Description
The importance of a knowledgeable, experienced and effective direct (inside or outside) sales force is often critical in the business market. If you sell through distribution channels also, the number and type of sales forces can vary tremendously and your success as a marketer is highly dependent on their success.
A STUDY OF SALES AND DISTRIBUTION TECHNIQUES PREFACE
The research provides an opportunity to a student to demonstrate knowledge, skill and competencies required during the project. The training project helps to know the problem in the organization and to suggest them how to get rid of those problems. Although I have tried my level best to prepare this report an error free report every effort has been made to offer the most authenticate position with accuracy. The report is divided into seven chapters. The first part consist of introduction to the topic, second contains the objectives of the project. The middle part gives a brief overview about the organization and the methodology use in the project. Fourth chapter is the most important part as it contains the analysis of data. Last part contains the findings and suggestions. The Chapter1- deals with the conceptual frame work related to the various sales & distribution Techniques used by LG and its deals with the introduction related to sales management, personal selling, distribution and channel of distribution. In this chapter I have also tried to introduce various functions of sales organization, its structure and the factors dealing with the sales management success. The efforts have also been made to understand the channels of distribution and various factors that are to be kept in mind while selecting the channel of distribution. The Chapter2 consists the rationale of the study. This chapter includes topics of basic purpose of the study, objectives of the study, scope of the study. The main purpose of the study is to find whether sales and distribution techniques really influences the sales of L.G. product or not. The main objective of my study is to understand what customer wants and what the competitors are offering The Chapter 3 deals with the profile of L.G. electronics. LG Electronics was founded in 1958 at Seoul, South Korea. This multinational company is the 2nd largest electronic products maker of South Korea and third largest appliance maker in the world. LG manufactures, develops and sells Digital Display, Digital Appliances, Digital Media and Mobile Communication products in international market. LG Electronics is a project of LG Group which earns revenue of USD$68.8 billion. Yong Nam is the CEO of the company who is making it possible to spread the network of LG throughout the world. Headquarter of LG Electronics is in LG Twin Towers at Seoul, South Korea. The Chapter 4 deals with research methodology used by me and explain factors like Research design, The Research Process, The Research Literature review. Research is the systematic exploration of the region of the unknown to find satisfactory answers to the
2 questions: what, how and why? It may be diligent enquiry in a scientific manner for improvement of an existing system or for development of a new one, or for improving a process. The Chapter 5 consists of data analysis and result through use of various tools and techniques dealt through sections: Section A: Percentage Analysis. Section B: Subjective Analysis through Inferences. The Chapter6 consist limitation of the study. The limitation of any study is that any research is time consuming and involves the basic knowledge of the interpretation which may not be up to the mark all the time. The Chapter 7 deals with various Suggestions and Conclusion drawn from the data collected and the interpretation of response as given by the respondents. My final conclusion is that the sales and distribution techniques decision are very important aspects faced by the manufacturers. It is very important decision as the involved in use of channel becomes the part of the price the customer has to pay and also it affects other decision like product line and pricing. Hence, the project undertaken focuses on these pressing issues linked with the sales and distribution System which are quintessential for each and every organization, and specifically studied here for L.G. electronics.
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INDEX
CHAPTERS Certificate Declaration Acknowledgement Preface List of Models
Model: 1.1: Direct and indirect sales structure of company x and y Model: 1.2 SD: Structure for Sales Order Processing Model: 1.3: Line sales organization Model: 1.4: Line and staff organization Model: 1.5: Line and staff organization Model: 1.5: Line and staff organization Model: 1.6: Distribution channel Model: 4.1: The research process
CONTENTS
PAGE NO.
(i) (ii) (iii) (iv)
9-22 Chapter 1 INTRODUCTION Conceptual framework Sales and distribution techniques 23-26
Chapter 2
COMPANY PROFILE
Chapter 3
RATIONAL OF STUDY Basic purpose of the study Objectives of study
27-29
Chapter 4
RESEARCH METHODOLOGY Design The Research Process The Research Scope of the study
30-38
4
Chapter 5
39-49 DATA ANALYSIS AND RESULTS Section A: Percentage Analysis Section B: Subjective Analysis through Inferences
Chapter 6 LIMITATIONS
50-51
Chapter 7 SUGGESTIONS AND CONCLUSION BIBLIOGRAPHY
52-57
58-77 APPENDICES a) Questionnaire. b) Percentage analysis c) Respondent sheet. d) Synopsis.
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A STUDY OF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 1
INTRODUCTION
CHAPTER-1 A STUDY OF SALES AND DISTRIBUTION TECHNIQUES
6
INTRODUCTION
CONCEPTUAL FRAMWORK It is a common belief that marketing is concerned with making sales and customer satisfaction only. Though it is true to certain extent, yet marketing is not simply concerned with sales and profit maximization. In fact depending upon the type or stage of demand the marketing task would differ. The study is based on sales and distribution techniques with the example of L.G. electronic product. To know the influences of the techniques of sales and distribution it is important to prepare a study which provides the result of the better sales and distribution methods and techniques. The primary goal of the marketing plan is to get people to buy your products or services. The Sales and Distribution part of the marketing plan details how this is going to happen. Traditionally there are three parts to the Sales and Distribution section of the marketing plan, although all three parts may not apply to your business; how is your product or service going to get to the customer? For instance, will you distribute your product or service through a Web site, through the mail, through sales representatives, or through retail? In a direct distribution channel, the product or service goes directly from the manufacturer to the consumer. In a one stage distribution channel it goes from manufacturer to retailer to consumer. The traditional distribution channel is from manufacturer to wholesaler to retailer to consumer. Outline all the different companies, people and/or technologies that will be involved in the process of getting your product or service to your customer. If business involves selling a product, you should also include information about inventory levels and packaging in this part of your marketing plan.
INTRODUCTION TO SELLING AND SALES MANAGEMENT
7 Marketing programs are designed around four elements of the marketing mix: products to be sold, pricing, promotion, and distribution channels. The promotion component includes advertising, public relations, personal selling, and sales promotion (point-ofpurchase displays, coupons, and sweepstakes). Note that advertising and sales promotions are no personal communications, whereas salespeople talk directly to customers. Thus, where advertising and sales promotion “pull” merchandise through the channel, personal selling provides the “push” needed to get orders signed. With public relations, the message is perceived as coming from the media rather than directly from the organization. Personal selling involves two-way communication with prospects and customers that allows the salesperson to address the special needs of the customer. It is often the job of a salesperson to uncover the special needs of the customer. When Customers have questions or concerns; the salesperson is there to provide appropriate explanation. Furthermore, personal selling can be directed to qualified prospects, whereas great deals of advertising and sales promotions are wasted because many people in the audience have no use for the product. Perhaps the most important advantage of personal selling is that it is considerably more effective than advertising, public relations, and sales promotion in identifying opportunities to create value for the customer and gaining customer commitment. The person responsible for management of the field sales operation is the sales manager. He or she may be a first-line manager, directly responsible for the day-to-day management of salespeople, or may be positioned at a higher level in the management hierarchy, responsible for directing the activities of other managers. In either case, sales management focuses on the administration of the personal selling function in the marketing mix. This role includes the planning, management, and control of sales programs, as well as the recruiting, training, compensating, motivating, and evaluating of field sales personnel. Sales management can thus be defined as: The planning, organizing, leading, and controlling of personal contact programs designed to achieve the sales and profit objectives of the firm.
Sales
According to KOTLER (2008)” Sale is the pinnacle activity involved in the selling products or services in return for money or other compensation.” It is an act of completion of a commercial activity. Selling is one of the oldest professions in the world. Selling can be done by many ways but the most popular two ways are given below 1. Personal selling 2. Direct marketing Personal selling means selling directly to the customers. It involves the direct connection with the customers and aim is to build customer unique value and long lasting relationship.
8 “A good sales organization is one wherein the functions or departments already detailed have each been carefully planned and coordinated towards the objectives of putting the product in the hand of the consumers the whole efforts being efficiently supervised and managed so that each function is carried out in the desired manner.” Sales organization is the planning, direction and control of selling including recruiting, selecting training, equipping, supervising and motivating, as these task apply to the sales force.
Model: 1.1: Direct and indirect sales structure of company x and y
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Function of sales organization
1. Planning function includes a) Sales forecasting b) Sales budgeting c) Selling policy 2. Administrative functions includes a) Selecting salesmen b) Training salesmen c) Control of salesmen d) Remuneration of salesmen 3. Executive functions includes a) Sales promotion b) Selling routine This chapter has introduced the topics of personal selling and sales management. Where personal selling focuses on direct contacts with prospects, sales management is concerned with the planning, organizing, leading, and controlling of personal contact programs to satisfy customers and achieve the objectives of the firm. You should now be able to do the following: 1. Describe the major changes taking place in selling and the forces causing these Changes- The competitive market place is becoming more globalize, product life cycles are getting shorter, and competitive boundaries are blurring. At the same time, customers are buying from fewer suppliers, their service and performance expectations are increasing, and their power is increasing so that they can not only demand but also obtain higher service and offerings from suppliers. As a result of these forces, the selling process is becoming more focused on relationship selling, selling teams are often necessary to fully address customer needs, people are spending more of their time on internal selling and marshaling resources to develop customer solutions, and sales force success is increasingly measured in terms of productivity and profits as opposed to topline revenues. 2. Define sales management. Sales management is defined as the planning, organizing, leading, and controlling of personal contact programs designed to achieve the sales and profit objectives of the firm. 3. Describe the sales management process. For pedagogical purposes and by way of organizing the variety of activities involved in sales management, the sales management Process is grouped as follows: seeing the big picture and developing strategic sales plans, Defining the role of the sales force in executing a firm’s business plan, structuring the Sales force for efficiency and effectiveness, building the sales competencies necessary to Implement the firm’s business strategy, and leading the sales force to achieve success.
