Modules in Distribution Management (Bsba 1)

MODULES IN DISTRIBUTION
MANAGEMENT (BSBA 1)
Module 1: Introduction to Sales and Distribution Management
Objectives:
1. To understand the evolution, nature and importance of sales management
2. Discuss distribution management
3. Be familiarize in Distribution Management
Introduction:
We shall introduce sales management and distribution management, and also
establish the linkage between the two. The first part of this chapter will be given to the
introduction to the sales management, and the second part will be devoted to the
understanding of the linkage between sales management and distribution management.
Sales Management
 The planning, direction and control of personal selling, including recruiting,
selecting, equipping, assigning, routing, supervising, paying and motivation as
these tasks apply to the personal salesforce.
Nature and Importance of Sales Management

 The nature or characteristics of sales management can be explained by:
 Its integration with marketing management
 Relationship selling, and
 Varying sales responsibilities
Integration with Marketing Management

 A company’s marketing team typically consists of two basic groups:
 Field selling team- are in their territories contacting existing and
prospective customers.
 Headquarter marketing team- supports and service functions or activities
to assist or help field salespeople in their jobs.
Relationship Selling
 Is the tactical arm of relationship marketing.
 Relationship marketing- is basically the creation of customer loyalty. It means
important or major customers need continuous attention through partnering or
collaborative.
Importance of Personal Selling and Sales Management

 Personal selling- is one of the most exciting, financially rewarding and
challenging careers. There are many more positions available in sales than any
other professional occupations.
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Sale and Distribution Management
By Krishna K. Havaldar
MANAGEMENT (BSBA 1)
 Sales management- is the only function or department in an organization that

generates revenue.
Skills of a Sales Manager

 People skills- ability to motivate, lead, communicate, and co-ordinate effectively
with the people around him/her.
 Managing skills- have managing skills like planning, organising, controlling, and
decision making.
 Technical skills- specific task such as training, selling, negotiating as well as the
ability the ability to use computer and problem-solving abilities in the specific
industry discipline.
Types of Sales Managers
CEO/ President
Strategic/ Top-Level Sales
V.P Sales/ V.P Marketing Leaders/ Managers
National Sales Manager
Regional/ Zonal/ Divisional Sales Tactical/ Middle-Level

Manager Sales Managers
Branch/ Area/ District Sales Managers Operational/ First-Level

Sales Trainee/ Sale Person/ Sales Sales Managers
Representative
Sales Objectives, Strategies and Tactics

 Sales objectives- are the statements of intents and when they are quantified to
specific and measurable targets with respect to time periods.
 Sales strategies- include ways of achieving the objectives, and tactics are the
activities or the actions that should be carried out in order to implement the
strategy.
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Emerging Trends in Sales Management

 To be successful in a changing marketing environment, you must:
 Global Perspective
 Revolution in technology
 Customer relationship management (CRM)
 Salesforce diversity
 Team selling approach
 Managing multi-channels
 Ethical and social issues
 E-selling
Linking Sales and Distribution Management

 Distribution management serves the primary function of ensuring that the product
or service is made available to the consumer within an arm’s length of his desire.
 Distribution- is an integral part of sales management. It is the heartbeat of sales
management.
Distribution Channels
 The distribution channels to be managed by sales management could be a
combination of:
 Own salesforce
 C&FA or depots
 Distributors, Dealers, Agents, Stockists
 Transporters, Warehouse Operator
 Independent wholesalers in the market
 Independent retailers in the market
Maximizing Customers Service

 Demand Management- a critical step in getting in getting sales volumes and
earning revenues.
 Supply Management- major responsibility of the distribution channel working
under the guidance of the sales management.
Sales Operations Planning

 Some of the operations planning exercise:
 List of markets to be covered and the schedule
 Market share objectives to be achieved
 Tracking competition in order to always do better than them
 Designing coverage beat plans/call
 Ensuring highest call productivity
 Market working method and tools
 Sales promotion efforts
 New product/ pack launches
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 Shelf space maximization and merchandising

 Reports and Records
Assignment:
Explain Sales Operations Planning
Describe Sales Objectives
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Module 2: Personal Selling: Preparation and Process
Objectives:
1. To understand the personal selling process
2. To understand the psychology in selling, buying decision, and buying situations
Introduction:
We deal with the major sales related knowledge and skills required by
salespeople. This includes psychology in selling, buying decision process, buying
situations, effective communication skills, sales knowledge, and sales related marketing
policies. We shall then deal with personal selling process in greater detail.
The Psychology in Selling
Stimulus Buyer’s Response

decision
(Sales making (buy or no
presentation) buy)
process
Buyer- Seller Dyadic Interaction
 Interactions between a salesperson and a buyer can be termed as dyadic (two
persons).
Buying Decision Process
information Post-
Problem/ need Evaluation of Purchase
search/ purchase
recognition alternatives decision
collection behavior
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Buying Decision Process

 Problem/need recognition- when the prospective consumer recognizes a
problem or need.
 Information search/ collection- an aroused consumer will search for more
information.
 Evaluation of Alternatives- the evaluation process used by consumer mostly on
a rational basis.
 Purchase decision- the consumer forms preferences among the brands and
also an intention to buy the most preferred brand.
 Post-purchase behavior- after buying the product or service, the consumer
experiences some level of satisfaction or dissatisfaction.
Buying situations or Types of Purchases

 For household and Individual Consumers
 Routine decision-making- the products that are purchased repeatedly
(like milk, bread, and grocery items)
 Limited decision-making- the consumers are not aware of each brand’s
benefits.
 Extensive decision-making- the consumer wants to buy products like
home, a car, or an insurance.
 Buying situations for Business Buyers
 New purchase (new task)- buying an item for the first time.
 Change in suppliers (modified rebuy) - when the company is not
satisfied with the performance of existing suppliers.
 Repeat purchase (straight rebuy)- the buying organization requires
certain products and services continuously.
Sales knowledge and Sales related marketing policies

 Salespeople require knowledge about their company, products and services sold,
customers and competitors and sales- related marketing policies. It is important
because it could:
 Increase in self-confidence of the salesperson due to the knowledge of the
product, its application to customer’s needs, and competitors
 Prospects and customers expect salespeople to have good product
knowledge, to give ideas to improve customer’s operations, and to be
reliable and efficient.
 Better service to the prospect
 Increased sales
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Company knowledge
 information about the company growth and achievements, policies and
procedures, production and service facilities are used in sales promotion.
Product knowledge
 If salespeople have to become experts of the company’s products and services,
as expected by today’s customers, they must know how the product is produced,
level of quality control, physical characteristics and sizes, particular features,
advantages, and benefits of the product, product operation and application.
Sales- Related Marketing Policies

