DISTRIBUTION MANAGEMENT wk1

Lesson Proper for Week 1

Sales management has gained importance to meet increasing competition and the need for improved methods of
distribution to reduce cost and to increase profits. Sales management today is the most important function in a
commercial and business enterprise.

The following are the other factors showing importance of the sales management:

(i) Introduction of new products in the market.

(ii) Increasing the production of existing products.

(iii) Reducing cost of sales and distribution.

(iv) Export market.

(v) Development in the means and communication of transportation within and outside the country.

(vi) Rise in per capita income and demand for more goods by the consumers.

Role and Skills of Modern Sales Managers

A sales manager plays a key role in the success and failure of an organization. He is the one who plays a pivotal role in
achieving the sales targets and eventually generates revenue for the organization

A sales manager must be very clear about his role in the organization. He should know what he is supposed to do at the
workplace.

Let us understand the roles and responsibilities of a sales manager:

1. A sales manager is responsible for meeting the sales targets of the organization through effective planning and
budgeting.

2. A sales manager can’t work alone. He needs the support of his sales team where each one contributes in his best
possible way and works towards the goals and objectives of the organization. He is the one who sets the targets for the
sales executives and other sales representatives. A sales manager must ensure the targets are realistic and achievable.

3. The duties must not be imposed on anyone, instead should be delegated as per interests and specializations of the
individuals. A sales manager must understand who can perform a particular task in the most effective way. It is his role to
extract the best out of each employee.

4. A sales manager devises strategies and techniques necessary for achieving the sales targets. He is the one who decides
the future course of action for his team members.

5. It is the sales manager’s duty to map potential customers and generate leads for the organization. He should look
forward to generating new opportunities for the organization.
6. A sales manager is also responsible for brand promotion. He must make the product popular amongst the consumers.
A banner at a wrong place is of no use. Canopies must be placed at strategic locations; hoardings should be installed at
important placesfor the best results.

7. Motivating team members is one of the most important duties of a sales manager. He needs to make his team work as
a single unit working towards a common objective. He must ensure team members don’t fight amongst themselves and
share cordial relationship with each other. Develop lucrative incentive schemes and introduce monetary benefits to
encourage them to deliver their level best. Appreciate whenever they do good work.

8. It is the sales manager’s duty to ensure his team is delivering desired results. Supervision is essential. Track their
performances. Make sure each one is living up to the expectations of the organization. Ask them to submit a report of
what all they have done throughout the week or month. The performers must be encouraged while the nonperformers
must be dealt with utmost patience and care.

9. He is the one who takes major decisions for his team. He should act as a pillar of support for them and stand by their
side at the hours of crisis.

10. A sales manager should set an example for his team members. He should be a source of inspiration for his team
members.

11. A sales manager is responsible for not only selling but also maintaining and improving relationships with the client.

12. As a sales manager, one should maintain necessary data and records for future reference.

WEEK 2

Lesson Proper for Week 2

• The Evoked Set • The Inept Set • The Inert Set

SALES OBJECTIVES, STRATEGIES AND PLAN

E.G. A company wants to increase sales of electric motors by 15%, as one of the sales objectives
LINKING SALES AND DISTRIBUTION MANAGEMENT

Either sales management or distribution management cannot exist, operate or perform without each other.

To achieve the sales objectives of sales revenue an growth, the sales management plans the strategy and action plans an
the distribution management has the role to execute those plans.
PERSONAL SELLING: PREPARATION AND PROCESS

Introducing ‘the psychology of selling,” which outlines precisely what you need to do break through the barriers keeping
you from making more money, so you can sell faster and easier. – period

You don’t have to work harder; in fact, the system will teach you is surprisingly simple to implement, and provides you
with powerful results.

Everything you do as salesperson becomes more efficient an more effective, your closing rate goes through the roof, and
your bank account grows- and all the while, you're having fun!

When you master “The psychology of selling,” you:

1. get what you want, faster than you ever thought possible.

2. Easily rally the people around you to help you reach your goals.

3. Become absolutely essential to your company and climb the ladder, fast.

4. dramatically increase your income.

5. Gain control; over every aspect of your life.

Buying decision process

Engel, Blackwell and Kollat have developed in 1968 a model of consumer buying decision process in five steps;
problem/need recognition, information search, evaluation of alternatives to meet this need, purchase decision and post-
purchase behaviour.

I. Need recognition/problem recognition:

The need recognition is the first and most important step in the buying process. If there is no need, there is no purchase.
This recognition happens when there is a lag between the consumer actual situation and the ideal and desire one.

Classification by type of needs :

1. Functional need:

the need is related to a feature or specific functions of the product or happens to be the answer to a functional problem.
Like a computer with a more powerful video card to be able to play the latest video games or a washing machine that
responds to the need to have clean clothes while avoiding having to do it by hand or go to Laundromat.

2. Social need:
The need comes from a desire for integration and belongingness in the social environment or for social environment or
for social recognition . Like buying a new fashionable bag to look good at school or choose a luxury car to “show‟ that
you are successful on life.

3. Need for change:

the need has its origin in a desire from the consumer to change. This may result in the purchase of a new coat or new
furniture o change the decoration of your apartment.

The Maslow's hierarchy of needs:

developed by the psychologist, this is one the best known and widely used classification and representations for
hierarchy of needs. It specifies that an individual is „guide” by certain needs that he wants to achieve before seeking to
focus on the following ones:

Information Search

Once the need is identified, It's time for the consumer to seek information about possible solutions to the problem.

He will search more less information depending on the complexity of the choices to be made but also his level of
involvement.
I. Internal Information

This information is already present in the consumer's memory. It comes from previous experiences he had with a
product or brand and the opinion he may have of the brand.

Internal Information is sufficient for the purchasing of everyday products that the consumer knows.

Fast-Moving Consumer Goods ( FMCG ) or Consumer Packaged Goods ( CPG ).

Example : Non-Durable goods such as soft drinks, over the counter drugs, processed foods and many other consumables.

II. External Information

This is information on a product or brand received from and obtained by friends or family, by reviews from other
consumers or from the press. Not to mention, of course, official business sources such as an advertising or a seller's
speech.

ALTERNATIVE EVALUATION

Once the information collected, the consumer will be able to evaluate the different alternatives that offer to him.

Two Aspects:

The objective characteristics (such as the features and functionality of the product.)

The subjective (perception and perceived value of the brand by the consumer or its reputation.)

Process…

• The Evoked Set

• The Inept Set

• The Inert Set

The Evoked Set

Also known as “Consideration set” is the set of brands or products with a probability of being purchased by the
consumer.

The Inept Set

is the set of brands or products that have no chance of being purchased by the shopper.

Is the set of brands or products for which the consumer has no specific opinion.

IV. Purchase decision

now that the consumer has evaluated the different solutions and products available for respond to his need, he will be
able to choose the product or brand that seems most appropriate to his need. The proceed to the actual purchase itself.

His decision will depend on the information and the selection made in the previous step based on the perceived value,
products features and capabilities that are important to him.

