Introduction To Sales & Distribution Management

INTRODUCTION TO SALES &
DISTRIBUTION MANAGEMENT
FUNCTIONAL AREAS OF MANAGEMENT
FUNCTIONAL
AREAS OF MGMT
LOGISTICS MARKETING
FINANCE HR IT PRODUCTION
(DISTRIBUTION) (SALES)
WHAT IS MARKETING ?
According to management guru Peter Drucker,

“The aim of marketing is to make selling unnecessary.”
Marketing must be understood not in the old sense of making a

sale—“telling and selling”—but in the new sense of satisfying
customer needs.
The simplest definition of marketing is: Marketing is engaging

customers and managing profitable customer relationships.
MARKETING
&
SALES
Chp 1: Marketing: Creating Customer Value

and Engagement
Marketing Management Orientations
• Marketing management wants to
design strategies that will engage Societal
Productio
target customers and build profitable Marketing
n Concept
Concept
relationships with them. This is done
by adopting marketing management
Marketin Product
orientations. g Concept Concept
• There are five alternative concepts

Selling
under which organizations design and Concept
carry out their marketing strategies
namely-
❑ Production Concept
• The production concept holds that consumers will favour products that are available
and highly affordable.
• Therefore, management should focus on improving production and distribution
efficiency. This concept is one of the oldest orientations that guides sellers.
• The production concept is still a useful philosophy in some situations.
• Companies adopting this orientation run a major risk of focusing too narrowly on
their own operations and losing sight of the real objective—satisfying customer
needs and building customer relationships.
• Example: both personal computer maker Lenovo and home appliance maker Haier
dominate the highly competitive, price-sensitive Chinese market through low
labour costs, high production efficiency, and mass distribution.

and Engagement
❑ Product Concept
• The product concept holds that consumers will favour products that offer the most
in quality, performance, and innovative features.
• Under this concept, marketing strategy focuses on making continuous product
improvements.
• Product quality and improvement are important parts of most marketing strategies.
• However, focusing only on the company’s products can also lead to marketing
myopia.
• Innovations in the scientific laboratory are commercialized and consumers get an
opportunity to know and use these products. This is called "Technology Push
Model".

and Engagement
❑ Selling Concept
• Many companies follow the selling concept, which holds that consumers will not buy
enough of the firm’s products unless it undertakes a large-scale selling and promotion
effort.
• The selling concept is typically practiced with unsought goods—those that buyers do
not normally think of buying, such as life insurance or blood donations.
• These industries must be good at tracking down prospects and selling them on a
product’s benefits.
• It focuses on creating sales transactions rather than on building long-term, profitable
customer relationships. The aim often is to sell what the company makes rather than to
make what the market wants.
• It assumes that customers who are coaxed into buying the product will like it. Or, if
they don’t like it, they will possibly forget their disappointment and buy it again later.

and Engagement
❑ Marketing Concept
• The marketing concept holds that achieving organizational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than
competitors do.
• Under the marketing concept, customer focus and value are the paths to sales and profits.
• Instead of a product-centered make-and sell philosophy, the marketing concept is a customer-
centered sense-and-respond philosophy.
• The job is not to find the right customers for your product but to find the right products for
your customers.

and Engagement
MARKETING VS SELLING
❑ Selling Concept
• Many companies follow the selling concept, which holds that consumers will not buy enough of
the firm’s products unless it undertakes a large-scale selling and promotion effort.
• The selling concept is typically practiced with unsought goods—those that buyers do not
normally think of buying, such as life insurance or blood donations.
• These industries must be good at tracking down prospects and selling them on a product’s
benefits.
• It focuses on creating sales transactions rather than on building long-term, profitable customer
relationships. The aim often is to sell what the company makes rather than to make what the
market wants.
• It assumes that customers who are coaxed into buying the product will like it. Or, if they don’t
like it, they will possibly forget their disappointment and buy it again later.

