Sales and Distribution Management

Unit 1- Selling Concept and Process

1. Selling Concept

 The selling concept is a marketing philosophy that assumes consumers will not buy
enough of a product unless it is aggressively promoted or sold.
 Focus: Existing products → Aggressive selling and promotion → Profits through sales
volume.
 It is often used for unsought goods (e.g., insurance, encyclopedias).
 Emphasizes persuasion and closing sales rather than satisfying customer needs.

2. Selling Process

The selling process includes the following key steps:

1. Prospecting and Qualifying – Identifying potential customers and assessing their potential
to buy.
2. Pre-approach – Researching the prospect and planning the sales approach.
3. Approach – First contact with the prospect; building rapport.
4. Presentation and Demonstration – Presenting the product, showing features and benefits.
5. Handling Objections – Addressing concerns and questions.
6. Closing the Sale – Securing agreement to make a purchase.
7. Follow-up – Ensuring customer satisfaction and encouraging repeat business.

Nature and Scope of Sales Management

Nature:

 Sales Management involves planning, direction, and control of personal selling activities.
 It is both a strategic and operational function.
 Includes tasks like recruiting, training, motivating, and evaluating salespeople.

Scope:

1. Sales Planning – Setting sales targets, territory management, resource allocation.

2. Sales Forecasting – Predicting future sales to inform business decisions.
3. Sales Force Management – Recruiting, training, supervising, and motivating the sales
team.
4. Sales Operations – Managing day-to-day sales functions.
5. Market and Customer Analysis – Understanding customer needs and market trends.
 6. Performance Evaluation – Monitoring and improving sales force effectiveness.

Setting and Formulating Personal Selling Objectives

Definition:

Personal selling objectives are specific goals that guide the activities and performance of sales
personnel.

Types of Objectives:

1. Behavioral Objectives: Focus on actions like number of calls made, customer visits, etc.
2. Output Objectives: Measurable results such as sales volume, revenue, profit margins.
3. Strategic Objectives: Building customer relationships, entering new markets, etc.

Steps in Formulating Objectives:

1. Analyze the market and organizational goals.

2. Identify the role of personal selling in achieving those goals.
3. Set specific, measurable, attainable, relevant, and time-bound (SMART) objectives.
4. Communicate objectives clearly to the sales team.
5. Link objectives with performance appraisal and incentives.

Sales Theories

Several theories explain the behavior and effectiveness of personal selling. Some major ones
include:

1. AIDAS Theory

 Attention – Interest – Desire – Action – Satisfaction

 Describes the stages a buyer goes through during the selling process.
 Emphasizes the psychological steps of converting a prospect to a customer.

2. Right Set of Circumstances Theory (Situation Theory)

 Selling depends on a favorable set of circumstances.

 Success is more situational than based on skill.

3. Buying Formula Theory

 Focuses on how buyers make decisions.

  Buying = Need → Product → Purchase → Satisfaction
 Salesperson must present the product as a solution to a specific need.

4. Behavioral Equation Theory

 Sales = Drive (Motivation) × Cue (Stimulus) × Response (Action)

 Suggests that both internal (drive) and external (stimulus) factors influence buyer
behavior.

Unit 2- Management of Sales Force

Sales force management is the process of planning, directing, and controlling the activities of the
sales personnel. The objective is to achieve organizational sales goals efficiently and effectively.

1. Recruiting and Selecting Sales Personnel

Recruitment

 Involves attracting potential candidates for the sales position.

 Sources:
o Internal (transfers, promotions)
o External (campus recruitment, job portals, referrals)
 Goal: Build a pool of qualified candidates.

Selection

 Process of choosing the right candidate from the pool.

 Steps:
1. Application and Resume Screening
2. Initial Interview
3. Aptitude and Psychological Testing
4. Final Interview
5. Reference and Background Check
6. Job Offer and Appointment
 Criteria: Communication skills, product knowledge, motivation, integrity, adaptability.

2. Developing and Conducting Sales Training Programme

Training is essential to ensure that salespeople have the skills, knowledge, and attitude required
to perform effectively.

