Sales and Distribution

Team C2X !!

• Market ?

• What is Marketed ?

• Who Markets ?

Dimensions of Market• Spatial Seperation

• Time Seperation

• Perceptional Seperation

• Seperation of Values

• Seperation of ownership

Sales ??

Sales Techniques• Direct Selling

• Pro Forma Sales

• Agency Based sales

• Request for Proposal

• B2B

The Role of the Sales Force

Sales ForceServes as a Critical Link

Between a Company and its Customers Since They:

Represent Customers to the Company to Produce Customer Satisfaction

Represent the Company to Customers to Produce

Company Profit

Step 1. Prospecting and Qualifying

Identifying and Screening For Qualified Potential Customers.

Steps in the Selling ProcessSteps in the Selling Process

Learning As Much As Possible About a Prospective Customer

Before Making a Sales Call.

Learning As Much As Possible About a Prospective Customer

Before Making a Sales Call.

Step 2. Pre-approach

Step 3. ApproachKnowing How to Meet the Buyer

to Get the Relationship Off to a Good Start.

Knowing How to Meet the Buyerto Get the Relationship Off

to a Good Start.

Step 4. Presentation/ Demonstration

Telling the Product “Story” to the Buyer, and Showing the

Product Benefits.

Telling the Product “Story” to the Buyer, and Showing the

Product Benefits.

Steps in the Selling ProcessSteps in the Selling Process

Step 5. Handling Objections

Step 6. Closing

Step 7. Follow-Up

Seeking Out, Clarifying, and Overcoming

Customer Objections to Buying.

Asking the Customerfor the Order.

Following Up After the Sale toEnsure Customer Satisfaction

and Repeat Business.

Distribution Channels and Management

Distribution

PRODUCER

CONSUMER

DISTRIBUTION

Distribution’s Function• The major purpose of marketing is to satisfy human needs by delivering products of various types to buyers when and wherethey want them and at a reasonable cost.

• The “when and where” is the function of Distribution

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Distribution Objectives

• Minimize total distribution costs for a given service output

• Determine the target segments and the best channels for each segment

• Objectives may vary with product characteristicso e.g. perishables, bulky products, non-standard items, products requiring installation & maintenance

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.

Distribution Channel Functions

Ordering

Payments

CommunicationTransfer

Negotiation

FinancingRisk Taking

PhysicalPhysicalDistribution

Information

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Basic Channels of Distribution

Manufacturers/products

Agents/brokers

Wholesalers/distributors

RetailersRetailers

Consumers and organizational end users

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Typical Distribution of Drugs

Manufacturers

Marketing Agents ( Optional )

Retailers/Wholesalers/Distributors

Private GPs/specialists Group Procurement

Office Retail

Pharmacy

Public Hospitals / Institutions

Patient

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Typical Distribution in FMCG

Manufacturers

Marketing Agents ( Optional )

Wholesalers/Distributors

Retail Chains like Big

Bazaar etc.

Unorganized retailersPublic Canteens/

Government Purchase

Consumer

Business-to-Business Channels

Direct

Wholesaler

Agent

Business-to-Business Channel Trends

Infomediaries & Vertical Exchange

Conventional Distribution Channel vs. Vertical Marketing Systems

Verticalmarketing

channel

Manufacturer

Retailer

Conventionalmarketing

channel

Consumer

Manufacturer

Consumer

Retailer

Wholesaler

Wh

ole

sale

r

Types of Vertical Marketing SystemsTypes of Vertical Marketing Systems

CorporateCommon Ownership at Different

Levels of the Channel

ContractualContractual Agreement Among

Channel Members

AdministeredLeadership is Assumed by One or

a Few Dominant Members

Vertical Marketing Systems

• Corporate systems - total ownership

• Administered - strong leadership

• Contractual - legal relationships

Horizontal Marketing System

• Joining of two or more corporations on the same

level for the purposes of pursuing a new marketing

opportunity.

• Established to make use of combined resources

• Produce synergistic effect for all the parties involves

• Example: Nestle & Coke in Europe, FIAT in India

Planning the Channel of

Distribution

• Determining the structure

o Marketing mix strategy

o Organizational resources

o External environmental factors

o Market characteristics

o Consumer preferences

o Consumer behavior

o The nature and availability of Intermediaries

o Other environmental factors

Customers’ Desired Service Levels

• Lot size

• Waiting time

• Spatial convenience

• Product variety

• Service backup

Steps: Distribution Planning

IntensiveDistribution

Exclusive Distribution

SelectiveDistribution

DistributionIntensity

Choosing a Distribution System

Intensive DistributionIntensive Distribution

Seeks to obtain

maximum product

exposure at the retail

level

Seeks to obtain

maximum product

exposure at the retail

level

Producer

Retailer RetailerRetailer

Retailer

Retailer Retailer

Retailer

Retailer

Retailer Retailer Retailer

Retailer

Retailer Retailer Retailer

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Example of Intensive Distribution

