Introduction to Sales &

Distribution
Management
 MARKET & MARKETING

total demand of potential buyers

all activities aimed consumer satisfaction

place or area (covers exchange functions)

where buying & selling take place

other facilitating functions (financing, risk

bearing, after sales services etc.)
 SELLING & MARKETING
Starting Focus Means Objectives
point

Selling
Factory Product Selling & Profit through
Concept Promotion Sales Volume

Market
-ing Target Customer Integrated Profit through
Concept Market needs market customer satisfaction
 SELLING & MARKETING
S. SELLING MARKETING
No.

1. Selling begins with the seller and Marketing starts with the consumer
the emphasis is on the product. and the emphasis is on the needs of
the customers.

2. Narrow in scope. Considers business as a consumer

satisfying process.

3. Considers business as a goods Considers business as a consumer

producing process satisfying process.

4. The product that is to be offered is The product that is to be offered

determined by the seller. determined by the buyer.

5. Packaging is considered as a Packaging is designed to provide the

mere protection or a mere maximum satisfaction and
container for the goods. convenience to the customer.
 SELLING & MARKETING
S. SELLING MARKETING

No.

6 Price is determined on the basis Price is determined by the

of cost. consumer.
7 Production is the central Marketing is the central function.
function and sales is a The whole concern is organized
secondary function. around the marketing function.
8 Internal, company orientation External, marketing orientation.
 MARKETING MIX – 4 P’S

Product Price

Marketing
Mix

Promotion Place
THE MARKETING MIX - 7 P’S
 PRODUCT
1. Brand
2. Style
3. Color
4. Design
5. Product Line
6. Package
7. Warranty
8. Service
 PRICE

1. Price Strategy
2. Pricing Policy
3. Basic Price
4. Terms of Credit
5. Discount
6. Allowances
 PLACE

1) Distribution Channels
1. Wholesalers
2. Retailers
3. Mercantile Agents
2) Physical Distribution
4. Transport
5. Warehouse
6. Inventory
 PROMOTION MIX

1. Personal Selling
2. Advertising
3. Publicity
4. Sales Promotion
Personal Selling
Personal selling is the process in which a
salesperson has a face-to-face interaction with
the customer for the purpose of selling a
product or service. Personal selling is one of
the tools in a company’s promotional mix. It
has greater significance than any other form of
promotion as it allows the sales person to
converse in detail with the customer about the
product or the service.
Personal Selling
“Personal Selling is oral presentation in a
conversation with one or more prospective
purchasers for purpose of making sales. It
includes in-person sales presentations and
telesales, sales meetings, samples. We have
already referred to personal selling as a tool of
marketing communication. Personal Selling is
communicating directly with the target audience
through paid personnel of the company or its
agents.”
- American Marketing Association
Personal Selling
“Personal Selling is the process effecting the
transfer, with the profit to buyer and seller, of
goods & services that gives such lasting
satisfaction that the buyer is predisposed to come
back to the seller for more of the same.”
- E.F. Schumakar
“Personal Selling consists of contracting
prospective buyers of a product personally.”
- Richard Buskirk
Objectives of Personal Selling
1. To keep customers informed to changes in the
product line.
2. To assist customers in selling the product line.
3. To serve the existing customers.
4. To secure and maintain customers’ co-
operation in stocking and promoting the
product line.
5. To handle the sales personnel of middlemen.
Objectives of Personal Selling
6. To collect and report market information on
interested matters to company management.
7. To provide advice and assistance to
middlemen whenever needed.
8. To provide technical advice and assistance to
customers.
9. To search out and obtain new customers.
10. Its goal is to actually make a sale.
Advantages of Personal Selling
1. Personal Selling reduces the cost of
production
2. It minimizes waste
3. It helps to reduce marketing costs.
4. It carries the advantage of flexibility
5. It facilitates consumption
6. It provides immediate & clear-cut feedback
7. It is a two-way communication
8. It helps to introduce new products & innovation
to the market.
Limitations Of Personal Selling
1. Personal selling accommodates only a limited
number of consumers at a given time.
2. It is quite expensive.
3. It is especially on retail level, has poor image
in the eyes of a number of customers.
4. It is not an effective tool for obtaining
consumer awareness about a product.
5. Good and competent sales persons are not
easily found.
Personal Selling Tools
1. Sales presentations
2. Sales meetings
3. Incentive programs
4. Samples
5. Fairs, Exhibitions and Trade Shows
Personal Selling Process
Pre-sale Prospecting
Pre approach
Preparation and Qualifying

