MODULE SALES MANAGEMENT 6

1 Lectures
TOPICS
1 Why Study Sales and Distribution Management 1
2 Organization framework of the field sales force: Types and 1
methods of Field Sales Organization
3 Career in Field Sales Management 1
4 Field Sales Manager – His tasks and responsibilities 1
5 Relation with sales man and relationship with the top management 1
Evaluative Case study on Hindustan Unilever Ltd. sales team management & 1
Assignment strategy

Sales refers to the exchange of goods/ commodities against money or service. Sales is the only
function in an organization that generates revenue or income for a company and hence it needs to
be managed properly. The financial results of a company depend upon the performance of the
sales department.

Distribution is the process of making a product or service available for use or consumption to
the end consumer or business. A distribution channel is the route through which goods or
services move from the company to the customer or the transfer of payment happens from the
customer to the company.

Distribution channels can mean selling of products directly or selling through wholesalers,
retailers etc. The same applies for payment transfer from customers to company; it can move
through a path or can be sent directly to the company. As per Philip Kotler, “Marketing
channels can be viewed as sets of interdependent organizations involved in the process of
making a product or a service available for use or consumption”.

Features of Sales & distribution Mngt:

 Goal-Oriented: Similar to other management activities, sales &dist. management also

have a specific purpose and intended for the achievement of specified goals or objectives.
 Continuous Process: The sales manager needs to perform sales management functions
regularly, and this process is never-ending.
 Relationship Selling: The salespeople make efforts to build a strong customer relationship
to sell the products or services effectively.
 Marketing Management Integration: Marketing is a broader concept; marketing
management includes all the activities related to sales management.
 Different Sales Position: It is the combined efforts of the whole sales team, including
salesperson, sales executive, sales head, sales manager and after-sales service personnel.

Features of DC:

The following are the functions of distribution channels −

 Facilitate selling by being physically close to customers

 Gather information about potential and current customer competitions, other factors and
forces of the environment
  Provide distributional efficiency by bridging the gap between the manufacturer and the
user efficiently and economically

 Assemble products into assortments to meet buyers’ needs

 Match segments of supply with segments of demand

 Assist in sales promotion

 Assist in introducing new products

 Assist in implementing the price mechanism

 Assist in developing sales forecast

 Provide market intelligence and feedback

 Maintain records

 Take care of liaison requirements

 Standardize transaction
Distribution could be of the following two types −

Direct Distribution

It can be defined as expanding or moving from one place to another without changing direction
or stopping. For example, Bata has no distribution channel; it sells its products directly to the
end consumers.

Indirect Distribution

It can be defined as means that are not directly caused by or resulting from something. For
example, LG sells its product from the factory to the dealers, and it reaches the consumers
through dealers.

Levels of Distribution channels

There are basically Four levels of distribution. To understand them, read this article on industrial
and customer channels. I have given a brief summary below.

1. Zero level channel – Where the distribution happens from company to end customer.
2. One level channel – Distribution happens with a single agent in between. Example – From
manufacturer to E-commerce companies. And from E-commerce to customer.
3. Two Level channel – Distribution happens with 2 business entities in between. Example –
Goods flowing from manufacturer to Distributor >> Distributor to Retailer >> And
Retailer to customer.
4. Three level channel – Distribution happening with 3 business entities in between. Example
– Goods flowing from Manufacturer to C&F >> C&F to Distributor >> Distributor to
Retailer >> And Retailer to customer.

Zero level channel is also known as Direct Channel while One level to Three levels
are also known as Indirect channels.

