SALES MANAGEMENT

SLMT 3
Group 5

SLMT

Abhishek Nigam
Aditi Mathew
Chiti Shree
Divya Naik
Kevin George
Kurian
Sophia DCruz

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

Aditi Matthew 14F504

Kevin George Kurian 14F426

1) Can you think of any other value addition? Can you think of an example
for each of the above?
Apart from the value additions already mentioned in the slides, one more
extremely important value addition of channels is growth of distribution
network. A channel helps in forming new distribution avenues for the existing
products. This helps in the expansion plans of the company. Also, companies
may utilize this information to come up with their own distribution network in the
near future. Examples are as follows:

Reach the product/service to the end customer (Supply side)

Reduce cost of reaching product by sharing overheads/opex (Supply side)
Desired SKU/variety ( Break- Bulk) (Demand side)
Facilitate Search Category of outlets (Demand side)
Facilitate high freq. purchase (Demand Side)
Sorting for unbranded products (Demand side)
Basket of products thru single window (Demand side)
Competitive comparison (Demand Side)
Assurance for unbranded/new products (Demand and supply side)

2) Why is branded retail more common in product categories like Apparel,

Jewellery, Watches and Spectacles?
There is no dispute to the fact that branding creates and strengthens
connections among stakeholders and end customers. It consolidates
engagement and fuels ones perception of a business. A brand now-a-days is
more about the customer experience. Experiences can occur directly with the
product as well as indirectly with anything that represents the brand. This is
where branded retail makes it presence felt.
Most companies think of retailers as a connection that helps consumers
understand the brand and what it means to them. It links the products with the
right retail brand. More often than not, this selection means the difference
between success and failure of any product. For example, Titan Eye wear sells
spectacles at a premium price due to the brand image Titan brings to the table.
Making a deal with a well-known retail giant can mean massive exposure and an
exponential increase in sales. Thats majorly because of the fact that Titan puts
the products in its stores which indirectly means that Titan guarantees the
authenticity of the product.
Hence we can say that branded retail has the following major functions:

Each branded retail has a distinct brand image and linking the products to
that image can help target the right consumers
SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

Aditi Matthew 14F504

Kevin George Kurian 14F426

Retail brands help in information processing. Any branded retail will allow
only a select few companies to supply for its stores. This indicates to the
end consumers that these products are the crme de la crme
Branded retail outlets offer security to buyers. They are better than pure
click as they allow customers to handle products and return unsatisfactory
purchases

3) In metro markets and for big brands is the WHOLESALER important. If

yes/no, Why??
Yes, Wholesalers are very important for big brands as well because of the
following reasons:

Warehousing Wholesalers are integral to warehousing operations. They

have large warehouse spaces across several locations and hence order
huge quantities of products which otherwise the retailers would not have
been able to order. Big brands generally authorize only a select few
wholesalers to distribute their products to retailers
Networks Wholesalers form several sales networks which are then used
for easy distribution. Big brands initially use these wholesalers to develop
and expand their channels. Wholesalers use their existing channels to
implement a sales network for the company
Logistics Wholesalers are in charge of trucking and transportation of
the products. Both local and long-distance transportations are handled
either in-house or through third party logistics services depending on the
wholesaler. A wholesaler also has the option of using a milk run system
which requires extensive spread. This would not be possible for a single
company
Tracking Wholesalers use advanced tools to track and distribute orders.
Modern day wholesalers employ techniques like Just in time, Vendor
managed inventory, etc. which helps in further optimizing the entire
supply chain process

Thus wholesalers bridge the gap between the company which makes
products in large quantity and the retailer who sells the product to the end
consumer.
4) Super Stockist/Super- Distributor: Many companies have an additional
intermediary---- Super distributor---- particularly in smaller market.
What is the intended role?
A super stockist has several sub stockists under it. Super stockists buy stocks
SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

Aditi Matthew 14F504

Kevin George Kurian 14F426

from company and sell them to sub stockists who further sell these stocks to
retailers. Their roles are as follows:

Inventory A super stockist must always have adequate inventory of

products at all times. The sub stockists and distributors rely on the super
stockist to meet their demands
Time Management A super stockist must ensure that all orders to the
company are place well in advance based on the levels of inventory
he/she has in the warehouse. A super stockist must avoid sales loss due to
stock out at all times. A super stockist must also ensure timely deliveries
to sub stockists
Tracking A super stockist must always keep a track on the SKUs in the
warehouse. He/she should also keep all sales records in proper form such
that necessary information can be provided to the company as and when
required
Infrastructure A super stockist must also ensure that the products are
in safe and hygienic conditions and for that he/she needs to invest in the
growth of the entire business
Finance A super stockist must have adequate levels of finance in order
to carry out daily activities and maintain desired level of manpower
Conflict Resolution A super stockist must mitigate and resolve
complaints of the sub stockists and distributors. A super stockist must also
make regular visits to be more receptive of the issues and grievances. A
super stockist must also have cordial relationship with all the clients
Promotions A super stockist should also actively participate in all
promotional activities which will help in the growth of the company.
He/she should also ensure that all the products are pushed to the various
distributors and sub stockists

5)
6)
7)
8)

9) Why is claw back of commission important in the channel value

proposition?
Clawback of commission is important for channel value proposition to
maintain control over the effective application of requirements from the
brand. Claw back of commission means that the amount of money paid
previously or the number of perks given is taken back due to certain
issues in certain situations. This is done when the terms of agreement are

SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

Aditi Matthew 14F504

Kevin George Kurian 14F426

not fulfilled or a company cancels the orders or when a customer defaults

to pay.

