UNIT I

Sales and

Distribution management

What Marketing Is?What Marketing Is?

Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in a way that benefit the organization and its stake holders

The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself

Exchange Process

Exchange: Value creating process At least 2 parties Each party has something of value to other Each is capable of communication and

delivery Free to accept or reject the offer Each party believes it is appropriate to deal

Transaction: Trade of values between two or more parties

Transfer

Exchange Process

Ways by which exchange can take place Directly (through its own sales force) Indirectly through (through middlemen,

retailers and wholesalers) Jointly

Value Value

Value= Benefits/Cost

Marketing vs. SellingMarketing vs. Selling

Selling focus on need of seller, marketing need of the buyer. Selling is preoccupied with seller’s need to convert his product into cash, marketing is preoccupied with the idea of satisfying the needs of customers by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.

Selling vs. Selling vs. MarketingMarketing

Emphasis on product

Sales volume oriented

Based on needs of seller

Short term Cost decides price

Emphasis on customer needs

Determines customer needs and how to deliver a product to satisfy needs

Profit orientation Based on need of the buyer Long term Consumer decides price,

price decides cost

Sales Management (Evolution)Sales Management (Evolution)

Pre industrial revolution period

Small scale enterprises dominated

Manufacturing received most importance

Single supervisor was required to manage

firms

Poor working conditions & low wages

Sales Management Sales Management (Evolution)(Evolution)

Post industrial shifts in social structure Great expansions in the area of sales

coverage Sales department grew it importance Technological development

Textile manufacture Mining steam power Effect on agriculture

Sales Management ConceptsSales Management Concepts

Objectives of Sales management Sales Volume Contribution to profit Continuing Growth

Primary goal of Marketing department is to position and differentiate a product so as to pull customers to the firm

Sales Department has always attempted to sell and push the products through the channels

American Marketing association” Sales management meant the planning, direction, and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to personal sales force”

Sales management TrendsSales management Trends

Traditional face to face has become one key selling options

In modern concept the personal selling includes Telemarketing Key Account management Team selling Independent representatives Part- time sales force Network marketing Net marketing

Technology Base: ERP(SAP) and Sales automation packages

Objectives of sales management

Quantitative objectives (short term) To retain and capture market share To determine sales volume in ways that

contributes to profitability To obtain new accounts To keep personal expenses within

specified limits

Objectives of sales management

Qualitative Objectives of long term

To search and maintain customer cooperation

To provide technical advice wherever necessary

To assist in training of middleman’s sales

personnel

To collect and report market information of

interest and use to the company management

Sales Management FunctionsSales Management Functions

Account Management Policy

Sales Force Organization

Sales planning, Forecasting and Quota Setting

Sales force deployment, territory design and route planning

Responsibilities of sales manager

Building the right sales strategy

Hiring the right team

Creating the right compensation

plans, territories and quotas.

Setting the right sales projections.

Motivating your team

Responsibilities of sales manager

Tracking revenue against goals

Resolving conflicts

Training and coaching sales reps

Managing sales process

Getting the sales

Distribution

Distribution or place is one of the four elements of marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.

Distribution Management

Definition

The management of the efficient

transfer of goods from the place of

manufacture to the point of sale.

Interdependence of sales and

Distribution

All organizations use their own sales force or distribution network to reach out to their customers. Activities of the sales organization would have to be coordinated with channel operations if sales goals have to be ef.fectivley realized

Interdependence of sales and

Distribution

The decision to the organization to allocate certain responsibility in the exchange process to its channel members would define the scope of responsibility of its own sales force and thereby would determine the type of personnel and training required.

Interdependence of sales and

Distribution

Even though, an organization may decide to deal directly with its wholesaler, semi wholesaler, retailer or consumer, it is required to decide upon the type of help it will provide to the first and subsequent level of intermediaries.

Interdependence of sales and

Distribution

The choice before an organization to have direct distribution, indirect distribution or a combination of the two is of strategic importance and depends upon factors such as the degree of control, flexibility, costs and financial requirements etc.