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Sales & Distribution Management (2005) Martin Khan
Instructor
Abdel Fatah AfifiMA&T, MBA, BA, ACPA, CPT1st Semester 2009/2010
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Chapter 1
Introduction to Sales & Distribution Management
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Introduction
1. The importance of marketing problems was realized only after the industrial revolution.
2. Increase in production, more: land, labour and capital was required which gave rise to corporate form of organization.
3. As the business activity become more complex and dynamic,
4. Term "Sales management" changed due to the changes in business operations.
5. Earlier the sales management was solely concerned with the direction of the sales force personnel.
6. At present the term "sales management" has a broader significance and includes all such marketing activities as advertising, sales promotion, marketing research, physical distribution, pricing and product merchandising.
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Figure 1-1: Positions of Personal Selling and Sales Management in the Marketing Mix
PlanningPlanning MotivatingMotivatingBudgetingBudgeting CompensatingCompensatingRecruiting and selectingRecruiting and selecting Designing territoriesDesigning territoriesTrainingTraining Evaluating performanceEvaluating performance
Marketingmix
Products Prices Promotion Distribution
AdvertisingPublic
relationsPersonalselling
Salespromotion
Internet
SalesSalesmanagementmanagement
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Marketing Program (marketing mix)
Designed around Four Elements of marketing mix:
1. Products to be sold2. Pricing3. Promotion4. Distribution Channels
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CompetitionCompetition• Globalization.Globalization.• Shorter product cycles.Shorter product cycles.• Blurred boundaries.Blurred boundaries.
Selling processSelling process• Relationship selling.Relationship selling.• Sales teams.Sales teams.• Inside selling.Inside selling.• Productivity metricsProductivity metrics
CustomersCustomers• fewer suppers.fewer suppers.• Rising expectations.Rising expectations.• Increasing power.Increasing power.
Marketplace Changes & Selling Consequences
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Difference between Marketing & Sales Management
1. Marketing and Sales management are close Relative.
2. Marketing sets the scene. Sales finish the job.3. Marketing is part of the sales process. Sales
in the end result of Marketing.4. Sales is a part of marketing. It is the transfer
of title of ownership of goods.5. Marketing is concept oriented and sales is
product oriented.6. The marketing function creates the dark
clouds, and the sales function makes the rain.7. Marketing, Sales management, and Marketing
management are closely related to each other.
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Figure 1-4:
Traditional Buyer-Seller Interfaceversus A Team Interface
Sales Purchasing SalesTeam
CustomerTeam
Supplier Customer Supplier Customer
TRADITIONALBUYER-SELLER
INTERFACE
BUYER-SELLERINTERFACE TEAM
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Objectives of sales management
1. Quantitative objectives (Short Term)
2. Qualitative objectives (Long Term)
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Quantitative objectives (Short Term)
1. To retain and capture market share.
2. To determine sales volume market share.
3. To obtain new accounts of given types.
4. To keep personal expenses within specified limits.
5. To secure targeted percentage of certain accounts of business.
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Qualitative objectives (Long Term)
1. To do the entire selling job.2. To service existing accounts, (customers).3. To search and maintain customer
cooperation.4. To assist the dealer in selling the product
line.5. To provide technical advice wherever
necessary.6. To assist in training of middleman's sales
personnel.7. To provide advice and assist the
middlemen.8. To collect and report market information of
interest and use to the company management.
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Important decision areas in sales management are deciding upon
1. The type and quality of sales personnel.2. The size of sales force.3. The organization and design of sales
department.4. The territory design.5. The recruitment and training procedure.6. The task allocation.7. The compensation of sales force.8. The performance appraisal and control
system.9. The feedback mechanism to be adopted.10. Managing channel relationship.11. Coordinating with other marketing
department.
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Sales Management Cycle
1. Analysis2. Planning3. Organization4. Direction5. Control
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Responsibilities of Sales Management
1. Building the right sales strategy.2. Hiring the right team.3. Creating the right compensation plan,
territories and quotas.4. Setting the right projections.5. Motivating your team.6. Tracking revenue against goals.7. Resolving conflicts.8. Training and coaching sales reps.9. Managing processes.10. Getting the sales.
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Productivity Metrics
Sales Volume is important, but not all sales are equally profitable.
Profitability depends on:1. Amount of time necessary to
complete the sales.2. Gross margins associated with sale.3. Level of price discounting.4. Amount of promotional support.5. Amount of post-sale support.6. Impact of future product sales.
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Improving Your Chances of Success
1. Build awareness2. Get on the short list3. Demonstrate how your proposal
meets company needs4. Directly address decision
maker’s personal needs5. Be prepared for “buyer
remorse”
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A Sales Quota Manager: Job Focus
1. Maintain direct responsibility for sales results for specific customers.
2. Manages one or a few larger, long-term or strategic accounts
3. May have a staff of one or more subordinate sales or support people, but focus on managing the sales team for the sake of achieving customer results
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1. Willingness to Train/Coach2. Willingness to Make Joint Sales
Calls3. Ability to Direct and Control
Others4. Profit Mentality5. Initiative
A Sales Force Manager’sSkill Set
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Direct sales : Challenges
1. Large number of prospects.2. High cost of sales.3. Low revenue per customer.4. Ineffective channel sales team.
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Sales Management: Needs
1. Improve collaboration with channel partner to increase reach and reduce cost of sales.
2. Track movement of opportunities through pipeline to identify bottlenecks.
3. Provide on-time sales support to channel.
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Basic requirements of sales promotion
1. Identifying the basic requirement (identify the need of sales promotion as to why this campaign is being undertaken).
2. Identifying the right promotional program.3. Role of a salesman4. Role of the dealers5. Launching and follow up campaign6. Tuning of the campaign (Seasons, Festivals, New
year, or other special events of national and local interest should be kept in mind).
7. Coordination with other elements of promotion
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