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1
Introduction to Sales
Management
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1. Willingness to go to bat for the buyer within thesupplier rm
2. Thoroughness and follow through
3. Knowledge of the sales person’s product line
4. ar!et !nowledge and !eeping the buyer posted". #pplying his product and ser$ices to buyer’s
needs
%. Knowledge of the buyer’s product line
&. 'reparation for sales calls
(. )egularity of *ales calls
+. ,iplomacy in dealing with operatingdepartments
1-.Technical education
Personal selling strategies
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3
'ersuasion
onsultati$e
*elling
'artnership
*trategies/usiness
anagemen
t0egotiation
Evolution of personal selling
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4
Marketing concepts
1 'roduction concept
2 'roduct concept
3 *elling concept 4 ar!eting concept
" *ocietal concept
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ustomer0eeds
*ales ustomers
mphasison *eller’s
0eeds
'roduction
'roduction
*ales
mphasison
ustomer0eeds
Societal marketing concept
*ales rientation
ar!eting rientation
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Nature and role of sales
management The determination of sales forceob5ecti$e and goals
*ales force organi6ation7 si6e7
territory7 and 8uota nali6ation *ales forecasting and budgeting
*ales force selection7 recruitment7and training
oti$ating and leading the sales force
,esigning compensation plan andcontrol systems
,esigning career growth plans and
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Types of personal selling
9ndustrial selling )etail selling
*er$ices selling
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Types of selling
rder ta!er sales people
rder creators
rder getters
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*elling:unctio
n
rder
Ta!ers
rder
;etters
rderreators
utside rderTa!ers
9nside rderTa!er
erchandisers
,eli$ery *ales'eople
issionary*ales 'eople
0ew/usiness
*ales'eoplergani6ation
al*ales 'eople
onsumer
*ales 'eople
Technical*upport sales
'eople
:ront
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:actory :actory
*elling andpromoting
'rotsthoughsales
$olume
*elling concept
ar!et concept
ar!et ustomerneeds
oordinatedmar!eti
ng
*tarting
point :ocus eans nds
'rots throughcustomersatisfaction
Difference between sales and marketing
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Marketing management process
#)KT #0T99'#T90
=change o>er of $alue
'roducer
ar!eteronsumer
ar!eting mi=
'roduct
'rice
'lace
'romotion
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:ormulation of a strategic sales programme
9mplementation of the sales programme
$aluation and control of sales force performance
Sales management process
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Technolo
gy
)elationshipselling
ustomerorientation
;lobal andethical9ssues
0ew sellingmethods
,i$ersity
mergingtrends in
salesmanagement
Emerging trends in sales management
Technology
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*elling *!ills and
*trategies
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*elling and buying styles
9
8
7
6
5
4
3
2
1 2 3 4 5 6 7 8 9
. o n c e r
n f o r t h e c u s t o m e r s
17+ 'eople riented9 am customer’s friend7
9 want to understand himand respond to hisfeelings and interests sothat he will li!e me. 9t is
the personal bond thatleads him to purchasefrom me."7" *ales techni8ueriented
9 ha$e tried an e>ecti$eroutine for getting acustomer to buy. 9t
moti$ates through ablended personality andproduct emphasis
171 Ta!e it or
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*elling situations
*ales tas! and function
aintenance selling
,e$elopmental selling
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*elling s!ills
*elling *!ills
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1!
ommunication process
0oise
hannel
:eedbac! 9ntended
essage
*ent essage
ncoding
'ercei$edessage
)ecei$edessage
,ecoding
*ender )ecei$er
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ommunication processcontd.
anaging body language@
'ersonal #ppearance
'osture ;estures
:acial =pressions
ye ontact
*pace ,istancing
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Process of listening
#ttendance
9nterpretation
$aluatio
ns
)emembrance
)esponse#ction
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Levels of listening
:eedbac!
'araphrasing
mphatic
listening
larications
#cti$e
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on?ict managements!ills
odels of con?ict
omponents of con?ict
The con?ict resolution process@B lumping
B a$oidance
B coercion
B meditation
B conciliationB arbitration
B ad5udication
B negotiation
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*tage 9
'otentialoppositionor
9ncompatibility
*tage 99
ognition C'ersonali6at
ion
*tage 999
9ntentions
*tage 9D
/eha$iour
*tage D
utcomes
#ntecedentonditions
ommunication
'ersonalDariables
*tructure
'ercei$ed on?ict
:elton?ict
on?icthandling
9ntentions
ompeting
ollaboration
ompromising
#$oiding
#ccommodati
$erton?ict
'arty’sbeha$iour
thersreaction
9ncreasedgroupperforman
ce
,ecreasedgroup
performance
onflict management process
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0egotiation s!ills
*ituation and timing for negotiations:ormulation for a bargaining
strategy
The theory and strategy of principlenegotiations
# separate the people from the problem# focus on interests7 not on positions
# in$ent options for mutual gains# insist on ob5ecti$e criteria
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'roblem sol$ing s!ills
Eabit 9@ be proacti$e Eabit 2@ begin with an end in mind
Eabit 3@ put rst things rst
Eabit 4@ thin! winFwin Eabit "@ see! rst to understand7
then to be understood
Eabit %@ synergi6e Eabit &@ renewal
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,ene theproblem
;enerate alternati$e solutions
,ecide the solution
9mplement the solution
$aluate the solution
Problem solving process
'roblem denition
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'roblem,enitionTechni8ues
:ind out originof theproblem
=plore theproblem
'resentdesiredstate
analysis
$aluateproblemstatemen
t
*tatementand
)estatement
,un!er’s
diagram
'roblem denitiontechni8ues
1
2
3"
4
%
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Dunker!s diagram
#chie$e the desired state
'ossible path to the desired state
'ath 1 'ath 2 'ath 3
lutions to implement C paths to desired solutions
*olution 1*olution 2 *olution 3
;eneral *olution
:unctional *olution
*pecic *olution
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: u 6 6 y e s s
'ercei$ed problems
)e *tatement
)e *tatement
:inal problem *tatement
)ela=onstraints
a!e anpposite*tatement
;enerali6e
Statement restatement tec"ni#ue
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omponents of a decision on t"e
future course of action
*ituation analysis
'roblem analysis
'astWhat is the fault
,ecision analysis
'otential problem#nalysis
:utureEow to pre$ent future
faultsG
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,ecision on the best solution
#ppro$al
'lanning
arry through
:ollow up
$aluation
9'<
0T#
T90
Solution implementation process
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T"e Selling Process
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Stages in t"e selling process
'reBsalepreparati
on
*ales'resentat
ion
Eandlingustomerb5ection
s
losingthe *ale
:ollow upaction
#pproachto the
customer
'reBapproach
beforethe
inter$iew
'rospecting
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Prospecting
*uccessful prospecting
"- potential prospects
1" Hualied prospects
% 9nter$iews
1 sale
"- potential prospects
2" Hualied prospects
1& 9nter$iews
& sales
*uccessful prospecting
0o Ies
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Process of prospecting
9dentify and dene prospects
*earch for sources of potentialaccounts
Hualify the prospects from thesuspects
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Met"ods of prospecting
old can$assing
ndless chain customer referral
'rospect pool
enters of in?uence 0on competing sales force bser$ation
:riends and ac8uaintances
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Selling process 're approach to selling
#pproach to the customer *ales presentation
B approach to sales presentationB attracting customer attentionB creating interest
B arousing desire and building con$iction ethods of sales presentation
B canned presentationB organi6ed presentationB tailored presentation
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$andling customer ob%ections
*tart with your highest e=pectations
#$oid conceding rst
/ sure the customer understands the $alue
of a concession
a!e concessions in small amounts
#dmit mista!es and ma!e corrections
willingly
/ prepared to withdraw a concession
,o not ad$ertise willingness to concede
*uggested by *9TE
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Met"ods of "andling customer
ob%ections
*uperior feature method IesJ/ut method )e$erse nglish method
9ndirect denial method 'ass out method omparison method ,irect denial method
#nother angle method 0arrati$e method Testimonial method Huestion or WEI method
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losing t"e sale
ethods of closingthe sale
:ollowBup action /2/ selling
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Sales Organization
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Sales organi&ation
an organi6ation of indi$iduals either wor!ing togetherfor the mar!eting of products and ser$ices manufactured
by an enterprise or for products that are procured by therm for the purpose of reselling
a sales organi6ation denes duties7 roles7 rights7 andresponsibilities of sales people engaged in sellingacti$ities meant for the e>ecti$e e=ecution of the sales
function
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Sales organi&ation
contd'
a structural body through which the functions ofsales management are carried out
sales organi6ation always ma!es e>orts to increase sales7thereby achie$ing the principle of prot ma=imi6ation7which contributes to the o$erall growth of enterprise
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(actors influencing structure
'roduct and ser$ice related factors
rgani6ation related actors
ar!eting mi= related factors
=ternal factors@#*ales rganisation design based on Team performance
# Trend towards elimination of sales force ba6ee.com# ar!et dri$en strategy customer segmentation strategy $s.
ustomer dri$en strategy partnership strategyB The speed of mar!et change higher decentralisationB )eduction in the number of $endors per buyerB loser customer relationships# hanges in regulations and international practices
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)rgani&ational principles *pan of control
entralisation $s. decentralisation
nity of command
Eierarchy of authority
*tability and continuity
oordination and integration arico C ' C; for rural
Eomogeneity
b5ecti$ity
*peciali6ation
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)rgani&ational design# $ormal and coordinated tas!
