Final Sales & Distribution Management

Authors: Tapan k.
Panda & Sunil Sahadev

Course: BBA
Prepared By: Hamid Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad
Chapter 1: Introduction to Sales Management

Learning Objectives
1)
2)
3)
4)
5)
6)
7)
8)
Sales & Distribution Management

Evolution of Sales Management
Evolution of Personal Selling Strategies
Nature and Role of Sales Management
Types of Personal Selling
Types of Selling
Difference between Selling and Marketing
The Sales Management Process

As a Composite Function of Marketing, it has evolved into key area of
Marketing Expertise and Knowledge
It focuses on:
Development of Sound Sales and Distribution Strategy
Management of Marketing Channels
Sales Force Management of an Organization

Traditionally, marketers focused on Developing Methods and Practices to
enhance Sales Force Productivity and Efficiency focusing on Individuals
Performance
Now focus is on the Process (Formulating Strategies and Methods for
improving Selling Approach) involved in the Enhancement of Performance
Sales Force Downsizing

Application of Information Technology
Enhance use of Telemarketing
Key Account Management
The use of Independent Sales Organizations
Electronic Data Interchange
Cross Functional Team Selling

Marketings Early Development
Marketing was the natural outgrowth of Production Surpluses
Trading was the beginning of Modern Marketing System

After purchasing goods, Traders resold them in other Geographical
Locations
Traders were chiefly Responsible for the Physical Distribution of Goods
Town Economy: Medieval Economic Organizations in which commercial

activities were concentrated in the Local Population Centers
Agricultural Middleman: Early businessperson who purchased Staple

Products from the countryside and transported them to Local Market for
resale
Guild System (Association of Craftsmen): The Guild System provided

the background from which First Industrial Society emerged

Bagman: Eighteenth Century Salesperson who sold Goods produced by the
Developing Factory System
Bagman emerged in Late Eighteenth Century during Englands

Industrial Revolution
Bagman are the first True Salespersons as they sold Goods for Firms in
which they did not have any Ownership
They are called Bagman as they sold their Goods from Sample Bags
Sometime after 1810, there developed Two Methods of Personal

Selling
Horse-Drawn Wagons called Wagon Peddlers

Retailing: Result of Strict Licensing requirements impose on
Peddlers

Credit Investigators: Supplier Employed people who evaluated
Retailers Credit and developed Good Will.
Commercial Traveler : Credit Investigators later on started to sell

Merchandise to Retailer
Greeters: Supplier Employed Sales Reps who Solicited Business from

Retailers on buying Trips
Rural and Small Town Retailers both made annual Trips to Cities to buy
Merchandise
They shifted their base to Railroad Stations

Drummers: 19th Century Salespeople who journeyed to merchants places
of business
Increase competition made Greeters to travel Outside the City
The term Greeter was replaced by Drummer
There are Two Views about the Term Drummer
They Drummed up Sales for Manufactures and Wholesalers which

they represented
The trunks which were used for carrying Samples, Personal Items
were shaped like Drums

Selling in 20th Century
From Production to Sales

At first, Selling was overshadowed by tremendous growth of
Manufacturing (Industrial Revolution)
Focus was on Production rather than Selling
Production Surpluses resulted in Re-emergence of Sales Era until WWII

Great Depression >> Aggressive Selling >> Need for Successful
Marketing
Creation and Rapid Growth of Corporate Departments designed to
Support Sales Effort e.g. Marketing Research
Postwar Era >> Modern Sales Era >> Professional Salespeople >>
Greater Emphasis on Educated Sales People and Extensive Sales Training

Traditional Sales Approaches
During the Modern Sales Era Traditional Sales Function called

Salesmanship Approach Emerged
Salespeoples behavior was considered the Key Ingredient in Sales

Process
Success or Failure of a Sales Call was depended on how the Salesman
handled a Prospect
There were Three Variations of Traditional Sales Approaches:

Canned Sales Presentation
Stimulus Response Theory
Selling Formulas

Canned Sales Presentation
A prepared, Structured Sales Script memorized by Salespeople

First used in Door to Door Selling and Now in Telemarketing
Company considers the Best Way to Sell
Major Weakness Prospect is treated as essentially Passive
Stimulus Response Theory

If the Salesperson Says or Does the Proper thing (Provides the Right
Stimulus) then Prospect will respond to the Stimulus by buying Good or
Service


Selling Formulas
Salespeople has to lead Prospects through various Steps in a
Persuasive manner
Arthur Fredrick Sheldon Selling Course

AIDR: Attention, Interest, Desire, Resolve are four progressive
Identifiable Stages before making Purchase Decision
AIDA: Attention, Interest, Desire, Action

Emergence of the Marketing Concept
During 1950s and 1960s, The Marketing Concept emerged as a Framework

for Business Philosophy of Customer Orientation
The formation of Technically Qualified Sales Support Departments aided in

Professionalization of Field Sales Force
Major Changes under Customer Orientation Philosophy are:

Problem Solving Role of Salesperson
Helping customers to buy rather than attempting to sell them
something
Building Long Term Relationships
Questioning and Need Analysis has replaced Sales Presentations


1. Persuasion: The peddlers carried their inventory and their goal was to
Persuade Buyers to buy goods at hand
2. Negotiation: As competition grew and buyers had a choice to opt for a
particular player:
It became requirement to Understand the Needs of Customers

Modification of Products, Prices and other Related Services
3. Consultative Selling (1970s): The sellers were required to identify New

Needs and Uses for the existing products:
Consultative Selling required Sellers to think like Buyers

4. Business Management (1980s 1990s):
Emphasis was put on Management of Sales Territories and Accounts as
Profit Centers
Salespersons were expected to have Financial Knowledge
Training in Business Management and Practice of Business
Management Strategies
5. Partnership Strategies:
Linking of Information Systems of Buyers and Sellers to improve
Product Planning and Reducing Inventory
Information Sharing
Salespersons are trained on Data Processing, Data Warehousing &

