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Sales andSales and
DistributionDistribution
Module OneModule One
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Session ObjectivesSession Objectives
Nature and importance of sales managementNature and importance of sales management Sales person to sales managerSales person to sales manager Emerging trends in sales managementEmerging trends in sales management
Role of distribution managementRole of distribution management
Overview of distribution channel membersOverview of distribution channel members Linking sales and distributionLinking sales and distribution
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What is Personal Selling?What is Personal Selling?
Involves two-way personalcommunication betweensalespeople and individualcustomers whether:face to face,
by telephone,
through video conferencing,
or by other means.
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The Role of the Sales ForceThe Role of the Sales Force
Sales ForceServes as a Critical Link
Between a Company and its Customers Since They:
Represent Customersto
the Company toProduce Customer
Satisfaction
Represent theCompany to
Customers to ProduceCompany Profit
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Types of Selling
THE SELLING
FUNCTION
ORDER
TAKERS
INSIDE
ORDER
TAKERS
MISSIONARY
SALES
PEOPLE
TECHNICAL
SUPPORT
MERCHAND
ISERS
ORDER
CREATORS
ORDER
GETTERS
DELIVERY
SALES
PEOPLE
OUTSIDE
ORDER
TAKERS
FRONT
LINE
SALES
SUPPORT
NEW
BUSINESSESCHANNELSINDUSTRIAL
Sales
development
Sales
Maintenance
Sales
Support
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The complexity and difficulty of sales job categoriesincrease as they move left to right.
Order Takers Order Getters
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Sales jobs differ from other jobsbecause salespeople
Implement a firms marketing strategies inthe field.
Are revenue generators
Are authorized to spend company funds intravel, communication and entertainment.
Represent their company to customers and
to society in general.
Represent the customer to their
companies.
Operate with little or no direct supervision
and require a high degree of motivation.
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Sales jobs differ from other jobsbecause salespeople
Have a higher level of social intelligenceand tact
Have to develop innovative solutions to
difficult problems.Face role ambiguity, role conflict, and role
stress.
Face more failures than successesRequire considerable travel and time awayfrom home
Have to bear pressure from all fronts
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Knowledge Updating Habitsof Successful Salespeople
Finding the right customersListening to customers customers
Cultivating resources in their ownorganizations
Keeping an eye on bottom lines
Anticipating problems
Adopting a long-term view
Reviewing each sales call after-the-fact
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Traits of Successful Salespeople
Ambitious
Analytical
Disciplined
Drive/EnthusiasmGood communicator
Empathy
Ethical/Integrity
Hard working
Initiative
Killer Instinct
Persistent/Persuasive
Personal CharismaRelationshipOriented
Resilience
Self confidenceTeam Players
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Selling Success Factors
1. Listening skills
2. Follow-up skills
3. Ability to adapt sales style to situation
4. Tenacity
5. Well organized
6. Verbal communication skills
7. Able to interact with people at all levels of anorganization
8. Ability to overcome objections
9. Closing skills
10.Personal planning and time management skills
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A Day in a Sales Managers LifeA Day in a Sales Managers Life
Von Oliver is currently national sales manager for aVon Oliver is currently national sales manager for a
division of Lockheed Martin Corp. Vons typical day startsdivision of Lockheed Martin Corp. Vons typical day starts
at 7:30 A.M. going through e-mail and prioritizing the daysat 7:30 A.M. going through e-mail and prioritizing the days
events. During the morning he will review reports, andevents. During the morning he will review reports, and
spend time with his sales reps. He will have lunch withspend time with his sales reps. He will have lunch withcustomers and spend the afternoon making sales callscustomers and spend the afternoon making sales calls
with his sales reps. He spends late afternoon reconcilingwith his sales reps. He spends late afternoon reconciling
the days activities and setting his agenda for the next day.the days activities and setting his agenda for the next day.
ActionAction
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A Day in a Sales Managers LifeA Day in a Sales Managers Life
Von Oliver is involved in a variety of different activities.Von Oliver is involved in a variety of different activities.
