Introduction to Sales [Part-2]

introduction to sales

In my last article (Introduction to Sales [Part-1]), we talked about what is the function of sales and why it is so important. In this article I am going to explain what role is played by Sales personnel and some important sales related terms.

Basic Responsibilities of Sales Manager:

  • Deliver volume
  • Exploit maximum market potential
  • Ensure stable distribution infrastructure
  • Ensure relationship distributors and customers (retailers)
  • Develop a capable team

Basic Responsibilities of Sales executive:

  • Reach outlet on time
  • Sell product
    Maximize LPC and BPC
  • Keep product availability in store
  • Maintain Visibility of product in store
  • Highlight promotions (promotional schemes)
  • Keep product neat and clean
  • Build and maintain relationship with retailer
  • And deliver volume

Glossary of Sales Terms:

  • RTM (Route To Market): Route To Market is the critical link between manufacturing and market. It is a distribution system employed by the company.
  • Primary Sales: It is a sales from company to distributors
  • Secondary Sales: Sales from distributor to retailers
  • Tertiary Sales: Sales from retailer to end consumers. It is also known as “Off-take“.
  • Trade schemes: These are promotional schemes that are offered to boost sales from time to time. They can be classified in two categories:
    • Primary Scheme: These are deducted while the invoicing is done to the distributor from the company’s end. This may be done to give the distributor an additional margin.
    • Secondary Scheme:  Distributor is supposed to first extend to the market and then claims it back from the company
    • Qualitative Purchase Schemes: These are schemes which company offers to distributor based on volume he buys
      eg. 5% discount on 100 pieces, 7% discount on 150 pieces
    • Quantitative Purchase Schemes: These are schemes which company offers to distributor based on value of total items bought
      eg. 5% on items worth 10000Rs, 7% discount on items worth 15000Rs
  • Landing Price: It is a price that buyer pays to seller for purchase of the product
    1. Distributor landing price: Per Unit Price distributor pays to compny for purchase of product
    2. Retailer Landing Price: Per Unit Price retailer pays to distributor for purchase of product
  • ROI (Return on Investment): Return on Investment is money earned for the investment made over one year
    ROI = 100*(Earning – Expenses)/Investment
  • Beat Plan: Beat plan is a pre-defined route for sales executive to follow to service the outlets.
  • Outlet universe: Total number of outlets which stores product same product category or related product category to which our product belongs
  • Coverage: Coverage is number of outlets covered from universe of outlets. 
    1. Numeric Distribution: Absolute quantitative distribution ie if outlet universe is 100 and my product is present in 60 outlets then Numberic Distribution is 100*60/100 = 60%
    2. Weighted Distribution: It is measured based on volume. ie if total volume sales by all outlets in outlet universe is 1000unit and my product is present in outlets which sells 700units then Weighted Distribution is 100*700/100 = 70%
  • MCP (Master Coverage Plan): At the time of product introduction, MCP is performed to identify and understand market and design distribution plan to meed objectives.
  • EDS (Every Dealer Survey): EDS includes visiting every retailer of the are and mapping market potential to design effecient route for coverage
  • LPC (Lines Per Call): Number of order lines per order
  • BPC (Brands Per Call): Number of brands per order
  • FDFT (Fixed Date Fixed Time): Ensuring the Distributor Salesman visits all the potential outlets on a FDFT. This helps to establish DSR reliability
  • OOS (Out Of Stock): When product is sold out and retailer is left with no inventory to sell.
  • POS (Point of Sales)
  • Merchandising: Arranging our Products and POS neatly and prominently so that they are easily noticed by the customer
  • PJP (Permanent Journey Plan): It is detailed plan for Sales Manager describing his monthly activities.
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One thought on “Introduction to Sales [Part-2]

  1. Pingback: Introduction to Sales [Part-1] |

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