# #ssigning territories# stablishing ?ows of communication and responsibilities
of sales groups and indi$iduals to customers e>ecti$ely
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onsumermar!et
9nstitutionalmar!et
orporatemar!et
0ational,istribut
ors
,irectto
Eome
,irectmar!etin
g
,istributors
/undling
;ifting
onsumer)egional,istributors
)etailers
onsumers
Typical structure of a line organi&ation
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Design by territory
D' ar!eting
0ational *alesanager
,i$isionalanager
ast
,i$isionalanager0orth
,i$isionalanagerWest
)egional *alesanager
,istrict *alesanager
*ales *ta> ity wise
)egional *alesanager
,istrict *alesanager
*ales *ta> ity wise
)egional *alesanager
,istrict *alesanager
*ales *ta> ity wise
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Design by management function
r. ,ara singh7
D'ar!eting
rs. hitra
ohanty
#d$t L *ales
'romotion gr
*ta> :unction *ta> :unction
r. ,ibya
/ehera
*ales anager
r. handra ,e
anager
)
2- *ales 'eople
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Design by product
'resident7ar!eting
'roduct anager #
'roduct anager /
anager*ales
anagerTraining
anager'romotion
anager*ales
anagerTraining
anager'romotion
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Design by customer
'residentar!eting
*ales anagerWholesalers
*ales anager)etail *ales
*ales 'eople
*ales anager9ndustrial)elations
Dice 'residentar!eting
*ales 'eople *ales 'eople
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:unctional
eographic
ustomer
ombined
Sales )rg' Design
'resident
ar!etinganager
9nternational
;.
9nternational*ales
ar!etinganager
9ndia
Dice'resident
ar!eting
;.onsumer care
;.
9nternational*ales
Dice'resident
E),
Dice'resident
'roduction
,i$isionalanager
*oaps
,i$isionalanager
:ood
,i$isionalanager
'aper
astern *ales,i$ision
Western *ales,i$ision
0orthern *ales,i$ision
urope ,i$ision#merica,i$ision
;ulf ,i$ision
'roduct
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Key account sales
*ales process automation
B focus on )B customer protability and $alue analysisB the few accounts gi$e incremental returnsB national accounts
B ,9 F lectronic ,ata =change
Sales )rgani&ation
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Emerging organi&ational design
agency and distribution selling
shared sales force
telemar!eting
TH and teamBbased selling
ustomer
*ales ar!etingTechnical*upport
anufacturing
*upplier selling team
N b f l l
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Number of sales people
determined by@B territories $ary in their demand structure for prospectingB product mi= demands
B le$els and types of prospecting
B nature of the customer segments
#>ordability method based on sales budget
9ncremental method
Wor!load method0umber of sales people M
0umberof e=istingcustomers
0umber of
'otential
customers
9dealfre8uency of calls
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Management of Sales Territory
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Sales territory
# group of present and potential customers
assigned to
an indi$idual sales person7 a group of sales
persons7 a branch7 a dealer7 a distributor or
a mar!eting organi6ation at a gi$en period
of time.
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O%&e'tives of ()les *erritory
• *o for+l)te s)les -l)ns, -oli'ies, str)tegies )rond
'o+-)nys -rod'ts/servi'es, designed for ) territory.• An)lye territory s)les -otenti)l -l)n +)reting
-rogr)+s ey -otenti)l 'sto+ers for ) territory.
• An)lye strengths e)nesses of 'o+-etitors or
ot str)tegies to s%vert 'o+-etition for ) territory.• denti')tion 'l)ssi')tion of )''onts )''ording to
their -otenti)l 'h)l ot ')ll -l)ns for ) territory.
• Org)nie s)les for'e, )llo')te s)les eorts, i+-le+ents)les -l)ns +ore ee'tively for ) territory.
• evie -erfor+)n'e of s)les for'e )t regl)r interv)lsfor ) territory
• edesign s)les -l)ns, -oli'ies, str)tegies in ')se of'h)nges in +)ret trends/%siness environ+ent for )
territory. 5!
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5"
Sales territory *contd'+
#d$antages of designing a sales territo
9t ensures better mar!et co$erage
>ecti$e utili6ation of the sales force
Ocient distribution of wor!load among
sales people 9t is con$enient to e$aluate the
performance of sales people
To control o$er the direct and indirect
costs of the sales function ptimum utili6ation of sales time by sales
people
D i i l i i:actors
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Designing sales territories
*elect the basicgeographic controlunits,ecide on thecriteria for allocation
,ecide on thestarting pointombine controlunits ad5acent tostarting point
ompare territorieson allocation criteriaand conduct wor!loadanalysis#ssign sales forceto new territories
:actorsin?uencing themodicationsof a territory@
mergers mar!et
consolidation split indi$ision sales force
turno$er customer
relocations productlifecycle change product
line
odifyterritorialboundaries to
balancewor!loadandpotential
T it "
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Territory s"apes
circlewedge
lo$er leaf
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Strategic Planning Matri,
pportunity
*trategy
pportunity
*trategy
*trategy
*trategy#llocate a moderate le$el ofresources to maintain currentad$antage.
ither commit a minimal le$el
of resources to the account or
consider abandoning the
account altogether.
The account o>ers stableopportunity since the sale
organi6ation has di>erentialad$antages to ser$ing them.
pportunity
pportunity
The account o>ers little
opportunity. 9ts potential is small
and the sales organi6ation is at a
competiti$e disad$antage in
ser$ing it.
The account o>ers a goodopportunity. 9t has highpotential and the salesorgani6ation has adi>erential ad$antage inser$ing it.
ommit high le$els of sales
resources to ta!e ad$antage ofthe opportunity.
The account may represent agood opportunity. The salesorgani6ation needs to o$ercomeits competiti$e disad$antagesand strengthen its position tocapitali6e on the opportunity.
ither direct a high le$el of
sales resources to impro$e theposition and to ta!e ad$antage
of the opportunity or shift
resources to other accounts.
*trong Wea!
Eigh
<o
w
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0ew Territories..G
se of 9nformation Technology
9T enabled ser$ices
computer programmes simulation techni8ues
Sales territories
8e'ide 9)si' *erritories: ;)ret 9ild#U-
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-;ethod
64
;)n)ge+ent +st deter+ine:
8esir)%le ')ll -)ttern
*ot)l ')lls needed in e)'h 'ontrol nit
?orlo)d ')-)'ity
*ent)tively set territori)l %ond)ry lines 'o+%ining 'ontrol nitsntil, @tot)l ')lls needed tot)l ')lls -ossi%leB
;odify territories )s needed
?orlo)d )--ro)'h: Cx)+-le#.
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-- -
ustomer
allfre8uen
cyLannum
0o. ofcustom
ers
0o. ofcalls L
annum
0o. ofcustom
ers
0o. ofcalls L
annum
Totalno. of
calls Lannum
inbothunits
Dontrol Unit # 1 Dontrol nit # 2
;)&or ! 100 !00 150 1200
;oder)te
6 150 "00 250 1500
;inor 4 600 2400 700 2!00
4100 5500 "600?orlo)d Eo of oring d)ys x )v. no. of ')lls / d)y240 oring d)ys x 4 ')lls -er d)y "60e=ired no. of s)les -ersons "600 F "60 10
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ustomerType
Time L call alls Lannum
Eours Lannum
Total hours Lannum
;)&or
60 +in. /
')ll
40 40 hrs. 10,000
;oder)te
30 +in. /')ll
30 15 hrs. 7,500
;inor
20 +in. /
')ll
1! 6 hrs. 4,!00
hrs.> *ot)l 22,300 hrs.
