7 sales and distribution management
TRANSCRIPT
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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)
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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.
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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.
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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
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Characteristics of Personal Selling
Flexibility• Identify best
prospects• Adapt to situations• Engage in dialogue
Builds Relationships• Long term• Assure buyers
receive appropriate services
• Solves customer’s problems
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Personal Selling Limitations
• Can not reach mass audience
• Expensive per contact• Numerous calls
needed to generate sale
• Labor intensive
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Personal Selling Tasks
Order taking
• Routine– writing up orders– checking invoices– assuring prompt order
processing
• Suggestive selling
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Personal Selling Tasks
Order getting• Seeking out
customers• Creative selling• Pioneering• Account management
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Personal Selling Tasks
• Missionary– Detailer– Goodwill– “Closers”
• Cross-functional• Account service rep
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Some Traits of Good Salespeople
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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. ApproachKnowing How to Meet the Buyer
to 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.
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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.
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Alternative Steps:
Find ’emFind ’em
Grab ‘emGrab ‘em
Show ‘emShow ‘em
Answer ‘emAnswer ‘em
Sell ‘emSell ‘em
Keep ‘emKeep ‘em
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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
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Approaching the Prospect
• Contact
• Rapport
• “Only one chance to make a first impression”
Approaching the Prospect
• Contact
• Rapport
• “Only one chance to make a first impression”
Creative Selling Process
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Sales Presentation
• Persuasive communication
• Attention
• Interest
• Desire
• “Tell the product’s story”
Sales Presentation
• Persuasive communication
• Attention
• Interest
• Desire
• “Tell the product’s story”
Creative Selling Process
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Handling Objections– Questions– Reservations
• Understand Concern
• Counterarguments
• Acknowledge concern
• Clues to process
Handling Objections– Questions– Reservations
• Understand Concern
• Counterarguments
• Acknowledge concern
• Clues to process
Creative Selling Process
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Closing the Sale
• Closing signals
• Trial close
• Ask for the sale
Closing the Sale
• Closing signals
• Trial close
• Ask for the sale
Creative Selling Process
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Following Up
• Commitments met– Shipment– Performance
• Reinforce relationship
• Satisfied customers rebuy & recommend
Following Up
• Commitments met– Shipment– Performance
• Reinforce relationship
• Satisfied customers rebuy & recommend
Creative Selling Process
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PlanningPlanning OrganizingOrganizing
DirectingDirectingControllingControlling
Settingobjectives
Organizingactivities
Recruit, select, train, develop, manage, &motivate
Motivate,evaluate, & control
Sales Management
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Organizing Sales ActivitiesOrganizing Sales Activities
Sales Territory:
• Geographic divisions
• Customer types
• Product lines
• Selling task
Sales Territory:
• Geographic divisions
• Customer types
• Product lines
• Selling task
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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
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Customer TypeCustomer Type
New Account#1
New Account#2
ExistingAccount #1
ExistingAccount #2
New AccountsManager
Existing AccountsManager
Vice-PresidentSales
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Product LineProduct Line
Sales RepEastern Region
Sales RepWest’n Region
Sales repEastern Region
Sales RepWest’n Region
Snack FoodsSales Manager
BeveragesSales Manager
Vice-PresidentSales
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Directing the Sales Force
• Recruiting and selecting
• Training & develop
• Compensating
• Motivating
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Compensation MethodsCompensation Methods
Straight Straight salary orsalary or
wagewage
Straight Straight salary orsalary or
wagewage
Salary plusSalary pluscommissioncommission
Salary plusSalary pluscommissioncommission
StraightStraightcommissioncommission
StraightStraightcommissioncommission
CommissionCommissionwith drawwith draw
CommissionCommissionwith drawwith draw
Quota-bonusQuota-bonusplanplan
Quota-bonusQuota-bonusplanplan
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Evaluation and Control
• Required reports• Measurement against
plan or sales standards
• Expense control• Productivity• New account
development
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Ethical Issues
• Kickbacks, bribes and “gifts”
• Price discrimination• Cheating on expense
accounts• Misrepresentation
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Distribution Channel Design and Management
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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
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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.
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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.
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Distribution
PRODUCER
CONSUMER
DISTRIBUTION
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Distribution Channel Distribution Channel FunctionsFunctions
Distribution Channel Distribution Channel FunctionsFunctions
OrderingOrdering
PaymentsPayments
CommunicationCommunicationTransferTransfer
NegotiationNegotiation
FinancingFinancingRisk TakingRisk Taking
PhysicalDistribution
PhysicalDistribution
InformationInformation
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Typical Channels of Distribution
ANUFACTURER
ONSUMER
HOLESALER
ETAILER
GENT
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Business-to-Business Channels
Direct
Wholesaler
Agent
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Business-to-Business Channel Trends
Infomediaries & Vertical Exchange
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Conventional Distribution Channel vs. Vertical Marketing Systems
VerticalVerticalmarketingmarketingchannelchannel
Manufacturer
Retailer
ConventionalConventionalmarketingmarketingchannelchannel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
Wh
ole
sale
r
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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
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Vertical Marketing Systems
• Corporate systems - total ownership
• Administered - strong leadership
• Contractual - legal relationships
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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
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Customers’ Desired Service Levels
• Lot size
• Waiting time
• Spatial convenience
• Product variety
• Service backup
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Steps in Distribution Planning
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IntensiveDistribution
IntensiveDistribution
Exclusive Distribution
Exclusive Distribution
SelectiveDistribution
SelectiveDistribution
DistributionIntensity
DistributionIntensity
Choosing a Distribution System
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Intensive DistributionIntensive Distribution
Seeks to obtain maximum product exposure at the
retail level
Seeks to obtain maximum product exposure at the
retail level
ProducerProducer
RetailerRetailer RetailerRetailerRetailerRetailer
RetailerRetailer
RetailerRetailer RetailerRetailer
RetailerRetailer
RetailerRetailer
RetailerRetailer RetailerRetailer RetailerRetailer
RetailerRetailer
RetailerRetailer RetailerRetailer RetailerRetailer
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Selective DistributionSelective Distribution
Product is sold Product is sold in a limited in a limited number of number of
outletsoutlets
Product is sold Product is sold in a limited in a limited number of number of
outletsoutlets
ProducerProducer
RetailerRetailer RetailerRetailerRetailerRetailer
RetailerRetailer RetailerRetailer RetailerRetailer
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Product is sold in Product is sold in only one outlet in only one outlet in
a given areaa given area
Product is sold in Product is sold in only one outlet in only one outlet in
a given areaa given area
ProducerProducer
RetailerRetailer
Exclusive Distribution
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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
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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
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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.
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Channel Relationships
• Cooperation
• Conflict
• Power– Coercive– Expert– Legitimate
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Decision Making Framework
Prospects of Destructive Conflict
Importance of threatened
channel 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
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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?
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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
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Managing Channel ConflictCHANNEL 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
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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
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Other Distribution Management Issues
• Reverse distribution
One Coca Cola Distributor
One thousand retailers
OK
Difficult
• Ethical, Political, & Legal