and Engagement
Selling Vs. Marketing
• Marketing is a broad concept and is defined as the process through which products and services move from the
producer to the end-user.
• Marketing starts much before and continues even after the product is sold.
• Philip Kotler defines marketing as a social activity directed at satisfying needs and wants through the
exchange process.
• Selling is a narrower concept and a part of marketing. It refers to the process of providing the customer with
the products or services they need in exchange for a price.
• The differences between selling and marketing are summarised below:
Selling Marketing
Focuses on the product and profits Focuses on customer satisfaction
It is a seller-oriented approach Is a customer-oriented approach
Emphasis is on maximising sales Emphasis is on providing quality products
Planning is short-term Planning is long-term
Cost determines price The consumer determines price and price

determines the cost of marketing
Is a direct activity Is an indirect activity
Has an inside-out perspective Has an outside-in perspective

Selling Marketing
Main focus is on finding customers for Main focus is on finding the right products
products for customers
Begins only after production and ends with Begins much before the production of goods
the delivery of product and collection of and services and continues even after sales
payment
Emphasis is on staying with existing Emphasis is on innovation in existing

technology and reducing costs technology and providing better value to
the customer
Views customer as the last link in business Views the customer as the very purpose of
the business
Sales Management as per
• The Definitions Committee of the American
marketing association defined sales management
as:
• “the planning , direction and control of personal

selling, including recruiting, selecting,
equipping, assigning, routing, supervising,
paying and motivating as these tasks apply to
the personal sales force”.
• However, we shall also include indirect sales

through channels within the ambit of sales
management.
Sales Management
• “Sales management” as the term implies means management

of sales. Often it is considered synonymous with the
management of personal sales.
• It involves an understanding of the effort that goes into the

management of the sales force and the various processes of
sales.
Selling as Per Theodore Levitt
of Harvard
• Levitt (Marketing Myopia, HBR, 1960) drew a perceptive contrast between selling
and marketing concepts:
• Selling focuses on the needs of the seller, marketing on the needs of the buyer.
• Selling is preoccupied with the seller’s need to convert his product into cash
• Marketing with the idea of satisfying the needs of the customer by means of the
product
• and the whole cluster of things associated with creating, delivering and finally
consuming it.
Objectives of Sales Management
• Whilst some objectives are unique to each organisation, all organisations pursue objectives of profitability, sales
volume, market share, growth, and corporate image.
• The management of the sales function influences all of these objectives. Thus, the sales management objectives
of an organisation are concerned with:
▪ Achieving desired sales volume
▪ Achieving desired profits
▪ Promoting growth
• The objectives of sales management integrate various sales functions.
• They must be realistic and achievable and expressed as much as possible, in quantifiable terms.
Objectives of Sales Management
• The scope of sales management in an organisation includes both quantitative and qualitative objectives as
shown in following below:
Establishing
Sales Developing
Rewards, Sales Fixing Sales
Forecasting Sales
Recognition, and Budgeting Quotas
and Planning Objectives
Remuneration
Establishing Collecting
Sales Sales Directing the
Sales Customer
Promotion organisation Sales Team
Territories Feedback
Planning, Coordinating
Managing
Recruiting, and and
Distribution
Training of the Monitoring the
Channel
Sales Force Sales Team
Broader scope of Sales Management
• Sales management initially was meant to be the direction of sales force personnel.
• Later the term took on a broader significance apart from personal selling and the
term “sales management” included managing of all the sales related activities
including
• below the line advertising

• sales promotion
• physical distribution
• pricing and
• Product merchandising.
Make v/s Buy: The Strategic Approach
• The make v/s buy decision

evaluates the contribution of
each activity.
• Using the value chain
framework developed by
Michael Porter, we classify all
supply chain activities as
Primary and Supportive
activities.
Value Chain Framework

VALUE CHAIN ANALYIS
Deepak R. Gupta / All About Management

PRIMARY ACTIVITIES
• Inbound logistics include the receiving, warehousing, and inventory control of input
materials.
• Operations are the value-creating activities that transform the inputs into the final
product.
• Outbound logistics are the activities required to get the finished product to the
customer, including warehousing, order fulfillment, etc.
• Marketing & Sales are those activities associated with getting buyers to purchase
the product, including channel selection, advertising, pricing, etc.
• Service activities are those that maintain and enhance the product's value including
customer support, repair services, etc.

