Chapter 1

Introduction to Sales &

Distribution Management
Learning Objectives

 To learn objectives, strategies and tactics of sales management

 To learn changing role of a sales force
 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 know emerging trends in sales management
 To understand linkage between sales and distribution management
What is Sales Management?

 “The management of the personal selling part of a

company’s marketing function.”

 “The process of planning, directing, and controlling

of personal selling, including recruiting, selecting,
equipping, assigning, supervising, paying, and
motivating the personal sales force.
Various sales responsibilities / positions / jobs
Sales Position Brief Description Examples
1. • Delivery • Delivery of products to business • Milk, newspapers to households
salesperson customers or households.
• Also takes orders. • Soft drinks, bread to retail stores.
 Sales Position Brief Description Examples

2. • Order taker (Response • Inside order taker • Behind counter in a garment

selling) • Telemarketing salesperson takes shop
orders over telephone • Pharma products’ orders from
• Outside order taker. Also nursing homes
performs other tasks • Food, clothing products’ orders
from retailers

Source: https://www.inman.com/2015/10/01/adviser-or-order-taker-which-are-you/
 Sales Position Brief Description Examples

3. • Sales support • Provide information, build • Medical reps. in pharma industry

• Missionary selling goodwill, introduce new products
• Technical selling • Technical information, • Steel, Chemical industries
assistance

Source: https://www.iol.co.za/dailynews/publisher-becomes-100-black-owned-13299348
Source : https://pharmashots.com/
 Sales Position Brief Description Examples

4. • Order-getter (Creative, • Getting orders from existing and • Automobiles, refrigerators,

Problem-solving, new household consumers insurance policies
Consultative selling) • Getting orders from business • Software and business
customers, by solving their solutions
business and technology problems

Source: https://www.richardson.com/blog/7-ways-to-elevate-your-consultative-selling-approach-to-compete-today/
Evolution, nature and
Importance of sales
management
Evolution of Sales Management

Some of the fundamental concepts that have guided the growth of

sales and marketing as a discipline are as follows.
 the production of goods creates its own demand
- Says Law (Jean – Baptiste Say)
(i) Production concept Henry Ford’s Ford
•It has its origin in the production orientation.
•The basic tenet of the concept is that
customers will choose products and services
that are widely available and are of low cost.
•Therefore, managers try to sell a higher
volume of goods at low costs and through an
intensive distribution strategy.
•This seems a viable strategy in a developing
market where market expansion is the crucial
survival strategy for a business.
•It is obvious that these companies cannot
deliver quality products and suffer from
problems arising out of their impersonal
behaviour with the customers.
 When the product is right, you don’t have to be a great
Marketer.
Lee Iacocca
(ii) Product concept
• The product concept has the proposition that
consumers will favour those products that offer
high-quality attributes such as quality,
performance, and other innovative features.
• The managers focus on developing superior 1 July 2003
products and improving the existing product lines
over a period of time.
• “bettermousetrap” fallacy - The problem is that
Failure -
managers launch innovative products without
properly understanding and analysing the needs of
the customers.
• Many a time it is observed that the innovative
products enter a market before the market is ready Google Glass - 2013
for the products. Discontinued in 2015
 “Sales Are Contingent Upon The Attitude Of The Salesman –
Not The Attitude of The Prospect.”
– W. Clement Stone

(iii) Selling concept

• The selling concept proposes that customers, either an
individual or an organization, will not buy enough of an
organization’s products unless they are persuaded to do so
through selling efforts.
• Therefore, organizations should undertake selling and
promotion of their products for marketing success.
• The consumers are typically inert and they need to be
stimulated for buying products by converting their inert need
into a buying motive through persuasion and selling action.
• In a modern marketing situation, a buyer has a number of
options to choose from and a customer is also fed with a high
dose of advertising.
 “The aim of marketing is to know and understand the customer so well
the product or service fits him and sells itself.”
~ Peter Drucker