Eo. of oring d)ys / )nn+ 273
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8e'ide 9)si' *erritories: ()les 9re) 8on;ethod
67
;)n)ge+ent +st deter+ine:
Do+-)ny ()les Potenti)l
()les -otenti)l in e)'h 'ontrol nit
()les vol+e ex-e'ted fro+ e)'h s)les -erson
*ent)tive territori)l %ond)ry lines %y 'o+%ining 'ontrol nits ntiltot)l s)les -otenti)l ex-e'ted s)les vol+e
*erritori)l +odi')tions )s needed
1 ompany *ales 'otential
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1. ompany *ales 'otential( EIPE Eo. of -ros-e'tive %yers of r+I Csti+)ted s)les nits J dire't selling 'ost .
0.20K K J 0.50 K J s.6,00,000.
K s.20,00,000 )v. vol+e of s)les, ) s)les-erson shold )'hieve in )territory.
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*ales 'otential ethod
Eo of s)les-ersons needed E
Ann)l ()les $ore')st for 'o+-)ny ( < s.40,000,000>Cst. -rod'tivity of )v. s)les-erson P Cst. -er'ent)ge of )nn)l s)les-erson trnover *
E (/P G * , or,E (/P
*herefore,
E 40,000,000 /20,00,000 22 s)les-eo-le ill %eneeded for the entire 'o+-)ny.
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anagement of *ales Hu
Sales #uota
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Sales #uota
A =ot) is )n ex-e'ted -erfor+)n'e
o%&e'tive
A =ot) is ) s)les )ssign+ents or go)l to
%e)'hieved in ) s-e'i' -eriod of ti+e
t is rotinely )ssigned to the s)les nits
()les nits -ro'eed to re)'h =ot)s intheir
res-e'tive do+)ins
“A sales quota is the sales goal set for a product line, company division, or salesrepresentative. It is primarily a managerialdevice for dening and stimulating the sales
eort.”. … Kotler
P i i l f t ttiPrinciples of #uota setting
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Principles of #uota settingPrinciples of #uota setting
(etting of s)les =ot)s is ) 'h)llenge tothe s)les
+)n)ger )nd shold %e h)ndled ith-re'ision
)nd )de=)te sill
t +st %e si+-le to nderst)nd%oth to the
+)n)ger )nd the s)les -eo-le
O%&e'tivity to %e o%served hile xing
=ot)s)nd shold %e %)sed on f)'ts )nd
gres dr)nfro+ the +)ret
Lot)s set )%ove the )'hiev)%le li+itoften
de+otiv)te )nd reslt in high trnover in
the
P i i lPrinciples
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:lexi%le to the -rev)iling )nd e+erging+)ret
'onditions There shold %e ) level of deniteness inthe =ot)
set for ) s)les-erson t shold %e xed either in ter+s ofgeogr)-hi'
territory, on +oney v)le, or on the %)sis of
nits of-rod't
# -)rti'i-)tory =ot) setting -ro'edrefolloed
&ointly %y the s)les +)n)ger )nd s)les -eo-letogether
serves )s ) tool of +otiv)tion )nd le)ds to the
Principles''Principles''contd'contd'
* # )
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T'9:9
#*
)#/
<
T
T#9
0#/
<
#<9
*T9
9
*'9:9
*/J
/ in the*ales
domainG
rgani6ation of the sales 5ob
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rgani6ation of the sales 5ob
,ening annual ob5ecti$es
'rocedure for setting sales 8uota
onferencing with each sales person 9 n d i $ i d u a l ; o a
l s e t t i n g
f o r m
utput
0ame Iear
Iour
territory)esultse=pected'essimistic )ealisticptimistic )esults1. Dolume per
month2. =penses permonth3. ;ross margin
Lmonth4. ar!etshareLmonth". Key accountco$erageL month
Types of sales #uota
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Types of sales #uota
sale $olume 8uota sales budget8uota
sale acti$ity8uota combination 8uota
f
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Met"ods of setting sales #uota
Huotas are based onJ sales forecasts and potentials
forecast
past sales and e=perience
e=ecuti$e 5udgement
sales people 5udgement
based on compensation
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Problems in setting sales #uota
1.There is a high le$el of indi$idual di>erencein e$eryorgani6ation
2. # perfect 8uota is a combination of
selling and nonB selling acti$ities
3. ften sales people do not gi$e proper
attention to thenonBselling acti$ities e.g. searching for
prospects7handling customer ob5ections7 and
creating mar!et for
-ersons -erfor+)n'e index. ?h)t 'on'lsions ')n yo dr) %)sed on yorresltsM
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*ales Huota #ctual *ales 'erformance 9nde=;r . A 150,000 160,000 107;r . 9 1"0,000 160,000 !4;r. D 160,000 110,000 6"
Perfor+)n'e index ')n %e ')l'l)ted %y dividing )'t)l s)les %y =ot) )ndthen the s)les +)n)ger ')n dr) inferen'es )%ot the )'tivity of e)'h s)les +)nin this ')se. ;r ND is nder -erfor+ing here )s ;r NA is doing ell. ;r N9 ')ni+-rove -on )s his -erfor+)n'e index is ithin )n )''e-t)%le li+it.
D)l'l)te the order to s)les ')ll r)tio )nd the )ver)ge sie of order for the ye)rfro+ the folloing t)%le. ?hy does the s)les-ersons -erfor+)n'e dierM
0ame 0o. of alls 0o. f rders #ctual *ales *alesLall*alesLrder;r . A 1300 350 s 500,000 s. 3!4.6 s.142!.6
;r. 9 1400 650 s 560,000 s. 400.0 s.!61.5;r. D 1600 5!0 s. "00,000 s. 562.5 s.1551.7 *ot)l 4300 15!0 s. 1",60,000 s.455.!s.1240.5 *he order to s)les ')ll r)tio ')n %e fond ot %y dividing the )'t)l s)les %y ')lls)nd )'t)l s)les %y orders. *he )ver)ge sie of the order ')n %e fond ot %y
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-ecruitment and selection of
t"e sales force
T"e sales manager
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'erforms sales management PE)
management A )ecruits7 selects7 trains7 moti$ates7leads7controls7 and compensates sales
teams *election and recruitment of eOcientsalespeople is always a process of building
competiti$ead$antage for an organi6ation
T"e sales manager
*trategic position
Turno$er Qob 8ualication
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g panalysis
,ecide on thenumber of people
to hire9dentify best sources ofrecruitment@
internal and e=ternalsources
;enerate database
of candidates
$aluate candidates
*elect and inducecandidates to accept
positions*ociali6e
Turno$er
stablish hiring
ob5ecti$es
Qob 8ualication
Qob descriptionrgani6atio
nalcharacteristics7
companyimage and
climate7styles of
super$ision7
compensati
on7 andmoti$ation
of thecompany
*election
*ociali6ation
)ecruitme
nt
'lanning
The hiring process
"allenges in sales force
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"allenges in sales forceselection
'ersonality types matching to
5ob proles
ne of the measures that theorgani6ation loo!s in an
employee is@
B the ability to perform by an
employee
M #bility = oti$ation
le$el of moti$ation
Planning for recruitment
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Planning for recruitment 1. (tr)tegi' -osition )n)lysis J )y s)les
&o% to %e -erfor+ed )nd sills )%ilities needed to-erfor+ the &o%.
2. *rnover J st#in#ti+e hiring / (to' -iling
3. o% An)lysis)thering )nd org)ni)tion of infor+)tion
'on'erning the *)ss, 8ties )nd es-onsi%ilities of )s-e'i' &o%s.
4. *)s nventory An)lysis : o% *)ss vs. C+-loyeeDh)r)'teristi's
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Sales force recruitment e'rit+ent is )n )'t of ind'ing =)lied )nd)--ro-ri)te -eo-le to get interested in )nd )--ly for )s)les-ersons -osition ithin ) s)les org)ni)tion.
9nternal sources
B existing e+-loyees# l)ter)l )nd -)rd +oves# interns )nd 'oo-er)tive stdents# e+-loyee referr)l -rogr)++es
=ternal sourcesB indstry sor'es
# ed')tion)l instittions )nd ')+-sre'rit+ents
# e+-loy+ent ex'h)nges# -l)'e+ent 'onslt)nts
# )l in intervies
=ternal sources
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B netoring referr)ls# e% 'onslt)nts
# res-onses to dire't o-en )dvertise+ents
=ternal sources contd...
