Sales and Distribution Slides Aug 2011

7/29/2019 Sales and Distribution Slides Aug 2011

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Selection and Training of Representatives

Introduction

Selection and training of sales representatives is an on going

procedure in all sales as organizations as sales managers

cannot hold on to their staff forever and it is also not good to

do so. Generally speaking, the sales representatives that stayon are not quality people. All the good people will either get

promoted in the same company or move on to other

companies for better prospects. So, it is not just the selection

procedure but training which is imparted to the selectedtrainees that plays a very important role. We provide training

to new people for doing the job and then keep them training

than for doing the same job better and better. Let us now look

at selection and training procedures in detail.

Unit - 2


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Selection of Sales Representatives

Selection procedure starts from the search of the right candidate. The

normal places to look for them are as follows:

1. Internal search

2. Competitor salesmen

3. From the staff of your distributors

4. From the institutes

5. From employment exchanges/agencies

6. From the staff of other companies

7. By advertising in newspapers


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Preparation of Job Description and Personnel Specification

Preparation of job description will involve the following activities:

1. Deciding the title of the job e.g., salesman, sales officer/ etc.

2. Deciding the duties and responsibilities.

3. To whom the person will report.

4. Technical requirements of the job e.g., travel for 20 days a month.

5. Location of the job i.e., place of work.

6. Degree of autonomy e.g., limits of authority.

Personnel specifications change from selector to selector. They can be:

1. Physical requirement e.g., strong physique to withstand traveling strain.

2. Attainments e.g. education experience.3. Aptitudes and qualities e.g., communication skills, motivation levels.

4. Deposition e.g., maturity, sense of responsibility.

5. Interests e.g., hobbies etc.

6. Personal status e.g., married/unmarried.


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Short Listing and Interviews

Short listed candidates are then interviewed to find the best

suitable candidates for your consideration and appointment.The next step is training the selected candidate for job

responsibilities. The training is again of two types:

1. Induction Training Company profile

Position in hierarchy and job responsibilities

Introduction to the administrative staff and accounts staff

Reporting procedures and standards of reporting

Knowledge of products, their features and benefits

Knowledge of manufacturing units

Handing over stationery and kit etc.


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On job training is a very important aspect of the sales

managers job. This is an ongoing and continuous process

for both the sales manager and his subordinates. It isdirected towards improving job related skills and along with

it the personality of the sales staff as these are the people

who improve or spoil the image of the company by way of

responsible or irresponsible behavior in the minds of the

trade. The company image in the trade circle is very

important in getting good channel members and their whole-

hearted support.

Training Skill Development

2. On Job Training (Field Training)

The skill development training, though similar in both

industrial and consumer products, differs in emphasis on

different aspects.


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Consumer Sales

Consumer sales are generally divided into steps of a sales

call. They are:

1. Planning and preparation

2. Approach

3. Stock check/need development4. Brand talk

5. Objection handing

6. Close

7. Detail work.

All the seven steps are very important for making a sales

call productive. If the salesman is weak in any of the above

aspects (steps), his performance will not be top class.


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Industrial Sale

In an industrial sale, though the steps are the same, the

emphasis shifts from brand talk to negotiating the terms of sale

because in this case the buyer is the final user and he does

not buy a brand but a need satisfier. If he is interested in

satisfying his need, and saving costs in the process, and if

your product is replacing an expensive product and satisfiesthe need effectively, you get the order. In industrial sales the

formula SPANCO is in use. Its meaning is as follows

S = Survey of customers

P = Prospecting the customerA = Approach the customer

N = Need development/negotiations

C = Close (order booking)

O = Order processing


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Training in Personality Development

In this part of training, the sales manager explains the

following things:

1. Dress code

2. Personal grooming

3. Body language4. Communications skills (a) written (b) oral

5. Listening skills

6. Manners and etiquette

A good understanding of each of the above will help one

become a better salesman.