10 Although these steps are not usually performed in sequence, this organization of sales A management activity provides a good overview of the decisions in which sales managers at all levels in the organization are involved. 4. Discuss the competencies required to be a successful sales manager. To be an effective sales manager in a dynamic environment requires six competencies: strategic action, coaching, team building, self-management, a global perspective, and a technology competency. You can develop these competencies through study, training, and experience. By doing so, you can prepare yourself for a variety of sales and sales management position in various industries and countries. You can continue practicing your managerial competencies by completing the exercises at the end of this and subsequent chapters. PREPARING FOR SALES MANAGEMENT SUCCESS Sales Management was written to prepare you for a successful sales management career. To accomplish this objective, its chapters provide comprehensive coverage in a manner that is both interesting and engaging. In addition, each chapter has been reviewed and enhanced by the experiences and suggestions of highly successful people in sales and marketing, including, among others, Paulette Turner, Sales Operations Business Unit Executive, IBM Corporation’s. J. Polk, Director-Sales-Marketing, Procter & Gamble Distributing Company; and Joseph Clayton, Chairman of the Board, Sirius Satellite. They have passed along the lessons they have learned to help you be a success. Success in business is directly related to the competencies that you develop. The remaining chapters build on the competencies introduced in this chapter. These six competencies have been identified as important for success in management. To illustrate the relevance of each competency to sales management in particular, four of the competencies as exercised by real companies or individuals are described in boxed inserts in the body of each chapter of this book. At the conclusion of each chapter, exercises for developing each of the six key competencies are presented. Each exercise relates to the chapter’s topic and is designed to help you build your competencies so that you are prepared to assume sales management Responsibilities when the opportunity is presented. To further help in your development, each chapter includes several Team Exercises describing typical situations in the day-today life of a sales manager. Each situation calls for you to decide the most appropriate action to be taken and often includes the opportunity to think about the words and phrases you would use when talking with the other people in the exercise. Because more than one person is usually involved, this exercise lends itself well to a team or group discussion and role playing of conversations between individuals. Each chapter begins with a company or individual vignette introducing many of the concepts and issues discussed in the chapter in a live situation. On the first page of each chapter is a list of Learning Objectives for that chapter. A Summary at the end of each chapter revisits each learning objective, along with a brief description of the topic. Key terms are presented in italics and are listed at the end of each chapter. Comprehensive cases are presented at the end of the book. Following this chapter is the D & M Insurance Company case describing Doug Bloom’s first days after being promoted to sales manager in a financial services company. This first case describes the company, its products, and organization,
11 as well as the “growing pains” Doug goes through in those first months as a sales manager. You are given the opportunity to grow with Doug as he faces challenges described at the end of each chapter. Again, you’re asked to make decisions based on the background information presented in the chapter.
SD: Functionality
1. 2. 3. 4. 5. 6. Sales Support Sales Shipping and Transportation Billing Credit Management Foreign Trade
Model: 1.2 SD: Structure for Sales Order Processing
•
Sales Support is a component of SD that assists in the sales, distribution, and marketing of a company’s products and services to its customers. It contains the following functionality:
12 – Creating and tracking customer contacts and communications (sales activity) • Phone call records • On-site meeting • Letters • Campaign communication Implementing and tracking direct mailing, internet, and trade fair campaigns based on customer attributes
–
Pre-sales documents need to be managed within the presales activities: Inquiries and Quotations. These documents help identify possible sales related activity and determine sales probability
Sales organizational structure
1. Line sales organization
Sales manager
Assistant sales manager Division 1
Assistant sales manager Division 2
Assistant sales manager Division 3
Assistant sales manager Division 3
Assistant sales manager Division 4
Sales people
Sales people
Sales people
Sales people
Sales people
Model: 1.3: Line sales organization
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2. Line and staff organization
Vice president in charge of marketing
Advertising manager
General sales manager
Manager of marketing research
Direct sale training
Sales personnel director
Assistant general sales manager
Assistant to general sales manager
Sales promotion manager
Distributor relation manager
Model: 1.4: Line and staff organization
2. Functional sales organization
Director of sales administrati on
Installation and service manager
Manager of sales manager
Manager of sales supervision
Manager of distributor relation
Manager of sales promotion
Manager of sales personnel
Sales people Sales people
Sales people
Sales people
Sales people
Sales people
Model: 1.5: Line and staff organization
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A sale is the pinnacle activity involved in the selling products or services in return for money successfully reaching a destination’s visitor market with the necessary information and booking channels is essential in converting intention to visit into actual visitation. The sales and distribution channels used by destination managers have been influenced significantly over the last decade with the rise in internet usage. While traditional methods of sales and distribution such as travel shows, tour wholesalers and travel agents still play a real part in converting potential visitors, the trend toward online conversion has been the focus of much attention in the future of sales and distribution techniques in the tourism industry.
PERSONAL SELLING
According to the U.S. Department of Labor’s Bureau of Labor Statistics, people working insales number close to 12 million, or about 10 percent of the total workforce in the United States. Personal selling is critical to the sale of many goods and services, especially major commercial and industrial products and consumer durables, and can be defined as: Direct communications between paid representatives and prospects that lead to transactions, customer satisfaction, account development, and profitable relationships. The relationships between selling and other elements of the marketing mix are highlighted in The seller - the provider of the goods or services - completes a sale in response to an acquisition or to an appropriation or to a request. There follows the passing of title (property or ownership) in the item, and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership. Ideally, a seller agrees upon a price at which he willingly parts with ownership of or any claim upon the item. The purchaser, though a party to the sale does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price, the sale remains valid and gives rise to an obligation to pay.
The seller - the provider of the goods or services - completes a sale in response to an acquisition or to an appropriation or to a request. There follows the passing of title (property or ownership) in the item, and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership. Ideally, a seller agrees upon a price at which he willingly parts with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise
15 to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price, the sale remains valid and gives rise to an obligation to pay.
Direct Sales Your Company sells directly to the customer or end user of the product. There is no agent between your company and the customer. Providing financial planning services to individuals is an example of direct sales. Catalog sales or sales over the Internet are also examples of this method. 2. Indirect Sales: Retail Your Company sells to a retailer whose salespeople then sell to the customer. Selling organically grown herbs to a local grocery store is an example of indirect sales.
1. 3.
Indirect Sales: Wholesale Your Company sells to a wholesaler or agent who sells products to retailers. The wholesaler most likely represents several companies. (It's more efficient for the retailer to have one source for many products instead of dealing with an unwieldy number of individuals.) Selling novelty pet accessories to wholesalers who resell to a variety of pet care stores, animal clinics and other retail outlets is an example of selling to wholesalers or agents. Trade shows and merchandise markets are locations where retailers order your product based on your display and promotion at the show. You can get schedules and names of these shows from trade publications available in most big libraries. Indirect Sales: Multi-level marketing you sell both directly to customers and to other sales people you have recruited to sell products.
4.
THE SALES MANAGEMENT COMPETENCIES
We’ve talked about the sales management process, but you may be wondering what it takes to be an outstanding sales manager. So, let’s look more closely at the competencies that managers need in order to succeed. Sales management competencies are defined as sets of knowledge, skills, behaviors, and attitudes that a person needs to be effective in a wide range of industries and various types oforganizations.13 People use many types of competencies in their everyday lives. Here we focus on six competencies (Figure 1-5) that you will need for today’s sales management responsibilities. Keeping these six sales management competencies in mind will help you remember how the material you are studying can improve your performance on the job. To help you in this process, we have included inserts into each chapter describing these competencies in the context of the chapter’s subject matter. Often these inserts are examples from actual companies. In addition, exercises are included at the end of each chapter focusing on each of the six competencies. Let’s examine the dimensions of each of these competencies more closely.
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DISTRIBUTION
Distribution is all about getting your product and service to the right people at the right time with special consideration for profit and effectiveness. Distribution is one of the four aspects of marketing. A distributor is the middle man between the manufacturer and retailer. After a product is manufactured it is usually sold to distributor. The distributor then sales the product to the retailers or customers. “Channel of distribution” is meant that that chain through which passing from one to other hand, the product reaches from the producers to the final consumers. The following are the main definition of the channelChannel of distribution is that system of financial organization by which a producer sends his product to the hand of consumers The distribution channel It is defined as a chain of intermediaries; each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user Function of the channel of distribution 1. Extending suggestion regarding price determination 2. Managing the finance 3. Performing the promotion activities 4. Serving the consumers 5. Regularizing the decisions Factors affecting the selection of channel of distribution
17 Every producer in order to pass the product to the consumers is required to select a channel of distribution. The selection of a suitable channel of distribution is one of the important factors of the distribution decisions. The following factors affect the selection of the channel of distribution. A. Factor pertaining to the product 1) 2) 3) 4) 5) Size and weight Technical nature Goods made to order Price of the product Perishability
B. Factor pertaining to the consumers and market 1) 2) 3) 4) 5) Size of the order Objective of purchase Need of the credit facilities Number of customers Expansion of consumers
C. Factors pertaining to the middlemen 1) Financial resources of the company 2) Managerial competence and experience 3) Level of the production Types of channels of distribution The producer and the final consumer are part of every channel. A marketing channel performs the work of moving goods from producer to consumer. It overcomes the time, and possession gaps that separate goods and services from those who need and want them.
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Model: 1.6: Distribution channel
Choice of a channel of distribution
The factors to be considered before choosing a suitable channel of distributions are listed below: 1. Product considerations: The nature and type of product have an important bearing on the choice of distribution channels. For examples, perishable goods need speedy movements and hence shorter channel or route of distribution; For durable goods, longer and diversified channels may be used; Similarly, for technical products requiring specialized selling and serving talents, the shortest channel should be used. 2. Market considerations: The nature and type of customers and size of market are important considerations in the choice of a channel of distribution. For example, if the market size is large, there may be long channels, whereas in a small market direct selling may be profitable. The nature and type of consumers include factors such as desire for credit, preference for the stop shopping, demand for personal services, amount of time and effort the customer is willing to spend. It also includes factors like age, income group, sex, and religion of customers. 3. Company considerations: The nature, size and objectives of the business firm also play an important role in the selection of distribution channel. It includes financial resources, market standing, volume of production, desire for control of channel, services provided by manufacturers', etc. For example a company with substantial financial resources need not rely too much on the middlemen and can afford to reduce the levels of distribution. Similarly a company desiring to exercise greater control over channel will prefer a shorter channel.
19 4. Middlemen considerations: The cost and efficiency of distribution depend largely on the nature and type of middlemen. It includes characteristics of middlemen such as availability, attitudes, services, sales potential, costs etc. For example, if the terms and conditions of engaging wholesalers are unfavorable manufacturer may like to channelise his products through semi: Business Studies Wholesalers or retailers, thereby, bypassing wholesalers. However, the determining factor would be the differential advantage involved in the choice. To conclude, the channel generating the largest sales volume at lower unit cost will be given top priority. This will minimize distribution cost. Distribution refers to how you deliver your product to the customer. If you are in a service business, it may be the way you deliver yourself to the customer to perform the service. Some of the primary categories of sales and distribution channels are named below. You may use one, more than one or various combinations of sales and distribution methods. Additionally, different products from the same company may require different methods.
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 2
COMPANY PROIFILE
20
CHAPTER-2
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
INTRODUCTION OF COMPANY –
LG Electronics was founded in 1958 at Seoul, South Korea. This multinational company is the 2nd largest electronic products maker of South Korea and third largest appliance maker in the world. LG manufactures, develops and sells Digital Display, Digital Appliances, Digital Media and Mobile Communication products in international market. LG Electronics is a project of LG Group which earns revenue of USD$68.8 billion. Yong Nam is the CEO of the company who is making it possible to spread the network of LG throughout the world. Headquarter of LG Electronics is in LG Twin Towers at Seoul, South Korea.