*election procedureB inviting )--li')tion for+s# -erson)l intervies
# referen'e 'he's# -hysi')l ex)+in)tions# -sy'hologi')l tests# intelligen'e# -erson)lity
# )-titde )nd sills# deter+in)tion of ter+s of servi'e# )--oint+ent# initi)l orient)tion
Sociali&ation process
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Sociali&ation process
Pro'ess of orienting ) ne s)les-erson to the
s)les org)ni)tion, territory, or division in hi' he or she ill %e oring
Three stages
#nticipatory stagerealistic 5ob pre$iew
ncounter stage
*ettling stageemployee mentoring
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Training the *ales :orce
h ll i l t i i
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hallenges in sales training
Will the training programme be e>ecti$ein sol$ing a problemG
Will the in$estment in it be 5ustiedG
Will it produce the desired or intendedresultsG
) l f th t i
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)ole of the trainer
• The success of the training programme depends onthe ability7 s!ill7 and moti$ation of the sales trainer
T"e training process
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T"e training process
Training need assessment
,esign and conduct of a training programm
$aluation of a training programme
Training need assessment
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Training need assessmentphase
rgani6ational le$el analysis
Tas! le$el analysis
9ndi$idual le$el analysis
Training needs
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Training needs
9dentication of specic problems
#nticipating impending and futureproblems
anagement re8uests
9nter$iewing and obser$ing thepersonnel on the 5ob
'erformance appraisal
Huestionnaire sur$ey
hec!list#ttitude sur$ey
9nterpersonal s!ill test
,esigning and conduct
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g gphase
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Types of training
rossBfunctional training
Team training
reati$ity training
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Training methods
,idactic method lecture methodB structure the lecture
B reinforce the essage
B aid concentration
B material used for the lectureB ma!e it memorable for the participants
B deli$er with dynamism
B use 8uestions
Disual support'articipati$e
onferences
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Training methods contd..
*eminars,iscussions
)ole play
ase study
:ishbowl role re$ersal methodWor!shops participati$e
*ensiti$ity training interpersonalrelationships
Transaction analysis9nBtray e=ercises
Transcendental meditation
, idi l t i i
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,eciding a sales trainingprogramme#imontent
Knowledge
'rociencies
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'rocess of sociali6ation
• Anti'i-)tory so'i)li)tion
• A''o++od)tion st)ge
• Ot'o+e st)ge
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*ales :orce ompensation
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101
()les $or'e Do+-ens)tionPl)n
$)irness;)n)ge+ent J &dge+ent
;otiv)tion
Do+-etitiveness$lexi%le Dost
ee'tive
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102
ompensation n)n'i)l )%ility )> -rev)iling 'o+-ens)tion-oli'ies in indstry
%> Do+-ens)tion -oli'y %> Reg)l 'onditions
'> e'rit+ent sele'tion-oli'y
'> C'ono+i' 'onditions
d> Pro+otion -oli'y d> ;)ret 'o+-etition
e> o% des'ri-tion e> *r)de nion
f> o% ev)l)tion f> lo%)l 'onsider)tions
g> An e+-loyees -osition design)tion
h> An e+-loyees rel)tive'ontri%tion to the &o%
#ims of a good compensation plan)> *o in're)se enthsi)s+ +otiv)tion of s)les-eo-le
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103
%> *o instill ) sense of 'o++it+ent in s)les-eo-le to)rdstheir &o%
'> *o in&e't )n )t+os-here of te)+ s-irit +or)le ithin thes)les-eo-le
d> *o develo- ) st)%le s)les for'e red'e 'h)n'es of)ttrition of s)les for'e
e> *o ret)in eS'ient s)les for'e for ) long rn
f> *o 'oordin)te 'ontrol s)les for'e s''essflly
g> *o )ttr)'t eS'ient s)les-eo-le fro+ the 'o+-eting r+s
h> *o in're)se loy)lty of s)les for'e to the r+
i> *o in're)se =)lity of inter)'tion of s)les-eo-le ith
'sto+ers
&> *o i+-rove sense of 'onden'e of 'sto+ers on s)les for'e the r+
> *o 're)te ) dedi')ted s)les for'e ho le)ves no stonentrned to )'hieve r+s go)ls
(te-s in develo-ing Do+-ens)tion Pl)n
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104
evie &o%
des'ri-tion
Cst)%lish'o+-ens)ti
ono%&e'tives
Cst)%lish'o+-ens)ti
on level
Dhoose'o+-ens)ti
on +ethod
8e'ide on'o++issionor indire't
Do+-ens)tions el)te
re)rds to-erfor+)n'
e +e)sre+e
nt of
evie theentire -l)n for
short ter+/longter+
+-le+entthe -l)n
:actors in?uencing the design
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:actors in?uencing the designof a compensation plan
• :inancial stability
• *i6e of the mar!et
• 0ature of the product
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;ethods of 'o+-ens)tion
• (tr)ight s)l)ry
• (tr)ight 'o++ission
• Do+%in)tion -l)ns
i. ()l)ry )nd 'o++ission
ii.()l)ry )nd %ons
iii.()l)ry G 'o++ission )nd %ons
106
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107
Do+%in)tion -l)ns i.()l)ry G 'o++ission
ii.()l)ry G %onsiii.()l)ry G 'o++ission G %ons
Types of compensation
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plans
• :inancial compensation
• 0onBnancial compensation
:i i l ti
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:inancial compensation
• *traight salary plan
• *traight commission plan
• /onus and incenti$e
• *alary plus incenti$e combination plan
• ,rawing account and commission plan
•
#llied methods
Do+-ens)tion s'he+es : non#n)n'i)l
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)--ro)'h
•
D)reer )dv)n'e+ent throgh -ro+otion J &o%enri'h+ent
• (elling ex-enses J x ex-ense =ot) to 'ontrolnde ex-enses %y s)les-ersons
•
$ringe %enets J +edi')l %enets, insr)n'e'over, R*D, retire+ent %enets, entert)in+ent)llo)n'e, +o% %ill )llo)n'e/rei+%rse+ents,d)t) ')rd
• Pers J 'o+-)ny ')r, fel 'h)rges, roo+
frnishing )llo)n'e et'.• ()les 'ontests J re)rds for )'hieving short ter+
go)ls
110
*traight *alary
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1 1 1
#d$antages ,isad$antages
)> Provides ) sense of
se'rity
)> t h)s no -rovision to -)y
in'entives to s)les-eo-le. *his +)y restr)in the+t)ing )ddition)l initi)tive drive in -erson)l selling
%> Cnsre st)%ility of in'o+e %> (elling ex-enses )re not
rel)ted to s)les vol+e.(elling ex-enses )re in'rredreg)rdless of s)les vol+e
'> Tel-s to develo- ) loy)ls)les for'e
'> t gives e=)l tre)t+ent to%oth high lo -erfor+ing
s)les-ersons
d> Prevents high trnover ofs)les-eo-le
d> *he s'he+e +)y not)ttr)'t high -erfor+ings)les-eo-le fro+ the'o+-eting r+s
f *afe to new salespeople f ay discouragesalespeople to o>erdditi l > t f l
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additional e>orts for slowmo$ing items
g> (i+-le to nderst)nd )nd ise'ono+i')l in )--li')tion g> T)rd oring s)les-eo-le+)y not nd this +ethod)ttr)'tive
h> ()les-eo-le feel +ore'o++itted to their &o%
i> ()les-eo-le -)y +ore)ttention ret)ining 'sto+ersth)n gener)ting ne ones
&> ()les-eo-le ')n 'on'entr)teon 'sto+er s)tisf)'tion to
ret)in 'sto+er loy)lty> ()les-eo-le ')n give +ore)ttention to non#selling)'tivities )s ell
l> ()les +)n)gers ')n exer'ise
*traight ommission
#d$antages ,isad$antages
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g g
)> A'ts ) s ) gre)t +otiv)tor )> Ross of 'ontrol overs)les-ersons
%> 8ierenti)tes high -erfor+ings)les-eo-le fro+ rest
%> ()les-eo-le +)y not t)einterest in slo selling / less+)rgin -rod'ts of the 'o+-)ny
'> Unli+ited o--ortnity to e)rnfor eS'ient s)les-eo-le
'> ()les-ersons ill 'on'entr)teon e)sy selling or high +)rgin
-rod'tsd> ;)n)ge+ent h)s no -ressreto in'r selling 'osts
d> ()les-ersons ill try to -shex-ensive v)ri)nts of -rod'tdes-ite )v)il)%ility ofe'ono+i')l v)ri)nts servings)+e -r-ose to 'ons+ers
e> ()les-eo-le ')n or freely e> ()les-eo-le +)y indlge in)ggressive selling th)t +)y)e't i+)ge of 'o+-)ny
f> C)sy to nderst)nd )nde'ono+i')l to o-er)te
f> ()les-ersons ill l)' sense of%elonging to the 'o+-)ny
* l l t * l
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g *alespeople cannotcomplain for anyunderpayment B lin!ed to
performance
g *alespersons candi$ulge $aluableinformation of the
company to outsidesources
h> ()les-eo-le ill not resent)g)inst )ny -ressre selling
&o%s.