But his consumer buying decision process and his decision process may also depend or be affected by such things as the
quality or his shopping experience or of the store(or online shopping website), the availability of a promotion, a return
policy or good terms and conditions for the sales.

Once the product is purchased and used, the consumer will evaluate the capability with his origin needs. And wheather
he has made the right choice in buying this product or not.

After buying the product or service, the consumer experiences some level of satisfaction or dissatisfaction. The
salesperson’s job does not end when the product is purchased. He/she shouldmonitor post-purchased satisfaction,
action, and product uses
5 2 Communication Skills for Salespeople

Don’t just talk ; listen and listen so well that the prospect feels understood & heard. Even if a prospect is unwilling to talk,
ask questions on encourage general feedback.

Modern sales training wisely teaches salespeople to be customer-centric. Find out what’s not working well, what’s
missing, or what deficiencies need improving ; then a show how products, services or special option from your company
can address these matters.

All too often, the first thing we do when adversity appears is focus on the negatives and all of the problems in our lives.
Failure and adversity are only present in our lives to help us, not hurt us. It’s extremely important to never lose sight of
this truth.

MATCH PROSPECT’S TONE (IMPRESSION)

Verbal mirroring has long helped professionals in any field where persuasion is necessary. Matching the prospect’s tone,
words or ideology can create trust, agreement and an atmosphere of ease. Use tips from any neuro linguistics and
psychology resources to start practicing how to match tone.
Some of the common-sense basics:

If the client is laid back & relaxed when speaking, don’t be overly formal, manic or uptight.

If the client is super upbeat & funny, don’t be comic and no-nonsense.

If the prospect is very elegant, you’ll want to be your most elegant.

If he is indifferent & all business, you’ll want be serious, too.

Clashes in tone can ruin a client meeting in the first minute.

Even if the prospect endures the meeting until the end, he likely won’t close a deal with someone he couldn’t connect
with in tone. Even if he can’t put his finger on the reason for the disconnect, he will feel it.

Don’t be that guy or girl. You never know when the person who doesn’t qualify today will turn into an interested buyer in
the future.

Communicating more effectively improves sales skills ranging from negotiating and closing to in person confidence and
cordiality. It’s a skill we all should work on more often.

WEEK 3

Lesson Proper for Week 3

Planning, Sales Forecasting and Budgeting
Planning
 is deciding now, what we are going to do later, including how and when we are going to do it, it is a forward
looking.
 Without planning we cannot get anything done efficiently and effectively. Successful companies practice
market-oriented strategic planning.
 The aim of strategic planning is to achieve targeted profits and growth in the face of continual changing
markets and environment.
Strategic Planning
 includes making decisions about the company’s long term objectives and strategies. Planning is being done
at three organizational levels
1. Corporate Strategic Plan
Corporate strategic planning is developed at the company’s headquarters to guide the whole organization. The
planning process includes four steps or planning activities.
a. Developing corporate mission and objectives
b. Defining strategic business units (SBU’s)
c. Allocation of resources to SBU’s
d. Developing corporate strategies to fill the strategic planning gap.
2. Business Unit (or SBU) Strategic Planning
 is done by the head o0f the business unit by developing long term mission, objectives and goals, and
strategies in the changing environment. The strategic planning process Business Unit (or SBU) includes the
following eight steps:
a. Defining the business unit’s mission
b. Scanning the external environment
c. Analysis of the internal environment
d. Developing long term objectives and goals
e. Formulating strategies for achieving the objectives and goals
f. Preparing program or action plan from the strategies
g. Implementing the strategies and action-plans
h. Monitoring results and taking corrective actions.
3. Product/Operational Planning
Is done for each product within a business unit. It plans the specific procedures or systems required at lower level of
the organization. Operational manaers normally develop plans for shot periods of time (up to one year). They focus
on routine tasks such as sales,production,material purchase,recruiting people, and dispatching goods. The
functional plans like marketing,production,human resource, and finance are developed by functional managers to
carry out the routine task on day to day basis.
THE ROLE OF MARKETING AND SALES
In most large and multi-product organizations, strategies are developed at three organizatonal levels. These are:
1. Corporate Level
 to provide information on competition and customer
 To advocate customer orientation and basic value of putting the customer first as part of long term corporate
strategy
2. Business Unit
 To help develop long term business strategy
 Provide competition and customer analysis
 Developing “competition advantage” strategy
 Developing segmentation, targeting and positioning strategies
3. Functional Level
 To evolve and implement marketing-mix strategies to achieve marketing objectives
 Coordinate marketing related activities
 Allocate resources
MARKETING AND PERSONAL SELLING STRATEGIES
The Key Elements of Marketing Strategies
Target market strategy – includes evaluating various market segment (or group of customers ) and deciding how
many and which market target segment target.
Marketing mix strategy – consists of a set of marketing tools the uses of achieve its marketing objectives on the
Target Market.
McCarthy classified these tools into Four broad groups that he called …
Four P’s of Marketing
1. Product
2. Place
3. Promotion
4. Price
Components of Marketing Communication Strategy
Sales Promotion
Advertising
Public Relation or Publicity
Personal Selling
Direct Marketing

INTEGRATED MARKETING COMMUNICATION (IMC)

The concept of IMC is increasing used by many firms. It is the strategies integration of variety of communication
tools such as advertising , sales promotion, personal selling, public relations, publicity and direct marketing 
 To use the most cost effective tools to achieve and desired communication objectives. 
 To ensure strong message consistency, clarity and sales impact.
To achieve these objectives, the following action points are suggested

1. The company should appoint a head of communication

2. The company should build a database by measuring the results after communication goals, the promotional
media cost and the message consistency.
3. Conduct training program for all persons handling various communication tools.

