Sales Management

Nature of Personal Selling

Most salespeople are well-educated, welltrained professionals who work to build and maintain long-term relationships with customers. The term salesperson covers a wide spectrum of positions from:
Order taker (department store salesperson) Order getter (someone engaged in creative selling) Missionary salesperson (building goodwill or educating buyers)

What is Personal Selling?

Involves Two-Way, Personal Communication Between Salespeople and Individual Customers Whether:
face to face, by telephone, through video conferencing, or by other means.

The Role of the Sales Force

Personal selling is effective because salespeople can:
probe customers to learn more about their problems, adjust the marketing offer to fit the special needs of each customer, negotiate terms of sale, and build long-term personal relationships with key decision makers.

The Role of the Sales Force

Represent the Company to Customers to Produce

Company Profit

Sales Force Serves as a Critical Link Between a Company and its Customers Since They:

Represent Customers to the Company to Produce

Customer Satisfaction

Characteristics of Personal Selling

Flexibility
Identify best prospects Adapt to situations Engage in dialogue

Builds Relationships
Long term Assure buyers receive appropriate services Solves customers problems

Personal Selling Limitations

Can not reach mass audience Expensive per contact Numerous calls needed to generate sale Labor intensive

Personal Selling Tasks

Order taking
Routine
writing up orders checking invoices assuring prompt order processing

Suggestive selling

Personal Selling Tasks

Order getting
Seeking out customers Creative selling Pioneering Account management

Personal Selling Tasks

Missionary
Detailer Goodwill Closers

Cross-functional Account service rep

Some Traits of Good Salespeople

Steps in the Selling Process

Step 1. Prospecting and Qualifying
Identifying and Screening For Qualified Potential Customers. Learning As Much As Possible About a Prospective Customer Before Making a Sales Call.

Step 2. Pre-approach

Step 3. Approach

Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start.
Telling the Product Story to the Buyer, and Showing the Product Benefits.

Step 4. Presentation/ Demonstration

Steps in the Selling Process

Step 5. Handling Objections
Seeking Out, Clarifying, and Overcoming Customer Objections to Buying.

Step 6. Closing

Asking the Customer for the Order.

Step 7. Follow-Up

Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business.

Alternative Steps:
Find em
Grab em Show em Answer em

Sell em Keep em

Creative Selling Process

Identify and Qualifying Prospects Prospecting: Identifying likely new customers
Leads

Qualifying: Evaluating a prospects potential

Creative Selling Process

Approaching the Prospect Contact Rapport Only one chance to make a first impression

Creative Selling Process

Sales Presentation Persuasive communication Attention Interest Desire Tell the products story

Creative Selling Process

Handling Objections
Questions Reservations

Understand Concern Counterarguments Acknowledge concern Clues to process

Creative Selling Process

Closing the Sale Closing signals Trial close Ask for the sale

Creative Selling Process

Following Up Commitments met
Shipment Performance

Reinforce relationship Satisfied customers rebuy & recommend

Sales Management
Setting objectives

Planning

Organizing Organizing activities

Motivate, evaluate, & control

Controlling

Directing

Recruit, select, train, develop, manage, & motivate

Organizing Sales Activities

Sales Territory:
Geographic divisions Customer types Product lines Selling task

Geographic Division
Vice-President Marketing

Regional Sales Manager

Regional Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

Sales Rep California

Sales Rep Pacific NW

Sales Rep Southeast

Sales Rep Northeast

Customer Type
Vice-President Sales

New Accounts Manager

Existing Accounts Manager

New Account #1

New Account #2

Existing Account #1

Existing Account #2

Product Line
Vice-President Sales

Snack Foods Sales Manager

Beverages Sales Manager

Sales Rep Sales Rep Eastern Region Westn Region

Sales rep Sales Rep Eastern Region Westn Region

Directing the Sales Force

Recruiting and selecting Training & develop Compensating

Motivating

Compensation Methods

Straight salary or wage

Salary plus commission Straight commission

Quota-bonus plan

Commission with draw

Evaluation and Control

Required reports Measurement against plan or sales standards Expense control Productivity New account development

Ethical Issues
Kickbacks, bribes and gifts Price discrimination Cheating on expense accounts Misrepresentation

Distribution Channel Design and Management

Distributions Function
The major purpose of marketing is to satisfy human needs by delivering products of various types to buyers when and where they want them and at a reasonable cost. The when and where is the function of Distribution

What is a Distribution Channel?

A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user. Marketing Channel decisions are among the most important decisions that management faces and will directly affect every other marketing decision.

Why are Marketing Intermediaries Used?

The use of intermediaries results from their greater efficiency in making goods available to target markets. Offer the firm more than it can achieve on its own through the intermediaries:
Contacts, Experience, Specialization, Scale of operation.

