Sales & Distribution Management

SALES&DISTRIBUTION MANAGEMENT
PERSONNEL MANAGEMENT IN THE SELLING

FIELD
Sales force management is a kind of personnel management

function applied to a special field. Whatever be the
functional areas of business, personnel activities are
involved.
Activities in sales force management
Recruitment
Selection
Training, supervision, and development
Performance appraisal
Compensation and motivational programmes.
Sales expenses
1. Variable Expenses
*Salaries of salesmen
*Advertising
*Traveling equipment
(1)
BY:- SHASHANK GUPTA

PGDM(FIN.&MKTG),M.COM
2. Fixed Expenses
*Sales commissions
*Training costs
*Supervision cost
*Controlling costs
Turnover of Sales Personnel
Reasons
1. Controllable reasons
• Faulty recruitment & selection.
• Faulty training.
• No proper motivation.
• No proper supervision.
• Lack of communication.
• Lack of performance.
• Transfers & promotions.
2. Uncontrollable Reasons
• Retirements.
• Death.
• Medical causes.
(2)
BY:- SHASHANK GUPTA

Job Analysis
It includes the functions and conditions of the job as well
as personnel requirements of the job.
• Job description.
• Job specification.
Sales Job Description
1. The title of the sales job.

2. Description of the selling job in brief.
3. The objectives of the job.
4. Functions of the selling job.
Job Specification
• Qualification.
• Responsibilities.
(3)
BY:- SHASHANK GUPTA
Recruiting Sales Personnel

Recruitment Sources
1. Internal sources
*Internal Transfers.
2. External sources
*Sales representatives of competing companies.
*Salesmen of non-competing companies.
*Campus recruitment from educational institutes.
*Placement firms.
*Advertisements.
(4)
BY:- SHASHANK GUPTA
Selecting sales Personnel

Selection is the process of offering jobs to one or more
candidates from among those who have applied for jobs
in the organization.
Selection Process
1. Reception of applicant.
*There may be receptionist to receive the applicant, who
will gather certain basic information about the candidate
by asking the applicant short questions.
2. Application Blank.
*Name
*Address
*Age
*Marital status
*Educational qualification
*Experience
*Reference.
3. Selection Test.
4. Interview.
5. Inspection of past career.
6. Primary selection.
7. Final selection.
8. Medical check-up.
BY:- SHASHANK GUPTA
Selection Techniques
1. Application Blank
2. Interview
3. Physical examination
4. Business Games
5. Group Discussion
6. Role Play
7. Different types of tests.
(6)
BY:- SHASHANK GUPTA
Sales Training
Training improves the effectiveness of the sales persons.

Training helps to reduce the sales turnover ratio.
Aims of the training
1. Knowledge of the company.

2. Knowledge of the company’s products.
3. Knowledge of the customers.
4. Knowledge of the sales procedures.
5. Training in the art of salesmanship.
Training Methods
1. On the job Training
• Demonstration
It is supported by lectures, visuals, and discussions.
2. Off the job training

*Lectures
*Conference Method
*Seminar
*Case study
*Role-playing
*Games
(7)
BY:- SHASHANK GUPTA

Execution and Evaluation of Sales Training

Programmes
Training organization
A big organization runs a staff training college and an
executive training college. Large organizations appoint a
sales training director. Trainers must understand the
selling task and the selling skills.
Timing of the training

New recruits are trained in groups. When a large number
of persons are recruited, it is better to arrange group
training. It means lower training costs per person.
It is necessary to keep an yearly schedule of refresher
and retraining programmes. It improves the effectiveness
of the sales persons.
Site of the training Programme

There are two option- conduct training at a centralized
location by transporting the trainees there or to conduct
training in a decentralized manner in the region or
district as here the sales persons has to work.
Training Aids
*Audio-visual impressions
*Video-players or CD-players
*Projectors
*Audiocassettes
(8)
BY:- SHASHANK GUPTA
Evaluation of Training Programmes
It measures how effective the training was. A training

programme has three costs-time, money, and effort. This
investment must pay back. It is, however, not so easy to
measure how far the Programme contributed to the
effectiveness of the individual. What we can do is to
match the aims expected and the results achieved.
(9)
BY:- SHASHANK GUPTA

Motivation & Morale of Sales Persons
An action of any individual to move in a direction to

achieve a specified goal.
Importance of motivation
1.Good Human Relation.

