Introduction to Sales Management

Leha

Sales management- planning, direction, and control of personal selling, including recruitment, selecting, equipping, assigning, routing, supervising, paying and motivating. Objectives: Sales volume Contribution to profits Continuing growth

Leha

Personal selling strategies

1. 2.

3.
4. 5. 6. 7.

Willingness to go to bat for the buyer Thoroughness and follow through Market knowledge and keeping the buyer posted Applying his product and services to buyers needs Preparation for sales calls Regularity of Sales calls Technical education

3
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Evolution of personal selling

Consultative Selling
Negotiation
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Persuasion

Nature and role of sales management

The determination of sales force objective and goals Sales force organization, size, territory, and quota finalization Sales forecasting and budgeting Sales force selection, recruitment, and training Motivating and leading the sales force Designing compensation plan and control systems Designing career growth plans and building relationship strategies with key customers
Leha

Types of personal selling

Leha

Industrial selling Retail selling Services selling

Types of selling
Order taker sales people Order creators Order getters
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Types of Selling
Inside Order Taker Order Takers Delivery Sales People

Outside Order Takers

Selling Function Order Creators Missionary Sales People

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Order Getters

Sales management process

Formulation of a strategic sales programme
Leha

Implementation of the sales programme

Evaluation and control of sales force performance

Technology

Customer orientation

Emerging trends in sales management

Technology

Relationship selling

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Global and ethical Issues

Diversity

New selling methods

Emerging trends in sales management 10

SELLING AND BUYING STYLES

9
(1,9) People Oriented

(9,9) Problem Solving Oriented I consult with the customer so as to inform myself of all the needs in his situation that my products can satisfy. We work towards a sound purchase decision on his part, which yield him the benefits he expects from it.

I am customers friend,

Concern for the customers

8
7 6 5 4 3 2

I want to understand him and respond to his feelings and interests so that he will like me. It is the personal bond that leads him to purchase from me. (5,5) Sales technique Oriented

I have tried an effective routine for getting a customer to buy. It motivates through a blended personality and product emphasis
(1,1) Take it or Leave it

(9,1) Push the product Oriented I take challenge of the customer and hard sell him, polling on all the pressure it takes to make him buy

I place the product before the customer and it sells itself as and when it comes.

2
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11

Concern for sale

SELLING SITUATIONS
Sales task and function Listening function Information dissemination function Negotiation& bargaining function Problem solving function

12
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SELLING SKILLS

Problem solving skills

Effective communication skills

Selling Skills

Listening Skills Negotiation and bargaining skills Conflict management and resolution skills
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13

COMMUNICATION PROCESS
Feedback Intended Message Perceived Message

Encoding

Decoding

Noise

Sent Message

Received Message

Channel

Sender
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Receiver

14

COMMUNICATION PROCESS
CONTD.

Managing body language:

Personal Appearance
Posture Gestures Facial Expressions Eye Contact

15
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Process of listening
Attendance
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Interpretation

Remembrance
Evaluations Response Action
16

Leha

The Selling Process

17

Stages in the selling process

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Pre-sale preparation

Prospecting

Preapproach before the interview

Handling Customer Objections

Approach to the customer

Follow up action

Closing the Sale

Sales Presentation

18

Prospecting
Successful prospecting
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50 potential prospects 15 Qualified prospects 6 Interviews 1 sale

50 potential prospects 25 Qualified prospects 17 Interviews 7 sales

No
Successful prospecting

Yes

19

Process of prospecting
Leha

Identify and define prospects

Search for sources of potential accounts

Qualify the prospects from the suspects

20

Methods of prospecting
Cold canvassing
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Endless chain customer referral Prospect pool Centers of influence Non competing sales force Observation Friends and acquaintances Lists and directories Direct mail Telemarketing Trade shows and demonstrations

21

Selling process
Pre approach to selling Approach to the customer Sales presentation - approach to sales presentation
- attracting customer attention - creating interest - arousing desire and building conviction
Leha

Methods of sales presentation

- canned presentation (script based) - organized presentation - tailored presentation (need satisfaction selling)
22

Handling customer objections

Suggested by SMITH
BE sure the customer understands the value of a concession Make concessions in small amounts Admit mistakes and make corrections willingly BE prepared to withdraw a concession Avoid split the difference strategy
Leha

23

Methods of handling customer objections

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Superior feature method YesBut method Indirect denial method Comparison method Direct denial method Another angle method Narrative method Testimonial method Question or WHY method