WEEK 4

Lesson Proper for Week 4

SALES STRATEGYA STRATEGIC DECISION AREA

1. CLASSIFICATION OF ACCOUNTS
Within a target market segment, the accounts or specific customers, are classified into different customer groups. All
customers within the target segment are not the same.
2. RELATIONSHIP STRATEGY
Buyers and sellers, particularly in business markets, have some kind of business (or working) relationships. These
relationship have a range or variety such as:
A. Transactional Relationship
Transactional-oriented customers show less loyalty to a particular supplier. They switch suppliers for lower costs.
Sales managers would consider such customers for transactional relationship.
B. Value Added Relationship
These customers have medium sales and profit potential. The focus of sales people is on complete understanding
of present and future problems or needs of the customer, and offering better solutions or meeting those needs
better than the competitors.
c. Collaborative Relationship
Between buyer and seller, the aim is to build long term, and mutually satisfying relations. The foundation of
collaborative relationship is commitment and trust. Both buyer and the seller should accept that the collaborative
relationship is so important that is deserves maximum efforts to continue with it.
3. SELLING METHOD
Sales people should use different method to suit different relationship strategies. There are:
1. Stimulus response method
2. Formula method
3. Need-satisfaction method
4. Team selling method
5. Consultative selling method
[Link] STRATEGY
A strategic issue in the sales strategy is to select an appropriate channel (also called marketing channel, distribution
channel) and for covering selling efforts, it is called sales channel. Sales managers should ensure that accounts (or
specific customers) and group of customers receive effective and efficient sales coverage. The various sales
channels available to firms for covering selling efforts tidiidlt
 The company sales force
 Industrial distributors or dealers
 Manufacturer’s representative s or agents
 Telemarketing
 The internet
 Brokers or commission merchants
DEVELOPING SALES FORECAST
The purpose of sales forecast is to plan and achieve the forecasted sales in an effective manner. Sales forecast are
being used by other functions such as: (i) manufacturing or production for setting up production capacity and
planning production, (ii) finance for raising cash for investment and operation as well as for profit planning, (iii)
purchase function for planning their purchases, and (iv) human resource management for manpower planning.
Thus, sales forecast has a role as a forerunner to all planning activities in an organization. Accurate sales forecast is
important because all functions base their plans on such forecast.
Forecasting Approaches
Top-down/Break-down Approaches
In this approach, typically the company sales forecast is developed at the business unit (SBU) level, by using
suitable forecasting methods. The head of sales/marketing then breaks down the company sales forecast into the
region, district, territory, salesperson, and individual customer sales quotas.
Bottom-up/Build-upApproach
It starts with the company’s area or branch managers asking its salespersons to estimate or forecast the sales in
their respective territories.
SALES FORECASTING METHODS
[Link] OPINION METHODS
 Oldest, simplest and then widely used method
 method includes getting the views of top executives of the company regarding future sales
2. DELPHI METHOD
 Members of expert panel do not meet or discuss in a committee
[Link] COMPOSITE METHOD

 Involves salesperson to estimate their future sales.

4. TEST MARKETING METHOD
 Useful for forecasting sales for a new product , which has no historical (or previous) sales figure.
[Link] AVERAGE METHOD
 this is relatively simple method that develops a company forecast by calculating the average company sales
for previous years.
6. DECOMPOSITION METHOD 
 the company previous periods sales data is broken down (or decomposed) four major components, such as
trend, cycle, seasonal, and unpredictable future.
[Link]/RATION METHOD 
 This method is a time series method of forecasting, which is based on the assumption that what happened
in the immediate past will continue to happen in the immediate future.
[Link] ANALYSIS 
 This is a statistical forecasting method that is used to predict sales, called as dependent variable “y”.
HOW TO IMPROVE FORECASTING ACCURACY ?
Sales forecasting is an important and difficult task. It is, therefore necessary to understand some guidelines that
help in improving the accuracy of the sales forecast. These are :
1. Use Multiple Forecasting Methods
companies use two or three forecasting methods to ensure high level of accuracy and to gain confidence.
2. Identify Suitable Methods
suitable of the forecasting methods depends on the application, cost and time available for forecasting. The
forecaster should also keep in mind the advantages and disadvantages of each forecasting method.
3. Develop a Few Factors
When the forecaster uses regression analysis, he/she should keep the number of independent variables or factors
as few as possible, because use of many factors in result in duplication of a few basic factors like population and
income.
4. Obtain a Range of Forecast
Most forecasting firms prepared a range of sales forecast, including minimum, intermediate, and maximum
estimates. The minimum sales estimates are based on the lowest probable potential market of the product or
service. The company also estimates the market potential (maximum possible sales estimate), assuming all
favorable things to happen. Between the two extremes of minimum and maximum estimates, the forecaster makes
suitable assumption to calculate the intermediate sales forecast
5. Use Computer Hardware and Software tools
Computer are playing an important role in sales forecasting. Personal computers (PC) are used widely for sales
forecasting, because they are fast, and capable of storing and progressing large amount of data.
SALES BUDGETS
What is sales budget ?
 A sales budget consists of estimates of expected volume of sales and selling expenses
 Sometimes sales budget is based on the sales forecast.
 Sales budget are generally set slightly lower than the sales forecast to avoid excessive risk.
 Sales budget includes a detailed estimate of sales revenue as well as selling expenditure.
The sales volume budget, which is derived from the sales forecast, is broken down into
a. Product-wise quantities – the average selling price per unit and sales revenue.
b. Territory-wise quantities – to be sold and sales revenue
c. Customer-wise and salesperson-wise volume – quota during yearly, quarterly and monthly budget period. In
other word, the sales budget includes a detailed estimate of sales revenue as well as selling expenditure.
Selling expenditure budget consists of :
SELLING-EXPENSE BUDGET – includes expenditures for personal selling activities such as salaries,
commissions, incentives and other expenses for the sales force.
ADMINISTRATIVE BUDGET – includes the salaries of territory sales, managers, sales supervisors, their
secretaries and office staff. The budget should also include operating expenses like rent, power, supplies, and office
equipment.