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Sales Quotas

Importance of Sales Quotas

Sales quotas serve several purposes. The important objectives are shown in the

diagram below:

SalesQuotas

Quotas provide performance targetsQuotas provide standardsQuotas provide controlQuotas are motivational

SalesObjectives


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Types of Sales Quotas

A sales organization can set many types of quotas. The most common

quotas are shown in the following diagram

Types of Sales Quotas

Sales VolumeQuotas

ProfitQuotas

ExpenseQuotas

ActivityQuotas

QuotaCombinations


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Territory Management

The following diagram outlines the activities of territory management

Trade relations/Dealer relations

Potential business

CoverageReports

Territory size

Portfolio of accounts

Selling techniques

Customer satisfaction

Selling abilities

Activities of

Territory

Management


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Why Establish Sales Territories?

A company can develop and use sales territories for various reasons. Some

of the reasons are as follows:

To obtain entire coverage of the market

To establish a salespersons responsibility

To evaluate performance

To improve customer relations

To reduce sales expenses

To allow better matching of salesperson to customer

To benefit salespeople and the company.


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Factors to be Considered when Designing Territories

In setting up or designing sales territories, these four stepsmust be followed:

Selecting a basic geographical control unit

Determining sales potentials in control unit

Combining control units into tentative territories

Adjusting for coverage difficulty and reallocating

tentative territories.

The two basic approaches commonly used for designingsales territories are discussed below.

1. Market Build-up Approach

2. The Workload Approach


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The work load approach

This approach is designed by WJ Talley on the basis of the work load

performed by salespersons. the following steps should be consideredimportant hen using the above approach:

Customer are grouped into class size according to the sales

volume.

Optimum call frequencies for each class of customer are estimated.

Present and potential customers are then located geographically

and arranged volume-wise and value-wise

The number of present and potential customer in eachvolume/value group is then multiplied by the desired call frequency to

get the total number of planned calls required for each geographical

control units.


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Assigning to Territories

BaseFirst Call

C

C

C


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CC

C

C

C

CC

C

Base

2 3

4 5

1

Clover Leaf Pattern

Major City Pattern


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Sales Management Information System and

Sales Training

What is Sales Management Information System?

To achieve the sales goals set by senior management, the sales manager

must make tactical decisions about

shape of sales territories allocation of sales staff to territories

what product to push

which customers to contact

incentive schemes

which market segments to emphasize and with what products.

In addition, they must also monitor the sales effort and make changes to the

tactics in response to changes in the market.


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Monthly Performance Review

Frequency : Monthly/Quarterly/Annual performance at office by Sales Rep.Guidelines

Each sales rep to report personally to the branch office once in a month to

review the following:

Previous tour cycle date wise

Plan for next tour cycle to be sent one week before reporting

Managers to ensure complete availability for each sales rep.


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Sales Training

Any training is dependent for its success on a number of

factors. These include how well it relates to identified needs,how relevant it is to the real day-to-day job of participants,

how participative it is, and more.

Presentational techniques

Techniques to prompt and handle participation

The methodology of role-playing, which as has been

said in the previous section can be of valuableassistance in developing sales skills

The use of training films.


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UNIT-3,4

Distribution System

Introduction : Basic Concepts of the Distribution System

Distribution of goods and services plays an important role in the sales

system. Distribution system varies from company to company and region

to region. The distribution system gives strength to the company by

helping to increase the reach of the product to various parts of the region,

country or even in foreign markets. An effective distribution system helps

in making available goods in the right quantity at the right time when they

are required and giving a reasonable earning to those who are associated

with the distribution system like wholesalers, retailers, departmental

stores, etc.


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functions

Contact

InformationRisk Taking

Promotion

Matching

Financing

Physical

Distribution

Negotiation


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Setting Distribution Objectives

What are distribution objectives? For a product market, they are defined in

terms of availability of the product (for example, percentage of total outletsreached). Most companies do not explicitly set distribution objectives. Of

those that do, distribution objectives often have no linkage to end

customer requirements. Often companies fail to ask questions like, How

many and what kind of outlets do I need, to be available to a given target

audience and their buyerbehaviour?

