Question

Describe how firms should approach the topic of distribution and sales

Answer 1

Sale of products is the transfer of ownership, and, delivery of the service or the product to the consumer. Post manufacturing, it forms the beginning of the latter part of supply chain. It is the direct contact that a firm makes with the customers. It is responsible for meeting the promises made by the marketing function to the consumer. Marketing gets customers, the sale of products is for service, and, retention. Distribution is about 'Place' in the 4Ps. The organizations through which a product must pass between its production, and, consumption comprise the distribution channel of the product.

Distribution includes

• Warehousing
• Order administration
• Inventory Control
• Material handling
• Outbound Transportation
• Packaging
• Data Processing

Sales Management involves

• The selling process: training on selling skills, and, selling strategies
• Salesforce automation
• Managing sales information
• Sales organization
• Management of sales quota, and, sales territory
• Training, and, evaluation of the sales force
• Selection, and, recruitment of sales force
• Salesforce compensation, motivation, and, control

Distribution management also includes:

• Rural distribution channels
• Designing customer-oriented marketing behaviour
• Retail Management
• Managing franchisees, and, wholesalers
• International channels of distribution

When an organization is approached by a distributor, the organization can test the market. As the distributor is already selling similar products in the particular market, the distributor is an appropriate partner. The distributor can be a temporary market entry vehicle. The organization can avoid risk by making a minimal financial commitment to the endeavour. It can delegate the sales, and, marketing responsibility to the independent distributor. MNC can buy back the distribution rights, and, set up a distribution subsidiary if dissatisfied with the performance after initial sales growth. The former distributor can dump the products into the market, disrupting the business, and, decreasing profitability.

Another strategy that the organization follows is that it can choose a market for itself. The organization will now look for distributors with culture, and, strategy compatibility with its own. The distributors and the organization's management can initiate marketing, and, development projects. There is uncertainty about the market's prospects, but, the firm makes a substantial commitment of market resources. It develops the market with the local distributor, and, retains control of marketing strategy. The MNC can exploit its competitive advantages in the local market, as the distributor will furnish detailed financial performance, and, market data. It leverages synergies, and, economies by building links amongst distributors. The team, and, the retail marketing organization maximize global share.