Combinepdf SDM

Chapter 1: Sales and Distribution Management:
Aligning Marketing and Selling

Introduction
• Difference between marketing and selling

• Is there a conflict between marketing and selling
Pingali Venugopal
Ending the War between Sales and Marketing:
Harvard Business Review
• Marketing blames the salesforce for its poor execution of an otherwise brilliant
rollout plan. The sales team, in turn, claims that marketing sets prices too high and
uses too much of the budget, which instead should go toward hiring more
salespeople or paying the sales reps higher commissions.
• Marketing believes the salesforce is myopic and blind to the future (Kotler,
Rackham, and Krishnaswamy 2006).
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Why Sales and Marketing Are at Odds or Even War
by Steve W. Martin
• Sales and marketing efforts are at odds. The marketing team lectures the sales
department, saying that if only the salespeople followed their advice, their
problems would have been solved. Meanwhile, the sales department always says
it needs something else from marketing.
—HBR Blog Network
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The Conflict between Sales and Marketing
• The ongoing conflict between sales and marketing is an ‘elephant’ in many

companies and not discussed until it becomes disruptive that it must be dealt
with.
—Faraz Vehvaria (2010)
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• The root cause of this situation is that sales and marketing have different
perspectives.
• Each group often undervalues the other’s contributions.
• This lack of alignment ends up hurting corporate performance.
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Marketing
• Creating a brand
• Creating loyalty
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• So marketing involves changing behaviour: Long term
• Selling involves satisfying current behaviour: Short term
Push and pull are seen as independent activities
Promotion Demand Pull Company Instore schemes Push Purchase
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Marketing versus Selling
• Therefore, there would be a gap between marketing and selling.

• Also, sometimes, it may contradict each other.
• So there is a need to synchronize marketing and selling.
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Sales and Distribution Management: Aligning
Marketing and Selling
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Chapter 2: Marketing and Selling
Process of Marketing: Changing Behaviour
Picking
Variety seeking Impulse
Legalistic
Subcontracted (if consumer is Problem solving (if consumer is

not knowledgeable to evaluate) knowledgeable to evaluate)
Heuristics
Brand Loyalty
Details of specific behaviour would be discussed in subsequent session.

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• Marketing is about increasing involvement by changing the way consumers
evaluate quality.
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Quality Evaluation
• Search attributes (can be evaluated before purchase)

• Experience attributes (can be evaluated after usage)
• Credence attributes (can not be evaluated even after use)
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Search Attributes
Metal Jacket Special Jacket Sealed Cover
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Experience Attributes
Source: http://www.youtube.com/watch?v=mdiRfDagxSA
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Credence Attributes
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Information Collected for Decision-making
Add Risk Build Heuristics
Search attributes Experience attributes Credence attributes
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Concepts
• Quality – Search, Experience & Credence attributes

• Involvement – product involvement and purchase involvement
Product involvement refers to the interest a person has in

purchasing a product and the person's commitment to a particular
brand.
Purchase involvement, on the other hand, refers to the

consumer's interest in the purchase process. The level
of involvement influences the purchase decision making process.
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Product Involvement
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Product Performance Risk
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Social Risk
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Purchase Involvement
Purchase involvement, on the other hand, refers to the consumer's interest in the purchase process.
The level of involvement influences the purchase decision making process.
• Visibility - displays
• Consumer Promotion
• Sales Promotions
• Kiosks
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Primarily there are 4 types-of-consumer-behavior – article reference
Generalized Framework – Buying Behaviour – Linking with Process of Marketing
Low Uncertainty of High Uncertainty of

Untried Brands Untried Brands
Low differences Buying behaviour: Buying behaviour:

between brands Picking Habit
High differences Buying behaviour: Buying behaviour:

between brands Variety-seeking Problem-solving
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Process of Marketing – Attribute strategy

Low Commodity Build Credence

differences attributes
between
brands
High
differences Build search attributes Build Experience
between attributes
brands
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Process of Marketing – involvement strategy

Low Commodity Reduce purchase

differences involvement
between
brands
High
differences Increase purchase Add product
between involvement involvement
brands
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Summary of Marketing Strategy

Low Search attribute of Credence attributes:

differences convenience: Product involvement is
between Product and purchase high, but purchase
brands involvement are less. involvement is less.
High Search attribute of Experience attributes:

differences price/quantity: Product and purchase
between Product involvement is involvement are high.
brands low, but purchase
involvement could be
high.
More clarity will come when we will discuss

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Selling: Buyer’s Perspective
Chapter 3: Selling: Buyer’s Perspective
Selling Process & Buyer’s Perspective
Process of Selling: Parallel Stage during Brand Decision Process from

Company’s Perspective Buyer’s perspective
Prospecting Creating awareness and want for the product and/or
brand and ensuring brand enters consideration set
Promoting Information search for brands in the consideration set
Evaluation of alternate brands
Bulk breaking & Form utility
assortment
Availability Time utility
Credit & service Possession utility
Type of outlet Place utility
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Process of Marketing: Changing Behaviour
Picking
Variety seeking Impulse
Legalistic
Subcontracted (if consumer is Problem solving (if consumer is

not knowledgeable to evaluate) knowledgeable to evaluate)
Heuristics
Brand Loyalty
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Considerations for Selling for Consumer Decision Process
Considerations for Details Required for Effective Selling for Each Consumer Decision
Selling Process
Decision sequence Between product, brand and store
Place utility From where does the buyer want to purchase? (The characteristics of
the outlet from where the buyer wants to purchase the product).
Time utility When does the buyer want to purchase? (Time: a buyer can wait if the
brand is not available).
Power Who has the power? (Between brand and store)
Trade schemes What is the objective of the trade schemes which would encourage
the trade to ‘push the brand’.
Role of the price for Significance of price for the end consumer.
the end consumer
Consumer schemes What type of consumer scheme(s) would influence the buyer?
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Picking Behaviour
Considerations for Selling Details Required for Picking Behaviour

Decision sequence Product—store—no brand decision.
Place utility Nearest (convenience).
Time utility Should be available when the buyer wants it.
Power Trade.
Trade schemes The objective should be to encourage stocking the brand
instead of the competitor’s brand, for example, bulk discounts,
credit and so on.
Role of the price for the end Price convenience evaluation. The buyer would be willing to
consumer pay for convenience.
Consumer schemes Not required for non-routine purchases.
Schemes encouraging preponing purchases for routine
purchases.
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Variety-seeking Behaviour
Considerations for Details Required for Variety-seeking Behaviour

Selling
Decision sequence Product followed by brand or store depending on the shopping
environment.
Place utility Multi-brand store and multi-product (for assortment purchase).
Status of the outlet.
Time utility If the brand is not available, another brand would be purchased.
Power Retailer
Trade schemes To enter consideration set, for example, brand visibility schemes like
shelf space.
Role of the price for Since the buyer would be evaluating mainly on search attributes, the
the end consumer buyer would be adopting price–quantity evaluation.
Consumer schemes Price discounts.
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• With addition of search attributes, buyers move into variety-seeking behaviour.
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Objective of Consumer Schemes for Variety-seeking Behaviour
Schemes
Increase consumption Cannot increase

per occasion consumption per
occasion
Consumption Experimentation
cycle fixed behaviour
More quantity Price off
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Impulse
Considerations for Selling Details Required for Impulse

Decision sequence Store–product/brand
Place utility Multi-brand store and multi-product (for assortment purchase)
Status of the outlet
Other sensory influences
Time utility Need to purchase immediate without any evaluation
Power Store
Trade schemes Visibility
Role of price for end No brand evaluation
consumer
Consumer schemes Price–quantity schemes
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Subcontracted & Problem Solving decisions
If the buyer is not knowledgeable to make a decision, then the buyer goes into
subcontracted decision process
Problem
Know the product to use Do not know the product to use
Expert Expert
Brand/store decision Product/brand/store decision

made by expert made by expert
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Moving from Low Involvement to High Involvement
Creating Different Marketing Products
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Subcontracted Decision Process
Considerations for Details Required for Subcontracted Decision Process

Selling
Decision sequence Product—expert—brand/store or
Expert—product/brand/store
Place utility Determined by expert
Time utility Can wait for brand suggested by expert
Power Expert
Schemes for experts (a) Technical knowledge and (b) incentives for recommending
the brand
Role of the price for the Price–quality evaluation
end consumer
Consumer schemes Schemes giving functional knowledge to consumers so that they
can move to problem-solving
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Problem-solving Behaviour
Considerations for Selling Details Required for Problem-solving Behaviour

Decision sequence Product—store—brand (based on credibility of information source
between company and retailer)
Place utility Reputed store and knowledgeable store’s salespeople
Time utility Can wait for the brand
Power Based on credibility of information source between company and
retailer
Trade schemes (a) Technical knowledge and (b) incentives for recommending the
brand
Role of the price for the Price–quality evaluation
end consumer
Consumer schemes Schemes guaranteeing brand performance
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Habit
Considerations for Selling Details Required for Habit

Decision sequence Product—brand—store
Place utility Reputed store
Time utility Can wait
Power Brand
Trade schemes Minimum or nil
Role of the price for the end Price–quality
consumer
Consumer schemes Solution-based schemes
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Product Characteristics and the Consumer Effort for Purchases
Product Low Uncertainty of Untried High Uncertainty of Untried

Characteristics Brands Brands
Low differences Consumers look for Evaluation is predominantly on

between brands convenience. credence attributes.
Look for nearest outlet. Consumers willing to travel for their

brand.
No information search.
High differences Evaluation is predominantly on Evaluation is predominantly on
between brands Search attributes. experience attributes.
Consumers would visit multi- Consumers compare brands and look

brand outlets; however, if the for unbiased and credible
brand is not available, they information.
would settle for another brand.
Demonstration and trial are required
to help the consumer compare the
brands
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Selling as per Generalized Framework
Product Low Uncertainty of High Uncertainty of Untried Brands

Characteristics Untried Brands
Low differences To ensure availability trade Brand building.

between brands schemes aimed at blocking Minimum trade schemes.
inventory. Consumer schemes aimed at associating the
brand with the solution (solution-based
schemes)
High differences Eye-level visibility to enter Trade schemes to ensure (a) experts gain
between brands the consideration set technical knowledge and retail salesforce gain
would require trade functional knowledge to help the consumer gain
schemes, and consumer information and evaluate the brand favourably
schemes focus should be and (b) sale-based incentive for recommending
on price–quantity benefit. the company’s brand.
Consumer schemes focusing on possession
utility are important.
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Conflict of Marketing and Selling

Low differences Commodity Credence attributes

between brands
High differences
between brands Search attributes Experience attributes
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For Example: Price and Discounts
• The marketing wants the salesforce to ‘sell the price’ as opposed to ‘selling
through price.’
• The salespeople usually favour lower prices because they can sell the product
more easily.
• Research has shown that deep discounts do cause the consumer to believe that
something is wrong and thereby reducing the quality perception (marketing
effort).
• So giving wrong trade or consumer schemes would conflict with the marketing
process.
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Salesforce
Deployment
Salesforce Deployment Working of Deployment Decisions
Involves
• Allocating of the selling effort Allocation of 2000 accounts X 25 sales calls/account
• Determining the size of the Sales Force Selling Effort = 50,000 sales calls required to cover
• Designing the Sales Territories
Sales Force 50,000 sales calls required
Size 1,250 sales calls/salesperson = 40 persons
Interrelatedness of Deployment Decisions Territory 40 territories needed to provide each

salesperson with opportunity for success
How much selling effort is needed to cover Design
Allocation of and to ensure proper coverage of accounts
accounts and prospects adequately so that
Selling Effort sales and profit objectives will be achieved?
How many salespeople are required to

Sales Force
provide the desired amount of selling effort?
Size
How should territories be designed and

Territory salespeople assigned to territories to ensure
Design proper coverage of accounts and to provide
each salesperson with a reasonable
opportunity for success?
Allocation of Selling Effort – SFAA
Determining the Sales Force Size
A Traditional calculation
Total Calls Required Number Of Calls

to Deliver 100% Individual Can Number Of
Divided by Equals
Coverage Make Territories Required
A SMART calculation
Total time Required

