UNIT-1

SALES AND DISTRIBUTION MANAGEMENT

SELLING-
Selling revolves around the needs and interest of the seller.Selling seeks profits by pushing
the products on the buyers.
MARKETING-
Marketing is the process of need identification of the customer and satisfy the needs of the
customer.According to Paul Mazur Marketing is the delivery of a standard of living

Difference between the Selling and Marketiong

SELLING MARKETING
Emphasis on the product. Emphasis on the customers wants.

Sales are the primary motive. Satisfaction of the customer is primary.

First production then selling takes place at First customersneed is known and then
aprofit without knowing customers need. productiontakes place.
It is an activity that converts the goods into It is a function that converts the consumer
cash. needs into products.
Selling views the customersas the last link in Marketing views the customer as the very
the business. important for the business.

Role of Sales Manager

Physical Qualities
Good Appearancr
Pleasing Voice
A Good Posture

Mental Qualities
Quick actioned
Imagination
Self confidence
Observation
Creative talk
Initative

Social Qualities
Good Manners
Courtesy
Helpfulness
Politeness
Co-operation
Mental Qualities
Quick actioned
Imagination
Self confidence
Observation
Creative talk
Initative

Moral Qualities
Determination
Sincerity
Integrity
Loyalty
Self-management
Courage

Theories of Personal Selling

The first approach distilled the experiences of successful salespeople and to a lesser
extent, advertising professionals. many such persons succeeded because of their grasp of
practical or learned through experience psychology and their ability to apply it in sales
situations. It is not too surprising that these selling theories emphasize the what to do
and how to do rather than the why. These theories, based on the experi-mental
knowledge accumulated from years of living in the market rather than on a
syatematic,fundamental body of knowledge, are subject to Howards dictum,
Experimental knowledge can be unreliable. The second approach borrowed findings
from the behavioral sciences. The late E.K.Strong, jr. professor of psychology at the
Stanford Graduate School of Business, was a pioneer in this effort and his buying
formula.

AIDAS Theory of Selling

This theory is the basis for many sales and advertising texts and is the skeleton round
which many sales programs are organized. here AIDAS stands for
attention,interest,desire,action and satisfaction. During the successful selling
interview, according to this theory, the prospect mind passes through five mental states:
attention, interest, desire, action and satisfaction. Implicit in this theory is the notion
that the prospect goes through these five states consciously, so the sales presentation must
lead the prospect through them in the right sequence if as ale is to result. The goal is to
put the prospect into a receptive state of mind. The first few minutes of the interview are
crucial. The salesperson has to have a reason, or an excuse, for conducting the interview.
If the salesperson previously has made an appoint personnel say that even with an
appointment, this phase presents on problem but experienced salesperson must possess
considerable mental alertness, and be a skilled conversationalist, to survive the start of
the interview. The prospects guard is naturally up, since he or she realizes that the caller
is bent on selling something. The salesperson must establish good rapport at once. The
salesperson needs an ample supply of conversation openers. Favorable first
Impressions are assured by, among other things, proper attire, neatness, friendliness, and
a genuine smile. Skilled sales personnel often decide upon conversation openers just
before the interview so that those chosen are as timely as possible Generally it is
advantageous if the opening remarks are about the prospect (people like to talk and hear
about themselves) or if they are favorable comments about the prospects business. A
good conversation opener causes the prospect to relax and sets the stage for the total
presentation. Conversation openers that cannot be readily tied in with the reminder of the
presentation should be avoided, for once the conversation starts to