There are also regional differences in category development to be taken

into account. For instance, will extending distribution in a region with a low

level of category development help me boost sales? Finally, the objectives

should take note of the marketing initiatives planned for the year


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The Andersen Consulting Distribution Strategy Pyramid

Distribution

Objectives

STRATEGY

ChannelDesign

NetworkStrategy

STRUCTURE

IntermediateManagement

Warehousesand Transport

MaterialsManagement

PROCESS

IT Policies andProcedures

Facilities andEquipment

ChannelManagement

IMPLEMENTATION


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The Distribution Development Index (DDI) is defined as the availability of a

brand/category in the market relative to that of a benchmark brand/category. The

Category Development Index (CDI) is defined as the per capita consumption of the

category in that market relative to the national per capita consumption of the

category. The relative level of DDI and CDI will determine the extent of the

opportunity to actually extend distribution.

Concentrate ondemand generationactivities

Concentrate onquality of distribution,

service level,frequency etc.

Develop integratedsales andmarketing package

Extend distributionimmediately

High

Low

DistributionDevelopment

Category Development

Low High


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Developing Channel Design

Distribution Processes Setting/AchievingDistribution Objectives

ControllingDistribution

u Inventory managementthrough a periodic reviewof network

u Integrated supply chainplanning

u Setting up distributionstrategy withalternatives

u Consistently lowerinventory levels inchanging demand

u Demand forecastingbased on consumertrend secondary

u

Setting distributionobjectives in line withthe demand potential

u

Lower inventoriesu Lower trade spends (no

attempts to boost saleswhere demand)

u Monitoring of tradespends

u Monitoring of distributor

u Achieving distributionobjectives by ensuringthe right mix of directcoverage and reach.

u Controlling trade spends

u Controlling distributorexpenses and serviceevils to prevent

distributors from makingsales.


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Definitions of Physical Distribution

1. The term Physical Distribution Management, is employed in

manufacturing and commerce to describe the broad range of activities

are:

Freight

Warehouseing

Material handling

Protective packing

Inventory control

Selection of site for various activities

Marketing

Forecasting.

2. Physical Distribution is the art and science of determiningrequirements, acquiring them, distributing them and, finally, maintaining

them in an operationally ready condition for their entire life.

3. Physical Distribution Management is specifically concerned with the

flow of goods through the economic system.


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Functions of Physical Distribution

In main, physical distribution functions may be listed as follows:

1. Locational analysis

2. Transportation

3. Material handling4. Warehousing

5. Packing

6. Order processing

7. Packaging

8. Inventory control

9. Customer sales service.


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Logistics

Introduction

Logistics is the process of planning, implementing and controlling the

efficient, effective flow and storage of goods, services and related

information from the point of origin to the point of consumption for the

purpose of conforming to consumerrequirements.

Logistics is not a new area of marketing management. It has been aroundsince the beginning of civilisation.

Logistics helps the inflow of materials into the manufacturing process. It

also helps in the distribution of products to consumers through various

marketing channels.

Logistical management includes the design and administration of systems

to control the flow of material, work-in-process and finished inventory to

support business unit strategy.


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Logistic Needs

Land Sufficient land so that industrial or business operations may be

conducted smoothly.

Water distribution

Energy Sufficient electric power or alternative resources of power so that

operations may go unhindered.

Storage for equipments, construction goods.

Machinery and spares.

Warehousing space for movement of goods/temporary storing till the

goods reach final destination.

Transport equipments, trucks, trolleys, etc.

Telephones, telefax and other communication equipments.


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Functional Areas of Logistics

There are seven important functional areas of logistics.

Transportation(Road, Rail or

Air) (3)

InformationTechnology (2)

NetworkDesign (1)

Logistics forCustomer

Satisfaction

Inventory andStorage (4)

Packaging andRe-packaging

(7)

MaterialsHandling,Loading,

and Unloading(6)

Warehousing

(Pvt./Public)(5)


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1. Network Design

Manufacturing plants, warehouses, material handling, distribution and after-

sale services are typical logistics facilities. Network design is one of the

prime responsibility of logistical management. It is required to determine thenumber and location of all types of facilities required to perform the logistics

task. The selection of a superior locational network can be the first step

towards competitive advantage. Logistical efficiency directly depends on the

proper design of network and infrastructure.