2.Low absenteeism & Turnover.
3. Achievement of organizational goals.
4. Higher efficiency.
Process of Motivation
Unsatisfied Need
Goal directed Behaviour
Need Satisfaction
Types of Motivation
a) Positive Motivation
b) Negative Motivation
(10)
BY:- SHASHANK GUPTA

a) Positive motivation
Monetary incentives
• Wages
• Salaries
Non-monetary incentives
*Increment in status
*Increasing Responsibilities
Negative Motivation
*Punishment
(11)
Compensating Sales Persons
BY:- SHASHANK GUPTA
Compensation plans are catalysts for motivation. It is

necessary to design the compensation plans properly, and
then administer them properly.
Compensation Elements
1. Fixed element (salary).
2. Variable element, e.g. commission, bonus, profit-
sharing arrangement.
3. Fringe benefits, e.g., medical benefits, pensions etc.
4. Reimbursement of expenses like newspaper
subscription, academic fees for children etc.
Types of compensation Plans
1. Straight Salary plan.

2. Straight commission plan.
3. Combined salary and incentive plan.
4. Bonus.
5. Fringe benefits.
6. Allowances
*Car allowance
*Laundry allowance
*Entertainment allowance
*Transfer allowances
(12)
Management of Sales Expenses
BY:- SHASHANK GUPTA
Sales expenses differ from industry to industry as a

percentage of the total compensation plan.
If new products are to be sold or products are to be sold
in new markets, the selling expenses tend to be high.
Expenses must be kept under control. The trade off is

being too liberal and too stringent.
Methods of Reimbursing
Flat Expense Account

A particular periodic sum is handed over to the sales
person to meet his expenses.
As flat sums are predetermined, they can be easily
budgeted.
Flexible Expense Account

It reimburses all allowable expenses incurred and
reported to management.
Here management estimates the probable expenses and
puts them into allowable and non- allowable categories.
(13)
Sales Meeting
BY:- SHASHANK GUPTA
Sales meeting have communicative as well as motivational

value. Sales job is a field job. Meetings provide a forum to
interact with the employer.
Objectives
*For communication and motivation.
*When a new product is being launched, or repositioned.
*Promotional programmes.
(14)
Sales contests
BY:- SHASHANK GUPTA
Each sales person is covered by a compensation plan. Sales

contests have motivational force. Companies arrange sales
contests either to improve sales volume or to improve
profitable sales volume or to improve both at one and the
same time.
Contests objectives
1. To sell more.
2. To sell more profitable lines.
3. To sell to new customers.
4. To promote slow-moving items.
5. To promote new products.
6. To arrange product display.
7. To promote seasonal products.
8. To overcome off-season slack.
(15)
BY:- SHASHANK GUPTA

Controlling Sales People-Evaluation and

Supervision
Setting standards
Measuring Actual performance
It is necessary to record the actual performance so that it

can be compared against the performance standard set.
Salient features of a Report
1. The report should be concise.

2. Information collected must be amenable to analysis
and interpretation.
3. A salesman must retain a copy.
Comparison of Standards Set and Actual

Performance
When we compare the actual performance against the
standards set, it is called Evaluation. We will have to
devise separate standards for different territories.
Action
When the standards are met, no action is necessary. If
they are not met, we may have to improve the
performance or revise the performance or revise the
objectives and strategies or lower the standards
themselves.
(16)
BY:- SHASHANK GUPTA
SALES BUDGET
A budget is a financial plan. In sales budget,

resources are allocated to achieve the sales
forecast.
Promotion
Advertising Personal selling Sales Promotion

Personal selling objectives
Sales Related Policies

Strategies
Sales Budget
Sales Force Management
Evaluation
BUDGET IN OVERALL PROMOTIONAL

CONTESTS
(17)
Budgets: What For?
Budgets are a tool of control. Once the budget is
accepted in terms of estimated sales, expenses and
BY:- SHASHANK GUPTA
profit figures, the actual results are measured, and

compared against the budgeted figures. The
variances are noted, which could be either
favorable or unfavorable. The management is able
to take corrective action.
Budgetary Process
In many organizations, the sales are the key

variable for formulating budges of the other
departments. Thus, raw materials are purchased in
accordance with the sales estimate leading to the
purchasing budget. Production is planned in
accordance with the sales and purchased budget.
Finance is arranged in accordance with the
requirements of production and other departments.
Planning can be top-down or bottom up. In sales

budgeting some organization adopts top-down
approach in which the goals are set by the
immediate higher level. Some organizations follow
bottom-up approach where each level in sales right
from the salesman put forward sales and profit
objectives.
(18)
Sales Quotas
BY:- SHASHANK GUPTA

Sales quota is a goal in terms quantity given to a

sales representative, or a group of sales
representatives over a period of time.
Sales quotas are based on sales forecasts and sales
potentials of different markets. The more accurate
the data used in formulating the sales quotas, the
more effective the quotas become.
Types
1. Sales volume quota.