Objectives of Sales Training:

  Improve product and market knowledge
 Develop selling and negotiation skills
 Teach time and territory management
 Align salespeople with company goals and ethics

Types of Training:

 Induction Training – For new hires

 On-the-job Training – Learning while doing
 Off-the-job Training – Workshops, simulations, case studies
 Continuous Training – Periodic updates and skill enhancement

Steps in Designing a Training Programme:

1. Identify Training Needs

2. Set Training Objectives
3. Design Training Content
4. Choose Training Methods
5. Conduct Training Sessions
6. Evaluate Training Effectiveness

3. Steps in the Selling Process

The selling process is a systematic approach that guides the salesperson from the first contact to
closing the sale and beyond.

Step Description

1. Prospecting Identifying potential customers

2. Pre-approach Researching the prospect and planning the approach

3. Approach Initial interaction with the prospect

4. Presentation Demonstrating the product’s features and benefits

5. Handling Objections Addressing concerns or doubts

6. Closing the Sale Securing commitment from the buyer

7. Follow-Up Ensuring customer satisfaction and retention

4. Pre-requisite of a Good Sales Personnel

To succeed in sales, a salesperson must have a blend of skills, attitude, and personality traits.

Key Pre-requisites:

1. Good Communication Skills – Clear, persuasive, and engaging

2. Product Knowledge – Deep understanding of features, benefits, and uses
3. Customer Orientation – Focus on solving customer problems
4. Confidence and Enthusiasm – Positive energy and motivation
5. Listening Ability – Understand customer needs and concerns
6. Adaptability and Resilience – Handling rejection and changes
7. Integrity and Ethics – Building trust and long-term relationships
8. Goal-Oriented – Focus on achieving targets and performance metrics

Unit 3-Sales Planning

Sales planning involves setting sales objectives, formulating strategies, and determining
resources to achieve business goals. It acts as a roadmap for sales activities to ensure alignment
with organizational objectives.

Objectives of Sales Planning:

 Establish clear sales goals.

 Identify target customers and markets.
 Allocate resources efficiently.
 Forecast sales and revenue.
 Develop sales strategies and tactics.

Importance of Sales Planning:

 Provides direction to the sales team.

 Enhances coordination and resource utilization.
 Aids in market analysis and competitor assessment.
 Facilitates budgeting and sales forecasting.

Process of Sales Planning

1. Analyzing Market Opportunities:

o Conduct market research to assess demand.
o Analyze competitors and consumer preferences.
2. Setting Sales Objectives:
 o Define clear, measurable, achievable, relevant, and time-bound (SMART) goals.
3. Developing Sales Strategies:
o Decide on pricing, distribution, and promotional tactics.
4. Sales Budgeting:
o Estimate sales expenses and allocate resources.
5. Forecasting Sales:
o Predict future sales based on historical data, market trends, and external factors.
6. Implementation:
o Communicate the plan to the sales team.
o Provide necessary training and resources.
7. Monitoring and Control:
o Track progress through performance metrics.
o Adjust the plan as required.

Size and Type of Sales Force

Determining the Size of the Sales Force:

 Workload Method: Based on the number of customers and frequency of visits.

 Incremental Method: Evaluates additional sales generated by hiring extra salespeople.
 Sales Force Productivity Method: Relates sales volume to the number of sales
representatives.

Types of Sales Force:

1. Direct Sales Force: Company-employed salespeople who directly engage with customers.
2. Indirect Sales Force: Distributors, agents, or resellers who sell products on behalf of the
company.
3. Technical Sales Force: Specialists with technical knowledge who support complex
product sales.
4. Missionary Sales Force: Promotes products and builds customer relationships without
immediate sales.

Developing and Managing Sales Evaluation Programme

Steps in Developing a Sales Evaluation Programme:

1. Establish Performance Criteria:

o Define qualitative and quantitative benchmarks such as sales volume, profit
margins, or customer satisfaction.
2. Set Objectives and Standards:
o Develop realistic goals for sales performance.
 3. Collect Performance Data:
o Use CRM systems, sales reports, and customer feedback.
4. Analyze Performance:
o Compare actual results with objectives.
5. Provide Feedback and Take Corrective Actions:
o Offer constructive feedback and identify areas for improvement.

Key Performance Indicators (KPIs) for Sales Evaluation:

 Sales volume and revenue growth.

 Market share.
 Customer acquisition and retention rates.
 Sales per representative.

 Conversion rate and sales cycle length.

Unit 4- Distribution Management

1. Introduction, Need, and Scope of Distribution Management

Introduction to Distribution Management:

Distribution management refers to the strategic management of the movement of goods and
services from the point of origin (manufacturer) to the point of consumption (end consumer). It
encompasses logistics, inventory control, warehousing, transportation, order processing, and
channel selection.