h> ()les-eo-le +)y not -)y)ttention to non#selling)'tivities
i> ()les-eo-le +)y not %einterested in %ilding longter+ rel)tionshi- ith'sto+ers
&> ()les-eo-le ill not %einterested in ) develo-ed+)ret
> (in'e e)rnings )ren'ert)in, s)les-ersons +)yle)ve in -eriods of %)d s)lesor for %etter &o% -ros-e'ts
ombination 'lan salaryPcommissionPbonus
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115
o b a o a sa a y co ss o bo us
#d$antages ,isad$antages
)> (t)%le in'o+eG )ddition)l
n)n'i)l in'entives
)> Eot si+-le to nderst)nd
diS'lt to o-er)te
%> (ense of &o% se'rity Gn)n'i)l in'entives forgener)ting +ore s)les
%> (elling 'osts v)ry )'rossdierent selling sit)tions Ji+-le+enting 'o+-)ringthis nifor+ly )'ross selling
sit)tions is diS'lt'> n'o+e v)ries ith s)les-rod'tivity, )lso is ) exi%leo-tion
'> ()les +)n)gers nd itdiS'lt to 'ontrol s)leso-er)tions
d> Do+%in)tion -l)n t)'les
dieren'es in s)les -otenti)l indierent territories, %etterth)n single -l)n
d> Pl)n re=ire 'onst)nt
re'ording of s)les trnoverth)t +)y )--e)r to %e'+%erso+e to s)les+)n)gers
e> CS'ient s)les-eo-le )re%eneted
e> t de+)nds high)d+inistr)tive 'ost
f de)l for )+%itios self f $ixin 'o+ osition of l)n
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116
g This plan can be made
?e=ible by suggestingdi>erent combinations fordi>erent le$els ofsalespersons
g ombination plans lead
to une8ual income ofsalespeople in di>erentterritories. Eencecomparison of theirperformance on commonstandards is diOcult.
h> ()les-ersons +)ynderesti+)te the non#selling)'tivities
i> ?hen s)les t)rgets )rexed )t high levels for
s)les-ersons to )tt)in, this-l)n ill dis'or)ge the+ todo their %est
&> Rong ter+ deferred-)y+ent of in'entives +)yfrstr)te s)les-eo-le
#pplication of compensation methods *pecic'lan
Do+-)ny )nts to go in for extensive -ros-e'ting drive
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117
?hile l)n'hing ) ne -rod't in the +)ret
C)sy to ev)l)te -ro'ien'y )+ong s)les -eo-le
Do+-)ny h)s ell est)%lished %r)nd n)+es in the +)ret
$or s)les tr)inees or nely )--ointed s)les-eo-le
?hen n)n'i)l strength of 'o+-)ny is e)
$or te'hni')lly 'o+-lex -rod'ts / -rod'ts of high =)lity
?hen non#selling )'tivities )re not i+-ort)nt?hen 'o+-)ny -rod'ts h)ve re)'hed ) +)trity / de'liningst)ge
Do+-)ny )nts to get into ) ne geogr)-hi')l territory
Do+-)ny )nts to rel)te selling ex-enses to s)les vol+e
Do+-)ny introd'es ) ne -rod't / -rod't line
Do+-)ny )nts to do overse)s selling
?hen -rod'ts )re sold throgh de)lers +er'h)ndising dis-l)y )re i+-ort)nt
?hen 'o+-)ny )--oints -)rt ti+e s)les -eo-le
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()les $or'e Dontrol
ntrod'tion
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• A good s)les +)n)ge+ent -rogr)+ needssyste+)ti' 'ontrol +e'h)nis+ to +onitor thes)les for'e -erfor+)n'e )nd ee- the 'ostsnder 'ontrol
•
Eo s)les -l)n is ee'tive in the )%sen'e of )s)les 'ontrol +e'h)nis+.
• ()les for'e 'ontrol +e'h)nis+ ee-s 'ostsithin %dgeted li+its %t )lso %rings dis'i-lineto org)ni)tion)l -ro'esses of i+-le+ent)tion.
• ()les for'e 'ontrol hel-s in %dget+odi')tions )nd )ddition)l re'rit+ent if sore=ired to )'hieve s)les o%&e'tives
Dir'l)tory E)tre of ()les; t $ ti
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;)n)ge+ent $n'tion
()les;)n)ge+ent Pro'ess
Pl)nning Org)niing
Doordin)tingDontrolling
Dontrolling ()les for'e Perfor+)n'e#n-t Ot-t 9)sed A--ro)'h
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n-t#Ot-t 9)sed A--ro)'h
An)lye +)ret sit)tion, 'o+-etition to set -erfor+)n'eev)l)tion )nd 'ontrol -oli'y
8e'ide the 'riteri) for s)les-eo-les -erfor+)n'e ev)l)tion
(et -erfor+)n'e st)nd)rds
Do+-)re )nd 'ontr)st )'t)l -erfor+)n'e ith set st)nd)rds
evie )nd 'o++ni')te -erfor+)n'e ev)l)tion
8e'ide s)les +)n)ge+ent )'tion
Dontrolling ()les for'e Perfor+)n'e#n-t Ot-t 9)sed A--ro)'h Dont
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n-t#Ot-t 9)sed A--ro)'h Dont.
• An)lysis of +)ret sit)tion )nd'o+-etition to set -erfor+)n'eev)l)tion )nd 'ontrol -oli'y –
?ho ill ev)l)te s)les -eo-leM – To fre=ently s)les -eo-le ill %e
ev)l)ted
– ?h)t sor'es of infor+)tion shold %e sed
for ev)l)tion – ?h)t shold %e the degree of ev)l)tion
Dontrolling ()les for'e Perfor+)n'e#n-t Ot-t 9)sed A--ro)'h Dont
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n-t#Ot-t 9)sed A--ro)'h Dont.
• Driteri) for ()les Perfor+)n'eCv)l)tion
– Ot-t %)sed 'riteri) – 9eh)vior)l 'riteri)
– Do+%in)tion of %oth
Dontrolling ()les for'e Perfor+)n'e#n-t Ot-t 9)sed A--ro)'h Dont
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n-t#Ot-t 9)sed A--ro)'h Dont.
• (etting U- Perfor+)n'e (t)nd)rds – ()les =ot)
– D)ll fre=en'y r)tio
– D)lls -er d)y – Order ')ll r)tio
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n-t#Ot-t 9)sed A--ro)'h Dont.
• Do+-)re )nd 'ontr)st )'t)l-erfor+)n'e ith set st)nd)rds – 8ene the infor+)tion need
– 8eter+ine the sor'e of infor+)tion – Dolle't the desired infor+)tion
• D)ll re-orts – D)ll -rogress re-ort
– Cx-ense re-orts
– ()les or -l)n
Dontrolling ()les for'e Perfor+)n'e#n-t Ot-t 9)sed A--ro)'h Dont
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n-t#Ot-t 9)sed A--ro)'h Dont.
• evie )nd Do++ni')te Perfor+)n'eCv)l)tion e-orts ith s)les -eo-le – O-en syste+ of -erfor+)n'e ev)l)tion
–
$or+)l syste+ of -erfor+)n'e ev)l)tion – nfor+)l syste+ of -erfor+)n'e ev)l)tion
– Do++ni')te throgh• Ier%)l 'h)nnels
• $or+)l 'h)nnels
• T+)n resor'e 'h)nnel
Dontrolling ()les for'e Perfor+)n'e#n-t Ot-t 9)sed A--ro)'h Dont
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n-t#Ot-t 9)sed A--ro)'h Dont.
• 8e'ide ()les ;)n)ge+ent A'tion – Positive )'tions
• n'entives• Pro+otion
• Tigher &o% res-onsi%ility• o% enri'h+ent
– Eeg)tive A'tions• 8e+otion
• ?ithdr))l• *r)nsfer• *er+in)tion
()les $or'e Dontrol()les Adit < investig)tion of the i+-)'t of intern)l/extern)l f)'tors on
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12!
< g -s)les -erfor+)n'e>i.?h)t de'isions ere t)en )t -l)nning i+-le+ent)tion st)gesM
ii.To these )e't the s)les o-er)tionsMiii.?h)t 'h)nges )re to %e %roght in, to i+-rove the sit)tionM
;)n)ge+ent nfor+)tion (yste+ i.ntern)l re-orting syste+ii.;)reting intelligen'e syste+
iii.;)reting rese)r'hiv.An)lyti')l syste+s
;)n)ge+ent %y ex'e-tions?henever signi')nt devi)tions )re noti'ed, 'orre'tive )'tions )re t)en,ithot del)y.