2. Information Technology: Two major areas that depend on information are:

Sales Forecasting: It is done to estimate the future requirements oflogistics. It helps inventory management to satisfy anticipated customer

requirements.

Order Management: Customers order is very important in logistics.Logistics services are required for external and internal customers. External

customers are those that consume the products or services and any trading

partners that purchase products or services for resale. Internal customers

are organisational units within a company.


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3. Transportation

It helps in positioning inventory geographically. There are three forms of

transport, i.e., private carriage, contract carriage and public carriage. Road Transport

The Plan of Super National Highways

Water Transport

Shipping Companies

Gopalpur Seaport Project

National Waterways

Air Transport


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Just-in-Time (JIT) Transport Management

Seven results were selected for this study as benefits of JIT implementation:

1. Downtime reduction

2. Inventory reduction

3. Workspace reduction

4. Increased quality

5. Increased manpower utilisation

6. Increased equipment utilisation

7. Increased inventory turnover


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Inventory Management

S.

No.

Title Basis Main Uses

1. ABC (Always BetterControl)

Value of Consumption To control raw material components andwork-in-progress inventories in the

normal course of business.

2. HML (High, Medium,

Low)

Unit price of material Mainly to control purchases.

3. XYZ Value of items instorage

To review the inventories and their usesat scheduled intervals.

4. VED (Vital Essential

Desirable)

Criticality of

component

To determine the stocking levels of

spare parts.

5. FNSD (Fast, Nominal,

Slow, Dead, etc.)

Consumption pattern

of the component

To control obsolescence.

6. SDE (Scarce, Difficult,

Easy to obtain)

Problems faced in

procurement

Lead-time analysis and purchasing

strategies.

7. GOLE (Government,

Ordinary, Local,

Foreign sources)

Source of the material Procurement strategies.

8. SOS (Seasonal, Off-

season)

Nature of supplies Procurement/Holding strategies for

seasonal items like agricultural

products.


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Warehousing

Warehouses provide a key link in the physical distribution chain and, like other

stages of distribution, they are being closely scrutinised by todays marketing

managers. The location, size and capabilities of warehouses can profoundly

affect a companys ability to satisfy its customers and deliver products and

services profitably.

Types of Wareshouses

There are two types of warehouses (i) private warehouses (ii) public

warehouses.

Purposes of a Good Warehouse

Storage

Breaking bulk

Consolidation

Unitisation


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Factors Affecting Warehousing Choice

The warehousing decision is influenced by the difficulty of moving goods directly

from the assembly line to buyers or public warehouses. The following factorshave to be kept in mind when deciding the location of a warehouse:

Product type

Transportation cost

Markets Rent

Labour supply

Taxes

Geography

Competition.


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Materials Handling Equipments

Material handling is such an important activity that it cannot be avoided in the

performance of logistics. Material handling activities should be minimised as it

requires a very high capital investment and direct labour cost. The network of

facilities forms a structure from which logistical operations are performed within a

network design framework as per the requirement of customers.

Materials handling system in logistics is designed under certain guidelines.

These are very important to assist management. These are:

Equipment for materials handling and storage should be standardised

The system should be designed to provide maximum continuous product

flow as per the requirements of the company

Handling equipment should be properly utilised.


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Classification of Materials Handling Systems

1. Mechanised Systems: These systems utilise a combination of labour andhandling equipment to facilitate receiving, processing, and/or shipping.

Mainly labour constitutes a high percentage of overall cost in mechanised

handling.

2. Semi-automated System: The main equipments used in semi-automated

system are:

Automated Guided Vehicle System (AGVS)

Sortations

Robotics.

3. Automated System: Automated System attempts to minimise labour as

much as practically possible by substituting capital investment by

equipment.


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Packaging

Packaging includes handling and storage of finished goods. It also emphasises

on protection from loss and damage.

Hence, we can say that logistics management is the framework of 7 RsRight

quantity of the Right product or service to the Right place in the Right conditions

at the Right cost and the Right time with Right impression.

Excellence in each aspect of functional work is relevant and must be viewed in

terms of improving the overall efficiency and effectiveness of integrated logistics.


