Some Areas to Ponder Upon

There are certain developments which are taking place almost all the time in the field of management, and sales management is no exception. The area, overall, is very dynamic and keeps on evolving at a very high speed. In the earlier chapters, the discussions veered around the organization (mainly the sales team) and its interaction with the marketplace. The focus of the discussion maintained throughout the book was on the existing paradigms of sales and distribution management and what really works in the marketplace. In this chapter, the objective is to familiarize the reader with some current research that is being undertaken in the field of sales management. There are certain areas in sales management which are classic in nature and their utilities and relevance has crossed the boundaries of time. Some of those concepts have also been included in this chapter. Overall, the broad objective of this chapter is to broaden the perspectives of students and managers as well as to open up their minds to the myriad possibilities that sales management has to offer.

Integration With Marketing

Sales promotion is an integral part of sales and marketing today. They are of two types – consumer promotion and trade promotion. Consumer promotion is run to entice consumers to the retail outlets and purchase the product. It also helps in building awareness and is normally run for a short period of time. Trade promotions are run to motivate the trade and the intermediaries to sell more of the product. It is a push strategy where the intermediaries try to sell more to the consumers. The downside of sales promotion is that when run repeatedly, or for a very long period of time, the brand image of the product is harmed. Sales promotions has to be run in synchronization with the integrated marketing communications plan of the brand or the product. These are normally high-profile events with lot of consumer attention through the media. More often than not, sales promotion is supported by media exposure and other communication methods, and hence, they have to be in sync with each other. The processes of buying and selling runs parallel and hence the integrated marketing communications along with sales promotion plans must take cognizance of the stage at which the product and the market is operating. While doing all these, the marketer as well as the sales team must keep in mind that there is a lot of difference between FMCG and consumer durable sales. The depth and width of distribution are completely different. The nature of intermediaries is completely different and hence the selling process also has to be quite different. International sales management is also a different cup of tea and this expertise comes over years of experience. One thing that has gained in importance in sales management and operations is ethics. This needs to be inculcated in the DNA of the sales team – right from the top to the bottom of the hierarchy.

Management of Sales Force

Recruitment of sales force is an established process in most large organizations. This is because not only is it a continuous activity as the organizations grow, but the quality of the sales force is very important for the organization to succeed in the marketplace. So, selection and then further training of the selected sales force is very critical. Training can be imparted in various ways. Sometimes it is on-the-job or sometimes there is classroom training, etc. The methods vary according to the requirements of the organization as well as the individual sales person. Once inducted in the sales team, the sales persons as well as the executives has to be kept motivated. The sales force is motivated through financial as well as non-financial methods of motivation. Sometimes a promotion is sufficient, or sometimes, more financial motivations are required. All these also depends on the compensation structure of the sales force, especially in comparison with those of their competitors in their industry. The top management uses the theories of motivation in order to formulate their policies and regulations for the sales force. Control of sales force also is a very important task for the top managers, and it is usually carried out through the analysis of performance in their appraisal system. The top managers have to play the leadership role with their sales team and establish benchmarks of behavior and attitude for the entire team. This is because they are the leaders the entire sales team looks up to.

Channel Management

Channel management is a critical and integral part of the marketing management department of the company. The channel partners help the company to move their goods from the manufacturing site to the doorstep of the consumers. This is a complicated process in all areas and countries – particularly in geographically and culturally diverse countries like India. There are a wide variety of intermediaries already existing in the markets and they serve different roles and purposes. The organization has to understand the objectives of each of these types of intermediaries and then plan and design their distribution systems accordingly. There is a cost attached to each layer of the marketing channel, and the companies have to find out the ways and means of getting the maximum benefits from these intermediaries at the optimum cost. The type of marketing channel adopted by the company is dependent on the product-market structure of the company. The distribution systems of FMCG companies are different from those of consumer durables, which are again different from those of industrial products. From time to time, there are conflicts between intermediaries and even between the company and its intermediaries. The key responsibility of resolving the conflicts is with the company, and in many cases, they have laid down policies and practices of resolving conflicts. These conflicts are happening more often as the power balance in the marketplaces are steadily shifting from the manufacturer to the retailers and, in general, to the channels. However, retailers and wholesalers provide invaluable service to the company as well as the consumers and have thus become an important part of the channels and the distribution system as a whole.

Introduction to Sales Management

Sales has evolved over centuries and now takes center stage among all the functions in the organization. It is as if all other functions in the organization revolve around and operate according to the needs of the sales function. This is primarily because sales is virtually the only function which gets the revenue and makes the profits for the organization. The fundamentals of marketing strategy of an organization are the 4Ps. The product, place, price, and promotion strategies of the organization are heavily influenced by the sales strategy. In this chapter, there will also be discussions on various theories of sales – what exactly is the role of sales in fulfilling the needs of the customers. In today's world, sales happen in a structured, methodical, and scientific manner where the process of selling follows a standard format. Sales is still partly an art, and the sales team has to perform varied tasks in order to sell a product or service. One of the principal responsibilities of a sales team is coordination across the organization as well as with entities outside the organization.

