Sales & Distribution Management (2005) Martin Khan Instructor Abdel Fatah Afifi MA&T, MBA, BA, ACPA, CPT 1st Semester 2009/2010

Introduction to Sales & Distribution Management Chapter 1 Introduction to Sales & Distribution Management

Introduction The importance of marketing problems was realized only after the industrial revolution. Increase in production, more: land, labour and capital was required which gave rise to corporate form of organization. As the business activity become more complex and dynamic, Term "Sales management" changed due to the changes in business operations. Earlier the sales management was solely concerned with the direction of the sales force personnel. 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.

Figure 1-1: Positions of Personal Selling and Sales Management in the Marketing Mix Planning Motivating Budgeting Compensating Recruiting and selecting Designing territories Training Evaluating performance

Marketing Program (marketing mix) Designed around Four Elements of marketing mix: Products to be sold Pricing Promotion Distribution Channels

Marketplace Changes & Selling Consequences Competition Globalization. Shorter product cycles. Blurred boundaries. Customers fewer suppers. Rising expectations. Increasing power. Selling process Relationship selling. Sales teams. Inside selling. Productivity metrics

Difference between Marketing & Sales Management Marketing and Sales management are close Relative. Marketing sets the scene. Sales finish the job. Marketing is part of the sales process. Sales in the end result of Marketing. Sales is a part of marketing. It is the transfer of title of ownership of goods. Marketing is concept oriented and sales is product oriented. The marketing function creates the dark clouds, and the sales function makes the rain. Marketing, Sales management, and Marketing management are closely related to each other.

Figure 1-4: Traditional Buyer-Seller Interface versus A Team Interface INTERFACE TEAM Sales Team Customer Team Sales Purchasing Supplier Customer Supplier Customer

Objectives of sales management Quantitative objectives (Short Term) Qualitative objectives (Long Term)

Quantitative objectives (Short Term) To retain and capture market share. To determine sales volume market share. To obtain new accounts of given types. To keep personal expenses within specified limits. To secure targeted percentage of certain accounts of business.

Qualitative objectives (Long Term) To do the entire selling job. To service existing accounts, (customers). To search and maintain customer cooperation. To assist the dealer in selling the product line. To provide technical advice wherever necessary. To assist in training of middleman's sales personnel. To provide advice and assist the middlemen. To collect and report market information of interest and use to the company management.

Important decision areas in sales management are deciding upon The type and quality of sales personnel. The size of sales force. The organization and design of sales department. The territory design. The recruitment and training procedure. The task allocation. The compensation of sales force. The performance appraisal and control system. The feedback mechanism to be adopted. Managing channel relationship. Coordinating with other marketing department.

Sales Management Cycle Analysis Planning Organization Direction Control

Responsibilities of Sales Management Building the right sales strategy. Hiring the right team. Creating the right compensation plan, territories and quotas. Setting the right projections. Motivating your team. Tracking revenue against goals. Resolving conflicts. Training and coaching sales reps. Managing processes. Getting the sales.

Productivity Metrics Profitability depends on: Sales Volume is important, but not all sales are equally profitable. Profitability depends on: Amount of time necessary to complete the sales. Gross margins associated with sale. Level of price discounting. Amount of promotional support. Amount of post-sale support. Impact of future product sales.

Improving Your Chances of Success Build awareness Get on the short list Demonstrate how your proposal meets company needs Directly address decision maker’s personal needs Be prepared for “buyer remorse”

A Sales Quota Manager: Job Focus Maintain direct responsibility for sales results for specific customers. Manages one or a few larger, long-term or strategic accounts 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

A Sales Force Manager’s Skill Set Willingness to Train/Coach Willingness to Make Joint Sales Calls Ability to Direct and Control Others Profit Mentality Initiative

Direct sales : Challenges Large number of prospects. High cost of sales. Low revenue per customer. Ineffective channel sales team.

Sales Management: Needs Improve collaboration with channel partner to increase reach and reduce cost of sales. Track movement of opportunities through pipeline to identify bottlenecks. Provide on-time sales support to channel.

Basic requirements of sales promotion Identifying the basic requirement (identify the need of sales promotion as to why this campaign is being undertaken). Identifying the right promotional program. Role of a salesman Role of the dealers Launching and follow up campaign Tuning of the campaign (Seasons, Festivals, New year, or other special events of national and local interest should be kept in mind). Coordination with other elements of promotion