Sales & Distribution
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Transcript of Sales & Distribution
Sales and Distribution
Team C2X !!
• Market ?
• What is Marketed ?
• Who Markets ?
Dimensions of Market• Spatial Seperation
• Time Seperation
• Perceptional Seperation
• Seperation of Values
• Seperation of ownership
Sales ??
Sales Techniques• Direct Selling
• Pro Forma Sales
• Agency Based sales
• Request for Proposal
• B2B
The Role of the Sales Force
Sales ForceServes as a Critical Link
Between a Company and its Customers Since They:
Represent Customers to the Company to Produce Customer Satisfaction
Represent the Company to Customers to Produce
Company Profit
Step 1. Prospecting and Qualifying
Identifying and Screening For Qualified Potential Customers.
Steps in the Selling ProcessSteps in the Selling Process
Learning As Much As Possible About a Prospective Customer
Before Making a Sales Call.
Learning As Much As Possible About a Prospective Customer
Before Making a Sales Call.
Step 2. Pre-approach
Step 3. ApproachKnowing How to Meet the Buyer
to Get the Relationship Off to a Good Start.
Knowing How to Meet the Buyerto Get the Relationship Off
to a Good Start.
Step 4. Presentation/ Demonstration
Telling the Product “Story” to the Buyer, and Showing the
Product Benefits.
Telling the Product “Story” to the Buyer, and Showing the
Product Benefits.
Steps in the Selling ProcessSteps in the Selling Process
Step 5. Handling Objections
Step 6. Closing
Step 7. Follow-Up
Seeking Out, Clarifying, and Overcoming
Customer Objections to Buying.
Asking the Customerfor the Order.
Following Up After the Sale toEnsure Customer Satisfaction
and Repeat Business.
Distribution Channels and Management
Distribution
PRODUCER
CONSUMER
DISTRIBUTION
Distribution’s Function• The major purpose of marketing is to satisfy human needs by delivering products of various types to buyers when and wherethey want them and at a reasonable cost.
• The “when and where” is the function of Distribution
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Distribution Objectives
• Minimize total distribution costs for a given service output
• Determine the target segments and the best channels for each segment
• Objectives may vary with product characteristicso e.g. perishables, bulky products, non-standard items, products requiring installation & maintenance
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.
Distribution Channel Functions
Ordering
Payments
CommunicationTransfer
Negotiation
FinancingRisk Taking
PhysicalPhysicalDistribution
Information
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Basic Channels of Distribution
Manufacturers/products
Agents/brokers
Wholesalers/distributors
RetailersRetailers
Consumers and organizational end users
16
Typical Distribution of Drugs
Manufacturers
Marketing Agents ( Optional )
Retailers/Wholesalers/Distributors
Private GPs/specialists Group Procurement
Office Retail
Pharmacy
Public Hospitals / Institutions
Patient
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Typical Distribution in FMCG
Manufacturers
Marketing Agents ( Optional )
Wholesalers/Distributors
Retail Chains like Big
Bazaar etc.
Unorganized retailersPublic Canteens/
Government Purchase
Consumer
Business-to-Business Channels
Direct
Wholesaler
Agent
Business-to-Business Channel Trends
Infomediaries & Vertical Exchange
Conventional Distribution Channel vs. Vertical Marketing Systems
Verticalmarketing
channel
Manufacturer
Retailer
Conventionalmarketing
channel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
Wh
ole
sale
r
Types of Vertical Marketing SystemsTypes of Vertical Marketing Systems
CorporateCommon Ownership at Different
Levels of the Channel
ContractualContractual Agreement Among
Channel Members
AdministeredLeadership is Assumed by One or
a Few Dominant Members
Vertical Marketing Systems
• Corporate systems - total ownership
• Administered - strong leadership
• Contractual - legal relationships
Horizontal Marketing System
• Joining of two or more corporations on the same
level for the purposes of pursuing a new marketing
opportunity.