Time an individual Number Of
to cover 100% Divided by Equals
can provide Territories Required
outlets
Workload case study
• If there are 39 Size 1 (weekly turnover more than 30K), 451 Size 2 (weekly
turnover more than 10K but less than 30K), and 1,541 Size 3 outlets (weekly
turnover less than 10K), are there in a small town. Call frequency (no. of times
the outlets to be visited) for 1, 2, 3 outlets are 4 (weekly), 4 (weekly), 2
(fortnightly) per month. In-store time by outlet type are 20,15,10 minutes, we
assume that we will cover the outlets 100%, then
– No of total visit ?
– Total in-store time per month ?
• A salesman works 22 days a month, 480 minutes a day, thus working time per
month in minutes is 9600 minutes, if his travel time is 100 minutes &
administrative work time is 80 minutes a day then
– His monthly in-store time will be ?
– How many Salesmen territories are derived ?
Estimate requirements ~ Headcount / Workload Calculation Tool
Let us calculate
Total time 61090
Grade # of O/L Frequenc Total # of In store Total # of mins/
y/month visit/ month time / call month
Required to minutes
1 39 4 156 20 mins 3120 mins cover 100%
2 451 4 1804 15 mins 27060 mins outlets
3 1541 2 3082 10 mins 30820 mins
Divided by Divided by
Total 2031 5042 61090 mins
Time an 6600 minutes

Distributor Salesman working time
individual can
Working Working Transit /Admin In store In store provide
day/month time/ day time/day time/day time/month
22 480 min 180 min 300 min 6600 mins

equals equals
Number Of 9.25
Territories
Required
Headcount /Workload Calculation Tool
Total time 61090 Total no. of 5042 Average # 545

Required to minutes visits / month visits /
cover 100% territory
outlets
Divided by Divided by Divided by Divided by Divided by Divided by
Time an 6600 No. of 9.25 No of 22

individual can minutes territories working day
provide
equals equals equals equals equals equals
Number Of 9.25 Average # 545 Average # 25

Territories visits / visits / day /
Required territory territory
Headcount / Workload Calculation Tool
Total time 61090 mins. Average mins / 12 mins / visit

Required to visit
cover 100%
outlets
Divided by Divided by Multiplied by Multiplied by
Total No. of 5042 visits Total No. of call / 25 calls / day /

visit / mth day / Salesman Salesman
equals equals equals equals
Average mins 12 mins / visit Total in store 300 mins / day /

/ visit time / day / Salesman
Salesman
Headcount / Workload Calculation Tool
Cost / Salesman / Rs. 50,000 Total expenses / Rs. 5,00000

year Salesman/ year
Multiplied by Multiplied by Divided by Divided by
No. of Salesman No. of 10 Total Turnover / year Rs. 3,60,00000
equals equals Multiplied by 100 Multiplied by 100
Total expenses Rs. 5,00000 Cost of Salesman as 1.38 % of TO

on Salesman / % of Turnover Value
year
Steps of Territory Design
1. 2. 3.
Define the Role Finalise

of Sales Outlet
Coverage
Operations Grading
Strategy
4. 5. 6.
Define Local
Set KPI Implement
Territory
Framework and Review
Boundaries
Step 1 of Territory Design
1. 2. 3.
Define the Finalise

Role of Sales Outlet
Coverage
Operations Grading
Strategy
4. 5. 6.
Define
Local Set KPI Implement
Territory Framework and Review
Boundaries
1. 2. 3.
Define the Finalise

Coverage
Operations Grading
Strategy
4. 5. 6.
Define
Boundaries
1. 2. 3.
Define the Finalise

Coverage
Operations Grading
Strategy
4. 5. 6.
Define
Boundaries
1. 2. 3.
Define the Finalise

Coverage
Operations Grading
Strategy
4. 5. 6.
Define
Boundaries
1. 2. 3.
Define the Finalise

Coverage
Operations Grading
Strategy
4. 5. 6.
Define
Boundaries
To succeed you need a tailor-
made…
Salesorganization
& hierarchy
structure...
Sales Organization Concepts are the foundation of hierarchy structure…
• Specialization – some individuals

concentrate on performing some of the
required activities
• Centralization – the degree to

which important decisions and tasks are
performed at higher levels in the
management hierarchy
• Span of Control – the number

of people who report to each sales
manager – the number of subordinates
who are supervised
Specialization/Centralization - Line vs. Staff Positions
Finance & Control Manager

National Sales Manager
HR Business Partner
Regional Sales Managers Capability Development Manager
Regional Sales Training Manager
Regional HR Manager
District Sales Managers

Staff Position
Line Position
Sales People
Flat Sales Organization Span of Control v/s
National Sales Management Levels
Management Levels
Manager
District District District District District

Sales Sales Sales Sales Sales
Manager Manager Manager Manager Manager
Span of Control
Tall Sales Organization

National Sales
Manager
Management Levels
Regional Sales Regional Sales
Manager Manager
District District District District District District

Sales Sales Sales Sales Sales Sales
Manager Manager Manager Manager Manager Manager
Sales Sales Sales Sales Sales Sales

People People People People People People
Span of Control Span of Control

Selling Situation Contingencies
Customer and Product Determinants of Sales Force Specialization
Customer Needs Different

Market- Product/Market-
Driven Driven
Simple Specialization Specialization Complex
Product Range of
Offering Geography- Product- Products
Driven Driven
Specialization Specialization
Customer Needs Similar

Product Sales Organization
Office Equipment Sales Manager Office Supplies Sales Manager
District Sales Managers (10) District Sales Managers (10)
Salespeople (100) Salespeople (100)
Advantages
• Efficiency in performing selling
activities
Disadvantages
• Geographic duplication
• Customer duplication
• Need for coordination
Geographic Sales Organization

Sales Training Manager
Eastern Region Sales Manager Western Region Sales Manager
Zone Sales Managers (4) Zone Sales Managers (4)
Advantages
• Low Cost
• No geographic duplication
• No customer duplication
Disadvantages
• Limited specialization
• Customer emphasis
Market Sales Organization
Commercial Accounts Government Accounts

Sales Manager Sales Manager
Sales Training Manager
Zone Sales Managers (4)
Advantages
• Salespeople develop better
understanding of unique
customer needs
Disadvantages
• High cost
Functional Sales Organization
Field Sales Manager Telemarketing Sales Manager
Regional Sales Managers (4)
Advantages
• Sales force with varied skills
• High customer & product focus
approach
Disadvantages
• Customer duplication
• Need for coordination
Strategic Account Management
National Sales
Manager
Management Levels
Regional Sales Head of Key
Manager (GT) Accounts (OT)
District Sales District Sales District Sales KA Manager KA Manager KA Manager

Manager Manager Manager BigBazaar WalMart Metro C&C
Sales Sales Sales Supply Finance Sales

People People People Chain Control People
Advantages
• Understanding of unique
customer needs/solution
Disadvantages
• High cost
• Non replaceable skills
Hybrid Sales Organization Structure
CEO
Finance Controller
Supply Chain Head National Sales Manager HRBP
Sales Capability
Commercial Accounts Government Accounts Head of Head of

Sales Manager Sales Manager Key Accounts E commerce
Sales Manager Regular Accounts Office Equipment Office Supplies Regional Manager - Foods & Manager – Other E
Industrial Sales Sales Manager Sales Manager Sales Manager Key Account Managers (4) Grocery formats
Field Sales Telemarketing District Sales Managers (KA) Manger Manager

Manager Sales Manager Grocermax Big Basket
Western Eastern Salespeople (160)

Sales Manager Sales Manager
Territory Planning
Practitioner’s approach
Intermediaries are a critical part of our Route-to-Market decisions in
many markets to reach fragmented outlet universe
Example INDIA
Tier A (>1m) Tier B (0.1-1m) Tier C (<0.1m) Rural
[12% of population] [9% of population] [8% of population] [71% of population]
F&B PLAYERS
Organized trade distribution centers
Distributors/Franchisee/Stockiest
Redistributors/Sub stockiest
Wholesalers
Outlets Outlets Outlets Outlets

# outlets
0.9 m 0.9 m 1.0 m 4.8 m 7.6 m
SAR to remain a market dominated by traditional and fragmented retail

• 7.6 million outlets scattered throughout India, mostly in rural area though. Outlets are growing both in urban and rural areas.
• Organized trade contribution low at 4% in India, higher share of 10% in top metro cities – total organized trade contribution expected to
reach 15% by 2015
• Fragmented Trade is modernizing
There are many RTM models applied
at Nestle Globally
Direct control of customer Indirect influence on
data & relationship customer data & relationship
Nestlé DSD/Van Sales Nestlé DSD/Pre-Sales Logistic Operator Distributor Pre-Sales Door-to-Door
Company Owned Boutique Home Delivery Broker Distributor/Van Sales Micro-Distributor
Home/Office Delivery Customer Pick-Up Nestlé DSD Pre-Sales Concessionaire Wholesaler

From Nestlé’s DC Consignment
Nestlé’s Direct Delivery Sub-Distributors Direct Sales to Consumer (Street

to KA’s DC (Platform) Selling)
Distributor Definition
Distributors are defined as Long Term Strategic Business Partners
whose objectives complement company standards and approach:
They are effectively an alternative Route to Market, replacing Nestlé direct
sales force
A Distributor has a written contract with Nestle and is responsible for sales,
distribution and merchandizing of a designated portfolio of products
*NOTE: Nestle may recommend resale prices, however, Distributors must be free
to independently set prices and terms & conditions with their customers
The Role of The Nestle Distributor
• Carry adequate stock of product to meet customer demand
• Obtain market distribution, at prices and margins competitive
with alternative products, within agreed distribution
parameters by:
• Trade channel
• Outlet type
• Provide sales force coverage geared to:-
• Achieving distribution objectives
• Covering all suitable current and new outlets to make the brands
available
• Providing display and merchandising support
• Provide sales data to Nestlé to assist in the profitable growth of
the business
• Represent Nestlé in an ethical and professional manner
Page 80
The Role of The Nestle
Distributor
• Deploy sufficient resources to adequately cover the assigned
territory
• Distribute efficiently, meeting the needs of the trade channels
• Extend competitive trade credit according to local custom and
practice
• Work to achieve agreed objectives in respect of:
• Sales volume
• Distribution by channel / outlet type
• Trade Standards
• Efficient use of Trade spend
• Promote the brands through promotional activity, working within
agreed guidelines, or to agreed strategy plans and budgets
• Provide competitive market and trade structure intelligence reports
to the company
Page 81
The Role of The Nestle
Distributor
• Manage key customers within agreed guidelines and in the best
interest of the company's brands
• Jointly train staff in product knowledge, professional skills in
sales, marketing and management
• Participate in the annual sales planning process, providing local
expertise and input and transparent performance reports
• Provide an organisational structure, both in quality and
numbers, capable of achieving agreed objectives and
implementing agreed plan
• Provide a level of service that meets the requirements of
customers within each trade channel
• Operates in an efficient manner to deliver profitable outcomes
Page 82
We have identified five Distributor
operating models that are available in
the Markets
Dedicated Sales
Exclusive Rep
Dedicated (Nestle only)
(Cover Non-
(Represent Nestlé's
Competing
portfolio only) Dedicated Sales
Portfolio)
Rep
(Nestle only)
Types of Distributor
Exclusive
(Cover Non- Non-Dedicated
Competing Sales Rep
Portfolio) (Shared with
Syndicated other Agencies)
(Represent Nestle's
and other Dedicated Sales
manufacterrers) Rep
Non-Exclusive (Nestle only)
(Cover Competing
Portfolio) Non-Dedicated
Sales Rep
(Shared with
other Agencies)
However the preferred models are only those which have dedicated sales representatives
83
Implementation RouteMap
We distinguish between two variants:
• whether your market has a Distributor Network or
• whether your market has no Distributor Network
Terminate Select Manage
Situation
No Analysis
& & &
Replace Appoint Review
Review Performing
to
Yes Current
Standards
Distributors
Manage
S Situation
Does your
Yes Analysis
&
T Market
Review
A have a Tools
Distributor &
R Network ?
Techniques
T
Pre-requisites
Select Manage
Situation
No Analysis
& &
Appoint Review
84
Source of GROWTH for Consumer Goods
Geography
New cities, new markets,
new areas extensions
New categories, products, packs,

variants and SKU extensions
Products Outlets
New channels, type of
outlets extensions
Shopper
Consumer
New shoppers &
consumers extensions
Source of Growth – outlet product relationship
Outlets
Existing New
Sell More to Sell Same to

