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MR. ANKIT BAJPAI ANKITBAJPAIS@GMAIL.COM Sales and Distribution Management By: Ankit Bajpai www.uptunotes.com Slide 2 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 Slide 3 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 Slide 4 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 Slide 5 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 Slide 6 Characteristics of Personal Selling Flexibility Identify best prospects Adapt to situations Engage in dialogue Builds Relationships Long term Assure buyers receive appropriate services Solves customers problems By: Ankit Bajpai www.uptunotes.com Slide 7 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 Slide 8 Personal Selling Tasks Order taking Routine writing up orders checking invoices assuring prompt order processing Suggestive selling By: Ankit Bajpai www.uptunotes.com Slide 9 Personal Selling Tasks Order getting Seeking out customers Creative selling Pioneering Account management By: Ankit Bajpai www.uptunotes.com Slide 10 Personal Selling Tasks Missionary Detailer Goodwill Closers Cross-functional Account service rep By: Ankit Bajpai www.uptunotes.com Slide 11 Some Traits of Good Salespeople By: Ankit Bajpai www.uptunotes.com Slide 12 Step 1. Prospecting andQualifying Identifying and Screening For Qualified Potential Customers. Steps 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-approach Step 3. Approach Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. 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 Slide 13 Steps in the Selling Process Step 5. Handling Objections Step 6. Closing Step 7. Follow-Up Seeking Out, Clarifying, and Overcoming Customer Objections to Buying. Asking the Customer for the Order. Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business. By: Ankit Bajpai www.uptunotes.com Slide 14 Alternative Steps: Find em Grab em Show em Answer em Sell em Keep em By: Ankit Bajpai www.uptunotes.com Slide 15 Identify and Qualifying Prospects Prospecting: Identifying likely new customers Leads Qualifying: Evaluating a prospects potential Identify and Qualifying Prospects Prospecting: Identifying likely new customers Leads Qualifying: Evaluating a prospects potential Creative Selling Process By: Ankit Bajpai www.uptunotes.com Slide 16 Creative Selling Process 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 By: Ankit Bajpai www.uptunotes.com Slide 17 Creative Selling Process Sales Presentation Persuasive communication Attention Interest Desire Tell the products story Sales Presentation Persuasive communication Attention Interest Desire Tell the products story By: Ankit Bajpai www.uptunotes.com Slide 18 Creative Selling Process Handling Objections Questions Reservations Understand Concern Counterarguments Acknowledge concern Clues to process Handling Objections Questions Reservations Understand Concern Counterarguments Acknowledge concern Clues to process By: Ankit Bajpai www.uptunotes.com Slide 19 Creative Selling Process Closing the Sale Closing signals Trial close Ask for the sale Closing the Sale Closing signals Trial close Ask for the sale By: Ankit Bajpai www.uptunotes.com Slide 20 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 By: Ankit Bajpai www.uptunotes.com Slide 21 Planning Organizing Directing Controlling Setting objectives Organizing activities Recruit, select, train, develop, manage, & motivate Motivate, evaluate, & control Sales Management By: Ankit Bajpai www.uptunotes.com Slide 22 Organizing Sales Activities Sales Territor y: Geographic divisions Customer types Product lines Selling task Sales Territor y: Geographic divisions Customer types Product lines Selling task By: Ankit Bajpai www.uptunotes.com Slide 23 Geographic Division Sales Rep California Sales Rep Pacific NW Sales Rep Southeast Sales Rep Northeast District Sales Manager District Sales Manager District Sales Manager District Sales Manager Regional Sales Manager Regional Sales Manager Vice-President Marketing By: Ankit Bajpai www.uptunotes.com Slide 24 Customer Type New Account #1 New Account #2 Existing Account #1 Existing Account #2 New Accounts Manager Existing Accounts Manager Vice-President Sales By: Ankit Bajpai www.uptunotes.com Slide 25 Product Line Sales Rep Eastern Region Sales Rep Westn Region Sales rep Eastern Region Sales Rep Westn Region Snack Foods Sales Manager Beverages Sales Manager Vice-President Sales By: Ankit Bajpai www.uptunotes.com Slide 26 Directing the Sales Force Recruiting and selecting Training & develop Compensating Motivating By: Ankit Bajpai www.uptunotes.com Slide 27 Compensation Methods Straight salary or wage Salary plus commissionStraightcommission Commission with draw Quota-bonusplan By: Ankit Bajpai www.uptunotes.com Slide 28 Evaluation and Control Required reports Measurement against plan or sales standards Expense control Productivity New account development By: Ankit Bajpai www.uptunotes.com Slide 29 Ethical Issues Kickbacks, bribes and gifts Price discrimination Cheating on expense accounts Misrepresentation By: Ankit Bajpai www.uptunotes.com Slide 30 Distribution Channel Design and Management By: Ankit Bajpai www.uptunotes.com Slide 31 Distributions 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 Slide 32 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 Slide 33 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 