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Closing the sale

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Methods of closing the sale Follow-up action

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Assumptive close Caution method close Consent close Special induced close Direct order Ownership suggestion close

26

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Recruitment and selection of the sales force

27

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The sales manager

performs sales management +HR management ! recruits, selects, trains, motivates, leads, controls, and compensates sales teams selection and recruitment of efficient sales people is always a process of building competitive advantage for an organization
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28

Turnover Establish hiring objectives Planning

Strategic position analysis Decide on the number of people to hire

Job qualification
Job description
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Identify best sources of recruitment: internal and external sources Recruitment Generate database of candidates Evaluate candidates Selection Socialization Select and induce candidates to accept positions Socialize

Organizational characteristics, company image and climate, styles of supervision, compensation, and motivation of the company

29

The hiring process

Challenges in sales force selection

Leha

personality types matching to job profiles one of the measures that the organization looks in an employee is:
- the ability to perform by an employee = ability x motivation

level of motivation
30

Planning for recruitment

1. Strategic position analysis
Leha

2. Turnover 3. Job analysis

gathering and organization of information concerning the tasks, duties and responsibilities of a specific job

Task inventory analysis

job qualification job description

31

Sales force recruitment

recruitment is an act of inducing qualified and appropriate people to get interested in and apply for a salespersons position within a sales organization
Leha

internal sources

- existing employees - lateral and upward moves - interns and cooperative students - employee referral programmes

external sources
- industry sources

- educational institutions and campus recruitments - employment exchanges - placement consultants - walk in interviews

32

External sources

contd...

- networking referrals - web consultants - responses to direct open advertisements

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Selection procedure
- inviting application forms - personal interviews - reference checks - physical examinations - psychological tests - intelligence - personality - aptitude and skills - determination of terms of service - appointment - initial orientation

33

Socialization process
process of orienting a new salesperson to the sales organization, territory, or division in which he or she will be working three stages
Anticipatory stage Encounter stage Settling stage
34
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Leha

TRAINING THE SALES FORCE

35

CHALLENGES IN SALES TRAINING

Will

the training programme be effective in solving a problem? Will the investment in it be justified? Will it produce the desired or intended results?

36
Leha

ROLE OF THE TRAINER

The success of the training programme depends on the ability, skill, and motivation of the sales trainer

37
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The training process

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Training need assessment

Design and conduct of a training programme

Evaluation of a training programme

38

TRAINING NEED ASSESSMENT PHASE

Leha

Organizational level analysis

Task level analysis

Individual level analysis

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TRAINING NEEDS
Identification

of specific problems Anticipating impending and future problems Management requests Interviewing and observing the personnel on the job Performance appraisal Questionnaire survey Checklist Attitude survey Interpersonal skill test
40
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DESIGNING AND CONDUCT PHASE

Location Job

Instruction Training (JIT) options

Presentation

41
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TYPES OF TRAINING

Cross-functional training
Team training Creativity training

42
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TRAINING METHODS
Didactic

method

- structure the lecture - reinforce the Message - aid concentration - material used for the lecture - make it memorable for the participants - deliver with dynamism - use questions
Visual

support Participative Conferences

Leha

43

TRAINING METHODS
Seminars Discussions Role play Case study Fishbowl Workshops Transcendental meditation

CONTD..

44
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DECIDING A SALES TRAINING PROGRAMME

Aim

Content
Knowledge Proficiencies Location Evaluation

45
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PROCESS OF SOCIALIZATION

Anticipatory socialization
Accommodation stage Outcome stage

46
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Management of Sales Territory

47

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Sales territory
a group of present and potential customers assigned to
Leha

an individual - sales person, a group of sales person, a branch, a dealer,

a distributor or a marketing organization at a given

period of time

48

Advantages of designing a sales territory :

it ensures better market coverage effective utilization of the sales force efficient distribution of workload among sales people it is convenient to evaluate the performance of sales people to control over the direct and indirect costs of the sales function optimum utilization of sales time by sales people No encroachment upon each others territory Understand customers current and latent need requirement and serves them better
Leha

49

SIZE OF THE TERRITORY

Nature and demand of the product Mode of physical distribution Transport and communication facility Level of competition Ability of salesperson