SUPPORT ACTIVITIES
• Procurement - the function of purchasing the raw materials and other inputs used in
the value-creating activities.
• Technology Development - includes research and development, process automation,
and other technology development used to support the value-chain activities.
• Human Resource Management - the activities associated with recruiting,
development, and compensation of employees.
• Firm Infrastructure - includes activities such as finance, legal, quality management,
etc.

VALUE ADDED ROLE OF LOGISTICS
• Different types of economic utilities like form utility, place and time utility and possession utility
add value to a product.
• Form Utility is given by Production to a product when conversion process is held. Logistics also
adds form utility when warehousing activities like mixing, assembling, processing postponement
or unpacking take place.
• Place and Time Utility is given by logistics functions when a product is moved to a needed place on
time to serve the customer
• Possession Utility: Marketing creates Possession Utility by promoting the product by advertising
and or by any other means. But possession finally happens through logistics.

VALUE ADVANTAGE
• “Customer’s don’t buy products – they buy BENEFITS.

• Hence number of advertisements tells us about what that product can deliver in addition to its
basic function.
• Example Surf / Ariel not only wash clothes but REMOVES STAINS.

VALUE AND SATISFACTION
• The product or offering will be successful if it delivers value and

satisfaction to the target buyer.
• Value = Benefits/Costs
• Value can be increased by:
– Raising benefits
– Reducing costs
– Raising benefits and reducing costs
– Raising benefits by more than the raise in costs
– Lower benefits by less than the reduction in costs

WALMART’S STOCK REPLENISHMENT PROCESS IS
LEGENDARY – VALUE CREATION

LOGISTICS & DISTRIBUTION
• The word logistics has been derived from the word

‘LOGER’, which means art of war pertaining to
movement and supply of armies.
• It is a military concept:
• Fighting a war requires:
– Setting an Objective
– Meticulous planning to achieve the Objective
– Proper deployment of troops
– Supply lines consisting of weapons, foods, etc.

Distribution channel
• Distribution channel refers to the steps taken to move and store a product from the
supplier stage to a customer stage in the supply chain
• In simple words: A distribution channel is a chain of intermediaries through which a good
or service passes until it reaches the end consumer
• Distribution channels are also known as marketing channels or marketing distribution
channels
30
LOGISTICS
• “The maintaining & transporting material, personnel and facilities.”
- Oxford English Dictionary
• "The time related positioning of resources."
• “Logistics Management can be defined as the process of planning,

implementing and controlling the efficient and effective flow and
storage of goods, services & related information from point of origin
to point of consumption for the purpose of meeting customer
requirements.”

LOGISTICS:
INBOUND AND OUTBOUND
• Logistics is an activity of managing the TOTAL flow of materials from the

beginning i.e. from the flow of raw materials to production and of finished
product to the customer.
• Inbound Logistics: It includes inward movement of materials from the
sources.
• Outbound Logistics: It includes distribution of products from the
manufacturers to customers.

Intermediary in Distribution Channels:
• Intermediaries, also known as distribution intermediaries, marketing intermediaries, or middlemen,
are an extremely crucial element of a company's product distribution channel
• Intermediaries are external groups, individuals, or businesses that make it possible for the company
to deliver their products to the end user
Types of Intermediaries:
1. Wholesalers
2. Distributors
3. Retailers
4. Agents
Use of intermediary to deliver
a product 33
FORMULA
Inbound In plant Outbound

Logistics
Logistics Logistics Logistics
• According to Council of Logistics Management,

“Logistics is the process of Planning, Implementing and Controlling
the efficient, effective flow and storage of goods, services and related
information from the point of origin to the point of consumption for the
purpose of conforming the customer requirement”

LOGISTICS INVOLVED IN BURGER
Sesame Seeds from Special Vegetarian Sauce

Ghaziabad, Uttar (Eggless) Sauce from Quaker
Pradesh
Ceremica, Phillapur, Punjab
Bans from Shah Bactor and

Sons, Khopoli, Maharashtra Batler and
and Cremica from Ludhiana breading from
Cremica EBI,
Ludhiana,
Punjab
Fresh Iceberg Lettuce from