its 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 Slide 34 Distribution PRODUCERPRODUCER CONSUMERCONSUMER DISTRIBUTION By: Ankit Bajpai www.uptunotes.com Slide 35 Distribution Channel Functions Ordering Payments Communication Transfer Negotiation Financing Risk Taking Physical Distribution Physical Distribution Information By: Ankit Bajpai www.uptunotes.com Slide 36 Typical Channels of Distribution ANUFACTURER ONSUMER HOLESALER ETAILER GENT By: Ankit Bajpai www.uptunotes.com Slide 37 Business-to-Business Channels Direct Wholesaler Agent By: Ankit Bajpai www.uptunotes.com Slide 38 Business-to-Business Channel Trends Infomediaries & Vertical Exchange By: Ankit Bajpai www.uptunotes.com Slide 39 Conventional Distribution Channel vs. Vertical Marketing Systems Verticalmarketingchannel Manufacturer Retailer Conventionalmarketingchannel Consumer Manufacturer ConsumerRetailer Wholesaler By: Ankit Bajpai www.uptunotes.com Slide 40 Types of Vertical Marketing Systems Corporate Common Ownership at Different Levels of the Channel Corporate Common Ownership at Different Levels of the Channel Contractual Contractual Agreement Among Channel Members Contractual Contractual Agreement Among Channel Members Administered Leadership is Assumed by One or a Few Dominant Members Administered Leadership is Assumed by One or a Few Dominant Members By: Ankit Bajpai www.uptunotes.com Slide 41 Vertical Marketing Systems Corporate systems - total ownership Administered - strong leadership Contractual - legal relationships By: Ankit Bajpai www.uptunotes.com Slide 42 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 Slide 43 Customers Desired Service Levels Lot size Waiting time Spatial convenience Product variety Service backup By: Ankit Bajpai www.uptunotes.com Slide 44 Steps in Distribution Planning By: Ankit Bajpai www.uptunotes.com Slide 45 Intensive Distribution Intensive Distribution Exclusive Distribution Exclusive Distribution Selective Distribution Selective Distribution Intensity Distribution Intensity Choosing a Distribution System By: Ankit Bajpai www.uptunotes.com Slide 46 Intensive Distribution Seeks to obtain maximum product exposure at the retail level Producer RetailerRetailerRetailer Retailer RetailerRetailer Retailer Retailer RetailerRetailerRetailer Retailer RetailerRetailerRetailer By: Ankit Bajpai www.uptunotes.com Slide 47 Selective Distribution Product is sold in a limited number of outlets Producer RetailerRetailerRetailer RetailerRetailerRetailer By: Ankit Bajpai www.uptunotes.com Slide 48 Product is sold in only one outlet in a given area Producer Retailer Exclusive Distribution By: Ankit Bajpai www.uptunotes.com Slide 49 Developing Distribution Tactics Selecting Channel Partners Reward or Coercive Power Reward or Coercive Power Legitimate Power Legitimate Power Economic Power Economic Power Managing the Channel of Distribution Channel Leader Power Managing the Channel of Distribution Channel Leader Power Distribution Channels & the Marketing Mix By: Ankit Bajpai www.uptunotes.com Slide 50 Materials Handling Moving Products Into, Within, and Out of Warehouses Materials Handling Moving Products Into, Within, and Out of Warehouses Warehousing Number Needed Where What Type Warehousing Number Needed Where What Type Inventory Control When to order How much to order Inventory Control When to order How much to order Order Processing Received Processed Shipped Order Processing Received Processed Shipped Physical Distribution Functions Transportation Rail, Water, Trucks, Air, Pipeline, Internet Physical Distribution By: Ankit Bajpai www.uptunotes.com Slide 51 Rail Cost-effective for shipping bulk products, piggy-back, fishyback, birdyback. Rail Cost-effective for shipping bulk products, piggy-back, fishyback, birdyback. Water Low cost for shipping bulky, low-value, non perishable goods, slowest form. Water Low cost for shipping bulky, low-value, non perishable goods, slowest form. Truck Most important carrier for consumer goods, flexible. Truck Most important carrier for consumer goods, flexible. Air High cost, ideal when speed is needed or distant markets have to be reached Air High cost, ideal when speed is needed or distant markets have to be reached Pipeline Carry petroleum based products, very low cost, requires little energy. Pipeline Carry petroleum based products, very low cost, requires little energy. Transportation Modes Internet Web sites have products available, used especially for services. Internet Web sites have products available, used especially for services. By: Ankit Bajpai www.uptunotes.com Slide 52 Channel Relationships Cooperation Conflict Power Coercive Expert Legitimate By: Ankit Bajpai www.uptunotes.com Slide 53 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 By: Ankit Bajpai www.uptunotes.com Slide 54 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 Slide 55 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 By: Ankit Bajpai www.uptunotes.com Slide 56 Managing Channel Conflict CHANNEL 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 By: Ankit Bajpai www.uptunotes.com Slide 57 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 Slide 58 Other Distribution Management Issues Reverse distribution One Coca Cola Distributor One thousand retailers OK Difficult Ethical, Political, & Legal By: Ankit Bajpai www.uptunotes.com