Types of distribution network :

 1. Intensive Network : In intensive distribution, a firm sells products through as many
outlets as possible. The products which can be easily accessed by customers without
much shopping effort are sold through intensive distribution. For example, newspapers,
milk, soaps, etc. These products do not require much additional services from
intermediaries apart from handling and assigning shelf space. A customer can walk into
any retail store or supermarket or a shopping mall and choose or ask for the product
needed. The consumers can get these products when and where they are needed. These
for mostly the FMCG products. This strategy provides great brand exposure and
consumer convenience is given high priority.
2. Selective distribution – In selective distribution, the manufacturer opts to distribute
products at select outlets and in select regions. This distribution lies between Selective
distribution and Intensive distribution. Selective distribution gives more market coverage
than Exclusive distribution and better control on the marketing channel than Intensive
distribution. The intermediary may be required to add value in some way like outlet
ambience, customer education before and after the sale of the product, etc. This channel
strategy is also less costly as compared to Intensive distribution. For example, Cannon
cameras can be found in many outlets but not all the models at all these outlets. The
manufacturer sells its select models at select outlets appealing to different customers in
the target markets.
3. Exclusive network :  In exclusive distribution, a firm selects only one or few
intermediaries for product distribution. This leads to a strong relationship between the
manufacturer and the intermediary. This system demands high level of support between
the manufacturer and distributer. They both become highly dependent on each other.
Manufacturer requires the knowledge and distribution expertise of the intermediary. The
intermediary is asked to promote the product, and they generally do this enthusiastically
as they get the benefits of higher sales. The intermediary being the sole distributor
benefits from the product’s success in the market. In case the manufacturer alters the
contract or gives additional selling rights to other intermediary, the relationship between
intermediary and the manufacturer hits a low. Intermediaries may block the sale of
products at its outlet. Many TV series sign exclusive contracts with networks for
exclusive premier on certain TV channels. Manufacturers of electronic items and
automobiles also sign exclusive distribution contracts. In India, Motorola, gave exclusive
rights to Amazon India to launch and sell its Moto G4 model of its mobile phone.

Components of distribution mngt.

(1) Order Processing: Order processing is the starting point of any distribution activity. Order
processing includes activities like receiving the order, handling the order, granting credit,
invoicing, dispatching, collecting bills, etc. Each customer expects that the order placed by him
is implemented without delay, and as per the specifications of the order.

Thus, order processing becomes very important. Marketer should make effort to maintain the
order cycle time i.e. the time period between the time of placement of an order by the customer
to the time of arrival of goods at his destination. Standard procedure should be laid down for
processing of order.

(2) Storage and Warehousing:

Storage means making proper arrangements for retaining the goods in proper condition till they
are demanded by customers. There are many products which are seasonally produced but are
used throughout the year, they can be stored and later released.
Similarly, there are products which are produced throughout the year but are seasonally used like
umbrella, fans, heaters, etc. Here also storing plays an important role.

Warehousing provides the storage function. Places where the goods are stored are known as
warehouse. Goods are stored in warehouses to be released in time of demand. Apart from storing
function, warehouses also perform other functions like sorting and assembling the goods.

(3) Inventory management:

Inventory control refers to efficient management of goods stored in warehouses. Maintaining

adequate level of inventory is very essential for smooth flow of business. Inventory acts as a
bridge between the orders of customers and production. They are the reservoir of the goods held
in anticipation of sales. Therefore, it needs to be properly managed and controlled. Neither to
small nor too large inventory should be maintained.

(4) Material Handling:

Material handling includes all those activities which are associated in moving products when it
leaves the manufacturing plant but before it is loaded on the transport.

It involves moving the goods from manufacturing point to warehouses and from warehouses to
place of loading in transport modes. Proper management of material handling helps in avoiding
unnecessary movement of goods, avoiding damage to the goods, facilitate order processing and
efficient movement of goods.

(5) Transportation:

Transportation as a component of physical distribution is concerned with the movement of goods

from the warehouse to customer destination. It includes loading and unloading of goods and their
movement from one place to another. In doing so it provides time and place utility. Transport
accounts for a major portion of the distribution cost and of the total price of the product.

Correct form of transportation mode is very essential as it directly affect the price of the product.
Proper choice facilitates smooth movement of goods on time and in good condition. Different
modes of transportation are Road transport, railways, Airways, Water transport and pipeline.
Each has its own share of merits and demerits. Normally a combination of different mode is
chosen and integrated in a sequential order to move the product economically and faster.

Choice of a particular mode of transportation depends upon various factors like cost of the
transport, availability of the mode of transport, speed, reliability, frequency, safety and suitability
of the mode to move the product.

