Unit-1

Introduction to Sales and Distribution Management

 Sales management: The planning, direction and control of personal selling, including
recruiting, selecting, equipping, assigning, routing, supervising, paying and
motivating as these tasks, apply to the personal salesforce.’ Sales management,
according to the above definition, is the management of the salesforce. This is a
personnel-type function.
Sales management also organises the selling effort. To do so, it creates a suitable
organisational structure, with appropriate communication system. Sales management
interfaces with the distribution channels, and external publics. Sales management
provide critical inputs for the key marketing decisions like budgeting, quotas and
territory management

 Objective of sales management:

1) Sales Volume: It is the capacity or the number of items sold or services
sold in the normal operations of a company in a specified period. The
foremost objective of sales management is to increase sales volume to
generate revenue.
2) Contribution to Profit: The sales of the organization should contribute
to profit, as it is the only revenue generating department. It can be
calculated as the percentage or ratio of gain in total turnover.
3) Continuing Growth: One of the main objectives of Sales Management
is to retain consumers to continue growth of the organization. There
should be regular expansion of sales and demand for an item in the
market with new advanced formulation.
These are the major objectives a sales executive has to focus on in sales management.

 Importance of Sales Management:

Sales management is very crucial for any organization to achieve its targets. In order
to increase customer demand for a particular product, we need management of sales.
The following points need to be considered for sales management in an organization −
1) The first and foremost importance of sales management is that it
facilitates the sale of a product at a price, which realizes profits and
helps in generating revenue to the company.
2) It helps to achieve organizational goals and objectives by focusing on
the aim and planning a strategy regarding achievement of the goal
within a timeframe.
3) Sales team monitors the customer preference, government policy,
competitor situation, etc., to make the required changes accordingly
and manage sales.
4) By monitoring the customer preference, the salesperson develops a
positive relationship with the customer, which helps to retain the
customer for a long period of time.
 5) Both the buyers and sellers have the same type of relationship, which
is based on exchange of goods, services and money. This helps in
attaining customer satisfaction.

Sales Management may differ from one organization to the other, but overall, we can
conclude that sales management is very important for an organization for achieving its
short- and long-term goals.

 Nature of sales management:

1) Goal-Oriented: Similar to other management activities, sales management also
have a specific purpose and intended for the achievement of specified goals or
objectives.
2) Continuous Process: The sales manager needs to perform sales management
functions regularly, and this process is never-ending.
3) Systematic Approach: It is an organized way of handling the sales function of
the company where every problem has a defined and proven solution.
4) Relationship Selling: The salespeople make efforts to build a strong customer
relationship to sell the products or services effectively.
5) Marketing Management Integration: Marketing is a broader concept;
marketing management includes all the activities related to sales management.
6) Different Sales or Job Position: It is the combined efforts of the whole sales
team, including salesperson, sales executive, sales head, sales manager and
after-sales service personnel.
7) Pervasive Function: It is a universally applicable concept which has been
adopted and tested by every kind of business organizations.

 Scope of sales management:

1) Sales Planning or Forecasting: The sales-related activities need to be planned
well in advance through anticipation of future sales prospectives.
2) Sales Budgeting: The sales manager needs to determine or estimate the sales
budget, i.e., the expenses which will be incurred in carrying out the sales
activities.
3) Determining Structure and Size of Sales Organization: The department of a
company which is solely responsible for all the sales-related functions is
termed as a sales organization.
4) Sales management provides for determining the size, composition and
structure of a sales organization.
5) Human Resource Planning: The sales management ensures a proper estimation
of sales personnel requirement in the organization.
6) Hiring Sales Personnel: It initiates the recruitment and selection of efficient
and suitable candidates for various vacant sales positions.
7) Training and Development of Salespeople: It also includes providing training
and orientation to the selected candidates to develop their skills and
knowledge to match those required for the job position.
8) Developing Salesperson’s Objectives: The sales manager set up achievable
objectives or goals for the salespeople appointed under him/her.
 9) Fixing Sales Quotas: Also, the sales quota (monthly, quarterly or yearly) is
fixed, either in terms of volume or value of sales to set targets for the sales
team.
10) Determining Sales Territories: Every sales team or salesperson is given a
particular region or area as a target market, where they need to penetrate for
selling products or services.
11) Motivating Sales Personnel: It also emphasizes on reviewing the work of
salespeople and driving them frequently to perform better.
12) Compensation and Remuneration of Salespeople: It ascertains appropriate
salary, remuneration, allowance, commission and other benefits to the
salespeople.
13) Controlling Salesforce: Exercising sufficient control by monitoring the
performance of the sales personnel is also a crucial function of sales
management.
14) Branding, Labelling and Packaging: The sales personnel gathers customer
feedback on the acceptability of the product packaging, presentation, branding
and labelling.
15) Managing Distribution Channel: It also ensures keeping track of the marketing
channels and filling the loopholes if any.
16) Sales Promotion: The product advertisements and other promotional tactics
are also determined through sales management functions.
17) Organizing and Support Service: It includes handling of queries and solving
problems of the sales personnel through proper guidance and support service.
18) After-Sale Services: The customer recognizes a company mostly through the
effectiveness and efficiency of the after-sale services it provides, which is the
concern of sales management.