Once the products are out to the distribution centers/ retailers, the brands
have no means to control how effectively they are maintaining the brand
image that the brand has developed. Hence there is a necessity to
exercise control by the marketers by withholding or reducing the
commissions that needs to be given post sales as a penalty for not
adhering to the required brand consistency..it also depends on the
performance of the sales representatives.. Sales commission claw back
can also be applied when the sales orders are cancelled by the customer.
Paying of a commission helps the salesperson to be actively involved in
the business and retain the clients and also increase the client base. Claw
back of commission also helps keep loyal customers. But the commission
system keeps sales aligned with the objective of the company
and reduces the risk of bad deals.

10) For which customer/product segments should we use DST and

not DSA?

DST is a part of the payrolls so it falls in the purview of the management

so the control is far better than that in case of DSA.

DST is also more aligned with the companys mission statements and can
work on targeted goals accordingly.

DST is required in the customer segments where we need to develop

relationships between the brand and the customers.

This becomes essential where expert trainings are required and the
company is willing to provide exclusive training programs for the DST. Like
in cases of niche automobile segment a DST will be more effective than
an outside agency selling the vehicle.

DSAs are more experienced and are required in cases where we need to
venture in new territories where DSAs have a better understanding and
effective networks. In such cases, hiring DST might not be a sound idea.
SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

11)

Aditi Matthew 14F504

Kevin George Kurian 14F426

What are the distinctive characteristics of Online Channel?

Answer
Online distribution is the delivery or distribution of products on an online
delivery medium, such as the Internet. This helps bypass the physical
distribution methods. Online distribution is generally done for
downloadable products/optimized content/digital services. Content may
be distributed online for example online streaming of videos/films, online
books download, online software.The distinctive characteristics of online
channel are:

Broader Customer Base: One can reach the whole customer base at one
go

Broader Products to showcase: Online channel provides you unlimited

space to fill in different assortment based on the requirement of the
manufacturer. This also helps in catching eyeballs of the consumer, cater
to their variety seeking behavior etc.

Creation of an account using an e-mail id is mandatory for most of the

online transactions. This helps the websites to track the purchase
activities and customize advertisements according to the requirements of
the user

All the activities are recorded and the data can be analysed to categorize
products, customers and identify related trends to come up with more
engaging sales promotions & activities.

No sales executive required but needs to have an efficient customer care

service to answer all customer queries..

It also has more access to global markets and not bounded by local
boundaries.
Online channels reduce costs by bypassing traditional distribution
channels. This lowers extra transaction and communication fees.
Online channels also provide a better customer service. Since this has
more access to information, online channels have more scope of
development.

SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

Aditi Matthew 14F504

Kevin George Kurian 14F426

Online distribution channels can be applicable when the products do not

require a lot of explanation/demo.
12)

Where online penetration is low, what options can be created?

Mobile networks are having higher penetration which can be utilised by

giving options like ordering through phone call or SMS

Companies can come up with engaging activities where the rural

population can send missed calls from their mobile to register and
involve telesellers to sell the products using their contacts.

One can provide kiosks to help the customers get acquainted with the
interface and utilise the kiosks to place orders.

13) Why does Flipkart want to promote Online EXCLUSIVELY THRU

mobile?
Flipkart wants to promote online through mobile for the following reasons:

More people have smartphones than computers

Access to rural and semi-rural areas
Cost efficient to maintain just the APP than both APP and website
More time is spent on smartphone than computers
APP can work with mediocre web connectivity speeds as well

14) HLL has 100+ products sold thru a SINGLE channel format. Telecom
has 1 product (AIRTIME) that is sold thru multiple channel formats.
What explains this divergent approach?

HLL could be focusing on single-channel format for sales of its different products
as its target segments are not too diverse. In fact, much of the products that are
sold by HLL target similar customer segments and a single-channel format will
suffice in achieving the target sales
In case of Airtime it a multi-channel approach is very important in getting to
potential customers (of all segments). Airtime as a commodity is usually beyond
segmentation and is equally demanded by most of the different segments. The
different options here are: online sales, Retailer, FOS etc

SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348
15)

Aditi Matthew 14F504

Kevin George Kurian 14F426

Does the retailer push brands? If yes, why? When? If No? Why not?