Trikaya Agriculture, Talegaon,
Maharashtra, Ooty Farms,
Ootacannaud, Tamilnadu, Vegetable Patty (made
Meena Agritech, Delhi, from fresh Peas, Carrots,
Ferrocoes Farms, Dehradun Green Beans, Red
Cheddar Chesse from Capsicum, Potatoes and
Dynamix Dairy, Baramati, Rice) from Kitran Foods,
Maharashtra Taloja, Maharashtra
LOGISTICS
INBOUND OUTBOUND
SUPPLIER MANUFACTURER CUSTOMER

RM FG
REVERSE

LOGISTICS FLOW
LOGISTICS MANAGEMENT
MATERIALS PRODUCTION DISTRIBUTION
IMMEDIATE IMMEDIATE
SUPPLIER CUSTOMER
FLOW OF INPUTS FLOW OF OUTPUTS
IN - BOUND IN - PLANT OUT - BOUD

LOGISTICS LOGISTICS LOGISTICS

LOGISTICS
FACTORIES
ANKLESHWAR KASNA
CENTRALISED
PURCHASE
(HEAD OFFICE)
BHANDUP
PATANCHERU
SUPPLIER : DELHI
PLANT 4: KASNA
PLANT 2 : ANKLESHWAR
SUPPLIER :WEST BENGAL
PLANT 1 : BHANDUP
SUPPLIER : SOLAPUR
PLANT 3 : PATANCHERU
FUNCTIONS OF LOGISTICS
INFORMATION TECNOLOGY
INVENTORY CONTROL
TRANSPORTATION
WAREHOUSING
MATERIAL HANDLING
PACKING
LOGISTICAL ACTIVITIES
• Customer Service
• Demand Forecasting
• Distribution Communication
• Inventory Control
• Material Handling
• Order Processing
• Part and Service Support
• Plant and Warehouse Site Selection
• Procurement
• Packaging
• Return Goods Handling
• Salvage and scrap Disposal
• Traffic and Transportation
• Warehousing and Storage
LOGISTICS MANAGEMENT PROCESS
• Logistics management is the means by which the needs of the customers

are fulfilled through coordination of material and information flow that
entered from marketplace, through the firm and its operation and
beyond that to suppliers.
• Logistics management has the potential to assist the organization in
achieving both cost and value advantage.
MATERIAL FLOW
SUPPLIERS PROCUREMENT OPERATIONS DISTRIBUTION CUSTOMERS
INFORMATION FLOW
INBOUND PROCESS IN VALUE CHAIN
ORDER SUPPLIER MFG

SOURCING TRANSPORATION RECEIVING
PLACEMENT AND SUPPLY

OUTBOUND PROCESS IN VALUE CHAIN
CUSTOMER ORDER ORDER ORDER ORDER CUSTOMER

ORDER TRANSMISSION PROCESSING SELECTION TRANSPORTATION DELIVERY

ADVANTAGES
• Logistics Adds Value By Creating Utility

– Form
– Possession
– Time
– Place
• Logistics Supports Marketing Activities
– Product, Price, Place and Promotion
• Logistics supports production
• Logistics moves goods in a Company
• Customer is Satisfied through Logistics

LOGISTICS OPERATING OBJECTIVES
• Rapid & Complete Response to Customer’s Requirements

• Minimum Variance
• Minimum Inventory
• Improvement in Quality
• Reduction in Overall Logistics Operations Costs
• Continuous Improvement in Quality of Services Offered
• Life-Cycle Support
• The basic objective of a good Logistics system can be defined as “To Get the Right Goods or
Services, to the Right Place, At the Right Time, In the Right Condition, and At the Right Cost"

LOGISTICS PERFORMANCE CYCLES
• The logistics performance cycle consists of three different performance cycles which takes place
the moment a customer places an order with the firm.
– Procurement Support Performance Cycle
– Manufacturing Support Performance Cycle
– Physical Distribution Performance Cycle