21
There are more than 75 subsidiaries of the company in the world which designs, manufactures, market and sells televisions, different electronic products, home appliances and telecommunication devices. LG Electronics is the owner of Zenith Electronics and have a joint venture with Philips Electronics under the name of LG Display. Both the companies are putting their effort in manufacturing and developing the quality of their products. Some important subsidiaries of LG Group are LG Electronics, LG Telecom, LG Chem. and Zenith Electronics in more than 80 countries. In early years of 2000 the company acquired popularity in new markets and earned more revenue. In 2005 and 2006 the company did a record business in the market of electronic products. LG is the largest plasma manufacturer of the world and LG Display is the largest manufacturer of liquid crystal displays. In 2006 the company focused its attention on mobile phones and introduced LG Chocolate. The company develops the designs and functions of its mobile phone and marketed LG Shine and LG Prada which became very successful. LG Electronics picked as "The Design Team of the Year" by Red Dot Design Award in 2006 and 2007. It is also called “new Apple” & “new Sony” in the communities due to its products and management. LG Electronics was established in 1958 as Gold Star. It was a manufacturer of refrigerators, TVs, air conditioners and washing machines. LG Group is the merger of Lucky and Gold Star, two Korean companies. L is taken from Lucky and G from Gold Star which formed LG Group. "Life's Good" is the slogan of the LG Electronics. Before the name of LG Electronics, Electronic goods were sold under the name of Lucky and similarly home appliances were sold under the name of Gold Star. Gold star produces Interactive Multiplayer which was costly but it was very successful. In 1995 Gold Star was renamed as LG Electronics and owned Zenith Electronics of USA. LG Electronics sponsors sports in different fields such as football, cricket and racing etc. LG Electronics of USA has introduced a variety of handsets which became very successful. The company is producing a large number of handsets and it is expected that it would become the fourth largest handset maker of the world in 2008. The mobiles of LG are becoming popular in the telecommunication market due to its quality and advance features. The division of home appliances manufactures products such as air conditioners, refrigerators, ovens and washing machines for home users. North America is the larges market for home appliances division of the company. In display divisions LG Electronics is very prominent. The company manufactures, LCD TVs, Monitors, Plasma TVs, OLED Panels, Flat Panel Monitors and USB Memory. The company has launched many products in the field of digital media such as DVD Recorders, CD RW, Home Theatre Systems, Notebook PCs, MP3 Players, Desktop PCs; PDAs etc. LG has introduced a series of air conditioners which is successful in the market of electronics.
22 By 2005, LG was a Top 100 global brand, and in 2006, LG recorded a brand growth of 14%. Now the world's largest plasma panel manufacturer, its affiliate, LG Display, is one of the largest manufacturers of liquid crystal displays. Also in 2006, the company's mobile phone division, LG Mobile, marketed the LG Chocolate phone, changing the company's image of the maker of thick 3G phones. It now focuses on the design and marketing of phones such as the LG Shine, the LG Glimmer and LG Prada (KE850) As a result, the company was picked as "The Design Team of the Year" by the red dot design award in 2006~2007 and is often called the "New Apple" in the industry and online communities
COMPANY PROFILE
Type Industry Founded Headquarters Area served Key people Public(KRX: 003550 Conglomerate 1947 in Busan, South Korea Seoul, South Korea Worldwide Koo Yu Sig Bon-Moo, Kang, (Chairman (Vice Chairman & & CEO) Co-CEO)
Juno Cho, (EVP, COO, & Director) Electronics Products Revenue Employees Chemicals Telecommunications
? $104.3 billion (115 trillion KRW) 2008
177,000 (2008) LG Electronics Display Telecom LG LG LG Chem LG.com
Subsidiaries
Website
Marketing has been defined as the management function responsible for identifying, anticipating and satisfying customer requirements profitably. Marketing is, therefore, both a philosophy and a set of techniques which address such matters as research, product design and development, pricing, packaging, sales and sales promotion, advertising, public relations, distribution and after sales services. These activities define the broad scope of marketing and their balanced integration within a
23 marketing plan is known as the marketing mix. A modification of a definition of marketing by Doyle (2000) suggests that marketing is the management process that seeks to maximize returns to shareholders by creating a competitive advantage in providing, communicating and delivering value to customers thereby developing a long-term relationship with them. LG adopted the same marketing strategy in India to capture the attention of the people and to influence their preferences. It also formulated the strategy to choose the right customer, to build relationship of trust with them and to create a competitive advantage. LG in India The LG Group had entered the Indian market through its wholly owned subsidiary LG Electronics India Pvt. Ltd (LGEIL). The company after being incorporated on 20th January 1997 was successfully established and by the end of December 1999, 23 branch offices were operational. Today LG’s arms in India include LG Electronics India (consumer electronics and white goods), LG Software India, LG Polymers, LG Construction, LG Hotline (picture tubes), LG Chemicals and a liaison office in Delhi. Being on its own, LG was also able to move at a fast pace. When it started off, within a space of five months it was able to complete its nationwide launch. Most other companies took at least two years to complete their all-India launch.
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 3
RATIONALE OF THE STUDY AND OBJECTIVES
24
CHAPTER-3
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
RATIONALE OF THE STUDY
The main purpose of the study is to find whether sales and distribution techniques really influences the sales of L.G. product In order to be a successful company in sales and distribution, it is essential that effort should be coordinated in such a manner that maximum utilization of resources takes place with minimum costs. The explanations of these elements are given. 1. Utility of distribution system 2. Controlling distribution cost 3. Effect on size of inventory
25 4. 5. 6. 7. Product planning Effect on channel of inventory Coordination of demand and supply Increase in sales volume
Getting the right goods to the right place at the right time for the least cost. Well cocoordinated distribution systems reduce the cost. Customer wants from suppliers 1. 2. 3. 4. satisfaction of emerging needs carefully handling of merchandise replacement of defective goods quickly willingness to carry inventory
What customer wants and what the competitors are offering. Distribution is a tool for demand creation.
OBJECTIVES OF THE STUDY
Objectives are the study of intends that what are impacts of the sales and distribution techniques of the company strategies. As it is the study on the electronics product of the L.G. Company. The objectives of the study must be specific and measurable as well as some kind of targets with respect to time periods. The sales and distribution objectives and goals are derived from the company’s marketing objectives and goals. The main objectives of the project are: 1. To find out the influence of sales and distribution techniques in the L.G. electronics 2. To find out the factors which help to increase in sales volume, reduce selling expenses. The importance of sale and distribution management to a company, the way salespeople go about setting objectives and strategies and plan of action to achieve the
26 objectives. Sale and distribution management serves the primary function of ensuring the product and service is made available to the consumer.
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 4
RESEARCH
27
METHODOLOGY
CHAPTER-4
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
RESEARCH METHODOLOGY
“Research methodology is a method of studying problems whose solutions are to be desired partly or wholly from facts. These facts may be statements of opinions, historical facts, those contained in records and reports, the results of tests, answers to questionnaires, experimental data of any sort, and so forth.”
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- By M.S. Monore Research is the systematic exploration of the region of the unknown to find satisfactory answers to the questions: what, how and why? It may be diligent enquiry in a scientific manner for improvement of an existing system or for development of a new one, or for improving a process. Research has been defined by various authors in different ways. It always begins with the question or a problem Research is carried out for two purposes 1. discovery of new facts 2. verification of old one
There are two types of methods A. Primary data collection method B. Secondary data collection method C. Statistical tools .
A. Primary data collection method: In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods include:
a) b) c)
questionnaires interviews focus group interviews
Observation B. Secondary data collection method:
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•
All methods of data collection can supply quantitative data (numbers, statistics or financial) or qualitative data (usually words or text). Quantitative data may often be presented in tabular or graphical form. Secondary data is data that has already been collected by someone else for a different purpose to yours
Thus, research is the systematic exploration of the region of the unknown to find satisfactory answers to the questions: what, how and why? It may be diligent enquiry in a scientific manner for improvement of an existing system or for development of a new one, or for improving a process. Thereby, the aim of research is to improve, develop and not merely control routine operations.
Characteristics of research 1) Directed towards the solution 2) Require systematic approach 3) Data collection and data analysis 4) Relevancy 5) Expertise 6) Unbiased 7) Control 8) Logical 9) Empirical Every project report conducted scientifically has specified framework for controlling data collection. This framework is called research design. Its function is to ensure that required data are collected accurately and effectively. Objectives 1) Finding out solutions
30 2) Understanding a business problem 3) To innovate new ideas 4) Identifying the cause and effect relationship 5) To improve the quality of products
THE RESEARCH PROCESS
31 Defining the problem And so on Defining the new problem
Planning a research design
Formulating conclusions and preparing the report
Planning a sample
Gathering the data
Processing and analyzing the data
Model: 4.1: THE RESEARCH PROCESS
THE RESEARCH
Research Objectives
32 A study of sales and distribution techniques with special reference to L.G. electronics”
Research Design 1. The research conducted is exploratory. 2. Research is designed to describe characteristics of a population or a phenomenon. 3. The study is made in attempt to modify the present system by providing with recommendations.
Sample for Research 1. The study has been carried out at L.G., Indore. 2. Census survey has been conducted for acquiring the information. 3. All on –the-rolls employees of L.G. (Indore) were taken into consideration for the acquisition of relevant and meaningful data. Data Collection Tools 1. Secondary data has been collected through various books, magazines, library, and Internet. 2. Primary data. This data has been collected through questionnaires cum schedules. It included both open-ended and close-ended/objective questions for collecting information.
33
Data Analysis Tools 1. Primary data was analyzed through Percentage analysis and Factor Analysis. It includes statistical methods such as graphs, percentages, pie charts, tables etc. 2. Inferences were drawn to analyze open-ended questions. 3. Secondary data was analyzed through interpretations and applied logic. Conclusions And Report 1. Valid interpretation of the gathered information is done to supply with meaningful recommendations. 2. Summary of the findings is provided. 3. The report in the form of a record is made available.
34
SCOPE OF STUDY-
This study will explore the best techniques of the sales and distribution. The study of sales and distribution techniques is helpful to know the result of sales and distribution techniques with example of L.G. electronics product. There are some important scope of this study 1. Designing and managing of sales force. 2. Sales force authority. 3. Target setting. 4. Sales forecasting. 5. To achieve coordination or balance 6. To assure that all the necessary activities are performed
In the competitive environment these aspects of study would motivate the sale force.
1. 2. 3. 4. 5. 6.
Production and sales planning Effectiveness of the distribution system Discovery of the new market of the product Help in adopting changes Production in accordance with demand Enables to meet change
35
SIGNIFICANCE
1. 2. 3. 4. 5. 6. 7. It provides a better utilization of distribution system It enables the management controlling distribution cost Effect on size of inventory Product planning Effect on channel of inventory Coordination of demand and supply Increase in sales volume
36
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 5
DATA ANALYSIS AND RESULTS
37
CHAPTER-5
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
DATA ANALYSIS
Q: 1 Result
Are you aware of the sales and distribution system followed in your branch? 98% is aware of the present system of sales and distribution 2% are unaware of such a system being followed.
Awareness of sales and distribution system No 2% Yes 98%
38
Respondents' Observation Yes No
TOTAL
Percentage Respondents 98% 2%
100%
Of
Yes 98 %
Interpretations:
Most of the respondents are found aware when they have been asked about the sales and distribution techniques. The company sales and distribution system is much strong. There are several reasons of the awareness like the growing competition in the market, marketing mix stratigies that are made through proper analysis of the market. The company has many kind of the electronic products and different kind of the sales and distribution techniques are planned. It is very important that company must have a managed sales and distribution system to improve the performance level of the company.