()les Adit
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• t 'o+-rised ) syste+)ti' -ro'ess of)--r)ising s)les o%&e'tives )nd -oli'ies %y)ggreg)ting individ)l in-ts intoorg)ni)tion)l -erfor+)n'e
• Tel-s in ev)l)ting over)ll -erfor+)n'e of theorg)ni)tion )g)inst s)les go)ls, o%&e'tives,+ethods, -ro'edres )nd s)les st)+otiv)tion
• t hel-s in fo'sing on over)ll s)les str)tegyr)ther th)n on individ)l 'o+-onents ofev)l)tion )nd sggests 'orre'tive )'tions.
• t hel-s in ne)rthing o--ortnities fori+-rove+ent in s)les for'e -erfor+)n'e
;)reting Adit
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• *his is ) syste+)ti' )nd o%&e'tive +ethod of stdyingthe tot)l +)reting eS'ien'y of )n org)ni)tion.
• t ev)l)tes the +)reting -oli'ies )nd )'tivities ofthe r+ )nd +e)sres the dire'tions )nd levels of
groth• t ev)l)tes long ter+ %siness groth in ter+s of
str)tegy, str'tre )nd -oli'ies folloed %y the r+
• t is ')lled N'ontrol of 'ontrols )s it 'overs %oth%siness )nd +)ret )s-e'ts of the org)ni)tion.
• t hel-s in revieing )ss+-tions sed in develo-ingstr)tegy. t serves )s )n indi')tor for ftre dire'tionth)t r+ -l)ns to t)e.
()les $or'e Cx-ense An)lysis
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• *his is the +ost rdi+ent)ry for+ of s)les for'e'ontrol.
• Do+-)nies do this )n)lysis %y looing into s)lesex-enses rei+%rse+ent -oli'y of theorg)ni)tion
• t shold %e seen )s ) f)ir )nd e=it)%le &sti'edone to )ll the -eo-le )'ross the territories
• ?hile de'iding on ) 'o+-ens)tion -oli'y for s)les-eo-le, ex-ense -l)nning 'onstittes ) +)&or
de'ision )nd it shold t)e into )''ont the sieof the territory, s)les =ot) )nd eorts ex-ended%y s)les -erson to )'hieve s)les go)ls.
;e)sre+ent of ()les Org)ni)tionCe'tiveness
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• ()les An)lysis – A'ross Org)ni)tions
• At n)tion)l level• At region)l level• At division level• At st)te level• At distri't level• At %r)n'h level
– 9y *y-es of s)les•
D)sh• Dredit• (hi-+ent• Order sie• Prod't ')tegory• ;)ret• *y-e of distri%tion 'h)nnel• (ie of 'sto+er order
– 9y ty-es of An)lysis
• Do+-)ring ith ()les =ot)• Do+-)ring ith Previos *i+e Period• Do+-)ring ith indstry )ver)ge• Do+-)ring ith (tr)tegi' Do+-etitors• Do+-)ring ith ()les $ore')st
;e)sre+ent of ()les Org)ni)tionCe'tiveness Dont.
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;)reting Dost An)lysis
Dl)ssify ;)retingCx-enses
*r)nsfor+ )''ontingex-enses d)t) to )'tivity
ex-ense gro-s
8evelo- 9)ses for)llo')ting Do++on
Cx-enses
D)l'l)te Dontri%tion;)rgin
$in)lie the Dorre'tiveA'tions e=ired for *he
(it)tion
;e)sre+ent of ()les Org)ni)tionCe'tiveness
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• Dredit Dontrol – Do+-)nies s)le %oth in ter+s of ')sh )nd 'redit
– D)sh s)les )re vit)l to org)ni)tions li=idity – Dredit 'ontrol is i+-ort)nt )s it restri'ts o of
')sh %)' to the syste+ – To +'h )nd ho often 'redits )re given to
'sto+ers shold %e 'riteri) – Dredit s'oring is done to nd ot the 'sto+er
ho )re ')sh/'redit de)l oriented )nd so )lso for
the s)les -eo-le ho sell on ')sh/ 'redit )s )-er'ent)ge to their tot)l s)les
;e)sre+ent of ()les Org)ni)tionCe'tiveness
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•
;)ret (h)re An)lysis – ;)ret sh)re is f)r+ s)les divided %y indstry s)les – t tests ho the org)ni)tion is doing in rel)tion to the rest
• 9dget)ry Dontrol – t involves s)les -l)nning, s)les fore')sting, s)les %dgeting )nd -rot -l)nning
• )tio An)lysis – ()les to D)-it)l C+-loyed r)tio
–
nventory *rnover )tio – ross Prot to ()les r)tio
– Eet Prot to ()les )tio
– etrn on ;)reting nvest+ents
– etrn of Assets
– etrn on D)-it)l C+-loyed
– ?oring D)-it)l *rnover )tio
– 8istri%tion Dost *rnover )tio
• ;)n)ge+ent %y O%&e'tives – 8eter+ine the o%&e'tives in e)'h signi')nt )re) of %siness
– ;e)sring -erfor+)n'e )g)inst -redeter+ined o%&e'tives
– ;)n)ging the %siness ith %ond)ry of set of o%&e'tives
Don'lsion
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• A good s)les +)n)ge+ent -rogr)+ de+)ndssyste+)ti' 'ontrol +e'h)nis+s to +onitor shes)les for'e -erfor+)n'e )nd ee- 'ost nder'ontrol
•
?ith in're)sed 'o+-etition )nd fr)g+ented+)ret sh)re it is i+-er)tive to 'ontrol 'osts)nd +)n)ge -erfor+)n'e in ti+e %ond+)nner
• ;)n)ge+ent )nd 'ontrol +e'h)nis+s shold
%e integr)ted ith -l)nning -ro'ess fori+-roving over)ll org)ni)tion -erfor+)n'e.
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137
Evaluation of t"e Sales (orce
Performance
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13!
Cv)l)tion st)nds on toi+-ort)nt f)'tors:
1.(etting -redeter+ined st)nd)rds2.Do+-)ring )'t)l -erfor+)n'eith the set st)nd)rds
Driteri) for Perfor+)n'e Cv)l)tion
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13"
(yste+)ti' Periodi'eslt Oriented $lexi%le
Provide dire'tions Cn'or)ging
Underst)nd)%le (tr)tegi' $itness
e)listi' $)ir
Iision fori+-rove+ent Ai+ for +)x.)''r)'y
(te-s in ()les $or'e Cv)l)tionPro'ess
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140
(et s)les go)ls o%&e'tives
8esign i+-le+ent)tion +e'h)nis+s
Cst)%lish -erfor+)n'e st)nd)rds
;e)sre )'t)l reslts
Do+-)re reslts )g)inst st)nd)rds
*)e 'ontrolling +e)sres
(etting s)les go)ls o%&e'tives
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• Att)in)%le• e)listi'
• L)nti)%le / ;e)sr)%le
• Do+-)r)%le / )n)lys)%le
141
8esigning i+-le+ent)tion+e'h)nis+s
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+e'h)nis+s
To s)les-ersons )'hieve t)rgetsM
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(t)nd)rds
• L)ntit)tive Perfor+)n'e(t)nd)rds
• L)lit)tive Perfor+)n'e(t)nd)rds
143
1. ;e)sre )'t)l reslts
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144
()les An)lysis
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()les Iol+e
i. 9y Prod'tsii.9y Dsto+er ro-s
iii.9y *erritories
Prots
i> ross or net -rot +)rgins re=ired• 9y Prod'ts• 9y Dsto+er ro-s•
9y *erritoriesii> ross ;)rgin )tio J gross +)rgin to tot)ls)les
iii> Eet Prot )tio J net -rot to tot)l s)les145
L)ntit)tive Perfor+)n'e (t)nd)rds ()les Orders
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iii.Order I)le
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i. (elling ex-enses : *ot)l ()les
ii.$ield selling ex-enses : tot)l selling ex-ensesiii.Aver)ge selling ex-enses / ')ll
Eo. of ')lls / d)y
Dost / ')ll D)ll fre=en'y r)tio
;)ret sh)re )n)lysis
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14!
aKnowledge on@
i. Prod'ts/servi'es de)lt ithii. Do+-)ny -oli'iesiii. Do+-etitioniv. 8istri%tion 'h)nnelsv. Dsto+er %eh)viors
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14"
'erformance #ppraisal ethods
Traditional ethods odern ethods
)> )ning +ethod )> ;)n)ge+ent %y o%&e'tives
%> P)ired Do+-)rison
+ethod
%> 9eh)vior)lly )n'hored r)ting s')le
J &o% )n)lysis
'> r)-hi' )ting s')le ' > 360 degree )--r)is)l
V ;9O J long ter+ go)l setting / &oint
short ter+ go)l setting / -re-)r)tion of)'tion -l)ns / -eriodi' -erfor+)n'erevie / for+)l )--r)is)l.
d> Dhe'list +ethod
e> Driti')l n'idents +ethod
f> $or'ed 8istri%tion +ethod
*r)dition)l ;ethods
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)ning ;ethod:
• )ned on the level of their -erfor+)n'e,reg)rdless of the ty-e of or they -erfor+.
