Sales distribution manual

This industry primarily involved in logging,. This industry primarily involved in. This industry primarily involved in broadcasting of aural programs. Don't feel like calling? Net Book Now. By Venkadesh Narayanan. In: SOP. Written by Venkadesh Narayanan Venkadesh is a Mechanical Engineer and an MBA with 30 years of experience in the domains of supply chain management, business analysis, new product development, business plan and standard operating procedures.

Leave a Reply. Content Title Description. Subscribe To Get Inspiration. Search form. Venkadesh Narayanan - Mar 17, Venkadesh Narayanan - Mar 18, Bharath Ravi - Jun 3, SOP Team Mar 15, SOP Team Mar 13, Related Post. Now we shall see the importance of sales organization. The sales of the company depend on the sales anticipation. The sales will increase only when the consumer purchases the goods or services. Therefore, the company has to plan the sales according to the consumer need and want, meaning where they want the product, what they want etc.

The planning and development is done accordingly to satisfy the need of consumer. The demand of the product is created to lead to sell in the market. When a product is manufactured in the factory, it is not sold automatically. Salespersons push the product to consumers. But even they cannot force the consumer to buy the product. This need is created by the selling skills, promotions through advertisements, etc.

This is an important step where the salesperson has to answer the calls and queries of the customers, receive orders and make the product ready as per the demand of consumers. Finally, the products are packed and dispatched as per the expectation of consumer; all these are imperative and effective tasks. Sales cannot always be done for cash. Bulk sales are made on credit. After the credit sales have been done, the organization has to collect dues. It is a very challenging task as the salesperson has to retain the business and still get the task done.

Every organization wants best sales personnel to enhance the sales. This depends on training. The organization has to select, train, motivate, monitor and control its sales personnel.

Here the company has to make an investment in sales personal. An organization is designed in a manner where we can identify the work or activity performed by an individual or group. The roles and responsibilities are defined, which helps in building relationships to enable people to work effectively and efficiently.

This helps in achieving the goals of the organization. Functional type of organization is divided and classified on the basis of the functions performed.

The following illustration shows a functional type organization. This depicts the functional type organization. We will now discuss the advantages and disadvantages of this type. By this, we can expect each function is specialized in its activity. In general, functional type of organization is suitable where the organization structure is small having limited products.

This type of division is made according to the products. The organization divides the departments based on the products. Where the organization has many products and it can divide the departments according to the products.

When the products of an organization are more technical oriented, the organization can divide the departments according to the products as the salesperson will be efficient and effective to discuss the product with the customer in an effective way. According to consumer specialization, the departments are divided on the basis of the costumers to whom the products are offered. Most of the time, market appearance plays an important role in knowing the consumer needs and to divide the departments accordingly.

In this type of organization, departments are divided accord ing to the attributes of areas. They can also be divided geographically. The following illustration shows the layout of the area type organization. Thus, the company can understand the customer psychology and perception better. Sales quota can be defined as the sales target, which is assigned to any sales unit for a particular duration of time; here sales unit can be a person, region, distributor etc.

Sales quota provides a target to be achieved in particular duration, which increases the productivity. Commercial firms set up sales quotas in order to improve sales volume and increase the net profit of the organization. It can also be viewed as a standard to determine the effectiveness of sales unit.

Sales quota is determined using various factors such as market potential, marketing method, past sales record etc. For planning sales quota, control of sales operations can be an effective method. Sales quota is imposed in an organization to fulfil various objectives required to increase the sales of product and maximize profit. These are some of the primary objectives of sales quota for an organization.

Further, sales quota can be divided in different types according to the requirement. Sales quota is divided into four different categories according to the difference in forecasting and cost allocation procedure, management goals, selling issues and executive decision. Sales and volume quota is allocation of sales quantity for salesperson, geographical regions, distribution outlets etc.

This quota can be implemented according to sales performed or revenue earned by respective units. The combination of both the criteria can also be used for the implementation of this quota. The quantity of sales and revenue earned can be allocated to the respective unit salesperson, region and it has to fulfil at least one of them.

Financial and budget quota is used to determine and restrict expenses on sales to attain desired net profit planned. It is implemented on various segment of sales organization to control the expenses accordingly. The aim of these quota is restriction of expenses for making sales so that profit can be increased.