39
Q: 2 Result
Are sales and distribution techniques marketing strategies? 99% agrees to the fact but 1% not agrees
used to make perfect
No 1%
Yes No
YES 99%
Respondents' Observation Yes No
TOTAL
Percentage Respondents 99% 1%
100%
Of
40
Interpretations: According to the respondents of the strategies of the company and planning of the company are made after the market analysis which provides strategic information about what consumer need and requirement. Marketing programs are designed to make all the functions in the proper way. The marketing strategies of the company provide help to made good advertising, sale promotion, pricing and the product planning. To the achievement of the company objectives specific kind of the sales and distribution techniques must be applied because these techniques always provide better utilization of the resources.
Q:3 Result
Does sales and distribution techniques works to organize the market segmentation ? 93% employee are agree but 7%are not agree
No 7%
Yes No
Yes 93 %
Respondents' Observation Yes No
TOTAL
Percentage Respondents 93% 7%
100%
Of
41
Interpretations: As the respondents replied that the segmentation is done after the
proper analysis of the sales and distribution techniques of the company the nature and type of customers and size of market are important considerations in the choice of a channel of distribution. For example, if the market size is large, there may be long channels, whereas in a small market direct selling may be profitable. The nature and type of consumers include factors such as desire for credit, preference for the stop shopping, demand for personal services, amount of time and effort the customer is willing to spend. It also includes factors like age, income group, sex, and religion of customers.
Q:4 Result
Do you clearly understand it? 93% employees in L.G. clearly understand the present system, while 7% lack the understanding of system. Understanding the Present system No 6%
Yes No
Yes 94 %
Respondents'
Percentage
Of
42
Observation Yes No
TOTAL
Respondents 94% 6%
100%
Interpretations: Most respondent believe that understanding of the proper distribution channel and sale techniques is most important because of the organizational performance level improved. Resources are limited and that in order to grow they need to take the maximum from the minimum. They thus try to exploit these resources. Interpersonal. In the past, most research on sales and distribution techniques has focused on the type of company and product.
Q: 5 Result
Does the sales and distribution gives an idea of what targets are to be achieved? 98% is aware of what is expected of them and targets to be achieved. 2% are not aware of the targets to be achieved.
Yes 98%
Yes No
No 2%
Respondents'
Percentage
Of
43
Observation Yes No
TOTAL
Respondents 98% 2%
100%
Interpretations: The respondent strongly believe that the sales and distribution
techniques always helps in the target achievement of the company. The importance of sale and distribution management to a company, the way salespeople go about setting objectives and strategies and plan of action to achieve the objectives. Sale and distribution management serves the primary function of ensuring the product and service is made available to the consumer. The sales and distribution channels used by destination managers have been influenced significantly over the last decade with the rise in internet usage. While traditional methods of sales and distribution such as travel shows, tour wholesalers and travel agents still play a real part in converting potential visitors, the trend toward online conversion has been the focus of much attention in the future of sales and distribution techniques in the industry. Q: 6 Result Does any steps have taken place in your organization that focuses on improving your overall sales and distribution system? 82% feel that organization takes steps to improve overall performance but 18% does not feel so.
Yes 82%
Yes No
No 18%
44
Respondents' Observation Yes No
TOTAL
Percentage Respondents 82% 18%
100%
Of
Interpretations: The respondent replied that according to the company product
demand and the growing competition sales and distribution techniques are planned and by the time many changes occur. The competitive market place is becoming more globalized, product life cycles are getting shorter, and competitive boundaries are blurring. At the same time, customers are buying from fewer suppliers, their service and performance expectations are increasing, and their power is increasing so that they can not only demand but also obtain higher service and offerings from suppliers. As a result of these forces, the selling process is becoming more focused on relationship selling, selling teams are often necessary to fully address customer needs, people are spending more of their time on internal selling and marshaling resources to develop customer solutions, and sales force success is increasingly measured in terms of productivity and profits as opposed to topline revenues.
Q: 7 Result
Does sales and distribution techniques help to fulfillment the consumer needs? 99% agrees to the fact but 1% not agrees
45
No 1%
Yes No
Yes 99%
Respondents' Observation Yes No
TOTAL
Percentage Respondents 99% 1%
100%
Of
Interpretations: Respondents answered that the good sales and distribution system
always help to the fulfillment the consumer demand. As the market is growing the competition is also becoming the main the problem in front of the managers. In the global environment the consumers expectation towards the product, price and place becoming more specific. Company like this must have the systematic approach in the sales and distribution system.
Q: 8 Result
Are you aware of sales techniques objectives like price, promotion, and place? 99% agrees to the fact but 1% show unawareness towards the specific organization’s objectives.
46
No 1%
Yes No
Yes 99%
Respondents' Observation Yes No
TOTAL
Percentage Respondents 99% 1%
100%
Of
Interpretations: Most of the respondent replied that there is much effect of the sales
and distribution in the marketing mix. Marketing mix is a combination of product, price, place, promotion. The respondents were clear about the marketing mix. All the strategies are made under the consideration of sales and distribution channel. These strategies are helpful in the decision making.
FINDINGS
47
1. Respondent are aware of the sales and distribution techniques followed by the company. 2. Respondent are satisfied by the method applied by the company. 3. Management makes effort to improve if they know where they are lacking. 4. Sales and distribution techniques in the company helps to match organizational objective. 5. Sales and distribution techniques of the company give rise to competition among the same level. 6. Respondents feel that sales and distribution is a tool for increasing the efficiency. 7. Proper sales and distribution techniques increase the strengths. 8. Sales and distribution techniques helps to make effective marketing strategies. 9. Sales and distribution techniques give idea to segmentation. 10. Sales and distribution techniques help to fulfillment of the consumer and organizational need and improve efficiency against competitors.
48
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 6
LIMITATIONS
49
CHAPTER-6
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
LIMITATIONS OF THE STUDY
Though the research has been conducted with full sincerity and lot of hard work, but still there were certain limitations faced while carrying on this research. 1. The study is meant for L.G. electronics. 2. Though census survey was conducted, it consist very few members. 3. The study is done to the employees available during the study period and is willing to participate in the study 4. Specially meant for L.G. electronics and not applicable to any other organization. 5. The data collected was not sufficient for carrying out a very in-depth analysis of the subject matter. 6. Data was subjected to bias responses. Hence, accuracy of the information collected can’t be proved. 7. Limited time was available for the study to be conducted.
50
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 7
RECOMMENDATIONS AND CONCLUSION
51
CHAPTER-7
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
RECOMMENDATIONS –
1. Explore the recent sales and distribution techniques in the company 2. To discuss about the market trends and customer needs. 3. Marketing strategies must be adopted according to the sales and distribution techniques. 4. Make proper research program to improve the techniques. 5. Don’t leave room for compromise. 6. Break the pack and do something different. 7. Proper understanding the nature of industry within which the organization is functioning. 8. Discover the extent to which a company is powerful to influence its environments. 9. Analysis of the results of the sales and distribution techniques.
52
CONCLUSION -
The sales and distribution techniques decision are very important aspects faced by the manufacturers. It is very important decision as the involved in use of channel becomes the part of the price the customer has to pay and also it affects other decision like product line and pricing. We’ve talked about the sales management process, but you may be wondering what it takes to be an outstanding sales manager. So, let’s look more closely at the competencies that managers need in order to succeed. Sales management competencies are defined as sets of knowledge, skills, behaviors, and attitudes that a person needs to be effective in a wide range of industries and various types oforganizations.13 People use many types of competencies in their everyday lives. Here we focus on six competencies that you will need for today’s sales management responsibilities. Keeping these six sales management competencies in mind will help you remember how the material you are studying can improve your performance on the job. The competitive market place is becoming more globalize, product life cycles are getting shorter, and competitive boundaries are blurring. At the same time, customers are buying from fewer suppliers, their service and performance expectations are increasing, and their power is increasing so that they can not only demand but also obtain higher service and offerings from suppliers. As a result of these forces, the selling process is becoming more focused on relationship selling, selling teams are often necessary to fully address customer needs, people are spending more of their time on internal selling and marshaling resources to develop customer solutions, and sales force success is increasingly measured in terms of productivity and profits as opposed to topline revenues. Selling has great significance in all type off organization, whether it is private or public small or large. The importance of selling can not be overemphasized. In pursuit of a prudent policy, an organization can derive maximum befit by giving selling the importance that it rightly deserves. It can helps boost sales if wisely used and bring in a human touch while carrying out a transaction. The importance of sale and distribution management to a company, the way salespeople go about setting objectives and strategies and plan of action to achieve the objectives. Sale and distribution management serves the primary function of ensuring the product and service is made available to the consumer.
53
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
BIBLIOGRAPHY
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
54
REFRENCE
1. Kotler Philip, (2008.)“Marketing Management – Text and Cases”, Pearson Education a south Asian perspective, 13th Edition 2. Krishna K Havaldar, Vasant M Cavale (2010) “Sale and distribution Management”, Mc Graw Hill, 8th Edition. 3. P. Subba Rao,(2009) “Essentials of Human Resource Management and Industrial Relations”, Himalaya Publishing House, 3rd revised and enlarged edition. 4. Robbins, Stephen P. (2008) Organizational Behavior, and New Delhi: Prentice Hall of India. 5. Johnson, (2010) “Sales Management”, Mc Graw Hill, 7th Edition. 6. S.J. Poliwoda, “International Marketing”, New Delhi, Prentice Hall of India. 7. Gordon Lewis, (1995) “Direct Marketing Strategies and Tactics”, New Delhi, Vision Book. 8. Mary Robert, (1995) “Direct Marketing Management”, London: Prantice Hall, 2nd Edn.
55
WEBLIOGRAPHY
1. www.lgelectronics.com 2. www.lg.com 3. www.yahoo.com 4. www.google.com 5. www.wikipedia.com 6. www.amazen.com 7. WWW.FREEBOOKS.COM
56
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
APPENDICES
57
Appendix-A
Questionnaire
Dear Sir/Madam, I am a management student of BM College of Management and Research. As part of course I am undertaking this project study. I would a request you to kindly answer a few questions. This questionnaire gives you the opportunity to express your opinion regarding various aspects of sales and distribution techniques. The results shall be submitted to the university in the report format for the usage of researchers and other concerned authorities. As is the case for entire study, no individual will be identified. Only group averages will be reported. Personal Profile of the Respondent 1. (a) Place of survey.................................. (b) Name............................................. (c) Address........................................... (d) Male/Female................................
Q: 1 Are you aware of the sales and distribution system followed in your organization? (a) Yes (b) No
Q: 2 Do you clearly understand sales and distribution system? (a) Yes (b) No
Q: 3 Are you satisfied by the present techniques being followed?