 Relationship between Sales Objective, Strategies and Tactics:

Sales managers are guided by strategic planning at company level and at marketing level.

1) Sales Objectives - Objectives are statement of intents.(Targets)

2) Sales Strategies - Strategies include ways of achieving objectives. 
3) Tactics - are the activities or action plans that should be carried out in order to
implement the strategy.
Example: To illustrate the relationship between sales objectives, strategies and tactics,
consider:

 Strategic role of Sales management: Strategic role of Sales management is about

leading the people and process your company uses to sell to prospects and convert
them into customers. Roles include:
1) Hiring the right team
2) Creating the right compensation plans, territories and quotas
3) Setting the right projections
4) Motivating your team
5) Tracking revenue
6) Resolving conflicts
7) Training sales representatives
8) Getting the sale!

 Emerging trends in sales management:

 Technological Revolution.
 Globalization.
 Customer Relationship Management (CRM).
 Sales Force Diversity.
 E-Selling
 Team- selling Approach.
Technological revolution:
Innovation in the processing and transformation of the information have increased the
capabilities of both the sales force and consumers. Today consumers can collect
information of product and services, compare prices by different suppliers and place
orders through the internet. In order to compete successfully, sales department must
adopt the latest technology. These technological innovation helps to increase the
efficiency and reduce the cost of sales efforts.
Example of technological environment
For example, the banking industry has reduced the cost of serving its customers by
using technologies such as automated teller machines (ATM’s), toll-free call centers,
and the Web. As of early 2005, the cost of a bank transaction conducted by a human
teller was approximately $2, compared to $1 for a telephone banking transaction,
$.50-1.00 for an ATM transaction, and about ten cents for banking over the Internet.

Globalization:
A company faces competition not only from domestic companies but also from the
companies abroad, sales management must meet foreign competition. They must also
improve personal selling efforts in other countries. Companies selling goods and
services in the global market, faces new challenges due to differences in culture,
languages, lifestyle etc. Sales mangers must develop a global perspective.
Personal Selling Process:

This process involves identifying the prospective buyer, establishing a contact and
relationship with the buyer, presentation of the product to the buyer and
demonstrating its uses and benefits, convincing the customers about the product by
efficiently handling objections from the customers, negotiating the price and terms of
payment and finally getting the orders.
A follow up call from the sales personnel, after the sales process is over ensures
customer satisfaction and establishes long term relationship between the seller and
customer and improves goodwill.

1. Identifying the Prospective Buyer (Prospecting and Qualifying):

The first stage of personal selling process involves identifying potential customers.
All prospects identified may not turn out to be actual customers. Hence identifying the
right prospect is essential as it determines the future selling process. Marketers tap
different sources to identify the prospective customers. Marketers search for prospects
in directories, websites and contact through mail and telephone. Marketers establish
booth at trade shows and exhibitions, get the names of the prospects from existing
customers, cultivate referral sources such as – dealers, suppliers, sales representatives,
executives, bankers etc. After identifying the prospect the sales person qualifies the
prospects on the basis of their financial ability, needs, taste and preferences.

2. Pre-Approach:
The next step to prospecting and qualifying is pre-approach. At this stage the
salesperson needs to decide as to how to approach the prospective customer. The
salesperson may make a personal visit, a phone call or send a letter, based on the
convenience of the prospects.

3. Approach:
At this stage the salesperson should properly approach the prospects. He should
properly greet the buyer and give a good start to the conversation. The salesperson’s
attitude, appearance, way of speaking matters most at this stage.

4. Presentation and Demonstration:

At this stage the salesperson provides detailed information about the product and
benefits of the product. The salesperson narrates the features of the product, explains
the benefit and the worth of the product in terms of money.

5. Overcoming Objections:
After presentation and demonstration, when customers are asked to place order, they
are reluctant to buy and raise objection. Customers give importance to well-
established brands, show apathy, impatience, reluctance to participate in the talk etc.
Customer may raise objection with regard to price, delivery schedule; product or
company characteristics, etc. Salesperson handles such objections skillfully by
clarifying their objections and convinces the customer to make purchase.