Why to study Sales Mngt/ Scope of SM/ Importance of SM

Sales Planning or Forecasting: The sales-related activities need to be planned well in advance
through anticipation of future sales prospectives.
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

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.

Sales management provides for determining the size, composition and structure of a sales
organization.

Human Resource Planning: The sales management ensures a proper estimation of sales
personnel requirement in the organization.

Hiring Sales Personnel: It initiates the recruitment and selection of efficient and suitable
candidates for various vacant sales positions.

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.

Developing Salesperson’s Objectives: The sales manager set up achievable objectives or goals
for the salespeople appointed under him/her.

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.

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.

Motivating Sales Personnel: It also emphasizes on reviewing the work of salespeople and
driving them frequently to perform better.

Compensation and Remuneration of Salespeople: It ascertains appropriate salary,

remuneration, allowance, commission and other benefits to the salespeople.

Controlling Salesforce: Exercising sufficient control by monitoring the performance of the sales
personnel is also a crucial function of sales management.

Branding, Labelling and Packaging: The sales personnel gathers customer feedback on the
acceptability of the product packaging, presentation, branding and labelling.

Managing Distribution Channel: It also ensures keeping track of the marketing channels and

filling the loopholes if any.

Sales Promotion: The product advertisements and other promotional tactics are also determined
through sales management functions.

Organizing and Support Service: It includes handling of queries and solving problems of the
sales personnel through proper guidance and support service.

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.

Skills required by Sales people :

Sales management is an art where the sales executive or the salesperson helps the organization
or individual to achieve its objective or buy a product with their skills.
The following are some skills that a sales executive needs to possess −

Conceptual Skills

Conceptual skill includes the formulation of ideas. Managers understand abstract relationships,
improve ideas, and solve issues creatively. The sales executive should be well versed with the
concept of the product he/she is selling.

People Skills

People skills involve the ability to interact effectively with people in a friendly way, especially
in business. The term ‘people skills’ involves both psychological skills and social skills, but
they are less inclusive than life skills. Every person has a different mindset, so a sales executive
should know how to present the product depending on the customer’s mindset.

Technical Skills

Technical skills are the abilities captured through learning and practice. They are often job or
task specific. In simple words, a specific skill set or proficiency is required to perform a specific
job or task. As a part of conceptual skills, a sales executive should also have a good grasp on the
technical skills of the product.

Decision Skills

Decision skills are the most important because to tackle the questions from consumers, sales
executive should always have the knowledge of competitors’ products and take a wise decision.

Roles and Responsibilities of a Sales Manager

A sales manager plays a key role in the success and failure of an organization. He is the one who
plays a pivotal role in achieving the sales targets and eventually generates revenue for the
organization.

Following are the roles and responsibilities of a sales manager:

 A sales manager is responsible for meeting the sales targets of the organization through
effective planning and budgeting.
 A sales manager can’t work alone. He needs the support of his sales team where each one
contributes in his best possible way and works towards the goals and objectives of the
organization. So people management is another skill that a sales manager must possess.
 A sales manager devises strategies and techniques necessary for achieving the sales
targets. He is the one who decides the future course of action for his team members.
 It is the sales manager’s duty to map potential customers and generate leads for the
organization.
 A sales manager is also responsible for brand promotion. He must make the product
popular amongst the consumers. A banner at a wrong place is of no use. Canopies must
be placed at strategic locations; hoardings should be installed at important places for the
best results.
 Motivating team members is one of the most important duties of a sales manager. He
needs to make his team work as a single unit working towards a common objective.
 It is the sales manager’s duty to ensure his team is delivering desired results.
Supervision is essential. Track their performances. Make sure each one is living up to the
expectations of the organization. Ask them to submit a report of what all they have done
 through out the week or month. The performers must be encouraged while the non
performers must be dealt with utmost patience and care.
 A sales manager is responsible for not only selling but also maintaining and improving
relationships with the client. Client relationship management is also his KRA. As a
sales manager, one should maintain necessary data and records for future reference.