He spends much of his time interacting withHe spends much of his time interacting withindividuals, especially salespeople and customers.individuals, especially salespeople and customers.
But, he also plans strategies and continuouslyBut, he also plans strategies and continuously
monitors performance. In other words, he performs allmonitors performance. In other words, he performs all
the major sales management functions.the major sales management functions.
ResultResult
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The Marketing ConceptThe Marketing Concept
Production Era up to 1970Production Era up to 1970 Focus on mass-producing a limited variety ofFocus on mass-producing a limited variety of
products for as little cost as possible.products for as little cost as possible.
Consultative Selling Era (70s)Consultative Selling Era (70s) Age of the hard-sell.Age of the hard-sell.
Strategic Selling Era (80s)Strategic Selling Era (80s) The marketing concept first emerges.The marketing concept first emerges.
Partnering Era (Mid 90s to Present)Partnering Era (Mid 90s to Present) The buyer and seller commit to doing businessThe buyer and seller commit to doing business
over a long timeover a long time
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Sales Management in the 21Sales Management in the 21stst CenturyCentury
Behavioural Rising customer expectation,Behavioural Rising customer expectation,globalisation, demassification of marketsglobalisation, demassification of markets Technological sales force automation,Technological sales force automation,
sales offices, electronic channelssales offices, electronic channels
Managerial Shift to Direct Marketing,Managerial Shift to Direct Marketing,outsourcing of sales and merging of salesoutsourcing of sales and merging of salesand marketingand marketing
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Sales Force Management Challenges in the 21Sales Force Management Challenges in the 21stst
CenturyCentury
Customer relationship management (CRM)Customer relationship management (CRM) Sales force diversitySales force diversity Electronic communication systems andElectronic communication systems and
computer-based technologycomputer-based technology Selling teamsSelling teams Necessary skills to sell intangiblesNecessary skills to sell intangibles Complex channels of distributionComplex channels of distribution
An international perspectiveAn international perspective Ethical behavior and social responsibilityEthical behavior and social responsibility
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Sales Management in the 21Sales Management in the 21stst CenturyCentury
Creating more nimble and adaptable salesCreating more nimble and adaptable salesorganizational structuresorganizational structures
Removing functional barriers within theRemoving functional barriers within the
organization to create greater joborganization to create greater job
ownership and commitment fromownership and commitment fromsalespeoplesalespeople
Integrating salesperson performanceIntegrating salesperson performance
evaluation to incorporate all activities andevaluation to incorporate all activities and
outcomesoutcomes
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Sales Management in the 21Sales Management in the 21stst CenturyCentury
Small business is where the business isSmall business is where the business is IBM changing its focus to organisations with 100 to 1000IBM changing its focus to organisations with 100 to 1000
employeesemployees HP Small Office InitiativeHP Small Office Initiative
Smaller companies purchase with a higherSmaller companies purchase with a higher
speed and frequencyspeed and frequency Prefer to research products onlinePrefer to research products online Want to be partnered not entertainedWant to be partnered not entertained Simple in their approachSimple in their approach Prefer a single point of contactPrefer a single point of contact No more cold callsNo more cold calls
Source: Jennifer Gilbert, Small but Mighty Sales and Marketing Jan 2004
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The Internet has allowed many companies to shiftThe Internet has allowed many companies to shift
sales support for small accounts to e-commerce sitessales support for small accounts to e-commerce sites
and away from sales personnel. Additionally, manyand away from sales personnel. Additionally, many
regularly occurring functions have becomeregularly occurring functions have becomeautomated, allowing customers with any sizeautomated, allowing customers with any size
organization to use web-based systems to place ordersorganization to use web-based systems to place orders
and submit warranty requests. Can you think of anyand submit warranty requests. Can you think of any
other areas where Internet-basedother areas where Internet-basedtechnologies could change thetechnologies could change the
way a sales force interactsway a sales force interacts
with their customers?with their customers?