In competitive market, the effective performance of sales group is required. It can act as a long term benefit for the organization. Organizations set up activity quota for sales force for efficient results. These can be performed by allocating sales target to salespersons.

Activity quota is planned on the basis of these activities performed by the salesperson. By setting quota for the activities, efficient performance and controlling can be managed. It depends on product type and market condition, issues related to sales of product and the challenges faced during the sales of a product. Organizations set up quota with combination of sales volume and activity quota in order to increase sales. Sales quota for any unit like salesperson, region, etc.

Territory potential method directly relates territorial sales potential to sales quota. Sales potential represents the maximum market size of the product; size of the market reflects the sales potential.

This method gives precise results if territorial sales potentials are used with a combination of territorial design. Past sales experience method determines the sales quantity based on the previous year sales. Managements of organizations set this up by increasing some percentage from the previous sales record.

For more precision in the approach, managements most commonly use an average of several years as a base line for the measurement. In this method, sales quota volume is determined by the management, but it is more likely to be a guess.

The management decides the sales quantity and no fixed procedures are involved. In this method, the sales quota is determined by the salesperson of the organization. Through this approach, a more relevant sales estimate can be maintained, which can be achieved by the salesperson. Salesperson have better knowledge of the market conditions, so they can set the target as per their standards, and if the standards are set by the salesperson themselves rather than imposed by the management, their fulfillment is more likely possible.

For example, if a salesperson has to receive 20, as salary, which can be received as 10 percent commission of the sales amount, then the salesperson has to sell products worth , A sales territory consists of a group of consumers or a geographical area assigned to a particular salesperson. The area allocated to the salesperson contains the present and the potential consumers of the organization.

After the allocation of sales territory, the sales manager can be in a position to contest between sales efforts and sales opportunities. It would be very difficult for the sales manager to monitor the total market as it is too large and unmanageable by one person.

Hence it is divided as per territories to manage effectively and efficiently and control the sales force. The salesperson does not only pay attention to the area but also the consumer prospects.

Thus, a sales territory can be known as the grouping of customers and prospects, which is assigned to an individual salesperson. Sales territory is for the big companies having huge market share. Small and medium scale companies do not use geographically defined territories.

The market share is not so high to divide into territories. The main motive of establishing sales territories is to simplify the planning and controlling of the selling function. According to the division of sales territory, the activities are assigned to salesperson. This helps in market coverage, rather than the salesperson selling the product according to his ambition. It helps the sales manager to monitor and take updates accordingly from different sales managers. Sales territories help in doing so because the task is assigned to the salesperson and he is responsible and answerable for the same.

Once the task is assigned, frequent checks are done to monitor the calls; it helps to determine the work of each salesperson. If the sales manager finds the workload for a particular person is more, the work is divided and reassigned equally. This creates motivation and interest to work. In an organization, the sales territory is compared from the previous years to current to find out the difference, i. It helps to work on the difference accordingly. This is done with the help of sales territory as the activities are assigned in a proper manner and gathering of data and evaluation becomes easy.

By this comparison, we can evaluate and determine where the sales force is contributing for high volume of sales. As we know, salespersons have to spend most of their time on road to sell the products but if the sales territory is designed in a proper way, the salesperson can spend more time with the customers present and potential. This helps in building rapport and understanding the needs better. Sales of a company can increase when a customer receives regular calls and the salesman has to visit the customers on the basis of calls.

The salesman and the customer get time to understand each other and resolve their issues regarding demand and supply. This also helps in increasing the brand value of the company. Once the geographical areas are decided, the company gets a proper picture as to the areas that can be assigned to the salespersons. The selling cost of the company gets reduced and leads to increase in profits.

There is also an advantage to the salesperson for few travels and overnight trips. The performance of a salesperson can be measured on the basis of calls made to customers, the routes taken and the schedules. In this case, the salesperson cannot deny if the results are not positive.

The salesperson has to work on the same routes, schedule and everything is predetermined. This results in better control of the sales force. If the sales territory is designed properly, it helps the management to perform other marketing functions as well. It is easy to perform an analysis on the basis territory as compared to the entire market. The research done by the management on marketing on territory basis can be used to set sales quotas, expenses and budgets.

