sales and distribution management unit-1
TRANSCRIPT
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BY:
Mrs. Gurpreet K Chhabra
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1. Willingness to go to bat for the buyer within thesupplier firm
2. Thoroughness and follow through
3. Knowledge of the sales person’s product line 4. Market knowledge and keeping the buyer posted5. Applying his product and services to buyer’s needs 6. Knowledge of the buyer’s product line 7. Preparation for sales calls
8. Regularity of Sales calls9. Diplomacy in dealing with operating departments10. Technical education
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Persuasion
Consultative
Selling
Partnership
StrategiesBusiness
Management
Negotiation
Evolution of personal selling
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Production conceptProduct conceptSelling conceptMarketing conceptSocietal concept
Marketing concepts
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Customer
Needs
Sales Customers
Emphasis on
Seller’s Needs
Production
Production
Sales
Emphasis onCustomer
Needs
Societal marketing concept
(Sales Orientation)
(Marketing Orientation)
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Nature and role of sales management
The determination of sales force objective and goals
Sales force organization, size, territory, and quotafinalization
Sales forecasting and budgeting
Sales force selection, recruitment, and training
Motivating and leading the sales force
Designing compensation plan and control systems
Designing career growth plans and building relationshipstrategies with key customers
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• Industrial selling
• Retail selling
• Services selling
Types of personal selling
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Types of selling
• Order taker sales people
• Order creators
• Order getters
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Selling
Function
Order
Takers
Order Getters
Order
Creators
Outside Order
Takers
Inside Order Taker
Merchandisers
Delivery Sales
People
Missionary Sales
People
New BusinessSales People
Organizational
Sales People
Consumer
Sales People
Technical Support
sales People
Front Line
Sales People
Sales
Support
Sales
people
Types of Selling
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Factory FactorySelling and
promotingProfits though
sales volume
Selling concept
Market concept
Market Customer
needs
Coordinated
marketing
Starting
point Focus Means Ends
Profits through
customer satisfaction
Difference between sales and marketing
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Marketing management process
MARKET ANTICIPATION
Exchange offer of value
Producer
MarketerConsumer
Marketing mix
•Product
•Price
•Place
•Promotion
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Formulation of a strategic sales programme
Implementation of the sales programme
Evaluation and control of sales force performance
Sales management process
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Technology
Relationship sellingCustomer orientation
Global and ethical
Issues
New selling methods
Diversity
Emerging trends
in sales
management
Emerging trends in sales management
Technology
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Selling and buying styles
9
8
7
6
5
4
3
2
1 2 3 4 5 6 7 8 9
C o n c e r n f o r t h e c u s t o m e r s
(1,9) People OrientedI am customer’s friend,
I want to understand him and
respond to his feelings and
interests so that he will like me. It
is the personal bond that leads
him to purchase from me.(5,5) Sales technique Oriented
I have tried an effective routine
for getting a customer to buy. It
motivates through a blended
personality and product emphasis
(1,1) Take it or Leave it
I place the product before the
customer and it sells itself as and
when it comes.
(9,1) Push the product Oriented
I take challenge of the customer
and hard sell him, polling on all
the pressure it takes to make him
buy
(9,9) Problem Solving Oriented
I consult with the customer so as to
inform myself of all the needs in his
situation that my products can satisfy.
We work towards a sound purchase
decision on his part, which yield him
the benefits he expects from it.
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Selling situations
Sales task and function
Maintenance selling
Developmental selling
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Communication process
Noise
Channel
FeedbackIntendedMessage
Sent Message
Encoding
PerceivedMessage
ReceivedMessage
Decoding
Sender Receiver
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Process of listening
Attendance
Interpretation
Evaluations
Remembrance
Response Action
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Levels of listening
Feedback
Paraphrasing
Emphatic listening
Clarifications
Active Listening
Barriers to Listening !
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Conflict management skills
Models of conflict
Components of conflict
The conflict resolution process:
- avoidance
- coercion
- meditation- conciliation
- arbitration
- adjudication
- negotiation
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Negotiation skills
Situation and timing for negotiations Formulation for a bargaining strategy
The theory and strategy of principle
negotiations
- separate the people from the problem- focus on interests, not on positions
- invent options for mutual gains
- insist on objective criteria
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Problem solving skills
Habit I: be proactive Habit 2: begin with an end in mind
Habit 3: put first things first
Habit 4: think win– win
Habit 5: seek first to understand, then to be understood
Habit 6: synergize
Habit 7: renewal
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Stages in the selling process
Pre-salepreparation
SalesPresentation
HandlingCustomer
Objections
Closing theSale
Follow upaction
Approach tothe customer
Pre- approachbefore theinterview
Prospecting
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Process of prospecting
Identify and define prospects
Search for sources of potentialaccounts
Qualify the prospects from thesuspects
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Selling process
• Pre approach to selling
• Approach to the customer
• Sales presentation- approach to sales presentation
- attracting customer attention- creating interest- arousing desire and building conviction
• Methods of sales presentation- canned presentation- organized presentation- tailored presentation
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Handling customer objections
• Start with your highest expectations
• Avoid conceding first
• BE sure the customer understands the value of a concession
• Make concessions in small amounts
• Admit mistakes and make corrections willingly
• BE prepared to withdraw a concession
• Avoid ‘split the difference’ strategy • Do not advertise willingness to concede
• Use TRACT formula to buy time
Suggested by SMITH
l h l
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Closing the sale
• Methods of closing the sale• Follow-up action
• B2B selling
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Forecasting process
The forecasting process is defined as the series of decisions andactions taken by a business organization in:
identifying the forecasting objectives
determining the independent anddependent variables
developing a forecasting procedure
using the available data in theselected method to estimate the sales infuture
i d
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Develop forecastingprocedure
Forecasting process contd.