2. Financial quota.
3. Activities quota.
4. Combination of the above.
Sales volume quota
Sales volume quotas may be

1. Units of products to be sold.
2. Rupees sales
3. Or both.
Financial Quotas
These quotas are set to gain a desired net profit and
to control sales expenditure.
(19)
Activity Quotas
BY:- SHASHANK GUPTA

1. Number of distributors called on.

2. Number of new customers visited.
3. Number of customers called on.
4. Number of institutions called on.
Combination Quotas
Depending upon the marketing situation and nature
of the product, some companies set quotas, which
combine some types given above.
(20)
Sales Territories
BY:- SHASHANK GUPTA

A territorial division brings out an element of

effectiveness in the sales operations.
A territory may represent
a) A particular geographical area mostly.

b) A group of customer’s accounts.
c) A market.
d) An industry.
Sales territories are established to achieve the

following goals.
1. To cover the market properly.

2. To service the customer grouping efficiently.
3. To facilitate higher productivity in selling and
marketing effort.
4. To control selling expenses.
5. To coordinate personal selling and advertising.
(21)
Factors which determine the size of a territory
BY:- SHASHANK GUPTA

1. Possible volume of sales.

2. The extent of ground to be serviced.
3. The inventory turnover at the retail level.
4. Whether it is easy to sell the product or difficult.
Designing Sales Territories
A company has to establish a geographic control

unit. For a multinational company, this could be a
country. Then for a national company, it could be a
region or zone consisting of one or several states.
There can be further units in terms of cities or
districts.
After establishing control unit. We have to
determine the sales potential of each control unit.
(22)
Sales Control and Cost Analysis
BY:- SHASHANK GUPTA

Sales Control Methods

1. Sales analysis
2. Marketing cost analysis
3. Sales management audit.
Sales analysis
Here we examine sales volume
1. By territory.
2. By customer.
3. By product line.
Marketing Cost Analysis
Marketing cost analysis involves a detailed

examination of the costs and their impact on sales
volume.
Sales Management Audit
The previous two techniques-sales analysis and

cost analysis-are operational.
The third audit technique is strategic. Audit is
comprehensive, Systematic, independent, and
periodic audit of sales policy, objectives, strategies,
organization and procedures.
(23)
Wholesaling
BY:- SHASHANK GUPTA

Wholesaling is sales to those who buy for resale or

for business use.
A wholesaler is the first intermediaries in the
channel of distribution. He purchase goods in bulk
from the manufacturer and sells them in small lots
to the retailers. A wholesaler is generally
specialized in the purchase and sale of only one
commodity.
Features
1.A wholesalers provide a link between the

manufacturers and retailers.
2.Capital invested in the wholesale trade is usually
larger than the capital invested in the retail trade.
3. A wholesaler generally specializes in one
commodity.
4. The wholesaler charges a smaller margin of
profit than what is charged by the retailer.
(24)
Services Rendered by Wholesalers
BY:- SHASHANK GUPTA

1. Buying
2. Selling
3. Dividing
4. Transportation
5. Storage
6. Financing
7. Risk Taking
8. Market feedback.
(25)
Physical Distribution Management

BY:- SHASHANK GUPTA
Physical Distribution means the actual movement

of the right quantity of products to the right place
at the right time.
Physical Distribution Management is the

management of efficient flow systems for products.
Tasks in Physical Distribution
1. Inventory Management
• The size of the inventory

• The location of the inventory
• The material handling
• The transportation of inventories
2.Storage
3. Warehousing
4. Centralized VS. Decentralized
5. Material Handling
(26)
5. Inventory Control
BY:- SHASHANK GUPTA

Economic Order Quantity

There are two types of costs associated with
inventory
a) Ordering costs
b) Carrying costs
6. Order Processing
Each organization must have a prescribed

procedure for handling orders. It involves credit
extension, invoice making, and collection of dues.
7. Transportation
(27)
Transportation and Traffic Management
BY:- SHASHANK GUPTA