Buying Formula Theory of Selling

In contrast to the previous theories, the second emphasizes the buyers side of the buyer-
seller dyad. The buyers needs or problems receive major attention, and the
salespersons role is to help the buyer find solutions. This theory purports to answer
the question: What thinking process goes on in the prospects mind that causes the
decision to buy or not to buy? The buying formula is a schematic representation of a
group of responses, arranged in psychological sequence. The buying formula theory
emphasizes the prospects responses (which, of course, are strongly influenced by
internal factors) and deemphasizes the external factors, on the assumption that the
salesperson, being naturally conscious of the external factors, will not overlook them.
Since the salespersons normal inclination is to neglect the internal factors, the formula is
a convenient way to help the salesperson remember. The origin of this theory is obscure,
but recognizable versions appear in a number of early books on advertising and selling by
authors who had experiential knowledge of salesmanship. Several psychologists also
advanced explanations similar to the buying formula. The name buying formulas
was given to this theory by the late E.K.Strong, Jr., and the following step-by-step
explanations adapted from his teaching and writings Reduced to their simplest elements,
the mental processes involved in a purchase are Need (or problem) solution
Purchase Because the outcome of a purchase affects the chance that a continuing
relationship will develop between the buyer and the seller, and because nearly all
sales organizations are interested in continuing relation ships, it is necessary to add
a fourth element. The four elements then, are Need (or problem) Solution
PurchasesatisfactionWhenever a need is felt, or a problem recognized, the
individuals conscious of a deficiency of satisfaction. In the world of selling and
buying, the solution will always be a product or service or both and they will belong to
a potential seller. In purchasing, those, the element solution involve two parts:
(1) Product (and/or service) and (2) trade name (name of manufacturer, company, or sales
person).
In buying anything, the purchaser proceeds mentally from need or problem top problem
to product or service, to trade name, to purchase, and, upon using the product or service,
he or she experience satisfaction or dissatisfaction. Thus, when a definite buying habit
has been established.of the learning process.

Behavioral Equation Theory

Using a stimulus-response model (a sophisticated version of the right set of
circumstances), and incorporating findings from behavioral research, J.A. Howard
explains buying behavior in terms of purchasing decision process.

Four essential elements of the learning process included in the stimulus response, and
reinforcement, described as follows:
1. Drives are strong internal stimuli that impel the buyers response. There are two
kinds:
A. Innate drives stem from the physiological needs, such as hunger, thirst, pain, cold,
and sex.
B. Learned drives, such as striving for status or social approval, are acquired when
paired with the satisfying of innate drives. They are elaborations of the innate drives,
serving as a faade behind which the functioning of the innate drives is hidden.
Insofar as marketing is concerned, the learned drives are dominant in economically
advanced societies

2. Cues are weak stimuli that determine when the buyer will respond.
a. Triggering cues influence the decision process for any given purchase.
b. No triggering cues influence the decision process but don not activate it, any may
operate at any time even though the buyer is not contemplating a purchase.
There are two kinds:
 1. Product cues are external stimuli received from the product directly, for
example, color of the package, weight, or price.
2. Informational cues are external stimuli that provide information of a symbolic
nature about the product. Such stimuli may come from advertising, conversations
with other people (including sales personnel), and so on.
c. Specific product and information cues may also happen when price triggers the
buyers decision.3. Response is what the buyer does.
.A reinforcement is any event that strengthens the buyer tendency to make a
particular response.

Process of Personal Selling

The approach of selling methods is different from salesman to salesman. The process
involved in selling method is as follows

Prospecting- A prospect means a probable buyer. It means searching for persons to

whom sales can be affected. Prospect is a person who wants to be satisfied and has ability
and willingness to buy. Therefore this is a first step in identifying and locating of
prospects.
Pree approaching- It involves developing an understanding about the prospective
buyer or qualified buyers as to their needs, problems, buying motives, preferences,
personal character. This pree approach is effective for making a ground for approach

Approaching and Attention- This is a sales interview. This is the seed, with which sales
tree grows. This stage is important.
Demonstration-The need satisfying characteristics of the product are to be presented or
demonstrated. He may also be informed of the special features, merits and benefits of the
product. The sales man can show the survey reports, data, and free gift.
Closing the sale- It aims at taking an order for the product from the buyer. At the climax
stage the prospects place orders the salesman.
Follow up- Satisfaction of the buyer is important as a source of publicity. This stage is
important to have information from buyers regarding the product use problems.
 UNIT -2
Goals in Sales Management

SALES FORECASTING:
Sales potentials, as defined earlier, are quantitative estimates of the maximum possible
sales opportunities present in particular market segments open to a specified company
selling a good or service during a stated future period. They are derived from market
potentials after analyses of historical market share relationship and adjustments for
changes in companies andcompetitiorsselling strategies and practices. A firms sales
potential and its sales forecast are not usually identical-in most instances; the sales
potential is larger than the sales forecast. There are several reasons for this: some
companies do not have sufficient production capacity to capitalize on the full sales
potential; other firms have not yet developed distributive networks capable of reaching
every potential customer; others do not attempt to realize their total sales potentials
because of limited financial resources; and still others, being mote profit oriented than
sales oriented, seek to maximize profitable sales and not possible sales. The estimate for
sales potential indicates how much a company could sell if it had all the necessary
resources and desired to use them. The sales forecast is a related but different estimate-it
indicates how much a company with a given amount of resources can sell if it
implements a particular marketing program.

