Amity School of Business

Sales and Distribution

Management

Dr. Deepa Kapoor

Amity School of Business
 Amity School of Business

Module – 1
Introduction

Selling
Emphasis is on the product
Company Manufactures the
product first
Management is sales volume
oriented
Planning is short-run-oriented in
terms of today’s products and
markets
Cost determines Price
Selling views customer as a last
link in business
Salespeople don’t develop
products.
Amity School of Business
Marketing
Emphasis on consumer needs wants
Company first determines customers needs and
wants and then decides out how to deliver a
product to satisfy these wants
Management is profit oriented
Planning is long-run-oriented in today’s products
and terms of new products, tomorrow’s markets
and future growth
Consumer determine price, price determines
cost
Marketing views the customer last link in
business as the very purpose of the business
Marketers do
 Amity School of Business

SALES MANAGEMENT
What is Sales Management?

“The planning, direction and control of personal selling,

including recruiting, selecting, equipping, assigning, routing,
supervising, paying and motivating as these tasks apply to
the personal sales force.”

-American Marketing Association 1960

“ The management of sales force”

 Responsibilities Amity School of Business

• To the firm: Responsible to organise sales efforts

within the organisation as well as outside
• To the sales force: To be selected, organised and
deployed with attractive compensation and
freedom of action
• To the customer: Sales persons are the ultimate
direct contact link of the organisation and
customers.
• To the society: Sales persons are in a better
position to reflect the feelings, attitudes and
sentiments of customers and community to the
management.
Functions of Sales Management Amity School of Business

Managerial functions
1.Planning: This involves, forecasting demand,
sales territory planning, personal selling, and
promotional efforts.
2.Organising: This involves, structure, resource
allocation, responsibility assignment and
delegation of authority etc.
3.Direction: This involves, leadership motivation,
communication, and promotional steps including
personal selling.
 Amity School of Business

Functions of Sales Management

• Control: This involves, delegation, quota

fixing, performance evaluation, incentives
and budgets.
• Co-ordination: This involves, liaison,
integration of various elements, internally,
P.R. and goodwill by contact with
customer/general public
 Amity School of Business

Functions of Sales Management

Staff functions: This is related to staff functions of
sales force such as the following:
•Recruitment and selection.
•Deployment and evaluation of performance
•Training and development.
•Career development.
•Compensation and incentives.
•Motivation and empowerment.
 Amity School of Business

Functions of Sales Management

Advisory functions :
•Product attributes/quality aspects.
•Pricing policies.
•Promotional steps and personal selling aspects.
•Distribution policies and channel selection criteria.
•Advertisement policies such as media selection
and target audience.
•Transportation and warehousing aspects.
 Amity School of Business

Functions of Sales Management

Liaison Functions: Liaison with departments
such as the following:
•Production department.
•Finance department.
•Marketing department.
•R & D department.
•Distribution network and
•After Sales Service department
 Evolution of Sales Management
Amity School of Business

• Broadly speaking evolution of Sales

Management developed under the following four
phases:
1. Pre-industrial revolution period.
2. Production oriented period.
3. Sales oriented period.
4. Customer oriented period.
 Pre-Industrial Revolution Period Amity School of Business

• Small-scale industries/crafts existed prior to Industrial

Revolution period.
• The owner/craftsman turned entrepreneur, looked after
all areas and functions of management.
• These areas are production, finance and design and
development.
• Sales and marketing was never a serious problem in
those days since demand far exceeded supplies.
• Selling was only a part-time job for these entrepreneurs.
This job is mostly confined to demonstration or display of
their craftsmanship
 Production Oriented Period Amity School of Business

• Industrial Revolution in 1760s heralded this

period.
• Mass production technique introduced during
this period, increased the production level
manifold.
• Following were the characteristics of this period:
– Prevailed in developed nations in the West till 1930s.
– Focus was on manufacturer and production capacity.
– Emphasis was laid on production process which
yielded volumes.
– Marketing meant "sell what is produced". Environment
was that of a "sellers market".
 Sales Oriented Period Amity School of Business

