Sales and Distribution Management – Process

By: TutorialsPoint
https://www.tutorialspoint.com/sales_and_distribution_management/sales_and_distribution_manage
ment_process.htm
07/20/2020

Sales management in an organization is a business discipline, which focuses on the practical application
of sales techniques and the management of a firm’s sales operation.

It is done in an efficient and effective manner through planning, staffing, training, leading and
controlling organizational resources. Now we will explain each of these processes.

Planning

Planning can be defined as the process of decision-making in a systematic manner regarding the goals
and the objectives of an organization. In short, it is a process an individual or group will undertake in the
future and the

Sales planning includes strategy, setting profit-based sales targets, quotas, sales forecasting, demand
management and the screening, writing and execution of a sales plan.

A sales plan is a strategic document that outlines the business targets, resources and sales activities. It
basically follows the lead of the marketing plan, the strategic plan and the business plan with more
precise detailing on how the goals and objectives can be achieved through the actual sale of products
and services.

Staffing

Staffing is the process of capturing, deploying, and retaining a workforce of optimal quantity and quality
to create a positive impact on the firm’s effectiveness.

Staffing consists of the following three components −

Acquisition − It involves human resource planning to select what the organization requires in terms of
the numbers of employees needed and their attributes such as knowledge, skills and abilities, in order to
effectively meet job requirements.
Deployment − It includes decisions regarding how those recruited will be assigned to specific roles
according to the business demands. It also concerns the frequent appointment to more advanced jobs
through internal recruitment, promotion or reorganization

Retention − It is concerned with the management of the outflow of employees from an organization. It
combines both managing voluntary practices like resignation and controlling involuntary measures
whereby employees are handled out of the organization through redundancy programs or other types
of dismissal.

Staffing is basically used in the sphere of employment. It is applicable to more than one aspect of the
working surrounding. Staffing is also used in a specific sense to refer to the management of employee
schedules.

Training

The training program in sales management provides frontline sales managers with proven skills,
knowledge and tools they need to drive margin line performance.

This in-depth program involves self-assessments and covers the following four crucial sales management
abilities −

Managing sales performance

Sales coaching

Recruiting

Selecting sales "STARs"

Sales leadership

After the sales personnel are recruited, the company ensures the training, i.e., off the job and on job
training related to the skills, knowledge and job culture, which helps to meet the selling performance
and goals.

Leading

Leading is done by the person who possesses the leadership quality, the ability to motivate other people
and get the work done. Leading is an effective sales management force that invites the sales
management executive to use practical tools and cutting edge concepts to create an effective sales
management model.
This model is derived after a thorough research and consulting experience through cases, group
discussions, problem-solving exercises, computer-aided workshops, and communicative case
presentations.

The managers need to explore various perspectives on what does and does not work, and why. A leader
also monitors the work and explains the pro and cons as well as the ways to complete a task effectively
and efficiently.

Controlling

The task assigned to the sales personnel is monitored to find out whether the organization is achieving
its target or the goals as per the planning. Controlling is a process, which defines the scope of and leads
the actual performance against the planned goals of the organization.

Controlling dwells in verifying whether everything happens in conformity with the plans adopted,
instructions issued and principles authorized. Controlling assures that there is effective and efficient
utilization of organizational resources so as to achieve the planned goals and objectives.

Controlling judges the deviation of actual performance from the standard performance, notices the
causes of such deviations and helps in taking corrective actions.

The following figure depicts sales management with its functions and explains the role of each function.
All the roles are inter-related. An individual function cannot relate to work without the help from other.

Resources

Resources are one of the important parts of sales management, as, without resources, the planned
process cannot be implemented. Resources include the following −

Human Resource

Human resources can be defined as that section of a business or organization that deals with the hiring,
administration, and training of staff. In sales management, we can say it is the salesperson responsible
for selling/marketing of products or services.

Financial Resource
Financial resource is the capital available to a business for investing in the form of cash, liquid securities
and credit lines. Before going into business, a businessman needs to secure sufficient financial
resources.

This is required in order to be able to function efficiently and sufficiently well to promote success. It
includes the finance that the company needs to perform the activities like campaign, advertisement etc.

Materials

They are assets in the form of material possessions. Here, by assets, we mean anything of material value
or usefulness that is owned by an individual or a company. It includes the source from where the raw
material could be procured in low cost.

Technology

It is the application of science, especially to industrial or commercial goals and objectives. it also
includes the scientific technique and material used to achieve a commercial or industrial objective as
well as the machinery and the techniques that the organization uses for the end product.

It will now be clear why resources are important in managing sales.

Performance

Performance is the completion of a given task measured against known preset standards of accuracy,
completeness, cost, and speed. In a contract, performance is assumed to be the fulfillment of
accountability in a manner that releases the performer from all liabilities under the contract.

