Unit - 2

Selection and Training of Representatives

Introduction

Selection and training of sales representatives is an on going procedure in all sales as organizations as sales managers cannot hold on to their staff forever and it is also not good to do so. Generally speaking, the sales representatives that stay on are not quality people. All the good people will either get promoted in the same company or move on to other companies for better prospects. So, it is not just the selection procedure but training which is imparted to the selected trainees that plays a very important role. We provide training to new people for doing the job and then keep them training than for doing the same job better and better. Let us now look at selection and training procedures in detail.

Selection of Sales Representatives

Selection procedure starts from the search of the right candidate. The normal places to look for them are as follows:
1. Internal search 2. Competitor salesmen 3. From the staff of your distributors 4. From the institutes 5. From employment exchanges/agencies 6. From the staff of other companies 7. By advertising in newspapers

Preparation of Job Description and Personnel Specification

Preparation of job description will involve the following activities:
1. 2. 3. 4. 5. 6. Deciding the title of the job e.g., salesman, sales officer/ etc. Deciding the duties and responsibilities. To whom the person will report. Technical requirements of the job e.g., travel for 20 days a month. Location of the job i.e., place of work. Degree of autonomy e.g., limits of authority.

Personnel specifications change from selector to selector. They can be:

1. 2. 3. 4. 5. 6. Physical requirement e.g., strong physique to withstand traveling strain. Attainments e.g. education experience. Aptitudes and qualities e.g., communication skills, motivation levels. Deposition e.g., maturity, sense of responsibility. Interests e.g., hobbies etc. Personal status e.g., married/unmarried.

Short Listing and Interviews Short listed candidates are then interviewed to find the best suitable candidates for your consideration and appointment. The next step is training the selected candidate for job responsibilities. The training is again of two types: 1. Induction Training Company profile Position in hierarchy and job responsibilities Introduction to the administrative staff and accounts staff Reporting procedures and standards of reporting Knowledge of products, their features and benefits Knowledge of manufacturing units Handing over stationery and kit etc.

On job training is a very important aspect of the sales managers job. This is an ongoing and continuous process for both the sales manager and his subordinates. It is directed towards improving job related skills and along with it the personality of the sales staff as these are the people who improve or spoil the image of the company by way of responsible or irresponsible behavior in the minds of the trade. The company image in the trade circle is very important in getting good channel members and their wholehearted support.
Training Skill Development 2. On Job Training (Field Training)

The skill development training, though similar in both industrial and consumer products, differs in emphasis on different aspects.

Consumer Sales Consumer sales are generally divided into steps of a sales call. They are: 1. 2. 3. 4. 5. 6. 7. Planning and preparation Approach Stock check/need development Brand talk Objection handing Close Detail work. All the seven steps are very important for making a sales call productive. If the salesman is weak in any of the above aspects (steps), his performance will not be top class.

Industrial Sale
In an industrial sale, though the steps are the same, the emphasis shifts from brand talk to negotiating the terms of sale because in this case the buyer is the final user and he does not buy a brand but a need satisfier. If he is interested in satisfying his need, and saving costs in the process, and if your product is replacing an expensive product and satisfies the need effectively, you get the order. In industrial sales the formula SPANCO is in use. Its meaning is as follows S = Survey of customers P = Prospecting the customer A = Approach the customer N = Need development/negotiations C = Close (order booking) O = Order processing

Training in Personality Development

In this part of training, the sales manager explains the following things: 1. 2. 3. 4. 5. 6. Dress code Personal grooming Body language Communications skills (a) written (b) oral Listening skills Manners and etiquette A good understanding of each of the above will help one become a better salesman.

Sales Quotas
Importance of Sales Quotas
Sales quotas serve several purposes. The important objectives are shown in the diagram below:

Sales Quotas

Quotas provide performance targets Quotas provide standards Quotas provide control Quotas are motivational

Sales Objectives

Types of Sales Quotas

A sales organization can set many types of quotas. The most common quotas are shown in the following diagram

Types of Sales Quotas

Sales Volume Quotas

Profit Quotas

Expense Quotas

Activity Quotas

Quota Combinations

Territory Management
The following diagram outlines the activities of territory management

Activities of Territory Management

Trade relations/Dealer relations Potential business Coverage Reports Territory size Portfolio of accounts Selling techniques Customer satisfaction Selling abilities

Why Establish Sales Territories?

A company can develop and use sales territories for various reasons. Some of the reasons are as follows:

To obtain entire coverage of the market To establish a salespersons responsibility To evaluate performance To improve customer relations To reduce sales expenses To allow better matching of salesperson to customer To benefit salespeople and the company.