Mining, Financial Analysis and Relationship Building Strategy

1. Industrial Selling: It is basically termed as Business to Business Selling
and it is grouped into Four Categories based on Consumer Base:
1.
Selling to Resellers: Wholesalers or Retailers which buy Finished

Goods and resells them to End Users
2.
Selling to Business Users: This means Output of one Producer

enters the Production Process of another Producer to manufacture a
Final Good
3.
Institutional Selling: Institutional Customers use products in their

Daily Operations
4.
Products are used to Support Buyers Business rather than

Producing Buyers Products
Selling to Government: In most countries, Government is a Leading

Buyer

2. Retail Selling: Retailing is defined as defined as all the Activities directly
related to Sales of Products and Services to Ultimate Consumer
In Retail Environment, a customer approaches the seller
3. Service Selling: Services are Activities or Benefits provided to a
consumers and Services are different from Products in 4 Areas:
1. Services are Intangible
2. Services are Produced, Sold and Consumed at the Same Time
3. Services cannot be Standardized
4. Services cannot be Stored or Inventoried

Types of Selling
The diverse nature of Buying Situations demand a Diverse Pattern of Selling
Function and Selling Function varies according to nature of Selling Tasks:
1.Order Taker Salespeople
A. Inside Order Takers are the Sales Assistants and their role is just to
Complete the Transactions
B. Delivery Salespeople: Their job is to Deliver Products to the
consumers
C. Outside Order Takers visit the customers regularly and their
primary task is to Respond to Customer Calls rather than seek New
Customers
2.Order Creators
Missionary Salespeople are the sales staff who do not close a sale but
Persuade the customers to Promote a Sellers Brand Medical
Representatives

Types of Selling
1.Order Getters Salespeople: These are the salespeople whose objective
is to Persuade customers to make a Direct Purchase.
A. New Business Salespeople persuade New Buyers and Non Users
to buy companys Products & Services
B. Organization Salespeople are the Industrial Sellers who try to
establish and nurture long term relationships with Organizational
Buyers
C. Consumer Salespeople comprise of Door to Door Salespeople who
sell Products & Services for Individual Consumption
D. Technical Support Salespeople support Frontline Salespeople when
product is Technically Complex or needs negotiations demanding
Financial Attention
E. Merchandisers provide Sales Support in Retail and Wholesale
Selling. The give advice on Display, Execution of Sales Promotion
Prepared
By: Hamid Ali Raza
| Source:
Sales in
& Distribution
Management
by Tapanof
K. Panda
& Sunil Sahadev
| Preston University,
Programs
and
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Difference between Selling & Marketing
Selling
1.Emphasis on Product
2.Product First & then Decision to
sell it
3.Management is Sales Volume

Oriented
Marketing
1.Emphasis on Consumer Needs and
Wants
2.Understanding of Customer Needs
& then a Product or Service to
satisfy these Needs
3.Management is Profit Oriented
4.Planning is Short Term todays

Products & Markets
4.Planning is Long Term New

Products, Tomorrow's Markets &
Future Growth
5.Stresses needs of Seller
5.Stressed Needs of Buyer
6.Views business as Goods

Producing Process
6.View business as Consumer

Satisfying Process

Difference between Selling & Marketing
Selling
7.Emphasizes on staying with
existing Technology and Reducing
Costs
8.Different departments work
separately
9.Cost determines price
Marketing
7.Emphasizes on Innovation
8.All departments work in Integrated
manner
9.Consumer determines price, price
determines cost
10.Marketing views customers as
the very beginning of a Business
10.Selling views customers as last

link in Business

Sales Management is the process of attaining Sales Force Goals in Effective
and Efficient Manner through Planning, Staffing, Training, Leading and
Controlling Organizational Resources. Sales Management Process covers
Three Interrelated Steps:
1.Formulation of a Strategic Sales Management Programme
Evaluating Environmental Issues Effecting Organization (SWOT, PEST, Core
Competencies)
Organizing and Planning Over All Personal Selling Efforts
Integrating Over All Personal Selling Strategy with other Elements of
Marketing Strategy
2.Implementation of Strategic Sales Management Programme
Selecting, Training, Leading and Motivating appropriate Sales Personnel
Designing & Implementing Policies and Procedures to direct Efforts of
Salespeople
toAliachieve
Corporate
Objectives
Prepared By: Hamid
Raza | Source: desired
Sales & Distribution
Management by Tapan
K. Panda & Sunil Sahadev | Preston University, Islamabad

Sales Management is the process of attaining Sales Force Goals in Effective
and Efficient Manner through Planning, Staffing, Training, Leading and
Controlling Organizational Resources. Sales Management Process covers
Three Interrelated Steps:
3.Evaluation and Control of Sales Force Performance
Developing Methods and Practices for Monitoring & Evaluating Individual &
Group Sales Force Performance
Taking Corrective Steps either in Formulation or Implementation
Programmes to achieve Corporate Goals
Chapter 2: Selling Skills & Selling Strategies

Learning Objectives
Selling & Buying Styles

Sales Task & Function
Communication Skills
Listening Skills
Conflict Management & Resolution Skills
Negotiation Skills
Problem Solving Skills

Buying Styles

Selling Styles

Sales Task & Function
A salesman has to undertake various Tasks/ Functions during the Process of
Selling. Different Sales Tasks/ Functions from Selling Point of View are:
1.Communication Function: When a salesperson gives Sales Presentation or
makes a Sales Call
2.Listening Function: A Customer may have Queries, Doubts and
Apprehensions and wishes the salesperson give him Patient Hearing, thus,
Salesperson must perform Listening Function
3.Information Function: Providing Information about Existing Products of the
company and New Products that are likely top come in market
4.Negotiation and Bargaining Function: Salesperson has to Negotiate and
Bargain for the benefit of the Organization (usually in Non Standardized
Markets)
5.Problem Solving Function: In case of Solution Selling a Customer has a
problem and he expects the salesperson to solve his problem

