Sales & Distribution

Management
Sales Management & the Business
Enterprise
• Sales Management
• Objectives of sales management
• Sales management and financial results
• Organization and Coordination
• Planning and coordination
• Coordination with other elements in the
marketing program
• Coordination with the distributive network
• Gaining product distribution
• Obtaining dealer identification
• Reconciling business goals
• Sharing promotional risks
• Coordination &implementation of overall
marketing strategy
• Sales management and control
• Setting quantitative performance standards
• Gathering & processing data on actual performance
• Evaluating performance
• Action to correct controllable variation
• Adjusting for uncontrollable variation
• Sales control – informal & formal
• Informal control
• Formal control & written sales policies
• Policy formulation & review
• Formal control over sales volume
• Budgetary control
• Sales control & organization
Sales management, Personal selling
&salesmanship
• Buyer-seller dyads
• Diversity of personal-selling situations
• Group A (service selling)
• Group B (developmental selling)
• Group C (basically developmental selling, but
requiring unusual creativity).
• Theories of selling
• AIDAS theory of selling
• Securing attention
• Gaining interest
• Kindling desire
• Inducing actions
• Building satisfaction
• “Right set of circumstances” theory of
selling
• “Buying formula” theory of selling
• “Behavioral equation” theory
• Buyer-seller dyad & reinforcement
• Salesperson’s influence process
• Salesperson’s role in reducing buyer dissonance
• Prospecting
• Formulating prospect definitions
• Searching out potential accounts
• Qualifying prospects & determining probable
requirements
• Relating company products to each prospect’s
requirements
• Sales resistance
• Obstacles to sales
• Sales objections
• Closing sales
Setting Personal – Selling
Objectives
• Objectives
• Market potential, Sales potential & Sales
forecast
• Market identification, market motivation and
analysis of market potential
• Market indexes
• Sales potential and sales forecasting
• Sales forecasting methods
• Jury of executive opinion
• The Delphi technique
• Poll of sales force opinion
• Projection of past sales
• Time-series analysis
• Exponential smoothing
• Evaluation of past sales projection methods
• Survey of customers’ buying plans
• Regression analysis
• Evaluation of regression analysis for sales forecasting
• Econometric model building & simulation
• Converting industry forecast to company sales
forecast
• Derivation of a sales volume objective
• Evaluation of forecasts
Sales related marketing policies

• Relation to product objectives

• Product line policies
• Changes in product offerings
• Reappraising the product line & line
simplification
• Reappraising the product line & line
diversification
• Ideas for new products
• Appraisal of proposed new products
• Product design policy
• Product quality and service policy
• Guarantee policy
• Distribution policies – who to sell
• Policies on marketing channels
• Sales volume potential
• Comparative distribution costs
• Net profit possibilities
• Policies on distribution intensity
• Mass distribution
• Selective distribution
• Exclusive agency distribution
• Pricing policies
• Policy on pricing relative to the competition
• Meeting the competition
• Pricing above the competition
• Pricing under the competition
• Policy on pricing relative to costs
• Full-cost pricing
• Promotion pricing
• Contribution pricing
• Policy on uniformity of prices to different buyers
• Policy on list pricing
• Policy on discounts
• Trade discounts
• Quantity discounts
• Geographical pricing policies
• F.O.B. pricing
• Delivered pricing
• Policy on price leadership
• Product line pricing policy
• Competitive bidding policy
The Sales Organization
• Purposes of sales organization
• To permit the development of specialists
• To assure that all necessary activities are
performed
• To achieve coordination of balance
• To define authority
• To economize on executive time
• Setting up a sales organization
• Defining objectives
• Determination of activities and their volume
on performance
• Grouping activities into positions
• Assignment of personnel to positions
• Provision for coordination and control
• Basic types of sales organizational structures
• Line sales organization
• Line & staff sales organization
• Functional sales organization
• Committee sales organization
• Field organization of the sales department
• Centralization versus decentralization in sales
force management
• Schemes for dividing line authority in the sales
organization
• Geographic division of line authority
• Product division of line authority
• Customer( or marketing channel ) division
of line authority
• Dividing line authority on more than one
basis.
Sales Department Relations
• Interdepartmental relations & coordination
• Formal coordinating methods
• Informal Coordination
• Coordination of personal selling with other
marketing activities
• Sales & advertising
• Sales & marketing information
• Sales & service
• Sales & physical distribution
• Coordination of personal-selling with other
departments
• Sales & production
• Sales and research & development
• Sales & personnel
• Sales & finance
• Sales & accounting
• Sales & purchasing
• Sales & public relations
• Sales & legal
• Sales department’s external relations
• Final buyer relations
• Industry relations
• Government relations
• Educational relations
• Press relations
Personnel management in the
selling field
• Sales force management
• Economies of effective sales force
management
• Rate of sales personnel turnover
• Involvement of sales executives in sales force
management
• Need for proper setting
• The law & sales force management
• Job analysis
• Sales job analysis
• Sales job description
• Procedure for sales job analysis &
preparation of written job description
• Preparation of sales job specifications
Recruiting sales personnel
• Organization for recruiting and selection
• The pre-recruiting reservoir
• Sources of sales force recruits
• Recruiting source evaluation
• Sources within the company
• Company sales personnel
• Company executives
• Internal transfers
• Sources outside the company
• Employment agencies
• Salespeople making calls on the company
• Employees of customers
• Sales executives’ clubs
• Sales forces of non competing companies
• Sales forces of competing companies
• Educational institutions
• Older persons
• The recruiting effort
• Personal recruiting
• College recruiting
• Recruiting direct–to-consumer sales
personnel
• Recruiting consultants
• Indirect recruiting
• Recruiting brochures
Selecting sales personnel