 Both salespeople and sales executive have to understand sales-related
marketing policies. The main sales- related marketing are:
 Pricing policies- should able to discuss the prices, discounts, and credit
policies.
 Distribution policies- understand the channel of distribution used by his
company to move its product and services to the final consumer.
 Promotional policies- consist of 5 major components: advertising, sales
promotion, public relations and publicity, personal selling, direct marketing.
 Product policies- relevant to salespeople are product mix, new product
ideas, and product information, quality, and service policy.
The sales process or the personal selling process
Preapproach Presentation
Prospecting and
(Pre call Approach and
Qualifying
planning) Demonstration
Overcoming Trial Close/ Follow-up and

Objections Closing the Sale Service
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The sales process or the personal selling process

 Prospecting- an individual, a family, or an organization who needs the product
or the service a salesperson is selling and also has the ability to buy.
 Qualifying- important that the lead, or the probable prospect is qualified (to meet
the necessary standards or conditions to receive further attention).
 Preapproach- includes 2 tasks: information gathering in greater depth about the
prospect and planning the sales call on the prospect.
 Information gathering- to collect as much information as possible about the
prospect.
 Planning the sales call- salesperson should do the planning, before
approaching the customer.
 Approach- after collecting the prospect’s name and other relevant information,
make appointment to see the prospect.
 Presentation and Demonstration- considering the current importance of
relationship selling. Understand the customers’ needs first before considering.
 Overcoming Objections- sales objections, resistances, or opposition may
typically take place during sales presentation or when the salesperson asks for
the order from the prospect.
 Trial Close/ Closing the Sale- trial close is one of the selling techniques. It
checks the attitude, or asks the opinion, of the prospect. Trial close does not ask
the decision of the prospect to buy.
 Follow- up and Service- salespeople must understand that their job is not over
after the receipt of the order.
Assignment:
Explain the sales process or the personal selling process
Elaborate the Buying Decision Process
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Module 3: Planning, Sales Forecasting and Budgeting
Objectives:
1. To understand strategic planning
2. To know how sales strategies work
3. Learn basic terms used in forecasting
Introduction:
Planning is deciding now what we are going to do later, including how and when we are
going to do it. Without planning we cannot get anything done efficiently and effectively.
Successful companies practice market oriented strategic planning. The aim of strategic
planning is to achieve targeted profits and growth in the face of continual changing
markets and environments.
Organization Structure
Corporate
office
SBU “A” SBU “B” SBU “C”
Product 1 Product 2 Product 3
Business Unit (or SBU) Strategic Planning

 Is done by the head of the business unit by developing long-term mission,
objectives and goals, and strategies in the changing environment.
 SBU includes 8 steps:
 Defining the business unit’s mission
 Scanning the external environment
 Analysis of the internal environment
 Developing long-term objectives and goals
 Preparing programme or action-plans
 Implementing the strategies and action-plans
 Monitoring results and taking corrective actions
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Role of Marketing and Sales

 In most large and multi-product organizations, strategies are developed at 3
organizational level:
 Corporate strategy
 Business strategy
 Functional strategy
Marketing and Personal Selling Strategies
Marketing
Strategy
Marketing Targeting
Market
Mix Strategy Strategy (Long-
(Short- term) term)
Promotion/Mar
Product/ keting Distribution
Communication Price Strategy
Service Strategy
Strategy
Personal Public Relations Direct

Sales Advertising Selling/ Sales and Publicity Marketing
Promotion Strategy Forces Strategy Strategy Strategy
Integrated Marketing Communications (IMC)

 Is increasingly used by many firms. It is the strategic integration of a variety of
communication tools such as advertising, sales promotion, personal selling,
public relations, publicity, and direct marketing.
 Objectives of IMC are to:
 Use the most cost-effective tools to achieve the desired communication
objectives
 To ensure strong message consistency, clarity, and sales impact
Sales Strategy- A strategic Decision Area

 Sales managers are responsible for strategic decisions at the account level.
Sales strategies are developed for each specific customer.
 4 parts of sales strategy:
 Classifications of accounts
 Relationship Strategy
 Selling Methods
 Channel Strategy
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Classification of Accounts
 Within a target market segment, the accounts or specific customers, are
classified into different customer groups. All customers within a target segment
are not same.
Relationship Strategy
 Buyers and sellers, particularly in business markets, have some kind of business
relationship.
 3 types of Relationship strategy:
 Transactional relationship- customer show less loyalty to a particular
supplier for lower costs.
 Value- added relationship- customers have medium sales and profit
potential.
 Collaborative Relationship- partner relationship between a buyer and as
seller, the aim is to build long-term, and mutually satisfying relations.
Selling Methods
 Sales people should use different selling methods to suit different relationship
strategies. The different methods of selling are:
 Stimulus response method
 Formula method
 Need-satisfaction method
 Team selling method
 Consultative selling method
Channel Strategy
 A strategic issue in the sales strategy is to select an appropriate channel and for
covering selling efforts, it is called sales channel. Sales managers ensure that
accounts and group of customers receive effective and efficient sales coverage.
Developing Sales Forecast

 Is to plan and achieve the forecasted sales in an effective manager. Sales
forecast are used by other functions:
 Manufacturing or production for setting up production capacity and
planning production
 Finance for raising cash for investment and operations as well as profit
planning
 Purchase function for planning their purchases
 Human resource management for manpower planning
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Types of Sales Forecast

 The term “forecast” is generally used to a prediction for a future period, such as
weather forecast.
 3 types of sales forecast:
 Product level
 Geographic area
 Time period
Forecast Approaches
 Two basic approaches of forecasting:
 Top-down/ Break-down approach
 Bottom-up/ Build-up approach
Steps in Top-down/ Break-down Approach

Forecast Relevant External Environment Factors over Specified Time
Period
Forecast Industry sales (or Market Potential) for Relevant Industry over
Specified Time Period
Company Sales = Industry Sales Forecast X Company’s Share of Total

Industry Sales in Percentage
Company Sales Forecast of the Product/ Service Under Study
Sales/ Marketing Manager’s Forecast for Regions, Branches, Territories,

and Customers
Steps in Bottom-up/ Build-up Approach
Combined into Company Sales Forecast
Combined into Regional/ Zonal Sales Forecast
Combined into Areas/ Branch Sales Forecast
Salespersons’ Sales Forecast od Individual Customers

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Sales Forecasting Methods

 Sales Forecasting methods or techniques can be classified as:
 Qualitative Method
 Quantitative Method
Qualitative Methods
 Executive Opinion Method- the method includes getting the views of top
executives of the company regarding future sales.
 Delphi Method- the procedure includes selection of panel of experts from within
and outside from the organization.
 Sales Force Composite Method- this method involves salespeople to estimate
their future sales.
 Survey of Buyers’ intentions Method- (A.K.A market research/ market survey)
it includes asking existing and potential customers about their likely purchases of
the company’s product or service.
 Test Marketing Method- useful for forecasting sales a new product, which has
no historical sales figures.
Quantitative Method
 Moving Average Method- a simple method that develops a company forecast
by calculating the average company sales for previous years.
 Exponential Smoothing Method- closely related to the moving averages
method for forecasting.
 Decomposition Method- the company’s previous periods’ sales data is broken
down into 4 major components (trend, cycle, seasonal, and erratic events)
 Naïve/Ratio Method- time of series of forecasting, which is based on the
assumption that what happened in the immediate past will continue to happen in
the immediate future
How to improve Forecasting Accuracy?