The last function is to review the performance. In this function, the leader reviews the past performance
and advises the Sales Personnel regarding the improvements required. It also involves checking that all
the functions are working in a proper way and there is no deviation in achieving the goals.

Sales method can be explained as one of several techniques used to recognize revenue specifically when
revenue and expense are recognized at the time of cash collection rather than at the time of sale.

Thus, we can say that Sales Methods are the different ways to sell the product or service. The Sales
Personnel help to sell the end products to the consumer. Some sales methods are given below.
Direct Sales

Direct sale is the sale of good/services involving person contact. It can be defined as the most important
method that is used, as most of the consumers prefer to purchase goods through a direct contact with
the seller, during which they understand the features and get to know about the needs and benefits.

The above illustration depicts the seller in the middle as A. Buyers are seen reaching out to the seller. It
is an example of direct sales where the buyers (in green) are approaching the seller in orange.

Example − Boeing airlines sells it air buses directly to the consumer with no intermediary involved.

Pro forma Sales

The term pro forma is a Latin word, which means, "as a matter of form" or "for the sake of form". It is
commonly used to describe a practice or document that is provided as a courtesy and that satisfies
limited requirements, conforms to a norm or doctrine, tends to be performed perfunctorily and/or is
considered a formality.

Pro forma financial statements are fashioned to reflect a proposed change, like a merger or acquisition
or to emphasize certain figures when a company issues an earnings announcement to the public.

It can be termed as the practice or document that is provided as a courtesy or satisfies the minimum
requirements which contain the details of the buyer and the receiver. It can also be termed as an invoice
of the product.

Agency-based Sales

In agency-based sales, the organization hires an agent on contract basis. That sales agent acquires the
right to negotiate the sale of the organization’s goods or services in exchange of a fixed commission or
fee. The commission is calculated on the basis of the percentage of the sales generated. Example:
Insurance Policy, opening of bank accounts etc.

Door to Door

In door to door sales, the sales executive walks from the door of one house to another to sell the
product or service. For this type of sale, the sales agent should be versatile and capable of quickly
creating a relationship with the customers.

The following are some major duties of sales personnel for door to door sales −
Striking a conversation with a stranger.

Getting the form filled and completing the administrative tasks.

Getting the payments processed from customers.

Building rapport with customers.

Providing training to new team members.

These are some of the major responsibilities that a door to door sales executive needs to manage in
order to maintain or increase productivity.

Hawking

Hawking is associated with a hawker (seller) who sells the goods that can be easily transported. A
hawker sells not-so-expensive goods on the streets by shouting in loud voice and chitchatting with the
passers-by to develop rapport and convince them to buy his goods.

In the above figure, we can see hawkers selling products on the roadside. In India, there are 10 million
street vendors, Mumbai and Delhi contributing the most to the number. Many consumers also prefer
street shopping because of the low price of the products.

B2B

B2B selling is known as Business to Business selling. It refers to a situation where one business makes a
transaction with another.

B2B occurs where −

Factory produces goods and sells them to wholesalers.

Example – Food products manufacturers, shoes, bags, etc.

Organization outsources its process to other companies to reduce the labor cost.

Example – BPO (Business Process Outsourcing)

Example – Tata Steel purchases goods from its ancillary companies

Electronic Sales

Electronic sales or e-Commerce is known as trading of goods or services through the internet. The figure
given below depicts how e-Commerce works. We can conclude that the e-commerce business has been
increasing day by day due to easy access and simplicity.

E-commerce businesses may employ some or all of the following −

Online shopping web sites for retail sales direct to consumers.

Providing or participating in online marketplaces, which process third-party business-to-consumer or

Business-to-business buying and selling.

Gathering and utilizing demographic data through web contacts or social media.

Marketing to prospective and established customers by e-mail or fax (for example, with newsletters).

Engaging in prevailing market for launching new products and services.

Thus, e-commerce can be defined as the business conducted through the application of computers,
telephones, fax machines, barcode readers, credit cards, automated teller machines (ATM) or other
electronic appliances (whether or not using the internet) without the exchange of paper-based
documents.

Request for Proposal

Request for proposal is a type of bidding procedure by a company who is interested in procurement of
goods or services from potential suppliers to submit business proposals. Given below are the salient
features of a Request for Proposal.
It informs the suppliers that a company is looking to solicit and inspire them to make their best effort.

The company has to provide specifications regarding the proposal to purchase and if the analysis
regarding the requirement is prepared, accordingly it can be easily integrated into a Request document.

It also signals suppliers that the selection process is competitive.

It ensures that suppliers respond factually to the identified requirements.

The selection process is structural so that there is no partiality in the process.

Thus, a request for proposal is a proposal that a company ensures for procurement of products. The
above points enlist the functions of a general request for proposal used by a company.