CH- 1 TO 7 SALES & MKTNG

PEARL KALRA, PGD SALES&MARKETING, TISS 15-16

History of Sales & its Evolution In the Beginning People Bartered (Around 5000 BC metal objects introduced as money) 1700’s-1800’s: The Industry Revolution changed the way we do

business. *Sales People often made exaggerated Claims *Bulk buying and selling concept introduced Starting 1900’s : Sales People were encouraged to earn

customer’s trust. 1950’s-1960’s : Sales People held power over the customer. * Fast Talking Salesman came knocking * TV promotion ads & Print Media Ads 1970’s-1980’s : Spin & Solution Selling started. * Customer became more involved. * Align Solution with an Customer need. * Demo Why it is better than the Competitor’s. 1990’s: Rise of Partnerships Power Base, Target Account, Complex Selling 2000’s : Rise of Cloud based & Saas CRM Soln Power Shifted from Salesman to Customer. 2010’s: Rise of Intelligent Sales Automation Age of the Informed Customer Works with any sales process

What is Distribution Distribution is the process of making a product or service

available for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries.

1) Intensive  -basic supplies, snack foods, magazines and soft drink beverages.

2) Selective -more specialised goods that are carried through specialist dealers, for example, brands of craft tools, or large appliances.

3) Exclusive - typical of luxury goods retailers such as Gucci

*

Channels (Sales) :

Consumer, Service & Industrial Basically there are Two Channels :

DIRECT

.B

A

.C

INDIRECT

• the vendor of a product or service sells directly to the customer.

• Direct sales approach requires vendors to take on the expense of hiring and training a sales team.

offloads sales activities to individuals and organizations known as intermediaries. e.g value-added resellers , consultants, wholesalers etc.

Consumer Channels

Manufacturers may reach out to consumers either directly, i.e., without using distribution channels, or by using one or more distribution channel members.

Consumer Channels Cont.

Manufacturer to consumer: Direct marketing includes use of personal selling, direct mail, telephone selling and internet. Avon cosmetics, Tupperware, Aqua guard and Amazon.com are examples of companies engaged primarily in direct marketing.

Manufacturer to retailer to consumer: supply directly to retailers rather than through wholesalers. Supermarket chains and corporate retailers e.g Big Bazaar, Natures Basket etc.

Manufacturer to wholesaler to retailer to consumer:For small retailers with limited order quantities the use of wholesalers makes economic sense. Wholesalers dominate where retail monopolies are not dominant.

Manufacturer to agent to wholesaler to retailer to consumers: A company uses this channel when it enters foreign markets. The agent contacts wholesalers in the foreign market and receives commission on sales to sell to larger number of customers.

Industrial Channels:

Industrial channels are usually shorter than consumer channels. Direct selling is prevalent due to closer relationship between the manufacturer and the customer, as well as due to the nature of the product sold.

Industrial Channels Cont.

Manufacturer to industrial customers: common channel for expensive industrial products like heavy equipments and machines. Close & Continuing relationship between the manufacturer and the customer. E.g JINDAL STEEL – HERO CYCLE

Manufacturer to agent to industrial customer: A company that sells industrial products can employ the services of an agent who may sell a range of products from several producers on a commission basis. JINDAL STEEL – AGENT – HERO CYCLE.

Manufacturer to distributor to industrial customer: For less expensive, more frequently purchased products, distributors are used. Distributors enable customers to buy small quantities locally.

Manufacturer to agent to distributor to industrial customers: The manufacturer employs an agent rather than a dedicated sales force & agent may sell the goods of several suppliers to an industrial distributor, who further sells it to the business user.

Service Channels

Distribution channel for services are usually short, and are either direct or use an agent.  Since stocks are not held, the role of wholesalers, retailers or industrial distributors does not apply.

Service provider to consumer or industrial customer: Close relationship between service provider and customer means that service supply has to be direct, for instance, healthcare, banks etc.

Service provider to agent to consumer or industrial customer: Agents are used when the service provider is geographically away from customers and when it is not economical for the provider to establish its own local sales team.

Service provider via internet to consumer or industrial customer: Increasingly, services like music, software solutions and financial information are being distributed via the internet. E.g e-tickets

Role of Channels

A manufacturer creates value utility in the product or service but time and place utilities are created by distribution channels.Distribution channels help in the following ways:(i) Enhance Efficiency: Distributor/agents(ii) Smooth Flow of Goods and Services: Merchant(iii)  Reducing Cost of Transactions: Intermediates(iv) Facilitate Search: Facilitator, Dealer(v) Less Stocks of Goods: Broker, Facilitator, MR,

OEM(vi) Proximity to Consumers: Dealer, Serive Center

etc.

Primary & Secondary Sales Primary Sales is some what easy to manage and monitor

rigorously with the help of different Sales and Distribution solutions available but as far as the secondary sales is concerned there is risk that companies have to depend on unverified assumptions.

With Example: PRIMARY SALES MEANS WHEN THE ORGANISATION SELLS

OR MAKE FLOW OF PRODUCT OR SERVICES TO THE CHANNEL PARTNERS. EX : IN FMCG : F&C AGENTS, DISTRIBUTORS , DEALERS EX : IN FINANCIAL SERVICE : BUSINESS PARTNERS, FRANCHISEES.

SECONDARY SALES MEANS WHEN THE ORGANISATION SELLS OR MAKE FLOW OF PRODUCT OR SERVICES TO END USERS. EX : IN FMCG : RETAILERS , TRADE FAIRS , PROMOTIONAL SALES EX : FINANCIAL SERVICES : SALES DIRECTLY BY COMPANY EMPLOYEES.

Case Study : PharmaNET Solution

THANK YOU