1. CH- 1 TO 7 SALES &
PGD SALES&MARKETING, TISS 15-16
2. History of Sales & its Evolution
In the Beginning People Bartered
(Around 5000 BC metal objects introduced as money)
1700’s-1800’s: The Industry Revolution changed the way we do
*Sales People often made exaggerated
*Bulk buying and selling concept introduced
Starting 1900’s : Sales People were encouraged to earn
1950’s-1960’s : Sales People held power over the customer.
* Fast Talking Salesman came knocking
* TV promotion ads & Print Media Ads
1970’s-1980’s : Spin & Solution Selling started.
* Customer became more involved.
* Align Solution with an Customer need.
* Demo Why it is better than the Competitor’s.
1990’s: Rise of Partnerships
Power Base, Target Account, Complex Selling
2000’s : Rise of Cloud based & Saas CRM Soln
Power Shifted from Salesman to Customer.
2010’s: Rise of Intelligent Sales Automation
Age of the Informed Customer
3. What is Distribution
Distribution is the process of making a product or
service available for use or consumption by a consumer
or business user, using direct means, or using indirect
means with intermediaries.
1) Intensive -basic supplies, snack foods, magazines and soft drink
2) Selective -more specialised goods that are carried through specialist
dealers, for example, brands of craft tools, or large appliances.
3) Exclusive - typical of luxury goods retailers such as Gucci
4. Channels (Sales) :
Consumer, Service & Industrial
Basically there are Two Channels :
• the vendor of a product or
service sells directly to the
• Direct sales approach requires
vendors to take on the expense of
hiring and training a sales team.
offloads sales activities to
individuals and organizations
known as intermediaries.
e.g value-added resellers
, consultants, wholesalers etc.
5. Consumer Channels
Manufacturers may reach out to consumers
either directly, i.e., without using distribution
channels, or by using one or more distribution
6. Consumer Channels Cont.
Manufacturer to consumer: Direct marketing includes
use of personal selling, direct mail, telephone selling and internet. Avon
cosmetics, Tupperware, Aqua guard and Amazon.com are examples of
companies engaged primarily in direct marketing.
Manufacturer to retailer to consumer: supply
directly to retailers rather than through wholesalers.
Supermarket chains and corporate retailers e.g Big Bazaar, Natures Basket
Manufacturer to wholesaler to retailer to
For small retailers with limited order quantities the use of wholesalers makes
economic sense. Wholesalers dominate where retail monopolies are not
Manufacturer to agent to wholesaler to
retailer to consumers: A company uses this channel
when it enters foreign markets. The agent contacts wholesalers in
the foreign market and receives commission on sales to sell to
larger number of customers.
7. Industrial Channels:
Industrial channels are usually shorter than consumer
channels. Direct selling is prevalent due to closer
relationship between the manufacturer and the customer,
as well as due to the nature of the product sold.
8. Industrial Channels Cont.
Manufacturer to industrial customers:
common channel for expensive industrial products like heavy
equipments and machines. Close & Continuing relationship
between the manufacturer and the customer. E.g JINDAL STEEL –
Manufacturer to agent to industrial
customer: A company that sells industrial products can
employ the services of an agent who may sell a range of products
from several producers on a commission basis. JINDAL STEEL –
AGENT – HERO CYCLE.
Manufacturer to distributor to industrial
customer: For less expensive, more frequently purchased
products, distributors are used. Distributors enable customers to
buy small quantities locally.
Manufacturer to agent to distributor to
industrial customers: The manufacturer employs an
agent rather than a dedicated sales force & agent may sell the
goods of several suppliers to an industrial distributor, who further
9. Service Channels
Distribution channel for services are usually
short, and are either direct or use an
agent. Since stocks are not held, the role of wholesalers, retailers or
industrial distributors does not apply.
Service provider to consumer or industrial customer: Close
relationship between service provider and customer means that service
supply has to be direct, for instance, healthcare, banks etc.
Service provider to agent to consumer or industrial customer: Agents
are used when the service provider is geographically away from customers
and when it is not economical for the provider to establish its own local
Service provider via internet to consumer or industrial customer:
Increasingly, services like music, software solutions and financial
information are being distributed via the internet. E.g e-tickets
10. Role of Channels
A manufacturer creates value utility in the
product or service but time and place utilities are
created by distribution channels.
Distribution channels help in the following
(i) Enhance Efficiency: Distributor/agents
(ii) Smooth Flow of Goods and Services:
(iii) Reducing Cost of Transactions:
(iv) Facilitate Search: Facilitator, Dealer
(v) Less Stocks of Goods: Broker, Facilitator,
(vi) Proximity to Consumers: Dealer, Serive
11. Primary & Secondary Sales
Primary Sales is some what easy to manage and monitor rigorously
with the help of different Sales and Distribution solutions available
but as far as the secondary sales is concerned there is risk that
companies have to depend on unverified assumptions.
PRIMARY SALES MEANS WHEN THE ORGANISATION SELLS
OR MAKE FLOW OF PRODUCT OR SERVICES TO THE
CHANNEL PARTNERS. EX : IN FMCG : F&C AGENTS,
DISTRIBUTORS , DEALERS EX : IN FINANCIAL SERVICE :
BUSINESS PARTNERS, FRANCHISEES.
SECONDARY SALES MEANS WHEN THE ORGANISATION
SELLS OR MAKE FLOW OF PRODUCT OR SERVICES TO END
USERS. EX : IN FMCG : RETAILERS , TRADE FAIRS ,
PROMOTIONAL SALES EX : FINANCIAL SERVICES : SALES
DIRECTLY BY COMPANY EMPLOYEES.