Types of Selling Situations
According to different Marketing and Situational Factors; Types of Selling are:
1.Maintenance Selling
The art of Servicing the Existing Accounts, Securing Promotional
Cooperation, Counting Inventory & Taking Replenishment Orders
There is no need of Prospecting as this kind of selling is done with Existing
Customers
2.Developmental Selling
The art of Contacting Potential Customers and Building Business for the
Firm
Salespeople engaged in Developmental Selling are called Business
Development Sales Executives
These sales people take the prospect through the complete Selling Process
fromPrepared
Prospecting
to| Source:
Closing
a Sale.
By: Hamid Ali Raza
Sales & Distribution
Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Selling Skills

Communication Skills
The ability and expertise to communicate is necessary in Selling Function
Salespeople should possess Good Vocabulary and should be able to express
themselves Intelligently
A salesperson ability to perceive Verbal & Non Verbal Clues help in
answering Objections and finding about the Purchase Intention
A good Voice Quality improves the Personality of the Salesperson and
contributes to the success
Effective Communication Skills contribute in Nurturing Long Term
Relationships with customer based on Mutual Trust through:
Truth of Words
Intent and Empathy
Communication Skills are important for Persuading Customers

Communication Process
Communication Process is defined as a Set of Activities & Systems Integrated
for an Exchange of Ideas, Concepts, Information and Knowledge between a
Sender and a Receiver through Alternative Channels e.g. Sales Presentations,
Sales Literature & TVCs are the examples of Sales Communication
A Typical Communication Process has the following Components:
Source/ Sender: (Salesman who provides information about Product or
Service)
Source has Ideas, Concepts, Information & Knowledge to be
communicated to Audience
Ideas, Concepts, Information & Knowledge have to be encoded in
presentable form
E.g. Print Ads, TVCs, News Releases etc.
Receiver: (Customer)
Receiver is the one for who the communication is directed at
Receiver Provides the Feedback

Communication Process is defined as a Set of Activities & Systems Integrated
for an Exchange of Ideas, Concepts, Information and Knowledge between a
Sender and a Receiver through Alternative Channels e.g. Sales Presentations,
Sales Literature TVCs are the examples of Sales Communication
A Typical Communication Process has the following Components:
Channel/ Medium:
Tools or Systems used to transmit Message (Ideas, Concepts,
Information, Knowledge)
E.g. Electronic and Print Media, Internet
Feedback:
Receiver assesses the Effectiveness & Response of the
Communication through Feedback
E.g. Interest in Product, Purchase Decisions, Rejecting any Sales
Offer
Noise: Any element which affects the Transmission or Effectiveness of
Reception of Message


Types of Sales Communication
There are Two Types of Sales Communication
1.Non Personal Communication
It includes the use of Mass Media for providing Product Information
Mass Media includes Newspapers, Television, Internet
The effectiveness of Non Personal Communication is Limited:
Scope of Recipients is not known
Ability to persuade customers is less
Effective in disseminating Product Information to Enhance the Level of
Awareness
2.Personal Communication
Effectiveness of this Medium is High
It takes Customers to High Level of Buying Decision Process
Customers are provided on the Spot Solutions/ Response to their
Problems and Objections
Prepared
Hamid Ali Raza
| Source:
& Distribution Management
by Tapan K. Panda & Sunil
Sahadevof
| Preston
University, Islamabad
By:
Results
can
beSales
evaluated
with Conversion
Rate
Prospects
into

Forms of Communication
There are Two Forms of Communication
1.Non Verbal Communication
It includes Information which is not in Oral &Written Forms
It is the most Basic Form of Communication and includes:
Facial Expressions, Gestures, Spatial Relationships, Attitude towards
Time & People, Dress Code, Voice Intonations, Expression of
Emotions like Laughter, Surprise etc.
Non Verbal Communication is Less Structured and More Difficult to Study/
Understand
2.Verbal Communication
Verbal Communication consists of Words arranged in Meaningful Pattern
It can be Oral or Written
Salespeople prefer Oral Communication over Written Channels
By: Hamid
Ali Raza | Source: Sales & Distribution
Management
by Tapan K. Panda
& Sunil Sahadev
Preston University, Islamabad
Its Prepared
ability
to communicate
Senders
Intended
Message
is| Limited

Managing Body Language
The Non Verbal Cues taken together are called Body Language. Salespeople
should manage Body Language to show that they are Confident to Handle
Sales Situation
1.Personal Appearance
Personal Appearance includes elements such as Dress, Hair Style,
Accessories and Over All Grooming
First Impact of any Potential Buyer is created by Personal Appearance of
Salesperson; even before he speaks
Salespeople should be careful about their Personal Appearance as it may
put Audience in a Hostile, Friendly or Agreeable Position

Sales Situation
2.Posture
Postures refers to the way one Stands, Sits, Walks and it also includes the
Mobility of Hands, Legs and other Parts of the Body
Postures are indicators of whether a person is Vibrant, Nervous, Jittery,
Confident or Self Assured
A salesperson should cultivate his Posture to create Positive Impact:
Stand Tall, Feet Together and Weight on Instep and Chin should be
parallel to Floor
Sitting Straight
Learn where to keep Hands and How to shift Weight of the Body

Sales Situation
3.Gesture
Gestures include movement of thehands,face, or other parts of thebody
Gestures enhance the Impact of what is being said
Gesture may or may not accompany Oral Delivery
Practice in front of Mirror how to use different kind of Gestures to improve
ones Communication Skills

Sales Situation
4.Facial Expressions
Face is the most Expressive Part of the Body and can add meaning to Verbal
Communication
A Smile is a Symbol of Friendliness
A Frown is a Symbol of Discontent
Raising Eyebrows as an Expression of Disbelief
Negative Facial Expressions can decrease the Effectiveness of a Sales
Presentations
Negative Facial Expressions include:
Deadwood Expression
Biting Lips
Raising Eyebrows
Blinking Eyes too much

Sales Situation
5.Eye Contact
Eye Contact is an Automatic Process of Obtaining Feedback
Eye Contact enables Salesperson to Alter, Adjust, and Reframe his Sales
Message
Eye Contact should be maintained as it Expresses Sincerity of Salesperson
and Attentiveness of Customer