LOGISTICS PERFORMANCE CYCLE
LOGISTICS PERFORMANCE CYCLE
MATERIALS PRODUCTION DISTRIBUTION
IMMEDIATE IMMEDIATE
SUPPLIER CUSTOMER
Production
Performance Cycle
Materials Distribution
Performance Cycle Performance Cycle
INTEGRATED LOGISTICS MANAGEMENT
• In order to perform various functions of logistics in coordinated fashion

bringing all functions of logistics under one operational command is
important.
• Performance of these functions in an isolated fashion is detrimental to
the objectives organization.
• Performance in isolation loses sight of overall picture.
Inventory flow
Suppliers
Customer
Physical Manufacturing Procurement
distribution support
Information flow
- A supply chain consist of
Supplier Manufacturer Distributor Retailer

Customer
- Aims to Match Supply and Demand, profitably

for products and services.
- Achieves SUPPLY SIDE DEMAND SIDE
Product
+ + + + +
The right The right
Price
The right The right
Store
The right
Quantity Customer Time
=
The right Higher
Profits
Supply Chain
Supplier Manufacture Distributor Retailer Customer
Supply Chain Management is the design and

management of processes across organizational
boundaries with the goal of matching supply and
demand in the most cost effective way.
The 7 “R’s” OF SCM
Participants in Distirbution
• Suppliers
• Manufacturers
• Distributors
• Customer
Suppliers
• They are organization that provides
goods and services to purchasing
organization (a manufacturer or a
distributor).
• For example suppliers of Coca-Cola

company are
Manufacturers
• They are the companies
engaged in the original
production and assembly
of products, equipment
and services.
Distributors
• These are the external entities
that sell for suppliers or
manufacturers directly and
often collect all payments from
customers and maintain an
inventory of the supplier’s or
manufacturer’s products.
Consumers
• They are the end receivers or

users of the product or
service.
Example:
In this picture we can

appreciate the supply
chain management
participants, which are
involved in the process of
supply chain.
Starting from the

manufacturer, means of
transport are used to
transport the goods to
the retailer to finally
reach the end consumer
For example, The Coca-

Cola Company, by road
transport makes its
drink available in the
different retail outlets for
customers to consume.
MODELS OF OUTSOURCING

What Is Outsourcing?
Outsourcing involves the contracting out of
a business process and operational, and/or
non-core functions (e.g.
manufacturing, facility management, call
center support) to another party.
The concept "outsourcing" came from the
American Glossary 'outside resourcing' and
it dates back to at least 1981.
Outsourcing sometimes involves
transferring employees and assets from
one firm to another, but not always.
Outsourcing is also the practice of handing
over control of public services to private
enterprise.
REASON FOR OUTSOURCING
• Outsourcing is defined as, “The contracting of one or more of company’s business activities to outside service
providers for increasing the profitability by primarily reducing the overall operating cost and focusing on the
core business activities for maximum utilization of available resources of the company like
Finance/Manpower/Technology etc.”
– Reasons for outsourcing:
– Reduction in operating costs
– Focus on core business activities and strategies
– Acquiring better management skills
– Avoiding labour/worker problems
– Avoiding major investment & financial risks
– Handle overflow(emergency) situations
– Improve flexibility in management functions
– Improve financial ratios
– Improve overall functioning of the organization
– Enhances market credibility