Factors to be Considered when Designing Territories In setting up or designing sales territories, these four steps must be followed: Selecting a basic geographical control unit Determining sales potentials in control unit Combining control units into tentative territories Adjusting for coverage difficulty and reallocating tentative territories. The two basic approaches commonly used for designing sales territories are discussed below.
1.

2.

Market Build-up Approach The Workload Approach

The work load approach

This approach is designed by WJ Talley on the basis of the work load performed by salespersons. the following steps should be considered important hen using the above approach: Customer are grouped into class size according to the sales volume. Optimum call frequencies for each class of customer are estimated. Present and potential customers are then located geographically and arranged volume-wise and value-wise The number of present and potential customer in each volume/value group is then multiplied by the desired call frequency to get the total number of planned calls required for each geographical control units.

Assigning to Territories

Base

First Call

C C C

Clover Leaf Pattern

C C Base

C C C C

Major City Pattern

2 1 4

Sales Management Information System and Sales Training

What is Sales Management Information System? To achieve the sales goals set by senior management, the sales manager must make tactical decisions about shape of sales territories allocation of sales staff to territories what product to push which customers to contact incentive schemes

which market segments to emphasize and with what products. In addition, they must also monitor the sales effort and make changes to the tactics in response to changes in the market.

Monthly Performance Review

Frequency : Monthly/Quarterly/Annual performance at office by Sales Rep. Guidelines Each sales rep to report personally to the branch office once in a month to review the following: Previous tour cycle date wise Plan for next tour cycle to be sent one week before reporting Managers to ensure complete availability for each sales rep.

Sales Training Any training is dependent for its success on a number of factors. These include how well it relates to identified needs, how relevant it is to the real day-to-day job of participants, how participative it is, and more. Presentational techniques

Techniques to prompt and handle participation

The methodology of role-playing, which as has been said in the previous section can be of valuable assistance in developing sales skills The use of training films.

UNIT-3,4 Distribution System

Introduction : Basic Concepts of the Distribution System

Distribution of goods and services plays an important role in the sales system. Distribution system varies from company to company and region to region. The distribution system gives strength to the company by helping to increase the reach of the product to various parts of the region, country or even in foreign markets. An effective distribution system helps in making available goods in the right quantity at the right time when they are required and giving a reasonable earning to those who are associated with the distribution system like wholesalers, retailers, departmental stores, etc.

Risk Taking Financing

Information Promotion

functions
Physical Distribution Negotiation

Contact

Matching

Setting Distribution Objectives

What are distribution objectives? For a product market, they are defined in terms of availability of the product (for example, percentage of total outlets reached). Most companies do not explicitly set distribution objectives. Of those that do, distribution objectives often have no linkage to end customer requirements. Often companies fail to ask questions like, How many and what kind of outlets do I need, to be available to a given target audience and their buyer behaviour? There are also regional differences in category development to be taken into account. For instance, will extending distribution in a region with a low level of category development help me boost sales? Finally, the objectives should take note of the marketing initiatives planned for the year

The Andersen Consulting Distribution Strategy Pyramid

Distribution Objectives STRATEGY Channel Design Network Strategy

STRUCTURE

Intermediate Management

Warehouses and Transport

Materials Management

PROCESS IT Policies and Procedures Facilities and Equipment IMPLEMENTATION Channel Management

The Distribution Development Index (DDI) is defined as the availability of a brand/category in the market relative to that of a benchmark brand/category. The Category Development Index (CDI) is defined as the per capita consumption of the category in that market relative to the national per capita consumption of the category. The relative level of DDI and CDI will determine the extent of the opportunity to actually extend distribution.

High Distribution Development Low

Concentrate on demand generation activities

Concentrate on quality of distribution, service level, frequency etc.

Develop integrated sales and marketing package

Extend distribution immediately

Low

High Category Development

Developing Channel Design

Distribution Processes
u

Setting/Achieving Distribution Objectives

u

Controlling Distribution
u

Inventory management through a periodic review of network Integrated supply chain planning Demand forecasting based on consumer trend secondary

Setting up distribution strategy with alternatives

Consistently lower inventory levels in changing demand

Setting distribution objectives in line with the demand potential

u u

Lower inventories Lower trade spends (no attempts to boost sales where demand)

Monitoring of trade spends Monitoring of distributor

Achieving distribution objectives by ensuring the right mix of direct coverage and reach.

u
u

Controlling trade spends Controlling distributor expenses and service evils to prevent distributors from m aking sales.

Definitions of Physical Distribution

1. The term Physical Distribution Management, is employed in manufacturing and commerce to describe the broad range of activities are: Freight Warehouseing Material handling Protective packing Inventory control Selection of site for various activities Marketing Forecasting. 2. Physical Distribution is the art and science of determining requirements, acquiring them, distributing them and, finally, maintaining them in an operationally ready condition for their entire life. 3. Physical Distribution Management is specifically concerned with the flow of goods through the economic system.

