 Presented by: Prof.

Neha Nikam

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Sales and Distribution

Management
Ch # 1
INTRODUCTION
Sales Management
Sales management is the process of
developing a sales force, coordinating sales
operations, and implementing sales
techniques that allow a business to
consistently hit, and even surpass, its sales
targets.
Market and Marketing
Concept of Market

• A convenient meeting place

Place
concept
• Fruit market
• Criteria:
• Two or more individuals have unmet wants
• They have products to meet demand
Area • They have some means of communication
concept

• Unmet wants, purchasing power and

Demand
concept
willingness to spend
Types of market
Selling area covered: Zones

Commodities traded: Steel,

medicines, vegetables etc

Nature of dealings: Spot/ cash or

Future/ forward

Volume of business transactions

Competition: competitive markets/

monopoly

Functioning of the market:

regulated/ organised or
unorganised
Sales Manager with other
management functions
 Planning
 Coordination
 Controlling
 Motivating
 Reporting (key performance indicators)
 Organizing
 Budgeting
 Directing
Qualities of a sales manager

 Physical characteristics
 Psychological (motivating leadership)
 Positive attitude
 Leadership by example
 Intellectual
 Technical and people skills
 Team management
 Designing
 Persuasive
 Communication
Developing trends in sales
management
 Effectiveness to Efficiency
 Multidisciplinary approach (R&D,
procurement, production process, Quality
control)
 Usage of internet
 CRM
 Professionalism in selling
Role of sales department
 Goal setting: setting individual and organizational objectives
 Designing and managing the sales force:
 Recruitment of sales force
 Training and development of sales force
 Structuring the sales force on territory, product or customers
basis
 Motivating
 Evaluating performance
 Product and distribution planning: With the help of consumer’s
feedback, the decisions related to modification/ dropping is taken
 Sales forecasting
 Customer service: Make it better by proactive/ reactive actions
 Coordination: Coordination of personnel as well as departments
Selling/ marketing in relation to user
base
Company

External marketing
Internal marketing

Employees Interactive marketing Customers

Structure of Sales Organisation

 Functional Sales Structure:

    Suitable for small organizations which
generally sells one product
 Functional Sales Structure

Head
marketing

Marketing Customer
Sales Promotional
research service
manager manager
manager manager

Area sales
manager

Sales people
Contd.

2. Product Specialization Structure

a. Sales organization with product managers
(separate marketing plans)
b. Sales organization with specialized sales force
Contd.

3. Market Specialization Structure (On the

basis of user industry or channel)
Eg. Govt., commercial etc.

4. Territory Based Structure (regional or

national market)
5. Combination/ Hybrid 
Distribution Management
Distribution management is an overarching
term that refers to numerous activities and
processes such as packaging, inventory,
warehousing, supply chain and logistics.
Importance of distribution
management
 Satisfactionof customers
 Standard of living
 Value addition
 Communication
 Employment
 Product planning and pricing
 Financing
Role of intermediaries

 Supply of information: Information about

new products/ competitors/ change in
preferences of consumers
 Product promotion
 Financing of operations
 Title of goods
 Feedback
 Ch # 2
MARKET ANALYSIS & SELLING
Market Analysis
•All the sub markets
•Market size measured in
terms of sales
Market size • Unexplored
market
segments
•A new user
base
Market Market
competition potential

Dimensions of a market

New trends/
Market growth
development
Sales forecasting

Sales Forecasting is the process of

estimating what your business’s sales are
going to be in the future. A sales forecast
period can be monthly, quarterly, half-
annually, or annually.
Types of sales forecasting

 Shortterm (3 to 6 months)
 Medium term (6 months to 2 years)
 Long term forecast ( 3 years to 10 or
above)
Method of sales forecasting

 Consensus method-combination forecasting

 Delphi technique-ete,systematic and qualitive
method of forecasting
 Consumer survey 
 Sales force estimate: Each salesperson makes a
prediction of future sales for his territory
 Moving average- getting an overall idea of
trends in data set
 Sales Hierarchy estimate (estimates at various
levels)
Types of Sales Quotas
 Sales value or financial quota: Quotas in terms of
rupees or total value to be achieved

 Sales volume quotas: Quotas for individuals for a

specific period of time

 Point sales volume: The objective is to sell those

products which would contribute more in profits

 Activity quotas: Focus is on selling as well as non

selling activities. It sets performance targets

 Combination quotas
Factors determining fixation of sales
quotas
 Past sales records

