SALES AND DISTRIBUTION

MANAGEMENT
mba ii year i semester
SALES AND DISTRIBUTION
MANAGEMENT
Unit - 1
Introduction: Evolution of Sales Mgt, Nature and Importance

Roles, Types & Skills of sales Managers

Sales Objectives, Strategies and Tactics, Emerging Trends

Linking Sales and Distribution Mgt

Buying Decision

Sales Knowledge and Sales Related Marketing Policies

Transactional and Relational Selling

What is Sale?

• The exchange of a commodity for money;

• An act of exchanging something for money;
• A sale is a transaction between two or more parties in which the buyer
receives tangible or intangible goods, services, or assets in exchange for
money;
• In the financial markets, a sale can also refer to an agreement that a buyer
and seller make regarding the price of a security;
• The action of selling something;
• An occasion when goods are sold at a lower price than usual;
 5

“Management is the process involving planning, organising, staffing,

directing and controlling human efforts to achieve stated objectives in
an organisation.”
• Sales management is the process of hiring, training and motivating sales staff,
coordinating operations across the sales department and implementing a cohesive sales
strategy that drives business revenues.

“
• Whether you are selling a service or a product, sales managers are responsible for
managing the sales force, setting the objectives for the team, planning and controlling
the entire sales process, and ultimately ensuring the execution of the team vision.
• Sales Management According to American Marketing Association (AMA), “Sales
Management means the planning, direction and control of personal selling, including
recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating
as these tasks apply to the personal sales force”
Importance of Sales
Management

• Sales are the lifeblood of any organization

• The only function which generates revenue in organization
• Highest & Surest route to top management
• Builds direct & strong relationship with customers
• Optimizes Distribution
• Directly impacts the bottom line & net profit
• Development of Products
• Opportunity to know Market demand
• Establishes sales territories
Nature of Sales Management

• Key Function
• Goal-oriented
• Customer-oriented
• Sub-system of Marketing
• Relationship Selling (Transactional, Value-added, Collaborative)
• Systematic Approach
• Different Sales or Job Positions
• Challenging Position
Evolution of Sales Management

• As old as Human Civilization

• Before Industrial revolution (1760), Small scale manufacturers
 Marketing task was relatively simple
 Only producing goods for consumers and sold out without any difficulty
 All business operations were supervised by one individual
 More attention paid on manufacturing rather than production
• Industrial revolution – 1760 A.D.
 In England, then immediately in America
 Large quantities of manufacturing
 Gave importance to marketing activities
 Expanded markets
 Involvement of Wholesalers and retailers
Evolution of Sales Management – Cont…..

• Bigger organizations
 Separate functional departments – Manufacturing, Finance, Admin, etc.
 Delegation of powers
 Complex Marketing department
 Became necessary to split marketing function into other support functions
 Logistics, Promotion, Marketing Research, Sales and others…
 Sales department was given importance
Roles of (Modern) Sales Manager:

• Forecasting & Defining the Sales Targets

• Designing Sales Strategy
• Recruiting & Training Sales Force
• Preparing Sales Budget
• Planning & Organizing Market Research
• Acting as a Team Leader
• Deciding proper Distribution Channels
• Advising Board of Directors
• Product Planning and Designing
• Using Latest Technologies
• Continuously Updating Information
Types of Sales Manager (Positions)
Types of Sales Manager (Positions) – Cont…
SKILLS OF SALES MANAGERS

• Recruiting, Coaching & Motivating

• Negotiation
• Planning Sales
• Building Relationships
• Selling to Customers
• Sales Processing
• CRM
• Manage Processes • Communicating &
• Market Knowledge Coordinating
• Managing People • Budgeting
• Leading Team • Problem-solving
• Etc..
SKILLS OF SALES MANAGERS
Sales Objective, Strategies and Tactics
Sales managers are guided by strategic planning at company level and at marketing
level, when they plan sales plan consisting of sales objective, sales strategies and
tactics or action plans. The relation between objectives, strategies and tactics is 
Sales Objective, Strategies and Tactics
Sales Objectives
Objectives are statement of intents and when they are quantified to specific and
measurable targets with respect to time periods, they are called goals. For example, a
company’s sales objective is quantified to a sales goal of 15% growth in sales to be
achieved in next financial year.
The sales objectives are derived from companies marketing objectives and goals, which
in turn depend upon company’s objective or goals.

Sales Strategies and Tactics
Strategies include ways of achieving objectives and tactics(or action plans) are the
activities or action plans that should be carried out in order to achieve implement the
strategy. The sales strategies are mostly related to sales force strategies.
Emerging Trends in Sales Management
• Global Perspective
• Revolution in Technology
• CRM
• Sales Force Diversity
• Team Selling Approach
• Managing Multi-Channels
• Ethical and Social Issues
• E-Selling
Linking Sales & 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 management takes care of the availability(physical distribution) and the
visibility. It provides ‘time’, ‘place’, and ‘possession’ utility to the consumer.
It is the sales managers, who decides the organization which is responsible for the
distribution effort.
Either sales management or distribution management cannot exist, operate or perform
without each other.
While sales management may plan the strategy and the operational details to achieve
revenue, growth and market shares, it is the distribution part which executes these plans,
of course, under the guidance of sales managers.
Planning and execution is a team effort between sales managers and the distribution
channels.
Buying Decision Process
Buying Decision Process – Cont…
1. Need or Problem Recognition
During need or problem recognition, the consumer recognizes a problem or need that could
be satisfied by a product or service in the market.
At this stage, the consumer recognizes a need or problem. The buyer feels a difference
between his or her actual state and some desired state.
2. Information Search
Once the need is recognized, the consumers try to find goods for satisfying such needs. They
search for information about the goods they want.
Consumers can get information about goods from different sources.
Personal sources: This includes family, friends, neighbors, acquaintance, etc.
Commercial source: This includes advertising, salespeople, dealers, packaging, display, etc.
Public sources: This includes mass media, consumer rating organizations, etc. they also
become confidential to provide information.
Experimental sources: This includes handling, examining, using, etc. Such information
becomes decisive and confidential.
Buying Decision Process – Cont…

