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Sales & Distribution Management

Sales & Distribution Management

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SALES&DISTRIBUTION MANAGEMENT

PERSONNEL MANAGEMENT IN THE SELLING FIELD Sales force management is a kind of personnel management function applied to a special field. Whatever be the functional areas of business, personnel activities are involved.

Activities in sales force management
Recruitment Selection Training, supervision, and development Performance appraisal Compensation and motivational programmes.

Sales expenses
1. Variable Expenses *Salaries of salesmen *Advertising *Traveling equipment

(1)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

2. Fixed Expenses *Sales commissions *Training costs *Supervision cost *Controlling costs Turnover of Sales Personnel Reasons 1. Controllable reasons • Faulty recruitment & selection. • Faulty training. • No proper motivation. • No proper supervision. • Lack of communication. • Lack of performance. • Transfers & promotions. 2. Uncontrollable Reasons • Retirements. • Death. • Medical causes. (2)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Job Analysis It includes the functions and conditions of the job as well as personnel requirements of the job. • Job description. • Job specification. Sales Job Description 1. The title of the sales job. 2. Description of the selling job in brief. 3. The objectives of the job. 4. Functions of the selling job. Job Specification • Qualification. • Responsibilities.

(3)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Recruiting Sales Personnel Recruitment Sources 1. Internal sources *Internal Transfers. 2. External sources *Sales representatives of competing companies. *Salesmen of non-competing companies. *Campus recruitment from educational institutes. *Placement firms. *Advertisements.

(4)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Selecting sales Personnel Selection is the process of offering jobs to one or more candidates from among those who have applied for jobs in the organization. Selection Process 1. Reception of applicant. *There may be receptionist to receive the applicant, who will gather certain basic information about the candidate by asking the applicant short questions. 2. Application Blank. *Name *Address *Age *Marital status *Educational qualification *Experience *Reference. 3. Selection Test. 4. Interview. 5. Inspection of past career. 6. Primary selection. 7. Final selection. 8. Medical check-up.
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Selection Techniques
1. Application Blank 2. Interview 3. Physical examination 4. Business Games 5. Group Discussion 6. Role Play 7. Different types of tests.

(6)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Sales Training Training improves the effectiveness of the sales persons. Training helps to reduce the sales turnover ratio. Aims of the training 1. Knowledge of the company. 2. Knowledge of the company’s products. 3. Knowledge of the customers. 4. Knowledge of the sales procedures. 5. Training in the art of salesmanship. Training Methods 1. On the job Training • Demonstration It is supported by lectures, visuals, and discussions. 2. Off the job training *Lectures *Conference Method *Seminar *Case study *Role-playing *Games

(7)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Execution and Evaluation of Sales Training Programmes Training organization A big organization runs a staff training college and an executive training college. Large organizations appoint a sales training director. Trainers must understand the selling task and the selling skills. Timing of the training New recruits are trained in groups. When a large number of persons are recruited, it is better to arrange group training. It means lower training costs per person. It is necessary to keep an yearly schedule of refresher and retraining programmes. It improves the effectiveness of the sales persons. Site of the training Programme There are two option- conduct training at a centralized location by transporting the trainees there or to conduct training in a decentralized manner in the region or district as here the sales persons has to work. Training Aids *Audio-visual impressions *Video-players or CD-players *Projectors *Audiocassettes (8)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Evaluation of Training Programmes It measures how effective the training was. A training programme has three costs-time, money, and effort. This investment must pay back. It is, however, not so easy to measure how far the Programme contributed to the effectiveness of the individual. What we can do is to match the aims expected and the results achieved.

(9)

BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Motivation & Morale of Sales Persons An action of any individual to move in a direction to achieve a specified goal. Importance of motivation 1.Good Human Relation. 2.Low absenteeism & Turnover. 3. Achievement of organizational goals. 4. Higher efficiency. Process of Motivation Unsatisfied Need Goal directed Behaviour Need Satisfaction Types of Motivation a) Positive Motivation b) Negative Motivation (10)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

a) Positive motivation Monetary incentives • Wages • Salaries Non-monetary incentives *Increment in status *Increasing Responsibilities Negative Motivation *Punishment

(11) Compensating Sales Persons
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Compensation plans are catalysts for motivation. It is necessary to design the compensation plans properly, and then administer them properly. Compensation Elements 1. Fixed element (salary). 2. Variable element, e.g. commission, bonus, profitsharing arrangement. 3. Fringe benefits, e.g., medical benefits, pensions etc. 4. Reimbursement of expenses like newspaper subscription, academic fees for children etc. Types of compensation Plans 1. Straight Salary plan. 2. Straight commission plan. 3. Combined salary and incentive plan. 4. Bonus. 5. Fringe benefits. 6. Allowances *Car allowance *Laundry allowance *Entertainment allowance *Transfer allowances