 Sales Forecasting is an important and difficult task. There are 5 guidelines to
help you and improve the Sales Forecasting. These are:
 Use Multiple Forecasting Method- companies use 2 or 3 forecasting
methods to ensure high level of accuracy and to gain confidence.
 Identify Suitable Methods- forecasting method depends on the
application, cost, and time available for forecasting.
 Develop a Few Factors- uses regression analysis or econometric
analysis.
 Obtain a Range Forecasts- prepare a range of sales forecast, including
minimum, intermediate, and maximum estimates.
 Use Computer Hardware and Software Tools- plating important role in
sales forecasting. They are used for widely sales forecasting.
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Sales Budget
 A sales budget consists of estimates of expected volume of sales and selling
expenses.
Purpose of Sales Budget

 There are many purposes or reasons of sales budget:
 Planning- consists of profit planning based on expected sales, minus the
cost of achieving the sales.
 Co-Ordination- is used for coordinating activities of various functional
areas.
 Control- any budget, or goal, becomes a tool for evaluation of
performance.
Assignment:
Explain Sales Forecasting Methods
Explain the Two basic approaches of forecasting
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Module 4: Management of Sales Territories and Quotas
Objectives:
1. To understand the concept of sales territories
2. To understand sales quota
3. To know the procedure of designing sale territories
Introduction:
A sales territory consists of existing and potential customers assigned to a salesperson.
The territory may or may not have geographic boundaries. However, generally, a
salesperson is assigned to a geographic area consisting of present and potential
customers. For instance, a salesperson is asked to look after customers.
Sales Territory
 Consist of existing and potential customers assigned to a salesperson. The
territory may or may not have geography boundaries.
Reasons for Setting up or Reviewing Sales Territories

 Increase market or customer coverage- allows salespeople to spend sufficient
time with present and potential customers.
 Control selling expenses- spend less time on the road, fewer nights away from
home, resulting in less cost travelling and less experience on lodging and food.
 Better evaluation of sales force performance- sales manager can evaluate the
performance of each salesperson in a better way.
 Improve customer relations- salesperson spends adequate time with present
and potential customers, to understand their problems and find solution.
 Increase salesforce effectiveness- salesperson workload is reasonable and
the conflicts are minimum as specific customers are assigned to them.
 Improve Co-ordination- improves substantially if the salesperson is involved, I
coordinating various elements of marketing communication.
 Benefits salespeople and the company- allocation of salespeople to territories
will result in improved salesforce performance.
Reasons for not Setting-up Sales Territories

 Reasons are:
 A small company with one or few salespersons selling in a local market
may not need to set up territories.
 Personal contacts or relationship is the basis of making sales
 Salespeople are demotivated due to restrictions of sales territories
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 Management of the company may not be aware of the advantage or

benefits of developing sales territories or may not know not to how to set
up sales territories.
Procedure for Designing Sales Territories

Use Build-up
Method
Find location and Decide basic

Select a control unit
potential of territories
OR
customers
Use Breakdown
Method
Build-Up Method
Estimate
Decide call Calculate total
Workload Make tentative Develop final
number of calls in
frequencies capacity of a Territories Territories
each control unit
Salesperson
Breakdown Method
Estimate Estimate sales

Forecast sales
company sales volume expected Make tentative Develop final
potential for
potential for from each sales territories territories
each control unit
total market salesperson
Use of IT in Territory Management

 For designing and aligning sales territories, computers and mapping software are
increasingly used by sales managers. The advantages of using Information
Technology (IT) in territory management over manual working of break-down or
build-up method are risk that the task will be done faster as well as more
comprehensively.
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Managing Territorial Coverage

 After designing sales territories, and assigning salespeople to different sales
territories, the next task of the sales manager is the management of territorial
coverage. It consists of 3 activities:
 Planning of efficient routes for salespeople
 Scheduling the salespeople’s time
 Using time management
Routing, Scheduling and Time Management

 Planning of efficient routes for salespeople is a managerial activity.
 The advantages of routing are:
 Reduction in travel time and cost by excluding backtracking and
crisscrossing by salespeople in their territory.
 Improvement in territory coverage, as salespeople reduce their travel time
and increase selling time.
Application and Importance of Routing

 The degree of importance of routing depends on two factors:
 The nature of the product
 The type of the job salespeople.
 Scheduling- is planning a salesperson’s specific time of visits to customers.
 Allocation of time- the sales manager must first decide and communicate the
major activities or duties of the salesperson, and the amount of time that should
be allocated to each activity.
 Customers calls- companies often state norms of visits to existing customers
and prospects to their salespeople.
Time management Tools for Salespeople

 There are many supports available to help salespeople manage their time more
efficiently and productive. These are:
 Use of computer, mobile communication equipment, and other high-tech
equipment
 Inside Salespeople
 High-tech equipment- desktop and laptop PCs, CDs, automatic dialers, email, fax
machines, tele- conferencing, videophones, cellular phone, and air phones are
the tome management tool that are available to salespeople and sales
managers.
 Inside salespeople- to reduce time demands on their outside salesforces, many
companies are increasingly using inside salespeople who remain within the
organization.
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Time Management Tools for Managers

 The same high- tech equipment are available to sales managers to help make
more efficient use of their time.
 Computerized support systems like CRM (Customer Relationship Management)
and ERP (Enterprise Resource Planning) are used by many companies for
effective use of management resources including time to improve the efficiency
of an enterprise.
Sales Quota or Sales Targets

 Sales quota are sales goals (or quantitative object) set by a company for its
marketing units for a certain period of time. A marketing unit includes a region, a
territory, a branch, a salesperson, a distributor, or a dealer. Sales quotas (also
called quotas) can be a set on sales volume, expenses, profit margin, activity,
customer satisfaction, and combination.
Assignment:
Elaborate the Breakdown Method
Describe the Procedure for Designing Sales Territories
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Module 5: Organizing and Staffing the Salesforce
Objectives:
1. To understand the concept of sales organization
2. To understand the major stages of salesforce
Introduction:
The management process consists of first setting the firm’s objective and goals. And
then planning the suitable strategies and actions to achieve the stated objectives and
goals. To implement the strategies and action plans, the company must have an
organizational structure and the people. This brings on the concept of organization.
Concepts of Sales Organization