Distribution is a vital component of the marketing mix (Place), ensuring that products reach
consumers efficiently and effectively.

Need for Distribution Management:

1. Bridging the Gap Between Production and Consumption:

o Goods produced in factories must be delivered to various markets where
customers exist.
o Distribution ensures the timely availability of products across geographies.
2. Product Availability:
o Makes sure that goods are available in the right quantity, at the right place, and at
the right time.
3. Cost Efficiency:
 Efficient distribution lowers transportation and storage costs, leading to better
o
pricing for customers.
4. Customer Satisfaction:
o Prompt delivery and product availability lead to improved customer experiences
and loyalty.
5. Competitive Advantage:
o Companies with strong distribution systems can reach markets faster and serve
customers better than competitors.
6. Market Expansion:
o Helps companies enter new geographical regions or target new customer
segments.

Scope of Distribution Management:

1. Channel Design and Management:

o Choosing the most suitable channel structure (direct/indirect).
2. Inventory Planning and Control:
o Managing stock levels to ensure product availability and cost control.
3. Warehousing:
o Storing goods safely and strategically for timely delivery.
4. Transportation Management:
o Choosing the best mode of transport and route optimization.
5. Order Processing:
o Managing customer orders efficiently for faster fulfillment.
6. Retail and Wholesale Coordination:
o Collaborating with intermediaries to improve reach and service.
7. Customer Service and Support:
o Handling delivery issues, returns, and feedback for customer satisfaction.

2. Marketing Channels Strategy

Definition:

A marketing channel is a set of interdependent organizations involved in the process of making a

product or service available for consumption.

Marketing channel strategy refers to planning and managing these channels to ensure efficient
product flow from producer to consumer.

Components of Marketing Channel Strategy:

 1. Channel Structure:
o Direct Channels: Manufacturer → Consumer
o Indirect Channels: Manufacturer → Wholesaler → Retailer → Consumer
2. Channel Length:
o Refers to the number of intermediaries.
o Short channels for perishable goods.
o Long channels for mass-distributed, non-perishable products.
3. Channel Width (Intensity):
o Intensive Distribution: Available everywhere (e.g., snacks, soft drinks).
o Selective Distribution: Limited outlets (e.g., electronics).
o Exclusive Distribution: Single outlet per territory (e.g., luxury goods).
4. Partner Selection Criteria:
o Market knowledge, financial stability, logistics capabilities, reputation.
5. Distribution Cost Analysis:
o Evaluating total costs vs. benefits of each channel option.

Factors Influencing Channel Strategy:

 Nature of product (perishable/non-perishable)

 Market size and customer preferences
 Competitor strategies
 Organizational goals
 Technological capabilities (e-commerce, CRM tools)

3. Channel Management

Definition:

Channel management is the process of selecting, managing, and motivating intermediaries to

ensure efficient product movement and customer satisfaction.

It includes the development and maintenance of relationships with distributors, wholesalers,

agents, and retailers.

Key Functions of Channel Management:

1. Channel Design:
o Creating an optimal channel structure based on product, market, and
organizational strategy.
2. Channel Selection:
 o Choosing partners that align with the company’s values and objectives.
3. Channel Motivation:
o Offering incentives, discounts, promotional support, and training to partners.
4. Conflict Resolution:
o Managing disputes related to pricing, territory, or performance.
5. Channel Evaluation and Control:
o Monitoring performance using metrics like sales volume, market share, customer
feedback, etc.
6. Channel Adaptation:
o Updating and adjusting channel policies to suit market dynamics and
technological changes.

4. Roles of Channel Management

Channel management plays several important roles in enhancing marketing effectiveness and
efficiency:

1. Facilitates Exchange Process:

 Provides a link between producer and consumer, enabling smooth transactions.

2. Expands Market Coverage:

 Helps penetrate new geographical areas and customer segments.

3. Improves Product Availability and Accessibility:

 Ensures that products are conveniently available to consumers.

4. Adds Value to the Product:

 Intermediaries may offer after-sales services, credit facilities, technical support, etc.

5. Promotes Efficiency:

 Reduces burden on producers by handling distribution, warehousing, and customer

service.

6. Supports Promotion Efforts:

 Channel members often participate in local promotions and advertising.

7. Collects Market Feedback:

  Channels act as a source of real-time market data and customer feedback.

8. Inventory Management:

 Helps maintain adequate stock levels and reduces inventory costs.