(12) Management of Sales Expenses
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Sales expenses differ from industry to industry as a percentage of the total compensation plan. If new products are to be sold or products are to be sold in new markets, the selling expenses tend to be high. Expenses must be kept under control. The trade off is being too liberal and too stringent. Methods of Reimbursing Flat Expense Account A particular periodic sum is handed over to the sales person to meet his expenses. As flat sums are predetermined, they can be easily budgeted. Flexible Expense Account It reimburses all allowable expenses incurred and reported to management. Here management estimates the probable expenses and puts them into allowable and non- allowable categories.

(13) Sales Meeting
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Sales meeting have communicative as well as motivational value. Sales job is a field job. Meetings provide a forum to interact with the employer. Objectives *For communication and motivation. *When a new product is being launched, or repositioned. *Promotional programmes.

(14) Sales contests
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Each sales person is covered by a compensation plan. Sales contests have motivational force. Companies arrange sales contests either to improve sales volume or to improve profitable sales volume or to improve both at one and the same time. Contests objectives 1. To sell more. 2. To sell more profitable lines. 3. To sell to new customers. 4. To promote slow-moving items. 5. To promote new products. 6. To arrange product display. 7. To promote seasonal products. 8. To overcome off-season slack.

(15)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Controlling Sales People-Evaluation and Supervision Setting standards Measuring Actual performance
It is necessary to record the actual performance so that it can be compared against the performance standard set.

Salient features of a Report
1. The report should be concise. 2. Information collected must be amenable to analysis and interpretation. 3. A salesman must retain a copy.

Comparison of Standards Set and Actual Performance
When we compare the actual performance against the standards set, it is called Evaluation. We will have to devise separate standards for different territories. Action When the standards are met, no action is necessary. If they are not met, we may have to improve the performance or revise the performance or revise the objectives and strategies or lower the standards themselves. (16)
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

SALES BUDGET

A budget is a financial plan. In sales budget, resources are allocated to achieve the sales forecast.

Promotion Advertising Personal selling Sales Promotion

Personal selling objectives Sales Related Policies Strategies Sales Budget Sales Force Management Evaluation BUDGET IN OVERALL PROMOTIONAL CONTESTS (17)

Budgets: What For? Budgets are a tool of control. Once the budget is accepted in terms of estimated sales, expenses and
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

profit figures, the actual results are measured, and compared against the budgeted figures. The variances are noted, which could be either favorable or unfavorable. The management is able to take corrective action. Budgetary Process In many organizations, the sales are the key variable for formulating budges of the other departments. Thus, raw materials are purchased in accordance with the sales estimate leading to the purchasing budget. Production is planned in accordance with the sales and purchased budget. Finance is arranged in accordance with the requirements of production and other departments. Planning can be top-down or bottom up. In sales budgeting some organization adopts top-down approach in which the goals are set by the immediate higher level. Some organizations follow bottom-up approach where each level in sales right from the salesman put forward sales and profit objectives. (18) Sales Quotas

BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Sales quota is a goal in terms quantity given to a sales representative, or a group of sales representatives over a period of time. Sales quotas are based on sales forecasts and sales potentials of different markets. The more accurate the data used in formulating the sales quotas, the more effective the quotas become. Types 1. 2. 3. 4. Sales volume quota. Financial quota. Activities quota. Combination of the above.

Sales volume quota Sales volume quotas may be 1. Units of products to be sold. 2. Rupees sales 3. Or both. Financial Quotas These quotas are set to gain a desired net profit and to control sales expenditure. (19) Activity Quotas
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

1. Number of distributors called on. 2. Number of new customers visited. 3. Number of customers called on. 4. Number of institutions called on. Combination Quotas Depending upon the marketing situation and nature of the product, some companies set quotas, which combine some types given above.

(20)

Sales Territories
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

A territorial division brings out an element of effectiveness in the sales operations. A territory may represent a) b) c) d) A particular geographical area mostly. A group of customer’s accounts. A market. An industry.

Sales territories are established to achieve the following goals. 1. To cover the market properly. 2. To service the customer grouping efficiently. 3. To facilitate higher productivity in selling and marketing effort. 4. To control selling expenses. 5. To coordinate personal selling and advertising.