• )ning )rr)nges s)les-eo-le in ter+s of
%est -erfor+)n'e, next %est -erfor+)n'etill the le)st -erfor+ing s)ler-erson isre)'hed.
• A't)l degree of dieren'e in the
-erfor+)n'e of the s)les-ersons ')nnot %e)s'ert)ined.
150
*r)dition)l ;ethods
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P)ired 'o+-)rison +ethod:
• *o s)les-ersons )re 'o+-)red )t )ti+e 'o+-)red on ) 'o++on 'riteri).
• f there )re 10 -ersons, the no of -)ired
'o+-)risons ill %e 45 : n /2• *hs hile it is %etter th)n r)ning
+ethod %t the -ro'edre is very
tedios, ti+e 'ons+ing s%&e't toh+)n error hi'h ill +lti-ly ith+ore sets of -erfor+)n'e 'riteri).
151
*r)dition)l ;ethods
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r)-hi' )ting (')le
1. Dontinos s')le: f)'tors )reev)l)ted 'ontinosly, +)ringso+ehere in the 'ontin+, on )
s-e'i' f)'tor.
152
1Iery high
3Tigh
5;oder)te
7Ro
"IeryRo
(%&e'tive &dg+ent J %i)s ')nnot %e rled ot
*r)dition)l ;ethods
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8is'reet (')le:
153
Iery ood ood Aver)ge 9)d Iery 9)d
5 4 3 21
%)sed on s%&e'tive &dg+ent J ')n le)d to %i)s
*r)dition)l ;ethods
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?eighted Dhe'list ;ethod :
154
#ttributes
)elati$e
weight
=cellent "
;ood
4
:air3
/ad2
Dery/ad 1
*core
Prod't
noledge
0.3 W 1.2
Do.noledge
0.2 W 0.!
(elling(ill 0.1 W 0.3
D;(ills
0.1 W 0.2
;otiv)tion
0.1 W 0.2
*r)dition)l ;ethods
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Driti')l n'ident ;ethod .
*he essen'e# to )s'ert)in 'riti')l events th)t +)ethe dieren'e %eteen -erfor+)n'e no-erfor+)n'e.
).9right in -ros-e'ting
%.Eot s+)rt in 'sto+er h)ndling
'.?rites ')ll re-orts ell
d.8e+o sill is ex'e-tion)l, et'.155
*r)dition)l ;ethods
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$or'ed 8istri%tion ;ethod:
156
bser$ations of the rater 'erformance *tandards
Do++ni')tion sill 25H Dery ;ood M R %-S;ood M 4- F %-S#$erage M 2- B 4-S
/ad M 2-SDery bad M 1-S
t is si+-le to i+-le+ent
)nd ')n )void %i)s to )l)rge extent.
(elling sill 40H
Pers)sive sill 50H
Person)lity 30H
C+otion)l +)trity 30H
Over)ll r)ting 35H Aver)ge.
*r)dition)l ;ethods
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$ield evie ;ethod: *he r)ter intervies eld s)les +)n)gers)nd s-ervisors to no hos)les-ersons -erfor+ in the eld on %oth=)ntit)tive )s ell )s =)lit)tive-)r)+eters.
Toever v)lidity reli)%ility ofinfor+)tion so 'olle'ted fro+ the eldshold %e 'he'ed.
157
;odern ;ethods;)n)ge+ent %y O%&e'tives :
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;)n)ge+ent %y O%&e'tives :
•
Org)nis)tion)l go)ls )s gidelines J long ter+ go)ls• oint go)l setting J ()les +)n)gers s)les-eo-le
est)%lish short#ter+ -erfor+)n'e t)rgets ho+)n)gers ')n hel- the+ )'hieving s'h t)rgets.
•
Pre-)r)tion of )'tion -l)ns J resor'e re=ire+ents +ethods of selling )re develo-ed. o%res-onsi%ilities )re 'le)rly dened/+odied.
• Perfor+)n'e revie J tr)'ing -rogress of s)les-erfor+)n'e on ) -eriodi' %)sis.
• $or+)l )--r)is)l J -erfor+)n'e reslts 'o+-)redith t)rgets 'orre'tive )'tions t)en/ go)lsredened.
15!
;odern ;ethods
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y g < >
)>An)lyse 'h)r)'teristi's %eh)vior)l )re)s of the &o%.
%>dentify 'riti')l %eh)vior)l )re)s ')tegorie the+)s +ost#ee'tive to le)st#ee'tive f)'tors.
'>*hese 'riti')l in'ident )re)s )re revieed rened to) s+)ll gro- of -erfor+)n'e di+ensions e)'h isgiven right denition.
d>Another gro- of s)les-eo-le/s-ervisors ithex-erien'e )re )sed to revie r)te on 1 s')le.e>$in)lly, fe -erfor+)n'e di+ensions ith individ)l
r)ting s')les dene the 9A(.
15"
;odern ;ethods
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360 degree )--r)is)l
160
8istri%tors
()les-eo-le
Peers
()les;)n)gers
*he+selves
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,istribution channel
management B anintroduction
)ole of distribution channels To ad5ust the discrepancy of assortment through the
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5 p y g
performance of the accumulation7 allocation
smaller lots C assorting process.
To minimi6e the distribution costs through
routini6ing and standardi6ing transactions to ma!e
e=change more eOcient and e>ecti$e.
To facilitate the searching process of both buyers
and sellers by structuring the information essential
to both the parties.
To pro$ide a place for both parties to meet each
other at a place con$enient to the customer and
reducing uncertainty
hannels facilitate afterBsalesBser$ice.
,iscrepancies in theprocess of e=change
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p g•
*patial discrepancy physical distance
• Temporal discrepancy di>erencebetween time of manufacturing $s. timeof consumption
• 0eed to brea! the bul! consumed insmaller 8uantities
• 0eed to pro$ide assortmentheterogeneous mi=.
The cost and control aspects ofintermediation
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intermediation
Direct ,istribution Indirect distribution
ontrol
osteOciency
,istribution channelstrategy
(etting distri%tion o%&e'tives in ter+s of the
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(etting distri%tion o%&e'tives in ter+s of the
'sto+er re=ire+ents
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8istri%tion 'h)nnel +)n)ge+ent
en'o+-)sses )ll )'tivities de)ling ith thedistri%tion fn'tion of the r+
*he distri%tion str)tegy -rovides gidelinesfor de'ision +)ing.
*he distri%tion +)n)ge+ent fn'tion ')n %e
vieed )s h)--ening in to -h)ses:
).8istri%tion -ro'ess +)--ing est)%lish+ent
%.8)y#to#d)y +)n)ge+ent of 'h)nnels.
,istribution channelmanagement contd.
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167
*he e ante -h)se involves )ll the )'tivitiesth)t )re )sso'i)ted ith the design )nd
est)%lish+ent of the distri%tion 'h)nnel.
*hese )'tivities )'t)lly t)e -l)'e %efore the
distri%tion 'h)nnel )'t)lly st)rts fn'tioning.
*he e poste -h)se involves +)n)ging the d)y
to d)y )'tivities of the 'h)nnel herein the
%eh)vior of the individ)l 'h)nnel +e+%ers)re 'oordin)ted
hannel anagementtas!s
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16!
,istribution hannel*trategy
•hannelb5ecti$e
•#cti$ity :inali6ation•rgani6ing theacti$ities•,e$eloping 'olicy;uidelines
,esign of thechannelstructure
stablishingthe channel
oti$atinghannelembers
)esol$ingon?ictsamongchannelmembers
= ante
'hase
='oste'hase
;)nf)'trer
hannels of drug distribution
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16"
D$ /8e-ot /(-er (to'ist
(to'ist / ?holes)ler
et)iler/ Dhe+ist
P)tient
nstittion Tos-it)l
r)l 8istri%tion Dh)nnels J ;)&orsses
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sses• C'ono+i' sses
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171
,esigning customerBoriented
mar!eting channels
Dh)nnel 8esign Pro'ess
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• Do++er'i)l Eetor :
J )gents / holes)lers / ret)ilers.