Same (SMS) New (SMN)
Existing KPI KPI

Larger Order Size Wider Distribution (ECO)
Products
Sell New to Sell New to

Same (SNS) New (SNN)
New
KPI KPI
Wider Range/SKUs Wider Reach
Wholesale vs. Distributor – a comparative study
Strength Weaknesses
1. Predictable revenue stream 1. Availability (Range Extension)

2. Faster reach thru few products 2. Basket size
Wholesale-led model 3. Assured Cash flow 3. NPD
4. Steady Inventory 4. Visibility
5. Relatively simpler model 5. Doorstep delivery
Strengths Weaknesses
1. Availability (Range Extension) 1. Slower but quality reach

Distributor-led model 2. Basket size 2. Revenue stream, Cash flow,
3. NPD Inventory all depends on ‘sale
4. Visibility out’ status
5. Doorstep delivery 3. More complex model
Hence the Wholesale and Distributor models are not supplementing

but COMPLEMENTING to each other
Outlet Classification & Mapping – Step one
Identify areas where people go, transacts, pass time, travels
• MAIN MARKETS
• SCHOOLS, COLLEGES • HOTELS & RESTAURANTS
• CINEMA HALLS • BUS STOPS
• RAIL STATIONS • OFFICE AREAS
• AIRPORTS • MALLS
• WHOLE SELLERS • HOSPITALS
• TOURIST SPOTS
• PETROL PUMPS
Outlet Classification & Mapping
• List all outlets ( use DSRs for listing )
• Identify relevant outlets where Nestle can sell
• Find out where nestle is available (YES) and Nestle is not available (NO)
• Place all YES outlets basis channels
• Embed Chanel strategy (e.g. Must Have SKUs, coverage frequency etc.)
• Make routes maps for optimum coverage
Tips for measuring potential

1. See Competition ( Brands / SKU / Off take / Business Terms )
2. Identify Consumer / Shoppers’ Profile ( Salaried / Working Class etc. )
3. Shop Location ( Near Office / School / Mohallas / Main Road…)
4. Expected Outlet Turnover (Nutrition / Foods / Dairy / Coffees & Beverages )
89
Outlet Classification & Mapping – TIME FACTOR
• Distribution Route Planning is essentially based on Time Management
Using efficiently the time is crucial in designing Distribution Routes
Time Breakdown:
1. Time spent in the morning in Depot/Factory

2. Morning Stem Time, Time since Depot to first Outlet
3. In store time / outlet
4. Driving time in between Outlets
5. Evening Stem time, Time spent since last Outlet to depot
6. Evening time in the depot
Establish Distribution Routes = Effective Daily Time planning
Unproductive Time.
Morning time Morning Stem In Route Time Afternoon Afternoon
in Depot time in the
Time Stem Time
depot
Time spent at the store is the most important time of the day because
1. Account Management & development
2. Order Generation
3. Apply Merchandising Standards
4. Product Delivery
5. Cash recovery
Productive Time for Nestlé
Morning Conduite Conduite Conduit Conduit Conduite Conduite Aftern

Time e e oon
Time
Depot
Driving Time between Outlet

Outlet Classification & Mapping – DISTANCE FACTOR
Bad Example Good Example

Outlet Classification & Mapping – DISTANCE FACTOR
• 20 Kms day X 50 Salesmen = 1000 Kms day
• 1000 Kms day X 6 days per week = 6000 Kms week
• 6000 Kms week X 52 weeks = 312 000 Kms year
A lot of Routes are not delivering due to planning, Salesman run long distances
nobody thinks to re-design Distribution Route
Outlet Classification & Mapping
Identify completion coverage days and market closed days
AREA - 2
TUESDAY- CADBURY
THURSDAY - PERFETTI
SATURDAY- NUTRINE
AREA - 1
MONDAY - CADBURY AREA - 3
TUESDAY - PERFETTI WEDNESDAY - CADBURY
FRIDAY - NUTRINE WEDNESDAY - PERFETTI
SUNDAY - MARKET CLOSED THURSDAY- NUTRINE
Re-mapping of Routes
• When Required ?
• What are the SIGNALS? If…
• Outlets give you feedback on coverage gaps
• DSR tells you on his heavy workload
• Competition is snatching space from us
• Strike Rate / SKU / AOS is not increasing
• Regular cash flow is decreasing
Tips for identifying these SIGNALS for Re Mapping

1. Market Coverage for
• Outlet feedback / Competition Shop space / DSR Workload
2. Document Analysis
• Strike Rate / SKU / AOS / Turnover / Cash Flow
96
Route Mapping Cycle
Route Mapping
Mapping / Re mapping
is a
Continuous Process
Route Monitoring
Tips
1. Don’t Re map ALL ROUTES TOGETHER
2. Don’t Re map UNNECESSARILY
3. Keep in mind Competitor's COVERAGE DAY for that market
4. Keep close watch on Outlet feedback / Strike Rate / SKU / Turnover
5. Make it a CONTINUOUS PROCESS ~ This is not an ONE TIME AFFAIR
Sales Quota
Practitioner’s approach
Sales Quota
Your Distributor Business Plan must start with a

number. How do you get this number?
• Top down
or
• Bottom up
or
• Combination of both
How Often Should a Distributor Business Plan Be
Prepared?
• Once a year
• At the end of current year for next year

Who Needs To Be Involved?
• Distributor Manager
• Distributor
• ABM
• Other Stakeholders
The Distributor Business Plan
Putting It All Together
Situation Analysis
Where are we now?
SWOT Analysis
What are our
capabilities
& resources?
Objectives
Where do we
want to be?
Strategies
How will we
get there?
Action Plan
What has to be done?
Who will do it?
When does it have
to be done by?
Developing the Distributor
Business Plan
Where are we Situation Analysis
right now?
What are the capabilities & SWOT Analysis

resources we have available?
Where do we Objectives
want to be?
How will we get there? Strategies

By whom? Action Plan
By when?
Situation Analysis Situation Analysis
Where are we now?
This can be thought of as the current “state of play” at this Distributor. This can be
viewed from two areas: Internally & Externally.
Internally Externally
• What are current sales (value &
• Are there any economic issues that
volume) compared with this time last
may impact on demand?
year? Last month? The targeted
sales? • Are our competitors taking action
• This can be further broken down by that is impacting on our business?
segment, category & product level to
• Are our Distributors’ competitors
identify problems & opportunities
taking action that is impacting on
• Highlights
our business?
• Issues that are hindering the business
• Market growth assumptions • Legislation
• Channel growth assumptions
• Brand growth
The SWOT Analysis SWOT Analysis
What are our
capabilities
& resources?
• The SWOT Analysis is probably one of the most useful strategic tools
we can use – if we use it correctly.
• Many people do a SWOT as an activity in itself, and fail to utilize it to
lead to action.
• As a tool, each element of the SWOT should lead to an action.
• Support/Emphasize/Hold our Strengths

• Change/Explain/Eradicate our Weaknesses
• Exploit the Opportunities
• Defend against the Threats
The SWOT Looks at
Internal Situation External Situation
The Company & Products Markets & Customers
Assets, skills Changing needs

= strengths & weaknesses = opportunities & threats
We can do We could do
S O
W T
=
Strategic Options
An Example Of A Check List For
A Strengths / Weaknesses Analysis
• Are you significantly better or worse than your competitors in

areas such as:
• Company size and cash resource
• Product range, and performance (market share, profitability, etc.)
• Consumer base (loyalty, usage etc.)
• Company image and influence
• Production capacity, flexibility, expertise
• Staff numbers, organization and quality (especially sales)
• Availability of market information
• Distribution coverage (all sectors)
• Current initiatives
An Example Of A Check List For An
Opportunities / Threats Analysis
• Are there significant opportunities / threats from:

• Change in consumer behavior (OOH, dual income group)
• Major changes in the market place (modern trade)
• The retailer’s view of the market place / us / our competitors /
their competition
• Our/competitor’s initiatives (POS materials)
• Filling distribution gaps (conf. Wholesale)
• Our/competitors promotional/pricing strategies
• Our/competitors changing needs
Strengths And Weaknesses
Leading to Action
Company, product, service strengths & Which means Nestlé should take the following
weaknesses as perceived by Distributor action to support/emphasize/hold
Strengths
Which means Nestlé should take the following

action to change/explain/eradicate
Weaknesses
Example - Strengths
As perceived by the Distributor looking at Nestlé versus it’s competitor
STRENGTHS
Which means we should take the following
Findings
action to capitalise on
1. Maggi has about 75% of the market and it’s key Continue to capitalise on brand strength and remind
SKUs (100g Mas/400g Mas) are big sellers Distributor of the return it generates for his business
2. Nestle provides a team of Merchandisers to help Should ensure that we continue to use the Merchandising
my sales team. team for sales building activities
3. Nestle provides us with a dedicated sales person Build a stronger relationship between the sales person and
who only looks after my FS business the Distributor so that the Distributor sees the sales person
as part of his team
4. Better settlement of claims Remind the CD of the quick rotation of capital and returns
he generates. Should focus on investing on a good DS
immediately
Example
only
Example - Weakness
As perceived by the Distributor looking at Nestlé versus it’s competitor
WEAKNESSES
Which means we should take the following
Findings action to support / eliminate
1.Strict policies, no chance Must make him clear on the benefits of strictly
of divulging the policies adhering to codes and legislation. Help him to
for increased sales understand long term benefits out of this adherence
2.Arrogant approach - my Must approach in a different way with sound

way (i.e. Nestlé’s way) commercial reasons, should respect his views
3.Too many documents that Should focus on specific documents and make him
do nothing specific for me understand HIS benefits out of those
Example
only
Opportunities & Threats - Something That Nestlé Can
Influence The Distributor On
Changes in the “market” situation Which means we should…
Opportunities
Which means we must…
Threats
Example - Opportunities
Opportunities relating to Nestlé with the Distributor in the market place

OPPORTUNITIES
Changes in the “market” situation Which means we should ...
1.New office area has come up Ensure we know of all new outlets nearby the
office area & ensure they are being covered
2.Cadbury’s facing manufacturing Help him to proactively indent for more stocks
constraints to exploit the void
3.Household disposable income is Identify those brands which may appeal to the
increasing in the territory shopper and ensure there are no gaps in the
range.
Example
only
Example - Threats
Threats relating to Nestlé with the Distributor in the market place

THREATS
Changes in the “market” situation Which means we should ...
1.Arrival of Modern Retailers Inform our Distributors of practices in other
leading to a possible shake- countries and the ways we are handling the
up in the industry. situations there
2.Higher opportunities are Must discuss with the CDs for strategies to retain
causing high turnover at Sec good Sec. Sales force thru increased salary and
force level achievable incentives
3.Out of home consumption in Nescafe may become less remembered as a major

coffee speciality shops such brand to a new generation of drinkers. Customer
as Barista, Café Coffee Day is needs to be reassured that Nescafe is still top of
rising and threatening in mind and we should plan lots of activity to align
home Nescafe consumption. Nescafe branding to the new generation
Example
only
Identify & Rank The Top 10 Factors and Actions
SWOT Factors Action Required
1. S Maggi has about 75% of the market and it’s Continue to capitalise on brand strength and remind
key SKUs (100g Mas/400g Mas) are big Distributor of the return it generates for his business
sellers
2. S Nestle provides us with a dedicated Build a stronger relationship between the salesperson and the
salesperson who only looks after my Distributor so that the Distributor sees the salesperson as part
business of their team
3. S Better settlement of claims Remind the CD of the quick rotation of capital and returns he
generates. Should focus on investing on a good DS
immediately
4. W Strict in policies, no chance of divulging the Must make him clear on the benefits of strictly adhering to
policies for increased sales codes and legislation. Help him to understand long term
benefits out of this adherence
5. O New Office area has come up Ensure we know of all new outlets nearby the Office areas &
ensure they are being visited by us
6. O Household disposable income is increasing Identify those brands which may appeal to the shopper and
in the territory ensure there are no gaps in the range
7. T Arrival of Modern Retailers leading to a Inform our Distributors of practices in other countries and the
possible shake-up in the industry ways we are handling the situations there
8. T Higher opportunities are causing high Must discuss with the CDs for strategies to retain good Sec.
turnover at Sec force level Sales force thru increased salary and achievable incentives
9. T Out of home consumption in coffee Nescafe may become less remembered as a major brand to a
speciality shops such as Barista, Café new generation of drinkers. Customer needs to be reassured
Coffee Day is rising and threatening in that Nescafe is still top of mind and we should plan lots of
home Nescafe consumption. activity to align Nescafe branding to the new generation
10 S Nestle provides a team of Merchandisers Should ensure that we continue to use the Merchandising
to help my sales team. team for sales building activities
Objectives Objectives
Where do we
want to be?
This is step 3. Should have a clear link with SWOT.