Purpose: match supply from producers to demand from consumers.

Distribution
P R O D U C E R C O N S U M E R

DISTRIBUTION

Distribution Channel Functions

Information

Transfer
Payments Physical Distribution Risk Taking

Communication Negotiation

Ordering Financing

Typical Channels of Distribution

ANUFACTURER GENT ETAILER

ONSUMER

HOLESALER

Business-to-Business Channels

Direct Wholesaler Agent

Business-to-Business Channel Trends

Infomediaries & Vertical Exchange

Conventional Distribution Channel vs. Vertical Marketing Systems

Conventional marketing channel Manufacturer

Vertical marketing channel

Manufacturer Wholesaler Retailer Consumer

Wholesaler

Retailer

Consumer

Types of Vertical Marketing Systems

Corporate
Common Ownership at Different Levels of the Channel

Administered
Leadership is Assumed by One or a Few Dominant Members

Contractual
Contractual Agreement Among Channel Members

Vertical Marketing Systems

Corporate systems - total ownership

Contractual - legal relationships

Administered - strong leadership

Planning the Channel of Distribution

Determining the structure
Marketing mix strategy Organizational resources External environmental factors Market characteristics Consumer preferences and behavior The nature and availability of Intermediaries Other environmental factors

Customers Desired Service Levels

Lot size Waiting time Spatial convenience Product variety Service backup

Steps in Distribution Planning

Choosing a Distribution System

Intensive Distribution

Exclusive Distribution

Distribution Intensity

Selective Distribution

Intensive Distribution
Producer

Seeks to obtain maximum product exposure at the retail level

Retailer Retailer Retailer

Retailer Retailer Retailer

Retailer Retailer Retailer

Retailer
Retailer

Retailer
Retailer

Retailer
Retailer

Selective Distribution

Producer

Product is sold in a limited number of outlets

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Exclusive Distribution

Product is sold in only one outlet in a given area

Producer

Retailer

Developing Distribution Tactics

Selecting Channel Partners Managing the Channel of Distribution
Channel Leader Power

Economic Power

Legitimate Power

Reward or Coercive Power

Distribution Channels & the Marketing Mix

Physical Distribution
Inventory Control
When to order How much to order

Order Processing
Received Processed Shipped

Transportation
Rail, Water, Trucks, Air, Pipeline, Internet

Physical Distribution Functions

Materials Handling
Moving Products Into, Within, and Out of Warehouses

Warehousing
Number Needed Where What Type

Transportation Modes
Rail
Cost-effective for shipping bulk products, piggy-back, fishyback, birdyback.

Water
Low cost for shipping bulky, low-value, non perishable goods, slowest form.

Truck
Most important carrier for consumer goods, flexible.

Air
High cost, ideal when speed is needed or distant markets have to be reached

Pipeline
Carry petroleum based products, very low cost, requires little energy.

Internet
Web sites have products available, used especially for services.

Channel Relationships
Cooperation

Conflict

Power
Coercive Expert Legitimate

Decision Making Framework

Prospects Importance of threatened of channel in terms of current or Destructive potential volume or profitability Conflict High Low High (FIRE) Act to avert or address Allow threatened conflict channel to decline Low Look for opportunities Do nothing (Smoke) to reassure threatened channel and leverage your power

Channel Conflict: Identifying Threats

First, are the channels really attempting to serve the same end users? Second, do channels mistakenly believe they are competing when in fact they are benefiting from each other's actions? Third, is the deteriorating profitability of a griping player genuinely the result of another channel's encroachment? Fourth, will a channel's decline necessarily harm a manufacturer's profits?

Managing Channel Conflict

WHEN TWO OR MORE CHANNELS TARGET THE SAME CUSTOMER SEGMENT

Differentiate the Channel offer Define Exclusive Territories Enhance or Change the Channels Value

Managing Channel Conflict

CHANNEL ECONOMICS DETERIORATE Change the channels economic formula: (Grant rebates if an intermediary fulfill certain requirements; Adjust margins between products to support different channel economics; and Treat channels fairly to create level playing field) Create Segment Specific Programs (certain services not available via direct channels) Complement value proposition of the existing channel by introducing a new channel Foster consolidation among intermediaries in a declining channel

Managing Channel Conflict

THREATENED CHANNEL STOP PERFORMING OR RETALIATE AGAINST THE SUPPLIER Leverage Power (eg. Strong Brand) against the channel to prevent retaliation Migrate volume to winning channel Back off

Other Distribution Management Issues

Reverse distribution
One Coca Cola Distributor

Ethical, Political, & Legal

Difficult

OK

One thousand retailers