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Percentage of Companies Using the Internet for Sales ActivitiesPercentage of Companies Using the Internet for Sales Activities
0%
20%
40%
60%
80%
100%
Help on the Net
ProductE
xplanation
ProposalDevelopment
Competitive
Reporting
ExpenseReports
OrderEntry
Prospecting
Source: G-BB, Sales and Marketing Management, June 2000, pp. 64&65.
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Sales ManagementSales Management
The planning, direction and control of personalThe planning, direction and control of personal
selling, including recruiting, selecting, equipping,selling, including recruiting, selecting, equipping,
assigning, routing, supervising, paying andassigning, routing, supervising, paying and
motivating as these tasks apply to the personal salesmotivating as these tasks apply to the personal sales
forceforceAmerican Marketing AssociationAmerican Marketing Association
The management of the personal selling componentThe management of the personal selling component
of an organisations marketing programmeof an organisations marketing programme
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Designing Salesforce Strategy and Structure
Recruiting and Selecting Salespeople
Training Salespeople
Compensating Salespeople
Leading and Motivating Salespeople
Evaluating Salespeople
Sales Force ManagementSales Force Management
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The Nature of Sales ManagementThe Nature of Sales Management
Has evolved from recruitment , training,Has evolved from recruitment , training,supervising and motivating the sales forcesupervising and motivating the sales forceto also include :to also include : Strategic PlanningStrategic Planning ForecastingForecasting BudgetingBudgeting Territory PlanningTerritory Planning Sales Cost AnalysisSales Cost Analysis
He has to have the ability to select the rightHe has to have the ability to select the right
person and keep him motivated throughperson and keep him motivated throughthe highs and the lowsthe highs and the lows
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Roles and Skills of a Sales ManagerRoles and Skills of a Sales Manager
No longer the driver but the supportNo longer the driver but the support From boss to leaderFrom boss to leader Detailed understanding of the customerDetailed understanding of the customer Partnering the sales repsPartnering the sales reps
Flexibility to deal with hybrid sales force ofFlexibility to deal with hybrid sales force ofreps, telemarketing, MSRsreps, telemarketing, MSRs
Seeking ways to exceed customerSeeking ways to exceed customer
expectationsexpectations
Better at people skills than at analytical orBetter at people skills than at analytical orevaluative skillsevaluative skills
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TransactionsTransactions RelationshipsRelationships
LocalLocal GlobalGlobal
ManagementManagement LeadershipLeadership
IndividualsIndividuals TeamsTeams
Sales VolumeSales Volume Sales ProductivitySales Productivity
Sales Management TrendsSales Management Trends
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TRANSACTION TO RELATIONSHIPTRANSACTION TO RELATIONSHIP
Transaction OrientedTransaction Oriented
Get new accountsGet new accounts
Get the orderGet the order Cut the priceCut the price Short termShort term Sell to anyoneSell to anyone
Relationship orientedRelationship oriented
Retain existing accountsRetain existing accounts
The preferred supplierThe preferred supplier Price for profitPrice for profit Long term profitLong term profit Concentrate on highConcentrate on high
profit potential accountsprofit potential accounts
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Effective Sales Managers:Effective Sales Managers:
Utilize a Strategic Perspective Focused onUtilize a Strategic Perspective Focused on
CustomersCustomers
Attract, Keep, and Develop Sales TalentAttract, Keep, and Develop Sales Talent
Leverage TechnologyLeverage Technology
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Selling and ManagingSelling and Managing
ActivityActivity Sales repSales rep Sales ManagerSales Manager
Primary responsibilityPrimary responsibility Develop accountsDevelop accounts Develop peopleDevelop people
Working relationshipsWorking relationships AloneAlone Through othersThrough others
RoleRole PlayerPlayer CoachCoach
Part of ManagementPart of Management NoNo YesYes
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DesignationsDesignations
Front Line Middle Senior
Sales RepSales Rep Area ManagerArea Manager Branch ManagerBranch Manager
Area ExecutiveArea Executive Major Account ManagerMajor Account Manager Regional ManagerRegional Manager