Handling Presentation &

Approach
Objections demonstration

Follow up and
Closing
Maintenance
A) Pre-sale Preparation
It involves all the preparations for getting ready for the
selling process by the salesmen. The salesman has to
be familiar with the product, the market, the techniques
of selling and organization. He would be successful if
he is aware of the unsatisfied needs and problems of
the customers. He should prepare himself by knowing
himself and his company, competition and market
environment.
B) Prospecting and Qualifying
The potential customer is known as a prospect and the
method of finding he potential customer is known as
prospecting. Prospecting involves a significant amount
of time, effort and money. Although the company will
give the leads, the salesmen have to develop their
own leads.
C) Pre Approach
It involves finding out the needs, problems,
preferences habits, attitudes, nature and interests of
the prospects. The salesman should set best
approach, which might be a personal visit, a phone
call, or a letter. The best timing should be thought out
because many prospects are busy at certain times and
finally the sales presentation strategies are planned.
D) Approach
The initial few minutes of the sales talk are known as
the ‘approach’ to the prospect. The purpose of the talk
is to arouse and sustain the customer’s attention.
Before the talk, the salesman should introduce himself
by using the telephone, by obtaining introduction from
a customer and by handling his business card. In the
first contact, he should attract the attention of the
customers.
D) Approach (Cont’d)
1. Reference approach that involves reference of
the product by the friends of the prospects,
2. Benefit approach that indicates the benefits of
the products,
3. Sample approach that involves giving samples to
the prospect and
4. Mutual approach that considers the prospect
supreme.
E) Presentation and Demonstration

It refers to the presentation of the product to the

customer or prospect, a demonstration of its features
and benefits to the prospect and showing how the
product meets the customer’s needs. It stimulates the
buyer by using right stimulus words, pictures, terms and
actions. Sales demonstrations can be improved by using
demonstration aids such as booklets, flip charts, slides,
movies, audio, video and actual product samples.
F) Handling Objections
The customers almost always pose objections during
presentations or when asked for the order. The
resistance can be psychological such as interference,
preference for established supply or brands, relevance
to give up something. The resistance can also be
logical such as objections to price, delivery schedule
or certain product or company characteristics.
To handle these objections, the salesman has to
maintain a positive approach, by classifying the
objections with valid reasons and turning objections
into reasons for buying.
G) Closing
The salesperson should try to close the presentation
at the earliest possible moment to avoid the
emergence of any reaction to the product. He should
be expert enough to close the sales talk at the right
moment and including physical actions, statements
and comments.
H) Follow up and Maintenance
Follow up action begins when the prospect signs the
order and asks for delivering the salesman arranges
for the dispatch and delivery of the product, facilitates
grant of credit and reassures the buyer about the
wisdom of his decision. This step is necessary to
ensure customer satisfaction and repeat business. The
sales person has to develop an account maintenance
plan to make sure that the customer is not forgotten or
lost.
Personal Selling – Classification
1. Industrial Selling
a. Resellers
b. Selling to Business users
c. Institutional Selling
d. Selling to Government
2. Retail Selling
3. Service Selling
Personal Selling – Types
1. Relationship Selling
2. Tele Marketing
3. Team Selling
4. System Selling
1. Relationship Selling
Developing a mutually beneficial relationship with
selected customer on a regular basis over time is
relationship selling. It may an extension of team
selling or it may be developed by individual sales
representative in their dealing with customer.
In relationship selling, a seller discontinues the
usual territorial practice of covering many
accounts. Instead the seller attempts to develop a
deeper, long lasting relationship built on trust with
key customers usually large buyers.
2. Telemarketing
Telemarketing is the innovative use of
telecommunication equipments and systems as
part of the “going to the customer” category of
personal selling. Both field selling and over the
counter selling sometimes utilize the telephones
in such activities as prospecting for new
customers and following up with existing
customer. The telephone is also the basis for a
third approach to personal selling that is
“telemarketing” in which selling is conducted
entirely by telephone.
2. Telemarketing
(a) Outbound Telemarketing: It involves a
sales force that use only the telephone to
contact customer. This approach is
designed to reduce the substantial cost
entitled in making personal visits to
customers’ home or business.
(b) Inbound Telemarketing: It typically involve
toll free hundred of number that customer
can call to obtain information and make
purchases.
3. Team Selling
The sales person is joined by specialist from
other functional areas of the firms during the
selling process. In other words, a sales team
(also called selling center) is a group of people
representing the sales department as well as
other functional areas in firm such as finance
production, distribution and research and
development.
3. Team Selling
Example, i.e. relation to selling washing machine to a
large buyer, a firm may assemble a team of sales
people particularly engineers to educate such large
buyer’s buying team in order to match the expertise on
the buying side especially in industrial market. A
growing number of firms on the selling has become the
standard for successful selling, especially to large and
important customers.
Team selling is expensive and is use therefore only
when there is potential for high sale volume and profit.
Each team is assigned to cover large retailer including
a large multinational firm.
4. System Selling
The concept of system selling means selling a
total package of related goods and services
(i.e., system) to solve a customer’s problem.
The purpose is that the system (i.e., the total
package of goods and services) will satisfy the
buyer’s need more effectively than selling
individual products separately.
Sales Force Structures
The sales force strategy will have implications for
structuring the sales force. If the company sells one
product line to one end using industry with customers
in many locations, the company would use a territorial
sales force structure. If the company sells many
products to many types of customers, it might need a
product or market sales force structure.
Alternative Structures for the Sales Force