(iv) Marketing concept

• The marketing concept proposes that the reason for success lies in a
company’s ability to create, deliver, and communicate a better value
proposition through its marketing offer, in comparison to its
competitors, for its chosen target market.
• The marketing concept is an elaborate attempt to explain the
phenomenon that rests on four key elements:
 target market,
 customer need,
 integrated marketing, and
 profitability.
• Instead of spending on a mass undifferentiated market, they have
started to look for specific markets best suited for their products, and
then accordingly design a marketing programme that would catch to
the taste of this target market.
In Spain, DHL created a healthcare
logistics function for a new field hospital.
Microsoft says that, in a matter of days, the
company delivered around 400 tons of
products including PPE, respirators and
medical supplies to treat Covid-19 patients.
 Marketing function splits into sales and other functions like market
research, advertising, physical distribution

Head-
Marketing

Manager- Manager – Manager – Manager – Manager –

Promotion Market Sales Market Customer
Research Logistics Service
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 surest routes to the top
management
 Roles and skills of a
modern sales manager
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

 CarDekho –
Amit and Anurag Jain

Cars24
-Vikram Chopra (CEO) and
-Mehul Agrawal (COO)

Cartrade
-Vinay Sanghi

Spinny
-Niraj Singh

Business Standard 1 Jan 2022

India – INR 10500 crore – 100 Million customers by 2022
Maharashtra – INR 6000 crore target
Navi Mumbai (2020) – 500,000 sq. feet – INR 2000 Crore
Hyderabad (2018) – 400,000 sq. feet – INR 1000 crore

Business Standard 18 December 2020

Roles
• 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
Changing Role of a Sales Force

Value creation for customers

 Value = Benefits – Cost
 Give more benefits, or
 Reduce cost
Value addition to the organization
 Importance to profit
 Attention to terms of payment.
 Give credit to credit-worthy customers only.
Skills

 Managing skills consist of planning, organizing,

controlling and decision making
 People skills include abilities to motivate, lead,
communicate, coordinate, team-oriented relationship,
and mentoring
 Technical skills include training, selling, negotiating,
problem-solving, and use of computers
Sales Planning

The main components of planning in a company are objectives,

strategies and tactics. Their relationship is shown below

Decide / Set Evolve Tactics /

Develop Strategies Action Plans
Objectives
Example - A company wants to increase sales of electric motors by 15
percent in the next financial year, as one of the sales objectives.

Sales Goals / Marketing Sales and Distribution Tactics /

Objectives Strategy Strategy Action plans

 Increase sales  Enter  Identify the countries  Marketing / sales head to

volume by 15 export get relevant information
percent markets  Decide distribution channels  Negotiate and sign
agreements in 3-5 months
with intermediaries
 Penetrate  Review and improve  Add channels and
existing salesforce training, members
domestic motivation and  Train salespeople in
markets compensation deficient areas
 Use effective and efficient  Train field sales managers
channels in effective supervision
 Link sales volume quotas
to the incentive scheme of
the compensation plan
Business Standard 1 January 2022
Emerging Trends in Sales Management

 Global perspective
 Revolution in technology
 Customer relationship management (CRM)
 Salesforce diversity
 Team selling approach
 Managing multi-channels and Omnichannel
 Ethical and social issues
 Sales professionalism
 E-Selling
Business Standard 26 December 2020
Distribution Management

Management of all activities which facilitate movement

and co-ordination of supply and demand in the creation
of time and place utility in goods

The art and science of determining requirements,

acquiring them, distributing them and finally
maintaining them in an operationally ready condition
for their entire life.
 Business Standard 1 January 2022

Business Standard 4 January 2022

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
(tactics), and the distribution management has the role to
execute these plans
 This will be illustrated by considering some sales
management actions and corresponding role of
distribution management (in the next slide), as well as by
discussing a few integrated cases given at the end of the
book
Business Standard 4 January 2022
Role of Distribution Management in Sales Management
Sales Management Tasks Distribution Management Role

 Achievement of volume and  Physical movement and storage of products

market shares closest to the markets
 Ensuring high shelf visibility
 Keeping high stock pressure at all selling
points
 Coverage of markets and  Follow beat plan/call plan designed by sales
outlets management using ‘milk-run’principles
 Making each customer call productive
 Extending required level of credit
 Width and depth of  Push all products, brands, packs in each
distribution outlet
 Sell more than competition
 Ensure high visibility
 Focus on slow movers
milk-run
Sales Management Tasks Distribution Management Role
 Managing institutional  Getting orders and execution
business and key accounts  Extending credit as necessary
 Keeping high stock pressure to avoid entry of
competition
 Competition tracking and  Regular oral and confirmed reports
action to protect market  Follow up on competition
shares  Promotions and sales incentives for
corrective action
 Market feedback and  Both for own products and competition
reporting  Report on good practices of other non-
competing companies
 Managing distribution  Each channel member has to manage
channels– recruitment, his downstream channels
development, evaluation  Contracted channel members like
and exit, if necessary distributors have a special role
 Conducting training programmes and
example setting sessions
Sales Management Tasks Distribution Management Role