 An organization structure defines relationship among jobs, and amongst the
people, in a company. The aim is to arrange the activities or jobs in such a
manner that the people involved can perform effectively and efficiently and act
together rather than individually.
 Should evolve in such way as to assist the sales manager and salespersons to
carry out the required task efficiently and effectively.
Sales Organization
 The basic concepts included in the sales organization are:
 Degree of Centralization- a centralized structure has authority and
responsibility placed at higher levels of management
 Degree of Specialization- each salesperson carries out all selling
activities and each sales manager performs all management tasks.
 Line and Staff position- sales management positions are grouped into
line or staff. Line position have line authority while the staff position has
the authority in staff.
 Marketing Orientation- company gives an adequate response by having
a market orientated organization structure.
 Effective Co-ordination- all functions in the organization should interact
harmoniously in order to achieve the firm’s objective.
 Span of Control- refers to the number of if individuals who report to each
sales manager.
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Basic types of Sales Organizational structures

 Line Sales Organization- simplest sales organization structure. All managers,
from top sales manager to middle level managers, have line authority.
 Line and Staff Sales Organization- a group of specialists are made available to
the top sales or marketing executive.
 Functional Sales Organization- the principle of specialization is fully used.
Each staff specialist manager has line authority of his/her function over
salespeople.
 Horizontal Organization- structure removes management (hierarchy) levels and
also departmental boundaries. The support functions like strategic, planning,
human resources, and finance are looked after by a small team of senior
executives.
Specialization Within Sales Organization

 Generally, many medium and large-sized companies expand one of the basic
sales organization structure in some specialized design, in order to increase the
effectiveness of their salesforce. The bases of this specialization are factors such
as:
 Geography
 Product
 Market
 Functional
 Combination of these factors
 The criteria to be used are
 Meeting customer needs
 Nature and number of products
 Abilities of sales force
 Sales costs
Management of Major or Key Accounts

 Major accounts (also called key accounts, house accounts, national accounts, or
global accounts) are customers who buy high volume of the company’s products
or services that are profitable.
Selection of key or national accounts

 For selecting a key, company use the following criteria:
 The customer should purchase a large volume of the supplier company’s
product or services in terms of sales volume.
 The customer should buy more profitable should buy more profitable
products or services.
 The customer may require a high level of service at one or several
geographic locations
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 The customer may be price-sensitive

 The customer may desire a long- term partnering or collaborative
relationship with the supplier firm.
Size of the Salesforce

 Once the company decide its sales organization structure, it is ready to
determine the size of the salesforce. The decision on how many salespeople are
required to meet the company’s sales volume and profit objectives is a key
decision.
Workload Method
 The assumptions made in this method are that all salespeople will have equal
workload, and that the total workload in covering the market includes customer
size, customers’ sales volume potential, and travel time.
 The steps involved in this method are: (next slide)
1. Group present and potential customers according to their sales potential

- Suppose the company estimates 500 numbers “A” class (large
potential) and 1000 numbers “B” class customers (medium sales
potential) to be covered by salespeople in the entire nation.
Customers with small sales potential (class “C”) will be looked after
by telemarketing people or the company’s dealers.
2. Decide time per sales call and desired call frequencies for each customer class
- Assume that both present and prospective customers require the
same time per sales call and the same call frequencies per year, as
follows:
- Class “A”: 60 minutes per call x 36 calls a year = 36 hours/ year
- Class “B”: 30 minutes per call x 12 calls a year = 06 hours/ year
3. Calculate the total (market) workload necessary to cover the entire market
- In the above example, this calculation is as follows:
- Class “A”: 500 customers x 36 hours/ year = 1800 hours
- Class “B”: 1000 customers x 06 hours/ year = 6000 hours
 Total = 24000 hours
4. Decide the total work time available per salesperson

- Suppose the company decides that salespeople should work 40
hours per week, 45 weeks per year (allowing seven weeks for
casual and earned leave and holidays), then each salesperson has
1800 hours/ year (40 hours/ weeks x 45 weeks per year) for selling,
non- selling and travelling time.
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5. Divide the total work time available by different activities per salesperson
- Suppose the management decides that salespeople should divide
their worktime as follows:
- Selling activities: 40 per cent = 720 hours
- Non- selling activities: 30 per cent = 540 hours
- Travelling: 30 per cent = 540 hours
- Total: 100 per cent = 1800 hours
-
6. Calculate the total number of salespeople needed
- This is done by dividing the total market workload by the total
selling time available per salesperson:
24000
 =33.3=Salespeople needed
720
Sales Potential/ Breakdown Method

 In this method, the sales manager assumes the productivity of the average
salesperson and that the company sales forecast is accurate. The method also
considers the anticipated salesforces turnover in terms of resignations,
retirements and promotion.
Incremental Method
 This method is based on marginal- analysis theory of economics. Its basic
concepts are that profits will increase when additional salespeople are added, if
the incremental sales revenues exceed the incremental costs.
Staffing the Salesforce

 Proper staffing of the salesforces is very important as it has a strong impact on a
company’s performance and profits. Salesforce staffing is the most important
activity of a sales manager. One cannot over- emphasize how critical it is to
choose the right salespeople.
Sales Force Staffing Process

 Salesforce staffing process consists of 5 major stages:
 Planning the recruitment and selection process
 Recruiting a sufficient number of applicants
 Selecting the most suitable applicants
 Hiring those candidates who have been selected
 Socialization and assimilation of the new recruits into the firms
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Sales Force Staffing Process
Planning Recruiting Selecting Socializatio

Hiring n
Establish Identify Develop
responsibilit sources of tools & Make Socialization
y sales the job Assimilation
procedure
Decide the recruits
number of
for offer
Evaluate measuring
salespeople
the sources applicants Accepta
needed
Outline the of recruits Select the nce of
type of salespeople the job
salespeople (selecting
needed decision)
Assignment:
Explain the Workload Method

Illustrate the Salesforce Staffing Process
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Module 6: Training, Motivating, Compensating, and Leading the Salesforce
Objectives:
1. To understand the sales training process
2. To know what is motivation
3. To know the objectives of compensation plan
Introduction:
Today’s customers expect salespeople to have a detailed product knowledge, to
suggest improvement in the customer’s operation, and to be reliable and efficient.
Proper training can prepare salespeople to meet with these customers’ expectations.
Salesforce training is the effort an employer makes to provide salespeople with job-
related knowledge, skills, attitudes, and culture that should result in improved
performance on sales, productivity, and profits.
Managing the Sales Training Process

 Sales Training is expensive and sales managers should take special care to
ensure that time and money are wisely spent.
Evaluate and
Design and
Reinforcement
Assess Sales Execute Sales
of Sales
Training Needs Training
Training
Programed
Programed
Assess Sales Training Needs
 The purpose of assessing the training needs is to understand the specific goals
of training for individual salespeople, such as improving product knowledge,
selling techniques, or relationship building.
Methods used for Assessing Training Needs

 Sales Manager’s observation
 Salesforce survey- field sales managers spend a lot of time in the field working
with the salespeople.
 Customer survey- some companies, where personal selling is the key element
of their sales and marketing strategy, customer survey to identify sales training
needs is very much recommended.
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 Performance testing- test knowledge and skills of salespeople by conducting

performance testing of salesperson on a regular basis.
 Job description- mentions clearly the duties, responsibilities, and the key task
or key result of the salespeople.
 Salesforce audit- use salesforce audit for assessing training needs of
salespeople.
Popular Sales Training Needs