Sales Situation
5.Space Distancing
Salespersons does not allow to invade Personal Space until the relationship
is very Friendly or if there is Prior Relationship
Social Distance (A Zone of 4 12 Feet) is maintained for Formal
Presentation
Social Distance also includes the Standing/ Seating Position

Noise/ Barriers to Communication
Any element which affects the Transmission or Effectiveness of Reception of
Message will be categorized as Noise
1.Physical Noise
Noise Emanating from Telephones or Computers or any other Physical
Objects
2.Psychological Noise
It includes Fantasies, Daydreams and Mental Blocks due to Culture, Religion
etc.
3.Factual Noise
It results from Factual Distractions which may be due preoccupation with
factors which deter the reception of real message

4.Semantic Noise
It occurs when one Over Reacts to an Emotional Statement
5.Self Focus
A Level of Preoccupation with thoughts about oneself
6.Self Defensiveness
It results when people are threatened about their positions due to Negative
Feedback
People tend to make arguments and Ignore the Communication by being
Self Defensive
Due to Self Focus the Attention Level becomes Low

7.Experiential Superiority
It is found in people who have gone through Varied Experiences
8.Egocentrism
It is the tendency to view oneself as the center of everything
9.Selective Perception
When Receiver is not in Same Frame of Mind as that of Sender due Poor
Level of Comprehension or High Level of Distortion
Selective Attention also means that people will pay more Attention to
Information which is of Value of them in the Present Situation rather than
which has Long Term Relevance

Listening Skills
Listening is an Active Search of Meaning in the Message Received
A good listener welcomes New Ideas, stays Informed, Up to Date and Out of
Danger
Effective Listening needs Conscious Effort and Willing Mind
Effective Listening supports Effective Relationships and Enhance Efficiency
of Salesperson

Types of Listening
There are Three types of Listening. These types differ on the Basis of Purpose
of Listening or in the Degree of Feedback or Interaction is required
1.Content Listening
The objective of Content Listening is to Understand and Retain the
Speakers Message
Feedback is not involved as it is only the reception of Message
2.Critical Listening
The objective of Critical Listening is to Understand and Evaluate the
Meaning of the Speakers Message at Several Levels
Logical Level of Argument

Strength of Evidence
Validity of Conclusions
Implications of Message
Speakers Intention and Motives

Types of Listening
3.Active/ Empathetic Listening
The objective of Empathetic Listening is understand Speakers Feelings,
Needs and Demands
The purpose is to appreciate Listeners Perspective whether we Like it or
not
By Listening in Empathetic way; the Listener allows the Speaker to vent his
Emotions
Chapter 4: Managing Sales Information

Learning Objectives
Market/ Sales Forecast and Market Demand

Marketing Decision Support System
Importance of Sales Forecasting
The Forecasting Process
Approaches to Forecasting
Sales Forecasting Methods

Market/ Sales Forecast and Market Demand
Market/ Sales Forecast: It is the estimated Rupee or Unit Sales for a
Specific Future Time Period based on Companys Marketing Plan and an
Assumed Market Environment
It depends on:
Industry Sales
The Market Share of the Firm
The Growth Rate in the Category
The Performance of Product Line and Individual Products Market
Market Demand: It is the Sum Total of All Individual Demand for a Product
or Service
It depends on:
Consumer Preferences (Advertising, Innovation, Changes on Customs
&Traditions)
Income Levels of Consumers
Price
of By:
other
Prepared
Hamid AliGoods
Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Marketing Decision Support System (MDSS)
MDSS is an Ongoing, Future Oriented Information Structure designed to
Collect, Collate, Categorize, Edit, Store and Retrieve Information to Aid
Decision Making in an Organizations Sales & Marketing Programs
It involves Problem Solving Technology consisting of People, Knowledge,
Software & Hardware
It collects Data from Transaction System & Analytical System and provide
Analysis for Decision Making
A Valuable MDSS provides Fast, Less Expensive and more Complete

Information for Sales Management Decision Making
Senior Management can Continually Monitor Sales, Markets, Performance of

Sales People and Other Marketing Systems in details
MDSS is Key for Accurate Sales Forecasting

Importance of Sales Forecasting:
Success of Business depends on Sales Forecasting because:
Supply Chain Management & Value Chain Management depends on
Demand Patterns of Product
Procurements can be Channelized as per Demand
Inventory Level during Production and Final Output Inventory can be

Regulated and Modified depending on the Sales Patterns
It forms the Basis for developing Production Schedules
It helps managers to decide Sales Quotas to different Segments, Zones &

Individual Salesmen
It forms the Basis for Developing Sales Budgets
An Integration of all these Variables help in Developing Marketing Plan,

Growth Strategies & Marketing Offer

Sales Forecasting Process
It is defined as Series of Decisions & Actions in Identifying the Sales
Forecasting Objectives, Determining the Independent & Dependent Variables,
Developing a Forecasting Procedure and using the Available Data in the
Selected Method to Estimate Future Sales
Supply Chain Management & Value Chain Management depends on
Demand Patterns of Product
Sales Forecasting Objectives: Rupee Sales, Unit Sales or Number of

Salespeople Hired
Dependent Variables are the Variables which are Forecasted (Rupee

Sales, Unit Sales or Salespeople Hired)
Independent Variables are the Market Factors which influence

Dependent Variables (Quantitative)
Forecasting Methods & Methods: Quantitative or Qualitative
Sales Forecast is finalized

and
itSahadev
is Evaluated
and
Modifications are made
by Tapan K. Panda
& Sunil
Islamabad

Approaches to Sales Forecasting
There are Two Approached to Sales Forecasting:
1.Break Down Approach
General Environment Forecast: It is the Study of Factors of Internal &
External Environments that influence to a Significant Levels (Pricing, Product
Changes, Distribution, Promotion, Financial Resources, Management Skills,
Technology, Economy etc.)
Industry Forecast/ Market Potential: The Sum Total of All Individual Demand
for a Product or Service or the entire Industry
Company Sales Forecast: The maximum Estimated or the Potential Sales
that company may reach in a defined Time Period under given conditions
(Percentage of Industry Sales)
Sales Forecast for the Product Lines
Individual Product Sales Forecast
by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