The results can be satisfactory if the salesperson helps in advertising, distribution and promotion when the work is assigned on territory basis instead of the market as a whole. At the time of designing the territory, the manager has to keep in mind the size of the territory that is going to be assigned to the salesperson. It should be neither too small nor too large.

If the territory is geographically too small, the salesperson would keep calling the same customers repeatedly. In contrast, in a too large geographical area, the salesperson will not be able reach the scattered customers as most of his time will be utilized in travelling. Hence the territory should not be too large or too small; it should be such that all potential customers can be visited as per the requirement.

The procedure of designing sales territories is the same for all companies, whether setting the territories for the first time or revising the existing territories. As the name suggests, the management has to select a geographical control point. The control points can be classified on the basis of district, pin codes, areas, states and cities. At the time of selecting the control unit, the management should aim to select as small a control unit as possible.

If the control unit is too large, the areas with low sales potential will be hidden by the areas with high sales potential. The areas with high sales will be concealed if the areas with low sales potential will be included. In case of any changes required in future, they can be done smoothly. This part of territory had earlier been assigned to Mr. It can be done easily, as the unit is small. If the sales potential for the company is located in urban areas, the city can be used as a control point.

But there are some disadvantage also, as the adjacent areas to cities also possess sales but they are covered by paying additional cost to the salesperson. The control point can also be set up according to the trading areas. It is a sensible decision to set up the control point according to the trading area. It is based on the flow of goods and services rather than economic boundaries. Trading area can be considered as the geographical region that consists of a city and the surrounding areas; this region works as the main retail or wholesale center of the region.

Generally, the customers from one trading area do not go outside the boundaries to buy goods. Even an outsider customer will not enter the trading area to purchase a product. The main advantage of the trading area is that the salesperson is aware of the buying habits of the customers and the pattern of trade. It also helps the management in planning and control.

The control point can be decided on the basis of states. A state may be a capable control unit when the organization has small sales force that is covering the market selectively. The next step after selection of geographical control unit is to plan an audit of each geographical unit. The reason for performing this audit is to analyze the customer prospects and find out the sales volumes for each account. Accounts can be recognized by names; in recent times, there are many sources to pull out the data, for example, the yellow pages.

We can also collect the data through the past sales of the company. After collecting the data, the next step is to estimate the sales for each geographical unit. The sales manager estimates the sales volume that the company is expected to get in the following years. There are many factors to contribute such as competition, advantage of the company in that geographical area, etc. Now there are many software available for calculation and the final result. This can be done much quickly as compared to when it is done by the sales manager manually.

After the sales potential estimates have been taken, the system divides into three types, which is done through ABC analysis. This is one of the most common analyses used by companies. The salesperson workload analysis is done on the basis of the time and effort taken by a salesperson to cover a geographical unit. The most important factor is the duration of calls. These depend on the customers and issues. If the problem is severe, it may take time to resolve and tackle the question from customers.

Another important factor is the travel time; this differs from one area to another depending on the factors transportation, condition of roads, weather condition etc. In the first three steps, the sales manager works on the geographical control units; now he has to combine the control units into territories.

Initially the sales manager used to manually develop a list of territories by combining the control units. It was a time consuming procedure and also the result was not accurate, as it was done manually.

Now computers handle this activity and complete it in a much shorter period of time with accurate results. The operational error is reduced here.

All the salespersons cannot be considered equal and competitive; it depends on the basis of experience and skills. The salespersons are assigned territories by the sales manager depending on the basis of sales. The geographical areas with high sales are assigned to the salesperson with experience, who can handle the workload. The new or less effective sales people are assigned the areas with less sales potential.

The sales manager has to decide the shape of the territory. The territory shapes affects the selling expenses and also helps for sales coverage. There are four types of shapes, which are used widely.

This shape is suitable for the territories, which contain both the urban and non-urban areas. The radius starts from the most populated urban center. Wedges can be divided into many sizes and the travel time can be maintained by balancing between the calls of urban and non-urban areas. When the clients are distributed evenly throughout an area, the sales manager chooses the circle shape. The salesperson starts from the office, moves in a circle of stops until he reaches the office again.

This helps the salesperson to come near to the customer as compared to the wedge. In this shape, the salesperson begins from the last point from office and reach out the customers while coming back to the office. While going, the salesperson does not stop anywhere and attends calls in one direction while coming back to the office.