WEEK 5
Lesson Proper for Week 5
ORGANIZING AND STAFFING THE SALESFORCE
Organization structure defines relationship among jobs and among the people in a company. The aim
is to arrange the activities or jobs in such a manner that the people involved can performed effectively
and efficiently and act together rather than individually. Organization structure is a tool mangers use
to employ resources for getting things done.
THE BASIC CONCEPTS INCLUDED IN THE SALES ORGANIZATION ARE:
1. Degree on Centralization
A centralized structure has authority and responsibility placed at higher levels of management. In a
decentralized organization, the responsibility and authority for carrying out tasks are delegated to
lower-level managers.
2. Degree of Specialization
A general approach is that each salesperson carries out all selling activities and each sales manager
performs all management tasks. However, the generalists approach become less effective as the
number and complexity of the company’s products and/or markets grow. Hence, some degree of
specialization is required, so that individuals can concentrate on a few activities.
3. Line or Staff Position
Line positions in sales management have line authority, which means people in management
positions have formal authority or power to direct and control immediate subordinates. Line sales
managers have responsibility to direct and control subordinates reporting to them. Line sales
managers are involved in performing sales management activities and are responsible for achieving
certain sales target or quotas. Staff management positions have staff authority, which means advising
and recommending roles in their respective areas of specialization or expertise
4. Marketing Orientation
Present and potential customers fall into many market segments. Each market oriented sales team
develops suitable sales strategy for the segment it serves. As the sales organization is market-based,
each market-oriented sales team can adapt its selling strategy to respond to the changing market
conditions.
5. Effective Co-ordination
In principle, all functions in the organization should interact harmoniously in order to achieve the firm’s
objectives. In typical organization, each function has a potential impact on customer’s satisfaction and
hence all the departments need to “think customer” and work together to satisfy customer needs and
satisfaction. One of the ways to have an effective co-ordination is to have a regular meeting with
other functions or departments.
6. Span of Control
It refers to the number of individuals who report to each sales manager. Span of control depends on
the job descriptions of subordinates as well as abilities of subordinates and sales managers. Flat
organization structure, which means reducing the number of organizational (or hierarchy) levels, in
order to get closer to the customer.
BASIC TYPES OF SALES ORGANIZATIONAL STRUCTURES
 LINE SALES ORGANIZATION
 LINE AND STAFF SALES ORGANIZATION
 FUNCTIONAL SALES ORGANIZATION
 HORIZONTAL SALES ORGANIZATION
LINE SALES ORGANIZATION
It is the simplest sales organization structure. This organization structure is widely used in small firms
and in companies having a small number of sales people.
Advantages of line sales organization are clear authority and responsibility, quick decision making
and low cost.
Disadvantages are that too much depends on the head of sales, who has no support from
subordinates with specialized knowledge and skills, such as advertising, sales promotion, and market
research.
LINE AND STAFF SALES ORGANIZATION
A group of specialists are made available to the top sales or marketing executive. These specialist,
called staff, are experts in certain support activities such as marketing research, sales training,
advertising or IMC and so on. Staff managers have the role of advising or assisting line sales
managers.
Line and staff organization structure is likely to be used in medium and large sized of companies
when.
a) Number of customer is large
b) Market coverage is national or regional
c) Sales force size is large
d) Many product/service to be sold/rendered
The advantages of Line and Staff Organization
 Better marketing decisions due to assistance from specialist’s staff, who are experts in their respective
areas. 
 Better sales performance, as sales managers can focus their efforts on selling function. 
 Top sales and marketing managers can concentrate on planning, coordination, human resource and
control aspects as their detailed work is lessened.
The Disadvantages include 
 Higher cost and co-ordination work 
 Slower decision making 
 Conflict may arise if line authority of staff managers is not clear
FUNCTIONAL SALES ORGANIZATION
This organization structure removes management (hierarchy) levels and also departmental
boundaries. The support function like strategic planning, human resources and finances are looked
after by a small team of senior executives.
The advantages of Functional Sales Organization
Qualified specialists guiding the sales force and high degree of division of labor.
Get reversed by confusion and frustration of salespeople, who have to respond to several bosses.
The main advantage of a functional sales organization is its administrative ease.
HORIZONTAL SALES ORGANIZATION
This organization structure removes management (hierarchy) levels and also departmental
boundaries. The support function like strategic planning, human resources and finances are looked
after by a small team of senior executives.
The advantages of Functional Sales Organization
 Reduction in supervision, unnecessary tasks, and costs.
 It significantly improves in efficiency and customer responses with enthusiasm.
SPECIALIZATION WITHIN SALES ORGANIZATION
Geographic Specialization
Salesperson is assigned in geographic area are responsible for all setting activities to all customers
within the assigned area. A reasonable number of salespeople are placed under a territory manager.
A territory manager is typically called branch, area, district, regional sales manager.
The Advantages of Geographic Specialization :
 Better market coverage
 Better control over sales force
 Superior customer service
 Quick response local conditions and competition
Disadvantage:
Geographic specialization has a limited specialization of marketing tasks.
Product Specialization
Product specialization is useful when the company has a large number of products/brands.
Two Types of Product Specialization:
a. Sales organization with product managers as staff specialists
b. Sales organization with product specialized sales force
Advantage: Each product gets a specialized attention from salespeople and territory sales
managers.
Disadvantage: More than one person from the company calls on the same customer, resulting in
customer dissatisfaction and increase in selling costs.
Marketing Specialization
An increasing important type of specialization. Market specialized sales organization is desirable
when customers are classified by specific types, user industry, or by channel of distribution.
Advantage: Sales and marketing efforts are organized to meet the needs of specific customer
groups.
Disadvantage: Duplication of territory coverage and resulting in higher selling costs.
Recruiting the Sales Force
The general purpose of recruitment is to provide a pool of job candidates from where a company
selects the right person
Three Steps including in the recruiting stage
a. Identify the sources of recruiting people.
 For identifying or locating prospecting candidate’s companies use the internal and external sources.
Internal recruitment sources came from inside the company they include:
1. Employee referral programs:
 A referral is a recommendation by one individual that another person be hired for a person.
2. Current Employees:
 Current employees can recommend friends and relatives to the company
 They also can be applicants by applying for sales job Many organization like to recruit within their own
companies because of two reasons: a) The cost of recruitment is less; b) It improves employee morale.
3. Promotions and Transfers:
 Internal promotions and transfers generally result after the company announces sales job openings
through newsletters, in meetings, or on the bulletin board.
External recruitment sources came from outside the company they include:
1. Advertisements.
 By advertising in newspapers and trade journals for sales jobs, a company can produce large pool of
applicants in a short time.
 Advertising is basically less expensive on a cost-per-applicant basis. However, a large number of
applicants may not be qualified for the job, due to below average quality of many applicants.
2. Internet.
 Many companies use their own websites to approach the applicants for various positions including
sales. The advantage of this web-based recruiting is very low cost of getting applicants resumes.
3. Educational Institutions.
 Large companies use colleges and universities as popular source for sales recruit.
 Small firms are less likely to recruit in college campuses because many graduate prefer large and well-
known companies, who have extensive training programs and company benefits.
4. Employment Agencies
 A commonly used source for recruitment.
 Candidates usually works from a job description provided by the Sales Manager, based on the specific
job qualification's they can do initial screening.
5. Other Companies
 A sales person recruited from competitor, who has a selling experience and requires less training.
Three Steps including in the recruiting stage
b. Evaluating of recruiting resources
 A company selects those sources that are effective based on the past database.
c. Contacting Candidates through the selected source
 The selection process consists of a number of steps. These steps are like filters, at any of these steps,
an applicant may be dropped from further consideration.
3. Selection Decision Stage
 In making selection, the sales manager should decide the important criteria, w/c are necessary for
performing the duties of sales job.
4. Hiring Stage
 The hiring stage should implement properly so as give a positive impression of the company of the
candidates who look for good work environment, where people are made to feel important.
4. Hiring Stage (continuation)
 There are two activities in the hiring stage
o The company making job offer.
o Acceptance of the job offer by the applicant
5. Socialization and Assimilation
 Socialization- is the process through w/c the new salespersons learn values, norms, attitudes, and
behavior of people who are already working in the organization.
 Assimilation- is the 2nd stage of socialization process. It starts when the new applicant accepts the job
offer. The newly hired employees must become familiar with the people working in the organization,
 understands the norms and values of the Company and learn how to perform various activities of the
sales job.