Approaches to Sales Forecasting
There are Two Approached to Sales Forecasting:
1.Build Up Approach
It is the Reverse of the Break Down Approach
Strategic Units or Unit Heads make Individual Forecasts
Individual Forecasts are combined to make Broader Forecast of the Firm
Difficult Method when Firm has Large Product Offerings and Serving Multiple
Markets

Based on the Type of Input Data; there are Two Types of Sales Forecasting
Methods:
1. Qualitative Methods: These methods are based on Judgments either of
Experts or a Collective Judgments of Knowledgeable People of Industry:
A.Experts Opinion Method: Experts in the Specific Area are asked for their
Forecast Estimates:
Marketing Professionals
Distributors/ Dealers
Industry Associations
Marketing Consultants
It can be in the form of Individual or Group Forecast
Group Approach has Two Methods:
Key Executives submit Independent Estimates without discussion and
Individual Estimates are Averaged into One Estimate
Group discussesby Tapan
and
presents
separate
estimates,
differences are
K. Panda
& Sunil Sahadev
Islamabad

1. Qualitative Methods
B.The Delphi Method: This is an improvement on Expert Opinion Method:
Group of Experts and Delphi Coordinator are selected
Experts give their Written Responses to Coordinator
Coordinator processes, complies and refers them back to Panel Members for
Revision this process continues for several Rounds (Usually Three Rounds)
Process stops when a consensus is reached
Only Coordinator will know all the Members of the Team and only he will
have access to all Responses and he runs Statistical Analysis
The process aims at Gradual Reduction of Variability
This method is widely used for Sales Forecasting regardless of Company
Size

C.Sales Force Composite: This method is based on the fact that individuals
with Direct Contact with Customers will be better informed
Organizations Salespersons come up with their Forecasts
Individual Forecasts are summed up to get a Overall Demand Forecast for
the product
Results can be affected by the:
Staff Biases
Lack of Interest in the Process
Ignorance about wider Economic Changes and Trends

D.Survey of Buyers Expectations: This method is based on Survey of
Buying Intentions and Market Tests
The Survey of Buying Intentions involves the selection of a Sample of
Potential Buyers and getting information on their likely purchase of Product in
Future
Forecast based solely on this method tend to be overly Optimistic; as a
positive response in survey may not result in Purchase in Future

D.Historical Analogy Method: This method is used for Forecasting the
demand for a Product or Service for which there is no Past Data
Marketing Personal may use Historical Analogy between Two Similar
Products and derive Demand for New Product using Historical Data
Chapter 5: Sales Organization

Learning Objectives
Sales Organization
Objectives/ Advantages of Sales Organization
Factors Influencing Structure
Organizational Principles
Span of Control
Centralization and Decentralization
Integration and Coordination
Organizational Design
Line Design
Organizational Design by Territory
Organizational Design by Management Function
Organizational Design by Product
Organizational Design by Customer
Combined Organizational Design
Key Account Sales
Emerging Organizational Designs
Agency & Distribution Selling
Shared Sales Force
Telemarketing
Number of Sales People

Sales Organization
Definition: A Sales Organization is an organization of Individuals either
working together for the marketing of Products & Services manufactured by
an enterprise or for Products that are procured by the firm for the purpose of
Reselling.

Sales
Organization helps to achieve coordination among the activities of

individuals
Sales
Organization defines the duties, roles, rights and responsibilities of

Salespeople
A
proper Sales Organization helps in the flow of both upward and downward
communication for taking Sales Related Decisions
A
proper Sales Organization also removes Duplication of Efforts
Sales
Organization helps in achieving Effectiveness and Efficiency

Prepared By:
Hamid Ali Raza | Source:
Sales &Targets
Distribution Management
by Tapan K. Panda Costs
& Sunil Sahadev | Preston University, Islamabad
achieving
maximum
Sales
with minimum

A
Sales Organization serves as the unified Contact or Relationship Point with

Customers
Sales
Organization contributes to building the morale of Salespeople as they

become clear about his position, role and responsibilities

Factors Influencing Sales Organizational Structure
1. Product & Service Related Factors
In
case of FMCGs (soaps, oils, toothpaste) the Size of the Organization is

Large as a large customer base is to be served
Organization
will be Complex and Large in Size when both Product Mix and
Quantity in each Sale Category is Large

2. Organization Related Factors
If
the Size of Enterprise is Small then it will have limited number of Products
and Customers and a Simple Structure is required and Vice Versa
Organizations
having Specialized Products and Serving Niche will have Small

and Simple Sales Organization
An
organization with Limited Financial Resources will prefer to engage

intermediaries for distribution and keeps Sales Organization Simple and Vice
Versa
If
organization follows a Centralized Policy for Sales Related Decisions then

Sales Organization will be simple and Vice Versa

3. Marketing Mix Related Factors
Size
of the Market also determines the Structure and Size of Sales

Organization
Global, International, National Market >>> Large Sales Organization
Organizations
which have Selective Distribution Strategy as compared to

Organizations with Intensive Distribution Strategy will have Simple Sales
Organization
Price
Policy also influences the Size and Structure of Sales Organization

Low Price Products with High Demand and Large Customer Base >>>
Large Sales Organization
4. External Factors
The
Customs and Traditions used in the past to cater the market influence
the Size and Structure of the Sales Organization

1. Span of Control
Span
of Control refers to number of Subordinates and Sales Staff under the

Supervision of one Sales Manager
Narrow
Span of Control: Less or Limited Number of Sales Staff under the

