
by One
One or
or
aa Few
Few Dominant
Dominant Members
Members

Contractual
Contractual
Contractual
Contractual Agreement
Agreement Among
Among
Channel
Channel Members
Members
By: Ankit Bajpai www.uptunotes.com
 Vertical Marketing Systems

Corporate systems - total ownership

• Contractual - legal relationships

• Administered - strong leadership

By: Ankit Bajpai www.uptunotes.com

 Planning the Channel of
Distribution
Determining the structure
 Marketing mix strategy
 Organizational resources

 External environmental factors

 Market characteristics

 Consumer preferences and behavior

 The nature and availability of Intermediaries

 Other environmental factors

By: Ankit Bajpai www.uptunotes.com

 Customers’ Desired Service Levels
Lot size
Waiting time
Spatial convenience
Product variety
Service backup

By: Ankit Bajpai www.uptunotes.com

 Steps in Distribution Planning

By: Ankit Bajpai www.uptunotes.com

 Choosing a Distribution System

Intensive
Intensive
Distribution
Distribution

Exclusive
Exclusive Distribution
Distribution
Distribution
Distribution Intensity
Intensity

Selective
Selective
Distribution
Distribution

By: Ankit Bajpai www.uptunotes.com

 Intensive
Intensive Distribution
Distribution

Producer

Seeks
Seeks to
to obtain
obtain Retailer Retailer Retailer
maximum
maximum product
product
exposure Retailer Retailer Retailer
exposure atat the
the retail
retail
level
level Retailer Retailer Retailer

Retailer Retailer Retailer

Retailer Retailer Retailer

By: Ankit Bajpai www.uptunotes.com

 Selective Distribution

Producer

Product
Product is is sold
sold Retailer Retailer Retailer
in
in aa limited
limited
number
number of of Retailer Retailer Retailer
outlets
outlets

By: Ankit Bajpai www.uptunotes.com

 Exclusive Distribution

Producer
Product
Product is
is sold
sold in
in
only
only one
one outlet
outlet in
in
Retailer
aa given
given area
area

By: Ankit Bajpai www.uptunotes.com

 Developing Distribution Tactics

Selecting
Selecting Channel
Channel Partners
Partners

Managing
Managing the
the Channel
Channel of
of Distribution
Distribution
Channel
ChannelLeader
LeaderPower
Power

Reward
Reward or
or
Economic
Economic Legitimate
Legitimate Coercive
Coercive
Power
Power Power
Power Power
Power

Distribution
Distribution Channels
Channels &
& the
the Marketing
Marketing Mix
Mix

By: Ankit Bajpai www.uptunotes.com

 Physical Distribution
Inventory
Inventory Order
Control OrderProcessing
Processing
Control Received
Received
When
Whento
toorder
order Processed
How Processed
Howmuch
muchto
toorder
order Shipped
Shipped

Physical
Distribution
Transportation Functions Warehousing
Warehousing
Rail, Water, Number
NumberNeeded
Needed
Trucks, Air, Where
Where
Pipeline, Internet What
WhatType
Type
Materials
MaterialsHandling
Handling
Moving
MovingProducts
ProductsInto,
Into,
Within,
Within,and
and
Out
Outof
ofWarehouses
Warehouses

By: Ankit Bajpai www.uptunotes.com

 Transportation Modes
Rail
Rail
Cost-effective
Cost-effectivefor
forshipping
shippingbulk
bulkproducts,
products,
piggy-back,
piggy-back,fishyback,
fishyback,birdyback.
birdyback.
Water
Water
Low
Lowcost
costfor
forshipping
shippingbulky,
bulky,low-value,
low-value,
non
non perishable goods, slowestform.
perishable goods, slowest form.
Truck
Truck
Most
Mostimportant
importantcarrier
carrierfor
forconsumer
consumer
goods, flexible.
goods, flexible.
Air
Air
High
Highcost,
cost,ideal
idealwhen
whenspeed
speedisisneeded
neededor
or
distant markets have to be reached
distant markets have to be reached
Pipeline
Pipeline
Carry
Carrypetroleum
petroleumbased
basedproducts,
products,
very
verylow
lowcost,
cost,requires
requireslittle
littleenergy.
energy.
Internet
Internet
Web
Websites
siteshave
haveproducts
productsavailable,
available,used
used
especially for services.
especially for services.
By: Ankit Bajpai www.uptunotes.com
 Channel Relationships

Cooperation

• Conflict

• Power
– Coercive
– Expert
– Legitimate
By: Ankit Bajpai www.uptunotes.com
 Decision Making Framework

Prospects Importance of threatened

of channel in terms of current or
Destructive potential volume or profitability
Conflict
High Low
High (FIRE) Act to avert or address Allow threatened
conflict channel to
decline
Low Look for opportunities Do nothing
(Smoke) to reassure threatened
channel and leverage
your power

By: Ankit Bajpai www.uptunotes.com

 Channel Conflict: Identifying
Threats
First, are the channels really attempting to
serve the same end users?
Second, do channels mistakenly believe
they are competing when in fact they are
benefiting from each other's actions?
Third, is the deteriorating profitability of a
griping player genuinely the result of
another channel's encroachment?
Fourth, will a channel's decline necessarily
harm a manufacturer's profits?

By: Ankit Bajpai www.uptunotes.com

 Managing Channel Conflict
WHEN TWO OR MORE CHANNELS TARGET
THE SAME CUSTOMER SEGMENT
Differentiate the Channel offer
Define Exclusive Territories
Enhance or Change the Channels
Value

By: Ankit Bajpai www.uptunotes.com

 Managing Channel Conflict
CHANNEL ECONOMICS DETERIORATE
Change the channels economic formula:
(Grant rebates if an intermediary fulfill certain
requirements; Adjust margins between products
to support different channel economics; and Treat
channels fairly to create level playing field)
Create Segment Specific Programs (certain
services not available via direct channels)
Complement value proposition of the existing
channel by introducing a new channel
Foster consolidation among intermediaries in a
declining channel
By: Ankit Bajpai www.uptunotes.com
 Managing Channel Conflict
THREATENED CHANNEL STOP
PERFORMING OR RETALIATE
AGAINST THE SUPPLIER
Leverage Power (eg. Strong Brand) against
the channel to prevent retaliation
Migrate volume to winning channel
Back off

By: Ankit Bajpai www.uptunotes.com

 Other Distribution Management Issues

Reverse distribution

One Coca Cola

Distributor
Difficult
• Ethical, Political, &
OK
Legal

One thousand
retailers

By: Ankit Bajpai www.uptunotes.com