Transcript Slide 1

Chapter 11
Sales, Distribution, and
Customer Relationship
Management
McGraw-Hill/Irwin
Introduction to Business
© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
Learning Objectives
1. Understand the relationship between
marketing, distribution, sales, and personal
selling.
2. Discuss the main distribution channels a
company can use to reach customers and the
factors that determine distribution channel
choices.
3. Differentiate between different approaches to
personal selling and explain why the nature of
a company’s products determines the selling
approach.
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Learning Objectives
4. Outline the major issues and problems that
arise during each stage of the personal selling
process.
5. Explain how customer relationship
management can improve the profitability of
the sales and distribution process.
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Distribution and the Sale of
Products to Customers
• Distribution
- the selection of the distribution channels to
reach and deliver products to customers
most efficiently and effectively
• Distribution channel
- the specific method a company uses to sell
and deliver its products to customers
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Types of Distribution Channels
• Company-owned or licensed distributors
• Wholesalers
• Retailers
• Direct distribution
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The Four Main Product
Distribution Channels
Figure 11.1
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Sales and Distribution Activities Involved in
Managing the Upstream Value Chain
Figure 11.2
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Company-Owned or Licensed
Distributors
• Personal selling
- direct face-to-face communication by
salespeople with existing and potential
customers to promote a company’s
products
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Company-Owned or Licensed
Distributors
• Downstream value chain
- all of the activities related to managing a
product from the time it is made to the time
it is delivered and used by customers
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Company-Owned or Licensed
Distributors
• Licensed distributors or dealers
- independent companies that buy the rights
to distribute, sell, and service a company’s
products within a specific geographical
area
• Exclusive dealerships
- distributors that are licensed to stock and
sell only one brand of a product
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Question?
What are intermediaries who sell other
companies’ products to the final
customer?
A. Wholesalers
B. Retailers
C. Distributors
D. Merchants
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Wholesalers
• Wholesaler
- an intermediary or broker that buys
products from manufacturers and then
resells them to other companies, such as
retailers, which in turn distribute them to the
final customer
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Wholesalers
• Final customer
- the person who
actually uses or
consumes a
product
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Retailers
• Retailers
- intermediaries who sell other companies’
products to the final customer
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Direct Distribution
• Direct distribution
- distribution channels used to deliver and
sell products directly to the final customer
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The Distribution Mix and How It’s
Chosen
• Distribution mix
- the combination of channels a company
selects to place, promote, sell, and deliver
its products to customers
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Factors Affecting the Choice of
Distribution Mix
• Product characteristics
• The importance of the purchase to the final
customer
• The need to customize a product
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Product Characteristics
• Complex products
- products with qualities and characteristics
that make them difficult for customers to
evaluate
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Factors Affecting the
Distribution Mix
Figure 11.3
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The Choice of Distribution Mix
Figure 11.4
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Approaches to Selling Complex
Products
Figure 11.5
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Selling Complex Products
• Technical selling
- selling that requires a company’s sales
representatives to impart detailed technical
information to their customers
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Selling Complex Products
• Missionary selling
- selling that occurs when a salesperson
educates customers, builds goodwill, and
performs promotional activities to
encourage them to purchase a product at a
later date
• Agent
- a person, or intermediary, acting on behalf
of final customers
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Selling Complex Products
• Creative selling
- selling that requires salespeople to
combine their technical knowledge and
personal selling experience to craft creative
and unique ways to better meet the needs
of their customers
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Selling Complex Products
• Connoisseur
- a person with immense knowledge about a
particular type of product and who can
identify the qualities
that make it valuable
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Approaches to Selling
Standardized Products
Figure 11.6
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Selling Standardized Products
• Trade selling
• Retail selling
• Telemarketing
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Selling Standardized Products
• Trade selling
- selling done through intermediaries, such
as wholesalers and retailers, which
manage the sale of a company’s products
to other companies
• Retail selling
- selling to the final customer – the person
who buys a product for his or her own use
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Selling Standardized Products
• Telemarketing
- a sales method used to contact prospective
customers exclusively by phone
Find out how to use telemarketing at
Telemarketing.com
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Stages in the Selling Process
• Prospecting for customers
• Making the initial contact
• Making the sales presentation
• Handling objections
• Closing the sale
• Doing after-sales service, follow-up, and
information gathering
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Question?
What are potential customers for the goods
and services a salesperson is offering?
A. Patrons
B. Sponsors
C. Consumers
D. Prospects
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Prospecting for Customers
• Prospects
- potential
customers for the
goods and
services a
salesperson is
offering
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Making the Initial Contact
• Cold calls
- the first contact a salesperson has with a
customer, either by e-mail, phone, or in
person
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Doing After-Sales Service, FollowUp, and Information Gathering
• Buyer’s remorse
- a phenomenon that occurs when a
customer believes he or she made a poor
purchasing choice
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Customer Relationship
Management
• Customer relationship management
system
- an IT-based knowledge management
system designed to track a company’s
customers – what they are buying, how
satisfied they are, and how their demands
are changing
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Components or Modules
of a CRM System
Figure 11.8
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Video: New Belgium Brewery
•
•
NBB achieves efficiencies through its
supply chain management processes
where it fully utilizes its facilities by
employing machines and technology and
reducing the need for direct labor.
What are the key components involved in
comparing manufacturing to service
organizations?
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