50

Leha

Designing sales territories

Factors influencing the modifications of a territory:
mergers market consolidation sales force turnover customer relocations product life cycle change product line change Select the basic geographic control units Decide on the criteria for allocation Decide on the starting point Combine control units adjacent to starting point Compare territories on allocation criteria and conduct workload analysis Assign sales force to new territories Modify territorial boundaries to balance workload and potential
51
Leha

Territory shapes
Leha

circle

wedge

Clover leaf
52

Strategic Planning Matrix

Opportunity

Opportunity
The account may represent a good opportunity. The sales organization needs to overcome its competitive disadvantages and strengthen its position to capitalize on the opportunity.
Leha

H i g h

The account offers a good opportunity. It has high potential and the sales organization has a differential advantage in serving it.

Strategy
Commit high levels of sales resources to take advantage of the opportunity.

Strategy
Either direct a high level of sales resources to improve the position and to take advantage of the opportunity or shift resources to other accounts.

L o w

Opportunity
The account offers stable opportunity since the sale organization has differential advantages to serving them.

Opportunity
The account offers little opportunity. Its potential is small and the sales organization is at a competitive disadvantage in serving it.

Strategy
Allocate a moderate level of resources to maintain current advantage.

Strategy

Strong

Either commit a minimal level of resources to the account or consider abandoning the account altogether.

53

Weak

Management of Sales Quota

54

Leha

Sales quota
a quota is an expected performance objective
Leha

a quota is a sales assignments or goal to be achieved in a specific period of time it is routinely assigned to the sales units (e.g. departments, divisions, and individuals) sales units proceed to reach quotas in their respective domains
A sales quota is the sales goal set for a product line, company division, or sales representative. It is primarily a managerial device for defining and stimulating the sales effort.. Kotler

55

Principles of quota setting

setting of sales quotas is a challenge to the sales manager and should be handled with precision and adequate skill objectivity to be observed while fixing quotas and should be based on facts and figures drawn from the market it must be simple to understand both to the manager and the sales people
Leha

quotas set above the achievable limit often demotivate and result in high turnover in the organization

56

Principles..
contd.

flexible to the prevailing and emerging market conditions there should be a level of definiteness in the quota set for a salesperson it should be fixed either in terms of geographic territory, on money value, or on the basis of units of product(s)

a participatory quota setting procedure followed jointly by the sales manager and sales people together serves as a tool of motivation and leads to the realization of the organizational sales goals 57

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S M A R T
P E CI FI C E A S U R A B L E T T A I N A B L E

R I E M SPECIFIC A E L I S SBO T I MBO in the Sales C domain?

58

Leha

SBO- SELLING BY OBJECTIVE

It involves two basic steps Organization of the sales job Defining annual objectives in important areas.

59
Leha

ORGANIZATION OF THE SALES JOB

While organizing the sales job, there are four key areas in which responsibility can be defined Territory management- It involves the management of the revenues, expenses, market share etc. Account management- It involves the management of each customer depending on his or her size and revenue potential. It has classified the clients as per the BCG Matrix. Call management- The call norms are decided taking into account the nature of the account. Self management- The self management issues involves dress, style, communication skills, memory, logical speaking etc.
60
Leha

DEFINING ANNUAL OBJECTIVES

There are three kind of objectives that can be set by a sales manager. Regular and recurring objectives Problem solving objectives Creative objectives

61
Leha

Individual Goal setting form

Procedure for setting sales quota

Output Name Year Your territory Results expected Pessimistic Realistic 1. Volume per month 2. Expenses per month 3. Gross margin per month 4. Market share per month 5. Key account coverage per month

Leha

Optimistic Results

Conferencing with each sales person

62

Types of sales quota

sale volume quota
Leha

sales budget quota

sale activity quota

combination quota

63

Methods of setting sales quota

Quotas are based on
sales forecasts and potentials past sales and experience executive judgment sales people judgment
Leha

64

Problems in setting sales quota

Leha

1. There is a high level of individual difference in every organization 2. A perfect quota is a combination of selling and nonselling activities 3. Often sales people do not give proper attention to the non-selling activities (e.g. searching for prospects, handling customer objections, and creating market for probable entry of new products)

65

SALES FORCE COMPENSATION

66

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FACTORS INFLUENCING THE DESIGN OF A

COMPENSATION PLAN

Financial Size

stability

of the market of the product

Nature

67
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TYPES OF COMPENSATION PLANS