58
(a) Very satisfied (b) Satisfied (c) Neutral (d) Not satisfied (e) Very dissatisfied
Q: 4 Does the sales and distribution system helps in achieving targets? (a) Yes (b) No
Q: 5 What kind of distribution system followed urban areas? (a)Manufacturer-representative-wholesaler-retailer-consumer (b) Manufacturer-representative--retailer-consumer (c) Manufacturer-representative--consumer (D) Manufacturer--wholesaler-retailer-consumer (e) Manufacturer-retailer-consumer (a) (b) (c) (d) (e)
Q: 6 Do sales and distribution techniques increase the sales volume? (a) Always (b) Sometimes (c) Rarely (d) Never (d) Can’t say
Q:7 What kind of competition do you have with other organization? (a) Extremely healthy (b) Healthy (c) Unhealthy (d) Extremely unhealthy (e) No competition
59
Q:8 Are you satisfied with the present sales and distribution system? (a) Very satisfied (b) Satisfied (c) Neutral (d) Not satisfied (e) Very dissatisfied
Q:9 Does distribution system control the cost? (a) Always (b) Sometimes (d) Never (d) Can’t say
(c) Rarely
Q:10
What kind of distribution system followed rural areas? (a)Manufacturer-representative-wholesaler-retailer-consumer (b) Manufacturer-representative--retailer-consumer (c) Manufacturer-representative--consumer (D) Manufacturer--wholesaler-retailer-consumer (e) Manufacturer-retailer-consumer (b) (a) (d) (c) (e)
Q:11 Does the sales and distribution system improve organizational performance level? (a) Always (b) Sometimes (c) Rarely (d) Never (d) Can’t say
Q:12 Does any steps have taken regarding improvement of the sales and distribution system ?
60
(a) Yes
(b) No
Q:13 Is there any relation between relation sales and distribution? (a) Yes (b) No Q:14 Does sales and distribution techniques help in product planning ? (a) Yes (b) No (c) Sometimes (e) Never (d) Rarely
Q:15 Are you aware of major physical distribution system? (a) Yes (b) No
Q:16 Does sales and distribution affect the price of the product? (a) Yes (b) No (c) Sometimes (d) Rarely (e) Never
Q:17 Do you feel competition in market effects sales and distribution system? (a) Yes (b) No (c) Sometimes (d) Rarely
61
(e) Can’t say
Q:18 Does it impact on the product strategies ? (a) Yes (b) No
Q:19 How much sales and distribution techniques are beneficial in customer point of view? (a) Low (b) Very high (c) High (d) Moderate (e) Very low
Q: 20 Do you think that the sales of L.G. products sale can be improved by proper management of channel of distribution? (a) Yes (b) No (c) Sometimes (d) Rarely (e) Can’t say
62
Appendix-B
Respondent Sheet I
63
Q.2 R:1 R:2 R:3 R:4 R:5 R:6 R:7 R:8 R:9 R:10 R:11 R:12 R:13 R:14 R:15 R:16 R:17 R.18 R.19 R.20 R.21 R.22 R.23 R.24 R.25 1 1 1 1 1 1 1 1 1 2 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1
Q.4 1 1 2 2 2 1 1 1 1 1 2 2 1 1 1 1 2 1 1 2 2 2 1 2 1
Q.6 2 4 2 1 1 3 2 2 2 2 4 3 1 1 1 2 2 2 1 1 1 3 3 2 2
Q.7 1 2 2 2 1 2 2 1 2 2 2 2 2 1 1 2 2 2 1 2 2 2 2 1 2
Q.8 1 1 2 3 2 3 2 1 1 3 2 2 2 1 1 1 4 2 3 2 1 1 3 2 2
Q.9 3 1 1 1 2 3 3 3 1 1 1 1 1 2 2 3 1 1 3 2 3 1 2 3 2
Q.11 1 1 1 1 2 2 3 3 1 1 1 2 2 2 3 1 1 2 2 2 3 1 1 2 1
Q.14 1 2 1 3 3 3 1 1 1 1 1 1 3 1 3 1 1 2 3 2 1 2 1 1 1
Q.16 1 2 1 1 3 1 1 1 1 1 1 3 2 3 1 1 1 3 1 1 1 2 2 1 1
Q.17 1 3 3 1 1 1 1 1 3 1 1 1 2 1 1 3 1 1 1 3 1 1 1 1 2
Q.19 2 3 2 2 3 4 2 2 2 2 2 2 2 3 3 3 2 2 3 3 2 2 2 3 2
Q.20 1 1 1 1 2 3 1 3 4 2 1 1 3 3 1 1 1 1 1 1 1 1 1 1 3
Appendix-C
APPENDIX
64
PERCENTAGE ANALYSIS Questions Percentage Analysis Q:1 Q:2 Q:4 Q:12 Q:13 Q:14 Q:15 Q:16 Q:17 Q:18 Q:20 Yes 98% Yes 93% Yes 98% Yes 82% Yes 67% Yes 85% Yes 96% Yes 99% Yes 86% Yes 93% Yes 87% No 2% No 7% No 2% No 18% No 33% No 15% No 4% No 1% No 14% No 7% No 13%
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
65
SYNOPSIS
A Synopsis for Masters of Business Administration Session ~ 2008-10
66
“A STUDY OF SALES AND DISTRIBUTION TECHNIQUES WITH SPECIAL REFERENCE TO L.G. ELECTRONICS”
Submitted to Devi Ahilya Vishwavidyalaya, Indore
Research Supervisor
Mrs. Richa darshan
Researcher
Anand urmaliya
Roll No. 82374620010
-------------------------------------------------------------------
BM College of Management, Indore
Research Centre
CONTENTS
1. 2. INTRODUCTION PURPOSE OF THE STUDY
67 3. OBJECTIVES 4. 5. SCOPE OF STUDY INTRODUCTION OF COMPANY
6. METHODOLOGY 7. RESULTS
8. CONCLUSION 10. SUGGESTION 11. WEBLIOGRAPHY 12. REFERENCE
INTRODUCTIONThe study is based on sales and distribution techniques with the example of L.G. electronic product. To know the influences of the techniques of sales and distribution it is important to prepare a study which provides the result of the better sales and distribution methods and techniques.
68 Selling is one of the oldest professions in the world. Selling can be done by many ways but the two most popular ways are 1. Personnel selling, 2. Direct marketing. The selling process can only be successful if the company knows the taste, preference and needs of their customers and consumers that mean what they want from the company and how they can be satisfied then only the company produce, sale their product in the market and rich to its target set objectives and have maximum profit. Selling has great significance in all type off organization, whether it is private or public small or large. The importance of selling can not be overemphasized. In pursuit of a prudent policy, an organization can derive maximum befit by giving selling the importance that it rightly deserves. It can helps boost sales if wisely used and bring in a human touch while carrying out a transaction. Distribution is all about gating your product and service to the right people at the right time with special consideration for profit and effectiveness. Distribution is one of the four aspects of marketing. Distribution is meant that way which the entitled owner adopts in sending the goods or products from the producer to the final consumer or the industrial consumer.
PURPOSE OF THE STUDY – The main purpose of of the study is to find whether sales and distribution techniques really influences the sales of L.G. product.
69
\\
OBJECTIVES The main objectives of the project are: ? To find out the influence of sales and distribution techniques in the L.G. electronics
? To find the most effective tool of Sales and distribution to entice customers used by electronics product.
? To study various sales and distribution techniques used by L.G.
? To find out the ranking of L.G. with its relative competitors as per the customers.
? To find certain new techniques that L.G. can adopt to improve its services
SCOPE OF STUDY-
This study will explore the best techniques of the sales and distribution. The study of sales and distribution techniques is helpful to know the result of sales and
70 distribution techniques with example of L.G. electronics product. There are some important scope of this study ? Designing and managing of sales force. ? Sales force authority. ? Target setting. ? Sales forecasting. ? To achieve coordination or balance ? To assure that all the necessary activities are performed
In the competitive environment these aspects of study would motivate the sale force.
INTRODUCTION OF COMPANY –
71
LG Electronics was founded in 1958 at Seoul, South Korea. This multinational company is the 2nd largest electronic products maker of South Korea and third largest appliance maker in the world. LG manufactures, develops and sells Digital Display, Digital Appliances, Digital Media and Mobile Communication products in international market. LG Electronics is a project of LG Group which earns a revenue of USD$68.8 billion. Yong Nam is the CEO & Vice Chairman of the company who is making it possible to spread the network of LG througout the world. Headquarter of LG Electronics is in LG Twin Towers at Seoul, South Korea. There are more than 75 subsidiaries of the compnay in the world which designs, manufactures, market and sells televisions, different electronic products, home appliances and telecommunication devices. LG Electronics is the owner of Zenith Electronics and have a joint venture with Philips Electronics under the name of LG Display. Both the companies are putting their effort in manufacturing and developing the quality of their products. Some important subsidiaries of LG Group are LG Electronics, LG Telecom, LG Chem and Zenith Electronics in more than 80 countries. In early years of 2000 the company acquired popularity in new makrets and earned more revenue. In 2005 and 2006 the company did a record business in the market of electronic products. LG is the largest plasma manufacturer of the world and LG Display is the largest manufacturer of liquid crystal displays. In 2006 the company focused its attention on mobile phones and introduced LG Chocolate. The company develops the designs and functions of its mobile phone and marketed LG Shine and LG Prada which became very successful. LG Electronics picked as "The Design Team of the Year" by Red Dot Design Award in 2006 and 2007. It is also called “new Apple” & “new Sony” in the communities due to its products and management. LG Electronics was established in 1958 as Gold Star. It was a manufacturer of refrigerators, TVs, air conditioners and washing machines. LG Group is the merger of Lucky and Gold Star, two Korean companies. L is taken from Lucky and G from Gold Star which formed LG Group. "Life's Good" is the slogan of the LG Electronics. Before the name of LG Electronics, Electronic goods were sold under the name of Lucky and similarly home appliances were sold under the name of Gold Star. Gold star produces Interactive Multiplayer which was costly but it was very successful. In 1995 Gold Star was renamed as LG Electronics and owned Zenith Electronics of USA. LG Electronics sponsors sports in different fields such as football, cricket and racing etc.
LG Electronics of USA has introduced a variety of handsets which became very successful. The company is producing a large number of handsets and it is expected that it would become the fourth largest handset maker of the world in 2008. The mobiles of LG are becoming popular in the telecommunication market due to its quality and
72 advance features. The division of home appliances manufactures products such as air conditioners, refrigerators, ovens and washing machines for home users. North America is the larges market for home appliances division of the company. In display divisions LG Electronics is very prominent. The company manufactures, LCD TVs, Monitors, Plasma TVs, OLED Panels, Flat Panel Monitors and USB Memory. The company has launched many products in the field of digital media such as DVD Recorders, CD RW, Home Theatre Systems, Notebook PCs, MP3 Players, Desktop PCs; PDAs etc. LG has introduced a series of air conditioners which is successful in the market of electronics.
73
METHODOLOGY
There are two types of methods which i use for this topic. D. Primary data collection method E. Secondary data collection method F. Statistical tools . a. Primary data collection method: In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods include:
d) e) f) g)
questionnaires interviews focus group interviews observation
b. Secondary data collection method:
•
All methods of data collection can supply quantitative data (numbers, statistics or financial) or qualitative data (usually words or text). Quantitative data may often be presented in tabular or graphical form. Secondary data is data that has already been collected by someone else for a different purpose to yours
74
RESULTS
CONCLUSION
SUGGESTIONS
75
WEBLIOGRAPHY
1. www.lgelectronics.com 2. www.lg.com 3. www.yahoo.com 4. www.google.com 5. www.wikipedia.com 6. www.amazen.com 7. WWW.FREEBOOKS.COM
76
REFRENCE
1. Kotler Philip, (2008.)“Marketing Management – Text and Cases”, Pearson Education a south Asian perspective, 13th Edition 2. Krishna K Havaldar, Vasant M Cavale (2010) “Sale and distribution Management”, Mc Graw Hill, 8th Edition. 3. P. Subba Rao,(2009) “Essentials of Human Resource Management and Industrial Relations”, Himalaya Publishing House, 3rd revised and enlarged edition. 4. Robbins, Stephen P. (2008) Organizational Behavior, and New Delhi: Prentice Hall of India.