Medical RepMedical Rep District ManagerDistrict Manager Zonal MangerZonal Manger
Territory ManagerTerritory Manager Unit Sales ManagerUnit Sales Manager General ManagerGeneral Manager
OfficerOfficer SupervisorSupervisor Vice PresidentVice President
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Sales Personnel Career Path
Middle Level
Senior/Top
Level
Front Line
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Importance of Personal Selling and SalesImportance of Personal Selling and Sales
ManagementManagement
In our EconomyIn our Economy Buyers market from mid 70s. The problem has shiftedBuyers market from mid 70s. The problem has shiftedfrom production to sellingfrom production to selling
Production and sales are seen as the two pillars with allProduction and sales are seen as the two pillars with allother areas supporting these functionsother areas supporting these functions
In an individual organisationIn an individual organisation All marketing plans go awry if not implemented by theAll marketing plans go awry if not implemented by the
sales forcesales force Biggest expense post manufacturingBiggest expense post manufacturing
To you, the studentsTo you, the students The line which you will join and stay with for at leastThe line which you will join and stay with for at least
another five yearsanother five years
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The best executive is the one who has enough
sense to pick good people to do what he wants doneand self-restraint enough to keep from meddling
with them while they do it.Theodore Roosevelt
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Sales andSales andDistributionDistribution
Module OneModule One
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The Need for Marketing ChannelsThe Need for Marketing Channels
Manufacturers lack the financial resources toManufacturers lack the financial resources tocarry out direct sales both in terms ofcarry out direct sales both in terms of
inventory and selling costsinventory and selling costs Practically not feasible especially for lowPractically not feasible especially for low
value high volume productsvalue high volume products Returns on manufacturing higher thanReturns on manufacturing higher than
returns on retailreturns on retail
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What is a Marketing Channel?What is a Marketing Channel?
A set of interdependent organisationsA set of interdependent organisationsinvolved in the process of making a productinvolved in the process of making a product
or service available for consumption or useor service available for consumption or useIntermediariesIntermediaries
create and meet demandcreate and meet demand Facilitate smooth flow of goods and fundsFacilitate smooth flow of goods and funds
between manufacturers and consumersbetween manufacturers and consumers
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Major Role of an IntermediaryMajor Role of an Intermediary
Possession
Utility
Place
Utility
Time
Utility
A customer wants to buy a tube of toothpaste at 8 pm on a Tuesday evening
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What is a Marketing Channel?What is a Marketing Channel?
A set ofA set ofinterdependentinterdependent organisationsorganisationsinvolved in theinvolved in the processprocess of making a productof making a product
or service available for consumption or useor service available for consumption or use They are the intermediaries whoThey are the intermediaries who
Create and meet demandCreate and meet demand Facilitate smooth flow of goods and fundsFacilitate smooth flow of goods and funds
between manufacturers and consumersbetween manufacturers and consumers Are the agents of delivery for manufacturers whoAre the agents of delivery for manufacturers who
concentrate on production and brand buildingconcentrate on production and brand building
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What is a Marketing Channel?What is a Marketing Channel?
Examples:Examples:Computers from direct sales to VARs to retailersfrom direct sales to VARs to retailers
to Internetto InternetBooks authors, publishers, wholesalers, retailersauthors, publishers, wholesalers, retailers
to the net. Impact for logisticsto the net. Impact for logisticsPharmaceuticals involving hospitals, doctors,involving hospitals, doctors,
wholesalers, distributors. Identification of keywholesalers, distributors. Identification of key
players on scanning the changing environmentplayers on scanning the changing environment
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Why are there Marketing Channels?Why are there Marketing Channels?