a) Territorial structured sales force

b) Product structured sales force
c) Market structured sales force
d) Complex sales force structures
a) Territorial structured sales force
In the simplest sales organization, each sales
representative is assigned an exclusive territory in
which to represent the company’s full line. This
structure has a number of advantages. First it
results in a clear definition of the sales person’s
responsibilities. As the only sales person working
the territory, he or she bears the credit or blame
from area sales. Secondly the territorial
responsibility increases. Thirdly, travel expenses
are relatively small, since the sales representative
travels within a small geographical area.
b) Product structured sales force
The importance of sales representatives
knowing their products, together with
development of product divisions and product
management has led companies to structure
their sales forces along product lines. Product
specialization is particularly warranted where
products are technically complex, highly
unrelated or very numerous.
C) Market structured sales force
Companies often specialize their sales forces
along industry or customer lines. Separate sales
forces can be setup for different industries or
even for different customers. The advantage of
market specialization is that each sales force
can become knowledgeable about specific
customer needs. The major disadvantages of
structured sales forces arise when the various
type of customers are scattered throughout the
country as this requires extensive travel by each
sales force.
d) Complex sales force structures
When a company sells a wide variety of
products to many types of customers over a
broad geographical area, if often companies
several principles of sales force structure. A
sales representative might then report to one or
more line managers and staff managers.
Market / Sales Potential
A sales potential is an estimate of the maximum
possible sales opportunities present in a
particular market segment open to a specified
company selling a good or service during a
stated future period.
Analyzing Market Potential
1. Market Identification
2. Market motivation
3. Analysis of Market Potential
Sales Forecast
A sales forecast is an estimate of sales, in Rupees
(monetary terms) or physical units, in a future
period under a particular marketing program and
as assumed set of economic and other factors
outside the unit for which the forecast is made. A
sales forecast may for a single product or for an
entire product line. It may be for a manufacturer’s
entire marketing area, or for any subdivision of it.
Sales Forecast
Accurate sales forecasting is essential for a firm to
enable it to manufacture the required quantities at
the right time and arrange well in advance for the
various factors of production e.g., raw materials,
equipments, machine accessories etc. Forecasting
helps a firm to access the probable demand for its
products and plan its production accordingly.
Importance of Sales Forecast
 Helpful in deciding the number of salesmen
required to achieve the sales objective.
 Determination of sales territories.
 To determine how much production capacity to be
built up.
 Determining the pricing strategy.
 Helpful in deciding the channels of distribution and
physical distribution decision.
 To decide to enter a new market or not.
 To prepare standard against which to measure
performance.
Factors Affecting Sales Forecast
1. Purchasing power of customers
2. Demography
3. Price
4. Replacement demand
5. Credit Conditions
6. Conditions within the industry
7. Socio economic conditions
Methods of Sales Forecast
1. Survey of buyer’s intentions / opinion survey
method
2. Sales force composite method / collective
opinion survey method
3. Executive judgment / jury of executive opinion
method
4. Delphi method
5. Time series analysis
6. Market test method
7. Correlation method
1. Survey of buyer’s intentions / opinion survey method