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Logistical Integration

The logistical integration process is composed of two interrelated efforts, i.e.,

goods flow and information flow. Information from and about customers flowsthrough the enterprise in the form of sales activity, forecasts and orders. This

information is refined into manufacturing and procurement plans. A value-added

inventory flow results in transfer of finished products to customers.

The following are the major components of logistical operations:

a. Physical Distribution

b. Manufacturing Support

c. Procurement

d. Inventory Flow

e. Information Flow


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Marketing and Physical Distribution of Petroleum

Products (An Indian Perspective)

Marketing and physical distribution of petroleum products in India is quitedeveloped and most of it is under public sector organisations. Recently, the

government gave permission for the import and distribution of cooking gas and

kerosene oil to the private sector.

Associated Units

1. Indian Oil Corporation Ltd (IOCL)

2. Bharat Petroleum Corporation Ltd (BPCL)

3. Hindustan Petroleum Corporation Ltd (HPCL)

4. Gas Authority of India Ltd (GAIL)


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Physical Distribution Management

Transportation and Warehousing

Definition

Physical distribution management refers to:

The management of all activities which facilitate movement and

coordination of supply and demand in the creation of time and place utility

in goods.

A more comprehensive definition of the physical distribution management

may be:

The term physical distribution management employed in manufacturing

and commerce is used to describe the broad range of activities with the

efficient movement of finished products from the end of production line to

the consumer and, in some cases, includes the movement of raw materials

from the source of supply to the beginning of the production line.


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These activities have been illustrated in Figure.

Location Ware Houseing

Material Handling

Packing and

Packaging

Inventory ControlOrder ProcessingTransportation

Customer Services

Records

Maintenance

PHYSICAL

DISTRIBUTION


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Transportation

Transportation system in an organisation should be:

Efficient

Economic

Reliable

Meeting customer needs in a timely manner

Experienced

Capable of meeting emergencies, special needs.


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Transport Infrastructure

In order to be successful in managing a good transportation system, acompany has to plan for a proper infrastructure like:

Land, building

Labour

Packing places

Roads

Lighting

Weight scales, handling equipments

Receipt and despatch procedures

Suitable manpower

Proper timing of operations, so that goods may be received or

dispatched on time.

Adequate number of vehicles to transport the goods.


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Modes of Transportation

The following modes of transportation are used keeping in mind the goodsand places where they are to be sent and the volume of goods:

1. Railways

2. Road Transportation

3. Air Transportation

4. Sea Transportation (Marine)

5. Inland Waterways

6. Ropeways

7. Postal

8. Courier

9. Hand carts, Thelas, Rehres, Cycle Rikshaws,

10. Bullock carts, etc.


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Distribution Agreement Specimen

(Between a fast moving consumer goods company and its distributor)

From:

M/s ABC+ CoNew Delhi

To

M/s XYZ + Co

Ghaziabad (UP)

Dear Sirs,

We have pleasure in appointing you as one of our Confectionery Division Distributors at

Ghaziabad wef 21.05.98 on the following terms and conditions:-------------------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------------------

Please signify your consent to the above terms and conditions by signing and returning to us the

duplicate copy of this agreement.

Thanking You,

Yours very truly,Accepted

For XYZ +Co. For ABC + Co.

sd/- sd/-

Partner Zonal Manager


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Operating Instructions

Terms of Payment

As you are aware, the company supplies its goods to you on the basis of your

ex-godown or shop. For your better understanding of the terms, we would like to

give clarifications as under:

a. Cost/Charges to Be Borne by the Company

b. Cost/Expenses to your Account

c. Interest on Delayed Payments

d. Payment for Short/ Damaged Delivery


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Warehouses(chpt-30)

A warehouse is a location with proper facilities where shipments are received

from a factory or production centre, broken down, reassembled, and shipped to

the customers as per their orders , It is also defined as:

a building in which goods are stored, bonded or displayed for sale.

Advantages

The warehouse provides the following main advantages

1. Reduces distribution costs.

2. Is easily accessible to the customers or is located near the market, resulting

in better and finer distribution.


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Documents

Sales and Distribution Slides Aug 2011