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Sales and Distribution Strategy Sales involves delivery and transfer of ownership of the product or service to the customer It forms the beginning of the latter part of the supply chain post manufacture Sales constitutes the direct and most intimate contact of the firm makes with its customers Sales is responsible for the fulfillment of the promise made to the customer by its predecessor functionmarketing While marketing is responsible for creation of a customer, sales and after sales service are responsible for servicing and retention of the customers
Methods of Selling
Selling through channel partners(distributors and dealers) Direct selling which bypasses channel associates works for some products(personal care,household-Avon,Amway, Eureka Forbes) Sales through large retail chains in house brands (Wal-Mart, Home Depot) Mail order sales(Sears), telemarketing of services increasingly popular-to be questioned in terms of appropriateness(standardized, low involvement products eligible)
Forecasting
Forecasting may be of total product/service sales or of sub product or individual products or combinations of all While forecasting is essentially a prediction of future sales, it usually is a projection of past sales incorporating credible trends Desirable to give more weightage to recent period sales. At least ten previous periods data should be taken for reliability.Most Indian firms ignore these to their cost
Forecasting
For cyclical industries, need to know the length of the cycle(might change as for Indian auto industry from 4 yrs up to 1980s to 5 years post 1980s) Amplitude as % change to be measured Cycles include macro economic cycles, industry cycles and inventory cycles(most Indian companies do not include these in their forecasts Finally consumer sales to be measured and forecasted and not sales to channel members as is unfortunately done
Sales Budgets
Sales budgets are overall sales plans enumerated in financial terms The forecast by gross units, product groups and individual variants to be converted into Re terms Expenses for promotions and schemes as well as infrastructure like hoardings and shop signage to feature Allowances for spoiled and obsolete product withdrawals to be included Targetted levels of overall receivables and acceptable age of receivables also part of budget
Sales Budgets
Budgets should be approved by senior sales executives with their marketing and financial counterparts and finally approved by top management Budgets should be reviewed definitely on a quarterly basis and preferably on monthly basis Changes should be minimal but incorporated into revised budgets after approval by top management
Sales Policy
Firstly the direct/indirect issue. Do we go for direct selling? Do we use distributors? If so how many in various territories and regions? How many in metros/large cities? Next to decide the terms of sale including credit terms and to whom various credit terms applicable(franchisees, direct and indirect dealers)
Sales Policy
Deciding minimum infrastructure for channel partners Intensity and frequency of coverage by sales personnel I.e. weekly/monthly visits to specific retail outlets and distributors and CFAs Warranty policy and ASS infrastructure to be decided.Training and supervision of Channel staff for various functions including logistics, motivation of retailers and handling quality issues are part of sales policy Need to involve Marketing and QC personnel in formulation of relevant aspects of sales policy where their contribution is critical
Administrative Functions
First step is the selection of sales personnel. Various sources including media, placement agencies and educational/vocational training campuses have to be tapped Employee contacts are useful for experienced personnel. Poaching seems attractive but is a short term approach
Some Suggestions
It is better to build brand credibility, offer real value propositions to customers through relevant communication and strategic pricing Associates should be supported through adequate infrastructure including signage and merchandising support Finally associate remuneration should be competitive and permissive of realistic long term earning prospects Information systems and good evaluation/incentive schemes with a view to build enduring partnerships should form the keystone of associate formation and development
Recruitment contd.
Reference check on previous employment experience and performance necessary Clear statement of expectations from new employees on conduct and performance a must Offer of emoluments and future prospects to be unambiguous(avoid vague sky is the limit promises-nobody believes them anyway)
Sales goals
Unit of sales needs to be defined properly. For services like telecom, a unit of standard value (Rs. x representing a standard offering like monthly revenue) For merchandising, and signage joint goals for sales and marketing should be set Min. no of inventory turns for each channel partner should also be a sales goal. Recommended min 12 for every industry Min revenue/profit per sq.ft of space should be a retail target Regular and reliable reports should be a
Merchandising
Merchandising is the process of increasing visibility and appeal of products to increase saleability It includes product packaging, placement, promotion and special pricing One other form of merchandising is using the brand power of one organization to sell products of another.(sports personalities and entertainment cos lending their brand names to various products)
Merchandising
Mostly merchandising focusses on presentation of products including displays and special instore storage and packaging(gift bags, racks, trays), posters, danglers, special cards/brochures It also features discount schemes along with the pricing and packaging features Outdoor signage and on shop and in shop signage could also feature as part of merchandising
Summary
Defining larger Marketing process and Sales sub process Areas of Sales responsibility, forecasting, sales organization, selection, training and retention issues, compensation, motivation of sales force Sales strategy, types of selling viz direct selling, through channel members, mail order, e selling Sales budgeting, how to develop the budget as effective planning and control tool
Summary
Essentials of space planning and inventory management Channel members types and roles, selection of channel partners Mutual expectations of firm and its chnl. Partners, training, rewards/recognition Sales goals optimizing the long term volume/margin combination
Summary
Company responsibility to channel members including promotional and information systems support Merchandising basics, role of company and channel partners