 There are 5 training needs that are popular. There are:
 Product knowledge- product knowledge is the commonly covered topic
in sales training program.
 Customer knowledge- training include relevant information about
company’s customers.
 Competitive knowledge- knowledge of competitors’ product or services
in terms of strength, weaknesses, strategies, and tactics as well as prices,
discounts, payment terms is important for salespeople to plan sales
strategy.
 Sales technique (or selling skills)- many salespeople are not competent
in sales techniques and they need training on “how to sell”.
 Company knowledge- new sales trainees should be told about
company’s vision, mission value, objective, organization structure, policies
and procedures.
Designing the Sales Trainee Program

 Steps:
 Aims/objective of sales training (why is sales training needed?)- first step
is to decide the specific aims or objective.
 Content of training programme (what should be the content of sales
training?)- the content of the initial for new sales trainees will be broader
and different from the content of refresher or continuing training or
experienced salesperson.
Commercial Terms and Conditions

 Terms of Payment (TOP)- there are 2 broads of TOP:
 Direct Payment- credit is normally offered to a customer who is a good
paymaster or creditworthy.
 Payments through bank- these are different types: (a)LC (Letter of
Credit), (b)DA (Documents on Acceptance), (c) DP (Document against
Payments). Payments are through banks.
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Sales Training Methods (How will the sales training be conducted?)

Online Training:
EPSS (Electronic Performance
Support System)
Interactive Multimedia
Training
Behavioral Learning: Distance Learning On-The-Job Training;
Role-Playing Mentoring
Case Studies Job Rotation
Stimulation Games
Classroom/ Absorption Training/

Conference Training: Sales Self Study:
Lectures Training Audio Cassettes
Demonstrations Manual, Books
Group Discussion
Methods CD- ROM
Organization Decision Making

 5 important organizational decisions:
 Who will be the trainees?
 Who will conduct the training?
 When should the training take place?
 Where should the training take done?
 What will be the budgeted expenditure for the training?
Who will be the trainees?

 New and Existing Salespeople: it is understood that initial sales training is
required for newly hired.
 Intermediaries: sometimes it is necessary for the company to train its
intermediaries, such as distributors, dealers, and manufacturer’s representative.
 Sales Manager: companies are aware that sales managers are also need
training.
Who will conduct the training?

 Lines Sales Personnel: senior Salesperson, branch or regional sales managers,
and sales managers who have line responsibilities are usually the main trainers
of the company’s salespeople.
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 Staff Trainers: large companies can hire a specialized staff training officer/
manager to conduct training programs.
 Outside Training Specialists: outside training specialist are involved on sales
training programs, for bringing in new ideas and training methods.
When should the training take place?

 Most sales managers assert that newly hired trainees should receive formal
group training before placing them in field selling. The need for training does not
end with completion of the initial sales training program for newly hired
salespeople.
Where should the training be done?

 Centralized training: training at a central location, which is typically held at the
home/ head office, or at the manufacturing plant, or at the resort.
 Decentralized training: take place at a branch, regional office, at the customer’s
place, or at the hotel room, as part of salesforce instruction, on-the-job training.
What would be the budgeted expenditure?

 After going through the various steps of assessing the training needs, deciding
aims of the training program, determine the content of the training program,
selecting the sales training methods, and taking organizational decision. The
training manager should now consolidate all the stages of the training process
into a written document, mentioning the estimated expenditure for conducting the
training program.
Evaluation of sales training program

 It is difficult to evaluate a sales training program. This difficulty arises because it
is hard to decide which future sales performance variations are due to sales
training. There are other factors, such as environmental, motivation of the
salespeople, changes in the company’s marketing and sales strategies and
policies, which may affect sales and profit performance of the company more or
less than sales training.
Motivation
 Is originally derived from the Latin word “movere” means “to move”. The desire to
spend effort to fulfill a need is motivation.
 Sales manager find task of motivating salespeople due to following factors:
 Changes in marketing environment
 Conflicting company objectives
 Unique nature of the sales job
 Separate motivational package
 Relevance of motivational theories to salespeople
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Marlow’s hierarchy of needs theory

Self
Actual
izatio
n
(Self-
fulfill
ment,
EsteemSelf-
Needs
devel
(Fulfilled through Status,
opme
Recognition, Reputation,
nt)
Prestige)
Social Needs
(Fulfilled through Acceptance, Belonginess,
Love, Friendship)
Safety Needs
(Fulfilled through Safety, Job Security. Income Security)
Physiological Needs
(Fulfilled through Food, Shelter, Clothing, Health Care)
Hertzberg’s Dual- factor theory

 A theory of motivation developed by Frederick Hertzberg, which sources of
dissatisfaction and satisfaction are grouped into 2 groups: hygiene factors and
motivation factors.
Vroom’s expectancy theory

 This theory assumes that person’s motivation to exert efforts depend upon his
expectations for success.
Effort Performance Reward
Expectancy Instrumentally Valence
• Expectancy- refers to the person’s perception of the relationship between effort

and performance.
• Instrumentally- person’s perception of the relationship between performance and
reward.
• Valence- describes the value placed on a particular reward by a salesperson.
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Churchill, Ford and Walker model of salesforce motivation
Satisfaction Motivation
Reward Effort
Performance
Financial Rewards: they are again divided in 2 groups

 Financial compensation plan: most companies use financial compensation
plan to motivate salespeople. These include: (a) current spendable income, (b)
deferred income, (c) various insurance plans.
 Sales contest- are short- term incentive programs that can be an effective
motivational tool if they are carefully and properly designed.
Non- financial rewards

 Sense of accomplishment- is an intrinsic motivation and it is considered as one
of the important rewards by salespeople.
 Personal growth opportunities- companies have policies to encourage
salespeople’s participation in programs as an opportunity for personal growth.
 Recognition- realize that they must pay more attention to the individual
salesperson’s higher- order needs.
 Job security- it is highly valued by older salespeople who are nearing retirement
age, but it is the least valued reward among younger salespeople.
 Sales meeting and conventions- use sales meeting and conventions as an
additional motivating tool to stimulate salesforce effort.
 Sales training programs- a good sales training program increase the
performance of salespeople and in turn improves their self- esteem.
 Job enrichment- gives a salesperson more responsibility autonomy, variety of
tasks, and growth opportunities.
 Supervision- to improve the performance of salespersons. Control of the
salesforce under normal operating conditions.
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Compensating the Salesforce

 Financial compensation, which includes:
 Direct payment of money, such as salary, commission, and bonus.
 Indirect payment, which includes fringe benefits, such as retirement plans,
medical reimbursement, and leave travel assistance. It also includes
various insurance plans.
 Non-financial compensation will be focused on financial compensation.
Objectives of a compensation plan