Lesson Proper for Week 7

MANAGING THE SALES TRAINING PROCESS
SALES TRAINING - is expensive and sales managers / HR should take special care to ensure that time and money
are wisely spent.
The sales training process consists of three phases.
1. Assess Sales Training Needs
2. Methods used for Assessing Training Needs
3. Popular Sales Training Needs

ASSESS SALES TRAINING NEEDS

PURPOSE: To understand the specific goals of training for individual salespeople.
SPECIFIC GOALS:
 Improving product knowledge
 Selling techniques, or relationship building
What is need assessment?
 “A needs assessment is simply a systematic process of asking questions, comparing answers, and making
informed decisions about what to do next to improve human or organizational performance.”
 [Link]
ROLE OF SALES TRAINING: - to prevent problems on a proactive basis.
Capability gaps - arise when the sales force does not have the required knowledge, skills, or capabilities to
become successful on the job.
REMEMBER!
Sales training exists to overcome deficiencies and to make salespeople continuously successful.
Sales managers / HR should access the training needs for both:
1. Newly hired sales trainees
- may need training in sales techniques.
2. Experienced (regular or existing) salespeople
- could need training in negotiating skills.
METHODS USED FOR ASSESSING TRAINING NEEDS
(a) sales manager’s observation
(b) sales force survey
(c) customer survey
(d) performance testing
(e) job description
(f) sales force audit
SALES MANAGER’S OBSERVATION
 Field sales managers spend a lot of time in the field working with the salespeople.
 These first level sales managers observe the need for particular sales training, based on specific
shortcoming (or deficiency) of the salesperson.
SALES FORCE SURVEY
 To identify the training needs of the salespeople, it is important to conduct sales force survey, as an
independent activity or combined.
CUSTOMER SURVEY
 Some companies, where personal selling is the key element of their sales and marketing strategy, customer
survey to identify sales training needs is very much recommended.
 The customer survey also helps to understand customer expectations, the company salespeople’s
competencies, as compared to that of other salespeople in the same industry.

PERFORMANCE TESTING
 Some companies test knowledge and skills of salespeople by conducting performance testing of
salespersons on a regular basis.
 Sales trainers / HR evaluate the performance of salespersons on presentation skills, product knowledge,
and customer relationship management and so on to determine training needs.
JOB DESCRIPTION
 Job description statement would be useful not only for recruitment and selection, but also for sales training
and evaluation of sales force.
 It is, therefore, a logical tool to be used in assessing the training needs.

SALES FORCE AUDIT

 As a part of marketing audit or sales audit, some companies use sales force audit for assessing training
needs of salespeople.
 Generally conducted once a year, the sales force audit asks questions on the training programs about its
adequacy, contribution, and version.
POPULAR SALES TRAINING NEEDS
(a)product knowledge
(b)customer knowledge
(c)competitive knowledge
(d)sales techniques
(e)company knowledge
PRODUCT KNOWLEDGE
 Usually product knowledge is the commonly covered topic sales training programs.
 It includes advantages, benefits, applications, and limitations.
 If the product or service is technically complex, more time is spent in giving the detailed knowledge.
 When the company develops a new product or carries out a major modification of the existing product,
training on new product is needed even for experienced salespeople.

CUSTOMER KNOWLEDGE
 The sales training may include relevant information about the company’s customer, such as type of
customers (like household consumers, government customers, and institutional customers), knowledge of
customer’s businesses, customer needs, buying motives, buying orientations and procedures, and so on.
 For international or foreign customers, the training programs should include cultural differences and
business practices followed in foreign countries.
COMPETITIVE KNOWLEDGE
 Knowledge of competitors’ products or services in terms of strengths, weaknesses, strategies, and tactics as
well as prices, discounts, payment terms are very important for salespeople to plan sales strategy.
 Competitors’ knowledge would help a salesperson during a sales presentation, overcoming customer
objections, negotiation, and finally closing the sale.

SALES TECHNIQUES (OR SELLING SKILLS)

 Many salespeople are not competent in sales techniques and hence, they need training on “how to sell”.
 There are many common shortcomings (like ineffective questioning and listening skills, giving benefits
before understanding the customer needs) which can be removed by a good training program.
COMPANY KNOWLEDGE
 New sales trainees should be told about the company’s vision, mission, values, objectives, organization
structure, policies and procedures.
 The general policies may include personnel policies like canteen policies and leave policies.
 It is also necessary for the trainees to understand the history and any other relevant background information
that helps to develop a sense of pride about the company.

Lesson Proper for Week 8

MOTIVATING THE SALESFORCE
“How do I motivate my salespeople?” is one of the most common questions asked by managers.
WHAT IS MOTIVATION?
 Motivation is originally derived from the Latin word “movere”, which means “to move”.
 The desire to spend effort to fulfill a need is motivation.
 In the sales job, motivation is the effort the salesperson makes to complete various activities of the job.
Motivation includes three dimensions:
 Intensity - refers to the amount of physical and mental effort the salesperson spends on a given task.
 Persistence - describes how long the salesperson continues to put forth effort.
 Direction - suggests the salesperson’s choice of direction of effort among various tasks.

RELEVANCE OF MOTIVATIONAL THEORIES TO SALESPEOPLE

 Maslow’s Hierarchy Of Needs Theory
 Hertzberg’s Dual-factor Theory
 Acquired Needs Theory
 Expectancy Theory
MASLOW’S HIERARCHY OF NEEDS THEORY
 This theory has a relevance to Salesforce motivation.
 Different salespersons will have different needs, and therefore, what may act as a motivator for one
salesperson may not be effective with another.
 A sales manager can take suitable managerial actions only after an accurate assessment of the needs of
individual salespersons.
HERTZBERG’S DUAL-FACTOR THEORY
 A theory of motivation developed by Frederick Hertzberg is called dual-factor theory, in which sources of
dissatisfaction and satisfaction are grouped into two groups: Hygiene factors and Motivation factors.
 Examples of hygiene factors are working conditions, security, supervision, interpersonal relationships, salary,
and company policies.

ACQUIRED NEEDS THEORY

1. Home
2. My courses
3. 123 - PMM414
4. Week 8 : MOTIVATING THE SALESFORCE
 5. Lesson Proper for Week 8

Lesson Proper for Week 8

MOTIVATING THE SALESFORCE
“How do I motivate my salespeople?” is one of the most common questions asked by managers.
WHAT IS MOTIVATION?
 Motivation is originally derived from the Latin word “movere”, which means “to move”.
 The desire to spend effort to fulfill a need is motivation.
 In the sales job, motivation is the effort the salesperson makes to complete various activities of the job.

Motivation includes three dimensions:

 Intensity - refers to the amount of physical and mental effort the salesperson spends on a given task.
 Persistence - describes how long the salesperson continues to put forth effort.
 Direction - suggests the salesperson’s choice of direction of effort among various tasks.
RELEVANCE OF MOTIVATIONAL THEORIES TO SALESPEOPLE
 Maslow’s Hierarchy Of Needs Theory
 Hertzberg’s Dual-factor Theory
 Acquired Needs Theory
 Expectancy Theory
MASLOW’S HIERARCHY OF NEEDS THEORY
 This theory has a relevance to Salesforce motivation.
 Different salespersons will have different needs, and therefore, what may act as a motivator for one
salesperson may not be effective with another.
 A sales manager can take suitable managerial actions only after an accurate assessment of the needs of
individual salespersons.
HERTZBERG’S DUAL-FACTOR THEORY
 A theory of motivation developed by Frederick Hertzberg is called dual-factor theory, in which sources of
dissatisfaction and satisfaction are grouped into two groups: Hygiene factors and Motivation factors.
 Examples of hygiene factors are working conditions, security, supervision, interpersonal relationships, salary,
and company policies.