Customers may be asked to communicate their buying

intentions in a coming period. This requires identifying
potential buyers and asking them if they intend to buy
a certain product during a specific future time period
and if so, how many units and from whom will they
buy.
Survey of this type is used especially for industrial
products’ sales forecasting.
2. Sales force composite method / collective opinion
survey method
In this method, the sales men are required to estimate
expected sales in their respective territories in a given
period. Then the individual sales force forecasts are
combined to produce the total company forecast. This
method is used based on the assumption that sales
persons are closest to the customers and have direct
contact with them.
3. Executive judgment/jury of executive
opinion method
It involves combining and averaging the sales
projections of executives in different departments to
come up with a forecast. If they are experienced and
knowledgeable about the factors that influence the
sales, and if they have up to date knowledge of current
market developments.
4. Delphi method
It consists of an attempt to arrive at a
consensus in an uncertain area by questioning
a group of experts repeatedly until the
responses appear to converge along a single
line. The participants are supplied the
responses to previous questions from others in
the group by the coordinator. The coordinator
provides each expert with the responses of the
others including their reasons. Each expert is
given the opportunity to react to the information
or considerations advanced by others.
5. Time series analysis
Time series analysis is based on
extrapolation, which is the process of
projecting a past trend or relationship into
the future on the belief that history will
repeat itself. Unfortunately, this is not
always the case, especially in the longer
term.
6. Market test method
In a market test the firm distributes the
product in one or more markets to total
potential customer response to the
marketing mix. The market test measures
actual sales, not intentions to buy. If test
markets are selected wisely and the test
is conducted properly, the marketer can
generalize test experience to the entire
market and develop a sales forecast.
6. Correlation method
The method is based on historical sales data. When
there is a close relationship between sales volume and a
well-known economic indicator, correlation method can
be used. The marketer could develop a mathematical
formula that describes the relationship between sales
and independent variable.
Direct Marketing
Most companies rely primarily on advertising,
sales promotion, and personal selling to move
their products and services. They use
advertising to create awareness and interest,
sales promotion to provide an incentive to buy,
and personal selling to close the sale. Direct
marketing attempts to compress these elements
to lead to a direct sale without using an
intermediary.
Direct Marketing
Direct marketing is the use of consumer-direct
channels to reach and deliver goods and
services to customers without using market
middlemen.
Direct Marketing - Methods
 The mail (Direct Mail).
 Telephone (Telemarketing).
 Humans (Door-to-Door Selling, Party Plan
Selling).
 E-mail (E-mail Marketing).
 Internet (Behavioral Targeting)
 Mobile phones.
 Social Media Marketing like FB, WA web etc.
Direct Mail
Direct marketers send single mail pieces-
letters flyers, foldouts, and other
“salespeople on wings”. Some direct
marketers have been mailing audiotapes,
videotapes and even computer diskette’s
Telemarketing
Telemarketing is the innovative use of
telecommunication equipments and
systems as part of the “going to the
customer” category of direct marketing.
Both field selling and over the counter
selling sometimes utilize the telephones in
such activities as prospecting for new
customers and following up with existing
customer.
Physical Distribution & Marketing Logistics & Supply Chain
Management
Importance
• Ensures the physical flow of the product from the producer to the consumer without this
flow marketing cannot take place.
• Confers place and time utility on products
• Helps build clientele
• Where production locations and markets are distanced, physical distribution becomes all
the more crucial.
• A promising area for cost reduction.
Component Functions of Physical Distribution & Marketing Logistics
• Planning the overall PD system
• In plant warehousing
• Transportation
• Field warehousing
• Receiving
• Handling secondary transportation, secondary handling and sub-distribution
Cont’d….
Physical Distribution & Marketing Logistics & Supply Chain
Management
• Inventory management at each level in the chain
• Order processing/execution
• Accounting/record keeping
• Communication
Steps involved in designing a physical distribution
system
• Articulating distribution objectives and specifying the
minimum service level desired in product delivery
• Finding out what the customers want in product delivery
• Finding out what competitors do
• Keeping the costs of the system as low as possible,
without sacrificing the minimum guaranteed service level.
• Keeping the system sufficiently flexible
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..