Advantages of Outsourcing
1. Cost Saving: Employee compensation costs, office space expenses and other costs
associated with providing a work space or manufacturing setup are eliminated and free up
resources for other purposes.
2. Focus on Core Business: Outsourcing allows organization to focus on their expertise and
core business. When organizations go outside their expertise, they get into business
functions and processes that they may not be as knowledgeable about and could potentially
take away from their main focus.
EX 11: A grocery store decides to add a florist to their operation. If too much focus is
put on that part of the business they lose focus of the core business which is grocery.
Advantages of Outsourcing
3. Improved Quality: Improved quality can be achieved by using vendors with more
expertise and more specialized
4. Customer Satisfaction: The advantage of having a vendor contract is they are bound to
certain levels of service and quality.
5. Operational Efficiency: Outsourcing gives an organization exposure to vendor specialized
systems. Specialization provides more efficiency that allows for a quicker turnaround time
and higher levels of quality.
Disadvantages of Outsourcing
1. Quality Risk: Outsourcing can expose an organization to potential risks and legal exposure.
2. Quality Service: Unless a contract specifically identifies a measurable process for quality
service reporting, there could be a poor service quality experience. Some contracts are
written to intentionally leave service levels out to save on costs.
3. Language Barriers: If a customer call center is outsourced to a country that speaks a
different language, there may be levels of dissatisfaction for customers dealing with the
language barriers of someone with a strong accent.
4. Employee/Public Opinion: There can be negative perceptions with outsourcing and the
sympathy of lost jobs.
5. Organizational Knowledge: An outsourced employee may not have the same
understanding and passion for an organization as a regular employee. There is the potential
that an outsourced employee will come in contact with customers and not be as
knowledgeable of the organization, resulting in a negative customer experience.
6. Labor Issues: Organized labor in India has very strong feelings about outsourcing to other
countries that have a less standard of living and worse working conditions. This viewpoint
can affect how the workforce responds to outsourcing and can affect their daily
productivity.
7. Legal Compliance and Security: It is important that issues regarding legal compliance
and security be addressed in formal documentation. Processes that are outsourced need to be
managed to ensure there is diligence with legal compliance and system security.
8. Employee Layoffs: Outsourcing commonly results in the need to reduce staffing
levels. Unless it can be planned through attrition, layoffs are inevitable. This is difficult at
best and if not managed appropriately, can have a negative impact on remaining employees.
THIRD PARTY LOGISTICS – 3PL
• A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a

firm that provides a one stop shop service to its customers of outsourced
(or "third party") logistics services for part, or all of their supply chain
management functions.
• “A firm [that] provides multiple logistics services for use by customers.

Preferably, these services are integrated, or "bundled" together, by the
provider. Among the services 3PLs provide are transportation,
warehousing, cross-docking, inventory management, packaging, and
freight forwarding.”
• - Council of Supply Chain Management Professionals

3PL
• 3PLs are external suppliers that perform all or part of a company’s

logistics functions, including:
– Transportation
– Warehousing
– Distribution
– Financial services
• Terms contract logistics and outsourcing are sometimes used in place of

3PL.
THIRD PARTY LOGISTICS – 3PL
MARK INTERNATIONAL LTD.

LOG-NET

THIRD PARTY LOGISTICS
SCOPE OF THIRD PARTY LOGISTICS ACTIVITIES
ORGANISATION
THIRD PARTY LOGISTICS COMPANY
MATERIALS DELIVERY
WAREHOUSING TRANSPORTATION
MANAGEMENT OF GOODS
INVENTORY COLLECTING REVERSE

PACKAGING
CONTROL PAYMENTS LOGISTICS

Advantages of 3pl
EXCELLENT SUPPLY CHAIN

MANAGEMENT BY 3PL CAN YIELD:
1.Reduction in 2.Reduction in 3.Increase in 4.Improvement 5.Increase in

total supply chain inventory forecast in order after tax free
costs holding accuracy fulfilment cycle cash flows
time
Range of services provided by 3 pl
i) Collecting the ii) The iii) The iv) Then the v) They are
finished goods incoming parenterals are FedEx Logistics subsequently
from the parenteral placed in the takes over the dispatched by
contract have been logistic centre’s task of packing truck or
manufacturer or thoroughly storage facility them ready for airfreight.
accepting inspected dispatch.
imported goods
for storage.
FOURTH PARTY LOGISTICS
• A Fourth-party logistics provider (abbreviated 4PL), lead logistics provider, or 4th Party Logistics
provider, is a consulting firm specialized in logistics, transportation, and supply chain
management.
• It is a complete outsourcing of manufacturing & logistics functions including selection of third
party service providers.