5. Johnson, (2010) “Sales Management”, Mc Graw Hill, 7th Edition. 6. S.J. Poliwoda, “International Marketing”, New Delhi, Prentice Hall of India. 7. Gordon Lewis, (1995) “Direct Marketing Strategies and Tactics”, New Delhi, Vision Book. 8. Mary Robert, (1995) “Direct Marketing Management”, London: Prantice Hall, 2nd Edn.
77
doc_432069197.doc
The importance of a knowledgeable, experienced and effective direct (inside or outside) sales force is often critical in the business market. If you sell through distribution channels also, the number and type of sales forces can vary tremendously and your success as a marketer is highly dependent on their success.
A STUDY OF SALES AND DISTRIBUTION TECHNIQUES PREFACE
The research provides an opportunity to a student to demonstrate knowledge, skill and competencies required during the project. The training project helps to know the problem in the organization and to suggest them how to get rid of those problems. Although I have tried my level best to prepare this report an error free report every effort has been made to offer the most authenticate position with accuracy. The report is divided into seven chapters. The first part consist of introduction to the topic, second contains the objectives of the project. The middle part gives a brief overview about the organization and the methodology use in the project. Fourth chapter is the most important part as it contains the analysis of data. Last part contains the findings and suggestions. The Chapter1- deals with the conceptual frame work related to the various sales & distribution Techniques used by LG and its deals with the introduction related to sales management, personal selling, distribution and channel of distribution. In this chapter I have also tried to introduce various functions of sales organization, its structure and the factors dealing with the sales management success. The efforts have also been made to understand the channels of distribution and various factors that are to be kept in mind while selecting the channel of distribution. The Chapter2 consists the rationale of the study. This chapter includes topics of basic purpose of the study, objectives of the study, scope of the study. The main purpose of the study is to find whether sales and distribution techniques really influences the sales of L.G. product or not. The main objective of my study is to understand what customer wants and what the competitors are offering The Chapter 3 deals with the profile of L.G. electronics. LG Electronics was founded in 1958 at Seoul, South Korea. This multinational company is the 2nd largest electronic products maker of South Korea and third largest appliance maker in the world. LG manufactures, develops and sells Digital Display, Digital Appliances, Digital Media and Mobile Communication products in international market. LG Electronics is a project of LG Group which earns revenue of USD$68.8 billion. Yong Nam is the CEO of the company who is making it possible to spread the network of LG throughout the world. Headquarter of LG Electronics is in LG Twin Towers at Seoul, South Korea. The Chapter 4 deals with research methodology used by me and explain factors like Research design, The Research Process, The Research Literature review. Research is the systematic exploration of the region of the unknown to find satisfactory answers to the
2 questions: what, how and why? It may be diligent enquiry in a scientific manner for improvement of an existing system or for development of a new one, or for improving a process. The Chapter 5 consists of data analysis and result through use of various tools and techniques dealt through sections: Section A: Percentage Analysis. Section B: Subjective Analysis through Inferences. The Chapter6 consist limitation of the study. The limitation of any study is that any research is time consuming and involves the basic knowledge of the interpretation which may not be up to the mark all the time. The Chapter 7 deals with various Suggestions and Conclusion drawn from the data collected and the interpretation of response as given by the respondents. My final conclusion is that the sales and distribution techniques decision are very important aspects faced by the manufacturers. It is very important decision as the involved in use of channel becomes the part of the price the customer has to pay and also it affects other decision like product line and pricing. Hence, the project undertaken focuses on these pressing issues linked with the sales and distribution System which are quintessential for each and every organization, and specifically studied here for L.G. electronics.
3
INDEX
CHAPTERS Certificate Declaration Acknowledgement Preface List of Models
Model: 1.1: Direct and indirect sales structure of company x and y Model: 1.2 SD: Structure for Sales Order Processing Model: 1.3: Line sales organization Model: 1.4: Line and staff organization Model: 1.5: Line and staff organization Model: 1.5: Line and staff organization Model: 1.6: Distribution channel Model: 4.1: The research process
CONTENTS
PAGE NO.
(i) (ii) (iii) (iv)
9-22 Chapter 1 INTRODUCTION Conceptual framework Sales and distribution techniques 23-26
Chapter 2
COMPANY PROFILE
Chapter 3
RATIONAL OF STUDY Basic purpose of the study Objectives of study
27-29
Chapter 4
RESEARCH METHODOLOGY Design The Research Process The Research Scope of the study
30-38
4
Chapter 5
39-49 DATA ANALYSIS AND RESULTS Section A: Percentage Analysis Section B: Subjective Analysis through Inferences
Chapter 6 LIMITATIONS
50-51
Chapter 7 SUGGESTIONS AND CONCLUSION BIBLIOGRAPHY
52-57
58-77 APPENDICES a) Questionnaire. b) Percentage analysis c) Respondent sheet. d) Synopsis.
5
A STUDY OF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 1
INTRODUCTION
CHAPTER-1 A STUDY OF SALES AND DISTRIBUTION TECHNIQUES
6
INTRODUCTION
CONCEPTUAL FRAMWORK It is a common belief that marketing is concerned with making sales and customer satisfaction only. Though it is true to certain extent, yet marketing is not simply concerned with sales and profit maximization. In fact depending upon the type or stage of demand the marketing task would differ. The study is based on sales and distribution techniques with the example of L.G. electronic product. To know the influences of the techniques of sales and distribution it is important to prepare a study which provides the result of the better sales and distribution methods and techniques. The primary goal of the marketing plan is to get people to buy your products or services. The Sales and Distribution part of the marketing plan details how this is going to happen. Traditionally there are three parts to the Sales and Distribution section of the marketing plan, although all three parts may not apply to your business; how is your product or service going to get to the customer? For instance, will you distribute your product or service through a Web site, through the mail, through sales representatives, or through retail? In a direct distribution channel, the product or service goes directly from the manufacturer to the consumer. In a one stage distribution channel it goes from manufacturer to retailer to consumer. The traditional distribution channel is from manufacturer to wholesaler to retailer to consumer. Outline all the different companies, people and/or technologies that will be involved in the process of getting your product or service to your customer. If business involves selling a product, you should also include information about inventory levels and packaging in this part of your marketing plan.
INTRODUCTION TO SELLING AND SALES MANAGEMENT
7 Marketing programs are designed around four elements of the marketing mix: products to be sold, pricing, promotion, and distribution channels. The promotion component includes advertising, public relations, personal selling, and sales promotion (point-ofpurchase displays, coupons, and sweepstakes). Note that advertising and sales promotions are no personal communications, whereas salespeople talk directly to customers. Thus, where advertising and sales promotion “pull” merchandise through the channel, personal selling provides the “push” needed to get orders signed. With public relations, the message is perceived as coming from the media rather than directly from the organization. Personal selling involves two-way communication with prospects and customers that allows the salesperson to address the special needs of the customer. It is often the job of a salesperson to uncover the special needs of the customer. When Customers have questions or concerns; the salesperson is there to provide appropriate explanation. Furthermore, personal selling can be directed to qualified prospects, whereas great deals of advertising and sales promotions are wasted because many people in the audience have no use for the product. Perhaps the most important advantage of personal selling is that it is considerably more effective than advertising, public relations, and sales promotion in identifying opportunities to create value for the customer and gaining customer commitment. The person responsible for management of the field sales operation is the sales manager. He or she may be a first-line manager, directly responsible for the day-to-day management of salespeople, or may be positioned at a higher level in the management hierarchy, responsible for directing the activities of other managers. In either case, sales management focuses on the administration of the personal selling function in the marketing mix. This role includes the planning, management, and control of sales programs, as well as the recruiting, training, compensating, motivating, and evaluating of field sales personnel. Sales management can thus be defined as: The planning, organizing, leading, and controlling of personal contact programs designed to achieve the sales and profit objectives of the firm.
Sales
According to KOTLER (2008)” Sale is the pinnacle activity involved in the selling products or services in return for money or other compensation.” It is an act of completion of a commercial activity. Selling is one of the oldest professions in the world. Selling can be done by many ways but the most popular two ways are given below 1. Personal selling 2. Direct marketing Personal selling means selling directly to the customers. It involves the direct connection with the customers and aim is to build customer unique value and long lasting relationship.
8 “A good sales organization is one wherein the functions or departments already detailed have each been carefully planned and coordinated towards the objectives of putting the product in the hand of the consumers the whole efforts being efficiently supervised and managed so that each function is carried out in the desired manner.” Sales organization is the planning, direction and control of selling including recruiting, selecting training, equipping, supervising and motivating, as these task apply to the sales force.
Model: 1.1: Direct and indirect sales structure of company x and y
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Function of sales organization
1. Planning function includes a) Sales forecasting b) Sales budgeting c) Selling policy 2. Administrative functions includes a) Selecting salesmen b) Training salesmen c) Control of salesmen d) Remuneration of salesmen 3. Executive functions includes a) Sales promotion b) Selling routine This chapter has introduced the topics of personal selling and sales management. Where personal selling focuses on direct contacts with prospects, sales management is concerned with the planning, organizing, leading, and controlling of personal contact programs to satisfy customers and achieve the objectives of the firm. You should now be able to do the following: 1. Describe the major changes taking place in selling and the forces causing these Changes- The competitive market place is becoming more globalize, product life cycles are getting shorter, and competitive boundaries are blurring. At the same time, customers are buying from fewer suppliers, their service and performance expectations are increasing, and their power is increasing so that they can not only demand but also obtain higher service and offerings from suppliers. As a result of these forces, the selling process is becoming more focused on relationship selling, selling teams are often necessary to fully address customer needs, people are spending more of their time on internal selling and marshaling resources to develop customer solutions, and sales force success is increasingly measured in terms of productivity and profits as opposed to topline revenues. 2. Define sales management. Sales management is defined as the planning, organizing, leading, and controlling of personal contact programs designed to achieve the sales and profit objectives of the firm. 3. Describe the sales management process. For pedagogical purposes and by way of organizing the variety of activities involved in sales management, the sales management Process is grouped as follows: seeing the big picture and developing strategic sales plans, Defining the role of the sales force in executing a firm’s business plan, structuring the Sales force for efficiency and effectiveness, building the sales competencies necessary to Implement the firm’s business strategy, and leading the sales force to achieve success.