• Pre interview screening & preliminary

interview
• Formal application form
• Objective scoring of personal history items
• The interview
• Who should do the interviewing
• How many interviews
• Interviewing the spouse
• Interviewing techniques
• Patterned interview
• Nondirective interview
• Interaction (stress) interview
• References
• Credit checks
• Psychological tests
• Validation of tests
• Basis for evaluation of tests
• Types of tests
• Tests of ability
• Tests of habitual characteristics
• Conclusions on testing
• Physical testing
Planning sales training programs

• Building sales training programs

• Defining training aims
• Identifying initial training needs
• Job specifications
• Trainee’s background & experience
• Sales related marketing policies
• Identifying continuing training needs
• Deciding training content
• Product data
• Sales technique
• Markets
• Company information
• Selecting training methods
• The lecture
• The personal conference
• Demonstrations
• Role playing
• Case discussion
• Impromptu discussion
• Gaming
• On-the-job training
• Programmed learning
• Correspondence courses
• Group versus individual training methods
Motivating sales personnel

• Meaning of motivation
• Motivational help from management
• Inherent nature of the sales job
• Salespersons boundary position and role
conflicts
• Conflict of identification
• Advocacy conflict
• Dual role conflict
• Tendency toward apathy
• Maintaining a feeling of group identity
• Need gratification & motivation
• Hierarchy of needs
• Motivation-hygiene theory
• Achievement motivation theory
• Expectancy model
• Interdependence & motivation
• Motivation & leadership
• Motivation & communications
• Interpersonal contact
• Written communications
• Unionization of sales personnel
Compensating sales personnel

• Requirements of a good sales compensation

plan
• Devising a sales compensation plan
• Define the sales job
• Consider the company’s general compensation
structure
• Simple ranking
• Classification or grading
• Point system
• Factor comparison method
• Job evaluation and sales positions
• Consider compensation patterns in community
& industry
• Determine compensation level
• Provide for the various compensation elements
• Special company needs & problems
• Consult the present sales force
• Reduce tentative plan to writing and pretest it
• Revise the plan
• Implement the plan and provide for follow-up
• Types of compensation plans
• Straight salary plan
• Straight commission plan
• Determining commission base
• Drawing accounts
• Combination salary & incentive plan
• Strengths and weaknesses of combination plans
• Use of bonuses
• Fringe benefits
The sales budget
• Purposes of the sales budget
• Mechanism of control
• Instrument of planning
• Sales budget – form & content
• Estimating budgeted selling expenses
• Using standard costs
• Other estimating methods
• Budgetary procedure
• Planning styles & budgetary procedures
• Actual budgetary procedure
• Handling competition for available funds within
the marketing division
• ‘Selling’ the sales budget to top management
• Using the budget for control purposes
• Effect of errors in budgetary estimates
• Flexibility in budgeting
Quotas