Financial compensation
Non-financial compensation

68
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FINANCIAL COMPENSATION

Straight salary plan Straight commission plan Bonus and incentive Salary plus incentive (combination plan)

69
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NON-FINANCIAL COMPENSATION

Promotions Recognitions programmes Fringe benefits Perks

70
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STEPS IN DESIGNING A COMPENSATION

PLAN

Determine sales force and compensation objectives

Determine major compensation issues Implement long-term and short-term compensation plans Relate rewards to performance

Measurement of performance Appraise the compensation plan

71
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SALES FORCE MOTIVATION

72

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Process of motivation
Leha

Motive

Behaviour

Tension reduction

Goal
73

Principles Security Achievement Approval Loyalty Advancement Leadership 74 Human behaviour

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THEORIES OF MOTIVATION
Content Process

75
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CONTENT THEORIES
Need

hierarchy theory two factor theory ERG theory

Hertzbergs Alderfers

McGregor
Z

Theory X and Y

theory of William Ouchy

76
Leha

Maslows hierarchy of needs

Self actualisation need
Esteem need Social need Security need Physiological need
77
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HERTZBERGS TWO FACTOR THEORY

It includes two factorHygiene factors- Hygiene factors are those factors that when absent in any motivational programme increase dissatisfaction with the job, and when present help in preventing dissatisfaction but do not increase satisfaction or motivation. Motivators- Motivators are factors that when absent in a job prevent both satisfaction and motivation, and present lead to satisfaction and motivation.
Leha

78

ALDERFERS ERG THEORY

Existence needs- it includes physiological and security needs. Relatedness needs- involves being understood and accepted by people. Growth needs- growth needs are those involved with the desire for self-esteem and selfactualization.

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MCGREGOR THEORY OF X AND Y

Theory X assumes that most people prefer to be directed, as they are not interested in assuming responsibility and want safety. Theory Y presents a dynamic view of an individual. The individual is seen as having growth and development capacities. It assumes that people are not inherently lazy and unreliable.

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Leha

Z THEORY OF WILLIAM OUCHY

In the Z type of organization, great stress is laid upon the long term employment of the employee, which contributes to enhancing the employee morale. The anticipation of a long career with one organization encourages the workers to become integrated into the organization.

81
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PROCESS THEORIES

Equity theories- The motivation of the salespeople is influenced by the extent to which they feel that they are being treated fairly and equitably by the organization.

Expectancy theories- By Victor Vroom.

82
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FACTORS INFLUENCING THE MOTIVATION OF

THE SALESPERSON

Personal characteristics Environmental conditions Organizational policies

83
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DESIGNING A MOTIVATIONAL PROGRAMME

Programme objective Motivational tools Individual methods Group methods Communication Feedback

84
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Leha

Evaluation of the Sales Force

85

Deciding on the criteria for measuring performance Deciding in the conduct of the performance appraisal Deciding on the evaluation of individuals and teams Comparison of actual performance with standards Deciding on the frequency of the performance appraisal The external variables and their influences
86

Leha

Appraisal Criteria- One has to identify what is to be measured. The sales manager can use performance measure techniques. o Relative and absolute judgements In relative judgement method, the sales manager is asked to compare the salespersons performance with that of other salespeople on the job. o The other method is based on the sales performance measured in sales volume, market share. o Trait based- Traditional business organization uses a trait based evaluation system. The most commonly used traits for this purpose are reliability, energy and loyalty. o Outcome based- Performance based on outcomes measure the result of the selling process

87
Leha

 Rating

scales can be used for evaluationRating forms, forced choice scales etc can be used. Forced choice scales allow the sales managers to rate salespeople on a series of adjectives that explain a salespersons performance Behavioural Observation Scales- The sales manager is asked to identify only that behaviour that significantly influences performance. Call reports- These are periodic accounts and customer statements prepared by salespersons.

88
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SALES MEETINGS
These are important both for communication and motivational purposes. Periodic group meetings are valuable for exchanging information and ideas.

89

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PLANNING AND STAGING SALES

MEETINGS
A-C-M-E-E Defining the specific aims. Deciding meeting content. Determining methods of conducting the meeting. Deciding how to execute the meeting. Deciding how to evaluate the results.