6. Closing:
After handling objections and convincing customers to buy the product, the
salesperson requests the customer to place order. The salesperson assists the buyer to
place order.

7. Follow-Up and Maintenance:

Immediately after closing the sale, the salesperson should take some follow up
measures. The sales person assures about delivery at right time, proper installation,
after sales service. This ensures customer satisfaction and repeat purchase.

In case of newly introduced product and product that requires demonstration and
presentation, personal selling is effective.
 Unit-2
Management of Sales Territories and Quotas
 Unit-3
Organizing and staffing the Salesforce

Sales Organization: Sales organisation is used, to attain the qualitative and

quantitative objectives of personal selling. These objectives are related to sales
volume, profitability and market share. Sales organisation is used not only to achieve
the present objectives, but also to attain a particular future position. Sales organisation
allows delegation of authority and assignment of responsibility. Specialised tasks are
performed by persons best suited to do so. It has a planned and well co-ordinated
structure. It performs the functions of planning, organizing and controlling marketing
and distribution of products. Sales organisation is a foundation for effective sales
planning and sales policies. Systematic execution of plans and policies and
programmes of a sales organisation control all the sales activities. As such it ensures
maximum efficiency and profitability without losing consumer service and
satisfaction.

Setting Up a Sales Organisation

Mostly, there exists some kind of sales organisation, and what is done is the
reorganisation. However,
each reorganisation should be considered as an opportunity to examine the structure
afresh.
Organisations are set up by undertaking five activities:
(i) define their objectives
(ii) list down the activities necessary to carry out these objectives
(iii) group the activities into jobs or positions
(iv) assign staff to man these positions
(v) provide for coordination and control.

Types of sales organization:

Sales organisations are generally classified into four basic types:

 Line Organisation
 Line and staff organisation
 Functional organisation
 Horizontal organisation
 Line sales organization:

 This is the oldest type used in smaller firms and in firms where there is a small selling
force. This limitation restricts them to narrow product line in limited geographical
area.
 All executives have line authority and each subordinate is responsible only to one
higherup.
 They have fixed responsibilities and sales personnel reports directly to the chief sales
executive
 Lines of authority and responsibility are clear and logical, and it is difficult for
individuals to shift or evade responsibilities
 Not appropriate when there is a large sales staff.

 Line and Staff Organization:

 Found in large and medium sized firms selling diversified product lines over a wide
geographical area
 Provides the top sales executive with a group of specialists and experts in dealer and
distributors relations, sales analysis , sales organization, sales personnel, sales
planning, sales promotion, sales training, service, traffic and warehousing
 Staff sales executives do not have authority to issue orders or directives.
 Staff recommendations are submitted to the top sales executives and after approval,
transmit necessary instructions to the line organization
 Gives time to the staff executives time to study problems before recommendations.

 Functional organization:

 Based upon the concept that each individual in an organization, executive and
employee, should have as few distinct duties as possible
 Salespeople receive instructions from several executives but on different aspects of
their work
 All specialists have line authority and they have a function authority
 There is a great improved performance
 Not feasible for small and medium sized firms

 Horizontal sales organization:

 Organization of sales force:

1) Geographical Specialization
2) Product Specialization
3) Customer Specialization

 Geographical Specialization:
 - Widely used
 - Territorial executives report directly to the General Sales Manager
 - Region-wise sales supervision and control becomes easy
 - Entire country is divided into few divisions under Area Sales
Managers. These divisions are further divided into smaller territories
covered by Area Sales Officers
 - Geographic organization is generally more effective when the
product line is not too wide or consists of relatively simple, non-
technical products
 - With geographic specialization, organization becomes more
responsive to local needs
Advantages:
 - More understanding of the market which leads to intensive market
cultivation
 - Tactics to suit local needs/tastes can be implemented
 - Better control over the sales force
 - Better contact and relations with the channel partners can respond
speedily to the local competition
 - Comparatively flatter organization leading to better Communication
 Disadvantages:
 - Administrative expenses increase because of multiple offices
 - Many sales executives are needed which adds to costs and
coordination problems
 - Product expertise not cultivated
 - Territorial managers/executives are responsible for the sale of entire
product line in their particular territory. They may not have good
knowledge about all these products. Again, within the territory, they
may focus on the products that easily sell and customers that are easy
prospects.
 Product Specialization:
 - Used when product line is large and diverse or when the products are
technical or when adequate technical knowledge is an important
determinant of successful selling
 - It is generally combined with geographical specialization at higher
levels while at the level of field executives, different salesmen are
assigned to specific product lines. Thus, initial geographic division is
followed by product specialization at the field personnel level.
 - Best suited for complex technical products or unrelated/dissimilar
products
 - Product expertise can be cultivated which is desired by the customers
Advantages:
 - Attention to each product line
 - Product expertise and specialization
 - Customer queries can be handled more effectively on account of
intensive product knowledge

