Sales and Distribution

Management
 Nature of Personal Selling

Most salespeople are well-educated, well-trained

professionals who work to build and maintain
long-term relationships with customers.
The term salesperson covers a wide spectrum of
positions from:
 Order taker (department store salesperson)
 Order getter (someone engaged in creative selling)

 Missionary salesperson (building goodwill or

educating buyers)
 What is Personal Selling?

Involves Two-Way, Personal

Communication Between Salespeople
and Individual Customers Whether:
face to face,
by telephone,
through video conferencing,
or by other means.
 The Role of the Sales Force

Personal selling is effective because salespeople can:

 probe customers to learn more about their problems,
 adjust the marketing offer to fit the special needs of each
customer,
 negotiate terms of sale, and
 build long-term personal relationships with key decision
makers.
 The Role of the Sales Force
Represent the Company
to Customers to Produce
Company Profit

Sales Force
Serves as a Critical Link
Between a Company and its Customers Since They:

Represent Customers to
the Company to Produce
Customer Satisfaction
 Characteristics of Personal Selling

Flexibility Builds Relationships

Identify best prospects Long term
Adapt to situations Assure buyers receive
Engage in dialogue appropriate services
Solves customer’s
problems
Personal Selling Limitations

Can not reach mass

audience
Expensive per contact
Numerous calls
needed to generate
sale
Labor intensive
Personal Selling Tasks

Order taking
Routine
 writing up orders
 checking invoices

 assuring prompt order

processing
Suggestive selling
Personal Selling Tasks

Order getting
Seeking out customers
Creative selling
Pioneering
Account management
Personal Selling Tasks
Missionary
 Detailer
 Goodwill
 “Closers”

• Cross-functional
• Account service rep
Some Traits of Good Salespeople
 Steps in the Selling Process
Step 1. Prospecting and
Identifying and Screening For
Qualifying Qualified Potential Customers.

Learning As Much As Possible

Step 2. Pre-approach About a Prospective Customer
Before Making a Sales Call.

Step 3. Approach Knowing How to Meet the Buyer

to Get the Relationship Off
to a Good Start.

Step 4. Presentation/ Telling the Product “Story”

Demonstration to the Buyer, and Showing the
Product Benefits.
 Steps in the Selling Process

Seeking Out, Clarifying,

Step 5. Handling Objections and Overcoming
Customer Objections to
Buying.

Step 6. Closing Asking the Customer

for the Order.

Step 7. Follow-Up Following Up After the Sale to

Ensure Customer Satisfaction
and Repeat Business.
 Alternative Steps:

Find ’em
Grab ‘em

Show ‘em

Answer ‘em

Sell ‘em
Keep ‘em
 Creative Selling Process

Identify and Qualifying Prospects

Prospecting: Identifying likely
new customers
 Leads
Qualifying: Evaluating a
prospect’s potential
Creative Selling Process

Approaching the Prospect

Contact
Rapport
“Only one chance to make a
first impression”
 Creative Selling Process
Sales Presentation
Persuasive communication
Attention
Interest
Desire
“Tell the product’s story”
Creative Selling Process
Handling Objections
 Questions
 Reservations
Understand Concern
Counterarguments
Acknowledge concern
Clues to process
 Creative Selling Process

Closing the Sale

Closing signals
Trial close
Ask for the sale
Creative Selling Process

Following Up
Commitments met
 Shipment
 Performance
Reinforce relationship
Satisfied customers rebuy
& recommend
 Sales Management

Setting Organizing
objectives Planning Organizing activities

Recruit,
select,
Motivate, train,
evaluate, develop,
& control manage, &
Controlling Directing motivate
 Organizing Sales Activities

Sales Territory:
Geographic divisions
Customer types
Product lines
Selling task
 Geographic Division