• Economic recession of 1930s was the starting

point where demand declined.
• Following are the characteristics of this period:
– Prevalent in developed nations in the past. However
still prevalent in developing nations.
– Focus is on sales and sales promotion with emphasis
on sales volume.
– Marketing means "product does not sell by self-it has
to be pushed. Customers are to be manipulated.“
– Environment is highly competitive where "supplies are
in excess and production capacity is more.
 Customer Oriented Period Amity School of Business

• Globalisation and liberalisation have further increased the

competition manifold.
• Following are the characteristics of this period:
– Prevalent in developed nations after 1960s. Developing
nations are also following this approach by 1980s.
– Focus is on "customer satisfaction."
– Emphasis is on "problem solving" on customer "needs"
and "wants“ to achieve customer loyalty.
– Marketing means customer satisfaction before, during
and after sales.
– Environment is that of “buyers market” having severe
competition
 Amity School of Business

Nature and Importance

of Sales Management
• Integration with marketing management

• Relationship selling

• Varying sales responsibilities

 Amity School of Business

Transaction Selling Relationship Selling

Get new accounts Retain existing accounts

Get the order Become the preferred

supplier
Cut the price to get the sale Price for profit

Manage all accounts to Manage each account for

maximise short-term sales long- term profit

Sell to anyone Concentrate on high profit

potential accounts
 Amity School of Business

Personal Selling
Personal selling involves the two-way flow
of communication between a buyer and
seller, often in a face-to-face encounter,
designed to influence a person's group's
purchase decision.
 Personal Selling Amity School of Business

• Personal Presentation by the firms’ sales force

for the purpose of making sale and building
customer relationship. Personal selling consists
of interpersonal interactions with customers and
prospects to make sales and maintain customer
relationships.
• Personal selling is a promotion via sales pitch by
a sales representation to a prospect or by a
retail assistant to a customer, guaranteeing
exposure to self-selected member of a target
market.
 Amity School of Business

Types of Personal selling

1. Industrial selling- Manufacturing sector selling.
Selling to resellers
Selling to Business Users
Institutional Selling
Selling to Government

2. Retail selling- Directly to the consumer for personal

and non-commercial use.

3. Services selling- Intangible activities/benefits to the

customers.
 Amity School of Business

Forms of Personal Selling

(on the basis of Selling
Functions)
 Amity School of Business

Inside Order
Taker
Order Takers
Delivery
Sales People

Outside Order
Taker

Order Creators Missionary

salespeople
Selling Function
New Business
Salespeople

Frontline Organizational
Salespeople Salespeople

Consumer
Salespeople

Order Getters Technical Support

Salespeople

Sales Support
Salespeople Merchandisers
 Amity School of Business

• Order takers are not expected to persuade

customers to buy the company’s products
or increase their quantity of purchase.
They are supposed to book customer
orders and pass on the information to
relevant people in the company.
 Amity School of Business

• Inside order takers:

• Retail sales assistants are typical inside
order takers. The customer has full
freedom to choose products without the
presence or influence of a salesperson.
The salesperson’s task is transactional.
He receives payments and passes over
the goods to the customers.
 Amity School of Business

• Delivery salespeople are primarily

concerned with delivering the product.
There is little attempt to persuade
customers to increase the order.
• Changes in order size are customer driven.
Though delivery salespeople do not try to
influence demand, winning and losing an
order is heavily dependent on reliability of
delivery.
 Amity School of Business

• Outside order takers:

• Salespeople visit the customer, but they
primarily respond to customers’ requests
rather than actively seek to persuade
them. They are being replaced by the
more cost efficient telemarketing teams
who call customers and book their orders.
 Amity School of Business