ACQUIRED NEEDS THEORY

Acquired needs theory was developed as a result of a research made by David McClelland and his associates.
Three fundamental needs:
 Need for achievement – This refers to the desire to do something better or more efficiently, to solve
problems, or to master complex tasks.
 Need for Affiliation – This refers to the desire to establish and maintain friendly and warm relations with
others.
 Need for power – This refers to the desire to control others, to influence their behavior, or to be responsible
for others.
EXPECTANCY THEORY
 One of the process theories refer to expectancy theory that was developed by Victor Vroom.
 This theory sees people as choosing a course of action according to what they anticipate will give them the
greatest rewards.

Motivation is a product of the following factors:

 VALENCE – how much one wants a reward. This concept describes the value placed on a particular reward
by a salesperson, for an instance, if the reward is recognition given to the salesperson by the sales
manager, it may not carry much value to the person. For some other person’s recognition has a great value.
  EXPECTANCY – This concept refers to the person’s perception of the relationship between effort and
performance. It points out to what extent a person expects (or hopes) that increased efforts will lead to
superior performance.
 INSTRUMENTALITY – one’s estimate that performance will result in receiving the reward.
COMPENSATING THE SALESFORCE
 Financial compensation or pay was given the highest value by salespeople as a tool for motivation.
 It is, therefore, a widely used method or tool for motivating salespeople.
Financial incentives take the form of any or a combination of the following:
 Time Rates
 Payment by Results
 Performance Related Pay
 Profit Related Pay
 Skill Based Pay
Time Rates
 This monetary reward uses the number of hours worked as means of determining rewards.

Payment By Results
 This scheme links pays the quality of the individual’s output.
Performance Related Pay
 This scheme considers results or output plus actual behavior in the job.
 Most often, rewards consist of bonus as a percentage of basic salary, with quality of performance
determining the magnitude of the percentage increase.

Profit Related Pay

 This is an organization wide scheme where pay is linked to company profits.
 Profit related pay takes the form of direct cash outlay, or allocation of stock options.
Skill Based Pay
 Also known as competency based or knowledge based pay, this is a pay that sets pay levels on the basis of
how many skills employees have, or how many jobs they can do.

WEEK 9
Lesson Proper for Week 9
Distribution Management and Marketing Mix

a
Place
 Part of the Marketing Mix
 One Major aspect of marketing management process
This aspect of the marketing function provides the following:
Place Utility
making your product available to the customer at the retail shop
Time Utility
making your product available (at the retail counter)
Possession Utility
when the customer goes to the retail shop to buy, he can pay for it and take home
Definition of Distribution Management
 The management of all activities which facilitates movement and co-ordination of supply and demand in the
creation of time and place utility in goods.
 The art and sciences determining requirements, acquiring, distributing, and maintaining in operationally
ready condition for their lives.
 Broad range of activities concerned with the efficient movement of finished products from the end of the
production line to the customer.
 It also includes the movement of raw materials from the source of supply to the beginning of the production
line.
Intermediaries or channel members are normally expected to perform the following functions:
 To accumulate the right kind of goods, aggregating and sorting to meet consumer needs at the point of
purchase.
 To believe in routine and simplified transactions and work with a large number of products.
 To provide information both to the sellers and the buyers to help them manage their business better.
 To buy a large variety of goods and can compare costs and prices and make the right recommendations to
their customers.
 To be aware of the environment in which they operate and hence isolate the companies from the direct
impact of these local conditions.
 To reduce the number of touch points.

Discrepancies and Distribution Channels

Spatial Discrepancy
 Temporal Discrepancy
 Need to break the bulk
 Need to provide assortment
Discrepancies and Distribution Channels
 Spatial Discrepancy it occurs due to the ‘space’ or distance between the production point of the product or
service and its consumption points.
  Temporal Discrepancy this refers to the time difference between the production point and the time at which
the product may get bought or consumed.
 Need for breaking the Bulk to minimize the production cost.

Lesson Proper for Week 10

RETAILING
WHAT IS RETAILING ?
 According to English Dictionary, “Retail” is derived from the term “Retailer” which seems to be a French
word meaning “to break the bulk” The term retailer also implies that he deals directly with the end user or
consumer.
SOME OF THE OTHER CHARACTERISTICS OF RETAIL TRADE ARE:
 The order sizes tend to be small but many
 The retailer caters to a wide variety of customers and hence has to keep a large assortment of goods.
 A lot of buying in the retail outlet could be on impulse and hence managing inventory is critical.
 The retailer’s strengths are in ensuring availability and visibility of the product he sells – true for the corner
grocer or the supermarket.
Definition of Retailing
Any business entity selling products and services to consumers is “RETAILING”. The goods may sold in shop, in
person by malls, on the internet. Telephone or vending machines.
Retailing includes all the activities involved in selling or renting consumer product and services directly to ultimate
consumers for their personal or home consumption.
HOW DO CONSUMERS DECIDE WHICH RETAILER TO BUY FROM? A CONSUMER SELECTS A RETAILER
BASED ON THE FOLLOWING FACTORS:
1. Price (value offered, credit, special discounts)
2. Location ( Convenience, parking , safety, stores nearby)
3. Product Selection (width and depth assortment, brands, quality)
4. Special Services (home delivery, special orders, gift wrap)
5. Helpful Salespeople (polite, knowledgeable, fast)
6. Fairness in dealings ( honesty, return privileges)
WHAT DOES THE RETAILER DO TO ENSURE STICKINESS IN HIS CONSUMERS?

FUNCTIONS OF RETAILING INCLUDE:

o Performing marketing functions that enable them to make available a wide variety of products to the
consumers.
o Helping create time, place and possession utility.
o Adding form utility such as when a clothing retailer alters a trouser to fit a consumer.
o A retailer’s services also help create an image for the products he sells.
o A retailer add value to products through:
 The services they offer such as credit, delivery, extended store hours.
 The personnel they hire who help identify and solve customer problems.
 The store’s location, perhaps near other stores or in a bazaar to facilitate comparison
shopping.
A retail firm can be classified according to:
1. Form of ownership sole ownership, partnership, corporation, consumer co-operatives.
2. Operational structure independent, chain, franchise.
3. Service and price orientation full service, limited service normal margin, discounter, off-price.
4. Merchandise offering general, mass or specialty, merchandise depth refers to the number of brands,
model or styles carried for each products category.
5. Where the sale takes place in the store or non-store.
Lesson Proper for Week 11
Some of the kinds of retailers are:
Specialty store
Narrow product line with deep assortment – apparel, furniture, books.
Department store
Several product line in different departments – shoppers stop, big bazaar.
Supermarket
Large, low-cost. Low margin. High volume self service operation with a wide offering.
Convenience store
Small stores located in residential areas, open long hours all days of the week – limited variety of fast moving
products like groceries and foods.
Discount store
These retail outlets buy in bulk from producers on low negotiated prices and can offer discounts of up to 20% on the
listed consumer price to the consumer.
Voluntary chain retailer co-ops
Wholesaler sponsored group of independent retailers independent retailers with central buying operations and
common promotion.
Consumer co-ops
Co-operative societies of group of consumers operating their own stores – farmers, industrial workers and so on.
Franchise organization
Contractual arrangement between the producer and retailers – selling the producer’s products exclusively.
Chain store
Retail stores could be in multiple locations but easily recognizable by the store design, brandname/logo, common
merchandizing plan and the same customer service and promotional strategies.
High street (western term)
Store located in busy shopping areas. These necessarily have to be a small (not more than 2000 sq ft.) limited
assortment of merchandise, no parking facilities.
Destination (western term)
These stores have to attract the customer with large size, good bargain, ample parking space and wide variety to
choose from but located in a particular part of the city which takes some effort to reach.
Family store
Is defined as an apparel store which caters to the entire family.
Specialty Store
Deals with a large variety of a limited range of goods. Bata shops and Titan showrooms are good example. They
could be company owned or franchised.
Emporium (used by government or export firms)
Usually promoted for selling a particular category of products. Thisis very similarto a specialty store. Most state
governments operate these to promote their handicrafts.
Superstore
Is considered as bigger than a supermarket but operating on a single floor. Experts say that a superstore is more
than 5000 sq ft. and stocks a wide variety of food and other items. It may also have a have a chemist, bakery or
florist on its premises.
Shopping Mall
These are growing rapidly in India. These are number of different retailstores organized in one premises which is
severalstories high and with ample parking [Link] may even include entertainment and food stalls.
Independentretailers pay for the space in the malls which are usually over 200,000 sq ft.
Hypermarket
Is considered more than 200,000 sq ft. but one retailer brand. It stocks almost everything including groceries, food,
nonfood, textiles, garments, footwear, and stationery.
Every day low price (EDLP)
These are discounted stores in the Western countries who announce low prices every day on some select
merchandised.
Category killer (Western term)
This is a specialty store with a large assortment at very low prices. They offer the best price regular in the market
and hence are a threat to all other retailers. This again is not a regular feature of Indian markets.
Factory outlet
Most of the garment and footwear manufacturers have these outlets. They would be selling either regular goods or
in many cases ‘seconds’ or ‘export materials. These used to be earlier in the factory premises but can now be seen
across cities.
Warehouse
This store is temporary and is run by individual parties for a limited period ‘sale’. They normally engage a huge
space like a marriage hall to conduct this sale.
Single price denomination
All items in the store are priced at one or two attractive, low prices.
Stop-Over Store
This is a store within another like grocery and food stores seen in petrol stations.
Kiosks
Is a small independent unit which can be located in busy place like airports, and busstations and normally sellssoft
drinks, cigarettes, and beverages and is open on three sides to handle the rush of customers. There could also be
kiosks to just give [Link] is reminded of the ‘may I help you kiosks you see In majorrailway stations.
Vending Machines
Dispensed fixed quantities of products for fixed prices. Selfoperated by the consumer – beverages, condoms,
magazines, chocolates.
Independent Store
Owned by a single person or one or two partners. All the hundreds of retail store in India come under this category
whether they are grocers, chemists or ration shops.
Franchise
The store brand is common but operated by many persons on behalf of the main retailer.
Hawkers
Visit residential localities with their merchandise and sell house to house with almost fresh tocks every day
THE ROLE OF THE RETAILER
The Retailer is able to provide the service to the customers by the following:
[Link] 
 The definition of merchandizing is a set of activities involved in acquiring goods and services and making
them available at the places, times and prices and the quality that enable a retailer to reach his goals. 
 It focuses on acquiring the goods and storing them so that any consumer can access them at a time, place
and quantity convenient to him.
[Link] SERVICE OR SERVICE 
 The basic function or retailer is to provide the goods most likely to be bought by his prospective customers
at a place and time when the customer wants them. 
 He should ensure that his goods are of a good quality and affordable by the customers
Some of the factors affecting the customers service are:
 The location of store and its working hours.
 The assortment of the goods.
 The prices at which the goods are made available.
 Help and assistance within the store support the selection of the goods by the customer.
 The store may even provide services like accepting orders on phone, home delivery, a credit, and transport
to the stores, and so on.
3. PLANNING THE RETAIL FORMAT 
  The format denotes the kind of store it is.
 The format is again to choice of the retailer based on his long term strategy.
 Once the format is decided, it is quite difficult to change as the customers then start recognizing the store by
its format.
 The format gives the image to the store.
4. CUSTOMER COMMUNICATION
 Communication refers to the manner in which the retailer makes himself known to his prospective
customers.
 this communication, initially may take the form of press advertisements., hand bills, and the like.
Communication basically is used by the retailer to:
o Announce the opening of the retailer store
o Tell customers about the promotions running
o Inform the customers about any additional facilities introduced in he store.

WEEK 13

Lesson Proper for Week 13

WHOLESALING
Wholesale business is mostly B2B – that is between businesses and institutions.
Wholesalers operate on large volumes but with chosen groups of products.
DEFINITION OF WHOLESALER
 Wholesalers buy and resell merchandise to retailers and other merchants and to industrial, institutional and
commercial user, but do not sell in significant amounts to ultimate consumers.
 The wholesaler, or the wholesaler trader, is a trader, who purchases goods in large quantities from
manufacturers and resells to retailers in small quantities.
Functions of Wholesalers:
A summary of the functions of wholesalers is given below.
 Sales and promotion of chosen company products
 Buying the assortment of goods to be handled
 Breaking bulk to suit customer requirements
 Storage and protection of the goods till they are sold out
 Grading and packing of goods like commodities
 Transportation of the goods to the customer
 Financing the buying of the goods and extension of credit to the customers
 Collecting and disseminating market information to suppliers and customers
WHOLESALING FUNCTIONS FOR A PRODUCER SUPPLIER
FUNCIONS HOW DO THEY DO IT 
SELLING ♦ Act as extension of the producer’s sales force
♦ Seek out supply sources and reduce the producers’
need for sales personnel 
STOCKING ♦ Reduces producers’ need for carrying large inventories
and invest in warehousing
FINANCING ♦ Reduce warehousing cost
♦ Reduce producers’ commitment to working capital ♦
Producers’ also receive payment for goods even
before they are sold to ultimate users 
MARKET INFORMATION ♦ Closer contact with final buyers gives better information
and reduces need for a market research
RISK REDUCTION ♦ Credit sales to their customers
♦ Risk of owning title to the products
♦ Risk of carrying inventory
♦ Order in advance and help to even out production scheduling
CLASSIFICATION OF WHOLESALER

1. FULL SERVICE 
 Stocking, selling, offering credit, delivery and any business assistance are all provided. Company
distributors are a good example.
2. LIMITED SERVICE 
 The name indicates that the range of activities/ services is limited. Examples include cash and carry (usually
their stock are in a limited number of products ) and mail order houses (send catalogues to customers.)
[Link] WHOLESALERS 
 Independent businesses which include distributors, jobbers (stock displays of products not normally carried
by retailers.)
[Link] AND AGENTS 
 Obviously these people bring the byer and seller together and rarely handles goods themselves and get a
commission out of all transactions.
5. MISCELLANEOUS 
 Include agricultural produce business, petroleum bulk handlers and auction companies.
Lesson Proper for Week 14

Distribution plays a vital role in the success of the sale effort, by ensuring the availability of the product in the right
quantities, at the right time and at the right place.
TYPES OF DISTRIBUTION CHANNEL
In international market, a company could choose from a variety of options depending on:

Product being marketed

The size of the market

Level of development of the market

1. COMMISSION AGENT – In the initial stage, a company could enter a market using this, by virtue of his
knowledge of the product and or the buyers could assist in getting business. Such an agent would not buy the
products himself/herself but would solicit business from buyers and arrange payments to be made directly to the
exporting company.
1. DISTRIBUTION – Once the business grows in volume and number of buyers, it may be necessary to appoint a
distributor who would import, stock, and sell the product to end buyers/users.