A distributor many have separate objectives for separate categories. Channels,
infrastructure, finance, people, value etc.
1. To achieve sales volume of 505 tonnes of Maggi Noodles by Dec 2020

2. To achieve a value of 60 million for all Nestlé products by Dec 2020
3. 3000 outlets to be covered by this Distributor by Dec 2020
4. To recruit 2 salesmen and buy 1 delivery van by the end of 3Qtr 2020
Strategies - Set Targets for
Categories and Products
Strategies
How will we
get there?
• TRADITIONAL WAY or HISTORICAL DATA APPROACH –

here DATA is the DRIVER
• MODERN WAY or OPPORTUNITY APPROACH – here

GAP is the DRIVER
Strategies - Set Targets for Execution
• PRIMARY Parameters for setting targets
• Strike Rate (ECO)
• Set a minimum standard ( 70% as example )
• Identify low Strike Rate focus areas ~ DSRs / Routes / Outlets ,
bring them to min. standards
• Make your working plans accordingly
• Monitor & Review
• SKU / Invoice & AOS
• Set a minimum standard ( 4/outlet as example )
• Identify low SKU focus areas ~ DSRs / Routes / Outlets , bring
them to min. standards
• Make your working plans accordingly
• Monitor & Review
118
Strategies - Set Targets for Execution
• SECONDARY Parameters for setting targets
• Contribution ( last month / week sales ~ SKU wise )
• Newly enlisted outlets
• New Products / SKUs
• Promotions
• Display
• Activities
• Seasonality / Festivals / Trend
• Competition coverage gaps ~ opportunity
• Area Dev. ( New township / Garment factory etc )
• Competence / Experience of your DSR
119
Action Plan
Action Plan
Who will do it?
When does it have
to be done by?
Management of Sales Quota
Sales Quota
• a quota is an expected performance objective
• a quota is a sales assignments or goal to be achieved in a

specific period of time
• it is routinely assigned to the sales units (e.g. departments,

divisions, and individuals)
• sales units proceed to reach quotas in their respective

domains
“A sales quota is the sales goal set for a product line, company division, or
sales representative. It is primarily a managerial device for defining and
stimulating the sales effort.”. … Kotler
Principles of quota setting
1. setting of sales quotas is a challenge to the sales manager and should be
handled with precision and adequate skill
2. objectivity to be observed while fixing quotas and should be based on facts

and figures drawn from the market
3. it must be simple to understand both to the manager and the sales people
4. quotas set above the achievable limit often demotivate and result in high
turnover in the organization
5. flexible to the prevailing and emerging market conditions
6. there should be a level of definiteness in the quota set for a salesperson
7. it should be fixed either in terms of geographic territory, on money value, or

on the basis of units of product(s)
8. a participatory quota setting procedure followed jointly by the sales

manager and sales people together serves as a tool of motivation and
leads to the realization of the organizational sales goals
Types of sales quota
• sale volume quota – product level, customer level
• sales budget quota – cost level, profit level
• sale activity quota – service calls, account open etc.
• combination quota – selling & non-selling, all the above
Methods of Sales Quota Obj. of Sales Quota
1. Territory potential 1. Measure performance standard

2. Part sales expenses 2. Measure control standard
3. Total marketing estimates 3. Identify strengths & weaknesses
4. Executives judgment 4. Motivating people
5. Salespeople’s estimates
6. Compensation plan
Problems in setting sales quota
1. There is a high level of individual difference in every

organization
2. A perfect quota is a combination of selling and non-selling

activities
3. Often sales people do not give proper attention to the non-

selling activities (e.g. searching for prospects, handling
customer objections, and creating market for probable entry
of new products)
Management of Sales Territory
Sales Territory
A sales territory is the customer group or geographical area for

which an individual salesperson or a sales team holds
responsibility
Territories can be defined on the basis of geography, sales

potential, history, or a combination of factors.
Sales territory (contd.)
Advantages of designing a sales territory :
 it ensures better market coverage

 effective utilization of the sales force
 efficient distribution of workload among sales people
 it is convenient to evaluate the performance of sales people
 to control over the direct and indirect costs of the sales function
 optimum utilization of sales time by sales people
Criteria for Dividing Sales Territories
1. Sales potential (Rs) = Number of possible accounts x Buying

power(Rs)
2. Workload (#) = [Current accounts (#) * Average time to service an

active account (#)] + [Prospects (#) * Time spent trying to convert a
prospect into an active account (#)]
3. Coverage :This is size or travel time. The amount of time needed to

reach customers and potential customers."
Sales
Force
Recruitment and
Selection…
Sales Force Socialization - refers to the process by which salespeople acquire the knowledge,
skills, and values essential to perform their job
• Achieving Congruence: Matching the
capabilities of the recruit with the need of the
organization. From the candidates’ perspective
they are more likely to choose an organization if
they perceive the goals and values to be
congruent with theirs.
• Achieving Realism: Giving the recruit an

accurate portrayal of the job through providing
accurate job description, key deliverables,
knowledge and skills required to perform the job
along with the behavioral competencies.
Difference between Recruitment and Selection
Classical Recruitment and Selection Process

COMPETENCY is a critical element to recruit and select
BEHAVIORAL COMPETENCY SALES FUNCTIONAL COMPETENCY

0. Position in the organizational hierarchy
And the JSP… Indicates the reporting structure, grade etc.
1. Main Purpose of the job (why the position is created)

Identifies at the highest level, the intended contribution of the Job to the business
2. Key Outputs and Measurements/KPIs
This section lists the main duties (the earlier JD part) and the results what the job
delivers.
3. Key Relationships - Internal and External
Identify those individuals/groups that are critical to deliver the business results for
this job.
4. Key Knowledge & Experience
Identify the key knowledge and experience which one needs to have to apply (or
qualify) for this job.
5. Leadership Competencies
These competences focus on those behaviors that are core to be effective in the
specific role. These are mapped as per position level
6. Functional Competencies
To enable employees to understand the core competencies and associated
behaviors essential for success within their functional (sales) area.
5 IMPORTANT things to focus while recruiting and selecting sales people
1. Organization's core culture, values 2. Organization's Sales structure
3. The Selling Approach 4. CORE career factors 5. Job Success Profile

Onboarding
and Sales
Training…
Capability
Development
The Four C’s of ONBOARDING
Onboarding has four distinct levels, the Four C’s:
1. Compliance is the lowest level and includes teaching employees

basic legal and policy-related rules and regulations.
2. Clarification refers to ensuring that employees understand their new

jobs and all related expectations.
3. Culture is a broad category that includes providing employees with a

sense of organizational norms— both formal and informal.
4. Connection refers to the vital interpersonal relationships and

information networks that new employees must establish.
The building blocks of successful onboarding are often called the Four
C’s. The degree to which each organization leverages these four building
blocks determines its overall onboarding strategy, with most firms falling
into one of three levels.
1. Passive
2. Hi-potential
3. Pro active
1. The first lever for successful onboarding is self-efficacy, or self-confidence, in job performance. To the degree that a new employee feels confident in doing the
job well, he or she will be more motivated and eventually more successful than less confident counterparts. Organizations should target specific onboarding
programs to help boost employees’ confidence as they navigate new organizational waters. Self-efficacy has an impact on organizational commitment,
satisfaction and turnover.
2. A second task-related lever is role clarity—how well a new employee understands his or her role and expectations. Performance will suffer if expectations are
ambiguous. Therefore, role clarity (or its flipside, role ambiguity) is a good indication of how well-adjusted a new employee is, and measuring role clarity can help
organizations stop potential performance problems before they get worse, leading to poor job attitudes.
3. Social integration is the third lever for successful onboarding. Meeting and starting to work with organizational ‘insiders’ is an important aspect of learning about
any organization. In addition, new employees need to feel socially comfortable and accepted by their peers and superiors.
4. Knowledge of and fit within an organizational culture is the fourth aspect of onboarding. Every company has a unique culture, so helping new hires navigate that
culture—and their place within it—is essential. Understanding an organization’s politics, goals and values, and learning the firm’s unique language are all
important indicators of employee
In every step the sales
person needs to bridge the
knowledge and skill gaps…
hence continuous gap

analysis and consistent
training of relevant
competencies are of utter
importance
Competency Matrix - Sales Team
1 LOW
3 MEDIUM
5 HIGH
2013 2013 2013
e.g. Analyst e.g. KAM Area Sales Manager Business
e.g. CCSD Customer Management e.g. Field Sales priorities
e.g. John Dude e.g. Christine LOL e.g. Margaret Smart
Competency Competency Definition
Enter priority 1
Enter priority 2
Enter priority 3
Priority
Priority
Priority
Desired
Desired
Desired
Current
Current
Current
Initial
Initial
Initial
GAP
GAP
GAP
Ensures a shopper focus and champions category thought leadership
Drive Category and Shopper Knowledge 0 0 0 0 0 0
within Nestlé commercial plans and processes.
Consistently improves channel /customer knowledge and applies it

Drive Channel / Customer Knowledge 0 0 0 0 0 0
inside the organization to guide customer management.
Integrated Customer Relationships and Ability to establish and maintain influential relationships between
0 0 0 0 0 0
Collaboration Nestlé and the customer.
Functional
Grows the business and optimizes resources ensuring Nestlé meets
Drive Sustainable Profitable Growth 0 0 0 0 0 0
sales and profit objectives over time.
Develops plans that leverages Nestlé internal resources to deliver

Effective Business Planning 0 0 0 0 0 0
agreed results.
Ability to engage and influence all key decision makers in strong

Effective Selling 0 0 0 0 0 0
execution of plans.
Reaches mutually acceptable agreements with customers that

Effective Negotiation 0 0 0 0 0 0
develop value.
Delivers a sustained competitive advantage by facilitating superior

Drive Excellence in Execution 0 0 0 0 0 0
execution across Nestlé and the customer.
• Increase sales or profits • Introduce new products, markets and

• Create positive attitudes and improve promotional programs
sales force morale • Develop for future senior positions
• Assist in sales force socialization
• Ensure awareness of ethical and legal
• Reduce role conflict and ambiguity responsibilities
ROOM SET UP
20 seats
Note: It should be possible to hang posters or
Chart Stand
brown paper on the walls without damage. If not
possible, foresee additional boards
Chart Stand
Implementation
□ Double side tape

Plan Board
One roll/4 people
□ Scotch Tape One roll/4 people
□ Staplers 2
□ Stop watches 4 Projection
Screen
AV
□ Flip chart stands 4 Table
□ Paper for flip chart stands 50 sheets per stand = 200 sheets
□ White Board with portable stand 3 (2x1m)
Presenter`s
□ Marker Pens (Sharpie - black) 1 item / participant (small for cards) Table
□ Note pad A4 (Consider NCE branded version) 1 by participant