90

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Execution- popular arrangements of rooms for sales meetings are-

Workshop Inverted U shape Seminar or the British Square

91

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National Sales Meetings Regional Sales Meetings Local sales meetings Remote control sales meetings

92

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SALES CONTESTS
It is a special selling campaign offering incentives in the form of prizes or awards beyond those in the compensation plan. Contest formats- A format should be timely and its effectiveness is enhanced if it coincides with and activity in the news.

93

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Contest prizesCash, Travel, Special honors or privileges. To stimulate widespread interest in the contest, it is good idea to make it possible for everyone to win. Contest duration is important in maintaining the interest of sales personnel. Pre and post evaluation should be done- Pre-evaluation aims to detect and correct weakness. Post-evaluation seeks insights helpful in improving future contests.

94

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Leha

DISTRIBUTION CHANNEL MANAGEMENT - AN

INTRODUCTION

95

ROLE OF DISTRIBUTION CHANNELS

To adjust the discrepancy of assortment through the process of sorting, accumulation, allocation, and assorting To minimize the distribution costs through routinising and standardizing transactions to make exchange more efficient and effective To facilitate the searching process of both buyers and sellers by structuring the information essential to both the parties To provide a place for both parties to meet each other and reducing uncertainty

96
Leha

HOW DO DISTRIBUTION CHANNELS CONTRIBUTE

Intermediaries can improve the efficiency of the exchange process Channel intermediaries adjust the discrepancy of assortment through the performance of the sorting process

Marketing intermediaries hang together in channel arrangements to provide for the routinisation of transactions Channels facilitate the searching process
97
Leha

DISCREPANCIES IN THE PROCESS OF

EXCHANGE

Spatial discrepancy
Temporal discrepancy Need to break the bulk Need to provide assortment

98
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DISTRIBUTION CHANNEL STRATEGY

Setting distribution objectives in terms of the customer requirements Finalizing the set of activities that are required to be performed to achieve the channel objectives Organizing the activities so that the responsibility of performing the activities is shared among the entities who are meant to perform these activities Developing policy guidelines for the smooth functioning of the channel on a day to day basis

99
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DISTRIBUTION CHANNEL MANAGEMENT

(CONTD.)

Distribution channel management encompasses all activities dealing with the distribution function of the firm The distribution strategy provides guidelines for decision making The distribution management function can be viewed as happening in two phases: the ex ante phase and the ex poste phase
100
Leha

DISTRIBUTION CHANNEL
MANAGEMENT
(CONTD.)

The ex ante phase involves all the activities that are associated with the design and establishment of the distribution channel. These activities actually take place before the distribution channel actually starts functioning.
The exposte phase involves managing the day to day activities of the channel wherein the behavior of the individual channel members are coordinated
101
Leha

CHANNEL MANAGEMENT TASKS

Leha Design of the channel structure

Ex ante

Phase
Establishing the channel

Distribution Channel Strategy Channel Objective Activity Finalization Organizing the activities Developing Policy Guidelines

Motivating Channel Members Ex Poste Phase Resolving Conflicts among channel members

102

Leha

DESIGNING CUSTOMER-ORIENTED
MARKETING CHANNELS

103

Channel Design

The channel design is normally meant to give a clear idea about: The number of channel entities in the channel network, The way in which they are linked, The roles and responsibilities of the entities in the network The rewards for participating in the activities and also Clear cut guidelines for the major activities to be performed during the normal functioning of the channel. 104
Leha

WHAT ARE THE SERVICE OUTPUTS

Waiting time

Breaking the bulk

Leha

Spatial convenience Assortment Physical possession Ownership Promotion flow Risk taking flow Negotiation and financing flow

105

DISTRIBUTION CHANNEL DESIGN

To consume a product

Channels
Leha

Service outputs have to be delivered

Participates in channel flows

Activities have to be performed

Thus performs activities

106

EXAMPLE OF A SERVICE OUTPUT DELIVERED TEMPLATE

S.No. Service dimension
1. 2. Bulk-Breaking Spatial convenience

Service output delivered

Units are delivered in ones There is at least one outlet for almost every 3 km radius excluding of course thinly populated areas Not more than 2 days for any model

3.

Waiting time

4.

Assortment

Other consumer goods items including that of other competitors are available at all the outlets where the products are otherwise Available
Available

5.

Installation support

6.

After sales support

Free for first two years, but available on payment afterwards. Also available at every city from where the product was bought.
Available
107

7.