Select forecastinganalysis method
Comprehend totalforecasting procedure
Collect, collate,gather and analyze
data
Determineindependent and
dependent variables
Present all theassumptions about
data
Forecast objectives
Evaluate performanceresults against theforecasts
Make and finalizethe forecast
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• marketing decision support system
- an MDSS is an ongoing future-oriented information structure designedto collect, collate, categorize, edit, store, and retrieve information on
demand to aid decision making in an organization’s sales and marketingprogramme
Market demand forecasting
P l h d i f i
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Qualitative methods
Expertopinion
Survey ofbuyer’s
expectation
Sales forcecomposite
Delphitechnique
History analogyQuantitative methods
Test marketing Naïve method Trend method
Moving average Regressionmethod
Exponentialsmoothening
Popular methods in forecasting
T d f f S l
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Observed sales Forecasted sales
Time
Sales
Trend forecast of Sales
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M th d f i
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In this method available data are divided into two parts, usually with equalnumber of years on both the parts
Year Sales
1993 102
1994 105
1995 114
1996 110
1997 108
1998 116
1999 112
The average of the first three years will be:102+105+114 321----------- = -------- = 107
3 3Similarly, for the last three years,
108 + 116 + 112 336---------------------- = --------- = 112
3 3
Method of semi-averages
M th d f i
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The 3-yearly moving average can be computed with the followingformula:
a+b+c b+c+d c+d+e d+e+f--------- , ----------- , ---------- , --------- , ………….
3 3 3 3
Method of moving averages
Method of Least Square
The least squares method is a formalization of the eyeball-fitting orgraphical technique. It is used to mathematically project the trend lineto the forecasting period with the time as the independent variablethat influences the dependent variable i.e sales.
It is a time series method in which seasonality is taken in to account while doing demand forecasting. This method consists of threeessential steps which are illustrated below.
Decomposition method
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Exponential smoothing method • It is similar to the moving- average forecasting method
• The forecaster is allowed to vary the weights assigned topast data points
• It allows consideration of all past data, but less weight is
placed on data as it ages
• Exponential smoothing is basically a weighted movingaverage of all past data
• The method is used to forecast only one period in the future
• Exponential smoothing techniques vary in terms of howthey address trend, seasonality, cyclical and irregularinfluences
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Marketing decision support system
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MDSS
TRANSACTIONAL SYSTEMS USERS
Marketing decision support system
Correlation analysis
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Correlation analysis
• a correlation is basically the degree of linear association between two
variables where one variable is treated as independent variable and sales asthe dependent variable
• sales managers look for variables that correlate with orrelate to sales
• correlation analysis involves the determination of whether a relation exists,and if it does, then measuring it, testing whether it is significant, andestablishing the cause and effect relation
• the degree of relationships between the variables is calledco-efficient of correlation
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M k f i di h d
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• the most commonly used market factor indexmethod is Buying Power Index Method (BPI)• BPI is used to predict sales for specific
geographic regions for retailer and FMCGsector such as clothing, food, auto, and other
consumer items• BPI is also used to determine sales quota by
many multinational organizations• applications are limited in Indian
organizations as we do not have data bases to
support this method at different levels of themarket
Market factor indices methods
M k t f t i di th d td
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Econometric techniques
Econometric techniques uses multiple independent variables where
the assumption is that of a liner equation between the dependent
variable (sales) and independent variables
Market factor indices methods contd.
Market factor indices methods contd
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Factors affecting selection of a forecasting technique
• data availability• cost• variability
• consistency of the data• the degree of detail necessary• time horizon• technical sophistication• ability of the method to capture the level of risk and
variability• the level of accuracy of the forecast• fundamental change indicators
Market factor indices methods contd.