• Objectives in using quotas

• To provide quantitative performance
standards
• To obtain tighter sales & expense control
• To motivate desired performance
• To use in connection with sales contests
• Quotas, the sales forecast, & the sales budget
• Types of quotas and quota setting procedure
• Sales volume quotas
• Rupee sales volume quotas
• Unit sales volume quotas
• Point sales volume quotas
• Procedures for setting sales volume quotas
• Sales volume quotas derived from territorial
sales potentials
• Sales volume quotas derived from total
market estimates
• Sales volume quotas based on past sales
experience alone
• Sales volume quotas based on executive
judgment alone
• Sales volume quotas related only to
compensation plan
• Letting sales personnel set their own sales
volume quotas
• Budget quotas
• Expense quotas
• Gross margin or net profit quotas
• Activity quotas
• Combination & other point system quotas
• Administering the quota system
• Accurate, fair & attainable quotas
• Securing & maintaining sales personnel’s
acceptance of quotas
• Participation by sales personnel in quota
setting
• Keeping sales personnel informed
• Need for continuous managerial control
• Reasons for not using sales quotas.
Sales territories
• The sales territory concept
• House accounts
• Reasons for establishing or revising sales
territories
• Providing proper market coverage
• Controlling selling expenses
• Assisting in evaluating sales personnel
• Contributing to sales force morale
• Aiding in coordination of personal selling &
advertising
• Procedures for setting up or revising sales
territories
• Selecting a basic geographical control unit
• Counties
• Zip code areas
• Cities
• Metropolitan statistical areas
• Trading areas
• Determining sales potential present in each
control unit
• Combining control units into tentative
territories
• Territory shape
• Adjusting for differences in coverage
difficulty and redistricting tentative territories
• Determine number, location & size of
customers & prospects in each tentative
territory
• Estimate time required for each sales call
• Determine length of time between calls
• Decide call frequencies
• Calculate the no. of calls possible within a
given period
• Adjust the no. of calls possible during a given
period by the desired call frequencies for the
different classes of customers & prospects
• Final decision is taken after a discussion with
sales personnel.
• Deciding assignment of sales personnel to
territories
• Routing & scheduling sales personnel.
Distribution
• Marketing channels
• What is a marketing channel
• Personal computers
• Books
• Pharmaceutical products
• Why are there marketing channels & why do
they change
• Demand side factors
• Facilitation of search
• Adjustment of assortment discrepancy
• Sorting out
• Accumulation
• Allocation
• Assorting
• Supply side factors
• Routinization of transactions
• Reduction in no of contacts
• What Is the work of marketing channel
• Who belongs to a marketing channel
• Manufacturers
• Intermediaries
• End - users
Channel design framework
• Channel design : segmentation
• Channel design : positioning
• Channel design : targeting
• Channel design : establish new channels or
refine existing channels
• Channel implementation : identifying power
sources
• Channel implementation : identifying channel
conflicts
• Channel implementation : the goal of
channel coordination
Segmentation for marketing
channel
• End user channel preferences
• Service outputs
• Trends in end user preferences
• Trends in B2B buyer preferences
• Outsourcing
• Downsizing
• “Alphabet soup”
• Trends in consumer preferences
• Poverty of time
• Increased knowledge about products &
availability
• Increased polarity in incomes
• Increased no of self-employed workers
• Segmenting the market by service output
demands
• Meeting service output demands
• Cost
• Competitiveness
• Ease of entry
• Other elements of excellence in the
marketing offering
• The role of service output demand
analysis in marketing channel design
Supply side channel analysis

• Financing
• Risking
• Ordering
• Payment
• Eight generic channel flows
• Customizing the list of flows for a
particular channel
Channel structure

• Who should be in the channel

• Should intermediaries be used at all
• What types of intermediaries should be used
• Mapping from flows to be performed to
appropriate intermediary choices: physical
possession, ownership, promotion, negotiation,
financing, risking, ordering, payment
• Which specific intermediaries should be used
• How many channel members should be there at
a given level of the channel
• A single channel or dual distribution
• Channel structure as a response to demand side
factors
• Channel structure as a response to supply side
factor
Vertical Integration

