MR. ANKIT BAJPAIANKITBAJPAIS@GMAIL .COM
Sales and Distribution Management
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
Sales Force Serves as a Critical Link
Between a Company and its Customers Since They:
Represent Customers to
the Company to Produce Customer
Satisfaction
Represent the Company to
Customers to Produce Company Profit
By: Ankit Bajpai www.uptunotes.com
Characteristics of Personal Selling
FlexibilityIdentify best
prospectsAdapt to situationsEngage in dialogue
Builds Relationships
Long termAssure buyers receive
appropriate servicesSolves 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 processingSuggestive selling
By: Ankit Bajpai www.uptunotes.com
Personal Selling Tasks
Order gettingSeeking out
customersCreative sellingPioneeringAccount
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
Step 1. Prospecting and Qualifying
Step 1. Prospecting and Qualifying
Identifying and Screening For Qualified Potential Customers.
Steps in the Selling ProcessSteps in the Selling Process
Learning As Much As Possible About a Prospective Customer
Before Making a Sales Call.
Learning As Much As Possible About a Prospective Customer
Before Making a Sales Call.Step 2. Pre-approachStep 2. Pre-approach
Step 3. ApproachStep 3. Approach Knowing How to Meet the Buyerto Get the Relationship Off
to a Good Start.
Knowing How to Meet the Buyerto Get the Relationship Off
to a Good Start.
Step 4. Presentation/ Demonstration
Step 4. Presentation/ Demonstration
Telling the Product “Story” to the Buyer, and Showing the
Product Benefits.
Telling the Product “Story” to the Buyer, and Showing the
Product Benefits.
By: Ankit Bajpai www.uptunotes.com
Steps in the Selling ProcessSteps in the Selling Process
Step 5. Handling Objections Step 5. Handling Objections
Step 6. Closing Step 6. Closing
Step 7. Follow-Up Step 7. Follow-Up
Seeking Out, Clarifying, and Overcoming
Customer Objections to Buying.
Asking the Customerfor the Order.
Following Up After the Sale toEnsure Customer Satisfaction
and Repeat Business.
By: Ankit Bajpai www.uptunotes.com
Alternative Steps:
Find ’emFind ’em
Grab ‘emGrab ‘em
Show ‘emShow ‘em
Answer ‘emAnswer ‘em
Sell ‘emSell ‘em
Keep ‘emKeep ‘emBy: Ankit Bajpai www.uptunotes.com
Identify and Qualifying Prospects
Prospecting: Identifying likely new customers Leads
Qualifying: Evaluating a prospect’s potential
Identify and Qualifying Prospects
Prospecting: Identifying likely new customers Leads
Qualifying: Evaluating a prospect’s potential
Creative Selling Process
By: Ankit Bajpai www.uptunotes.com
Creative Selling Process
Approaching the ProspectContactRapport“Only one chance to
make a first impression”
Approaching the ProspectContactRapport“Only one chance to
make a first impression”
By: Ankit Bajpai www.uptunotes.com
Creative Selling Process
Sales PresentationPersuasive communicationAttentionInterestDesire“Tell the product’s story”
Sales PresentationPersuasive communicationAttentionInterestDesire“Tell the product’s story”
By: Ankit Bajpai www.uptunotes.com
Creative Selling Process
Handling Objections Questions Reservations
Understand ConcernCounterargumentsAcknowledge concernClues to process
Handling Objections Questions Reservations
Understand ConcernCounterargumentsAcknowledge concernClues to process
By: Ankit Bajpai www.uptunotes.com
Creative Selling Process
Closing the SaleClosing signalsTrial closeAsk for the sale
Closing the SaleClosing signalsTrial closeAsk for the sale
By: Ankit Bajpai www.uptunotes.com
Following UpCommitments met
Shipment Performance
Reinforce relationshipSatisfied customers
rebuy & recommend
Following UpCommitments met
Shipment Performance
Reinforce relationshipSatisfied customers
rebuy & recommend
Creative Selling Process
By: Ankit Bajpai www.uptunotes.com
Planning Organizing
DirectingControlling
Settingobjectives
Organizingactivities
Recruit, select, train, develop, manage, &motivate
Motivate,evaluate, & control
Sales Management
By: Ankit Bajpai www.uptunotes.com
Organizing Sales ActivitiesOrganizing Sales Activities
Sales Territory:Geographic divisionsCustomer typesProduct linesSelling task
Sales Territory:Geographic divisionsCustomer typesProduct linesSelling task
By: Ankit Bajpai www.uptunotes.com
Geographic DivisionGeographic Division
Sales RepCalifornia
Sales RepPacific NW
Sales RepSoutheast
Sales RepNortheast
District SalesManager
District SalesManager
District SalesManager
District SalesManager
Regional SalesManager
Regional SalesManager
Vice-PresidentMarketing
By: Ankit Bajpai www.uptunotes.com
Customer TypeCustomer Type
New Account#1
New Account#2
ExistingAccount #1
ExistingAccount #2
New AccountsManager
Existing AccountsManager
Vice-PresidentSales
By: Ankit Bajpai www.uptunotes.com
Product LineProduct Line
Sales RepEastern Region
Sales RepWest’n Region
Sales repEastern Region
Sales RepWest’n Region
Snack FoodsSales Manager
BeveragesSales Manager
Vice-PresidentSales
By: Ankit Bajpai www.uptunotes.com
Directing the Sales Force
Recruiting and selectingTraining & developCompensating
• Motivating
By: Ankit Bajpai www.uptunotes.com
Compensation MethodsCompensation Methods
Straight salary or
wage
Straight salary or
wage
Salary pluscommissionSalary pluscommission
Straightcommission
Straightcommission
Commissionwith draw
Commissionwith draw
Quota-bonusplan
Quota-bonusplan
By: Ankit Bajpai www.uptunotes.com
