Session 1

Introduction to Sales
and Distribution
Management
 Learning
Objectives
• To understand evolution, nature and importance of
sales management

• To know role and skills of modern sales managers

• To understand types of sales managers

• To learn objectives, strategies and of

sales
tactics management
• To know emerging trends in sales management

• To understand linkage between sales distribution

and management
Sales refers to the exchange of goods/ commodities against
money or service. It is the only revenue generating function in an
organization. It has formed an important part in business
throughout history. Even prior to the introduction of money,
people used to exchange goods in order to fulfill the needs,
which is known as the barter system.

There are two parties involved in the transaction, the seller and

the buyer.
The seller is the provider of goods or services and the buyer is
the purchaser in exchange of money.
The seller of goods has to transfer the title of ownership of the
item to the buyer upon an agreed price. A person who sells
goods or services on behalf of the seller is known as the
salesman/woman.
Distribution is the process of making a product or
service available for use or consumption to the end
consumer or business.
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.
Sales management in an organization is a
business discipline, which focuses on the
practical application of sales techniques and the
management of a firm’s sales operation. It is
done in an efficient and effective manner
through planning, staffing, training, leading and
controlling organizational resources.

Sales management is done by Sales Managers

and they are responsible for generating sales,
profits and customer satisfaction.
 Skills of a Sales Executive
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
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.

Monitoring Performance
Sales executives should monitor the performance of the employees and
report to higher management to improve the performance and fill the loop
holes.
Thus, conceptual skills deal with ideas, technical skills deal with things, people
skills concern individuals, technical skills are concerned with product-specific
skills, and decision skills relate to decision-making.
 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 −

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.

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.
 Importance of Sales Management
Sales team monitors the customer preference, government
policy, competitor situation, etc., to make the required changes
accordingly and manage sales.

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.

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.
 Objective of Sales Management
Every organization has an objective before initializing functions. We need to
understand the goal of managing sales. Here we are discussing Sales
Management in terms of its objectives.
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.
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.
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.
 Evolution, Nature and Importance of Sales
Management

Evolution of Sales Management

• Production era
• Sales era
• Marketing era
• Relationship marketing era

• Than Marketing function splits into sales and other functions

like market research, advertising, physical distribution.

Three Stages of Marketing Evolution

Product Orientation
Some industries & organizations remain at the product-orientation stage

Product Orientation Sales

Orientation

Other industries & organizations have progressed only to the sales-orientation stage

Product Orientation Sales Orientation Market Orientation

Many industries & organizations have progressed to the market-orientation stage

Late 1800s Early 1930s Mid – 1950s 1990s

 Product – Orientation Stage
• Manufacturers in the product-orientation stage typically
focused on the quality & quantity of output while assuming
that customers would buy reasonably priced , well-made
products.
• In an era when the demand for goods generally exceeded
the supply, the primary focus in business was to efficiently
produce large quantities of product.

• Finding customers was viewed as a relatively minor

function.
 Sales – Orientation Stage
• The world economic crisis of the late 1920’s changed the
perception
• Finds that the economic problem no longer was how to
manufacture efficiently, but rather it was how to sell
the resulting output
• Just offering a quality product was no assurance of
success
•
The Sales-orientation stage was characterized by a heavy
dependant on promotional activity to sell the products the firm
wanted to make.
 Market – Orientation Stage

• Sellers discovered that the war II years had changed

consumers

• In addition the consumers had more choices

• The technology that was developed during the war made it

possible to produce much greater variety of goods

• At this stage companies identify what customers want

 What is Sales

Management?
• One definition: “The management of the personal
selling part of a company’s marketing function.”

• Another definition: “The process of planning,

directing, and controlling of personal selling, including
recruiting, selecting, assigning, supervising, paying,
and motivating the personal sales force.
 Nature of Sales Management
• Its integration with marketing
management Head-
Marketing

Manager- Manager – Manager – Manager – Manager –

Promotion Market Sales Market
Research Logistics Customer
Service
• Relationship Selling

Transactional Value – Collaborative

Relationship added / Partnering
Selling / Relationship Relationship
/ Selling / Selling
 Relationship Selling

• Salespeople concentrate their team selling efforts on

building trust and service on a few carefully selected

customers over a long period with a aim of becoming

a preferred or sole supplier.

 Transactional Relationship / Selling:- One type of
relationship marketing in which salespeople make one-time
sales to price-oriented customers ,who are not contacted again.
Focus on single transaction.