 Buying power of customers: Income status, living habits etc

 Company policies: Policies relating to credit, quality of

goods, discounts etc

 Total production of the year

 Extent of competition

 Consulting: Taking help of brokers, dealers or agencies

 Salespersons estimates

 Territory potential (migration)

Reasons for setting sales territories

 Increase market or customer coverage

 Control selling expenses
 Better evaluation of sales force performance
 Improves customer relations
Process of selling and inducing the
customers
 Opening the sales call
 Sales proposition (To understand the
inner thoughts)
 Prospect’s understanding of the market
 Attitude towards competitors products
 Presentation (using factual data, statistics,
audio visual aids)
 Inducing the customers (creating urgency)
 Closing sale
Methods of closing a sale
 Ask for the orders
 Direct or closed questions
 Narrow down the choices/ options elimination technique
 This is used when there are large variants
 Summarize and ask for the orders
 Orders are not asked immediately after the presentation
 Convincing is done by highlighting the main selling points
 Action agreement
 Apt for industrial and pharmaceuticals products
 The objection close
 The sales person uses an objection to create a lead and close a
sale.
Methods of closing a sale
 Concession close/ Inducement close
 A sale is close with the help of a price discount
 Trial close
 closure when the presentation has made a good progress
 Its done so that the prospect may not raise any further
objection.
 Suggestive close
 Using lack of knowledge of consumer
 Inducing the buyers by providing appealing suggestions
 Side close
 Side issues like features, color, size, delivery, payment etc.
 Apt for FMCG or consumer durables
 Alternative close
 The sales person gives two best alternatives to choose from
Reasons for unsuccessful closing
Wrong
attitude

Untimely Incomplete
preparednes
close s

Unsuccessful
closing

Eagernes External
s to close interruption

Misinterpretin
g the prospect
Theories of Selling

 Stimulus- Response Theory (telemarketing, door to

door..)
 Personality projection
 Competitor killing
 Price concession
 Preferential treatment
 Product Orientation Theory
 Assumes that , buyer is not aware of new technologies and
 Production will automatically can generate the demand
 Need Satisfaction Theory
 Selling Strategies
1. Hard-sell Vs. Soft-sell strategy

Hard-sell strategy Soft-sell strategy

Focus on company Focus on customer
Pushing the product Providing buying
opportunity

Talking than listening Listening than talking

Narrating product features Presenting product
benefits

Needs aren’t considered Acknowledging needs

Selling Strategies
2. Client centered strategy: Generally used when dealing in industrial goods. The
clients are huge and therefore special care has to be taken

3. Product-Price strategy: Put a higher price on the products of a good quality

and vise a versa

4. Win- Win strategy (Desirable profits): By creation of greater value for

customers
5. Negotiation strategy
 Accommodating (lose-win): Allow the other party to win in order to protect
the relationship
 Collaborating (Win-win or lose-lose): Objective is to achieve personal corporate
goals. It is a cooperative approach
 Compromising (Partially satisfy the parties) : When win-win is not possible
 Controlling strategy (Win – lose): Dominant party wins
 Avoidance: Parties ignore corporate/ personal goals and relationships. Generally
they postpone the decision
Significance of assigning sales territory

1. Keep a check on performance of sales force

2. Reduce selling expenses
3. Spend more time with potential customers
4. Improve customer relations
5. Increase in market coverage
6. Coordinates with retailers
Selling skills
 Communication skills
 Listening skills
 Attention
 Interpretation
 Remembrance
 Evaluation
 Response
 Trust building skills
 Negotiation skills
 Problem solving skills
 Conflict management skills (Task, Process, relationship,
functional )
Consumer and Organizational selling
Consumer selling Organizational selling
Salesperson focus on the special Focus on specifications, quality and
attributes of the product suitability

Interaction process is simple Complex

Relationship building is short term Long term

Cash and carry Credit and carry

 National and International
selling
National selling International selling
Within the domestic boundaries Selling business is spread globally

