SALES & DISTRIBUTION MANAGEMENT

What is Sales Management?

The process of planning, directing, and controlling of personal selling, including recruiting, selecting, equipping, assigning, supervising, paying, and motivating the personal sales force.

NATURE OF SALES MANAGEMENT

1. Integration With Marketing Management : A companys marketing team consists of 2 basic groups : a. Field selling (field sales force , in their sales territory contacting existing & prospecting customers.) b. Head quarter marketing team (performs support & service functions to help field salespeople in their jobs)

HeadMarketing

Promotion

Market Research

Market Logistics

Customer Service

Coordination

2. Relationship selling :
Its basically the creation of customer loyalty.

Transactional Relationship/ Selling

Value added Collaborative/ Relationship/ Partnering Selling Relationship/ Selling

Transactional selling : customers with low sales & profit potential & businesses that have low priced & low profit products and services , the focus is on single transaction with each customer, where after the product or service is sold the customer is contacted again and hence the relationship is not extended. Eg: Seeing a movie in a theatre or eating at a restaurant

Value added relationship selling : The focus is on the sales person understanding the current & future needs of the customer correctly & meeting those needs better than the competitors. After the purchase is made , the salesperson contacts the customer to find out if the customer is satisfied & has any future needs. Such customers have medium sale s& profit potential. Eg: Maruti Udyogs sale s service centre contacts each customer to find out their level of satisfaction or dissatisfaction after the car purchase or service.

Collaborative selling : It means handling every aspect of the sales process with a high degree of professionalism. There are six basic steps that describe how the collaborative sales process unfolds Target (identify the specific markets)
Contact

 Explore (collaborative salespeople conduct research, meet with their prospects frequently, and do whatever it takes to become an expert on their prospect's business . Collaborative salespeople make it clear that they want to help, not just make a sale)
Collaborate (after an in-depth exploration of a prospect's situation that collaborative salespeople talk about their products or services. Collaborative salespeople never dictate solutions to their prospects. Instead, they form "partnerships" in which prospects play an active role in the search for the best solution. The collaborate phase of the sale is conducted in the spirit of "let's work together on the solution and together build a commitment to its successful implementation." )

 Confirm (Collaborative salespeople move on to the next phase of the sales process only after they have received assurances that their customers are in agreement with them on everything that has been discussed.) Assure (This phase of the collaborative sales process begins immediately after the sale has been confirmed. Collaborative salespeople keep in touch after the sale. They communicate regularly about delivery dates, installation, training, and other relevant matters. They make sure their customers are satisfied with their purchases. They help customers track their results and analyze the effectiveness of the solution.)

3. Varying sales responsibilities / sales positions

Selling includes a variety of sales jobs , which are different from one another. No two sales positions are similar for eg : Delivery sales person , order taker sales support people , technical sales support , demand creator , soultion vendor

Objectives of sales management

Sales Volume Contribution to profits Continuous Growth

Importance of 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

Personal selling objective

Building Product Awareness A common task of salespeople, especially when selling in business markets, is to educate customers on new product offerings . Creating Interest The fact that personal selling involves person-toperson communication makes it a natural method for getting customers to experience a product for the first time. r

Providing Information When salespeople engage customers a large part of the conversation focuses on product information. Marketing organizations provide their sales staff with large amounts of sales support including brochures, research reports, computer programs and many other forms of informational material.

Stimulating Demand By far, the most important objective of personal selling is to convince customers to make a purchase.

 Reinforcing the Brand Most personal selling is

intended to build long-term relationships with customers. A strong relationship can only be built over time and requires regular communication with a customer. Meeting with customers on a regular basis allows salespeople to repeatedly discuss their companys products and by doing so helps strengthen customers knowledge of what the company has to offer.

Personal selling process

Prospecting :
Sources :

Qualifying :
conditions for a prospect to qualify -

After qualifying, the prospects are placed into 3 groups :

Pre approach
It basically includes 2 tasks: 1. Information gathering 2. Planning the sales call a. setting call objectives It includes : Gathering info about needs from the prospect. Checking merchandise & placing reorder from existing distributor. Preparing sales presentation etc.

b. planning the sales strategyfinding out when (date & time) and whom to approach by phone call. Adaptive selling The tentative planning of the sales strategy may have to be changed later on after gaining the info based on actual calls made by the salesperson. This type of modification to the selling objective or plan is called adaptive selling.

Approach :
The next step is to make an appointment to see the prospect, this is called the approach.

Presentation & Demonstration

It includes following steps : 1. Understanding the buyers need. 2. Knowing sales presentation methods. 3. Developing an effective presentation.

1. Understanding the buyers need :

2. Knowing sales presentation methods

1. Stimulus response method 2. Formula method - Attention - Interest - Desire - Action 3. Need satisfaction method (features, advantage, benefits) 4. Team selling method 5. Consultative selling method

3. Developing an effective presentation :

Planning Adapt presentation Use technology Dont overload Prospects language Convincing

Demonstration :

Overcoming objections:
2 types of objection are there : 1. Psychological (hidden) eg: beliefs , preference for established brand 2. Logical ( real or practical) eg : they are tangible like : quicker delivery, high price , product quality, product availablitiy

Methods for handling & overcoming objections:

Ask questions Turn an objection into a benefit Deny objection tactfully

Trail close/Closing the sale:

Closing the sale means asking for order. when should a sales person close the sale. Most of the times prospective buyer gives indication about their readiness to buy. Eg:

Follow up & service :

Size of the sales force

a. Work load method

2. Sales potential / breakdown method

3. Incremental method

Example of incremental method

Theories of personal selling

1. AIDAS theory of selling : Seeking Attention Gaining Interest Developing Desire Generating Action Customer Satisfaction

2. Right set of circumstances theory : Its a seller oriented theory. The sales person should give proper stimuli to secure attention of the prospect .
This theory sums up that everything was right for the sale. Its also known as situationresponse theory. Situation is of 2 types Internal External

3. Buying formula theory:

Need solution purchase satisfaction

Solution consists of 2 parts Product / service Trade name Need product/service trade name purchase satisfaction

4. Behavioral equation theory :

Given by : J A Howard. It consist of 4 elements

1. Drive its a strong internal stimuli that holds the key to the buyers response. a. innate (strong drive governed by physiological needs) b. learned drive (social status ) 2. Cues weak stimuli that indicate when buyer is going to initiate the purchase activity. a. triggering (activates the decision making process of the buyer). It takes the buyer to the buying point.

b. non triggering- only influences the buyers decision. It helps in selecting the product. Its of 2 typesproduct cues & informational cues

3. Response (+ve or ve) 4. Reinforcement B= P x D x K x V B- Response of the buyer P- force of habit D- motivation level of buyer K- incentive provided by the product V- intensity of all cues.

Ethics in sales management

Ethics is the rule of conduct that reflects the characteristics and sentiments of the community. Primary areas served by ethics: a. Company policies & practices b. Sharing confidential information c. Reciprocity d. Bribery e. Gift giving

f. Entertainment g. Sales persons values h. Towards a personal code of ethics. Some guidelines: 1. Use an honest approach 2. Put your customer interest first 3. Avoid misleading sale claims 4. Avoid attacking competitors 5. Avoid misuse of company resources.

Social responsibilities
A firms main social responsibilities are its 8 major stake holders Customers Community Creditors Government CCC GOMES Owners Managers Employees Suppliers

4 main social responsibilities towards 8 stake holders are: a. Ethical responsibilities b. Legal responsibilities c. Economic responsibilities d. Voluntary responsibilities