Consumer financing
Leha

Channel flows and contribution to service outputs

Flow
Physical Possession Ownership Promotion Negotiation Risk taking Financing Ordering Payment Spatial convenience, waiting time, bulk breaking Bulk breaking, spatial convenience, waiting time Bulk breaking, spatial convenience, waiting time Spatial convenience, bulk breaking

Direct contribution
Spatial convenience, bulk breaking, waiting time

Indirect contribution
Assortment

Other contribution
Leha

Spatial convenience Spatial convenience Assortment Waiting time, bulk breaking, spatial convenience Assortment

Is a service output in itself

108

CHANNEL DESIGN EFFORT DECISIONS

The service output levels The flows or activities that are associated with the achievement of the service output levels The type of entity who would be entrusted with the performance of each of these flows

109

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PARAMETERS FOR COMPARING CHANNEL

DESIGNS
Leha

Efficiency Effectiveness Equity Scalability Flexibility

110

THE CHANNEL ESTABLISHMENT PLAN

(CONTD.)

The main purpose of the channel to be set-up The profile of the customers who are the target market for the channel

The needs and requirements of the target market with regard to the identified service outputs provided by the proposed/ existing channel:

Analysis of the operations of the existing channels that deal in similar product/service lines Detailed activity chart for achieving the service output objectives
111

Leha

PLAN..

CONTD.

Details about the various channel constituents who will be performing these tasks The cost of performing the activities The designated roles and responsibilities of the channel constituents The proposed remuneration for performing these roles and responsibilities Standards for measuring the performance Procedures for reporting and information sharing Monitoring mechanisms Criteria for appointing the channel members

112

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Customer-oriented logistics management

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113

LOGISTICS STRATEGY
Cost

reduction
Leha

Capital

reduction improvement

Service

114

Logistics Planning
Inventory Management
Inventory levels Deployment of inventories Control methods

Transportation decisions
Modes of transport Carrier routing/scheduling Shipment size /consolidation
Leha

Customer Service goals

Location decisions
Number, size and location of facilities Assignments of stocking points to sourcing points Assignment of demand to stocking points

115

Generic types of outbound logistics strategies

Direct

shipment
Leha

Warehousing Cross-docking

116

Functions of warehousing operations

Movement Storage Information

Receiving Transferring Order picking/selection Shipping

Leha

transfer
Stock keeping locations Inbound and outbound shipments Facility space utilization Order fulfillment data
117

WHY INVENTORIES?
To

improve customer service To smoothen the operations of the logistics system To reduces costs Inventory procurement costs Inventory carrying costs Stock out costs Cost associated with inventory

118

Leha

Components of inventory carrying cost

Capital cost Inventory Investments

Inventory carrying cost

Inventory service costs

Storage space costs Inventory carrying cost

Insurance and Taxes

Warehouse rent, maintenance charges Obsolescence Damage& Pilferage Shrinkage Relocation 119 costs
Leha

Echelon inventory
Stockist echelon lead time

Supplier

Stockist echelon Inventory

Leha

Stockist

Retailer

Retailer

Retailer

Retailer

Retailer
120

Factors affecting transportation cost

Product

related factors
Leha

The density of the product Stow ability Difficult in handling Liability

Market

related factors

Intramode competition Location of markets Balance or imbalance of in freight traffic in and out of the market Seasonability of the product movements
121

Managing Channel Member Behaviour

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122

CHANNEL RELATIONSHIPS

Perceptions of organisational power Dependence Control Trust Commitment Co-operation

123

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DISCRETE RELATIONAL EXCHANGE CONTINUUM

Leha

Arms length relationship

Relational exchange relationship

124

CHANNEL CONTROL

Leha

Distributors profit earned

Tolerance Function

PayOff Function
125

Zone of acceptance

Supplier authority

ROLE OF PERSUASION, AUTHORITY, AND COERCION IN CHANNEL

CONTROL

Channel members profit

Tolerance function B

Pay off function

Leha

Coercion

126

persuasion

Authority

control

COMPONENTS OF CHANNEL OFFERING

Manufacturer sales force incentives

Promotional Responsiveness support systems Financial returns Quality products Technical Reliable delivery assistance Competitive price National reputation Company

Training

policies

Market research

Distributor sales force incentives

Leha

Incentive programme

Distributor firm incentives

Channel core elements

Capability building programmes

127

Influenc e Strategy group

Types of Influence strategy

Explanation

Indirect Information influenc exchange e Information control strategi Modeling es

Direct Recommendation Warning Positive normative Negative normative.