3. Evaluation of Alternatives
With the information in hand, the consumer proceeds to alternative evaluation, during which
the information is used to evaluate” brands in the choice set.
While evaluating goods and services, different consumers use different bases.
Generally, the consumers evaluate the alternatives on the basis of attributes of the product,
the degree of importance, belief in the brand, satisfaction, etc. to choose correctly.
4. Purchase Decision
After the alternatives have been evaluated, consumers decide to purchase products and
services. They decide to buy the best brand.
But their decision is influenced by others’ attitudes and situational factors.
5. Post-Purchase Evaluation
In the final stage of the buyer decision process, post-purchase behavior, the consumer takes
action based on satisfaction or dissatisfaction.
If his expectation meets their expectations, the consumer is satisfied. And if it exceeds their
expectations, the consumer is delighted.
Business Buying Decision Process

1. Problem Identification
2. Need Description
3. Product or Service Specification
4. Potential Supplier Search
5. Request for Proposals
6. Supplier Evaluation and Selection
7. Establishing Credit and Order
Specification
8. Supplier Performance Review
 SALES KNOWLEDGE

Sources : Sales Training & Experience

Sales Training – Employer provides the sales training to provide job
related concepts, and skills to improve performance
Experience – on-the-job learning, developed through experience.

Why Sales Knowledge?

Increases Sales person’s confidence
Increases buyer’s confidence in sales person.
Knowledge about the product is needed to gain buyer’s confidence
Knowledge about the product increases sales person’s confidence
More knowledge=More Confidence=More Relationships=More Sales=More Profits
 SALES KNOWLEDGE
What to know?
Customers’ Information – Find every information
Company Information – Growth, Accomplishments, Policies & Procedures,
Production, Service
Distribution Channel – Resellers, Wholesalers, Dealers etc.
Competitors Knowledge

Policies & Procedures: Product:

How the order is processes? Performance,
How long it takes to process? Physical Size & Characteristics
Return goods…? Operation
Etc.. Specific features, Advantages
Market information.
 SALES-RELATED
MARKETING POLICIES
Product Policies - What to Sell?
Pricing Policies – What price to sell?
Promotional Policies – How to reach customers?
Distribution Policies – Who to sell?

Product Policies – Product Line, Product Design, Product Quality / Service

Policy, Guarantee Policy
Pricing Policies – Competition Pricing, Pricing related cost i.e. List Price, Net
Price, Discount, Transportation Cost, Payment terms, Credit
Policies etc.
Promotional Policies – Advertising, Sales Promotion, Public Relations and
Publicity, Personal Selling, Direct Marketing
Distribution Policies – Distribution Channels used, Distribution Intensity,
Distribution costs, etc.
An effective sales process is:
• Customer-centric
• Clearly defined
• Replicable
• Predictable
• Goal-oriented
• Measurable
THE SALE PROCESS – Cont..
1. Prospecting – Sales person find potential customers and determine whether they
have a need for your product or service—and whether they can afford what you offer.
Evaluating whether the customers need your product or service and can afford it is
known as qualifying.
2. Preparation - Sales person is in preparation for initial contact with a potential
customer, researching the market and collecting all relevant information regarding
your product or service. At this point, he develops his sales presentation and tailor it
to your potential client’s particular needs.
3. Approach - makes first contact with your client. Sometimes this is a face-to-face
meeting, sometimes it’s over the phone. There are three common approach
methods.
Premium approach: Presenting potential client with a gift at the beginning of
your interaction
Question approach: Asking a question to get the prospect interested
Product approach: Giving the prospect a sample or a free trial to review and
evaluate your service
THE SALE PROCESS – Cont..
4. Presentation - actively demonstrate how your product or service meets the needs of
your potential customer. Sales persons should actively listen to your customer’s
needs and then act and react accordingly.
5. Handling objections - This is where sales person listens to the prospect’s concerns
and address them. It’s also where many unsuccessful salespeople drop out of the
process. Successfully handling objections and alleviating concerns separates good
salespeople from bad and great from good.
6. Closing - In the closing stage, sales person gets the decision from the client to
move forward. One can follow any of these closing strategies.
Alternative choice close:  “Will that be cash or charge?”
Extra inducement close: Offering something extra to get the prospect to close,
such as a free month of service or a discount
Standing room only close: Creating urgency, “The price will be going up after
this month” or “We only have six spots left”
THE SALE PROCESS – Cont..
7. Follow-up - Once the sale is closed, the job is not done. The follow-up stage keeps
sales person in contact with customers he has closed, not only for potential repeat
business but for referrals as well.
 TRANSACTIONAL AND RELATIONSHIP SELLING
Transactional Selling Parameters Relationship Selling
Get the order or sales Objective Become sole or preferred
supplier
Sales presentation, Focus Building trust & Superior
overcoming objections, and customer service
closing
Many customers with low Customer type and number Few high profit potential
profit potential customers
Short (Days) Length of relationship Long (months/years)
One or two junior level Sales team Team selling with 3 to 5 junior
salespeople and senior level people
Low to medium, involving few Selling efforts High, involving many functions
functions
Competitive or lowest prices Pricing Strategy Mutually accepted prices for
to get sales profits or mutual benefits
UNIT 1 - Review