• Missionary salespeople:
• In some industries, notably pharmaceuticals and
building industry, the sales task is not to close the sale
but to persuade the customer to specify the seller’s
products.
• Medical representatives calling on doctors cannot
make a direct sale since the doctor does not buy
drugs but prescribes them for patients. Architects also
act as specifies rather than buyers. In these situations,
the selling task is to educate and build goodwill for the
company.
 Amity School of Business

• Order getters:
• An order getter persuades a customer to
make a purchase. He is a frontline
salesperson, and is in a typical selling job.
He is supported by technical support staff
and merchandisers.
 Amity School of Business

THE SALES MANAGEMENT

FUNCTIONS
 Sales management Amity School of Business

directing the sales force

• Recruiting • Education
• Training – Knowledge
• – Skills
Compensating
• Motivation • Personality traits
• Screening tests
• Interviews
• Work experience
 Sales management Amity School of Business

directing the sales force

• Recruiting • Company policies and

• Training procedures
• Compensating • Industry and
• Motivation competition
• Product knowledge
and selling skills
• On-the-job training
• Continuing training
 Sales management Amity School of Business

directing the sales force

• Recruiting
• Training • Straight salary
• Compensating • Straight commission
• Motivation • Quota-bonus
• Combinations of the
above
 Sales management Amity School of Business

directing the sales force

• Recruiting • Financial rewards

• Training • Contests, prizes,
• Compensating conventions, trips,
• Motivation sales meetings
• Increased territories
or choice accounts
• Recognition before
peers
Sales Management Functions
Amity School of Business
 Amity School of Business

Objectives of sales management

Three general
objectives:

• Sales volume

• Contribution to profits

• Continuing growth
 Amity School of Business

Roles and Skills of a Modern Sales

Manager
• A member of the strategic management team
• A member of the corporate team to achieve objectives
• A team leader, working with salespeople
• Managing multiple sales / marketing channels
• Using latest technologies (like CRM) to build superior
buyer-seller relationships
• Continually updating information on changes in
marketing environment
 Amity School of Business

Skills of a Successful Sales Manager

• People skills include abilities to motivate, lead,
communicate, coordinate, team-oriented relationship,
and mentoring

• Managing skills consist of planning, organizing,

controlling and decision making.

• Technical skills include training, selling, negotiating,

problem-solving, and use of computers
 Amity School of Business

Importance of Sales Management

• The only function / department in a company
that generates revenue / income
• The financial results of a firm depend on the
performance of the sales department /
management
• Many salespeople are among the best paid
people in business
• It is one of the fastest and surest routes to the
top management
 Amity School of Business

What Do Customers Care

About?

THEMSELVES!!
Wants, Needs, Desires
 Amity School of Business

What Do They Buy?

SOLUTIONS!!
 Amity School of Business

Goals of Selling
• To ensure customer
satisfaction so the firm can
count on repeat business.
• Helping Customers make
satisfying buying decisions
by communicating how
products and their features
match their wants and
needs.
 FOLLOWING UP
Amity School of Business

CLOSING THE SALE

HANDLING OBJECTIONS

MAKING THE SALES

PRESENTATION

APPROACHING THE PROSPECT

Pre approach: QUALIFYING

PROSPECTS

PROSPECTING: IDENTIFYING
POTENTIAL CUSTOMERS
 Prospect Amity School of Business

• Prospect- possible customer

• Qualified Prospect-customer who has desire,
means and power to decide
• Leads
• Developing lists of potential customers
 Amity School of Business
Pre- Approach
• Finding and analyzing information about
prospects
• Evaluating a prospect’s potential
• Gathering information
(when to call, income level, risk tolerance)
 Amity School of Business

Customer Buying Decisions

• Salespeople must study what
motivates customers to buy and what
decisions customers make before
finally purchasing a product.
 Amity School of Business

Customer Buying Decisions

Rationale Motives Emotional Motives
• product dependability • social approval
• time or monetary • recognition
savings • power
• convenience • love
• comfort • affection
• recreational value • prestige
 Amity School of Business