 The company’s viewpoint- the company wants to attract, retain, and motivate
competent salespeople.
 To control salespeople’s activities- should offer incentives to control several
key activities of salesforce.
 To be competitive, yet economical- want to keep their salespeople’s expenses
at the same level as those competitors.
 To be flexible- should be flexible to adapt new products, volatile markets, and
differing territory sales potential.
Steps in Designing an Effective Sales Compensation Plan
Decide levels of
Examine job Set up specific
pay/
descriptions objectives
compensation
Pretest, Develop the

Decide indirect
administer, and compensation
payment plan
evaluate the plan mix
Leading the salesforce

 Leadership is absolutely necessary to a sales manager’s effectiveness. Sales
managers not only supervise but also lead.
 Supervision- is directing of the everyday activities of the salespeople.
 Manager achieves organizational goals and objectives in an effective and
efficient manner through planning, organizing, staffing, directing, and controlling
the organizational resources.
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Situational Leadership
 It means the sales manager who has an ability to use the leadership style that fits
the situation leadership.
 Leadership skills- effective sales management leaders include communication
skills. Problem-solving skills, and interpersonal skills.
 Communication skills- must have spoken and written communication skills.
 Problem-solving skills- should anticipate potential problems, diagnose the
problem, and select a suitable decision.
 Interpersonal skill- should have good working relationship with their
salespeople.
Assignment:
Explain the skills that the leader should have.

Explain Vroom’s expectancy theory
Differentiate Financial compensation plan and Sales Contest
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Module 7: Controlling the Salesforce
Objectives:
1. To learn about sales and marketing intelligence system
2. To understand salesforce audit
Introduction:
Information for better decision making is supplied to sales and marketing managers by
the company’s marketing information system (MIS). A marketing information system is
developed from internal company records, sales and marketing intelligence system,
marketing research and decision support system.
Sales and Marketing Intelligence System

 Sales and Marketing managers obtain everyday information about developments
taking place in the market from various sources:
 Salespeople- most salespeople can give a part of time to collect sales
intelligence for analysis by staff personnel but at the same time they are
very busy and often fail to collect and pass on the relevant information
about customers and competitors.
 Secondary Data Sources- sources such as trade publications, business
newspapers, government publications, and the like can give information
on markets conditions and competitors.
 Discussion with Customers and Intermediaries- this can result in
improving the quality of the company’s marketing intelligence.
 Other sources- companies obtain competitive intelligence by purchasing
competitors’ product and asking the industrial engineers to estimate the
cost.
Salesforce Expenses
 Some companies allow full reimbursement to their salespeople for legitimate
sales expenses incurred while on the job. Typical reimbursement of salesforce
expenses includes: travel, meals, lodging, entertainment of customers, and
telephone.
Type of expense plans

 4 types of expense plans:
 The salesperson pays all expenses
 The company pays all expenses (unlimited payment plan)
 The company partially pays expenses (limited- payment plan)
 Combination plan (expense- quota plan)
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Marketing Audit
 Although the term audit is most often used to refer to financial audits carried out
by accounting firms, the audit concept is extended to other functions in recent
years.
Salesforce Audit
 Is a comprehensive, systematic, diagnostic, and prescriptive tool. The purpose of
a salesforce audit is “to assess whether a firm’s sales management process is
adequate, to give direction for performance improvement, and to recommend the
needed changes.”
The Evaluation Process of a Salesforce Audit
Management
to Find out: What Why it What to do
happened happened about it
• What happened- company should get the information by comparing the actual
performance with the goals or targets.
• Why it happened- the specific factors that have been contributed to the variance
such as marketing mix elements, salespeople, and sales managers.
• What to do about it- the corrective actions are taken to solve problems, overcome
the harmful conditions, or leverage the favorable conditions.
Evaluation of Effective of Sales Organization
Cost Profitability
Analysis Analysis
Sales Productivity
Analysis Analysis
Effectiveness
of a Sales
Organization
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Different type of Analysis

National Level Sales Organization
Regional Level
Sales Analysis All Levels in the Sales
Organization
Branch/ District Level
Territory Level
Individual Customer Level
Total sales of the company

By type of products
Different Type of Sales By type of distribution channels
By type of customer classifications
By size of the colors
Comparisons with sales quota

Comparisons with previous periods
Different of analysis Comparisons with industry/ competitors
Comparisons within sales organization
Comparisons with sales forecst
Procedure for Marketing Cost and Profitability Analysis

 The procedure followed for conducting a marketing cost and profitability analysis
for a sales organization includes the following steps:
 State the purpose of the analysis
 Identify functional expenses
 Convert natural accounting expenses into functional expenses
 Allocate functional expenses to market segments, products, or other
marketing/ sales units
 Prepare the profitability of the marketing/ sales units.
Product Analysis
 Productivity is usually measured by ratios between outputs and inputs. The
productivity analysis gives useful information that is not available with sales,
marketing cost, and profitability analysis done earlier.
Assignment:
Explain the Procedure for Marketing Cost and Profitability Analysis
What is a Product Analysis?
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Module 8: Distribution Management and the Marketing Mix
Objectives:
1. To understand the role of distribution management
2. To understand why distribution channel
3. To get a brief introduction channel
Introduction:
As we have already discussed, the 4Ps of the marketing mix include product, price,
place and promotion. Distribution management deals with ‘place’ part of the marketing
mix.
Distribution Management
 The management of all activities which facilities movement and co-ordination of
supply and demand in the creation of time and place utility in goods.
 The art and science of determining, acquiring them, distributing them and finally
maintaining them in an operationally ready condition for their entire lives.
 Broad range of activities concerned with the efficient movement of finished
products from the end of production line to the consumer and in some cases, it
also includes the movement of raw materials from the source of supply to the
beginning of the production line.
Need for Distribution Channels

 The channel or set of intermediaries help the process of “exchange” of the
product or service at a certain margin themselves.
 Distribution channels are required as the companies by themselves by
themselves cannot directly reach and sell the products to their millions of
consumers.
How does Distribution add value?

 The distribution function using the network of the channel partners adds value to
the selling function by providing time, place, and possession utility to the
consumer.
Distribution Channel Strategy

 The company’s marketing strategy is part of the overall business plan of the
company and its corporate strategy. Distribution, being part of marketing effort,
forms a critical part of the marketing strategy.
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Customer Service Levels

 The nature of the industry in which the company is operating, its products and
services, its market share and the nature of competition help define the level of
customer service the firm can promise its customers.
Setting Distribution Objectives

 Apart from the firm’s decision on the service levels to be provided, the customer
also have certain expectations from the company and its channel partners.
Distribution Organization
 Having established the service levels to be provided, the distribution objectives
and the steps and activities achieve the objectives, the firm has to now determine
as to who will do what.
Policy and Procedure

 It is expected that the company sales personnel and its channel partners
understand what is expected of them and discharge their roles and
responsibilities faithfully. But as the salespeople may change and the network is
so vast with a large number of channel partners, not all of them may understand
the policy and implementation guidelines in the same manner.
Key Performance Indicators (KPIs)

