Introduction to Sales
[Part-2]
Posted on November 10, 2013
In my last article (Introduction to Sales [Part-1]), we talked about what is the function of sales and why it is so important. In this article I am going to
explain what role is played by Sales personnel and some important sales related terms.
Basic Responsibilities of Sales Manager:
Deliver volume
Exploit maximum market potential
Ensure stable distribution infrastructure
Ensure relationship distributors and customers (retailers)
Develop a capable team
Basic Responsibilities of Sales executive:
Reach outlet on time
Sell product
Maximize LPC and BPC
Keep product availability in store
Maintain Visibility of product in store
Highlight promotions (promotional schemes)
Keep product neat and clean
Build and maintain relationship with retailer
And deliver volume
Glossary of Sales Terms:
RTM (Route To Market): Route To Market is the critical link between manufacturing and market. It is a distribution system employed by the
company.
Primary Sales: It is a sales from company to distributors
Secondary Sales: Sales from distributor to retailers
Tertiary Sales: Sales from retailer to end consumers. It is also known as “Off-take“.
Trade schemes: These are promotional schemes that are offered to boost sales from time to time. They can be classified in two categories:
o Primary Scheme: These are deducted while the invoicing is done to the distributor from the company’s end. This may be done to
give the distributor an additional margin.
o Secondary Scheme: Distributor is supposed to first extend to the market and then claims it back from the company
o Qualitative Purchase Schemes: These are schemes which company offers to distributor based on volume he buys
eg. 5% discount on 100 pieces, 7% discount on 150 pieces
o Quantitative Purchase Schemes: These are schemes which company offers to distributor based on value of total items bought
eg. 5% on items worth 10000Rs, 7% discount on items worth 15000Rs
Landing Price: It is a price that buyer pays to seller for purchase of the product
1. Distributor landing price: Per Unit Price distributor pays to compny for purchase of product
2. Retailer Landing Price: Per Unit Price retailer pays to distributor for purchase of product
ROI (Return on Investment): Return on Investment is money earned for the investment made over one year
ROI = 100*(Earning – Expenses)/Investment
Beat Plan: Beat plan is a pre-defined route for sales executive to follow to service the outlets.
Outlet universe: Total number of outlets which stores product same product category or related product category to which our product
belongs
Coverage: Coverage is number of outlets covered from universe of outlets.
1. Numeric Distribution: Absolute quantitative distribution ie if outlet universe is 100 and my product is present in 60 outlets then Numberic
Distribution is 100*60/100 = 60%
2. Weighted Distribution: It is measured based on volume. ie if total volume sales by all outlets in outlet universe is 1000unit and my product
is present in outlets which sells 700units then Weighted Distribution is 100*700/100 = 70%
MCP (Master Coverage Plan): At the time of product introduction, MCP is performed to identify and understand market and design
distribution plan to meed objectives.
EDS (Every Dealer Survey): EDS includes visiting every retailer of the are and mapping market potential to design effecient route for
coverage
LPC (Lines Per Call): Number of order lines per order
BPC (Brands Per Call): Number of brands per order
FDFT (Fixed Date Fixed Time): Ensuring the Distributor Salesman visits all the potential outlets on a FDFT. This helps to establish DSR
reliability
OOS (Out Of Stock): When product is sold out and retailer is left with no inventory to sell.
POS (Point of Sales)
Merchandising: Arranging our Products and POS neatly and prominently so that they are easily noticed by the customer
PJP (Permanent Journey Plan): It is detailed plan for Sales Manager describing his monthly activities.