Group Work
□ Pen (Consider NCE branded version) 1 by participant Tables
Chart Stand
□ Binders 3'' (Consider NCE branded version) 1 by participant
Competency based workshop designing process
Final output of step 4 – Training Calendar
Motivation
for Sales
People…
Key Management Principle
Performance is based on
1. opportunity
2. ability Motivation is the force within us that activates our behavior.
3. motivation It is a function of three distinct components, Intensity,
Direction, and Persistence.
Motivation
Intensity Direction Persistence

Motivation
Intensity Direction Persistence
It describes how hard a High intensity is unlikely to It measures how long a

person tries. lead to favorable job- person can maintain effort.
performance outcomes Motivated individuals stay
Intensity refers to the
unless the effort is with a task long enough to
amount of mental and
channeled in a direction that achieve their goal.
physical effort put forth by
benefits organization.
the salesperson. The extent to which the
The extent to which an goal-directed effort is put
individual determines and forth over time.
chooses efforts focused on a
particular goal.
Motivational theories addressing the issue: what motivates sales people
challenge in job, achievements
job title, perks
friends/colleagues in work group

PF/gratuity, pension plan
basic salary
Source: Maslow, 1943

Motivational theories addressing the issue: what motivates salespeople
Two Factor Theory
Motivation factors - e.g. achievement, recognition, responsibility

Hygiene factors - e.g. supervision, pay, job security, working conditions
The theory argues that: Lead to motivation and job satisfaction

1. The motivation factors or motivators are the primary causes of motivation and address the question “why work harder”;
2. The hygiene factors are necessary conditions to achieve a state of neutrality and address the question “why work here”.
Absence leads to apathy and job dissatisfaction

Motivational theories addressing the issue: ‘how’ do salespeople choose their actions?
Equity Theory
Equity (inequity) is defined as the belief that one is treated fairly (unfairly) in
relation to others.
A salesperson’s choice of effort to be expended is a result of a comparison between his output-input
ratio and the output-input ratios of others.
Output of A (e.g. pay, recognition) Output of B (e.g. pay, recognition)
Input of A (e.g. effort, loyalty) = Input of A (e.g. effort, loyalty)
A salesperson who perceives to be inequitably treated can change his input, output, alter the
perceptions of self and/or others, change comparisons or leave the situation.
Motivational theories addressing the issue: ‘how’ do salespeople choose their actions?”
Expectancy Theory
Motivation is a function of a salesperson’s anticipation that a particular

behaviour will lead to outcomes that she/he values.
Motivation = function of (Expectancy x Instrumentality x Valence)
1. Expectancy is the salesperson’s perception that a certain amount of effort will lead to successful
performance (e.g. Can I do it?)
2. Instrumentality refers to salesperson’s perception of the probability that performance will lead to
certain outcomes or rewards (e.g. What do I get for doing it?)
3. Valence is the perceived attractiveness (or unattractiveness) of an outcome or reward (e.g. How much
do I value the reward?)
Motivational theories addressing the issue: ‘why’ do salespeople choose their actions?”
Attribution Theory
Attribution theory is concerned with the “why” question.
Since different behaviours can be attributed to different factors salespeople try

to attribute success or failure as the outcome of their behaviour to some causes
by posing the question “why did this happen?”
Taxonomy of causes:
1. Locus of control dimension (causes that are within [internal] or outside [external] the individual)
2. Stability dimension (causes that are stable or unstable)
3. Control dimension (causes that are controllable or uncontrollable)
Salespeople are motivated by different needs
1. Need for status (e.g. need for recognition and promotion)
2. Need for control (e.g. need to be in control and influence others)
3. Need for respect (e.g. need to be seen as experts who can give advice)
4. Need for routine (e.g. need to follow a routine that must not be interrupted)
5. Need for accomplishment (e.g. need more money and challenges)
6. Need for stimulation (e.g. need to seek outside stimulation and challenges)
7. Need for honesty (e.g. need to believe in the rightness of their practices)
(Smyth and Murphy, 1969)

Two Basic Categories of Rewards
1. Compensation rewards: Those given in return for acceptable performance or effort. They can include
non-financial compensation.
2. Non-compensation rewards: Those beneficial factors related to the work situation and well-being of
each salesperson.
Optimal Sales Force Reward System

1. Provides an acceptable ratio of costs and sales force output in volume, profit, or other objectives
2. Encourages specific activities consistent with the firm's overall, marketing, and sales force objectives and
strategies
3. Attracts and retains competent salespeople, thereby enhancing long-term customer relationships
4. Allows the kind of adjustments that facilitate administration of the reward system.
Financial Compensation: Straight Salary Financial Compensation: Straight Commission
Advantages Advantages
- Salaries are simple to administer - Income is linked directly to desired results.
- Planned earnings are easy to project.
- Straight commission plans offer cost-control
- Salaries can provide control over
salespeople’s activities, and reassignments benefits.
are less of a problem.
- Salaries are useful when substantial Disadvantages
development work is required.
- Straight commission plans contribute little
Disadvantages to company loyalty.
- Salaries offer little incentive for better
performance. - Problems may also arise if commissions are
- Salary compression could cause not limited by an earnings cap.
perceptions of inequity among experiences
salespeople.
- Salaries represent fixed overhead.
Nonfinancial Compensation
Opportunity for Promotion:
• The ability to move up in an organization along one or more career paths
Sense of Accomplishment:
• The internal sense of satisfaction from successful performance
• Sales managers should facilitate salespeople’s ability to feel this a sense of accomplishment
Opportunity for Personal Growth:
• Access to programs that allow for personal development (e.g., tuition reimbursement, leadership
development seminars)
Recognition:
• The informal or formal acknowledgement of a desired accomplishment
Job Security:
• A sense of being a desired employee that comes from consistent exceptional performance
Designing High Performance
Compensation Plan
Practitioner’s approach...
Total Reward Management – The Workforce Deal
Individual Growth Compelling Future

- Investment in People - Vision & Values
- Development & Training - Company Growth & Success
- Performance Management - Company Image & Reputation
- Career Enhancement
Positive Workplace
Total Pay - People Focus
- Base Pay - Leadership
- Variable Pay - Work itself
- Benefits - Colleagues
- Recognition - Involvement
- Trust and commitment
- Open Communication
Reward Management Principle
• Alignment of rewards with business goals

• Extending people’s line of sight
• Integrate rewards
• Reward individual ongoing value with base pay
• Reward results with variable pay
• “Pay for Position”

• “Pay for Person”
• “Pay for Performance”
“Pay for Position” – Change in structure
– Changing Business Models (Key
accounts, channels, etc.)
Job Evaluation – Changing Roles of employees
– Increased size of business
– Regional configuration of the market
Remuneration
for a position Key Factors Considered for evaluating a
job - Classify System
Remuneration • Technical Skills
Benchmarking • Level
• Application
• Managerial Skills
• Coordination
• Decisions
• Persuasive Skills
• Selling
• General Communication
• Control
• Staff Reporting
• Sites Controlled
• Impact / Influence
Salary Survey
• Basket of Comparators - FMCG Companies
• Hindustan Levers Ltd
• Glaxo Smithkline Beechem Consumer Healthcare
• Pepsico India Holdings Pvt Ltd.
• Colgate Palmolive (India) Ltd. Establishing Remuneration Strategy
• Cadbury India Ltd.
• Reckitt Benckiser (India) Ltd.
• Brittania Industries Ltd.
• P&G
• Marico
• Dabur
• ITC Ltd
• Non-FMCG companies
• Citibank
• American Express
• ICICI Prudential
• Bharti
• GE Money
“Pay for Person”
• In determining the increase in base pay the
following 4 factors need to be considered:
Sustained Contribution
External Competitiveness
Internal Competitiveness
Salary History
“Pay for Performance”
Overall package – Key Drivers
Component Driving factor
Fixed Salary 4 Factors
Variable Pay Company/Dept./Team performance for the year
Benefits Employee needs/ Industry benchmark
Retiral Benefits Statutory requirement/employee needs

Social Security Issues
Components of Total Package
• Fixed Salary • Benefits

– Basic • House benefits
– HRA • Car benefits
– Comp All • Fuel
– Conveyance • Medical (Domiciliary &
Allowance hospitalization)
• Club
– LTA
• Driver
• Variable Pay
• Loans (Staff/Car/Two-
– Sales Incentive wheeler)
– Professional Merit
• Retiral Benefits
Scheme (PMS)
• Provident Fund –
– Bonus Company contribution
• Gratuity
• Pension
EVALUATING
THE PERFORMANCE
OF SALESPEOPLE
SALES PERFORMANCE
Sales Performace is the attainment of sales

goals in an ethical, efficient, and effective
manner.
Purposes of Salesperson
Performance Evaluations
1. To ensure that compensation and other
reward disbursements are consistent with
actual salesperson performance
2. To identify salespeople that might be

promoted
3. To identify salespeople whose employment

should be terminated and to supply
evidence to support the need for
termination
4. To determine the specific training and
counseling needs of individual salespeople
and the overall sales force
5. To provide information for effective human

resource planning
6. To identify criteria that can be used to

recruit and select salespeople in the future
7. To advise salespeople of work expectations
8. To motivate salespeople
9. To help salespeople set career goals
10. To improve salesperson performance

Salesperson Performance
Evaluation Approaches
General conclusions:
1. Most evaluate on an annual basis
2. Most combine input and output criteria which are

evaluated using quantitative and qualitative measures
3. When used, performance standards or quotas are set

in collaboration with salespeople
4. Many assign weights to different objectives and

incorporate territory data.
Salesperson Performance
Evaluation Approaches
General conclusions:
5. Most use multiple sources of information
6. Most are conducted by the field sales manager

who supervises the salesperson
7. Most provide a written copy of the review and

personal discussion
360-Degree Feedback System
• Salesperson is Sales Manager
evaluated by multiple
Evaluation
raters
• Helps salespeople
better understand their Salesperson
ability to add value to
their organization and
their customers
Performance Cycle Tools
SMART
Business
Objectives Set Personal OSM
Performance
Objectives*
Career Insight Discussion

Identify Skills &
Behaviors
Career &
Development
Plan
Development Discussion STAR

Review
Final Review Progress
ORCE
Coaching and Feedback is ongoing and occurs at each stage of the Cycle
186
Key Issues in Evaluating and
Controlling Salesperson Performance
• Outcome-Based Perspective
• Focuses on objective measures of results
• with little monitoring or directing of salesperson behavior
by sales managers
• Behavior-Based Perspective
• Incorporates complex and often subjective assessments of
salesperson characteristics and behaviors
• with considerable monitoring and directing of salesperson
behavior by sales managers
Dimensions of Salesperson
Performance Evaluation
Behavioral Results
Salesperson
Performance
Professional
Profitability
Development
Criteria for Performance Evaluation
Behavior :
• Consists of criteria related to activities performed by

individual salespeople
• Sales calls, customer complaints, required reports

submitted, training meetings, letters and calls
• Should not only address activities related to short-term

sales generation but should also include non-selling
activities needed to ensure long-term customer
satisfaction
Professional Development:
• Assess improvements in certain characteristics of

salespeople that are related to successful
performance in the sales job
• Characteristics include - Attitude, product

knowledge, initiative and aggressiveness,
communication skills, ethical behavior
Results:
• Salespeople measured objectively based on results such

as – sales, market share, and accounts
• A sales quota represents a reasonable sales objective

for a territory, district, region, or zone
• Some research shows that rewards for achieving results

have a negative effect on performance and satisfaction
Profitability:
• Salespeople have an impact on gross profits through
the specific products they sell and/or through
the prices they negotiate for final sale.
• Salespeople affect net profits by the
expenses they incur in generating sales.
• Criteria Examples
• Net profit in absolute money
• Gross margin per sale
• Return on investment
• Number of orders secured
• Selling expenses versus budget
Performance Evaluation Methods
Graphic Rating/Checklist Methods
• Salespeople are evaluated using some type of

performance evaluation form
• Especially useful in evaluating behavioral and

professional development criteria
• May be filled out by customers
• Disadvantage is that it does not provide

evaluations that discriminate sufficiently
Performance Evaluation Methods:
Ranking Methods
• Rank all salespeople according to relative

performance on each performance criterion
• These methods force discrimination as to the
performance of individual salespeople
• May be complex
• Rankings only reveal relative performance evaluation
Performance Evaluation Methods:
Objective-Setting Methods
Management By Objectives (MBO)

