DISTRIBUTION & SALES MANAGEMENT

SHAPING FUTURE SALES LEADERS

4 May 2012

Deepak Singh- D & S M

DISTRIBUTION & SALES MANAGEMENT

PHYSICAL DISTRIBUTION SYSTEM & LOGISTICS

Distribution System: Decision Areas

Distribution Costs; Control & Customer Service

Logistics: Logistic Integration for customer satisfaction

Supply Chain Management

4 May 2012

Deepak Singh- D & S M

CHANNEL MANAGEMENT DECISIONS

Selecting
(No. of years; Other lines; Growth & profit records, Coverage & Reputation; Type of clientele; Support Systems) SLG Pg 481

Training
(Technical; installation/ servicing; selling; business records)

(Distributor & Salespersons)

(Trade margin; special incentives; harmonious rel; effective comm)

Evaluating
(Sales Target achievement; Inventory levels; Selling Resources; Market coverage; Back Office Support; Customer services)

Modifying
(changes in consumer buying pattern, product, competition, innovative distribution) 4 May 2012 Deepak Singh- D & S M 3

FEEDBACK

& Motivating

PHYSICAL DISTRIBUTION SYSTEM & SCM

Physical Distribution involves planning, implementing, and controlling the physical movement of materials & final goods from point of origin to point of use to meet customer needs at a profit.
Its major objective is getting the Right goods to the Right place at the Right time at the Least cost.
Logistics involves entire supply chain. There has been increasing importance of logistics because: Effective logistics is becoming a key to winning and keeping customers. Logistics is a major cost element for most companies (approx. 15% of the products price). The explosion in product variety has created a need for improved logistics management. Information technology has created opportunities for major gains in distribution efficiency.

4 May 2012

Deepak Singh- D & S M

PHYSICAL DISTRIBUTION DECISIONS

ORDER PROCESSING (How should order be handled) WAREHOUSING (Where stock should be located)

INVENTORY (How much stock should be held)

TRANSPORTATION (How should goods be shipped)

4 May 2012

Deepak Singh- D & S M

NATURE AND IMPORTANCE OF PHYSICAL DISTRIBUTION AND MARKETING LOGISTICS

Market logistic thinking starts with the marketplace and works backwards to the factory. Logistics deal with (1) outbound distribution - moving products from the factory to customers, and (2) inbound distribution - moving products and materials from suppliers to the factory. The logistics managers task is to coordinate the whole-channel physical distribution system - the activities of suppliers, purchasing agents, marketers, channel members and customers.

4 May 2012

Deepak Singh- D & S M

MARKETING LOGISTICS & SCM

SUPPLIERS Inbound logistics COMPANY Outbound logistics RESELLERS

Reverse logistics

CUSTOMERS

4 May 2012

Deepak Singh- D & S M

INVENTORY Vs SERVICE LEVELS

100%

Reorder point should balance the risks of stockouts against costs of overstocking

Company needs to balance ordering costs vs inventory carrying costs

inventory

4 May 2012

Deepak Singh- D & S M

MARKETING LOGISTICS & SCM

A. Order Processing Ordering cost is the cost of placing an order with the supplier. Orders can be submitted in many ways; by mail, telephone, or through salespeople. Order processing systems prepare invoices and order information. The warehouse receives instructions to pack and ship the ordered items. And bills are send out. B. Warehousing Every company stores its goods while they wait to be sold. It can be used for storage, bulk breaking, consolidation, etc. A company must decide on: (1) how many, (2) what types of warehouses it needs, and (3) where they will be located.