Uncertain environment can be analyzed Risks and uncertainty is unpredictable

or predicted
Use of local currency Use of foreign currency

Competition is restricted to national/ Competition is on global level

regional or local market
 Ch # 3
DISTRIBUTION CHANNEL MANAGEMENT
Distribution Channel
A distribution channel is a chain of businesses or
intermediaries through which a good or service
passes until it reaches the end consumer.
It can include wholesalers, retailers, distributors and
even the internet itself.
Distribution Channel
Functions of channel partners

Wholesaler:

 They choose and decide what products they will sell

 Generally, they are not on contractual basis
 Their customers are other wholesalers, retailers and agents
 They can negotiate about credit period as well as special privileges
 They extend credit terms to their loyal customers
 Sales and promotion of chosen company products
 Buying the assortments
 Breaking the bulk to suit customer requirement
 Storage and protection
 Grading and packing of goods
 Bearing the risks associated with the business
Functions of channel partners

Retailers

Merchandising-
 Procuring goods and storing the same so that those
are readily available to buyers at the right time,
place and quantity desired by them
 The price factor also has to be taken into account
4 aspects of merchandising

 Purchase (which, when and how much to buy)

 Involves financial considerations
 Stock turnover
 Variety gives better customer choice (product
spread and brand spread)
 Availability of 100 % not always good
 Storage
 Display (shelf visibility)
 Sale
Types of retail outlets
Department Stores
 A department store is a set-up which offers wide range of
products to the end-users under one roof.
 Merchandise:
Electronic Appliances
Apparels
Jewels
Cosmetics
Footwear
Sportswear
Toys
Books
CDs, DVDs
 Examples - Shoppers Stop, Pantaloon, Westside
Types of retail outlets

Discount Stores
 Discount stores also offer products to the end-users at a
discounted rate. The discount stores generally offer a limited
range and the quality in certain cases might be a little
inferior as compared to the department stores.
 Wal-Mart currently operates more than 1300 discount stores
in United States. In India Vishal Mega Mart, Patel low price
etc
 Merchandise:
Almost same as department store but at a cheaper price.
Types of retail outlets
Supermarket
 A retail store which generally sells food products and household
items, properly placed and arranged in specific departments is
called a supermarket. A supermarket is an advanced form of the
small grocery stores and caters to the household needs of the
consumer.
 Merchandise:
Bakery products
Cereals
Meat Products, Fish products
Medicines
Vegetables, Fruits, Soft drinks
Frozen Food
Canned Juices
 Reliance fresh
Types of retail outlets

Warehouse Stores
 A retail format which sells limited stock in bulk at a
discounted rate is called as warehouse store.
Warehouse stores do not bother much about the
interiors of the store and the products are not
properly displayed.
Types of retail outlets
Mom and Pop Store (also called Kirana Store in India)
 Mom and Pop stores are the small stores run by individuals in the nearby
locality to cater to daily needs of the consumers staying in the vicinity.
They offer selected items and are not at all organized. The size of the store
would not be very big and depends on the land available to the owner. They
wouldn’t offer high-end products.
 Merchandise:
Eggs
Bread
Stationery
Toys
Cigarettes
Cereals
Pulses
Medicines
Types of retail outlets

Specialty Stores
 As the name suggests, Specialty store would specialize in a
particular product and would not sell anything else apart
from the specific range. Specialty stores sell only selective
items of one particular brand to the consumers and primarily
focus on high customer satisfaction.
 Example -You will find only Reebok merchandise at Reebok
store and nothing else, thus making it a specialty store. You
can never find Adidas shoes at a Reebok outlet.
Types of retail outlets
Malls
 Many retail stores operating at one place form a mall. A mall would
consist of several retail outlets each selling their own merchandise
but at a common platform.
E Tailers
 Now a days the customers have the option of shopping while sitting
at their homes. They can place their order through internet, pay with
the help of debit or credit cards and the products are delivered at
their homes only. However, there are chances that the products
ordered might not reach in the same condition as they were ordered.
This kind of shopping is convenient for those who have a hectic
schedule and are reluctant to go to retail outlets. In this kind of
shopping; the transportation charges are borne by the consumer
itself.
 Example - EBAY, Rediff Shopping, Amazon
Vending machines
Types of Itinerant Retailers

 Peddlers and Hawkers:

 Peddlers are those retailers who carry goods in
hand cart to sell them at the doors of consumers.
To hawk means to sell goods in the streets or by
knocking on people’s doors.
 They persuade people to accept goods which may
be of low quality. So, the price charged by
hawkers is lower than the market price. They
move from place to place with limited stock.
Types of Itinerant Retailers