Customer Buying Decisions

Extensive Decision
Making
• Used when little or
no previous
experience with the
item because it is
infrequently
purchased.
 Amity School of Business

Customer Buying Decisions

Limited Decision
Making
• Used when a
person buys goods
and services he or
she has purchased
before but not on a
regular basis.
 Amity School of Business
Customer Buying Decisions
Routine Decision
Making
• Used when a
person needs little
information about a
product because of
a high degree of
prior experience or
low perceived risk.
 Amity School of Business

Approaching The Prospect

PHYSICAL IMPRESSIONS
– APPEARANCE,
TIMELINESS, HOW DO WE MAKE THE
CONFIDENCE INITIAL CONTACT &
BUILD RAPPORT

There is only
one time to
make a first
impression
 Amity School of Business

Making The Sales Presentation

• Using Persuasive communication

• Hold Attention
• Stimulate Interest
• Desire
• “Tell the product’s story”
 Amity School of Business

• Need-Satisfaction Format
– Let the customer do the talking
– Salesman probes, listens then suggests, like a
financial planner
• Formula Selling Format
– more formal and planned, like a telemarketer
– Memorized, standardized message conveyed
to every prospect.
– Works when seller is a novice or does not
know the buyer well
 Amity School of Business

Handling Objections
Handling Objections
– Questions
– Reservations
• Understand Concern
• Counterarguments
• Acknowledge concern
 Amity School of Business

Handling Objections
• Acknowledge and Convert the Objection
use the objection as a reason to buy (expensive)
• Postpone
hold off answer because next info will convince buyer
(complicated)
• Agree and Neutralize
show the objection’s insignificance (side effects)
• Denial
refute objection with clear facts
 Amity School of Business

Closing the Sale

• Closing signals
• Trial close
• Asking the prospect to buy
 Amity School of Business

Closing the Sales

• Trial Close-”Can I put you down for blue or

green?”
• Assumptive Close-ask about delivery or
warranty choices.
• Urgency Close-”Offer valid for today only.”
• Final Close-Buyer initiated acceptance of
the sale.
 Amity School of Business

Following Up
• Commitments met
– Shipment
– Performance
• Satisfied customers re-buy
• Today’s customer becomes tomorrow’s
qualified prospect or referral source
 Amity School of Business
Follow-up
Sold Didn’t sell
• Thank • Thank
• Restate terms • Restate need and
etc feature/benefit
• You’ll stay in the • Leave a way back
loop in
 Amity School of Business
Handling Complaints
• Don’t argue
• Apologize even if you’re not wrong
• Restate problem
• Give time frame to resolution
• If you can’t meet time, call and extend
• Let them know you care and that you are
involved
Stages and objectives of the
personal selling process Amity School of Business
 Amity School of Business

Negotiation
• "What's your best price?"
• "That's too expensive."
• "Your competitor is selling the same thing for….“
• Sales negotiations might take place over a
series of meetings, conversations and phone
calls, or can begin and end within minutes.
 Amity School of Business

Points to Remember

• Have an alternative - negotiate with

freedom of choice
• Negotiate when the sale is conditionally
agreed, not before (if buying the opposite
applies)
– buyers tend to try to negotiate before giving
you any commitment - don't let them)
 Amity School of Business

Points to Remember

• Aim for the best outcome (buyers aim low,

and they tend not to go first either)
• list all of the other side's requirements
before negotiating
• Keep the whole package in mind all of the
time (buyers tend to divide and erode your
position, bit by bit)
 Amity School of Business

The Three Most Common Sales

Mistakes
• Not listening to the buyer
• Not asking for the order
• Forgetting to sell existing customers
 Amity School of Business

Characteristics of Effective
Salespeople
• Good Communication Skills
• Good Interpersonal Skills
• Solid Technical Skills
• Positive Attitude and Self- Confidence
 Amity School of Business

Characteristics of Effective
Salespeople
• Goal Oriented
• Empathy
• Honesty
• Enthusiasm