 The effectiveness of the strategy can only be judged if the company has agreed
on certain measurement criteria with its channel partners. It is obvious that these
KPIs will all revolve around the promised service levels to the customers. If the
service levels as perceived by the customer are being consistently achieved, the
strategy and the implementation plans are working well.
Critical Success Factors (CSFs)

 The distribution strategy also will be successful if it has the support and backing
of the top management of the company.
An overview of Distribution Channels

 A distribution channel is a group of people and firms involved in the transfer of
title or ownership as the product moves from the producer to the ultimate
consumer.
 The American Marketing Association describes channel as: the structure of intra
company organization units and extra company agents, dealers, wholesalers and
retailers through which a commodity, product or service is marked.
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Distributors, Dealers, Stockists, Agents

 This set of channel members are also known as stockists, agents, and
guarantors depending on the extent of re- distribution undertaken by them for the
companies they represent.
Wholesalers
 They normally operate out of the main markets in a city. They deal with a large
number of companies’ products and packs.
Retailers
 They are the shopkeepers who set up shops in the market place to cater to the
needs of hundreds of consumers. If the retailer is located in a busy part of the
market where the consumer traffic is large, he can command a lot of profitable.
Different kinds of Distribution Networks

 Industrial Products- as industrial products are generally technical in nature and
mostly B2B.
 Consumer Products- in consumer products is the most evolved. Consumers are
millions in the number and companies can use every possible route to reach
them.
 Consumer Durables- similar to consumer products except that durables also
need to be ‘maintained’ in a properly operating condition throughout their life.
 Pharmaceutical Products- apart from distributors, companies also use dealers
and stockists in smaller town. There are independent wholesalers who provide
the reach to chemists.
 Textiles/Paper etc.- the network is quite simple and straightforward with its
components of distributors, dealers, and stockists.
 Chemicals and fertilizers- apart from regular distributors/dealers/stockiest,
there could be additional channel members like wholesalers in feeder markets
where the farmers may be buying most of their Agri-inputs.
 Automotive and engineering- network of channel for the original equipment
follows the conventional system of using dealers who are exclusive.
 Services- the channel network would be at most one intermediary in the channel
system.
 Cellular services- the product has to cater to a large number of customers very
similar to the consumer product industry.
 IT hardware- has a combination of own sales team and the channel partners like
dealers/re-sellers to service a large number of smaller customers.
 IT software/ services and management consulting- the selling part may be
given to a sales or business development team and the implementation can be
done by an execution team.
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Patterns of Distribution
 This determines the intensity of desired distribution after a firm has decided on
the most appropriate channels of distribution. Type of it are:
 Intensive distribution- is to make sure that the product is made available
in as many outlets as possible so that anywhere the consumer goes, he or
she should be able to get the product.
 Selective distribution- only a few outlets will be permitted to keep the
company products.
 Exclusive distribution- only one outlet in a market may keep the product.
Characteristics of channel intensity

 Intensive- it ensures widespread coverage, volumes, and availability.
 Selective- it ensures a good image, moderate market coverage and limited
channel control.
 Exclusive- it helps create a premium and prestigious image for the product.
Assignment:
What are the Characteristics of channel intensity?

Explain the Patterns of Distribution.
Illustrate the Different kinds of Distribution Networks
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Module 9: Marketing Channels
Objectives:
1. To understand the concept of channel flows
2. To understand the relationship of channel flows
3. To learn marketing channel
Introduction:
We saw the functions performed by marketing channels. Let us briefly look at the
functions to understand the functions and flows of marketing channels.
Marketing Channel
 Are defined as the internal (own salesforce) or external (all kinds of channel
partners) contractual (some kind of a contract or agreement) organizational that
management operates to achieve its distribution objectives.
Channel formats possible

 The wide variety of channel formats possible has been always categorized into 4
categories based on who drives the channel. These are:
 Producer driven- The manufacturer produces and tries to reach the
product directly to his customers. It could be a high technology product
like a generator made to customer specifications or a product.
 Seller driven- The company making the products uses wholesalers and
retailers in the final stage to reach their consumers or end users. This is
the format used most of the consumer product and pharmaceutical
companies where the number of consumers to be reached is in thousands
and it can only be possible to do this through hundreds of retailers.
 Service driven- They are the people who ‘facilitate’ the distribution.
- All kinds of transporters provide service on contract for companies
to reach their ultimate customers. They are the most common and
best category of service-based channel formats.
 Others Formats
 Multi- level marketing systems- the sales agents sell the
company products and also recruits other sales agents to keep the
chain getting stronger.
 Co-operative societies- which were set up particularly in rural
India to help farmers. These co-operatives are formed by the
farmers themselves and have a number of outlets set up closer to
the famers’ location dealing in agricultural inputs.
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Channel Levels
 The number of channel members decides the level of the channel in operation. A
zero-level channel denotes a direct distribution set-up where the product or
service is provided to the end user directly by the company.
 A one-level channel- consists if one intermediary. The company may sell to the
retailer who sells to the consumers.
 A two-level channel- would have two intermediaries. This is who have their own
distributors who sell to retailers who service the consumers.
Service Channel
 Well-established channel members can be recruited for a fee. In the case of
selling service like health, education, banking insurance, and others. The
companies concerned have to establish their own unique channels for
distribution of their service to the largest number of end users.
Summary of Channel functions

 Physical distribution- reaches the product or service to the user.
 Keeps contact with the company customers including handling customer
complaints.
 Helps build long term relationships- relevant for selling in B2B.
 Market feedback to a company- on company products, promotions, promotions,
pricing, and competition activities.
 Company rules, terms, promotions etc. are communicated to the customers.
 Negotiates prices with the company and its customers.
 Understand market trends and keeps the company informed.
 Matches term and condition to suit customers
 Handles risks for price fluctuations
 Handles final stage product assembly
 Finances credit into the market and inventory holdings
 Provides after sakes service.
Prominent Channel Systems

 The various channel partners can be grouped into 3 channels:
 Vertical Marketing System- this is at variance with a conventional
marketing channel system of a producer, distributor, and retailer. Each
member is acting independently and trying to run a profitable business.
 Horizontal Marketing System- this system operates between two or
more totally unrelated companies but the arrangement of working together
provides benefits to both.
 Multi- Channel Marketing Systems- this system is adopted by
companies which use two or more marketing channels to reach different
customer segments.
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Costs and Margins in the Distribution Systems