3. RESIDENT REPRESENTATIVE – As business develops, a company may choose to establish its own office
resident representative who undertakes the job of developing customers and ensuring their requirements are met.

4. JOINT VENTURE/ MANUFACTURING – Once the volume of business reaches a certain size, a company may
be forced to consider investing in the market with a longer term perspective. This could take the form of a joint
venture for distribution or manufacturing or may involve the company opting for a wholly owned subsidiary for
distribution and manufacturing.
Different Channel Distributions
Manufacturer-consumer (Direct selling):
 Shortest and simplest channel
 No middleman between the producer and consumer
 Producers sell directly to customers through door-to-door salesmen, direct mail, own retail stores
 Used generally for selling shoes, clothes, books, etc.
 Very fast and economical
 Expert services of middlemen are not available
 Large investment is required
Manufacturer-retailer-consumer:
 Manufacturer sells to one or more retailers who sell to consumers
 This channel is popular when retailers are big and buy in large quantities, e.g. departmental stores, super
markets.
 Generally used for distribution of consumer durables and products of high value like automobiles, home
appliances, etc.
 Relieves manufacturer of the burden of selling and provides control over distribution.
Manufacturer-wholesaler-retailer-consumer:
 Traditional or normal channel
 Suitable where producers have limited finance and narrow product line.
 Channel used in case of consumer durables which are not subject to frequent changes in fashion.
Manufacturer-agent-retailer-consumer:
 Used when retailers are few or geographically concentrated
 Commonly used to sell agricultural products, machinery and equipment, etc.
Manufacturer-agent-wholesaler-retailer-consumer:
 Longest channel
 Producer hands over entire output to the agent who sales them to wholesalers
 In case of cloth this channel is widely used
 Results in wider distribution of products.
ANALYZING THE SERVICE OUTPUT LEVELS DESIRED BY CUSTOMERS
In designing the marketing channels, the marketer must understand the output levels desired by the target
customers.
Channel produce five service outputs:
LOT SIZE- this is the number of units the channel permits a typical customer to purchase on one occasion.
WAITING TIME- this is the average time customers of that channel wait for receipt of the goods.
SPATIAL CONVENIENCE- this is the degree to which the marketing channel makes it easy for customers to
purchase the product.
PRODUCT VARIETY- this is the assortment breadth provided by the marketing channel. Normally customer prefer
greater assortment because more choices increase the chance of finding what they need.
SERVICE BACKUP- this is the add-on services (credit, delivery, installation, repairs) provided by the channel.
Lesson Proper for Week 15

Many small and medium companies are unable to take advantage of this boom as they do not have an
understanding of selling in International markets. This aims to provide an understanding of this aspect of business.
Choosing the Market
 This is a very important element in international marketing.
Some of the factors to be bear in mind while choosing the market to enter are:
1. The size of the market 
 Size of the market is an obvious attraction, the manufacturer must bear in mind that all large markets will
inevitably be more competitive as every manufacturer wants to get a slice of the market. Small
manufacturers may find it difficult to service the large markets and would be comfortable in choosing small
markets.

2. The language and culture of the market

 Language and cultural affinity is very important in international markets. Indian companies will find it easier
to do business in the nearby markets like Sri Lanka, Bangladesh, Nepal and the Middle East, due to easy
communication and similarity in cultures.
 Culture is very important factor in international marketing. Culture encompasses everything from the way of
thinking and doing business to the consumption patterns of the population.
  Language is very important aspect of international business. In many countries knowledge of the local
language is a must for doing business. It is important to bear in mind that meaning of terms and words vary
with the language and culture. This is very important in communication including mass communication like
advertisements and promotions, and brand names.

3. The competition in the market 

 International competition is a fact of life for today’s companies. Manufacturers in the United States, for
example must compete not only with exports from other countries, but also with American subsidiaries of
foreign corporations. The same is true for manufacturers and other companies in Japan and the European
Union (EU). Newly industrialized countries such as China, Singapore and South Korea, Taiwan, Brazil and
Mexico are also competing for a share of the international marketplace. In short, international competition is
the driving force behind the globalization of production and markets.

4. Contact of the market

  In order to select those which are most attractive? For small firms this step may not be very involving since
they may lack the resources needed to do it effectively. So they are often left with using their own intuition or
judgement to determine which segments are the most promising. For companies with the time and money to
commit this step, the results may identify the segments that are primary candidates for current marketing
efforts and also present segments that are future targets for the company’s offerings.

5. Political and financial stability of the country

 A term used to describe the financial system of a nation that displays only minor fluctuations in output growth
and exhibits a consistently low inflation rate. Economic stability is usually seen as a desirable state for a
developed country that is often encouraged by the policies and actions of its central bank.
 The political environment in international business consists of a set of political factors and government
activities in a foreign market that can either facilitate or hinder a business ability to conduct business
activities in the foreign market.
Lesson Proper for Week 16
SELLING IN INTERNATIONAL MARKETS
Trade between countries occurs because of the following reasons:
 A particular product (Especially natural raw materials) is unavailable
 There are cost advantages by buying the product instead of manufacturing locally – outsourcing occurs due
to this consideration.
 The product offered us differentiated from the local product – countries make, but and sell a product, for
example, India manufacturers, exports and imports automobiles.
A company may decide to sell its products in international markets due to one or more of the following reasons:
 It has a good market domestically where the growth is limited.
 International markets offer large and profitable opportunities.
 The company has excess capacity, which the domestic market cannot absorb.
 The company has a considerable cost advantage over its international competitors.
 The company predicts increased competition in the domestic market and seeks to moderate the risk of
diversifying.

PROFILE OF AN INTERNATIONAL SALESPERSON

While an international salesperson needs to have all the traits expected of a good salesperson, he/she would need
to have the following additional qualities:

 The ability to speak in one or more international languages.

 The ability to adapt for foreign cultures – especially food, drink, and the like.

 The ability to act independently and decisively.

 A pleasant and amiable personality.
 The ability to understand not only the product and pricing, but also financing of the sales, the instruments of
payment, and foreign exchange risks.
A company may choose to appoint local persons as sales executives or representative in different countries
depending on the suitability of the candidate and the custom country. It is often found that certain businesses are
dominated by particular ethnic groups and it may be helpful for a company if it uses the services of a salesperson
from that group.