Disadvantages:
 - Higher travel time and expenses
 - Overlapping of sales calls in possible

 Customer Specialization:
- Based on marketing concept
- Customer may be grouped by the type of industry or channel of
distribution
- Focus on customers rather than products
- Used in case of almost identical products
- Each sales person sales entire product line to the selected set of buyers
- Variant – Major accounts organization involving sales representative, sales
engineer, financial executive and a production/manufacturing person

Advantages:
Customer specialization enables the sales persons to become more
knowledgeable about unique problems and needs of each group of
customers
- The greater market specialization developed as a result of
constantly working with a same set of customers imparts a degree
of professionalism to the sales task and has been found to result in
lower turnover of sales personnel.

Disadvantages:
- Territorial overlap possible
- There may be number of company’s representatives covering the
same geographical area, but serving different customers that often
results in higher costs

Identifying training needs:

It aims to identify the specific knowledge, skills, attitudes, and behaviour that
are lacking amongst employees, particularly at the entry point. Identifying
training needs, therefore, entails analysing the latches amongst employees that
prevent the organization to attain its goals.

Setting sales training objectives: Training objectives are formulated on the

basis of the types of product or service to sell nature of selling jobs, types of
salespeople that undergo training, types of customers to deal with, and
environmental conditions that the salespeople will confront.

Deciding on the Training Methods:

Once the company has decided on the objectives of the training, they need to
evolve appropriate training methods to fulfil them. A suitably devised training
method also entails how the training will be conducted.

Designing the Training Programme:

 After analysing the training needs, determining objectives of training, and
suggesting training methods, designing the training programme is a critical
step for the success of training. The benefits of sales training cannot be
achieved, if there is a flaw in its programme or is not correctly laid down to
satisfy any one of the training needs.

Perform Sales Training:

As the training is being conducted, the sales manager’s primary responsibility
is to monitor progress of the trainees and to ensure adequate presentation of
the training topics.

Conduct follow-up and evaluation:

It is always difficult to measure the effectiveness of sales training.
Nevertheless, a reasonable attempt must be made to assess whether current
training expenditures are worthwhile and whether future modification is
warranted.

Characteristics:
1. Sales training is imparted to develop selling skills of the sales persons.
2. It develops principles and practice of selling.
3. Sales training is a planned and organized activity of the sales department.
4. The sales organization and the salesmen, both are benefited from the sales
training.
5. Training programmes are organized for the interests of new and old
salesmen.
6. Its aim is to provide maximum satisfaction to customers through the
knowledge gained by salesmen.
7. Training is given to find out solutions to various problems related with
sales.

 Sales budget: Sales budget is a financial plan, which shows how the resources should
be allocated to achieve forecasted sales. The main purpose of sales budget is to plan
for maximum utilization of resources and forecast sales. The information required to
prepare a sales budget comes from many sources. One of the best sources is the
salesperson who deals with the products on a daily basis. The company can also
gather information from the production department regarding the date of manufacture
or expiry.
It is very important to forecast the accurate sales because the budget of other
departments is based on the sales budget. For example, the production is
manufactured as per the sales forecast, but if the sales forecast is not accurate, either
the production will be less or more than desired.
 Objective of Sales Budgeting: The objective of sales budgeting is to plan for and
control expenditure of resources (money, material, facilities and people) necessary to
achieve the desired sales objective. It aims at leveraging and maximizing profits.
 The purpose of sales budget is to achieve the objectives of the sales department. It
also acts as a planning tool. It helps a firm to set standards and strive to achieve them.
It is also an instrument of coordination between different departments in an
organization like sales, finance, production and advertising.
 Sales budgeting is also a tool or control, which helps by comparison with the actual
results. If the actual of sale is more than that of budget, we can say it is a favorable
condition.

 Methods of Sales Budgeting:

 There are a variety of methods which can be used to prepare a sales budget.
1) Affordable Budgeting: This is a method generally used by
organizations dealing in industrial goods. Also, firms, which do not
give importance to budgeting or firms which are having small size of
operation, make use of this judgmental method.
2) Rule of Thumb: Such as a given percentage of sales. Companies
involved in mass selling of goods and companies dominated by the
finance function are the major users of this method.
3) Competitive Method: A few companies, the products of which face
tough competition and many challenges in selling and which need
effective marketing strategy to maintain profits, make use of this
method. Using this method needs knowledge of how our competitor is
working with regards to resource allocation.
 Companies make use of a combination of the above methods. Depending upon the
past experiences, budgeting approaches are refined time to time. The status of the
sales & marketing helps the organization to figure out the extent of sophistication
needed in approaching sales budgeting.