Evaluation and Control
Required reportsMeasurement against
plan or sales standards
Expense controlProductivityNew 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
PRODUCER
CONSUMER
DISTRIBUTION
By: Ankit Bajpai www.uptunotes.com
Distribution Channel Functions
Distribution Channel Functions
OrderingOrdering
PaymentsPayments
CommunicationCommunicationTransferTransfer
NegotiationNegotiation
FinancingFinancingRisk TakingRisk Taking
PhysicalDistribution
PhysicalDistribution
InformationInformation
By: Ankit Bajpai www.uptunotes.com
Typical Channels of Distribution
ANUFACTURER
ONSUMER
HOLESALER
ETAILER
GENT
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 ExchangeBy: Ankit Bajpai www.uptunotes.com
Conventional Distribution Channel vs. Vertical Marketing Systems
Verticalmarketingchannel
Manufacturer
Retailer
Conventionalmarketingchannel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
Wh
ole
sale
rBy: Ankit Bajpai www.uptunotes.com
Types of Vertical Marketing SystemsTypes of Vertical Marketing SystemsCorporate
Common Ownership at Different Levels of the Channel
CorporateCommon Ownership at Different
Levels of the Channel
ContractualContractual Agreement Among
Channel Members
ContractualContractual Agreement Among
Channel Members
AdministeredLeadership is Assumed by One or
a Few Dominant Members
AdministeredLeadership is Assumed by One or
a Few Dominant Members
By: Ankit Bajpai www.uptunotes.com
Vertical Marketing Systems
Corporate systems - total ownership
• Administered - strong leadership
• Contractual - legal relationships
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 sizeWaiting timeSpatial convenienceProduct varietyService backup
By: Ankit Bajpai www.uptunotes.com
Steps in Distribution Planning
By: Ankit Bajpai www.uptunotes.com
IntensiveDistribution
IntensiveDistribution
Exclusive Distribution
Exclusive Distribution
SelectiveDistribution
SelectiveDistribution
DistributionIntensity
DistributionIntensity
Choosing a Distribution System
By: Ankit Bajpai www.uptunotes.com
Intensive DistributionIntensive Distribution
Seeks to obtain maximum product
exposure at the retail level
Seeks to obtain maximum product
exposure at the retail level
Producer
Retailer RetailerRetailer
Retailer
Retailer Retailer
Retailer
Retailer
Retailer Retailer Retailer
Retailer
Retailer Retailer Retailer
By: Ankit Bajpai www.uptunotes.com
Selective DistributionSelective Distribution
Product is sold in a limited number of
outlets
Product is sold in a limited number of
outlets
Producer
Retailer RetailerRetailer
Retailer Retailer Retailer
By: Ankit Bajpai www.uptunotes.com
Product is sold in only one outlet in
a given area
Product is sold in only one outlet in
a given area
Producer
Retailer
Exclusive Distribution
By: Ankit Bajpai www.uptunotes.com
Developing Distribution Tactics
Selecting Channel PartnersSelecting Channel Partners
Reward orCoercive
Power
Reward orCoercive
Power
LegitimatePower
LegitimatePower
EconomicPower
EconomicPower
Managing the Channel of DistributionChannel Leader Power
Managing the Channel of DistributionChannel Leader Power
Distribution Channels & the Marketing MixDistribution Channels & the Marketing Mix
By: Ankit Bajpai www.uptunotes.com
Materials HandlingMoving Products Into,
Within, andOut of Warehouses
Materials HandlingMoving Products Into,
Within, andOut of Warehouses
Warehousing Number Needed
WhereWhat Type
Warehousing Number Needed
WhereWhat Type
Inventory Control
When to orderHow much to order
Inventory Control
When to orderHow much to order
Order ProcessingReceived
ProcessedShipped
Order ProcessingReceived
ProcessedShipped
Physical DistributionFunctionsTransportation
Rail, Water, Trucks, Air,
Pipeline, Internet
Physical Distribution
By: Ankit Bajpai www.uptunotes.com
Rail Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
Rail Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
WaterLow cost for shipping bulky, low-value,
non perishable goods, slowest form.
WaterLow cost for shipping bulky, low-value,
non perishable goods, slowest form.
TruckMost important carrier for consumer
goods, flexible.
TruckMost important carrier for consumer
goods, flexible.
AirHigh cost, ideal when speed is needed or
distant markets have to be reached
AirHigh cost, ideal when speed is needed or
distant markets have to be reached
PipelineCarry petroleum based products,
very low cost, requires little energy.
PipelineCarry petroleum based products,
very low cost, requires little energy.
Transportation Modes
InternetWeb sites have products available, used
especially for services.
InternetWeb sites have products available, used
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 of Destructive Conflict
Importance of threatenedchannel in terms of current or potential volume or profitability High Low
High (FIRE) Act to avert or address conflict
Allow threatened channel to decline
Low (Smoke)
Look for opportunities to reassure threatened channel and leverage your power
Do nothing
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 TerritoriesEnhance or Change the Channels Value
By: Ankit Bajpai www.uptunotes.com
Managing Channel Conflict
CHANNEL ECONOMICS DETERIORATEChange 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
One thousand retailers
OK
Difficult• Ethical, Political, &
Legal
By: Ankit Bajpai www.uptunotes.com