1. Mutual setting of well-defined and measurable
goals within a specified time period.
2. Managing activities within the specified time
period toward the accomplishment of the stated
objectives.
3. Appraisal of performance against objectives.
Corporate Goals MBO
Maximize shareholder
wealth
Biz unit objectives
12% revenue growth
18% pretax profits growth
Marketing objectives Sales person objectives

Increase product A’s Achieve sales revenue of
market share by 2% $ 1.2 million in product A
Sales department objectives Major account objectives

Achieve sales revenue of Achieve sales revenue of
$ 210 million $95,000 in product A
Sales direct objectives

Achieve sales revenue of * Objectives could also
$ 10.5 million in product A include contribution %,
gross margins $$,
sales expenses
Framework for Using
Performance Information
Evaluate Salespeople against Relevant Performance Criteria
Compare Salesperson Evaluations to Identify Problem Area
Investigate Problem Areas to Identify Causes

of Performance Problems
Determine Sales Management Actions to Eliminate Causes of

Future Problems and to Solve Existing Problems
Final Review
Evaluating objectives ‘what’ & behaviors ‘how’
198
Sales Organization Effectiveness
versus Salesperson Performance
Salesforce
Environmental Control
Factors System
Salesforce
Salesforce Sales
Salesforce Selling
Outcome Organization
Characteristics Behavioral
Performance Effectiveness
Performance
Salesforce
Nonselling
Organizational Behavior
Factors Performance
Let’s go to the case…
Channel Strategy & Design
This session talks about:
• Explain the functions and key activities of

marketing channels.
• Discuss the role of intermediaries in marketing

channels.
• Distinguish between direct and indirect

marketing channels.
• See how marketing-channel decisions are

related to other key marketing decision
variables.
Major Decisions To Make
• The role of channels & distribution in the firm’s
overall objectives & strategies (Strategy Level Issue)
• The role channel & distribution should play in the

marketing mix (Program Level Issue)
• The design of the firm’s marketing channels

• The selection of channel members
• The management of the marketing channel

• The evaluation of channel member performance
When to emphasize Distribution Strategy
• IF… distribution is the most relevant variable
• OR… parity exists among competitors in the other

three variables of the marketing mix.
• OR … a high degree of competitive vulnerability

exists
• OR… distribution can create synergy among

marketing channels.
Then the firm should choose distribution strategy for strategic

emphasis & Channel Design becomes extremely important
What is Channel Design?
• What is channel design?
– Decisions associated with forming new or
altering existing channels.
• Why are channel design decisions critical?

– They directly influence all other marketing
decisions.
– Key external resource for many manufacturers.
Differential advantage occurs when a firm attains a long-term,

advantageous position in the market relative to competitors.
Closeness of Channel Relationships
Factors to consider
• Distribution intensity
• Targeted markets
• Products characteristics
• Marketing mix
Marketing channel objectives and strategies must be

compatible with overall marketing strategy.
Distribution Intensity
Target Market
• Current and potential buyer behaviors:
– Who is doing the buying?
• Where, when and how end users buy:
– Seasonal
– Shopping from home
• Knowledge of industry (and its language)
Product characteristics
• Product Characteristics
– Unit value
– Standardization
– Bulkiness
– Complexity
– Stage of Product Life Cycle: intensity, ownership
 Implications for Channel Design

Marketing mix
Product
Strategy
(Quality/Branding)
Distribution Pricing
Marketing
strategy Strategy
Mix
(Wholesale/Retail/Consumer)
Promotion
Strategy
(Push/Pull)
 Implications for Channel Design
Consumer and B2B Marketing Channels
Contributions of Intermediries
• Provide Economic Value
• Provide Social Value
• Provide Marketing Support
• Impact Supply-chain Management
• Add Value to the Market Offering
Key Functions Performed in Marketing Channels
Marketing Communications
• Advertising the Product
• Providing Visibility & Displays
• Providing a sales force that offers information & service to customers
Inventory Management
• Ordering appropriate merchandise assortment
• Maintaining adequate stock to meet customer demand
• Storing merchandise in an appropriate facility
Physical Distribution
• Delivering products
• Coordinating delivery schedules to meet customer expectations
• Arranging for the return of defective merchandise
Key Functions Performed in Marketing Channels
Market Feedback
• Serving on manufacturer advisory boards
• Informing other channel members of competitive activity
• Participating in test market evaluations
Financial Risk
• Offering credit
• Managing risks related to product loss or deterioration
• Managing risks related to product safety and liability
Types of Marketing Channels
• Direct Channels
• Indirect Channels
• Single Marketing Channels
• Multiple Marketing Channels
• Vertical Marketing Systems
Companies Using Direct Marketing Channels
Companies Using Indirect Marketing Channels
Companies Using Vertical Marketing Systems
Evaluating Channel Alternatives
• Evaluation of Capabilities and Costs
• Evaluation of Channel Compatibility:

• Product Considerations
• Pricing Considerations
• Marketing Communications Considerations
• Evaluation of Availability
Determining Channel Structure
• The key question is “What channel

structure is best for us to use?”
Direct of Indirect Channels?
Single or Multiple Channels?
Vertical Marketing Systems?

Implementing Channel Strategy
• Run a Trial Period
• Set Performance Expectations
• Create Communication Networks

Evaluating Channel Performance
1. Financial Evaluation
2. Evaluate Working Relationships
3. Evaluate Legal and Ethical Issues

Financial Evaluation
In the short run channel members

will accept low levels of
financial performance
In the long run channel members

must have positive financial
results to sustain channel relationships
Evaluating Working Relationships
Channel Power
• Reward Power
• Legitimate Power
• Expert Power
• Referent Power
• Coercive Power
• Channel Leader Power
Channel Conflict
Channel Cooperation
Evaluate Legal and Ethical Issues
• Are any laws being violated?
• Are any exclusive territories set up?
• Are any exclusive dealing arrangements

being made?
• Are resellers being bound to tying contracts?

Future Considerations for Channel Management
The environment is dynamic

• Firms must always ask “How well can this channel be expected
to perform in the future?”
• Companies will be forced to alter their channels because of:
• Changing consumer preferences
• Intense competition
• Innovation in information technology

To sum up: Managing Marketing Channels
Practitioner’s
Approach on
Distribution &
Channel
Management…
Managing CHANNEL POWER &
Channel CONFLICT AND
Conflict… CHANNEL DYNAMICS
RETAIL AUDIT: understanding the effectiveness of Channel execution
What is Retail Audit?
Retail audits are studies of selected retail outlets performed by brand representatives or
retail store employees for the purpose of collecting data about the health of the brand’s
products. Types of information that brand reps gather include:
• Sales volume
• Stock levels (shelf and backstock)
• Descriptions of in-store displays and promotional materials
• Competitor activity
• Plano gram compliance (shelf location, number of facings present, number of SKUs present,
missing/inaccurate shelf tags)
• Pricing
• In-store location of products
• Product damage
Importance of an Audit
The benefits of conducting retail audits are two-fold.
• On the one hand, they serve as a tool for suppliers to ensure that retailers are complying with pre-established
agreements on product placement, pricing, and promotion.
• On the other hand, they allow brands to accurately measure their success in the retail environment.
Equally advantageous is the priceless commodity of data that audits provide, though our data is only as
good as our method of collecting it. By taking the steps to aggregate quality data from various retail
locations over time and comparing results, managers can make actionable decisions that reduce
inefficiencies and ultimately drive sales.
Types of Retail Audits

With so much variance in the information that can be recorded in a retail audit, it makes sense to
segment audits by data type. Different audit forms should be used to reflect the respective data being
collected at a given store visit.
Retail Market Questionnaire
In some cases, brands might simply want to know the lay of the land where their products are being stocked
(or could potentially be stocked in the future). Document the following:
• Consumer sentiment towards the brand and its competitors as discovered by surveying passerby and observing how they
interact with the brand.
• Store appearance and location. Is the store well-organized and clean? Is it located in a suburban or urban area? How does
the facade of the store appear?
• Qualitative & quantitative information about other brands present in the store. How many facings do competing brands
have on shelf? Are there mostly emerging or established brands in our category?
Merchandising Report - This type of store audit is primarily concerned with the brand’s performance. Reps
use merchandising reports to log:
• Inventory levels & Stock-outs
• Condition of products
• Amount of available shelf space
• Units ordered
• Retail price
• General shelf appearance
Retail Market Questionnaire
Promotional Report - If a brand is holding a sale or other type of special promotion, it’s important to track its
success so as to know how it’s performing in the short-term and how to improve in the future. It’s key to
report on:
• The type of promotion being used (tasting, demo, price reduction, etc.)
• The duration of the promotion
• The featured product SKUs
• In-store position
• Sales results
• General effectiveness of the promotion. Are consumers engaging with our brand? Are retailers complying with the
placement of promotional materials?
Competitor Survey - One audit that brands shouldn’t overlook is the competitor survey, which can reveal
invaluable insight into how our brand stacks up against others in its category. It’s a good idea to identify:
• Who our direct and indirect competitors are in the store
• Competitors’ pricing strategies
• How many facings competitors have on the shelf. Is our brand being significantly overshadowed?
• Where competitors’ products are located in the store. Do they have prime placement at eye-level or near a checkout
counter? Are they located in a high- or low-traffic area?
• Any promotions competitors are running
Steps in the audit process
After realizing the inherent value of retail audits, how can our company guarantee that it’s executing them properly? Consider the following
procedure to help our team make the most of every store visit.
1. Articulate our goals. Determine the main objectives of our retail audit. Are you primarily concerned with monitoring competitor activity? Or do you care about how quickly our
products are moving off the shelf? Put in writing exactly what you are trying to measure through the audit and assign numeric or qualitative values to each goal as a parameter for
success.
2. Design audit criteria. Select the exact questions you will be asking in the audit and the acceptable answer types. Will you use “yes/no” questions, have reps write-in responses, or use
a scale such as 1-5? Avoid frivolous questions; only ask for information that can help our business improve (i.e. brand performance, competitor activity, retailer compliance, etc.) See
below for an example of the level of detail to include in our survey questions.
3. Schedule appointments. Once you know what you’re trying to gain from the retail audit, it’s time to make it happen. Aim for consistency in terms of who you send to which accounts.
This way, individual reps can become extremely knowledgeable about their stores and build a rapport with store management. Recognize that some retailers might want to be
notified before reps will be visiting their store. Also be mindful to schedule reps for an appropriate number of audits as determined by their assigned territory.
4. Gather data and photos. Make sure reps collect data that directly corresponds to the goals and criteria you’ve laid out. It might make sense to have some retail survey questions be
marked as “mandatory” if they’re extremely significant to company objectives. Including photos in audits is a great way to depict exactly what’s happening in a store at any given
time, and promotes accountability and compliance. Review the mediums reps are using to collect data and consider how to optimize them, ideally using software (more on this
below).
5. Evaluate results. Once audits are completed, organize our data in an easily digestible format. Numerical values can be depicted graphically, whereas notes could be tagged by a select
quality. Check to see how the results you’ve achieved stack up against our pre-determined KPIs.
6. Implement changes. After analyzing the findings, execute on what needs to be done in the short term. For example, perhaps you discover that a particular SKU is performing
significantly worse than others across several locations and you decide to pull it from shelves immediately. Alternatively, long-term business decisions can be made after you’ve
amassed data over a lengthier time period.
7. Repeat the process. After conducting several retail audits, you’ll be able to make adjustments to our retail audit process as needed to tailor it to our company’s unique needs.
Regularly conducting audits will allow our business to be as agile and rapidly adjust to the ever changing retail landscape.
Three Types of Data
In order to guarantee our retail auditing process is effective, make sure you and our team are equipped to
understand the data you'll be collecting. There are three types of retail execution data to focus on:
observational, activity, and sales data.
• Observational Data paints a picture of the in-store conditions our reps are observing and reporting on. This data
includes stock levels, number of facings, competitive activity, and more.
• Activity Data refers to the specific actions our team is taking in the field to improve execution in the store. Measuring
and tracking these actions is key to understanding what is impacting our sales and how.
• Sales Data is simply how much of each product is sold over a certain period at certain store locations -- something you
are likely already tracking. But it takes on new meaning when associated with our team’s Observational and Activity Data
-- giving you a sense of which activities and store conditions lead to the highest sales.
Advantages of Retail Audit Software
Historically, business have used pen and paper for retail auditing, which presents a number of avoidable
challenges, such as:
• Need to transcribe findings into a digital format after the fact
• Risk of losing or damaging paper
• Higher risk of human errors
• Delayed transmission of data from the field to decision-makers
These flaws in retail audit methodology make it hard for brands to replenish orders, alter their
merchandising strategy, or handle retailer compliance issues on the fly. To combat these issues, companies
can make use of technology. Choosing the right software for our company will be dependent on its specific
demands, but any solution should be equipped with the following functionalities:
• Ability to easily collect data through digital forms