 Sales Audit
 Definition: The Sales Audit is the comprehensive, systematic, periodic, analysis,
evaluation and interpretation of business environment, objectives, strategies,
principles to determine the areas of problem or opportunities and recommending
the plan of action to improve the sales performance. The sales audit is performed
by the sales auditor, who can be from within the organization or from outside the
firm.
 The sales auditor takes the following points into consideration while conducting
the Sales Audit.
 The sales audit begins with the analysis of the Hiring Procedure of the sales staff.
Here, the complete records of the personnel, their backgrounds, experience,
method of selection, is checked to ensure the correctness of the hiring procedure
followed by the company. Also, the training programs are checked to make sure
that these are well designed and increases the efficiency of the sales staff.
  Also, the Market Conditions are also checked to see whether the company’s sales
targets are feasible or not. The auditor generally performs the SWOT (strengths,
weakness, opportunities, threats) analysis, in which he analyze the opportunities
and threats that exist in the external environment and have a huge impact on the
sales strategy. He checks the prospective threats from the competitor and also
determines the opportunities that can give a first mover advantage to the firm.
 The auditor checks the Sales Procedure followed to facilitate the sales. The
discounts or any other promotion scheme offered to the customer should be in line
with the company’s profit objective. Thus, the auditor compares the ideal Sales
Procedure as written on the paper with the actual operations performed by the
firm.
 The Auditor also checks, the quality of the Customer Services offered once when
the product was sold or at times when the problems were encountered. The
repurchase of the product solely depends on the after sales service offered by the
company. Thus, the auditor analyses the performance of the company in terms of
its services and give the recommendations for the improvement, if any.
 The Office Environment, wherein the sales staff, operates play a significant role in
achieving the sales targets. The business environment should be created in such a
way that it should be in the best interest of the workers so that they can work up to
their potential. The relation with the managers, Co-workers, and other
department’s personnel also affects the efficiency of the sale staff and thus the
auditor checks all these perspectives and prepares the sales audit report
accordingly.
 Thus, the sales audit involves the analysis of the entire sales process starting from
the sales objectives set for the ultimate sales done by the company’s sales staff.

Unit-4
Distribution management and the marketing mix

Distribution management is the process used to oversee the movement of goods from supplier
to manufacturer to wholesaler or retailer and finally to the end consumer. Numerous activities
and processes are involved, including raw good vendor management, packaging,
warehousing, inventory, supply chain, logistics and sometimes even blockchain. Distribution
management is first and foremost about organizing everything involved in getting goods to
the buyer in a timely fashion and with the least amount of waste. Therefore, it has a direct
impact on profits.

Marketing channels: A marketing channel is a set of interdependent organizations involved

in the process of making a product or service available for use or consumption. A marketing
channel (also called a channel of distribution) is a group of individuals and organizations that
directs the flow of products from producers to consumers. The major role of marketing
channels is to make products available at the right time at the right place in the right
quantities.
Types of Intermediaries:
Some intermediaries – such as wholesales and retailers –buy, take title to, and resell the
merchandise; they are called merchants.
Others – brokers, manufacturer’s representatives, sales agents – search for customers and
may negotiate on the producer’s behalf but do not take title to the goods; they are called
agents.
Still others – transportation companies, independent warehouses, banks, advertising agencies
– assist in distribution process but neither take title to goods nor negotiate purchases or sales;
they are called facilitators.

A Marketing Channel System is the particular set of marketing channels employed by a firm.
Decisions about marketing channel system are among the most critical decisions facing
management. Marketing channels must not just serve markets, they must also make markets.
The channels chosen affect all other marketing decisions. Pricing and promotion decisions
are affected by channel decisions

 A push strategy involves the manufacturer using its sales force and trade promotion
money to induce intermediaries to carry, promote, and sell the product to end users.
Push strategy is appropriate where there is low brand loyalty in a category, brand
choice is made in the store, the product is an impulse item and product benefits are
well understood.
 A pull strategy involves the manufacturer using advertising and promotion to
persuade consumers to ask intermediaries for the product, thus inducing the
intermediaries to order it. Pull strategy is appropriate when there is high brand loyalty
and high involvement in the category, when people perceive differences between
brands, and when people choose the brand before they go to store.