10 Although these steps are not usually performed in sequence, this organization of sales A management activity provides a good overview of the decisions in which sales managers at all levels in the organization are involved. 4. Discuss the competencies required to be a successful sales manager. To be an effective sales manager in a dynamic environment requires six competencies: strategic action, coaching, team building, self-management, a global perspective, and a technology competency. You can develop these competencies through study, training, and experience. By doing so, you can prepare yourself for a variety of sales and sales management position in various industries and countries. You can continue practicing your managerial competencies by completing the exercises at the end of this and subsequent chapters. PREPARING FOR SALES MANAGEMENT SUCCESS Sales Management was written to prepare you for a successful sales management career. To accomplish this objective, its chapters provide comprehensive coverage in a manner that is both interesting and engaging. In addition, each chapter has been reviewed and enhanced by the experiences and suggestions of highly successful people in sales and marketing, including, among others, Paulette Turner, Sales Operations Business Unit Executive, IBM Corporation’s. J. Polk, Director-Sales-Marketing, Procter & Gamble Distributing Company; and Joseph Clayton, Chairman of the Board, Sirius Satellite. They have passed along the lessons they have learned to help you be a success. Success in business is directly related to the competencies that you develop. The remaining chapters build on the competencies introduced in this chapter. These six competencies have been identified as important for success in management. To illustrate the relevance of each competency to sales management in particular, four of the competencies as exercised by real companies or individuals are described in boxed inserts in the body of each chapter of this book. At the conclusion of each chapter, exercises for developing each of the six key competencies are presented. Each exercise relates to the chapter’s topic and is designed to help you build your competencies so that you are prepared to assume sales management Responsibilities when the opportunity is presented. To further help in your development, each chapter includes several Team Exercises describing typical situations in the day-today life of a sales manager. Each situation calls for you to decide the most appropriate action to be taken and often includes the opportunity to think about the words and phrases you would use when talking with the other people in the exercise. Because more than one person is usually involved, this exercise lends itself well to a team or group discussion and role playing of conversations between individuals. Each chapter begins with a company or individual vignette introducing many of the concepts and issues discussed in the chapter in a live situation. On the first page of each chapter is a list of Learning Objectives for that chapter. A Summary at the end of each chapter revisits each learning objective, along with a brief description of the topic. Key terms are presented in italics and are listed at the end of each chapter. Comprehensive cases are presented at the end of the book. Following this chapter is the D & M Insurance Company case describing Doug Bloom’s first days after being promoted to sales manager in a financial services company. This first case describes the company, its products, and organization,
11 as well as the “growing pains” Doug goes through in those first months as a sales manager. You are given the opportunity to grow with Doug as he faces challenges described at the end of each chapter. Again, you’re asked to make decisions based on the background information presented in the chapter.
SD: Functionality
1. 2. 3. 4. 5. 6. Sales Support Sales Shipping and Transportation Billing Credit Management Foreign Trade
Model: 1.2 SD: Structure for Sales Order Processing
•
Sales Support is a component of SD that assists in the sales, distribution, and marketing of a company’s products and services to its customers. It contains the following functionality:
12 – Creating and tracking customer contacts and communications (sales activity) • Phone call records • On-site meeting • Letters • Campaign communication Implementing and tracking direct mailing, internet, and trade fair campaigns based on customer attributes
–
Pre-sales documents need to be managed within the presales activities: Inquiries and Quotations. These documents help identify possible sales related activity and determine sales probability
Sales organizational structure
1. Line sales organization
Sales manager
Assistant sales manager Division 1
Assistant sales manager Division 2
Assistant sales manager Division 3
Assistant sales manager Division 3
Assistant sales manager Division 4
Sales people
Sales people
Sales people
Sales people
Sales people
Model: 1.3: Line sales organization
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2. Line and staff organization
Vice president in charge of marketing
Advertising manager
General sales manager
Manager of marketing research
Direct sale training
Sales personnel director
Assistant general sales manager
Assistant to general sales manager
Sales promotion manager
Distributor relation manager
Model: 1.4: Line and staff organization
2. Functional sales organization
Director of sales administrati on
Installation and service manager
Manager of sales manager
Manager of sales supervision
Manager of distributor relation
Manager of sales promotion
Manager of sales personnel
Sales people Sales people
Sales people
Sales people
Sales people
Sales people
Model: 1.5: Line and staff organization
14
A sale is the pinnacle activity involved in the selling products or services in return for money successfully reaching a destination’s visitor market with the necessary information and booking channels is essential in converting intention to visit into actual visitation. The sales and distribution channels used by destination managers have been influenced significantly over the last decade with the rise in internet usage. While traditional methods of sales and distribution such as travel shows, tour wholesalers and travel agents still play a real part in converting potential visitors, the trend toward online conversion has been the focus of much attention in the future of sales and distribution techniques in the tourism industry.
PERSONAL SELLING
According to the U.S. Department of Labor’s Bureau of Labor Statistics, people working insales number close to 12 million, or about 10 percent of the total workforce in the United States. Personal selling is critical to the sale of many goods and services, especially major commercial and industrial products and consumer durables, and can be defined as: Direct communications between paid representatives and prospects that lead to transactions, customer satisfaction, account development, and profitable relationships. The relationships between selling and other elements of the marketing mix are highlighted in The seller - the provider of the goods or services - completes a sale in response to an acquisition or to an appropriation or to a request. There follows the passing of title (property or ownership) in the item, and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership. Ideally, a seller agrees upon a price at which he willingly parts with ownership of or any claim upon the item. The purchaser, though a party to the sale does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price, the sale remains valid and gives rise to an obligation to pay.
The seller - the provider of the goods or services - completes a sale in response to an acquisition or to an appropriation or to a request. There follows the passing of title (property or ownership) in the item, and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership. Ideally, a seller agrees upon a price at which he willingly parts with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise
15 to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price, the sale remains valid and gives rise to an obligation to pay.
Direct Sales Your Company sells directly to the customer or end user of the product. There is no agent between your company and the customer. Providing financial planning services to individuals is an example of direct sales. Catalog sales or sales over the Internet are also examples of this method. 2. Indirect Sales: Retail Your Company sells to a retailer whose salespeople then sell to the customer. Selling organically grown herbs to a local grocery store is an example of indirect sales.
1. 3.
Indirect Sales: Wholesale Your Company sells to a wholesaler or agent who sells products to retailers. The wholesaler most likely represents several companies. (It's more efficient for the retailer to have one source for many products instead of dealing with an unwieldy number of individuals.) Selling novelty pet accessories to wholesalers who resell to a variety of pet care stores, animal clinics and other retail outlets is an example of selling to wholesalers or agents. Trade shows and merchandise markets are locations where retailers order your product based on your display and promotion at the show. You can get schedules and names of these shows from trade publications available in most big libraries. Indirect Sales: Multi-level marketing you sell both directly to customers and to other sales people you have recruited to sell products.
4.
THE SALES MANAGEMENT COMPETENCIES
We’ve talked about the sales management process, but you may be wondering what it takes to be an outstanding sales manager. So, let’s look more closely at the competencies that managers need in order to succeed. Sales management competencies are defined as sets of knowledge, skills, behaviors, and attitudes that a person needs to be effective in a wide range of industries and various types oforganizations.13 People use many types of competencies in their everyday lives. Here we focus on six competencies (Figure 1-5) that you will need for today’s sales management responsibilities. Keeping these six sales management competencies in mind will help you remember how the material you are studying can improve your performance on the job. To help you in this process, we have included inserts into each chapter describing these competencies in the context of the chapter’s subject matter. Often these inserts are examples from actual companies. In addition, exercises are included at the end of each chapter focusing on each of the six competencies. Let’s examine the dimensions of each of these competencies more closely.
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DISTRIBUTION
Distribution is all about getting your product and service to the right people at the right time with special consideration for profit and effectiveness. Distribution is one of the four aspects of marketing. A distributor is the middle man between the manufacturer and retailer. After a product is manufactured it is usually sold to distributor. The distributor then sales the product to the retailers or customers. “Channel of distribution” is meant that that chain through which passing from one to other hand, the product reaches from the producers to the final consumers. The following are the main definition of the channelChannel of distribution is that system of financial organization by which a producer sends his product to the hand of consumers The distribution channel It is defined as a chain of intermediaries; each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user Function of the channel of distribution 1. Extending suggestion regarding price determination 2. Managing the finance 3. Performing the promotion activities 4. Serving the consumers 5. Regularizing the decisions Factors affecting the selection of channel of distribution
17 Every producer in order to pass the product to the consumers is required to select a channel of distribution. The selection of a suitable channel of distribution is one of the important factors of the distribution decisions. The following factors affect the selection of the channel of distribution. A. Factor pertaining to the product 1) 2) 3) 4) 5) Size and weight Technical nature Goods made to order Price of the product Perishability
B. Factor pertaining to the consumers and market 1) 2) 3) 4) 5) Size of the order Objective of purchase Need of the credit facilities Number of customers Expansion of consumers
C. Factors pertaining to the middlemen 1) Financial resources of the company 2) Managerial competence and experience 3) Level of the production Types of channels of distribution The producer and the final consumer are part of every channel. A marketing channel performs the work of moving goods from producer to consumer. It overcomes the time, and possession gaps that separate goods and services from those who need and want them.
18
Model: 1.6: Distribution channel
Choice of a channel of distribution
The factors to be considered before choosing a suitable channel of distributions are listed below: 1. Product considerations: The nature and type of product have an important bearing on the choice of distribution channels. For examples, perishable goods need speedy movements and hence shorter channel or route of distribution; For durable goods, longer and diversified channels may be used; Similarly, for technical products requiring specialized selling and serving talents, the shortest channel should be used. 2. Market considerations: The nature and type of customers and size of market are important considerations in the choice of a channel of distribution. For example, if the market size is large, there may be long channels, whereas in a small market direct selling may be profitable. The nature and type of consumers include factors such as desire for credit, preference for the stop shopping, demand for personal services, amount of time and effort the customer is willing to spend. It also includes factors like age, income group, sex, and religion of customers. 3. Company considerations: The nature, size and objectives of the business firm also play an important role in the selection of distribution channel. It includes financial resources, market standing, volume of production, desire for control of channel, services provided by manufacturers', etc. For example a company with substantial financial resources need not rely too much on the middlemen and can afford to reduce the levels of distribution. Similarly a company desiring to exercise greater control over channel will prefer a shorter channel.
19 4. Middlemen considerations: The cost and efficiency of distribution depend largely on the nature and type of middlemen. It includes characteristics of middlemen such as availability, attitudes, services, sales potential, costs etc. For example, if the terms and conditions of engaging wholesalers are unfavorable manufacturer may like to channelise his products through semi: Business Studies Wholesalers or retailers, thereby, bypassing wholesalers. However, the determining factor would be the differential advantage involved in the choice. To conclude, the channel generating the largest sales volume at lower unit cost will be given top priority. This will minimize distribution cost. Distribution refers to how you deliver your product to the customer. If you are in a service business, it may be the way you deliver yourself to the customer to perform the service. Some of the primary categories of sales and distribution channels are named below. You may use one, more than one or various combinations of sales and distribution methods. Additionally, different products from the same company may require different methods.