 Value – added Relationship / Selling:- Understanding current

and future needs of customers and meeting those needs better
than competitors with value – added solution to their problems

 Collaborative relationship :- A type of relationship marketing

in which a selling organization works continuously with its large
customers to improve the customer performance in terms of
operations , sales and profit
Varying Sales Responsibilities / Positions / Jobs
Sales Position
• Delivery salesperson
households
•Order taker (Response
selling)
• Sales Support
•Technical selling
•Creative, Problem-solving,
selling
Brief Description Examples
• Delivery of products to business • Milk, newspapers to
customers or households and
also takes orders. • Soft drinks, bread to retail stores.
• Inside order taker • Behind counter in a shop
•Telemarketing takes •Food, clothing products’ orders
salesperson orders over from retailers
telephone
•Provide information, build goodwill,
introduce new products • Steel, Chemical industries
• Technical information, assistance
•Getting orders from existing and new •Automobiles, refrigerators,
household consumers insurance policies
• Getting orders from • Software and business
business solutions
customers, by solving their business
and technology problems
Importance of Personal Selling and Sales
Management

• The only function / department in a company that

generates

revenue / income

• The financial results of a firm depend on the performance of the

sales department / management

• Many salespeople are among the best paid people in business

• It is one of the fastest and guaranteed routes to reach the top

 Roles and Skills of a Modern Sales Manager

Some of the important roles of the modern sales manager are:

• A member of the strategic management team

• A member of the corporate team to achieve objectives

• A team leader, working with salespeople

• Managing multiple sales / marketing channels

• Using latest technologies (like CRM) to build

superior buyer-seller relationships
• Continually updating information on changes in marketing
environment
 Skills of a Successful Sales Manager

• People skills include abilities to motivate, lead,

communicate, coordinate, team-oriented relationship,
and mentoring
• Managing skills consist of planning, organizing,
controlling and decision making
• Technical skills include training, selling, negotiating,
problem-solving, and use of professional tools
(software)
Types of Sales Managers / Levels of
Sales Management Positions
CEO /
President

V. P. Sales / Top-Level Sales Managers /

V. P. Marketing Leaders

National Sales Manager

Regional / Zonal / Divisional

Middle-Level Sales Managers
Sales Managers

District / Branch / Area Sales Managers First / Lower Level Sales Managers

Sales Trainee / Sales Person / Sales Representative

 Levels of Sales Management Positions
 Top-Level Sales Managers / Leaders
• Highest Level in Sale Management called VP, GM etc

• Responsible for Long term marketing , Sale Planning Ex. E commerce

 Middle-Level Sales Managers

• Title of regional , zonal or divisional sale manager

• Responsibility are to manage several branches or district

• Implement strategy and action plan approved by Top Management

 First / Lower Level Sales Managers

• Title of Branch sale managers, area sale managers or district sale managers

• Responsible to achieve goals and rules decided by higher level

 Sales Objectives, Strategies and Plan

The main components of planning in a company are

objectives, strategies and tactics. Their relationship is
shown below

Decide / Set Action Plans

Develop Strategies
Objectives

E.G. A company wants to increase sales of

electric motors by 15 percent, as one of the sales
objectives.
Relationship between Objectives, Strategies & Plans
Sales Goals / Marketing Sales and Distribution
Objectives Strategy Strategy Action plans

 Marketing / sales head to get

 Increase  Enter  Identify the countries
relevant information
sales volume export
by 15 markets  Decide distribution channels  Negotiate and sign agreements

percent in 3-5 months with

intermediaries

 Add channels and members

 Penetrate Train sales people in
existing
 Review and improve sales force 
deficient areas
training, motivation and
domestic
compensation  Train field sales managers in
markets 
Use effective and efficient effective supervision

channels  Link sales volume to the

incentive scheme of the

compensation plan
 Sales Management

• Sales as a Career

• Rewards in Sales Career

• Sales Person to Sale manager

 Emerging Trends in Sales Management

• Global perspective

• Revolution in technology

• Customer relationship management (CRM)

• Sales force diversity

• Team selling approach

• Managing multi-channels

• Ethical and social issues

• E-selling
 Linking Sales and Distribution
Management

• Either sales management or distribution management cannot

exist, operate or perform without each other

• To achieve the sales goals of sales revenue and growth, the

sales management plans the strategy and action plans and the

distribution management has the role to execute these plans

 Role of Distribution Management for some of the
Sales Management Actions / Tasks
Sales Management Actions Distribution Management Role
 Effective coverage of markets  Follow up by call (Track)
& outlets  Use multi-channel approach
 Market Feedback

 Handling customer  Involve senior sales and service people

complaints

 Participate in promotional

events  Co-ordination with distribution channels

 Planning of local advertising  Responsibility of execution with

and sales promotion distribution channels
 Local advertising –
hoardings  Expenses are shared between the
Thank You