s1 s and d

Upload: ajay-gehlot

Post on 30-May-2018

219 views

Category:

Documents


0 download

TRANSCRIPT

  • 8/14/2019 S1 S and D

    1/59

    Sales andSales and

    DistributionDistribution

    Module OneModule One

  • 8/14/2019 S1 S and D

    2/59

    2

    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

  • 8/14/2019 S1 S and D

    3/59

    3

    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.

  • 8/14/2019 S1 S and D

    4/59

    4

    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

  • 8/14/2019 S1 S and D

    5/59

    1

    1

    5

    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

  • 8/14/2019 S1 S and D

    6/59

    1

    1

    6

    The complexity and difficulty of sales job categoriesincrease as they move left to right.

    Order Takers Order Getters

  • 8/14/2019 S1 S and D

    7/59

    1

    1

    7

    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.

  • 8/14/2019 S1 S and D

    8/59

    1

    1

    8

    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

  • 8/14/2019 S1 S and D

    9/59

    1

    1

    9

    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

  • 8/14/2019 S1 S and D

    10/59

    1

    1

    10

    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

  • 8/14/2019 S1 S and D

    11/59

    1

    1

    11

    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

  • 8/14/2019 S1 S and D

    12/59

    12

    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

  • 8/14/2019 S1 S and D

    13/59

    13

    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

  • 8/14/2019 S1 S and D

    14/59

    14

    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

  • 8/14/2019 S1 S and D

    15/59

    15

    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

  • 8/14/2019 S1 S and D

    16/59

    16

    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

  • 8/14/2019 S1 S and D

    17/59

    17

    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

  • 8/14/2019 S1 S and D

    18/59

    18

    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

  • 8/14/2019 S1 S and D

    19/59

    4819

    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?

  • 8/14/2019 S1 S and D

    20/59

    20

    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.

  • 8/14/2019 S1 S and D

    21/59

    21

    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

  • 8/14/2019 S1 S and D

    22/59

    22

    Designing Salesforce Strategy and Structure

    Recruiting and Selecting Salespeople

    Training Salespeople

    Compensating Salespeople

    Leading and Motivating Salespeople

    Evaluating Salespeople

    Sales Force ManagementSales Force Management

  • 8/14/2019 S1 S and D

    23/59

    23

    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

  • 8/14/2019 S1 S and D

    24/59

    24

    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

  • 8/14/2019 S1 S and D

    25/59

    25

    TransactionsTransactions RelationshipsRelationships

    LocalLocal GlobalGlobal

    ManagementManagement LeadershipLeadership

    IndividualsIndividuals TeamsTeams

    Sales VolumeSales Volume Sales ProductivitySales Productivity

    Sales Management TrendsSales Management Trends

  • 8/14/2019 S1 S and D

    26/59

    26

    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

  • 8/14/2019 S1 S and D

    27/59

    27

    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

  • 8/14/2019 S1 S and D

    28/59

    28

    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

  • 8/14/2019 S1 S and D

    29/59

    29

    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

  • 8/14/2019 S1 S and D

    30/59

    30

    Sales Personnel Career Path

    Middle Level

    Senior/Top

    Level

    Front Line

  • 8/14/2019 S1 S and D

    31/59

    31

    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

  • 8/14/2019 S1 S and D

    32/59

    4832

    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

  • 8/14/2019 S1 S and D

    33/59

    Sales andSales andDistributionDistribution

    Module OneModule One

  • 8/14/2019 S1 S and D

    34/59

    40

    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

  • 8/14/2019 S1 S and D

    35/59

    40

    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

  • 8/14/2019 S1 S and D

    36/59

    40

    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

  • 8/14/2019 S1 S and D

    37/59

    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

  • 8/14/2019 S1 S and D

    38/59

    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

  • 8/14/2019 S1 S and D

    39/59

    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

  • 8/14/2019 S1 S and D

    40/59

    40

    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

  • 8/14/2019 S1 S and D

    41/59

    4041

    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

  • 8/14/2019 S1 S and D

    42/59

    40

    Cost Value RelationshipsCost Value Relationships

  • 8/14/2019 S1 S and D

    43/59

    40

    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

  • 8/14/2019 S1 S and D

    44/59

    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

  • 8/14/2019 S1 S and D

    45/59

    40

    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

  • 8/14/2019 S1 S and D

    46/59

    40

    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

  • 8/14/2019 S1 S and D

    47/59

  • 8/14/2019 S1 S and D

    48/59

    40

    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

  • 8/14/2019 S1 S and D

    49/59

    40

    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

  • 8/14/2019 S1 S and D

    50/59

    40

    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

  • 8/14/2019 S1 S and D

    51/59

    40

    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

  • 8/14/2019 S1 S and D

    52/59

    40

    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

  • 8/14/2019 S1 S and D

    53/59

    40

    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

  • 8/14/2019 S1 S and D

    54/59

    40

    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

  • 8/14/2019 S1 S and D

    55/59

    40

    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

  • 8/14/2019 S1 S and D

    56/59

    40

    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

  • 8/14/2019 S1 S and D

    57/59

    40

    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

  • 8/14/2019 S1 S and D

    58/59

    40

    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

  • 8/14/2019 S1 S and D

    59/59

    1

    59

    We Often Do Not Reach OurPotential Because

    We set our limits

    It is hard to breakaway from our old self