 Cheap Jacks
 They have an independent shop. But, the shop is not a permanent
one. If business at one place is not profitable, cheap jacks will choose
some other location.
 Market traders
 Market traders, as the name itself implies, open their shops on
market days. Market days vary from place to place, being conducted
on weekly or monthly basis. Market traders perform business only
when the market is open. They open their shops at different places, on
different days whenever the market is open.
Types of Itinerant Retailers

 Street traders
 As the name itself suggests street traders carry on
their business in busy streets. Aiming at the
floating population, they choose bus stops,
railway stations, government and commercial
offices and educational institutions to do
business. They deal in one kind of goods at a time
that are in high demand.
Difference between distributor and
wholesaler
Distributor Wholesaler

An agent who supplies goods to An agent who buy in bulk from

other businesses the producers

The distributor serves both, the The wholesaler serves only to the
retailer and the wholesaler respective users

Deals in similar types of products Supply huge range of products

Do not store the goods They store and then distribute the
goods
Need of Distribution Channels
 Creation of time and place utility
 Supply of information
 Information like what are new products or substitutes are available, new strategies
and offers by competitors, changes in customer tastes or change in market trends
etc.

 Product promotion-
 Example, test marketing

 Financing of operations
 Maintaining price stability
 By absorbing the inflated price

 Title of goods
 Holding merchandise
 Promotes efficient process
Need for channel management
Channel
Efficiency

Ensure
Reduced
timely
distributio
delivery of
n cost
goods

Channel
management

Ethical Role
practices clarity

Reduce
channel
conflict
Choice of distribution system
 Intensive distribution
 Use of all possible outlets
 Aim is to distribute extensively
 Relevant for anytime, anywhere products
 Eg. Soft drink corners

 Selective distribution
 Aim is to get market coverage at a lesser cost
 Maintain good relations with the channel members
 Titan watches, consumer electronics goods etc

 Exclusive distribution
 Selling in one or two outlets
 These are authorized showrooms
 Company has direct control over price, promotion, inventory etc
How to choose a distribution system?

 Company characteristics
 Manufacturing capacity
 Mission and vision statements
 Marketing plans etc.
 Product characteristics
 If the products are consumer durable or FMCG
 Weight and size
 The cost
 Channel network
 Competitor characteristics
 Environmental characteristics
 Statutory control
Factors affecting distribution strategy
 Locational demand
 The magnitude of distribution for a particular product is decided on the basis
of its demand
 Example: More frequent distribution where the demand is more

 Product characteristics
 The frequency of stock replenishment for heavy or industrial products is very
less unlike FMCG

 Pricing policy
 Frequent stock replenishment is not required when a product is following
premium pricing policy
 Speed and efficiency

 Distribution costs
Factors affecting effective management of
distribution system
 Channel design (no. of members, role and responsibility, cost, profit margins
etc)
 Selection of channel members
 Objective of establishments
 Length of the channel
 Role of each member
 Maintaining relationships
 Performance standards
 Channel policy (market coverage, product line, product pricing etc.)
 Market coverage: Subject to resource limitations and business potential
 Product lines
 Product pricing: Members would like a policy which will give them
maximum margin
 Choice of channel partners: Agent or distributor, franchise/ independent
showroom
 Termination of channel partners
Factors affecting effective
management of distribution system
 Channel conflict
 Vertical level: Disagreement between two channel members on
consecutive levels
 Horizontal level: Disagreements at same level. Ex: 2 wholesalers
disagreeing on retailer coverage
 Multichannel level: when the manufacturer has his own franchise
a) Reasons for channel conflict
a) Role ambiguity: Generally happens in multichannel conflict
b) Goal incompatibility: occurs when the objectives clashes. (Long
term and short term goals)
c) Market perception
d) Target fixing
e) Competitor inducement
b) Conflict resolution methods

High

Low

Low High
 b) Conflict resolution methods

 Accommodating –
 Cooperate to a high-degree, and it may be at your
own expense
 May be against your own goals, objectives, and
desired outcomes. 
 This approach is effective when the other party is
the expert or has a better solution. 
 It can also be effective for preserving future
relations with the other party.
 b) Conflict resolution methods