Where information on general business issues and the channel program is merely exchanged with channel member personnel.

In this type of strategy the consequences of the acceptance Unmediat or ed rejection of the channel Strategies programme or its implementation are stressed, but these consequences are based on a NFLUENCE STRATEGY TYPES (CONTD.) response from the market Leha 128 environment, not on the mediation of the

Reward and Economic reward Punishment Non-economic reward Economic punishment Strategies
Non-economic punishment Direct request

In this type of strategy rewards and punishments are directly given to channel members
This strategy involves making a direct request to the channel member where the Principal mainly communicates desires or wishes concerning the channel members acceptance of the channel program. In this type of strategy specific action is requested; consequences of acceptance or rejection are stressed and are based on the mediation of the channel principal.
129

Direct unweighted strategy

Direct Mediated strategies

Personal plea Promise Threat and Legalistic reference.

(CONTD.)

INFLUENCE STRATEGY TYPES

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STAGES IN CHANNEL CONFLICT

Attitudinal sources of conflict Cognitive/ Affective conflict Manifest conflict Conflict outcomes
Leha

Structural sources of conflict

Conflict resolution

CAUSES OF CONFLICTS Attitudinal Causes Structural causes

130

CONFLICT MANAGEMENT
CONFLICT

METHODS AT DIFFERENT STAGES OF

Institutional approaches
Latent conflict Joint membership of associations Exchange of executives Cooptation Dealer councils
Leha

Felt conflict

Third party mechanisms Mediation arbitration

Manifest conflict

Negotiation

131

Retail Management

132

Leha

Retail marketing mix

Merchandise characteristic
Leha

Customer service characteristic Trading format Customer communication

133

Retail marketing mix

(contd.)

(i) the merchandise in the store affect the volume of sales as it is primarily the merchandise that attracts customers (ii) since profitability is based on the turnover rate of the inventory, the choice of merchandise and the quantity of merchandise of each category stocked affects the overall profitability of the establishment

How merchandising functions affects profitability?

134

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FACTORS AFFECTING CHOICE OF RETAIL STRATEGY

Companys

strategic objectives in terms of the level of profitability desired availability of target customers with manufacturers

Leha

Space

Preferences

Relationships Availability

of trained salespeople etc.

135

MERCHANDISE PLANNING PROCESS

Develop a sales plan
Leha

Plan reductions Develop a stock plan Plan merchandise needs

Calculated planned Purchase

Plan mark ups based on profitability targets
136

CUSTOMER SERVICES

Product Service Support

services products activities

137

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CUSTOMER PERFORMANCE MEASURING

TECHNIQUES
Leha

Frequency Frequency

or browsing visits of purchase visits

Average
Items

transaction per visit

purchased

Range

purchased
service facilities used
138

Customer

PURCHASE PROCESS FOR SERVICE

REQUIREMENT IDENTIFICATION
Purchase process
Pre-purchase phase Service requirements Search Comparison
Leha

Product related

Purchase phase

Transaction related

Delivery Installation
Post purchase phase Repeat visits
139

ATTITUDE TOWARDS TRADING FORMAT

AND STORE ENVIRONMENT
Shopping Attitudes Task Oriented Pleasure Oriented

Pre-purchase Stage During Purchase

Convenient Locations Exclusive Store Merchandise Ample Parking Wide Choice Close to Other Task Oriented Prestigious Image Stores Relevant Merchandise Selection High Availability Competitive Pricing Rapid Cash Handling Ambience and Excitement Visual Merchandising In-store Facilities Product Services Centers

Leha

Post-purchase 140 Stage

Product Displays Customer Advice Areas

Theme Displays Customer Advice Areas

Leha

MANAGING THE INTERNATIONAL

CHANNELS OF DISTRIBUTION

141

FACTORS AFFECTING INTERNATIONAL TRADE

Differences

in customer expectations across countries Differences in channel structure and trade practices Differences in governmental policies and regulations Differences in the quality of physical infrastructure

142

Leha

MARKET ENTRY STRATEGY

Indirect exporting

C O N T R O L

Direct exporting
Leha

Licensing Franchising Contract manufacturing Strategic alliance

R I S K

Joint venture
Wholly owned subsidiary
143

INTERNATIONAL LOGISTICS MANAGEMENT

International International Offshore Fully

distribution system
Leha

suppliers

manufacturing

integrated global supply chain

144