FOURTH PARTY LOGISTICS
SCOPE OF FOURTH PARTY LOGISTICS ACTIVITIES
ORGANISATION
FOURTH PARTY LOGISTICS COMPANY
LOGISTICS
IT CUSTOMER
ACTIVITIES MANUFACTURING
INTEGRATION SERVICE
(3 P/L ACTIVITIES)
RISK
CASH FLOW QUALITY REVERSE
MANAGEMENT
MANAGEMENT IMPROVEMENT LOGISTICS
& INSURANCE

3C’s IN LOGISTICS
• The 3C's model (three C's framework) of Kenichi Ohmae, a famous Japanese strategy guru,
stresses that a strategist should focus on three key factors for success.
• "In the construction of any business strategy, three main players must be taken into account:
• The COMPANY
• The COMPETITOR
• The CUSTOMER

3C’s IN LOGISTICS
CUSTOMER
VALUE VALUE
COMPETIT
COMPANY
OR COST
DIFF
ERE
NTIA
LS
3C’s In Chain
CONSUMERS
The consumers buying decision has a huge impact on the corporate
sector. The customer always looks for the benefit he gets against his
costs.
COMPETITORS
A company provide better and high quality products than their competitors & it
tries to differentiate its product. But the competitors prevent product
differentiation by standardization of technology, products and human skills.
COMPANY
Satisfaction to customers along with achieving their own targets or goals,
effective and efficient use of resources and profitability.
3C’s IN LOGISTICS
• CUSTOMER:
– Look for value, benefit at lowest price
• COMPANY
– By effective utilization of assets tries to create and offer value to customers
• COMPETITOR
– By effective utilization of assets tries to create and offer value to customers better than
competitor

COST ADVANTAGE
• Cost advantage can be gained by productivity improvements or increasing the sales and market
share or reducing logistical costs.
• Cost in the logistics can be reduced by
– Savings in transportation costs – outward/inward
– Savings in operating costs
– Savings in post production costs viz. warehousing, distribution, etc.
• These savings can be passed on to customers.

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INTRODUCTION TO SALES &

According to management guru Peter Drucker,

Marketing must be understood not in the old sense of making a

The simplest definition of marketing is: Marketing is engaging

Chp 1: Marketing: Creating Customer Value

• There are five alternative concepts

Chp 1: Marketing: Creating Customer Value

Chp 1: Marketing: Creating Customer Value

Chp 1: Marketing: Creating Customer Value

Chp 1: Marketing: Creating Customer Value

Chp 1: Marketing: Creating Customer Value

Focuses on the product and profits Focuses on customer satisfaction

It is a seller-oriented approach Is a customer-oriented approach

Emphasis is on maximising sales Emphasis is on providing quality products

Planning is short-term Planning is long-term

Cost determines price The consumer determines price and price

Has an inside-out perspective Has an outside-in perspective

Emphasis is on staying with existing Emphasis is on innovation in existing

• “the planning , direction and control of personal

• However, we shall also include indirect sales

• “Sales management” as the term implies means management

• It involves an understanding of the effort that goes into the

• below the line advertising

• The make v/s buy decision

Value Chain Framework

Deepak R. Gupta / All About Management

Deepak R. Gupta / All About Management

Deepak R. Gupta / All About Management

Deepak R. Gupta / All About Management

• “Customer’s don’t buy products – they buy BENEFITS.

Deepak R. Gupta / All About Management

• The product or offering will be successful if it delivers value and

Deepak R. Gupta / All About Management

Deepak R. Gupta / All About Management

• The word logistics has been derived from the word

Deepak R. Gupta / All About Management

• "The time related positioning of resources."

• “Logistics Management can be defined as the process of planning,

Deepak R. Gupta / All About Management

• Logistics is an activity of managing the TOTAL flow of materials from the

Deepak R. Gupta / All About Management

Inbound In plant Outbound

• According to Council of Logistics Management,

Deepak R. Gupta / All About Management

Sesame Seeds from Special Vegetarian Sauce

Bans from Shah Bactor and

Fresh Iceberg Lettuce from

SUPPLIER MANUFACTURER CUSTOMER

Deepak R. Gupta / All About Management

MATERIALS PRODUCTION DISTRIBUTION

FLOW OF INPUTS FLOW OF OUTPUTS

IN - BOUND IN - PLANT OUT - BOUD

Deepak R. Gupta / All About Management

• Logistics management is the means by which the needs of the customers

SUPPLIERS PROCUREMENT OPERATIONS DISTRIBUTION CUSTOMERS

ORDER SUPPLIER MFG

Deepak R. Gupta / All About Management

CUSTOMER ORDER ORDER ORDER ORDER CUSTOMER

Deepak R. Gupta / All About Management