Demand Side factorsDemand Side factors Facilitation of Search both for the manufacturerFacilitation of Search both for the manufacturer
and the end userand the end user Example Bond paper vs. fancy stationeryExample Bond paper vs. fancy stationery
Adjustment of Assortment DiscrepancyAdjustment of Assortment Discrepancy Sorting - case of fruits, gradingSorting - case of fruits, grading Accumulation from various suppliers, varietyAccumulation from various suppliers, variety Allocation breaking bulkAllocation breaking bulk Assorting breakfast tableAssorting breakfast table
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Consumer Marketing LevelsConsumer Marketing Levels
M A N U F A C T U R E R S
C O N S U M E R S
Distributors
Wholesalers
Retailers
Wholesalers
Retailers Retailers
ZeroLevel
OneLevel
TwoLe
vels
ThreeLevels
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Industrial Marketing LevelsIndustrial Marketing Levels
M A N U F A C T U R E R S
C O N S U M E R S
Sales Branches
Industrial
Distributors
ZeroLevel
OneLevel
TwoLevels
Industrial
Distributors
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Cost Value RelationshipsCost Value Relationships
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Distribution ModesDistribution Modes
Choice of combination and contribution ofChoice of combination and contribution ofeach set is determined by:each set is determined by: Nature of productsNature of products Nature and dispersal of customersNature and dispersal of customers
Market expectations of creditMarket expectations of credit Companys capabilities and strengthsCompanys capabilities and strengths Desired speed of market penetrationDesired speed of market penetration Competitive forcesCompetitive forces
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Functions of Marketing ChannelsFunctions of Marketing Channels
Demand Side factorsDemand Side factors Facilitation of Search both for the manufacturerFacilitation of Search both for the manufacturer
and the end userand the end user Example Bond paper vs. fancy stationeryExample Bond paper vs. fancy stationery
Adjustment of Assortment DiscrepancyAdjustment of Assortment Discrepancy Sorting heterogeneous supply into relatively homogeneousSorting heterogeneous supply into relatively homogeneous
sets gradingsets grading Accumulation from various suppliers, varietyAccumulation from various suppliers, variety Allocation breaking bulkAllocation breaking bulk Assorting for resale in association with each other Assorting for resale in association with each other
breakfast tablebreakfast table
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Functions of Marketing ChannelsFunctions of Marketing Channels
Routinisation of transactionsRoutinisation of transactions Each purchase transaction involves ordering,Each purchase transaction involves ordering,
valuating and paying for goods/servicesvaluating and paying for goods/services Routinisation of these transactions lead to higherRoutinisation of these transactions lead to higher
efficiencies and standardisation of goodsefficiencies and standardisation of goods Electronic Data InterchangeElectronic Data Interchange Continuous Replenishment ProgrammesContinuous Replenishment Programmes
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Functions of Marketing ChannelsFunctions of Marketing Channels
Reduction in Number ofReduction in Number of
Contacts by ManufacturersContacts by Manufacturers Manufacturer also wants toManufacturer also wants to
take advantage of bulktake advantage of bulkpacks to reducepacks to reduce
transaction andtransaction and
distribution costsdistribution costs
Lot sizes, frequency ofLot sizes, frequency ofdelivery, payments anddelivery, payments and
communicationscommunications
routinised throughroutinised through
channelschannels
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Who Belongs to a Marketing Channel?Who Belongs to a Marketing Channel?
Manufacturers own distribution centres andManufacturers own distribution centres andCarrying and Forwarding Agents (These wereCarrying and Forwarding Agents (These were
very necessary in the pre VAT days)very necessary in the pre VAT days) IntermediariesIntermediaries
Distributors, Stockists, Value Added ResellersDistributors, Stockists, Value Added Resellersand Agentsand Agents
WholesalersWholesalers RetailersRetailers
End UsersEnd Users
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IntermediariesIntermediaries
They can be broadly classified into:They can be broadly classified into:Merchants who buy, take title to and resell thewho buy, take title to and resell the
goods wholesalers, retailersgoods wholesalers, retailersAgents who search for customers, negotiate onwho search for customers, negotiate on
manufacturers behalf but do not take title to themanufacturers behalf but do not take title to thegoods brokers, merchant representativesgoods brokers, merchant representatives
Facilitators who assist the distribution process butwho assist the distribution process but
neither negotiate nor take title to the goods neither negotiate nor take title to the goods