The organization must have goods available at the

place they are needed, at the time they are needed
and at the lowest possible cost.
Traffic functions is a specialized phase of

purchasing dealing with such matters as selection
of the mode of shipping, routing if incoming
shipments, rate schedules and claims.
Basic Responsibilities of the Traffic Manager
1. Negotiation of rates
2. Selection of mode of transport and carrier.
3. Audit of freight bills.
4. Filing and negotiation of claims for lost or
damaged shipments.
5. Minimize transportation costs.
Negotiation of Rates
1. The value of the product

2. Density
3. Packaging requirements
4. Space required
(28)
5. The place to which the goods are to be
transported
BY:- SHASHANK GUPTA
6. Special services required

7. Competition
Warehousing and Storage
BY:- SHASHANK GUPTA

Warehouses are a key component of the physical

distribution management. A warehouse is chosen
on the basis of the product handled, transport costs,
rentals, and market scenario.
Store Functions
1. Receipt
2. Storage
3. Retrieval
4. Issue
5. Records
6. Surplus stock
7. Verification
8. Coordination and cooperation.
Store-Keeping
In stores room, the inventories-like raw materials,
W.I.P., finished goods, consumables stores, spares
and scraps-costs heavily to the organization.
1. Raw materials
2. W.I.P.
3. Consumables stores
4. Spares
5. Ready made components
6. Scraps
(30)
Approaches to stores location
BY:- SHASHANK GUPTA
1. Fixed location
2. Random location
3. Zoned location
Storing of Materials
Record keeping of Materials
1. The Bin Card.
2. The stores Ledger
3. Issue of Materials.
BY:- SHASHANK GUPTA

GOALS QUESTIONNAIRE
Have you ever spent sufficient time, in a totally

peaceful environment, to seriously think with full
concentration of mind and formulate a set of clear
goals of your Professional, Personal, and Social Life?
…….Yes/No.
List out below the goals you have already established.
a) Professional Life Goals

1. _________________________________
2. _________________________________
3. _________________________________
4. _________________________________
5. _________________________________
b) Personal Life Goals

1. _________________________________
2. _________________________________
3. _________________________________
4. _________________________________
5. _________________________________
Place:
Date: Signature
BY:- SHASHANK GUPTA

(Signature of candidate)
BY:- SHASHANK GUPTA


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SALES&DISTRIBUTION MANAGEMENT

PERSONNEL MANAGEMENT IN THE SELLING

Sales force management is a kind of personnel management

Activities in sales force management

Training, supervision, and development

Compensation and motivational programmes.

BY:- SHASHANK GUPTA

Turnover of Sales Personnel

BY:- SHASHANK GUPTA

Sales Job Description

1. The title of the sales job.

Recruiting Sales Personnel

Selecting sales Personnel

5. Inspection of past career.

Training improves the effectiveness of the sales persons.

Aims of the training

1. Knowledge of the company.

2. Off the job training

BY:- SHASHANK GUPTA

Execution and Evaluation of Sales Training

Timing of the training

Site of the training Programme

Evaluation of Training Programmes

It measures how effective the training was. A training

BY:- SHASHANK GUPTA

Motivation & Morale of Sales Persons

An action of any individual to move in a direction to

1.Good Human Relation.

Goal directed Behaviour

BY:- SHASHANK GUPTA

Compensation plans are catalysts for motivation. It is

Types of compensation Plans

1. Straight Salary plan.

Sales expenses differ from industry to industry as a

Expenses must be kept under control. The trade off is

Flat Expense Account

Flexible Expense Account

Sales meeting have communicative as well as motivational

Each sales person is covered by a compensation plan. Sales

BY:- SHASHANK GUPTA

Controlling Sales People-Evaluation and

Measuring Actual performance

It is necessary to record the actual performance so that it

Salient features of a Report

1. The report should be concise.

Comparison of Standards Set and Actual

A budget is a financial plan. In sales budget,

Advertising Personal selling Sales Promotion

Sales Related Policies

BUDGET IN OVERALL PROMOTIONAL

profit figures, the actual results are measured, and

In many organizations, the sales are the key

Planning can be top-down or bottom up. In sales

BY:- SHASHANK GUPTA

Sales quota is a goal in terms quantity given to a

1. Sales volume quota.

Sales volume quota

Sales volume quotas may be

BY:- SHASHANK GUPTA

1. Number of distributors called on.

BY:- SHASHANK GUPTA

A territorial division brings out an element of

A territory may represent

Sales & Distribution Management

Sales & Distribution Management