1

Sales & Distribution Management (2005) Martin Khan

Instructor

Abdel Fatah AfifiMA&T, MBA, BA, ACPA, CPT1st Semester 2009/2010

2

Chapter 1

Introduction to Sales & Distribution Management

3

Introduction

1. The importance of marketing problems was realized only after the industrial revolution.

2. Increase in production, more: land, labour and capital was required which gave rise to corporate form of organization.

3. As the business activity become more complex and dynamic,

4. Term "Sales management" changed due to the changes in business operations.

5. Earlier the sales management was solely concerned with the direction of the sales force personnel.

6. At present the term "sales management" has a broader significance and includes all such marketing activities as advertising, sales promotion, marketing research, physical distribution, pricing and product merchandising.

4

Figure 1-1: Positions of Personal Selling and Sales Management in the Marketing Mix

PlanningPlanning MotivatingMotivatingBudgetingBudgeting CompensatingCompensatingRecruiting and selectingRecruiting and selecting Designing territoriesDesigning territoriesTrainingTraining Evaluating performanceEvaluating performance

Marketingmix

Products Prices Promotion Distribution

AdvertisingPublic

relationsPersonalselling

Salespromotion

Internet

SalesSalesmanagementmanagement

5

Marketing Program (marketing mix)

Designed around Four Elements of marketing mix:

1. Products to be sold2. Pricing3. Promotion4. Distribution Channels

6

CompetitionCompetition• Globalization.Globalization.• Shorter product cycles.Shorter product cycles.• Blurred boundaries.Blurred boundaries.

Selling processSelling process• Relationship selling.Relationship selling.• Sales teams.Sales teams.• Inside selling.Inside selling.• Productivity metricsProductivity metrics

CustomersCustomers• fewer suppers.fewer suppers.• Rising expectations.Rising expectations.• Increasing power.Increasing power.

Marketplace Changes & Selling Consequences

7

Difference between Marketing & Sales Management

1. Marketing and Sales management are close Relative.

2. Marketing sets the scene. Sales finish the job.3. Marketing is part of the sales process. Sales

in the end result of Marketing.4. Sales is a part of marketing. It is the transfer

of title of ownership of goods.5. Marketing is concept oriented and sales is

product oriented.6. The marketing function creates the dark

clouds, and the sales function makes the rain.7. Marketing, Sales management, and Marketing

management are closely related to each other.

8

Figure 1-4:

Traditional Buyer-Seller Interfaceversus A Team Interface

Sales Purchasing SalesTeam

CustomerTeam

Supplier Customer Supplier Customer

TRADITIONALBUYER-SELLER

INTERFACE

BUYER-SELLERINTERFACE TEAM

9

Objectives of sales management

1. Quantitative objectives (Short Term)

2. Qualitative objectives (Long Term)

10

Quantitative objectives (Short Term)

1. To retain and capture market share.

2. To determine sales volume market share.

3. To obtain new accounts of given types.

4. To keep personal expenses within specified limits.

5. To secure targeted percentage of certain accounts of business.

11

Qualitative objectives (Long Term)

1. To do the entire selling job.2. To service existing accounts, (customers).3. To search and maintain customer

cooperation.4. To assist the dealer in selling the product

line.5. To provide technical advice wherever

necessary.6. To assist in training of middleman's sales

personnel.7. To provide advice and assist the

middlemen.8. To collect and report market information of

interest and use to the company management.

12

Important decision areas in sales management are deciding upon

1. The type and quality of sales personnel.2. The size of sales force.3. The organization and design of sales

department.4. The territory design.5. The recruitment and training procedure.6. The task allocation.7. The compensation of sales force.8. The performance appraisal and control

system.9. The feedback mechanism to be adopted.10. Managing channel relationship.11. Coordinating with other marketing

department.

13

Sales Management Cycle

1. Analysis2. Planning3. Organization4. Direction5. Control

14

Responsibilities of Sales Management

1. Building the right sales strategy.2. Hiring the right team.3. Creating the right compensation plan,

territories and quotas.4. Setting the right projections.5. Motivating your team.6. Tracking revenue against goals.7. Resolving conflicts.8. Training and coaching sales reps.9. Managing processes.10. Getting the sales.

15

Productivity Metrics

Sales Volume is important, but not all sales are equally profitable.

Profitability depends on:1. Amount of time necessary to

complete the sales.2. Gross margins associated with sale.3. Level of price discounting.4. Amount of promotional support.5. Amount of post-sale support.6. Impact of future product sales.

16

Improving Your Chances of Success

1. Build awareness2. Get on the short list3. Demonstrate how your proposal

meets company needs4. Directly address decision

maker’s personal needs5. Be prepared for “buyer

remorse”

17

A Sales Quota Manager: Job Focus

1. Maintain direct responsibility for sales results for specific customers.

2. Manages one or a few larger, long-term or strategic accounts

3. May have a staff of one or more subordinate sales or support people, but focus on managing the sales team for the sake of achieving customer results

18

1. Willingness to Train/Coach2. Willingness to Make Joint Sales

Calls3. Ability to Direct and Control

Others4. Profit Mentality5. Initiative

A Sales Force Manager’sSkill Set

19

Direct sales : Challenges

1. Large number of prospects.2. High cost of sales.3. Low revenue per customer.4. Ineffective channel sales team.

20

Sales Management: Needs

1. Improve collaboration with channel partner to increase reach and reduce cost of sales.

2. Track movement of opportunities through pipeline to identify bottlenecks.

3. Provide on-time sales support to channel.

21

Basic requirements of sales promotion

1. Identifying the basic requirement (identify the need of sales promotion as to why this campaign is being undertaken).

2. Identifying the right promotional program.3. Role of a salesman4. Role of the dealers5. Launching and follow up campaign6. Tuning of the campaign (Seasons, Festivals, New

year, or other special events of national and local interest should be kept in mind).

7. Coordination with other elements of promotion