When the accounts or client are located randomly in a geographical area, the cloverleaf shape is used. This type of shape is more often found in industrial markets than in consumer markets.

Once the sales territory has been designed, the last step is to assign sales personnel to the territories. All the salespersons are not equal in terms of ability, initiative, etc. The sales manager must rank the salespersons accordingly before assignment of territories. The ranking should be done on the basis of ability, knowledge, communication, etc.

The other points, which the sales manager should look at, are the cultural characteristics of the salespersons and how they match with the territory. We can now conclude that the goal of a sales manager is to assign the geographical area to the salesperson who would maximize the territory sales and where the customers are comfortable with the salesperson. Establishing the sales territory helps in planning and controlling the sales operations. A well designed sales territory helps to increase sales volume and market coverage and provide better services to customers.

Once the sales territory is allocated to the salesperson, he is responsible for making things happen. Personal selling can be termed as the oral presentation given by the salesperson to one or more than one consumers face to face to sell the product or service.

Personal selling is a highly peculiar form of promotion. It is mostly two-way communication, which not only involves a particular individual but also social behavior. The intention is to deliver the right product to the right customers. Depending upon the complexity of product, personal selling plays an important role. Industries manufacturing technical products like laptops, computers, digital phone, gadgets, etc.

The reason behind this is to explain the features of the product, tackle the customer queries and provide the best customer service. The competition in the market has increased today and therefore the importance of the salesperson in the organization.

Salespersons are also called salesman or salesgirl or sales representative and their payment is made as the commission to push the product in the market by motivating the customer through oral conversation. The consumer wants all kinds of goods and services in the market but lack of interest keeps them away from making decisions or purchasing products. This is where the salesman needs to act as a catalyst and explain the product or service to the customer. This helps the consumer to make a decision.

In case of technical products, the salesperson plays a more vital role as compared to the promotions. It becomes difficult for the customers to make decision while purchasing high value products with complex nature. The salesperson helps the customers by making personal contact with them and making them understand the quality and utility of the product. The reason behind setting personal selling objectives is to make decision on sales policies and personal selling strategies, which helps in promoting the product.

The objectives are set for long-term, as it becomes the important element for qualitative personal selling objectives. The objectives can also be quantitative if they are short-term and it could be adjusted from one promotional period to another.

The quantitative personal selling objective is related to sales volume objective. Hence, the sales volume objective should also be explained. In some situations, personal selling becomes more relevant. These are the four situations where personal selling is important. This will help the salesperson to spot the customers and provide product knowledge through face to face presentation.

In our day to day life, we come across different types of selling situations. This depends on the individual selling styles because of the marketing factors. The activities of the salesperson differ as per the situation. In case of soft drinks, the salesperson is not required to explain the significance or the nature of product but in case of computers, the salesperson has to clarify all the technical requirements. The categorization of the salesperson is done on the basis of selling styles, creative skill required in the job, complexity of the product etc.

As the name suggests, the job of the delivery salesperson is to deliver the product; the selling responsibility is secondary. The person standing behind the counter is known as inside order taker. He does not help the customers much with suggestions. The main purpose is to provide the product requested by the customer. The salesperson does not have the permission to promote an order. Their primary job is to develop goodwill and educate the customers about the products.

This type represents those products or services sold to consumer, which are highly priced and need huge investment to purchase. Due to high capital investment by the customer, the salesperson cannot put much pressure to sell.

The salesperson should have a thorough knowledge regarding the product and the patience to discuss and advise the features and advantage of the product.

During the sales process, the salesperson has to be creative. He should maintain the interest with customer without exerting much pressure on the client. The most important character of the salesperson should be the knowledge relating to the product. The salesperson should have a detailed knowledge regarding the product features, benefits, disadvantages, etc. Most of the people do not have the required technical knowledge and easily agree to the points of salesperson but there are few customers having knowledge that may influence the decision of purchasing the product.

The salesperson should satisfy these types of customers by explaining the product features, installation etc. The salesperson should be well trained to tackle the questions of customers and provide relevant knowledge. In this category, the salesperson has to sell the product to other business, industry or government organization etc. The sales process is short as compared to business to customer sales.

The salesperson has to be aggressive and highly motivated for the follow up and maintenance of accounts. Direct sale of product involves selling the products and services to the final consumers. The sales process is short and closed in a short period of time. There are many products available in market for direct sales; hence the salesperson is trained to close the deal in the first visit because the consumer will either purchase the product or switch to its competitor.