Sales Forecasting Methods

A sales forecasting method is a procedure for estimating how much of a given product (or
product line) can be sold if a given marketing program is implemented. No sales
forecasting method is foolproof-each is subject to some error. Some methods are
unsophisticated, such as the jury of executive opinion or the poll of sales force opinion.
Others involve the application of sophisticated statistical techniques, such as regression
analysis or econometric model building and simulation. Two sales forecasting methods
Amy be either sophisticated or unsophisticated, depending upon how they aroused the
projection of past sales and the survey of customers buying plans Well-managed
companies do not rely upon a single sales forecasting method but use several. If different
methods produce roughly the same sales forecasts, then more confidences placed in the
results. But if different methods produce greatly different sales forecasts, then the sales
situation merits further study.
The Delphi Technique
Several years ago researchers at the Rand Corporation developed technique for predicting
the future that is called the Delphi technique this is a version of the jury of executive
opinion method in which those giving opinions are selected for theirExpertise. The
panel of experts responds to a sequence of questionnaires in which the responses to one
questionnaire are used to produce the next questionnaire. Thus, information available to
some and not to other experts is disseminated to all, enabling all to base their final
forecasts on all available information. Some contend that this technique eliminates the
bandwagon effect of majority opinion

Survey of Customers Buying Plans

What more sensible way to forecast than to ask customers about their future buying plans
industrial marketers use this approach more than consumer goods marketers, because it is
easiest to use where the potential market consists of small numbers of customers and
prospects, substantial sales are made to individual accounts, the manufacture sells direct
to users, and customers are concentrated in a few geographical areas (all more typical of
industrial than consumer marketing). In such instance, it is relatively inexpensive to
survey a sample of customers and prospects to obtain their estimated requirements for the
product, and to project the results to obtain sales

Forecast. Survey results, however, need tempering by managements specialized

knowledge and by contemplated changes in marketing programs. Few companies base
forecasts exclusively on a survey of customers buying plans. The main reason lies in the
inherent assumptions that customer know what they are going to do and that buyers
plans, once made, will not change. Even though the survey of customers buying plans is
generally an unsophisticated forecasting method, it can be rather sophisticate that is, if it
is a true survey (in the marketing research sense) and if the selection of respondents is by
probability sampling.
However, since it gathers opinions rather than measures actions, substantial no sampling
error is present. Respondents do not always have well formulated buying plans, and, even
if they do, they are not always willing to relate them. In practice, most companies using
this approach appear to pay little attention to the composition of sample and devote
minimum effort to measuring sampling and no sampling errors.
SALES QUOTAS
Quotas are quantitative objective assigned to organizational unitsindividual sales
personnel, for instance. As standards for appraising selling effectiveness, quotas specify
Desired performance levels for sales volume; such budgeted items as expenses, gross
margin, net profit, and return on investment; selling and no selling-related activities; or
some combination of these items. Sales management sets quotas for organizational units,
such as individual sales districts and sales personnel. In some companies, sales
management sets quotas for middlemen, such as agents, wholesalers, and retailers.