Vice-President
Marketing

Regional Sales Regional Sales

Manager Manager

District Sales District Sales District Sales District Sales

Manager Manager Manager Manager

Sales Rep Sales Rep Sales Rep Sales Rep

California Pacific NW Southeast Northeast
 Customer Type

Vice-President
Sales

New Accounts Existing Accounts

Manager Manager

New Account New Account Existing Existing

#1 #2 Account #1 Account #2
 Product Line

Vice-President
Sales

Snack Foods Beverages

Sales Manager Sales Manager

Sales Rep Sales Rep Sales rep Sales Rep

Eastern Region West’n Region Eastern Region West’n Region
 Directing the Sales Force

Recruiting and selecting

Training & develop
Compensating

• Motivating
 Compensation Methods

Straight
salary or
wage
Salary plus Straight
commission commission

Quota-bonus Commission
plan with draw
Evaluation and Control

Required reports
Measurement against
plan or sales standards
Expense control
Productivity
New account
development
 Ethical Issues
Kickbacks, bribes and
“gifts”
Price discrimination
Cheating on expense
accounts
Misrepresentation
Distribution Channel Design
and Management
 Distribution’s Function

The major purpose of marketing is to satisfy

human needs by delivering products of various
types to buyers when and where they want them
and at a reasonable cost.
The “when and where” is the function of
Distribution
 What is a Distribution Channel?

A set of interdependent organizations

(intermediaries) involved in the process of
making a product or service available for use or
consumption by the consumer or business user.
Marketing Channel decisions are among the
most important decisions that management faces
and will directly affect every other marketing
decision.

By: Ankit Bajpai www.uptunotes.com

Why are Marketing Intermediaries
Used?

The use of intermediaries results from their

greater efficiency in making goods available to
target markets.
Offer the firm more than it can achieve on it’s
own through the intermediaries:
 Contacts,
 Experience,
 Specialization,
 Scale of operation.

Purpose: match supply from producers to

demand from consumers.
 Distribution

P C
R O
O N
D S
U DISTRIBUTION U
C M
E E
R R
 Distribution Channel Functions
Information

Transfer
Communication

Payments
Negotiation
Physical
Distribution Ordering

Risk Taking Financing

 Typical Channels of Distribution

ANUFACTURER ONSUMER

GENT

ETAILER

HOLESALER

By: Ankit Bajpai www.uptunotes.com

 Business-to-Business Channels

Direct

Wholesaler

Agent

By: Ankit Bajpai www.uptunotes.com

 Business-to-Business Channel Trends

Infomediaries & Vertical Exchange

By: Ankit Bajpai www.uptunotes.com
 Conventional Distribution Channel vs.
Vertical Marketing Systems
Conventional Vertical
marketing marketing
channel channel
Manufacturer
Manufacturer

Wholesaler
Wholesaler

Retailer Retailer

Consumer Consumer
By: Ankit Bajpai www.uptunotes.com
 Types of Vertical Marketing Systems
Corporate
Common Ownership at Different
Levels of the Channel

Administered
Leadership is Assumed by One or
a Few Dominant Members

Contractual
Contractual Agreement Among
Channel Members

By: Ankit Bajpai www.uptunotes.com

 Vertical Marketing Systems

Corporate systems - total ownership

• Contractual - legal relationships

• Administered - strong leadership

By: Ankit Bajpai www.uptunotes.com

 Planning the Channel of
Distribution
Determining the structure
 Marketing mix strategy
 Organizational resources

 External environmental factors

 Market characteristics

 Consumer preferences and behavior

 The nature and availability of Intermediaries

 Other environmental factors

By: Ankit Bajpai www.uptunotes.com

 Customers’ Desired Service Levels
Lot size
Waiting time
Spatial convenience
Product variety
Service backup

By: Ankit Bajpai www.uptunotes.com

 Steps in Distribution Planning

By: Ankit Bajpai www.uptunotes.com

 Choosing a Distribution System

Intensive
Distribution

Exclusive Distribution
Distribution Intensity

Selective
Distribution

By: Ankit Bajpai www.uptunotes.com

 Intensive Distribution

Producer

Seeks to obtain Retailer Retailer Retailer

maximum product
exposure at the retail Retailer Retailer Retailer
level Retailer Retailer Retailer