• Make or buy : a critical determinant of

company competencies
• Costs & benefits in marketing channels
• Degrees of vertical integration
• Terms of payment to third parties
• Deciding when to vertically integrate
forward
• Efficiency: the traditional criterion
• Outsourcing as the starting point
• Reasons for outsourcing distribution
• Motivation
• Specialization
• Survival of the economically fittest
• Economies of scale
• Heavier market coverage
• Independence from any single manufacturer
• Vertical integration forward when
competition is low
• Company specific capabilities
• Company specific capabilities in
distribution
• Idiosyncratic knowledge
• Relationships
• Brand equity
• Dedicated capacity
• Site specificity
• Customized physical facilities
• Specific assets can change to general-
purpose assets
• Switching costs
• Rarity versus specificity : the effects of
thin markets
• Should the channel member integrate
backwards
• Vertical integration to cope with
environmental uncertainty
• Vertical integration to reduce performance
ambiguity
• Vertical integration as an option
Managing conflict

• What is channel conflict

• Measuring conflict
• Counting up the issues
• Importance
• Frequency of disagreement
• Intensity of dispute
• The consequences of conflict
• When conflict is desirable
• Communicate more frequently and
effectively
• Establish outlets for expressing their
grievances
• Critically review their past actions
• Devise & implement a more equitable split
of system resources
• Develop a more balanced distribution of
power in their relationship
• Develop standardized ways to deal with
future conflict & keep it within bounds
• How intense conflict damages channel
performance and coordination
• Major sources of conflict in marketing
channels
• Channel members’ goals
• Their perception of reality
• What they consider to be their domains
• Intra channel competition
• Multiple channels
• Is it really a problem
• What suppliers can do
• Unwanted channels : gray markets
• Fueling conflict
• Conflict begets more conflict
• Threats
• Industrial marketing channels in developed
economies
• Conflict resolution strategies: how they drive
conflict & shape channel performance
• Resolving conflict : institutionalized
mechanisms designed to contain conflict
early
• Information intensive mechanisms
• Co-optation
• Third party mechanisms
• Building relational norms
• Flexibility
• Information exchange
• Solidarity
• Styles of conflict resolution
• Accommodation
• Avoidance
• Competition or aggression
• Compromise, Collaboration or problem solving
• Resolving conflict & achieving coordination
via incentives
Retailng
• Consists of the activities involved in selling
goods & services to ultimate consumers for
personal consumption
• Positioning strategy
• Financial & cost side positioning : margin &
inventory turnover goals
• Gross margin return on inventory investment
• Gross margin per full time equivalent employee
• Gross margin per square feet
• Demand side positioning
• Bulk breaking
• Spatial convenience
• Waiting & delivery time
• Product variety
• Customer service possibilities
• Implications for a taxonomy of retail types
• Strategic issues in retailing
• Importance of convenience to consumers
• Increased power of retailers
• Forward buying on deals
• Slotting allowances
• Failure fees
• Broadened role & impact of private branding
• Strategic responses by suppliers to
growing power in the retail sector
• “Power retailing” & category killers
• Retailing polarity: price sensitivity or the
flight to quality
• The emergence of global retailing
Non store retailing

• Catalog retailing
• A catalog company must manage the
following :
• The procurement of product from
suppliers if it does not produce itself
• Creation of catalog itself
• The mailing list
• Order fulfillment & shipping
• Out of stocks
• Merchandise returns
• Direct selling organizations
• Electronic channels
• Market potential for electronic channels
• Service output provision & demand side
gaps in electronic channels
• Channel flow performance & supply side
gaps in electronic channels
• Instances of specific channel flows whose
costs are notably affected by the use of
electronic channels:
• Physical possession
• Promotion, negotiation, risking, ordering,
payment
• Coordination challenges in electronic
channels
Wholesaling

• Wholesalers- distributors
• Their role in the supply chain
• Growth & influence of wholesaler-
distributor
• What the independent wholesale sector
offers; the essential tasks
• Innovative ways to deliver value in
wholesaling
• Wholesaler led initiatives
• Integrated supply
• Manufacturer led initiatives
• Requirements for innovative wholesale service
• Wholesaler voluntary groups
• Consolidation
• Consolidation pressures in wholesaling
• Manufacturer’s response to wholesale
consolidation
• Future of wholesaler-distributor
• International expansion
• Electronic commerce
• E-business models & wholesaler-
distributors
• On-line retailing & wholesaler-distributors
• Vertical integration forward into
wholesaling by manufacturers