 Handling customer and  Bring to the notice of sales management, if

consumer complaints problem persists
 Quickly remove complaint/damaged stocks from
the market

 Implementing marketing  Ensure wide and equitable distribution

plans –product launches,  Ensure high visibility
consumer and trade  Make every promotion a success in terms of set
promotions,
objectives
merchandising
 Ensure success of new product or pack launches
 Planning of local  Co-ordination with distribution channels
advertising and sales  Responsibility of execution with distribution
promotion channels
 Expenses are shared between the company and
intermediaries
Objectives of Sales Management
 Achievement of targets/sales volume with required growth
 Contribution to profits
 Coordination with the distribution network
 Customer relationship management
 Sales management aims for an optimum relationship among the
three factors it can directly affect: sales, gross margin, and
expenses.
 Consumer
versus
Organizational
Selling
Consumer Market & Business Market
Consumer Buying Process
Characteristics of
Consumer Goods
Market
Organizational Buying Process

Source: Adopted from Robinson, Faris, and Wind (1967)

1. Problem recognition

2. Decide characteristics and quantity needed

3. Develop specifications

3. Supplier search

4. Proposal solicitation

5. Supplier selection

6. Order-routine specification

7. Performance review
Characteristics of Business markets
 Fewer, larger buyers  Multiple sales calls
 Close supplier–customer  Derived demand
relationships  Inelastic demand
 Professional purchasing  Fluctuating demand
 Multiple buying  Geographically
influences concentrated buyers
 Direct purchasing
Differences between Consumer and Organizational Buying Behaviour

Point of
Consumer Buying Behavior     Organizational Buying Behavior
difference
The buying purpose of organizational buyers is to
Individuals buy goods and services for
Purpose earn profit by using and reselling the goods and
their own usage.
services.
Decisions are taken either by consumers Organizational buying is a rational process and a
Purchase 
by themselves or in consultation with buying team decides about the purchases in a
Decision
family members and friends. firm.
Most of the time, the consumers do not
Organizational purchases are carried out on pre-
Market have adequate knowledge and
specified criteria. The organizational buyers have
Knowledge information about specifications of goods
adequate knowledge of market and vendors.
and services.
Buying The consumer buying process is It is relatively complex and time consuming
Process relatively simple. process..
Although consumers buy various kinds of
Quantity goods, the quantity of goods remains Organizational buying is done in large quantities.
small.
Consumer buying behavior is effected by
A number of individuals and departments are
Effect age, occupation, income level,
involved in the buying process.
education, gender etc. of consumers.
Types of Consumers buy many goods to use to Organizational buyers buy limited goods to use to
Goods satisfy personal or family needs. conduct business.
Organizational versus Consumer SELLING

Selling in Business-to-Consumer Markets

These jobs involve selling goods and services to end-user
consumers for their own personal use. Examples are direct
sellers and retail store salespeople.

Selling in Business-to-Business Markets

A much greater amount of relationship selling is
accounted for by the business-to-business (B2B) market,
which is called as industrial selling - the sale of goods and
services to non-end-user consumers.
Importance of Promotional tools in consumer and Industrial Markets
Classifying Types of B2B Sales Jobs

1.Trade servicer - Their primary responsibility is to increase business

from current and potential customers by providing them with
merchandising and promotional assistance.
2.Missionary seller - Their primary job is to increase business from
current and potential customers by providing them with product
information and other personal selling assistance; often do not take
orders from customers directly but persuade customers to buy their
firm’s product from distributors or other wholesale suppliers.
3.Technical seller - Their primary responsibility is to increase
business from current customers and potential customers by
providing them with technical and engineering information and
assistance.
Question.1. Assume that you are a regional sales manager of
Bajaj Auto Ltd. and you are asked by your general manager
(sales and marketing) to submit your sales force strategy and
tactics to achieve an increase in sales volume by 20 percent for
the next financial year. What would be your response?