• Newspapers

• Most fast moving consumer goods

• Photo processing shops

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• Advantages:o Increased sales, wider customer recognition, and

impulse buying

• Disadvantages:o Characteristically low price and low-margin products

that require a fast turnover

o Difficult to control large number of retailers

Intensive Distribution

Selective DistributionSelective Distribution

Product is sold in a limited

number of outlets

Product is sold in a limited

number of outlets

Producer

Retailer RetailerRetailer

Retailer Retailer Retailer

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Example of Selective Distribution

Daewoo has 2 distributors in Singapore

• “Starsauto, part of a larger Indonesian group, represents Daewoo’s traditional line of sedans.

• Homegrown family-owned JTA Motors market Daewoo’s offroad vehicles like the Musso and Korando, and an upmarket model called the Chairman.

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Selective Distribution

• Advantages:o Better market coverage than exclusive distribution

o More control and less cost than intensive

distribution

o Concentrate effort on few productive outlets

o Selected firms capable of carrying full product line

and provide the required service

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Selective Distribution (cont’d)

• Disadvantages:o May not cover the market adequately

o Difficult to select dealers (retailers) that can match your

requirement and goals

Product is sold in only one outlet in a

given area

Product is sold in only one outlet in a

given area

Producer

Retailer

Exclusive DistributionExclusive Distribution

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Exclusive Distribution:

Advantages

• Maximize control over service level/output

• Enhance product’s image & allow higher markups

• Promotes dealers loyalty, better forecasting, better inventory and merchandising control

• Restricts resellers from carrying competing brands

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Exclusive Distribution: Disadvantages

• Betting on one dealer in each market

• Only suitable for high price, high margin,

and low volume products

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Multiple-Channel StrategyUsing two or more different channels to

distribute goods and services

• Why ?

o Permits optimal access to each market

segment

o Increase market coverage, lower channel

cost and provide more customized selling

• What to look out for ?

o More channels usually means more conflict

and control problems

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Complementary ChannelsEach channel handles a product or segment that is different or non-competing e.g.

• Toyota Lexus

• Magazine distributions

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Competitive Channels

The same product is sold through two different and

competing channels e.g.

o Non-prescriptive drugs

o Electronic goods

• Why ? To increase sales

• What to look out for?o Over extending yourself

o Dealers’ resentment

o Control problems

Developing Distribution Tactics

Selecting Channel Partners

Reward orReward orCoercive

Power

LegitimatePower

EconomicPower

Managing the Channel of DistributionChannel Leader Power

Distribution Channels & the Marketing Mix

Materials HandlingMaterials HandlingMoving Products Into,

Within, andOut of Warehouses

WarehousingWarehousingNumber Needed

WhereWhat Type

Inventory Inventory Control

When to orderHow much to order

Order ProcessingOrder ProcessingReceivedProcessedShipped

Physical Distribution

FunctionsTransportation Rail, Water, Trucks,

Air, Pipeline, Internet

Physical Distribution

Rail Cost-effective for shipping bulk products,

piggy-back, fishyback, birdyback.

Rail Cost-effective for shipping bulk products,

piggy-back, fishyback, birdyback.

WaterLow cost for shipping bulky, low-value,

non perishable goods, slowest form.

WaterLow cost for shipping bulky, low-value,

non perishable goods, slowest form.

TruckMost important carrier for consumer

goods, flexible.

TruckMost important carrier for consumer

goods, flexible.

AirHigh cost, ideal when speed is needed or

distant markets have to be reached

AirHigh cost, ideal when speed is needed or

distant markets have to be reached

PipelineCarry petroleum based products,

very low cost, requires little energy.

PipelineCarry petroleum based products,

very low cost, requires little energy.

Transportation Modes

InternetWeb sites have products available, used

especially for services.

InternetWeb sites have products available, used

especially for services.

Channel Relationships• Cooperation

• Conflict

• Power– Coercive– Expert– Legitimate

Decision Making Framework

Prospects of Destructive Conflict

Importance of threatened channel in terms of current or potential volume or profitability

High Low

High (FIRE) Act to avert or address

conflict

Allow threatened

channel to

decline

Low (Smoke)

Look for opportunities

to reassure threatened

channel and leverage

your power

Do nothing

All the Best for Summers ☺

Feel free to contact Team C2X

for any query!!