Sales, Distribution, and Customer Relationship Management and Satisfying Customers © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Introduction to Business Chapter Eleven

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers 1.Understand the relationship of marketing, distribution, sales, and personal selling. 2.Discuss the main distribution channels a company can use to reach customers and the factors that determine the choice of distribution channel. 3.Differentiate approaches to personal selling and explain why the nature of a company’s products determines the selling approach. 4.Outline the major issues and problems during each stage of the personal selling process. 5.Explain customer relationship management can improve the profitability of the sales and distribution process.

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Process of utilizing intermediaries Wholesaler Distributor/dealer Retailer Direct to customer

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Process to effectively and efficiently deliver the product to the customer Product is sold to intermediaries In turn sell to next intermediary Channel of distribution

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Sales Activities locating customers Persuading to buy a company’s product Crucial sales activity is personal selling

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Personal Selling Direct face-to-face communication by salespersons with existing and potential customers Promotes a company’s products Selling occurs at all levels of the channel of distribution

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Franchising Contractual form of licensed distributor/dealer in the channel of distribution

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Channel of Distribution Wholesaler intermediary buys product from manufacturers and then resell to retailers who resell to final customers

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Retailers Intermediaries who sell other companies’ products to final customers

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Mix Combination of channels selected to deliver products to customers

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Mix -- Criteria Selecting the channels to distribute Characteristics of its products Need to customize its products Significance of the purchase to customer

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Mix -- Criteria Product characteristics may be either simple or complex Product qualities challenge customers evaluation Getting close to customers may simplify the products

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Mix -- Criteria Distribution mix determines level of pre-sale service Distribution mix determines the opportunity to provide a high level of post sale service Dealers or a national sales force?

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Mix -- Criteria Complex, customized, and costly products can capture a competitive advantage by choosing a distribution mix that has intermediaries and direct selling as the main channel

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Mix -- Criteria Sales and personal selling are a vital part of the promotional activities in distribution channels To reach and deliver products to customers efficiently and effectively

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Distribution Mix -- Criteria Wholesalers and Retailers choose to stock Which drugs doctors decide to prescribe Both depend on promotional activity A salespersons ability to persuade customers their company’s product is the best choice

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Technical Selling Process of using detailed product- specific knowledge to align the product with a customer’s needs Especially important when a company’s products are state of the art or must be customized to suit the needs of specific customers

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Trade Selling Managing the sale of one company’s products to other companies. these companies may be intermediaries, such as wholesalers and retailers; or companies will include this product in their own product

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Retailing Selling to the final consumer Provide customers with the product information Keep the product in stock Process customers orders correctly Packaging/delivery of product

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Missionary Selling Does not involve a salesperson attempting to close a sale immediately Salesperson educates customers Builds goodwill Performs promotional activities Product sampling to encourage a purchase at a later date

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Creative Selling Salespeople compile their technical knowledge and personal selling skills to craft a sales message that convinces customers to buy a product

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Telemarketing An increasingly ineffective channel to sell directly to the final customer Customers often perceive it as obtrusive, annoying method of personal selling Some companies are going back to the past and using door to door sales

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Six Stages of Selling Prospecting for customers Making the initial contact The sales presentation Handling objections Closing the sale After sales service and follow-up/information gathering

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Buyer’s remorse Customers’ believe after a sale they have made a poor purchasing choice, and lowers their satisfaction Focus on after-sale service and building customer relationship to preclude any remorse

Chapter 11 Sales, Distribution, and Customer Relationship Management and Satisfying Customers Customer Relationship Management An IT based knowledge management system designed to track customers changing demand for a product To maximize responsiveness to customers. CRM system consists of a marketing module, a sales and selling module, and an after-sales service and support module