• Synchronization of data to brand managers in real-time
• Image capture capabilities
• Barcode scanning
• Time stamping and/or geo-tagging
• Electronic signature capture
Takeaways
A retail audit can help us evaluate the effectiveness of our overall retail execution strategy. However,
the insights gained from retail audits are only as strong as the quality of the audits themselves. Moving
forward, contemplate how our business can augment its retail audit process by streamlining scheduling,
data collection, and analysis. Invest the time necessary in evaluating our findings to make the auditing
process worthwhile and enable our company to make agile, informed decisions.
RETAILING
UniGlobe Philippines
• Points to ponder
• What are the advantages and disadvantages of Interdependence?
• How does INTERDEPENDENCE impact the local companies?

• What are the advantages and challenges when goals and strategies are set globally and the
tactics are made locally?
•
• What type of organizational structure is required to handle coordination between global and
local teams?
• Is tying the compensations of GMs and regional directors with country’s profit goals a prudent
strategy? What are the advantages and pitfalls? Let us discuss with Exhibit 1
• What are the advantages and challenges when the process of budget allocation for local
marketing plans got changed from brand expansion targets to a certain percentage of sales?
• Was it strategically correct to transfer the power to the GM ?

• Apart from innumerable projects, what could have been a better strategy to focus on growths?
• What are the short and long term advantages and pitfalls of cost cutting initiatives?
• UniGlobe’s target shoppers - strengths and weaknesses (let us discuss with Exhibit 2 data)
• Let us discuss the efficacy of Sales Department (with Exhibit 3). Do you think the operation could
be made more simplistic?
• Do you think the sales operation structure would invite channel conflicts – vertical, horizontal ?
• How do you rate SLS division as a strategic Route

to Market design? What are the strengths and
weaknesses?
• What is your take on the strategy of incentivizing

mobile van based distributors ? Will the
distributors be motivated to make those new
brands big?
• Small size packs – evaluate the strategic decision
• Distribution targets achieved 80% to 85% and the

sales volume by 22% - what are the short and long
term impact of these growths? Let us discuss on
Exhibit 4 & 5
• How do you rate these 5 solutions? Let us take one

by one
• Strengths and weaknesses of distributors’ revenue structure
• Do you think UniGlobe’s trading terms with distributors support the objectives of SLS division?
• How correct is this strategy?
• What are the probable risks of channel conflicts?

• How would you handle the complexity of lower incremental margin vs. huge potential of sales?
• What could have been an effective strategy (both short & long term)?
Technology led transformation
Article Review:
The transformation of professional selling: Implications for leading the modern sales organization
Javier Marcos Cuevas
In Practitioner’s eyes
Key drivers of change in professional selling
• New buyer behavior and rising customer requirements
• Sophisticated and more powerful buyers seeking to achieve savings and to capture more value
• Procurement becoming a strategic function
• Value creation traditionally embedded in a product or service now manifested ‘in use’
• New information and communication technologies

• Technology facilitating new ways of working
• The traditional role of information provision of the sales force put into question
• Technologies disrupting the ‘service provision’ role of sales forces and administrative transactions
• Globalization, concentration and competition

• The business landscape changed as a result of greater market liberalization
• Large-scale mergers and acquisitions resulting in increased concentration
• Increased globalization and degree of connectedness
• Increasing number of Global Fortune 500 from emerging markets
• Need to adapt sales forces to new centralized and consolidated buying organizations
• Global negotiations becoming the norm
Key transformations of professional selling
From selling bounded offerings to increasingly integrated value propositions
From product/service knowledge to deep customer business understanding
From discrete interactions to dynamic relationships across boundaries
From customer facing towards encompassing extended end-to-end processes
From precise skills to holistic managerial competences
From compliance and adherence to transparency and accountability

Summary of transformation of professional selling & their implications
• Selling integrated offerings of products and services

• Change in the approach to sell and in the extent of the value proposition offered
• Establish new contractual schemes
• Develop better understanding risk transfer and risk ownership
• Sales forces are needed before solutions are created
• Business models in need to be revisited
• Product/service knowledge and deep customer business understanding

• Higher level of involvement and understanding across the customer organization
• Longer timeframes to understand the customer requirements and expectations
• Increase the comprehension of both present and future needs
• Organize highly interactive workshops to create new insights
• Encourage the sharing of knowledge internally
• Create ‘parallel’ sales organizations – relationship oriented and product focused
Summary of transformation of professional selling & their implications
• More dynamic relationships across boundaries
• Need to avoid over-serving some customers and undeserving others
• Appointment of multifunctional sales teams
• Create new ways of developing relationships when access to customer people is not granted or regulated
• Balance sales automation and efficiency with customer intimacy when allocating customer management time
• Define enabling mechanisms for the sales force to engage internally with their organization
• Towards encompassing extended end-to-end processes

• The scope of the sales function extends encompassing end-to-end business processes
• Emergence of two types of sales organizations – transactional and strategic
• From precise skills to holistic managerial competences

• Conventional skills that emphasize persuasion, increasingly questioned
• An integrated set of managerial competences (functional, relational, managerial and cognitive) are needed
• From compliance and adherence to transparency and accountability

• Work polices, corporate codes of conduct and ethical guidelines are necessary but not sufficient to create trusted relationships
• Personal integrity and ability to make ethical decisions key in selling roles
Competency requirements of the future sales role
Elements of strategic alternatives for managing future sales orgs.
Forms of ambidexterity in sales management
Emerging paradoxes in transition from selling to customer development
Sales Force Automation (SFA)
What does Sales Force Automation (SFA) mean?
Sales force automation (SFA) is when parts of the sales process are automated by software tools. The
automation usually focuses on repetitive, administrative tasks that, while important, can be time-
consuming for sales teams to perform. Reports suggests that, on average, two-thirds of a sales rep's time is
spent on non-revenue generating tasks. By letting a sales force automation software take care of these
tasks, sales reps can spend their time on more productive parts of their job: selling.
• Sales Force Automation (SFA) refers to software apps for sales management.
• It is computer software that helps organizations manage their sales process. Usually as part of a CRM system, it
creates an automated flow that tracks new customers, or leads, from their initial inquiry through the sales
process.
• Sales automation lets you effectively manage your leads, creating efficiency in the workplace with team
collaboration that drives the sales process. It’s about reducing the manual processes and making sure your leads
are followed up in a timely manner, so you never miss another deal.
• Sales automation helps you prioritize your workload, ensuring time is not wasted with duplication of effort or in
manual data entry and in sifting through information.
Purpose of Sales Force Automation (SFA)
• Sales force automation tools are meant to assist sales teams in the selling process. Ultimately, the purpose of sales
force automation is to allow companies to sell more of their products. It does this in three main ways:
• Allow sales teams to focus on the most important tasks: By freeing up sales team members from administrative
tasks, sales force automation tools allow reps to spend more time on the activities more likely to result in sales.
For example, calling prospects, setting up meetings, or working on strategies.
• Streamline the sales process so the most effective strategy is always used: Sales force automation can also make
the sales process more efficient which can lead to sales. Team members may forget to send follow up calls or
emails. However, when set-up correctly, sales force automation tools should not have this issue.
• Allow managers to get insight into the effectiveness of the sales process: The reporting and analysis tools found in
most sales force automation software allow those in charge of sales teams to see what is working and make
adjustments to things that aren’t. This can lead to an overall far more effective sales strategy.
What does Sales Force Automation (SFA) do?
Contact Management - With all the information your need at your fingertips you’ll never miss another sale
• Find and track every customer, contact and communication instantly, then set tasks to follow up, and share with your team.
• Advanced search across your contacts, accounts, opportunities and tasks to quickly find what you need.
• Email integration to automatically capture your emails to and from your contacts to the CRM.
• VoIP telephony integration for incoming call recognition.
• Use geo-locations on Google Maps to find nearby accounts when planning our customer meetings.
• Keep track of your calls and meetings by setting tasks to follow up, or assign them to others in your team.
• Record all your interactions and activities to maintain a full account history and timeline.
• Import documents to your customer account records.
• Customize your CRM to reflect your business by adding custom fields to your contact information data.
Task Management - Task management tools to organize everything and delight your customers
With SFA task management, when you create a task or reminder in the customer’s account it integrates with your calendar.
So when you open the task all the customer’s data and past communications are there in front of you. Once the task is
completed it is automatically added to the account record, creating a complete history of your interactions.
• Set up CRM tasks for yourself to follow up or assign them to others in your team.
• View and manage your tasks from your CRM dashboard and view outstanding tasks across your team.
• Completed tasks automatically added to activities timeline.
• Record meetings, calls, emails and any other exchanges in the activity timeline.
• Automatically capture your emails to and from your contacts into the company account record.
• Microsoft Outlook 365 and Google Calendar synchronization

Opportunity Management – always on the ball
Effectively manage and track every sales opportunity through each stage of your sales process to successful closure. Manage and track your
sales opportunities to effectively prioritize your sales effort. You get visibility of your sales team’s pipelines right through the sales process.
You can create sales opportunities showing the value of the deal, set and update the probability of the sale and also add weighted values. As
a result, our intuitive CRM system will help you create more accurate forecasts and close more leads. Creating quotations and invoicing
directly from your opportunities means no more switching between systems to get the paperwork done.
• Estimate the probability of success for each sales opportunity and track it through your pipeline.
• Add weighted values to give a sales forecast for the coming months and year.
• Use Opportunity Lines to create a breakdown of each sales opportunity.
• Opportunity History automatically tracks any changes to each sales opportunity as it passes through the pipeline.
• Set User Permission Levels to set security levels for all your team and control who has access to your data.
• Customize the stages of your sales process so your pipeline accurately reflects your business.
• Generate quotations documents directly from your opportunities and send them to your contacts.
• Powerful report writer dedicated to creating detailed sales forecasts.