MAPE (M Ab l t P t E )
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• level of accuracy is an explanation of the gap between
the actual and predicted sales• techniques with lower level of gap are more accurate
• statistic used to calculate the level of accuracy of aforecast is called MAPE (Mean Absolute Percentage
Error)
MAPE (Mean Absolute Percentage Error)
• MAPE is the average percentage forecast error and is apopular way to measure accuracy
S l i ti
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Sales organization
• an organization of individuals either working togetherfor the marketing of products and services manufacturedby an enterprise or for products that are procured by the
firm for the purpose of reselling
• a sales organization defines duties, roles, rights, andresponsibilities of sales people engaged in selling
activities meant for the effective execution of the salesfunction
Sales organization (cont )
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Sales organization (cont….)
• a structural body through which the functions ofsales management are carried out
• sales organization always makes efforts to increase sales,thereby achieving the principle of profit maximization,
which contributes to the overall growth of enterprise
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Factors influencing structure
• product and service related factors
• organization related factors
• marketing mix related factors
• external factors:
- the speed of market change- reduction in the number of vendors perbuyer
- closer to customer relationships- changes in regulations and internationalpractices
Organizational principles
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Organizational principles
span of control
unity of command
hierarchy of authority
stability and continuity
coordination and integration
homogeneity
objectivity
specialization
Organizational design
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Organizational design
- formal and coordinated task
- assigning territories
- establishing flows of communication and responsibilities
of sales groups and individuals to customers effectively
Line organization Mr. Ratnakar ShettyPresident / Owner
Mr. Chandrakant VP (Sales)
Five sales people
Typical structure of a line organization
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Consumermarket
Institutionalmarket
Corporatemarket
National
DistributorsDirect to
Home
Direct
marketing Distributors Bundling Gifting
ConsumerRegional
Distributors
Retailers
Consumers
yp g
Design by territory
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Design by territory
VP Marketing
National SalesManager
Divisional Manager
(East)
Divisional Manager
(North)
Divisional Manager
(West)
Regional SalesManager
District SalesManager
Sales Staff(City wise)
Regional SalesManager
District SalesManager
Sales Staff(City wise)
Regional SalesManager
District SalesManager
Sales Staff(City wise)
Design by management function
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Design by management function
Mr. Dara singh,
VP(Marketing)
Mrs. Chitra
Mohanty
(Advt / Sales
Promotion Mgr)
Staff Function Line Function
Mr. Dibya Behera
(Sales Manager)
Mr. Chandra De
Manager
(MR)
20 Sales People
Design by product
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Design by product
President,Marketing
Product Manager (A)
Product Manager (B)
Manager(Sales)
Manager(Training)
Manager(Promotion)
Manager(Sales)
Manager(Training)
Manager(Promotion)
Design by customer
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Design by customer
President
(Marketing)
Sales Manager Wholesalers
Sales ManagerRetail Sales
Sales People
Sales ManagerIndustrial Relations
Vice President(Marketing)
Sales People Sales People
President
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Functional
Geographic
Customer
CombinedSales Org. Design
Marketing ManagerInternational
G.M
International Sales
Marketing ManagerIndia
Vice President(Marketing)
G.M
Consumer care
G.M
International Sales
Vice President(HRD)
Vice President(Production)
Divisional ManagerSoaps
Divisional ManagerFood
Divisional ManagerPaper
Eastern SalesDivision
Western SalesDivision
Northern SalesDivision
Europe Division America Division Gulf Division
Product
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Emerging organizational design
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g g g g
• agency and distribution selling
• shared sales force
• telemarketing
• TQM and team-based selling
Customer
Sales MarketingTechnical
SupportManufacturing
Supplier selling team
Number of sales people
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p p
• determined by:
- territories vary in their demand structure for prospecting- product mix demands
- levels and types of prospecting
- nature of the customer segments
Affordability method (based on sales budget)
Incremental method
Workload method
Number of sales people =
(Number ofexisting
customers)
(Number ofPotential
customers)
(Idealfrequency of
calls)
(Length ofa call) X X
X
Ideal selling time available for a salesperson
Sales territory
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y
• a group of present and potential customers assigned to
an individual
• sales person, a group of sales person, a branch, a dealer,
a distributor or a marketing organization at a given
period of time
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Territory shapes
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y p
circlewedge
Clover leaf
Strategic Planning Matrix
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Strategic Planning Matrix
Opportunity
Strategy
Opportunity
Strategy
Strategy
Strategy Allocate a moderate level of resources tomaintain current advantage.
Either commit a minimal level of
resources to the account or consider
abandoning the account altogether.
The account offers stable opportunity sincethe sale organization has differential
advantages to serving them.
Opportunity
Opportunity
The account offers little opportunity. Its
potential is small and the sales organization
is at a competitive disadvantage in serving
it.
The account offers a good opportunity. Ithas high potential and the salesorganization has a differential advantagein serving it.
Commit high levels of sales resources to
take advantage of the opportunity.
The account may represent a goodopportunity. The sales organization needs toovercome its competitive disadvantages andstrengthen its position to capitalize on theopportunity.
Either direct a high level of sales
resources to improve the position and totake advantage of the opportunity or
shift resources to other accounts.
Strong Weak
High
Lo
w
Sales Territories