 Avoiding – 
 Simply avoid the issue. 
 You aren’t helping the other party reach their goals,
and you aren’t assertively pursuing your own.
 This also works when you have no chance of
winning.
 It can also be effective when the issue would be
very costly. 
 Avoiding is not a good long term strategy.
 b) Conflict resolution methods

 Collaborating –
 Pair up with party to achieve the goals of both the
parties. 
 This is how you break free of the “win-lose” paradigm
and seek the “win-win.” 
 This can also mean re-framing the challenge to create a
bigger space and room for everybody’s ideas.
 The downside is that it requires a high-degree of trust
and reaching a consensus can require a lot of time and
effort to get everybody on board and to synthesize all the
ideas.
b) Conflict resolution methods

High

Low

Low
High
 b) Conflict resolution methods

 Competing –
 This is the “win-lose” approach. 
 You act in a very assertive way to achieve your goals,
without seeking to cooperate with the other party
 It may be at the expense of the other party.  
 This approach may be appropriate for emergencies
when time is of the essence, or when you need
quick, decisive action, and people are aware of and
support the approach.
 b) Conflict resolution methods

 Compromising –
 This is the “lose-lose” scenario where neither party
really achieves what they want. 
 This requires a moderate level of assertiveness and
cooperation. 
 It may be appropriate for scenarios where you need a
temporary solution, or where both sides have equally
important goals.  
 The trap is to fall into compromising as an easy way out,
when collaborating would produce a better solution.
Factors affecting effective management
of distribution system (Contd.)

 Motivating channel members

 Referent power: The channel members feel proud to be
associated with companies which give them power of
reference
 Expert power: Imparting knowledge and technical skill to
the channel partners
 Reward power
 Legitimate power: in terms of contract or agreement
 Coercive power: Should be avoided as far as possible
Factors affecting effective management
of distribution system (Contd.)

 Control of channel
 Contracts and agreements
 Budgets and reports
 Distribution audit
Selecting Channel Partners
• Existing market structure
MARKET
FACTORS
• Consumer preference and competition

• Technical aspects
PRODUCT
FACTORS
• PLC

• Financial trustworthiness, goodwill

CHANNEL
FACTORS
• Selling, promotion capability

• Analyzing Internal and external forces

SWOT
CH #4
Performance Evaluation, Ethics and Trends
Sales performance management

Sales performance management (SPM) is

the practice of monitoring and guiding
personnel to improve their ability to sell
products or services. Software programs are
available to enhance the sales
performance management process.
Methods of supervision and control of sales
force
Direct Indirect
supervisory supervisory
methods methods

telecommunications Sales reports

Sales meetings Compensation plan

Expense
Personal reports
contacts

Coaching
Sales force controlling methods

 Establishing sales territories

 Allocating of sales quota
 Maintaining continuous contact with salesmen
 Determining authorities and rights of salesmen
 Scheduling sales personnel
 Issuing memo
 Analyzing sales expenses
 Unannounced field trips
 Providing sales manuals
Key Result Areas (KRAs): Evaluation
criteria
 Sales approaches to appointments
 Appointments to enquiries
 Enquiries to sales
 Sales revenue per order
 Sales per hour
 Sales to cost of sales
 New customers to new prospects
Sales performance review

 Sales performance review helps to

understand the degree of improvement in
the sales person’s performance
 It is also helpful in planning the appraisal of
an individual
 Gives direction to the employee so that the
mistake is avoided for future tasks
Sales Management Audit

 Composite evaluation system

 The feedback are used for next year’s
budgeting, target setting etc
 Audit process-
 Establishing and planning course of operation
 Deviations from the prescribed course
 Analyzing reasons for deviation
 Course correction
Evaluating channel: by L. W. Stern

 Effectiveness
 Efficiency
 Equity
Ethics in Sales Management

 Exaggerating features and benefits

 Bribery
 Selling dangerous products
 Wrong delivery schedules
 Not following company’s policy
New trends in sales and distribution
management
 Global perspective: Take efforts to tackle the global
competition
 Salesforce diversity: Variedness in terms of gender,
qualification, motivation etc
 Technology revolution: Digital marketing and MIS
 E-CRM: Meeting individual needs
 Team selling approach: Is used mostly for selling technical
products
 Managing multi channel: To increase the market coverage
 Handling ethical issues
 Sales professionalism
 E-selling
All the best &

THANK YOU…