Main tasks in Transportation management

• Assessment of transportation requirement
• Choosing the `mix’ of transportation modes
• Deciding the routing
• Development of operational plans
• Implementation/review
• Control of transportation costs
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
Role & Importance of warehousing
• Like transportation, warehousing too vests the product with the
time utility and place utility
• In case of some products, ware housing vests the product with
`form utility’ as well.
• It is common knowledge that a certain level of storage is in
escapable in marketing of most products
• For products with high seasonality, storage is needed on a larger
scale.
• In some cases, sub-distribution realities necessitate extra storage
• Storage reduces the need for instant transportation, which often
difficult and costly
• Storage is also a competitive advantage, as with better storage,
better servicing of the channel and consumer is possible.
• Storage also helps in balancing demand and supply and in
stabilizing prices
• In case of some products, storage by itself acts as a stimulant of
demand.
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
Elements of Inventory Management
• Interest on capital tied up in the inventory
• Warehouse rent
• Staff salaries
• Insurance
• Rates and taxes
• Stationery
• Postage and communication charges
• Administrative overheads
• Costs of handling, unloading, loading and stacking setting up of
goods in godown
• Loss due to damage and deterioration while on storage
• Cost order processing/record keeping accounting
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
Functions performed by Marketing Channels
• Facilitate selling by physically close to customers
• Provide the distributional efficiency by bridging the
manufacturer with the user, efficiently and
economically.
• Break the bulk and cater to tiny requirements of
buyers
• Assemble products into assortment to meet buyer’s
needs; match `segment of supply’ with `demand’.
• Look after a part of physical distribution/marketing
logistics.
Sub-distribution
a) Reselling
b) Retransport
c) Handling
d) Accounting
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
Stock Holding
a) Providing warehouse space
b) Storing the stocks
c) Bearing risks
d) Transforming static stocks into operational stocks, thereby
aiding the sale process
e) Share the financial burden of the principal; provide deposits;
finance the stocks till they are sold to the ultimate consumers;
extend credit to retailers/consumers.
f) Provide salesmanship
g) Provide pre-sale & after sales service
h) Assist in merchandising
i) Assist in introducing new product
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
• Assist in implementing he price mechanism, assist in
price negotiations
• Assist in developing sales forecasts/sales plans for
the territory
• Provide market intelligence and feedback
• Maintain records
• Take care of liaison requirements
• Act as change agents and generate demand
• Channels acquire their importance by their functions
• Channels cannot be eliminated
• Channels/middlemen are no parasites.
• Channel decisions have a bearing on other marketing
decisions
 Physical Distribution & Marketing Logistics & Supply Chain
Management – Cont’d..

Alternative Channel Patterns:-

• Manufacturer – manufacturer’s salesmen – user
• Manufacturer – showrooms/depots – user
• Manufacturer – retailer – user
• Manufacturer – franchisees – user
• Manufacturer – wholesaler (stockist)/Distributor – Retailer – user
• Manufacturer – wholesaler (stockist)/Distributor semi-wholesaler
– retailer – user
• Manufacturer – marketer – wholesaler – distributor – semi-
wholesaler- retailer – user
• Manufacturer – sole-selling agent – wholesaler-
(stockist)/Distributor – semi-wholesaler – retailer – user
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
Types of Intermediaries:-
• Sole-selling agent or a marketer
• C&F agents (CFAs)
• Redistribution stockist
• Stockist/distributor/wholesaler
• Semi-wholesaler
• Retailer/dealer
• Broker
• Franchisees
• Authorized representatives
• Commission agents
• jobbers
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
Points to be considered while designing a channel system:-
How does the firm make the choice? How does it determine which one is
the best?
• Should it go for own channels – company owned showrooms and
depots / exclusive company dealer or prefer conventional
intermediaries I.e. wholesale/retail trade?
• How many levels / tiers should there be in the chosen channel design?
• How many wholesale points should it have to ensure satisfactory
market coverage? Where should they be located?
• How many retail points should it have? Which are the places where it
should have them?
• What should be the relationship between the wholesalers and
retailers?
• Formulating the channel objectives
• Identifying the functions to be performed by the channel.
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..
• Analyzing the product and linking the channel design to the product
characteristics.
• Evaluating competitor’s channel design.
• Evaluating company resources and matching the channel design to
the resources.
• Generating alternative designs, evaluating them and selecting the one
that suits the firm best.
Firms commonly seek following objectives from the channels
• Effective coverage of the target market.
• Efficient and cost-effective distribution
• Ensuring that consumers incur minimum exertion in procuring the
product
• Helping the firm to carry on manufacturing un-interrupted `confidence
that the channels will take care of sales
• Partnering the firm in finance and sub-distribution tasks
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..

Distinctive Characteristics of Industrial product

• Buyers are few
• Purchased only once in a while, as their replacement
rate / re-demand is low.
• Have high unit value
• Size at the time of a purchase is large
• They are complex, technical and often custom made as
per buyer’s specification requirements
 Physical Distribution & Marketing Logistics &
Supply Chain Management – Cont’d..

Industrial Products: Amenability for marketing

through channels.
• Only some industrial products lend for selling through
channels
• The product must have a sizeable customer base
• It must be a reasonably standard item; not a totally
custom-made item
• It must a stockable item
• The unit value of an item should not be too high

In any case; industrial products need specialist

distributors.