Why would a retailer push a brand? They will, if the retailer is assured of a
certain return for the risk he is taking by pushing a specific brand. A higher
margin for the product and other perks might give him the prod to push the
brand.
Why they wont push? They wont push cause of the risk involved. They might be
losing out on higher sales and margins from other brands. The margins and
perks given to the retailer by the brand to push their product may not be enough
to cover the risk.
More and more retail outlets are going the self-service way and hence there is
very little potential to push the brands from the retailers end.
Additionally, the retailers job has expanded so much in present times that
he/she rarely has the time to focus on single brand pushing

16) What does the below statement mean? Explain Most trade schemes
are a mere waste of money and merely advance primary/secondary
without increasing consumption.

Trade schemes offered rarely convert to actual benefits of increased

consumption. Let us look at an example. A retailer offers a considerable discount
of 1 kg pack of wheat flour. This could induce a consumer to buy the more than
his normal requirement (say 1 kg pack per month). While such a purchase
translates to higher sales figures in the month it actually doesnt impact the
annual sales as the same consumer refrains from buying another pack in the
next month as he already has the extra pack.
Ultimately, the consumption is not increased and remains almost the same. The
only benefit could be that if a new user is lured by the discount and then the
retailer may be able to have higher sales in the long run

17) What is stock pressure? What does the above statement mean?
Explain.

Stock pressure measures how much of total stock/production of a company has

been converted to sales. It is calculated by the ratio Sales/Total Stock. A brand
having high stock pressure sells a larger quantity of its produced goods. A brand
having low stock pressure is able to sell very little of its total stock, resulting in
SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

Aditi Matthew 14F504

Kevin George Kurian 14F426

considerable unsold inventory/closing inventory at the end of the period. The

stock pressure of a brand is highly influenced by the offerings of competitors as
if competing brands offer better value propositions to the consumer, then the
other brands stock pressure will be low.
High stock pressure means that there is greater turnover in the form of sales.
However, in todays world, most sales are not done on a cash basis. With huge
quantities being demanded, customers and brands both find it convenient to
provide sales on a credit basis. Therefore, high stock pressure does not
necessarily affect the cash conversion cycle of the company with immediate
effect, but could generate higher accounts receivable in the form of credit sales
in the market.

18)

Margin structure

The answer lies in the key difference between a retailer and a distributor. Karan,
being a distributor has a more long-standing relationship with the manufacturer
of the product. Retailers seldom have this direct relationship. Distributors engage
in warehousing activities and accumulation of stock, leading to significant
operating costs. Retailers are free of this burden, more or less. They stock goods
that are highly demanded by customers so that their capital is not locked up.
Therefore, they enjoy greater margins than distributors.
Hence, Karan is not in the wrong business per se. Hes just in a very different
business, and enjoys benefits of his own even if they are not in the form of high
gross margins. He has the benefit of being in close standing with the source of
the product i.e. the manufacturer and is keenly aware of likely product changes,
features, benefits and so on. Also, it might be possible that his net margin would
not be very less than that of a retailer, as the latter has a lot of non-operating
expenses to bear. Therefore in terms of overall profitability, there might not be
that big a difference.

19)

Still on Margin structure

In both cases of Prepaid Recharge as well as Maggi noodles, the consumer has a
wide range to choose from in terms of brands available. There is an inherent risk
that they might not be loyal to the brand in question and may have very low
switching costs for brands that provide the same service. In such situations,
brands need retailers support in ensuring sales. Retailers are given a higher
margin so that they are motivated to sell the brand to the customer over other
available brands. Also, they might give the brand more prominent shelf space.

SLMT 3 Group 6

Abhishek Nigam 14F402

Chiti Shree 14F415
Divya Naik 14F518
Sophia DCruz 14F348

Aditi Matthew 14F504

Kevin George Kurian 14F426

As customers are likely to believe the recommendations of their trusted

shopkeeper, this strategy generally works.

20)

Saturated market

On average, every consumer is using 1.8 units of telecom service. The seller
needs to identify those customers who have less than 1.8 units of usage, and
provide offerings to them. For example, it is very likely that the rural segment
has considerable untapped potential. In a matured market such a telecom, it is
imperative that the seller comes up with a unique value proposition to target
customers. Otherwise the brand too would fizzle out. Target customers should be
those who are looking for additional features and benefits in the product that
other brands do not offer. They might be young and looking for innovation and
change. If the company fails to meet these needs for innovative products, it
would undoubtedly be loss-making in a market that is already slow.

21)

Month-end rush

Month-end rushes could be on account of promotions and discounts offered by

retailers to clear unsold stock. It could also be that the customers need these
items only during this time. This could depend on the nature of item. Most
people buy groceries/staples at the end of the month or beginning of the next.
These buying patterns are significant as they let the marketer know exactly at
what price how much of a product is being demanded and for what purpose.
They would enable him to sketch a more prudent and strategic sales plan to
ensure greater profitability.

SLMT 3 Group 6