Distribution & Sales Mgt_Unit V_Class

8/3/2019 Distribution & Sales Mgt_Unit V_Class

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4 May 2012 Deepak Singh- D & S M 14 May 2012 Deepak Singh- D & S M 1

DISTRIBUTION &SALES MANAGEMENT

SHAPING FUTURE SALESLEADERS


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4 May 2012 Deepak Singh- D & S M 24 May 2012 Deepak Singh- D & S M 2

PHYSICAL DISTRIBUTION SYSTEM & LOGISTICS

Distribution System: Decision Areas

Distribution Costs; Control & Customer Service

Logistics: Logistic Integration forcustomer satisfaction

Supply Chain Management

DISTRIBUTION & SALES MANAGEMENT

5


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4 May 2012 Deepak Singh- D & S M 3

CHANNEL MANAGEMENT DECISIONS

Selecting(No. of years; Other lines; Growth & profit records, Coverage &

Reputation; Type of clientele; Support Systems) SLG Pg 481

Training(Technical; installation/ servicing; selling; business records)

&Motivating

(Distributor & Salespersons)

(Trade margin; special incentives; harmonious rel; effective comm)

Evaluating(Sales Target achievement; Inventory levels; Selling Resources;

Market coverage; Back Office Support; Customer services)

FEED

BACK

Modifying(changes in consumer buying pattern, product,

competition, innovative distribution)


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PHYSICAL DISTRIBUTION SYSTEM & SCMPhysical Distribution involves planning, implementing, and controlling thephysical movement of materials & final goods from point of origin to point ofuse to meet customer needs at a profit.Its major objective is getting the Right goods to the Right place at theRight time at the Least cost.

Logistics involves entire supply chain. There has been increasing

importance of logistics because: Effective logistics is becoming a key to winning and keeping

customers.

Logistics is a major cost element for most companies (approx.15% of the products price).

The explosion in product variety has created a need for improved

logistics management. Information technology has created opportunities for major gains

in distribution efficiency.


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PHYSICAL DISTRIBUTION DECISIONSORDER PROCESSING

(How should order be handled)

WAREHOUSING

(Where stock should be located)

INVENTORY

(How much stock should be held)

TRANSPORTATION(How should goods be shipped)


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NATURE AND IMPORTANCE OF PHYSICAL

DISTRIBUTION AND MARKETING

LOGISTICS

Market logistic thinking starts with the marketplace and worksbackwards to the factory.

Logistics deal with

(1) outbound distribution - moving products from the factory tocustomers, and

(2) inbound distribution - moving products and materials fromsuppliers to the factory.

The logistics managers task is to coordinate the whole-channelphysical distribution system - the activities of suppliers,purchasing agents, marketers, channel members and

customers.


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MARKETING LOGISTICS & SCM

CUSTOMERS

RESELLERS

COMPANY

SUPPLIERS

Inbound logistics

Outbound logisticsReverse

logistics


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INVENTORY Vs SERVICE LEVELS

inventory

100%

Reorder point should balancethe risks of stockouts againstcosts of overstocking

Company needs to balance ordering costs vsinventory carrying costs


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A. Order Processing Ordering cost is the cost of placing an order with the supplier. Orders

can be submitted in many ways; by mail, telephone, or throughsalespeople.

Order processing systems prepare invoices and order information.The warehouse receives instructions to pack and ship the ordereditems. And bills are send out.

B. Warehousing Every company stores its goods while they wait to be sold. It can be

used for storage, bulk breaking, consolidation, etc.

A company must decide on:(1) how many,(2) what types of warehouses it needs, and(3) where they will be located.


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MARKETING LOGISTICS & SCMThe company might own private warehouses or rent space in publicwarehouses or both. Both has advantages and disadvantages.