transporters, warehouses, banks, advertisingtransporters, warehouses, banks, advertising
agenciesagencies
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Patterns of DistributionPatterns of Distribution
Intensive normally for FMCG and fastIntensive normally for FMCG and fastmoving electricalsmoving electricals
Selective normally for consumer durablesSelective normally for consumer durables Exclusive LG, Samsung, BenettonExclusive LG, Samsung, Benetton
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Historical Perspective IndiaHistorical Perspective India
50s and 60sWholesalersRegional distributorsDirect sales
70s and 80sShift to dealer network
90sDirect marketing
The recent past
InternetPrivate labelsDirect selling agents
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Marketing Flows in ChannelsMarketing Flows in Channels
MAN
UFACTURER
S
WHOLESALERS
RETAILERS
C
ONSUMERS
Physical PhysicalPhysical
Possession Possession Possession
NegotiationNegotiation
Promotion
Negotiation
FinancingFinancing
Risking Risking
Financing
Ordering Ordering
Risking
Ordering
Payment Payment Payment
Ownership
Promotion Promotion
OwnershipOwnership
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Marketing Flows in ChannelsMarketing Flows in Channels
Marketing FlowMarketing Flow Physical possession Ownership Promotion
NegotiationNegotiation FinancingFinancing
RiskingRisking
OrderingOrdering PaymentPayment
Cost representedCost represented Storage and delivery costs Inventory carrying costs Personal selling, Advertising, Sales
Promotion, Publicity, PR Time and legal costsTime and legal costs Credit terms, terms and conditions ofCredit terms, terms and conditions of
salessales Price guarantees, warranties, insurance,Price guarantees, warranties, insurance,
repairs and after sales servicerepairs and after sales service Order processing costsOrder processing costs Collections, bad debt costsCollections, bad debt costs
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Value Added by Distribution ChannelsValue Added by Distribution Channels
Channels are not only the conduits but haveChannels are not only the conduits but haveto be viewed as adding value throughto be viewed as adding value through
services provided:services provided: Bulk Breaking reducing large sizesBulk Breaking reducing large sizes
Spatial Convenience reducing distance betweenSpatial Convenience reducing distance betweenproducers and consumersproducers and consumers
Waiting and Delivery TimeWaiting and Delivery Time Assortment - providing varietyAssortment - providing variety
Other areas of value addition are:Other areas of value addition are: After Sales ServiceAfter Sales Service Financial support for high value itemFinancial support for high value item
C t S i L l d Di t ib tiC t S i L l d Di t ib ti
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Customer Service Levels and DistributionCustomer Service Levels and Distribution
ObjectivesObjectives
Customer service levels looks at:Customer service levels looks at: Number of channelsNumber of channels Frequency of visitsFrequency of visits Stock levelsStock levels
Setting distribution objectives:Setting distribution objectives: In terms of time, place and possession utilitiesIn terms of time, place and possession utilities Credit periodCredit period
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Set of ActivitiesSet of Activities
Area wise sales forecastArea wise sales forecast Dispatch of goods and maintenance ofDispatch of goods and maintenance of
inventory levelsinventory levels Developing market beats for sales andDeveloping market beats for sales and
service personnelservice personnel Collection of proceedsCollection of proceeds Carrying out promotional activitiesCarrying out promotional activities
Relationship building with bigger channelRelationship building with bigger channel
membersmembers
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Distribution OrganisationDistribution Organisation
Who does what?Who does what? How much does he get compensated for it?How much does he get compensated for it? Guidelines for selection and appointment ofGuidelines for selection and appointment of
channel partnerschannel partners Guidelines for financial investments byGuidelines for financial investments by
channel memberschannel members
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Policy and ProceduresPolicy and Procedures
Operating manual issued to sales people:Operating manual issued to sales people: Basic space and finance requirementBasic space and finance requirement ExclusivityExclusivity Terms of deliveryTerms of delivery
Terms of paymentTerms of payment Basic discountsBasic discounts Other discountsOther discounts Promotional supportPromotional support System for handling disputesSystem for handling disputes Additional support for rural marketsAdditional support for rural markets Coverage of institutional businessCoverage of institutional business
1We Often Do Not Reach Our
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We Often Do Not Reach OurPotential Because
We set our limits
It is hard to breakaway from our old self