Functions of Physical Distribution

In main, physical distribution functions may be listed as follows:

1.
2. 3. 4. 5. 6. 7. 8. 9.

Locational analysis
Transportation Material handling Warehousing Packing Order processing Packaging Inventory control Customer sales service.

Logistics Introduction
Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming to consumer requirements. Logistics is not a new area of marketing management. It has been around since the beginning of civilisation. Logistics helps the inflow of materials into the manufacturing process. It also helps in the distribution of products to consumers through various marketing channels. Logistical management includes the design and administration of systems to control the flow of material, work-in-process and finished inventory to support business unit strategy.

Logistic Needs
Land Sufficient land so that industrial or business operations may be conducted smoothly. Water distribution Energy Sufficient electric power or alternative resources of power so that operations may go unhindered. Storage for equipments, construction goods. Machinery and spares. Warehousing space for movement of goods/temporary storing till the goods reach final destination. Transport equipments, trucks, trolleys, etc. Telephones, telefax and other communication equipments.

Functional Areas of Logistics

There are seven important functional areas of logistics.

Information Technology (2)

Transportation (Road, Rail or Air) (3)

Network Design (1) Logistics for Customer Satisfaction

Inventory and Storage (4)

Packaging and Re-packaging (7) Materials Handling, Loading, and Unloading (6)

Warehousing (Pvt./Public) (5)

1.

Network Design Manufacturing plants, warehouses, material handling, distribution and aftersale services are typical logistics facilities. Network design is one of the prime responsibility of logistical management. It is required to determine the number and location of all types of facilities required to perform the logistics task. The selection of a superior locational network can be the first step towards competitive advantage. Logistical efficiency directly depends on the proper design of network and infrastructure.

2.

Information Technology: Two major areas that depend on information are: Sales Forecasting: It is done to estimate the future requirements of logistics. It helps inventory management to satisfy anticipated customer requirements.

Order Management: Customers order is very important in logistics. Logistics services are required for external and internal customers. External customers are those that consume the products or services and any trading partners that purchase products or services for resale. Internal customers are organisational units within a company.

3.

Transportation
It helps in positioning inventory geographically. There are three forms of transport, i.e., private carriage, contract carriage and public carriage.

Road Transport The Plan of Super National Highways Water Transport Shipping Companies

Gopalpur Seaport Project

National Waterways Air Transport

Just-in-Time (JIT) Transport Management

Seven results were selected for this study as benefits of JIT implementation: 1. Downtime reduction

2.
3. 4.

Inventory reduction
Workspace reduction Increased quality

5.
6. 7.

Increased manpower utilisation

Increased equipment utilisation Increased inventory turnover

Inventory Management
S. No. 1. Title ABC (Always Better Control) Basis Value of Consumption Main Uses To control raw material components and work -in -progress inventories in the normal course of business.

2.
3. 4. 5. 6. 7.

HML (High, Medium, Low)

XYZ VED (Vital Essential Desirable) FNSD (Fast, Nominal, Slow, Dead, et c.) SDE (Scarce, Difficult, Easy to obtain) GOLE (Government, Ordinary, Local, Foreign sources) SOS (Seasonal, Off season)

Unit price of material

Value of items in storage Criticality of component Consumption pattern of the component Problems faced in procurement Source of the material

Mainly to control pur chases.

To review the inventories and their uses at scheduled intervals. To determine the stocking levels of spare parts. To control obsolescence. Lead -time analysis and purchasing strategies. Procurement strategies.

8.

Nature of supplies

Procurement/Holding strategies for seasonal items like agricultural products.

Warehousing
Warehouses provide a key link in the physical distribution chain and, like other stages of distribution, they are being closely scrutinised by todays marketing managers. The location, size and capabilities of warehouses can profoundly affect a companys ability to satisfy its customers and deliver products and services profitably.
Purposes of a Good Warehouse Storage Breaking bulk

Consolidation
Unitisation

Types of Wareshouses There are two types of warehouses (i) private warehouses (ii) public warehouses.

Factors Affecting Warehousing Choice The warehousing decision is influenced by the difficulty of moving goods directly from the assembly line to buyers or public warehouses. The following factors have to be kept in mind when deciding the location of a warehouse:

Product type
Transportation cost Markets Rent Labour supply Taxes Geography

Competition.

Materials Handling Equipments

Material handling is such an important activity that it cannot be avoided in the

performance of logistics. Material handling activities should be minimised as it requires a very high capital investment and direct labour cost. The network of facilities forms a structure from which logistical operations are performed within a network design framework as per the requirement of customers. Materials handling system in logistics is designed under certain guidelines.
These are very important to assist management. These are: Equipment for materials handling and storage should be standardised The system should be designed to provide maximum continuous product flow as per the requirements of the company Handling equipment should be properly utilised.