(21)

Factors which determine the size of a territory

BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

1. Possible volume of sales. 2. The extent of ground to be serviced. 3. The inventory turnover at the retail level. 4. Whether it is easy to sell the product or difficult. Designing Sales Territories A company has to establish a geographic control unit. For a multinational company, this could be a country. Then for a national company, it could be a region or zone consisting of one or several states. There can be further units in terms of cities or districts. After establishing control unit. We have to determine the sales potential of each control unit.

(22) Sales Control and Cost Analysis
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Sales Control Methods 1. Sales analysis 2. Marketing cost analysis 3. Sales management audit. Sales analysis Here we examine sales volume 1. By territory. 2. By customer. 3. By product line. Marketing Cost Analysis Marketing cost analysis involves a detailed examination of the costs and their impact on sales volume. Sales Management Audit The previous two techniques-sales analysis and cost analysis-are operational. The third audit technique is strategic. Audit is comprehensive, Systematic, independent, and periodic audit of sales policy, objectives, strategies, organization and procedures. (23) Wholesaling
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Wholesaling is sales to those who buy for resale or for business use. A wholesaler is the first intermediaries in the channel of distribution. He purchase goods in bulk from the manufacturer and sells them in small lots to the retailers. A wholesaler is generally specialized in the purchase and sale of only one commodity. Features 1.A wholesalers provide a link between the manufacturers and retailers. 2.Capital invested in the wholesale trade is usually larger than the capital invested in the retail trade. 3. A wholesaler generally specializes in one commodity. 4. The wholesaler charges a smaller margin of profit than what is charged by the retailer.

(24) Services Rendered by Wholesalers
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

1. Buying 2. Selling 3. Dividing 4. Transportation 5. Storage 6. Financing 7. Risk Taking 8. Market feedback.

(25) Physical Distribution Management
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Physical Distribution means the actual movement of the right quantity of products to the right place at the right time. Physical Distribution Management is the management of efficient flow systems for products. Tasks in Physical Distribution 1. Inventory Management • • • • The size of the inventory The location of the inventory The material handling The transportation of inventories

2.Storage 3. Warehousing 4. Centralized VS. Decentralized 5. Material Handling (26) 5. Inventory Control

BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Economic Order Quantity There are two types of costs associated with inventory a) Ordering costs b) Carrying costs 6. Order Processing Each organization must have a prescribed procedure for handling orders. It involves credit extension, invoice making, and collection of dues. 7. Transportation

(27) Transportation and Traffic Management
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

The organization must have goods available at the place they are needed, at the time they are needed and at the lowest possible cost. Traffic functions is a specialized phase of purchasing dealing with such matters as selection of the mode of shipping, routing if incoming shipments, rate schedules and claims. Basic Responsibilities of the Traffic Manager 1. Negotiation of rates 2. Selection of mode of transport and carrier. 3. Audit of freight bills. 4. Filing and negotiation of claims for lost or damaged shipments. 5. Minimize transportation costs. Negotiation of Rates 1. The value of the product 2. Density 3. Packaging requirements 4. Space required (28) 5. The place to which the goods are to be transported
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

6. Special services required 7. Competition

Warehousing and Storage
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

Warehouses are a key component of the physical distribution management. A warehouse is chosen on the basis of the product handled, transport costs, rentals, and market scenario. Store Functions 1. Receipt 2. Storage 3. Retrieval 4. Issue 5. Records 6. Surplus stock 7. Verification 8. Coordination and cooperation. Store-Keeping In stores room, the inventories-like raw materials, W.I.P., finished goods, consumables stores, spares and scraps-costs heavily to the organization. 1. Raw materials 2. W.I.P. 3. Consumables stores 4. Spares 5. Ready made components 6. Scraps (30) Approaches to stores location
BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

1. Fixed location 2. Random location 3. Zoned location Storing of Materials Record keeping of Materials 1. The Bin Card. 2. The stores Ledger 3. Issue of Materials.

BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

GOALS QUESTIONNAIRE
Have you ever spent sufficient time, in a totally peaceful environment, to seriously think with full concentration of mind and formulate a set of clear goals of your Professional, Personal, and Social Life? …….Yes/No. List out below the goals you have already established. a) Professional Life Goals 1. _________________________________ 2. _________________________________ 3. _________________________________ 4. _________________________________ 5. _________________________________ b) Personal Life Goals 1. _________________________________ 2. _________________________________ 3. _________________________________ 4. _________________________________ 5. _________________________________ Place: Date: Signature

BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

SALES&DISTRIBUTION MANAGEMENT

(Signature of candidate)

BY:- SHASHANK GUPTA PGDM(FIN.&MKTG),M.COM

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