Lead Generation the more the better -
• Sales automation is most effective when used in conjunction with Marketing Automation. This is where you can fine tune your customer
experience(CX) strategy, providing a seamless customer journey by integrating all your platforms, for example, your website, booking platform and
social media.
• Having arrived at your website or social page your new lead may be completing a signup form that flags their interest in your product or service.
• Using marketing automation your web form and social leads are integrated directly with your CRM system, so the new inquiry is immediately
logged as a prospect. Using Drip Marketing you might send a personalized, automated “thank you” message and create a task for a sales person to
follow up.
• You might also be applying integrated lead scoring and lead enrichment software that will help you prioritize the best leads for your business.
• To help prioritize your sales activity you can use lead scoring to assess which ones are most likely to turn into sales.
• It’s likely that when you look at your new leads, in your mind you consider their fit with your product based on a variety of criteria in
your qualification process.
• This could be their location, size of business, role of the inquirer, budget available and other considerations of their abil ity to buy. If you are
running marketing campaigns you may look at who has opened your messages, clicked through on your weblinks or even who has responded to
you.
• But rather than manually assessing this information you could score the various information and activity to give each lead a rating. Your sales
people might then just check this figure before picking up the phone to follow up. This is known as lead scoring and is a goo d use of cloud
automation.
Team Collaboration - the more the better
• Sales Force Automation has come into its own with the arrival of cloud technology. Accessing the CRM system through your
internet browser means you can retrieve the data wherever you are, seeing the latest updates. You can have multiple users
all accessing and editing a customer’s account at any one time, creating a central hub for your business.
• This is particularly useful if you have a remote workforce. Sales professionals working from home or on the road can login
and see the same information as their colleagues at head office. There’s no need to synchronize the data as everything is
updated in real-time.
Components of Sales Force Automation
Components of Sales Force Automation
• Activity Tracking and Alerts: Track and prioritize meetings and activities associated with your
contacts. Benefit from alerts that keep you on top of your customer commitments.
• Sales process automation: Manage opportunities using a powerful, out-of-the-box process or

one you customize. Complete activities in each stage of the sales process to keep deals
moving.
• Opportunity tracking: Track probability of close, products, lead source, status, and more for
every opportunity for total visibility and control of your sales pipeline.
• Dynamic sales pipeline management: See a complete, visual representation of your sales
pipeline at-a-glance to project revenue, adjust your strategy, and quickly focus your efforts.
• Sales Reporting: See dynamic, visual snapshots of real-time metrics covering sales
productivity and performance, sales pipeline health, top performing products, win/loss
analysis, and more with interactive, graphical dashboards.
7 advantages of automation – the ultimate advantage of Customer Management
• Improved Use of Resources
• Constant Accessibility
• Increased Customer Service Team Performance
• A More Personalized Experience
• Letting Data Drive Your Strategy
• Connecting With Customers
• Increasing Customer Retention

Sales Ethics: : Is There a Code of Ethics
for Marketing and Sales?
• Sales ethics is about doing right by your customers, but this can mean many different things based on
who you ask.
• When sales and marketing ethics are mentioned, the first thing that often comes to mind is fraud or,
more specifically, avoiding it, but there’s more to ethical behavior in business.
• Sales ethics can take your entire company to the next level. By embedding ethical culture into your
organization, you’ll set the foundation for customer loyalty, higher morale among your sales reps and
marketing team, and even sustainable growth.
• To make that happen, you’ll need to take some specific steps. In this article, we’ll outline benefits,
examples and steps to take to implement an ethical culture in your business.
What is sales ethics?
• Sales ethics refers to a set of behaviors that ensure that every lead, prospect and customer is treated with
respect, fairness, honesty and integrity.
• It means that, as a salesperson or marketer, you put the people you sell to first. You respect their choices
and opinions instead of forcing your agenda on them.
• When you consider the long game, ethical behavior in sales makes sense—you build loyalty and trust with
customers because you’re doing right by them. The outcome? Higher customer spend, more engaged
employees and lower costs of running the business.
• By adopting an ethical approach to sales, you’re making a clear statement: you want to sell to customers
that want to buy from you instead of selling by any means necessary.
What is ethical behavior when it comes to sales?
• What does ethical behavior look like in a real-life sales team? Here are some examples to follow.
• Always be honest about the impact your product makes
• Picture this: You’re on a sales call. It’s going well and you’ve built a great rapport with your prospect. But then they ask you for more
insights into your product’s specifics, including features, capabilities and pricing options.
• You may feel tempted to say exactly what your prospect wants to hear just to close the sale, even if it’s not completely true. For example,
you could exaggerate the results other customers got with the product or completely make up figures.
• Not only does this make your product attractive, but it also makes you sound smart. What could go wrong?
• The answer: a lot. When the customer uses your product, they won’t just realize you were dishonest—they’ll lose trust in the entire
company.
• Many customers will never do business with a company again after just one negative experience. These unhappy customers may also
overload your customer support department with complaints and refund requests.
• The fallout doesn’t end with a lost customer. A study by American Express revealed that Americans tell an average of 15 people about a
poor service experience, but only 11 about a good experience.
• Instead of winning a happy, satisfied customer, you’ll end up with a negative referral engine.
• Don’t attack your competitors
• “Why should I pick you over your competitor?” is a question you’ll hear more times than you want to.
• When that happens, you have two options:
• Slander and criticize your competitor for everything they do worse than you
• Use this as an opportunity to show your knowledge of available options and why your product stands out, brings better results and is
more suited to the prospect’s needs
• Belittling your competitors won’t make you look better in your prospect’s eyes. Instead, they’ll see you as dishonest and unethical.
• Instead, use the competitor question as an opportunity to showcase:
• Case studies and success stories of existing customers that switched from a competitor to you
• A feature comparison, with an explanation of why your product is a better match to your prospect’s pain points
• What makes you and your product unique, like on-boarding, product documentation, walkthroughs and anything else that makes your
customer’s experience exceptional
• Simply put: make your product stand out because it’s good, not because your competitors are bad.
• Adopt the Serve Don’t Sell Method
• The sales process is fundamentally about helping buyers make informed decisions. According to Liston Witherill, creator of the Serve
Don’t Sell Method, this approach lifts the pressure from sales reps to sell anything.
• The Serve Don’t Sell (SDS) Method is made of five stages you can follow in sequence:
• Fit: define your Perfect Fit Client (PFC) using demographic and psychographic factors such as job title, industry, company size,
beliefs, core problems, previous experience
• Discovery: establish your prospect’s personal and organizational pain points, why this change needs to happen now, their goals,
objectives and motivations
• Offer: include your prospect’s pain points and goals, how you can help, examples of similar previous clients, options of working
with you and a Q&A section
• Agreement: send a written proposal, collect and address unmet needs and get a signed contract
• Transition: onboard and prepare your client, establish points of contact and send supporting materials and documentation that will
make them more successful
• When you build a customer base packed with people and companies you can actually serve and help, you’ll build relationships that
work both ways.
• From your customer’s perspective, you’ll make a genuine difference in their life or business. And from your company’s perspective, you’ll
have a loyal customer that’s happy to keep paying for what you offer.
• In other words, you won’t sell just for the sake of selling; you’ll grow your company in an ethical, honest way in the long run.
How to foster an ethical culture in your sales team and business?
• Growing and managing your company in an ethical manner is no easy feat. Building an ethical culture needs to happen from every facet
of the company. It also has to be intentional.
• Here are the main ways you can make ethics in sales a habit for your company.
• Encourage open communication around goals and expectations
• Setting sales goals is essential to moving the entire company forward. When you use the SMART approach in setting goals—making them
specific, measurable, achievable, realistic and time-based—they can be huge motivators for your sales team.
• But when you set ambitious sales quotas and don’t outline a solid plan detailing how to achieve them, you’re setting yourself up for
failure.
• At best, you’ll end up with bad, high-churning deals. You might also see a drop in your sales team morale, from a dip in performance and
a longer sales cycle to an increase in tension.
• The worst-case scenario? Driving your sales team to commit fraud. Just remember the Wells Fargo scandal, in which bank tellers opened
thousands of fraudulent accounts due to mathematically unrealistic quotas:
• “[...] there were only about 11,500 potential customers in the area, and 11 other financial institutions. The quotas for the bankers at Guitron’s
branch totaled 12,000 Daily Solutions each year, including almost 3,000 new checking accounts. Without fraud, the math didn’t work.”
• Process of Increasing Product Involvement
• Increasing risk associated with purchasing untried brand
increases the importance of the product class.
• Increasing risk is about highlighting the consequences
of taking an unfavourable action.
• http://www.youtube.com/watch?v=xSGnbl95w0Q
• http://www.youtube.com/watch?v=zaI2JEV3Yuo
•
Straight Commission: Plan Variations Straight Commission: Rates
1. Commission base — volume or 1. Constant rates: Rates that remain

profitability unchanged over the pay period.
Pay is linked directly to
2. Commission rate — constant, performance.
progressive, or a combination
3. Commission splits — between two 2. Progressive rates: Rates that
or more salespeople or between increase as salespeople reach pre-
salespeople and the employer specified targets.
4. Commission payout event —
when the order is confirmed, 3. Regressive rates: Rates that
shipped, billed, paid for, or some decline at some predetermined
combination of these events point.
Latent Conflict
• There may be multiple forms of latent conflict that are present before a conflict episode… for example:
• Competition for scarce resources (i.e. there is only one best retailer prize but many are competing)
• Autonomy control (i.e. my company forces me to follow compliance of visibility but I need freedom).
• Goal divergence (i.e. many retailers were put on a task group together, but we cannot reach a decision together)
Perceived Conflict
• Conflict may exist with or without the perception of those involved. For example, there might be
situations where people perceive conflict to exist, but after speaking, they realize that there was
indeed no difference in opinions, and in fact, no conflict whatsoever. In this case, the stages of conflict
do not proceed. This type of perception issue can be resolved through improved communication.
• However, conflict may not be perceived or noticed when it actually exists. To become felt conflict, it
must be perceived in some way.

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Chapter 1: Sales and Distribution Management:

Aligning Marketing and Selling

• Difference between marketing and selling

• The ongoing conflict between sales and marketing is an ‘elephant’ in many

Push and pull are seen as independent activities

Promotion Demand Pull Company Instore schemes Push Purchase

• Therefore, there would be a gap between marketing and selling.

Variety seeking Impulse

Subcontracted (if consumer is Problem solving (if consumer is

Details of specific behaviour would be discussed in subsequent session.

• Search attributes (can be evaluated before purchase)

Metal Jacket Special Jacket Sealed Cover

Add Risk Build Heuristics

Search attributes Experience attributes Credence attributes

• Quality – Search, Experience & Credence attributes

Product involvement refers to the interest a person has in

Purchase involvement, on the other hand, refers to the

Low Uncertainty of High Uncertainty of

Low differences Buying behaviour: Buying behaviour:

High differences Buying behaviour: Buying behaviour:

Low Uncertainty of High Uncertainty of

Low Commodity Build Credence

Low Uncertainty of High Uncertainty of

Low Commodity Reduce purchase

Low Uncertainty of High Uncertainty of

Low Search attribute of Credence attributes:

High Search attribute of Experience attributes:

More clarity will come when we will discuss

Process of Selling: Parallel Stage during Brand Decision Process from

Type of outlet Place utility

Variety seeking Impulse

Subcontracted (if consumer is Problem solving (if consumer is

Considerations for Selling Details Required for Picking Behaviour

Considerations for Details Required for Variety-seeking Behaviour

Increase consumption Cannot increase

More quantity Price off

Considerations for Selling Details Required for Impulse

Know the product to use Do not know the product to use

Brand/store decision Product/brand/store decision

Considerations for Details Required for Subcontracted Decision Process

Considerations for Selling Details Required for Problem-solving Behaviour

Considerations for Selling Details Required for Habit

Product Low Uncertainty of Untried High Uncertainty of Untried

Low differences Consumers look for Evaluation is predominantly on

Look for nearest outlet. Consumers willing to travel for their

Consumers would visit multi- Consumers compare brands and look

Product Low Uncertainty of High Uncertainty of Untried Brands

Low differences To ensure availability trade Brand building.

Low Uncertainty of High Uncertainty of

Low differences Commodity Credence attributes

Interrelatedness of Deployment Decisions Territory 40 territories needed to provide each

How many salespeople are required to

How should territories be designed and

Total Calls Required Number Of Calls

Total time Required

Time an 6600 minutes

22 480 min 180 min 300 min 6600 mins

Total time 61090 Total no. of 5042 Average # 545

Divided by Divided by Divided by Divided by Divided by Divided by

Time an 6600 No. of 9.25 No of 22

equals equals equals equals equals equals

Number Of 9.25 Average # 545 Average # 25