4 May 2012

Deepak Singh- D & S M

MARKETING LOGISTICS & SCM

The company might own private warehouses or rent space in public warehouses or both. Both has advantages and disadvantages. Private warehouse; bring more control ties up capital is less flexible if locations change Public warehouses, on the other hand,; charge for rented space provide additional services for inspecting, packaging, shipping and invoicing goods but at a cost offer wide choice of locations and warehouse type Basic types of warehouses are: Storage warehouses store goods for moderate to long periods Distribution centers are designed to move goods rather than just store them. They are large and automated warehouses designed to receive goods from suppliers, take orders and deliver goods to customers. Material Handling equipments: Classified as mechanized system; semi-automated system; automated system.
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MARKETING LOGISTICS & SCM

C. Inventory decisions: Inventory carrying cost includes cost of operating stores, insurance costs, interest on capital locked, deterioration & wastage of material Inventory decision involves: (1) when to order and (2) how much to order. In deciding when to order, the company must think of the risks of running out of stock and costs of carrying too much. In deciding how much to order, the company must think of orderprocessing costs and inventory-carrying costs. Just-in-time logistic systems are used by some companies in which the producers carry only small inventories only enough for a few days of operations. Such systems result in savings in inventory carrying and handling costs.

4 May 2012

Deepak Singh- D & S M

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OPTIMUM ORDER QUANTITY & REORDER POINT

Total Demand (D): 20000 cycles per year with an avg price of Rs 700 Ordering Costs (S): Rs 4000 per order Inventory Carrying (IC) cost: 5% of value of inventory (i.e. 700@5%=Rs 35 per unit) Cost of processing each order: Rs. 4000 EOQ = (2DS/IC)1/2 = 2138 Reorder point: Demand per week (d)= 20000/52= 384 If lead time (T)= 4 weeks Reorder point = 384 X 4= 1536

Hence the inventory policy is to order 2138 units whenever the inventory falls below 1536 units.

4 May 2012

Deepak Singh- D & S M

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TRANSPORTATION MODES
D. TRANSPORTATION: Cost Vs Benefits

Rail
Cost-effective for shipping bulk products.

Water
Low cost for shipping bulky, low-value, non perishable goods, slowest form.

Truck
Most important carrier for consumer goods, flexible.

Air
High cost, ideal when speed is needed or distant markets have to be reached

Pipeline
Carry petroleum based products, very low cost, requires little energy.

Internet
4 May 2012

Web sites have products available, used especially for services. Deepak Singh- D & S M

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CHOOSING TRANSPORTATION MODE

Checklist for Choosing Transportation Modes Speed. Dependability. Capability. Availability. Cost. Frequency Traceability

4 May 2012

Deepak Singh- D & S M

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TRENDS IN SALES MANAGEMENT

1. 2. 3. 4. Transactions to Relationships Individual to Teams Volume to Productivity Management to Leadership

5.
6.

Local to Global
Technology

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Deepak Singh- D & S M

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ETHICAL ISSUES IN DISTRIBUTION & SALES MANAGEMENT

Pharmacy: Bitter Pill- Your doctors flout ethical norms CEOs cash in on layoff wave

4 May 2012

Deepak Singh- D & S M

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CASE 8: SUBHIKSHA: FALL OF RETAILING GIANT

Trends Issues to ponder: Afgars Global Acquisition

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Deepak Singh- D & S M

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 Opening Discussions on Major Sales related news: Atleast 30 so far Critical Thinking around Concepts: Introduction to Sales Management / Sales Management Functions/ International Sales Management/ Establishing Parameters of Firms Strategy/ Personal Selling Approaches & Process. Analyzing Sales Environment & Aligning Sales Organizations/ Sales Forecasting/ Territory Design & Management/ Sales Budgets & Quotas Sales force Job Analysis & Description/ Hiring & Training Sales personnel/ Compensating, Motivating & Leading Sales force/ Evaluating Sales force Performance Examples & Cases Discussed: NCR Corp./ Tupperware Brand Corp./ Fortis Healthcare/ MRF Tyres/ Tuncan Fetilizers/ Anchor Switches/ Titan Industries/ Tamplets on Recruitment; Selection; Induction; Physical Examination. Library Assignment: Selling Theories (4)/ Circular & Leapfrog Route Pattern/ Motivation & Leadership Theories. Individual Assignments/ Group Assignments: 3 so far/ 1 per team Role Plays: 4 May 2012 Deepak Singh- D & S 18 Selling Process/ Hiring Process (Interviews)M

OUR JOURNEY SO FAR