Retailer Retailer Retailer

Retailer Retailer Retailer

By: Ankit Bajpai www.uptunotes.com

 Selective Distribution

Producer

Product is sold Retailer Retailer Retailer

in a limited
number of Retailer Retailer Retailer
outlets

By: Ankit Bajpai www.uptunotes.com

 Exclusive Distribution

Producer
Product is sold in
only one outlet in
Retailer
a given area

By: Ankit Bajpai www.uptunotes.com

 Developing Distribution Tactics

Selecting Channel Partners

Managing the Channel of Distribution

Channel Leader Power

Reward or
Economic Legitimate
Coercive
Power Power
Power

Distribution Channels & the Marketing Mix

By: Ankit Bajpai www.uptunotes.com

 Physical Distribution
Inventory Order Processing
Control Received
When to order Processed
How much to order Shipped

Physical
Distribution
Transportation Functions Warehousing
Rail, Water, Number Needed
Trucks, Air, Where
Pipeline, Internet What Type
Materials Handling
Moving Products Into,
Within, and
Out of Warehouses

By: Ankit Bajpai www.uptunotes.com

 Transportation Modes
Rail
Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
Water
Low cost for shipping bulky, low-value,
non perishable goods, slowest form.
Truck
Most important carrier for consumer
goods, flexible.
Air
High cost, ideal when speed is needed or
distant markets have to be reached
Pipeline
Carry petroleum based products,
very low cost, requires little energy.
Internet
Web sites have products available, used
especially for services.
By: Ankit Bajpai www.uptunotes.com
 Channel Relationships

Cooperation

• Conflict

• Power
– Coercive
– Expert
– Legitimate
By: Ankit Bajpai www.uptunotes.com
 Decision Making Framework

Prospects Importance of threatened

of channel in terms of current or
Destructive potential volume or profitability
Conflict High Low
High (FIRE) Act to avert or address Allow threatened
conflict channel to
decline
Low Look for opportunities Do nothing
(Smoke) to reassure threatened
channel and leverage
your power

By: Ankit Bajpai www.uptunotes.com

 Channel Conflict: Identifying
Threats
First, are the channels really attempting to
serve the same end users?
Second, do channels mistakenly believe
they are competing when in fact they are
benefiting from each other's actions?
Third, is the deteriorating profitability of a
griping player genuinely the result of
another channel's encroachment?
Fourth, will a channel's decline necessarily
harm a manufacturer's profits?

By: Ankit Bajpai www.uptunotes.com

 Managing Channel Conflict
WHEN TWO OR MORE CHANNELS TARGET
THE SAME CUSTOMER SEGMENT
Differentiate the Channel offer
Define Exclusive Territories
Enhance or Change the Channels
Value

By: Ankit Bajpai www.uptunotes.com

 Managing Channel Conflict
CHANNEL ECONOMICS DETERIORATE
Change the channels economic formula:
(Grant rebates if an intermediary fulfill certain
requirements; Adjust margins between products
to support different channel economics; and
Treat channels fairly to create level playing field)
Create Segment Specific Programs (certain
services not available via direct channels)
Complement value proposition of the existing
channel by introducing a new channel
Foster consolidation among intermediaries in a
declining channel
By: Ankit Bajpai www.uptunotes.com
 Managing Channel Conflict
THREATENED CHANNEL STOP
PERFORMING OR RETALIATE
AGAINST THE SUPPLIER
Leverage Power (eg. Strong Brand) against
the channel to prevent retaliation
Migrate volume to winning channel
Back off

By: Ankit Bajpai www.uptunotes.com

 Other Distribution Management Issues

Reverse distribution

One Coca Cola

Distributor
Difficult
• Ethical, Political, &
OK
Legal

One thousand
retailers

By: Ankit Bajpai www.uptunotes.com