Unit 5- 1. Supply Chain Management (SCM)

Definition:

Supply Chain Management is the coordination and integration of all activities involved in
sourcing, procurement, production, and distribution of goods and services, from raw material
suppliers to the end customer.

Objectives of SCM:

 Optimize resource utilization

 Minimize total operating costs
 Ensure timely delivery
 Improve customer satisfaction
 Enhance flexibility and responsiveness

Key Activities:

 Supplier relationship management

 Demand forecasting and planning
 Production scheduling
 Warehousing and distribution
 Transportation management
 Returns and reverse logistics

Benefits:

 Reduced operational costs

 Improved inventory turnover
 Stronger supplier-customer relationships
 Greater adaptability to market changes

2. Definition & Scope of Logistics

Definition of Logistics:

Logistics is the process of planning, implementing, and controlling the efficient movement and
storage of goods, services, and related information from the point of origin to the point of
consumption.
It is a vital part of the supply chain that focuses on transportation, warehousing, inventory, and
order fulfillment.

Scope of Logistics:

 Inbound Logistics: Receiving, storing, and handling raw materials.

 Outbound Logistics: Distributing finished products to end-users.
 Reverse Logistics: Handling returns, recycling, or disposal of products.
 Third-Party Logistics (3PL): Outsourcing logistics activities to specialized providers.
 Global Logistics: Managing logistics across international boundaries.

3. Components of Logistics

1. Transportation:
o Selection of mode (road, rail, air, sea)
o Route optimization
o Freight cost management
2. Warehousing:
o Storage facilities for raw materials and finished goods
o Types: private, public, bonded, distribution centers
3. Inventory Management:
o Balancing supply and demand
o Minimizing holding costs while avoiding stockouts
4. Order Processing:
o Managing customer orders accurately and promptly
o Includes billing, packaging, and dispatching
5. Material Handling:
o Safe and efficient movement of materials within warehouses
6. Packaging:
o Protection during transit and handling
o Aids in branding and customer appeal
7. Logistics Information System:
o Software and tools to monitor and control logistics operations

4. Inventory Management

Definition:

Inventory management is the systematic approach to sourcing, storing, and selling inventory —
both raw materials and finished goods.

Objectives:
  Ensure product availability
 Reduce carrying costs
 Prevent overstocking and stockouts
 Optimize order quantities and reorder points

Key Techniques:

 ABC Analysis: Categorizes inventory based on value and usage.

 Economic Order Quantity (EOQ): Determines optimal order size.
 Just-In-Time (JIT): Minimizes inventory by receiving goods only when needed.
 Safety Stock: Extra inventory to prevent stockouts.
 Reorder Point (ROP): Inventory level that triggers a new purchase order.

5. Information System in Logistics and SCM

Definition:

An information system in logistics refers to the software and technologies used to plan, execute,
and monitor logistics and supply chain activities.

Functions:

 Real-time inventory tracking

 Order processing and billing
 Shipment and delivery tracking
 Forecasting and demand planning
 Supplier and customer data management

Examples of Systems:

 ERP (Enterprise Resource Planning)

 WMS (Warehouse Management System)
 TMS (Transportation Management System)
 SCM Software (e.g., SAP SCM, Oracle SCM)

Benefits:

 Better decision-making
 Enhanced visibility across the supply chain
 Faster response to disruptions
 Increased operational efficiency
6. Distribution Management in International Markets

Definition:

Distribution management in international markets involves planning and controlling the

movement of goods from domestic production to foreign customers, across borders.

Challenges in International Distribution:

 Long lead times and transit delays

 Compliance with different laws and trade regulations
 Tariffs, duties, and taxes
 Currency fluctuations
 Political and cultural differences

Key Considerations:

1. Global Channel Strategy:

o Selection of direct vs. indirect export channels
o Use of agents, distributors, and local subsidiaries
2. Transportation & Logistics:
o Choosing international shipping modes
o Managing customs clearance and documentation
3. Warehousing and Inventory Management:
o Use of bonded warehouses
o Demand forecasting for global markets
4. Third-Party Logistics (3PL) Providers:
o Partnering with logistics firms for international delivery and compliance
5. Legal and Regulatory Compliance:
o Adhering to international trade laws (e.g., Incoterms, WTO guidelines)

Benefits of Efficient International Distribution:

 Global market penetration

 Faster delivery to international customers
 Reduced cost and risk of international operations
 Enhanced global brand presence