Quotas set for sales regions, or other marketing units on higher organizational levels, are
customarily broken down and reassigned to lower-level units like sales districts, or to
individual sales personnel. All quotas have a time dimension they quantify what
management expects within a given period. Quotas are devices for directing and
controlling sales operations. Their effectiveness depends upon the kind, amount, and
accuracy of marketing information used in setting them, and upon managements skill in
administering the quota system. In effective systems, management bases quotas on
information derived from sales forecasts, studies of market and sales potentials, and cost
estimates. Accurate data are important to the effectiveness of a quota system, but, in and
of themselves, they are not sufficient; judgment and administrative skill are required of
those with quota setting responsibilities. Soundly administered quotas based on thorough
market knowledge are effective devices for directing and controlling sales operations

Objectives in Using Quotas

The general objective that sales management has in mind in using quotas is to control the
sales effort. Sales control is facilitated through setting quotas to use in appraising
Performances of sales organizational units, such as a sales region or an individual on the
sales force. Sales control is tightened through setting of quotas on expenses and
Profitability of sales volume. A skilled management uses quotas to motivate personnel to
achieve desired performance levels. When management sets quotas, if firms up its
Performance expectations; when these expectations are communicated to those who are
to perform, motivational forces are put into operation that, it is hoped, result in the
required.
Quotas, The Sales Forecast, and The Sales Budget
Relationships among quotas, the sales forecast, and the sales budget vary from company
to company. Relationships depend not only upon the procedures used in forecasting,
budgeting, and quota setting but upon how the planners integrate these

Three procedures. The greater the integration, the more effective quotas are as devices for
controlling sales efforts. Planning a company sales effort begins with a sales forecast and
evolves naturally into a sales budget, thus setting the stage for the controlling phase,
which involves, among other things, determination of quotas for use as performance
standards. A review of the sales planning process is in order. Basically, a sales forecast is
a sales estimate tied to a marketing program and assuming certain environmental factors.
When management arrives at the sales estimate, it has, in effect, decided the sales volume
objective; then, after determining the expenses of obtaining this sales level, management
computes the net profit contribution, brings all these figures together into a sales budget,
and sets the objective for net profit. Management now decides how much of the estimated
sales volume should come out of each territory, how much expense should be incurred in
each, and how much profit contribution each should produce. Here management
determines quantitative objectives, such as quotas, to assign to individual sales personnel
(or to other organizational units of the sales department, or to distributive outlets).
However, as is made clear later, setting quotas is not a matter of simply dividing
companywide estimates into smaller parts.

SALES TERRITORIES

Concept of Sales Terrritories

Establishment of sales territories facilitates matching selling efforts with sales
opportunities. Sales personnel are assigned the responsibility for serving particular
groupings of customers and prospects and provide contact points with the markets.

Territorial assignments lend direction to the planning and control of sales operations.
It establishing sales territories, management is taking an important step toward
accumulating knowledge on the companys strengths and weaknesses in serving different
markets. Through utilization of this knowledge in planning sales operations, managerial
efforts to improve competitive position become increasingly effective.
Realistic sales planning is done on a territory-by-territory basis. Characteristics of
customers and prospects vary from one sales territory to another and sometimes even
from one country to the next.
The territory is a more homogeneous unit than the market as a whole. Breaking down the
total market into smaller units makes control of sales operations more effective.
Assigning responsibility for achieving specific objectives to subordinate line executives
and individual sales personnel bring selling efforts into alignment with sales
opportunities. Direction is lent to gathering information on individual performances, and
comparisons of performances with sales opportunities present in each territory provide
sound bases for appraisal. The emphasis in the territory concept is upon, customers and
prospects rather than upon the area in which an individual salesperson works.
Operationally defined, a sale territory is a grouping of customers and prospects as signed
to an individual salesperson. Many sales executives refer to sales territories as geographic
areas, for example, the Southern California territory or the Michigan territory. But, in
contrast, in some companies, particularly those in which the technical selling style is
predominant, geographical considerations are ignored and sales personnel are assigned
entire classes of customers, regardless of their locations.

Whether designated geographically or not, a sales territory is a grouping of customers and

prospects that can be called upon conveniently and economically by an individual
salesperson. To emphasize the point that designations of territories should not be solely
along geographical lines, consider the following situations. When sales personnel sell
mainly to personal acquaintances, as in selling property insurance, investment securities,
and automobiles, little logical basis exists for dividing the market geographically.
Similarly, in selling real estate, where the market is localized and where the customer
usually seeks out the firm rather than meaningless. In these cases, sales personnel are for
the most part, inside order takers; customers seek out the supplier. But even, as in life
insurance selling, where sales personnel are outside order getters and seek out prospects,
the personnel and localized nature of the market makes geographical assignments of
territories inappropriate.