Supervision of one Sales Manager
Appropriate Model when there are New Recruits to be handled in the
field
New Recruits learn from Experienced Managers when it is One to One
Coaching
It has following disadvantages:
Complicated Communication Flow
Demotivation due to Direct Supervision
Resistance by Innovative New Recruits to Traditional Methods of
Coaching
Isolation of Management from Grassroots Levels
Higher Operations Costs
Wide
Span of Control: Large Number of Sales Staff under the Supervision

of one
Sales
Manager
Prepared
By: Hamid
Ali Raza | Source: Sales & Distribution Management by Tapan K. Panda & Sunil Sahadev | Preston University, Islamabad

2. Centralization and Decentralization
The
extent of Control and Authority of the Top Management versus the Field
Sales Manager over the Sales Force decides the Level of Centralization in an
organization
Centralized
Organization: In Centralized Organizations; Top Management
decides:
Recruitment, Selection, Training, Supervisions, Fixation of Quotas,
Territory Allocations and Compensation Plans
Consistency in Marketing Plans, Uniformity in Products & Services and
Coordination & Integration of Sales People are the Advantages of
Centralization
Helps in saving Recruitment, Selection, Training and Motivational Plan
Costs
Decentralized
Organization: Field Managers take all the decisions
It helps Organizations to be more Competitive and Responsive at

respective Market Levels
to action
results
Motivated
Prepared By:Greater
Hamid Ali Raza Freedom
| Source: Sales & Distribution
Management
by Tapanin
K. Panda
& Sunil Sahadev and
| PrestonProductive
University, Islamabad

3. Integration and Coordination
Integration
and Coordination relates to Flow and Use of Communication and

Marketing Intelligence
Traditional
(Butter Fly) Approach: All information flows through the

Sales Organization or Sales is the only Upfront Department
Modern
(Bow Tie) Approach: Organization across all departments is

integrated to serve customers
Sales
Department provided information to:
Research & Development for New Product Development

Sales and Marketing Departments interact for deciding Advertising
Policy, Sales Promotion, Cooperative Advertising with Intermediaries

Sales Department also provides about Financial Arrangements, Credit
Policy, Credit Collection
Coordinates information on Compensation and Dealer Motivation Plans

Organizational Design refers to:
Formal
and Coordinated task of assigning Territories
Establishing
of Flows of Communication
Establishing
Responsibilities of Sales Groups and Individuals
Organizations
adopt different kinds of Structures e.g.
Line Organization
Organization Design by Territory
Organization Design by Management Function
Organization Design by Product
Combined Organization Design

Line Organization
Small
Firms have Line Organization
Chief
Executive does the Decision Making and Decisions flow down the Line
for execution
Chief
Executive has all the Authority over Sales Function
Advantages
Decisions
are made Faster, Overhead Costs are Low and Salespeople need
to follow command
Disadvantages
Salespeople
do not have time for Sales Planning and are busy in achieving
Targets set at the Top

Organization
is designed on the basis of Geographic Territory
Several
Areas are combined together as Territory for assigning a Supervisor

and several Territories are combined to assign a Sales Manager
Advantages
Travel
Times are Limited and Sales Force remains close to the customers
Quality
of Customer Service is Better as Number of Customers is Limited

and Geographically Concentrated
Conflict
is minimum as customers are identified in each area
Demand
for New Products can be identified
Product
Modifications, Marketing Strategies, Sales Recruitment can be

adjusted to specific requirements of Level of Competition, Area, Job and
Demand

Disadvantages
Salespeople have to sell entire Product Line in a Specific Area to all Types of
Customers
Salespeople
spend too much time on Products which are easier to sell but
may not be Profitable or provide High Growth Potential
Coordination
is difficult over Territories
There
is High Probability of Conflict in Resource Allocation
These
problems can be solved through:
Close Supervision
Proper Incentive Structure
Hiring Better Sales Talent
Professional Training and Technical Support

It
is the Grouping of Sales Task according to their characteristics
Firms
need Special Expertise for which Selling Activities are divided into
Functions to be performed
Sales Planning
Recruitment & Training of Salespeople
Supervision of Sales Personnel
Advertising Function
Sales Promotion
Sales Analysis & Marketing Research
Advantages
Special
Expertise and Support makes organization profitable
Specialization
Response
is achieved at different Levels of Hierarchy
to and Decision Making on Sales related problems is faster

Disadvantages
Dependence
on each other on Delivery of Final Customer Service
Integration
is achieved at Higher Level which makes the job of Higher

Authority Complex
Interdepartmental
rivalry and Non Cooperation issues arise

Organizations
with Diversified Product Portfolios prefer Design on the basis

of the Type of Products
Product
Specialization is necessary when products are Technical and

Complex but completely different from each other
Advantages
Close
attention to each Product in Product Portfolio
Salespeople
The
can master all the relevant Product Information
interference from other departments is minimum
Satisfaction
of Customer is highest as customer receives maximum
attention

Disadvantages
Coordination
of Sales function is difficult across different product categories
There
can be Duplication of Effort when Salespeople from the same

organization call same customers; it increases cost of selling
Operational
Cost is high because of Large Number of Employees

Organizations
with several and distinct markets are designed on the of

Customer Profiles
These
designs are based on Customer Profitability Analysis and Varied

Service Delivery
Each
Salesperson sells entire Product Line to the same customer
Advantages
This
design is Customer Driven and Salespeople gain more Knowledge on

Customer Requirements and become experts
This
design helps in building Successful Customer Relationships
Sales
and Marketing Planning developed depending customer requirements

and behavior

Disadvantages
This design is expensive to maintain
There is fear of Duplication of Effort as controlling and coordinating

activities are difficult in large firms

Combined Organizational Design
Many organizations that are Large in Size and Complex in Product Offering
prefer complex design
This design can be a combination of Product, Function, Geography or the

customer depending on the Market Coverage and Scope of Business
Chapter 6: Management of Sales Territory

Learning Objectives
Sales Territory
Designing a Sales Territory

Sales Territory
Definition: A Sales Territory is a Group of Present and
Potential Customers assigned to an individual salesperson, a
group of salesperson, a branch, a dealer, a distributor or a
marketing organization at a given period of time.
Advantages of Sales Territory
It ensures better Market Coverage, Effective Utilization of Sales
Force and Efficient distribution of Workload among Salespeople
It enables Sales Managers to Evaluate the Performance of
Salespeople, Control over Direct and Indirect Costs of Sales Function
and Optimum Utilization of Sales Time by Sales People
Restricting Sales Force to Specific Geographic Areas helps in
generating more Sales from the same area