Private warehouse; bring more control ties up capital is less flexible if locations change

Public warehouses, on the other hand,; charge for rented space

provide additional services for inspecting, packaging, shippingand invoicing goods but at a cost

offer wide choice of locations and warehouse type

Basic types of warehouses are: Storage warehouses store goods for moderate to long periods

Distribution centers are designed to move goods rather than just storethem. They are large and automated warehouses designed to receivegoods from suppliers, take orders and deliver goods to customers.

Material Handling equipments: Classified as mechanized system;semi-automated system; automated system.


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C. Inventory decisions:Inventory carrying cost includes cost of operating stores, insurancecosts, interest on capital locked, deterioration & wastage of material

Inventory decision involves:(1) when to order and(2) how much to order.

In deciding when to order, the company must think of the risks ofrunning out of stock and costs of carrying too much.

In deciding how much to order, the company must think of order-processing costs and inventory-carrying costs.

Just-in-time logistic systems are used by some companies in whichthe producers carry only small inventories only enough for a few daysof operations. Such systems result in savings in inventory carryingand handling costs.


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OPTIMUM ORDER QUANTITY & REORDER POINT

Total Demand (D): 20000 cycles per year with an avg price of Rs 700

Ordering Costs (S): Rs 4000 per order

Inventory Carrying (IC) cost: 5% of value of inventory

(i.e. 700@5%=Rs 35 per unit)

Cost of processing each order: Rs. 4000

EOQ = (2DS/IC)1/2 = 2138

Reorder point:

Demand per week (d)= 20000/52= 384

If lead time (T)= 4 weeks

Reorder point = 384 X 4= 1536

Hence the inventory policy is to order 2138 units whenever theinventory falls below 1536 units.


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TRANSPORTATION MODES

Rail

Cost-effective for shipping bulk products.

WaterLow cost for shipping bulky, low-value,

non perishable goods, slowest form.

TruckMost important carrier for consumergoods, flexible.

AirHigh cost, ideal when speed is needed or

distant markets have to be reached

PipelineCarry petroleum based products,

very low cost, requires little energy.

InternetWeb sites have products available, used

especially for services.

D. TRANSPORTATION: Cost Vs Benefits


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CHOOSING TRANSPORTATION MODE

Checklist for Choosing Transportation Modes

Speed.Dependability.Capability.Availability.Cost.FrequencyTraceability


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TRENDS IN SALES MANAGEMENT

1. Transactions to Relationships

2. Individual to Teams

3. Volume to Productivity

4. Management to Leadership

5. Local to Global

6. Technology


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ETHICAL ISSUES IN DISTRIBUTION &SALES MANAGEMENT

Pharmacy: Bitter Pill- Your doctors flout ethical norms

CEOs cash in on layoff wave


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CASE 8: SUBHIKSHA: FALL OF RETAILING GIANT

Trends Issues to ponder:

Afgars Global Acquisition
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OUR JOURNEY SO FAR Opening Discussions on Major Sales related news:

Atleast 30 so far Critical Thinking around Concepts:

Introduction to Sales Management / Sales Management Functions/International Sales Management/ Establishing Parameters of Firms Strategy/Personal Selling Approaches & Process.

Analyzing Sales Environment & Aligning Sales Organizations/ SalesForecasting/ Territory Design & Management/ Sales Budgets & Quotas Sales force Job Analysis & Description/ Hiring & Training Sales personnel/Compensating, Motivating & Leading Sales force/ Evaluating Sales force

Performance Examples & Cases Discussed:

NCR Corp./ Tupperware Brand Corp./ Fortis Healthcare/ MRF Tyres/ TuncanFetilizers/ Anchor Switches/ Titan Industries/ Tamplets on Recruitment;Selection; Induction; Physical Examination. Library Assignment:

Selling Theories (4)/ Circular & Leapfrog Route Pattern/ Motivation &Leadership Theories. Individual Assignments/ Group Assignments:

3 so far/ 1 per team Role Plays:

Selling Process/ Hiring Process (Interviews)
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Distribution & Sales Mgt_Unit V_Class

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