• Established to make use of combined resources
• Produce synergistic effect for all the parties involves
• Example: Nestle & Coke in Europe, FIAT in India
Planning the Channel of
Distribution
• Determining the structure
o Marketing mix strategy
o Organizational resources
o External environmental factors
o Market characteristics
o Consumer preferences
o Consumer behavior
o The nature and availability of Intermediaries
o Other environmental factors
Customers’ Desired Service Levels
• Lot size
• Waiting time
• Spatial convenience
• Product variety
• Service backup
Steps: Distribution Planning
IntensiveDistribution
Exclusive Distribution
SelectiveDistribution
DistributionIntensity
Choosing a Distribution System
Intensive DistributionIntensive Distribution
Seeks to obtain
maximum product
exposure at the retail
level
Seeks to obtain
maximum product
exposure at the retail
level
Producer
Retailer RetailerRetailer
Retailer
Retailer Retailer
Retailer
Retailer
Retailer Retailer Retailer
Retailer
Retailer Retailer Retailer
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Example of Intensive Distribution
• Newspapers
• Most fast moving consumer goods
• Photo processing shops
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• Advantages:o Increased sales, wider customer recognition, and
impulse buying
• Disadvantages:o Characteristically low price and low-margin products
that require a fast turnover
o Difficult to control large number of retailers
Intensive Distribution
Selective DistributionSelective Distribution
Product is sold in a limited
number of outlets
Product is sold in a limited
number of outlets
Producer
Retailer RetailerRetailer
Retailer Retailer Retailer
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Example of Selective Distribution
Daewoo has 2 distributors in Singapore
• “Starsauto, part of a larger Indonesian group, represents Daewoo’s traditional line of sedans.
• Homegrown family-owned JTA Motors market Daewoo’s offroad vehicles like the Musso and Korando, and an upmarket model called the Chairman.
33
Selective Distribution
• Advantages:o Better market coverage than exclusive distribution
o More control and less cost than intensive
distribution
o Concentrate effort on few productive outlets
o Selected firms capable of carrying full product line
and provide the required service
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Selective Distribution (cont’d)
• Disadvantages:o May not cover the market adequately
o Difficult to select dealers (retailers) that can match your
requirement and goals
Product is sold in only one outlet in a
given area
Product is sold in only one outlet in a
given area
Producer
Retailer
Exclusive DistributionExclusive Distribution
36
Exclusive Distribution:
Advantages
• Maximize control over service level/output
• Enhance product’s image & allow higher markups
• Promotes dealers loyalty, better forecasting, better inventory and merchandising control
• Restricts resellers from carrying competing brands
37
Exclusive Distribution: Disadvantages
• Betting on one dealer in each market
• Only suitable for high price, high margin,
and low volume products
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Multiple-Channel StrategyUsing two or more different channels to
distribute goods and services
• Why ?
o Permits optimal access to each market
segment
o Increase market coverage, lower channel
cost and provide more customized selling
• What to look out for ?
o More channels usually means more conflict
and control problems
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Complementary ChannelsEach channel handles a product or segment that is different or non-competing e.g.
• Toyota Lexus
• Magazine distributions
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Competitive Channels
The same product is sold through two different and
competing channels e.g.
o Non-prescriptive drugs
o Electronic goods
• Why ? To increase sales
• What to look out for?o Over extending yourself
o Dealers’ resentment
o Control problems
Developing Distribution Tactics
Selecting Channel Partners
Reward orReward orCoercive
Power
LegitimatePower
EconomicPower
Managing the Channel of DistributionChannel Leader Power
Distribution Channels & the Marketing Mix
Materials HandlingMaterials HandlingMoving Products Into,
Within, andOut of Warehouses
WarehousingWarehousingNumber Needed
WhereWhat Type
Inventory Inventory Control
When to orderHow much to order
Order ProcessingOrder ProcessingReceivedProcessedShipped
Physical Distribution
FunctionsTransportation Rail, Water, Trucks,
Air, Pipeline, Internet
Physical Distribution
Rail Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
Rail Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
WaterLow cost for shipping bulky, low-value,
non perishable goods, slowest form.
WaterLow cost for shipping bulky, low-value,
non perishable goods, slowest form.
TruckMost important carrier for consumer
goods, flexible.
TruckMost important carrier for consumer
goods, flexible.
AirHigh cost, ideal when speed is needed or
distant markets have to be reached
AirHigh cost, ideal when speed is needed or
distant markets have to be reached
PipelineCarry petroleum based products,
very low cost, requires little energy.
PipelineCarry petroleum based products,
very low cost, requires little energy.
Transportation Modes
InternetWeb sites have products available, used
especially for services.
InternetWeb sites have products available, used
especially for services.
Channel Relationships• Cooperation
• Conflict
• Power– Coercive– Expert– Legitimate
Decision Making Framework
Prospects of Destructive Conflict
Importance of threatened channel in terms of current or potential volume or profitability
High Low
High (FIRE) Act to avert or address
conflict
Allow threatened
channel to
decline
Low (Smoke)
Look for opportunities
to reassure threatened
channel and leverage
your power
Do nothing
All the Best for Summers ☺
Feel free to contact Team C2X
for any query!!