Classification of Materials Handling Systems

1.

Mechanised Systems: These systems utilise a combination of labour and handling equipment to facilitate receiving, processing, and/or shipping. Mainly labour constitutes a high percentage of overall cost in mechanised handling. Semi-automated System: The main equipments used in semi-automated system are:

2.

3.

Automated Guided Vehicle System (AGVS)

Sortations Robotics. Automated System: Automated System attempts to minimise labour as much as practically possible by substituting capital investment by equipment.

Packaging
Packaging includes handling and storage of finished goods. It also emphasises on protection from loss and damage. Hence, we can say that logistics management is the framework of 7 RsRight quantity of the Right product or service to the Right place in the Right conditions at the Right cost and the Right time with Right impression. Excellence in each aspect of functional work is relevant and must be viewed in

terms of improving the overall efficiency and effectiveness of integrated logistics.

Logistical Integration
The logistical integration process is composed of two interrelated efforts, i.e., goods flow and information flow. Information from and about customers flows through the enterprise in the form of sales activity, forecasts and orders. This information is refined into manufacturing and procurement plans. A value-added inventory flow results in transfer of finished products to customers. The following are the major components of logistical operations: a. b. c. d. e. Physical Distribution Manufacturing Support Procurement Inventory Flow Information Flow

Marketing and Physical Distribution of Petroleum Products (An Indian Perspective)

Marketing and physical distribution of petroleum products in India is quite developed and most of it is under public sector organisations. Recently, the

government gave permission for the import and distribution of cooking gas and kerosene oil to the private sector.
Associated Units 1. 2. 3. 4. Indian Oil Corporation Ltd (IOCL) Bharat Petroleum Corporation Ltd (BPCL) Hindustan Petroleum Corporation Ltd (HPCL) Gas Authority of India Ltd (GAIL)

Physical Distribution Management Transportation and Warehousing

Definition Physical distribution management refers to: The management of all activities which facilitate movement and coordination of supply and demand in the creation of time and place utility in goods.

A more comprehensive definition of the physical distribution management

may be: The term physical distribution management employed in manufacturing

and commerce is used to describe the broad range of activities with the
efficient movement of finished products from the end of production line to the consumer and, in some cases, includes the movement of raw materials from the source of supply to the beginning of the production line.

These activities have been illustrated in Figure.

Location

Ware Houseing

Records Maintenance PHYSICAL DISTRIBUTION

Material Handling

Customer Services

Packing and Packaging

Transportation

Order Processing

Inventory Control

Transportation

Transportation system in an organisation should be: Efficient Economic Reliable Meeting customer needs in a timely manner Experienced Capable of meeting emergencies, special needs.

Transport Infrastructure
In order to be successful in managing a good transportation system, a company has to plan for a proper infrastructure like:

Land, building
Labour Packing places Roads

Lighting
Weight scales, handling equipments Receipt and despatch procedures Suitable manpower

Proper timing of operations, so that goods may be received or dispatched on time.

Adequate number of vehicles to transport the goods.

Modes of Transportation
The following modes of transportation are used keeping in mind the goods and places where they are to be sent and the volume of goods: 1. 2. 3. 4. 5. 6. 7. 8. 9. Railways Road Transportation Air Transportation Sea Transportation (Marine) Inland Waterways Ropeways Postal Courier Hand carts, Thelas, Rehres, Cycle Rikshaws,

10. Bullock carts, etc.

Distribution Agreement Specimen

(Between a fast moving consumer goods company and its distributor) From: M/s ABC+ Co New Delhi To M/s XYZ + Co Ghaziabad (UP) Dear Sirs, We have pleasure in appointing you as one of our Confectionery Division Distributors at Ghaziabad wef 21.05.98 on the following terms and conditions: ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Please signify your consent to the above terms and conditions by signing and returning to us the duplicate copy of this agreement. Thanking You, Yours very truly, Accepted For XYZ +Co. For ABC + Co. sd/sd/Partner Zonal Manager

Operating Instructions

Terms of Payment
As you are aware, the company supplies its goods to you on the basis of your ex-godown or shop. For your better understanding of the terms, we would like to give clarifications as under: a. Cost/Charges to Be Borne by the Company

b.
c. d.

Cost/Expenses to your Account

Interest on Delayed Payments Payment for Short/ Damaged Delivery

Warehouses(chpt-30)

A warehouse is a location with proper facilities where shipments are received

from a factory or production centre, broken down, reassembled, and shipped to the customers as per their orders , It is also defined as:
a building in which goods are stored, bonded or displayed for sale. Advantages

The warehouse provides the following main advantages

1. 2. Reduces distribution costs. Is easily accessible to the customers or is located near the market, resulting

in better and finer distribution.