 Each channel members in a system has to incur some cost to ensure distribution
up to the customer level. The costs include the capital investment and working
capital and operating investments and working capital and operating expenses.
Assignment:
Explain the Prominent Channel Systems
What is a Marketing Channel?
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Module 10: Channel institutions: Retailing
Objectives:
1. To be familiarize with retailing
2. To define the types of retailing
Introduction:
According to the English Dictionary, ‘retail’ is derived from the term ‘retailler’, which
seems to be a French word meaning to ‘break bulk’. In broad terms, that is a retailer
does very well. To illustrate, the retailer buys a cartoon/box of Britannia Tigers Biscuits
from the distributor, but sells a pack of 100 gm, and not the whole cartoon, to the
consumer. The term retailer also implies that he deals directly with the end- user
consumer, the retailer has more knowledge of the consumer’s aspirations and needs
and can influence the end user buying decisions.
Retailing
 Any business entity selling products and services to consumers is ‘retailing’. The
goods may be sold in a shop, in person, by mail, on the internet, telephone or a
vending machine.
Type of Retailer
 Specialty store- narrow product line with deep assortment.
 Department store- several product lines in departments.
 Supermarkets- large, low-cost, low-margin, high- volume, self-service, operation
with a wide offering.
 Convenience store- small stores located in residential areas, open long hours
all days of the week.
 Discount store- standard merchandise sold at lower prices for low margins.
 Corporate chains- more outlets commonly owned and controlled by one firm.
 Voluntary chain- wholesalers sponsored group of independent retailers.
 Retailer co-ops- independent retailers with central buying operations and
common promotions.
 Consumer co-ops- co-operative societies of groups of consumers operating
their own stores.
 Franchise organization- contractual arrangement between the producer and
retailers.
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Theories in Retail
 Wheel of retailing- this theory was proposed by Malcomb Mcnair and
enumerate the way in which retail organizations change during their lifetime.
 Retail accordion theory- proposed by Hollander and has also been described
as general-specific-general theory. It explains that an outlet which starts as a
general retailer growth into a specialized retailer.
 Theory of natural selection- the evolution of retail stores is influenced by the
environmental factors like economic, demographic, legal, political and
technological.
 Retail life cycle- this theory looks at retail similar to the product life cycle. This
explained by the retail life cycle include 4 stages and this are: innovation, quick
growth, maturity, and decline.
Retailers Dictate Terms

 At one time, the packaged goods manufacturers were calling the shots in the
retail sectors. Today, with modern organized retail, the retailer is gaining an
upper hand. Even with the limited growth of organized retail in India, the few
modern retailers negotiate and get the most favorable terms from their consumer
goods suppliers.
 Consumer product margins for the retailer are low and in order to get higher
volumes they need to get a share from others and the situations has become
very competitive.
Retailers’ own Brands/ Private Labels

 Modern retailers in the western countries particularly in Europe, have resorted
very strongly to keep their own developed brands to compete with the better-
known company brands on their shelves. This practice is catching up, through
Shopper’s Stop, Big Bazaar and Nilgiris are already into developing and selling
their own brands.
Retail Relationships
 A successful retailer builds strong relationship both with his suppliers and his
customers. Supplier relationship help in getting the products at the best bargains.
A part of benefits of good buying can be passed on to customers to gain
competitive advantage and ensure ‘stickness’. Customers satisfaction is a result
of total customer experience and not just price or assortment that the retailer has
to offer.
43
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MANAGEMENT (BSBA 1)
The role of the Retailer

 the retailer is able to provide the service to the customers by the following:
 Merchandising
 The service
 The format used
 The communication process
Merchandising
 Is a set of activities involve in acquiring goods and services and making them
available at the places, times and prices and the quantity that enable a retailer to
reach his goals.
 Merchandise planning- control relates to merchandise variety and assortment.
 Merchandising strategy- a retailer following a wide merchandising strategy will
stock different categories.
 Category management- management of the retail business by looking at the
performance of categories of products rather than the brands or model
comprising the category.
Customer Service Needs

 Every customer who is a prospective buyer in a retail outlet has expectations of
the store in terms of basic needs to be fulfilled and add-ons, which the particular
store may provide.
 Planning customer convenience- the retailers’ choice of service levels
determines the attractiveness of the trailer to his target markets. As any
distribution channel, the service levels are directly related to the channel flows
which the retailer participates in.
Retail strategies
 It is obvious that the retailer develops his strategy based on a number of factors.
These factors are:
 The markets and customers he is targeting
 The location of the store
 The store ‘image’ to be created in the minds of the prospects
 The store design aspects
Positioning strategy
 This is the identify that the store develops for itself in terms of what it has to offer
the customers. This positioning, once defined, cannot be easily changed. The
positioning is defined only by 2 things: the product range being offered and the
value add of the store itself.
43
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MANAGEMENT (BSBA 1)
Aspects of Store Design

 2 important considerations in store design:
 Functional- relate to convenience to the shopper and include protection,
placement, easy access, information and displays of the merchandise.
 Social- take into consideration the ambiance, the image and
attractiveness.
Assignment:
Explain Retailing
Define the types of retailing
Elaborate the aspect of store design
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Modules in Distribution Management (Bsba 1)

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MODULES IN DISTRIBUTION

Module 1: Introduction to Sales and Distribution Management

Nature and Importance of Sales Management

Integration with Marketing Management

Importance of Personal Selling and Sales Management

 Sales management- is the only function or department in an organization that

Skills of a Sales Manager

Types of Sales Managers

Regional/ Zonal/ Divisional Sales Tactical/ Middle-Level

Branch/ Area/ District Sales Managers Operational/ First-Level

Sales Objectives, Strategies and Tactics

Emerging Trends in Sales Management

Linking Sales and Distribution Management

Maximizing Customers Service

Sales Operations Planning

 Shelf space maximization and merchandising

Module 2: Personal Selling: Preparation and Process

The Psychology in Selling

Stimulus Buyer’s Response

Buying Decision Process

Buying Decision Process

Buying situations or Types of Purchases

Sales knowledge and Sales related marketing policies

Sales- Related Marketing Policies

The sales process or the personal selling process

Overcoming Trial Close/ Follow-up and

The sales process or the personal selling process

Module 3: Planning, Sales Forecasting and Budgeting

SBU “A” SBU “B” SBU “C”

Product 1 Product 2 Product 3

Business Unit (or SBU) Strategic Planning

Role of Marketing and Sales

Marketing and Personal Selling Strategies

Personal Public Relations Direct

Integrated Marketing Communications (IMC)

Sales Strategy- A strategic Decision Area

Developing Sales Forecast

Types of Sales Forecast

Steps in Top-down/ Break-down Approach

Company Sales = Industry Sales Forecast X Company’s Share of Total

Company Sales Forecast of the Product/ Service Under Study

Sales/ Marketing Manager’s Forecast for Regions, Branches, Territories,

Steps in Bottom-up/ Build-up Approach

Combined into Company Sales Forecast

Combined into Regional/ Zonal Sales Forecast

Combined into Areas/ Branch Sales Forecast

Salespersons’ Sales Forecast od Individual Customers

Sales Forecasting Methods

How to improve Forecasting Accuracy?

Purpose of Sales Budget

Module 4: Management of Sales Territories and Quotas

Reasons for Setting up or Reviewing Sales Territories

Reasons for not Setting-up Sales Territories

 Management of the company may not be aware of the advantage or

Procedure for Designing Sales Territories

Find location and Decide basic

Estimate Estimate sales

Use of IT in Territory Management

Managing Territorial Coverage