• Rogisti')l Eetor:
J tr)ns-orters / inst)ll)tion
+)inten)n'e st) .
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172
"annel Design*he 'h)nnel design is nor+)lly +e)nt to
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*he 'h)nnel design is nor+)lly +e)nt to
give ) 'le)r ide) )%ot:1> *he n+%er of 'h)nnel entities in the
'h)nnel netor .
2> *he )y in hi'h they )re lined.
3> *he roles )nd res-onsi%ilities of the entitiesin the netor 'le)r 't gidelines for the+)&or )'tivities to %e -erfor+ed dring the
nor+)l fn'tioning of the 'h)nnel.4> *he re)rds for -)rti'i-)ting in the
)'tivities.
What are the ser$iceoutputs
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• Donvenien'e
• (-)ti)l 'onvenien'e < 'h)nnelintensity vs. 'ost>
• ?)iting ti+e
• Assort+ent
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175
3. A'tivities to %e -erfor+ed to fll servi'e ot-t o%&e'tives
4. D)l'l)te 'ost in'rred for -erfor+ing these )'tivities, )t e)'h level
5. 8esign ide)l 'h)nnel str'tre, netor of +e+%ers, -erfor+ing
'ert)in fn'tions )t ) +ini++ 'ost
6. Do+-)re ide)l 'h)nnel str'tre ith the str'tre existing in re)lityJ for )ny +odi')tion
7. Assess ide)l 'h)nnel design J ee'tiveness, e=ity, s')l)%ility,exi%ility
!. 8evelo- the 'h)nnel est)%lish+ent / +odi')tion -l)n
=ample of a ser$ice outputdeli$ered template
Sl No Service dimension Service output delivered
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176
Sl.No. Service dimension Service output delivered
1. Bulk-Breakin !nits are delivered in ones
2. Spatial convenience "#ere is at least one outlet $or almost ever%3 km radius e&cludin o$ course t#inl%populated areas
3. 'aitin time Not more t#an 2 da%s $or an% model
4. (ssortment )t#er consumer oods items includin t#ato$ ot#er competitors are availa*le at all t#eoutlets +#ere t#e products are ot#er+ise(vaila*le
5. ,nstallation support (vaila*le
6. ($ter sales support ree $or $irst t+o %ears *ut availa*le onpa%ment a$ter+ards. (lso availa*le at ever%cit% $rom +#ere t#e product +as *ou#t.
7. /onsumer $inancin (vaila*le
Dh)nnel $los
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:low 0ame =planation
'hysical'ossession
*r)ns-ort)tion (tor)ge
wnership *)ing title to the -rod't
'romotion Pro+oting -rod't in v)rios )ys
0egotiation *er+s of tr)de ith -stre)+/donstre)+
:inancing D)sh o / oring ')-it)l re=ire+ents of'h)nnel -)rtners
)is! ta!ing Underriting riss hile -ossessing/oning,
)rr)nties et'.rdering Pro'essing of orders -)ssing on to -stre)+
'ayment $lo of -)y+ents )t e)'h 'h)nnel level© Oxford University Press 2005, All
rights reserved.177
hannel design e>ort decisions Fconsumer durables
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17!
consumer durables
• *he servi'e ot-t levels
• *he os or )'tivities th)t )re)sso'i)ted ith the )'hieve+ent ofthe servi'e ot-t levels
• *he ty-e of entity ho old %eentrsted ith the -erfor+)n'e ofe)'h of these os
'arameters for comparingchannel designs
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17"
channel designs
• CS'ien'y
• Ce'tiveness
• C=ity
• (')l)%ility
The channel establishment plancontd.
• *he +)in -r-ose of the 'h)nnel to %e set#-.
• *he -role of the 'sto+ers ho )re the t)rget +)ret
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1!0
• *he -role of the 'sto+ers ho )re the t)rget +)ret
for the 'h)nnel .• *he needs )nd re=ire+ents of the t)rget +)ret ith
reg)rd to the identied servi'e ot-ts -rovided %y
the -ro-osed/ existing 'h)nnel.
• An)lysis of the o-er)tions of the existing 'h)nnels th)tde)l in si+il)r -rod't/servi'e lines J ide)s for
dierenti)tion.
• 8et)iled )'tivity 'h)rt for )'hieving the servi'e ot-t
o%&e'tives # lining servi'e o%&e'tives to s-e'i'
)'tivities.
'lanJ.. ontd.• 8et)ils )%ot the v)rios 'h)nnel 'onstitents
ho ill %e -erfor+ing these t)ss
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1!1
• *he 'ost of -erfor+ing the )'tivities
• *he design)ted roles )nd res-onsi%ilities of the'h)nnel 'onstitents
• *he -ro-osed re+ner)tion for -erfor+ing theseroles )nd res-onsi%ilities
• (t)nd)rds for +e)sring the -erfor+)n'e
• Driteri) for )--ointing the 'h)nnel +e+%ers
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1!2
Managing "annel Member
.e"aviour
hannel relationships
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1!3
Per'e-tions of org)ni)tion)l -oer 8e-enden'e
Dontrol
*rst
Do++it+ent
Do#o-er)tion
,iscrete relational e=changecontinuum
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1!4
#rm’s length relationship
)elational e=change relationship
hannel control
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1!5
'ayF> 'ayF>
:unction:unction
ToleranceTolerance
:unction:unction
lostlost
opportunitieopportunitie
ss
*upplier*upplier
authorityauthority
protprot
earned byearned by
channelchannel
membermember
Uone ofUone of
acceptanceacceptance
A
)ole of persuasion7 authority7 andcoercion in channel control
hannelhannel ToleranceTolerance
f tif ti
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1!6
#uthority#uthoritypersuasionpersuasion
oercion
'ay Fo>'ay Fo>
functionfunction
//
/
members protmembers prot functionfunction
controlcontrol
Dh)nnel Poer
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•
e)rd Poer
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1!!
$in)n'i)l retrnsHuality
products
Do+-etitive -ri'e)eliable deli$ery
0ational
reputation
'romotionalsupportTraining
ar!etresearch
ompanypolicies
Technicalassistanc
e
)esponsi$eness systems
incenti$es
,istributosales forcincenti$e
,istributor rmincenti$es
2. apabilit/uilding'rograms
1.hannelore
3.9ncenti$e'rogram
,n$luenceStrate%
roup
"%pes o$ ,n$luenceStrate%
0&planation
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1!"
hannel anager’s9n?uence strategy types
,ndirectin$luence
strateies
•
,n$ormation e&c#ane• ,n$ormation control
• odellin
'#ere in$ormation on eneral *usinessissues and t#e c#annel proram is
merel% e&c#aned +it# c#annelmem*er personnel.
irect !nmediated
Strateies
• ecommendation
• 'arnin
• ositive normative• Neative normative.
,n t#is t%pe o$ strate% t#econseuences o$ t#e acceptance or
reection o$ t#e c#annel proramme orits implementation are stressed *utt#ese conseuences are *ased on aresponse $rom t#e market
environmentnot on t#e mediation o$ t#e c#annel
rincipal.
e+ard and
unis#ment
Strateies
• 0conomic re+ard
• Non-economic re+ard
• 0conomic punis#ment
• Non-economic punis#ment
,n t#is t%pe o$ strate% re+ardsand punis#ments are directl%iven to c#annel mem*ers
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1"0
contd. 9n?uence strategytypes
irect
un+ei#ted
strate%
• irect reuest "#is strate% involves makin a
direct reuest to t#e c#annelmem*er +#ere t#e rincipalmainl% communicates desires or+is#es concernin t#e c#annelmem*ers acceptance o$ t#ec#annel proram.
irect
ediated
strateies
• ersonal plea
• romise
• "#reat and
• ealistic re$erence.
,n t#is t%pe o$ strate% speci$icaction is reuestedconseuences o$ acceptance orreection are stressed and are*ased on t#e mediation o$ t#ec#annel principal.
9n?uence situations in channelrelationship
/ttitude towards t"e c"annel program/ttitude towards t"e c"annel program
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1"1
ein$orcementprocess
Be#aviouralein$orcement
:non-economicre+ard;
oderaterationali
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1"2
of con?ictof con?ict
*tructural*tructural
sources of sources of con?ictcon?ict
on?icton?ict
resolutionresolution
:elt:elt
con?ictcon?ict
con?ictcon?ict outcomesoutcomes
#** : 0:
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1"3
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#ccommodati$#ccommodati$
eeollaborati$eLprobleollaborati$eLproble
m sol$ingm sol$ing
ompromiseompromiseonceroncern forn for
thethe
ther’ther’
ss
E9;EE9;E