Sales Territory
Advantages of Sales Territory
Sales Territory ensures that Salespeople do not encroach on each
others Territory
Restricting Sales Force to Specific Area helps salespeople to
understand the Current and Latent Needs of Customers and to serve
them better
Disadvantages of Sales Territory
A Sales Territory may not help a New Established Organization or
where Sales are made through Personal Relationships
Sales Territory may also not suitable for organizations which are
selling Highly Sophisticated and Technically Complex Products
Organizations which have customer base distributed over a vast

Designing Sales Territory
Various Factors are considered while Designing a Sales Territory
Size of Organization
Level of Competition in each Product Category
Number and Quality Level of Products in Portfolio
Type and Quality of Services and Customer Support to be provided
Quality of Salesperson serving in the Organization

Step 1: Select Appropriate Geographical Control Unit
Small enough to allow Flexibility but not so small that High Level of
Data Computation is needed
Homogenous and of Reasonable size to achieve Economies of Scale
The Basic units can be Country, State, District, Division or Block
with Clear Boundaries
Basic Control Units should be based on Trading Area. A Treading
Area is made up of a Principal City and the surrounding dependent
area

Step 2: Criteria
Managers identify the Sales Potential of each Geographical Control
Unit based on Current Customer Base as well as Future Customer
Base
Based on Forecasted Sales (for both Current and Potential
Customers) and Geographic Size Managers Combine Contiguous
Control Units to form Territories
Each Sales Territory should as Equal as Possible in terms of Market
Potential
Differences in the Workload and Sales Potential due to different
Levels of Competitive Activity are ignored at this stage
It is also assumed that all Salespeople have equal Experience and
Capabilities

Step 3: Starting Point
After ascertaining Sales Potential in Control Units, a Sales Manager
should form Tentative Sales Territories
Location Point
Trading Area
Location of Large Account
Central Geographic Location or State Capital

Step 4: Territory Shapes
Shape of Territory affects the Sales Expenses and Ease of Coverage
and Less Time on Travel
Wedge Shaped: Used by FMCGs which serve both Urban and
Rural Areas
Circular Shaped: These are suitable when companies have
their accounts distributed across equally sized areas.
Salesperson is located in Central Part of the Territory and
Travels uniformly to different areas
Cloverleaf Shaped: It is used when accounts are distributed
randomly through out the Territory

Step 5: Control Units Adjacent to Starting Point
After deciding Starting Point Sales Managers then combine Control
Units to build up Market
Sales Manager keeps on running totals on the Allocation Criteria for
each newly designed Territory
The process continues until all Control Units are assigned to each
Sales Person
At this Level, Sales Territories are tentative and necessary
adjustments can be made in future on the basis of Scope of Market
Coverage
Chapter 7: Management of Sales Quota

Learning Objectives
Sales Quota
Importance of Sales Quota
Principles of Setting Quota
Procedure for Setting Quota
Types of Sales Quota
Methods of Setting Sales Quota
Quotas Based on Sales Forecasts and Potentials
Quotas Bases of Forecasts
Quotas Based on Past Sales or Experience
Quotas Based on Executive Judgement
Quotas Based on Salespeople Judgement
Quotas Based on Compensation

Sales Quota
Sales Quota are the Targets (Sales Target and Duties) that Salespeople try
to achieve within a Specific Period of Time, which contributes towards
achieveing the Organizational Goals regarding Sales Forecasts
It is an expected Performance Objective
Quotas are assigned to Sales Units such as Departments, Divisions and

Individuals

Importance of Sales Quota
Motivating Salespeople
Management by Expectation
Objectivity in Measurement and linked with Reward Systems

Feedback on Performance
Focus on High Performers and taking care of their Interests

Focus on Poor Performers and making efforts in their Skill Building
Giving Direction to Salespeoples Performance

Rewards are linked with attainment of Quotas and Desired Type & Level
of Behaviors can be achieved
Performance based on Sales Volume in Product Categories, New
Accounts and Expenses

Principles of Setting Sales Quota
Objectivity
Based on Facts & Figures drawn from Market
Simples Method should be used
Easy to understand by all stakeholders
Uniform for all Salespeople by taking Competition Level, Experience &

Ability of Salespeople
Achievable Limit
Level of Definiteness
Should be fixed in Terms of Goegraphic Territory, Money Value or Units

Frequent Changes in Quotas can create problems

Procedure for Setting Sales Quota
Schedule Planning
Planning for Goal Setting Meetings
Explaining Systems, Reasons, Benefits and Incentives for each
Salesperson
Orientation Sessions
Submission of Individual Goal Proposals
Conferencing with Each Salesperson

Discussion of Individua; Goal Proposals
Territory, the Account, the Call Management and Self Management
Volume per Month, Expense per Month, Gross Margin per Month, Market
Share per Month and Key Account Coverage per Month
Written Summary of Agreed Upon Goals

Types of Sales Quota
Sales Volume Quota
Sales Budget Quota
Monetary Terms and Unit Terms

Variuos Product Lines
Control Expenses
Profit Quota: Gross Margins and Net Profit
Sales Activity Quota
Quota can be set on Activity Level instead of Final Outcome

Prospecting, Generate Sales Leads, Develop New Buisness

Methods of Setting Sales Quota
Quotas Based on Sales Forecasts and Potentials
Quotas Bases of Forecasts
Quotas Based on Past Sales or Experience
Quotas Based on Executive Judgement
Quotas Based on Salespeople Judgement
Quotas Based on Compensation
Chapter 8: Recruitment & Selection of the Sales Force

Learning Objectives
Hiring Process
Challenges in Sales Force Selection
Sales Force Recruitment
Sources
Selection of a Salesperson
Socialization

Hiring Process
Turnover
Strategic Position Analysis
JQ & JD
Decide No. of Salespeople to be hired