The selling process consists of several steps; there are few basic steps, which need to be followed for all types of products. The selling process can be for short time or long time, depending upon the nature of the product. A product, which needs huge investment, may take longer time to complete the selling process whereas in case of daily products where the customer is aware of the nature of the product, the selling process ends in shorter time. However, for heavy machinery, it may take time to present the technical nature and explain the product; it takes more than one visit to complete the selling process.

The initial step of selling process starts with prospecting or searching for potential customers. Finding the prospect is not an easy step for a sales person because consumers would not even like to listen to the presentation regarding the product they do not need. In few consumer goods, the identification of customers comes from sources like friends, relatives, colleagues etc. The following are some of the best sources.

For a salesperson, it is very easy to sell the products to an existing customer instead of selling to the new customers. The salesperson reaches many new customers with the help of existing customers. The salesperson selling the product to existing customers asks to provide referral to friends or relatives and the salesperson reaches the new customers. This chain goes on and on. The sales process starts from introduction but in this case, the rejection rate is high.

The salesperson can also collect the information through membership directories of trade associations, social organization etc. Announcement is advance, before the exhibitions starts, is very helpful to attract more customers. After the salesperson has identified the potential customers, he should find out if they are valid prospects. After finding the valid prospects, the salesperson has to give the presentation. There are several approaches for qualifying customers and the prominent approach is MAN, i.

The consumer or the prospect should be able to pay money in return of the product. This is important while dealing with government agencies, corporate etc. Once the prospect has been identified and qualified as discussed in first step, the salesperson has to prepare for the sales of product or service. This step involves collecting all the information important to learn about the prospects and their needs.

Call Planning includes a particular planning sequence. The salesperson calls the customer and explains the objective of the call and explains the product to makes appointments. The first objective of the salesperson is to get an order from the customer. Some objectives may also be required in the mid-of-the-call progress, depending on the call.

The salesperson has to develop a strategy and plan accordingly to achieve the objective or goal. The salesperson should be very careful while checking the background of the customers and obtaining details. This helps to frame a strategy and develop a plan. The calls made by salesperson are costly, so they have to take prior appointment. In this step, the salesperson has to give the presentation regarding the product to the customer.

The presentation should be clear and understandable by the customer. It should also be interesting to keep the customer involved in the conversation. In this approach, the salesperson gives the presentation with the help of slides in a structured manner. He also explains and clears the doubts of the customers. Example: Life Insurance. The salesperson reads out the company brochures and adds comments as per requirement or queries from the client. Example: Pharmaceutical products. The company presents its message, which is short and crisp, and which can be easily memorized by the customer.

One of the most attractive, effective and often-used approaches is organized presentation. In this approach, the sale person covers the four steps, i. The salesperson and the customer together try to resolve the problems.

Hence this approach is also known as problem solving. This type of presentation is not well focused many a times; some points are missed and time is wasted. Thus, we can conclude that the presentation to the established customers should be done by an effective salesperson. The salesperson has to struggle to sell the product to the customers.

During the sales process, the prospects raise objections, which can be stated or hidden. Prospects may state the reason for objections and give a chance to salesperson to answer. This is an absolute situation because the prospect is informed regarding the objections. Unfortunately, in many cases, the prospects do not provide the reason for objection of the product. They hide their real reason for not buying the product. Many times, the objection is due to high price of the product. Also, in many cases, the prospects do not understand the technical aspects and are misinformed.

The salesperson should provide additional information in this case. Now we can conclude that the objection can be resolved by providing an alternative product to the prospects. After answering the objections made by prospects, the salesperson asks for the prospect to order the product. If the prospect does not agree to buy the product, the entire effort gets waste.

In this technique, the customers get an incentive for immediate buying action. The salesperson informs regarding the benefits of the product to the prospects. Here, if the customer has made a purchase of Rs. This helps the company to sell two extra products — one for Rs. This is one of the simplest techniques to close the sales. This happens when the buyer has positive approach to buy a product.

The salesperson summarizes the important points that were made prior to sale. The salesperson offers the products; if required, shows the demo. A good salesperson makes sure that he has completed all the steps during sales process. Thus, closing is an important step in sales process. The other steps are meaningless without closing.