Channel Strategy and Design

This chapter is about the relationships between the corporate strategy and the channel strategy. It then goes on to discuss the ways and means of choosing the channel structure appropriate to the company, selecting the channel members and then motivating them to achieve their objectives. The channel is the only sure shot way of differentiation with the competitors these days as all the rest of the variable factors are getting copied easily. The channels must be synchronized with the structures and objectives of the company. For that, proper positioning of the channels are required in the marketplace. The channels are also a function of the product and the market that they operate in. Once the channel design is complete and the channel structure finalized, selection of the channel members are made. There are various sources of locating good prospective channel partners and then recruiting and inducting them in the channel system of the company. This decision is reached after the company and the intermediary have both studied and understood each other and their respective requirements. Once inducted, the intermediary has to provide all support to the company in their efforts to market their products and brands. Similarly, the company is also expected to extend all kinds of support to the intermediaries as they face the challenges in the competitive market place. This may range from extending credit to organizing sales promotion activities along with the intermediaries.

Introduction to Distribution Management

Distribution management is all about reaching the product as near to the customer as possible and making the product and service available to the customer. The products must be available to the customer at the right place and at the right time and with an assortment which gives a lot of choice to the customers. The intermediaries in the marketing channel performs a lot of activities for the manufacturer and serves as the go-between of the manufacturer as well as the consumer. The value addition of the distribution system is tremendous and that is why it is now a very important component of the marketing strategy. It is the fourth P in the 4Ps of the marketing mix and has not been given much importance traditionally. However, now the situation has changed primarily because it is very difficult nowadays to differentiate in the market through the use of product, price, and promotions alone. Distribution systems can help the company in differentiating themselves from the competitors. The distribution system understands the end-customers very well and thus guides the company in offering the best product mix to the consumers. The distribution system also expects a lot of support and motivation from the company and when the company is able to do that well, a long-term relationship is formed. This is crucial as the then the commitment level of the system goes up and tends to support the company and the brand in every possible manner. It has been seen time and again that when the long-term relationship forms, the company gets a very positive response and return from the market. The idea here is that the distribution systems should not be treated as a combination of some marketing tactics, but a significant and important part of the company's strategic intent and goals.

Organization and the Sales Force

A sales person has to have many qualities in order to become an ace salesperson. Communication skills and inter-personal skills are absolutely necessary for a sales person to succeed in the marketplace. He also has to have coordination skills and the ideal condition would be to develop leadership skills as well. This is because these are requirements of moving up the hierarchy where performance is not good enough – potential for higher positions are also needed. The organization structure in sales organizations are developed on the basis of the product-market combination as well as the spread of the organization. The specialization of the organization is also dependent on the degree of centralization of the organization. Key or major accounts are very important for the organization. The organizations have separate teams to manage these accounts as they are mostly spread across a wide geographical area. As in major accounts, the sales team overall has to perform a lot of coordination work. This coordination is with several departments within the organization and with many external agencies and stake holders as well. So, meetings become very important for sales management – both external as well as within the sales team. There is an underlying theme of competition within and outside the sales team. Sales persons are motivated by challenges – and so does the market. So, contests are held regularly – and, sometimes, they are an ongoing process within the sales team.

Performance Evaluation and Logistics

This chapter will deal with varied areas and their interactions with the distribution system and the marketing channels of the company. The first area discussed is the evaluation of the channel members. This is important as proper evaluation of the performances and other characteristics of the channel members is connected with their motivation as well as the overall performance of the company itself. The distribution system or the marketing channels of service-oriented companies are also discussed as the economy, especially of developed countries, are fast moving towards the service sector. In the service sector the basic principles remain the same – however, there are some major differences with the marketing channels of products. The distribution channels are so complex for large organizations that a very robust information system has to be in place in order to maintain the operations of the system and also to have proper control and evaluations of the channel members. The backbone of the distribution systems of large organizations are the logistics and the supply chain management of the company. Proper utilization of the tools and techniques of modern logistics and supply chain management is a prerequisite for efficient and effective functioning of the entire distribution system. Again, in this open world, companies are increasingly looking at the entire world as their prospective customers, and hence, a proper understanding of international channel management is necessary for all companies.

Marketing

This chapter primarily deals with the relationship between the marketing mix and the channel strategy of the companies. The distribution system is influenced by product, price, and promotion of the brand. The choice of the distribution system also influences the product, price, and promotion strategy of the brand. The chapter will discuss in detail how each of the factors of product, price, and promotion are correlated with the channel strategy of the company. It is seen that the product along with the market determines the distribution strategy and the channel choices and strategies are influenced by the stage of the product life cycle. Pricing has always been a very important aspect of marketing a product. It assumes more importance as the price of the product also goes on to influence the margins of the intermediaries. It can be easily understood that the margins on a product impacts upon the commitment of the intermediaries or channel members. This in turn influences the willingness of the channel members to push the brand or the product to their customers. The channel members also expect a lot of support from the company in terms of advertisements or other consumer or trade promotion schemes. The quantum of support is dependent on the capacity of the company and the type of product and market they are operating in. This chapter also discusses about the franchise system and the electronic channel system which are now part of the channel strategy of almost all large companies. The characteristics of these channels along with their advantages and disadvantages are also discussed in detail.