Planning
Identify Sources of Recruitment
Recruitment
Generate Database of Candidates
Evaluate Candidates
Selection
Select and Induce
Socialization
Socailize

Sources for Sales Forces Recruiment
Internal Sources
Lateral & Upward Moves
Intern & Cooperative Students
Emplyee Referral Programmes
External Sources
Other Industry Sources

Educational Intitutions and Campus Recruitments
Advertising
Employment Agencies
Walk In
Networking
Web Sources
Chapter 11: Sales Force Compensation

Learning Objectives
Objectives of Sales Compensation Plan

Characteristics of an Effective Compensation Plan
Factors Influencing the Design of Compensation Plan
Types of Compensation Plan
Financial Compensation
Non Financial Compensation
Chapter 11: Sales Force Compensation

Objectives of Sales Compensation Plan
Attract Quality Sales People
Retaining Quality People and Reducing Attrition
Improve Prodcutivity Level
Maximise Sales and Reducing Sales Expensed & Production Cost
Good Rapport between Sales Managers & Salespeople
Better Company Image
Chapter 3: The Selling Process

Learning Objectives
Prospecting
Identifying Prospects
Qualifying Prospects MAN
Preparing
Pre-approach
Call Planning
Presenting
Approach
Probe for Needs
Convince the Prospect
Handle Objections
Close
Follow Up

The Selling Process
It is a process by which a salesperson
Identifies and Locates Prospects

Separates the prospects from Suspects
Approaches them
Makes a Sales Presentation
Handles their Objections
Close a Sale
He also Follows Up with the Existing Customers to Identify further
Sales Leads, Measure Success and Customer Satisfaction Level of
Current Products & Service Offerings

The Selling Process

Prospecting
It is a process by which a salesperson
Identify Potential Buyers who have Need for Products & Services
The Ability to Pay for it
The Adequate Authority to Buy it
Prospecting is important for Effective Utilization of Selling Time by
distinguishing the Prospects from Suspects
Key Steps involved in Prospecting Process are:
Define Target Market
Generating Sales Leads
Qualifying Prospects (MAN)

Prospecting
Define Target Market
Generate Sales Leads
Determining the type of Person or Organization which is most likely to

buy a Product or Service
Salesperson can be helped by Researchers, Product Managers, Market
Planners and Sales Managers for Defining Target Market
Networking
Market Survey
A Sales Lead is any Specific Person or Organization that might Need a

given Product or Service
Qualifying Prospects
Qualifying means: Need and/ or Desire to Buy >> Financial
Resources >> Authority
MAN: Money > Authority > Need

Prospecting
Identifying Prospects
Present Customers
Former Customers
Cold Calling
Spotters
Directories and Mailing Lists
Prospecting Services
Referrals
Center of Influence Approach
Endless Chain Prospecting
Personal Contacts
Trade Shows and Exhibits
Direct Marketing

Final Sales &amp; Distribution Management

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Final Sales &amp; Distribution Management

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Authors: Tapan k.

Panda & Sunil Sahadev

Chapter 1: Introduction to Sales Management

Sales & Distribution Management

Chapter 1: Introduction to Sales Management

Chapter 1: Introduction to Sales Management

Sales Force Downsizing

Chapter 1: Introduction to Sales Management

Marketing was the natural outgrowth of Production Surpluses

Trading was the beginning of Modern Marketing System

Town Economy: Medieval Economic Organizations in which commercial

Agricultural Middleman: Early businessperson who purchased Staple

Guild System (Association of Craftsmen): The Guild System provided

Chapter 1: Introduction to Sales Management

Bagman emerged in Late Eighteenth Century during Englands

Sometime after 1810, there developed Two Methods of Personal

Horse-Drawn Wagons called Wagon Peddlers

Chapter 1: Introduction to Sales Management

Commercial Traveler : Credit Investigators later on started to sell

Greeters: Supplier Employed Sales Reps who Solicited Business from

Chapter 1: Introduction to Sales Management

They Drummed up Sales for Manufactures and Wholesalers which

Chapter 1: Introduction to Sales Management

From Production to Sales

Production Surpluses resulted in Re-emergence of Sales Era until WWII

Chapter 1: Introduction to Sales Management

Traditional Sales Approaches

During the Modern Sales Era Traditional Sales Function called

Salespeoples behavior was considered the Key Ingredient in Sales

There were Three Variations of Traditional Sales Approaches:

Chapter 1: Introduction to Sales Management

Traditional Sales Approaches

Canned Sales Presentation

A prepared, Structured Sales Script memorized by Salespeople

Stimulus Response Theory

Chapter 1: Introduction to Sales Management

Traditional Sales Approaches

Arthur Fredrick Sheldon Selling Course

AIDA: Attention, Interest, Desire, Action

Chapter 1: Introduction to Sales Management

Emergence of the Marketing Concept

During 1950s and 1960s, The Marketing Concept emerged as a Framework

The formation of Technically Qualified Sales Support Departments aided in

Major Changes under Customer Orientation Philosophy are:

Chapter 1: Introduction to Sales Management

Chapter 1: Introduction to Sales Management

It became requirement to Understand the Needs of Customers

3. Consultative Selling (1970s): The sellers were required to identify New

Consultative Selling required Sellers to think like Buyers

Chapter 1: Introduction to Sales Management

Salespersons are trained on Data Processing, Data Warehousing &

Chapter 1: Introduction to Sales Management

Selling to Resellers: Wholesalers or Retailers which buy Finished

Selling to Business Users: This means Output of one Producer

Institutional Selling: Institutional Customers use products in their

Products are used to Support Buyers Business rather than

Selling to Government: In most countries, Government is a Leading

Chapter 1: Introduction to Sales Management

Chapter 1: Introduction to Sales Management

Chapter 1: Introduction to Sales Management

Chapter 1: Introduction to Sales Management

3.Management is Sales Volume

4.Planning is Short Term todays

4.Planning is Long Term New

Final Sales & Distribution Management

Final Sales & Distribution Management