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 2
COMPANY PROIFILE
20
CHAPTER-2
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
INTRODUCTION OF COMPANY –
LG Electronics was founded in 1958 at Seoul, South Korea. This multinational company is the 2nd largest electronic products maker of South Korea and third largest appliance maker in the world. LG manufactures, develops and sells Digital Display, Digital Appliances, Digital Media and Mobile Communication products in international market. LG Electronics is a project of LG Group which earns revenue of USD$68.8 billion. Yong Nam is the CEO of the company who is making it possible to spread the network of LG throughout the world. Headquarter of LG Electronics is in LG Twin Towers at Seoul, South Korea.
21
There are more than 75 subsidiaries of the company in the world which designs, manufactures, market and sells televisions, different electronic products, home appliances and telecommunication devices. LG Electronics is the owner of Zenith Electronics and have a joint venture with Philips Electronics under the name of LG Display. Both the companies are putting their effort in manufacturing and developing the quality of their products. Some important subsidiaries of LG Group are LG Electronics, LG Telecom, LG Chem. and Zenith Electronics in more than 80 countries. In early years of 2000 the company acquired popularity in new markets and earned more revenue. In 2005 and 2006 the company did a record business in the market of electronic products. LG is the largest plasma manufacturer of the world and LG Display is the largest manufacturer of liquid crystal displays. In 2006 the company focused its attention on mobile phones and introduced LG Chocolate. The company develops the designs and functions of its mobile phone and marketed LG Shine and LG Prada which became very successful. LG Electronics picked as "The Design Team of the Year" by Red Dot Design Award in 2006 and 2007. It is also called “new Apple” & “new Sony” in the communities due to its products and management. LG Electronics was established in 1958 as Gold Star. It was a manufacturer of refrigerators, TVs, air conditioners and washing machines. LG Group is the merger of Lucky and Gold Star, two Korean companies. L is taken from Lucky and G from Gold Star which formed LG Group. "Life's Good" is the slogan of the LG Electronics. Before the name of LG Electronics, Electronic goods were sold under the name of Lucky and similarly home appliances were sold under the name of Gold Star. Gold star produces Interactive Multiplayer which was costly but it was very successful. In 1995 Gold Star was renamed as LG Electronics and owned Zenith Electronics of USA. LG Electronics sponsors sports in different fields such as football, cricket and racing etc. LG Electronics of USA has introduced a variety of handsets which became very successful. The company is producing a large number of handsets and it is expected that it would become the fourth largest handset maker of the world in 2008. The mobiles of LG are becoming popular in the telecommunication market due to its quality and advance features. The division of home appliances manufactures products such as air conditioners, refrigerators, ovens and washing machines for home users. North America is the larges market for home appliances division of the company. In display divisions LG Electronics is very prominent. The company manufactures, LCD TVs, Monitors, Plasma TVs, OLED Panels, Flat Panel Monitors and USB Memory. The company has launched many products in the field of digital media such as DVD Recorders, CD RW, Home Theatre Systems, Notebook PCs, MP3 Players, Desktop PCs; PDAs etc. LG has introduced a series of air conditioners which is successful in the market of electronics.
22 By 2005, LG was a Top 100 global brand, and in 2006, LG recorded a brand growth of 14%. Now the world's largest plasma panel manufacturer, its affiliate, LG Display, is one of the largest manufacturers of liquid crystal displays. Also in 2006, the company's mobile phone division, LG Mobile, marketed the LG Chocolate phone, changing the company's image of the maker of thick 3G phones. It now focuses on the design and marketing of phones such as the LG Shine, the LG Glimmer and LG Prada (KE850) As a result, the company was picked as "The Design Team of the Year" by the red dot design award in 2006~2007 and is often called the "New Apple" in the industry and online communities
COMPANY PROFILE
Type Industry Founded Headquarters Area served Key people Public(KRX: 003550 Conglomerate 1947 in Busan, South Korea Seoul, South Korea Worldwide Koo Yu Sig Bon-Moo, Kang, (Chairman (Vice Chairman & & CEO) Co-CEO)
Juno Cho, (EVP, COO, & Director) Electronics Products Revenue Employees Chemicals Telecommunications
? $104.3 billion (115 trillion KRW) 2008
177,000 (2008) LG Electronics Display Telecom LG LG LG Chem LG.com
Subsidiaries
Website
Marketing has been defined as the management function responsible for identifying, anticipating and satisfying customer requirements profitably. Marketing is, therefore, both a philosophy and a set of techniques which address such matters as research, product design and development, pricing, packaging, sales and sales promotion, advertising, public relations, distribution and after sales services. These activities define the broad scope of marketing and their balanced integration within a
23 marketing plan is known as the marketing mix. A modification of a definition of marketing by Doyle (2000) suggests that marketing is the management process that seeks to maximize returns to shareholders by creating a competitive advantage in providing, communicating and delivering value to customers thereby developing a long-term relationship with them. LG adopted the same marketing strategy in India to capture the attention of the people and to influence their preferences. It also formulated the strategy to choose the right customer, to build relationship of trust with them and to create a competitive advantage. LG in India The LG Group had entered the Indian market through its wholly owned subsidiary LG Electronics India Pvt. Ltd (LGEIL). The company after being incorporated on 20th January 1997 was successfully established and by the end of December 1999, 23 branch offices were operational. Today LG’s arms in India include LG Electronics India (consumer electronics and white goods), LG Software India, LG Polymers, LG Construction, LG Hotline (picture tubes), LG Chemicals and a liaison office in Delhi. Being on its own, LG was also able to move at a fast pace. When it started off, within a space of five months it was able to complete its nationwide launch. Most other companies took at least two years to complete their all-India launch.
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 3
RATIONALE OF THE STUDY AND OBJECTIVES
24
CHAPTER-3
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
RATIONALE OF THE STUDY
The main purpose of the study is to find whether sales and distribution techniques really influences the sales of L.G. product In order to be a successful company in sales and distribution, it is essential that effort should be coordinated in such a manner that maximum utilization of resources takes place with minimum costs. The explanations of these elements are given. 1. Utility of distribution system 2. Controlling distribution cost 3. Effect on size of inventory
25 4. 5. 6. 7. Product planning Effect on channel of inventory Coordination of demand and supply Increase in sales volume
Getting the right goods to the right place at the right time for the least cost. Well cocoordinated distribution systems reduce the cost. Customer wants from suppliers 1. 2. 3. 4. satisfaction of emerging needs carefully handling of merchandise replacement of defective goods quickly willingness to carry inventory
What customer wants and what the competitors are offering. Distribution is a tool for demand creation.
OBJECTIVES OF THE STUDY
Objectives are the study of intends that what are impacts of the sales and distribution techniques of the company strategies. As it is the study on the electronics product of the L.G. Company. The objectives of the study must be specific and measurable as well as some kind of targets with respect to time periods. The sales and distribution objectives and goals are derived from the company’s marketing objectives and goals. The main objectives of the project are: 1. To find out the influence of sales and distribution techniques in the L.G. electronics 2. To find out the factors which help to increase in sales volume, reduce selling expenses. The importance of sale and distribution management to a company, the way salespeople go about setting objectives and strategies and plan of action to achieve the
26 objectives. Sale and distribution management serves the primary function of ensuring the product and service is made available to the consumer.
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 4
RESEARCH
27
METHODOLOGY
CHAPTER-4
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
RESEARCH METHODOLOGY
“Research methodology is a method of studying problems whose solutions are to be desired partly or wholly from facts. These facts may be statements of opinions, historical facts, those contained in records and reports, the results of tests, answers to questionnaires, experimental data of any sort, and so forth.”
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- By M.S. Monore Research is the systematic exploration of the region of the unknown to find satisfactory answers to the questions: what, how and why? It may be diligent enquiry in a scientific manner for improvement of an existing system or for development of a new one, or for improving a process. Research has been defined by various authors in different ways. It always begins with the question or a problem Research is carried out for two purposes 1. discovery of new facts 2. verification of old one
There are two types of methods A. Primary data collection method B. Secondary data collection method C. Statistical tools .
A. Primary data collection method: In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods include:
a) b) c)
questionnaires interviews focus group interviews
Observation B. Secondary data collection method:
29
•
All methods of data collection can supply quantitative data (numbers, statistics or financial) or qualitative data (usually words or text). Quantitative data may often be presented in tabular or graphical form. Secondary data is data that has already been collected by someone else for a different purpose to yours
Thus, research is the systematic exploration of the region of the unknown to find satisfactory answers to the questions: what, how and why? It may be diligent enquiry in a scientific manner for improvement of an existing system or for development of a new one, or for improving a process. Thereby, the aim of research is to improve, develop and not merely control routine operations.
Characteristics of research 1) Directed towards the solution 2) Require systematic approach 3) Data collection and data analysis 4) Relevancy 5) Expertise 6) Unbiased 7) Control 8) Logical 9) Empirical Every project report conducted scientifically has specified framework for controlling data collection. This framework is called research design. Its function is to ensure that required data are collected accurately and effectively. Objectives 1) Finding out solutions
30 2) Understanding a business problem 3) To innovate new ideas 4) Identifying the cause and effect relationship 5) To improve the quality of products
THE RESEARCH PROCESS
31 Defining the problem And so on Defining the new problem
Planning a research design
Formulating conclusions and preparing the report
Planning a sample
Gathering the data
Processing and analyzing the data
Model: 4.1: THE RESEARCH PROCESS
THE RESEARCH
Research Objectives
32 A study of sales and distribution techniques with special reference to L.G. electronics”
Research Design 1. The research conducted is exploratory. 2. Research is designed to describe characteristics of a population or a phenomenon. 3. The study is made in attempt to modify the present system by providing with recommendations.
Sample for Research 1. The study has been carried out at L.G., Indore. 2. Census survey has been conducted for acquiring the information. 3. All on –the-rolls employees of L.G. (Indore) were taken into consideration for the acquisition of relevant and meaningful data. Data Collection Tools 1. Secondary data has been collected through various books, magazines, library, and Internet. 2. Primary data. This data has been collected through questionnaires cum schedules. It included both open-ended and close-ended/objective questions for collecting information.
33
Data Analysis Tools 1. Primary data was analyzed through Percentage analysis and Factor Analysis. It includes statistical methods such as graphs, percentages, pie charts, tables etc. 2. Inferences were drawn to analyze open-ended questions. 3. Secondary data was analyzed through interpretations and applied logic. Conclusions And Report 1. Valid interpretation of the gathered information is done to supply with meaningful recommendations. 2. Summary of the findings is provided. 3. The report in the form of a record is made available.
34
SCOPE OF STUDY-
This study will explore the best techniques of the sales and distribution. The study of sales and distribution techniques is helpful to know the result of sales and distribution techniques with example of L.G. electronics product. There are some important scope of this study 1. Designing and managing of sales force. 2. Sales force authority. 3. Target setting. 4. Sales forecasting. 5. To achieve coordination or balance 6. To assure that all the necessary activities are performed
In the competitive environment these aspects of study would motivate the sale force.
1. 2. 3. 4. 5. 6.
Production and sales planning Effectiveness of the distribution system Discovery of the new market of the product Help in adopting changes Production in accordance with demand Enables to meet change
35
SIGNIFICANCE
1. 2. 3. 4. 5. 6. 7. It provides a better utilization of distribution system It enables the management controlling distribution cost Effect on size of inventory Product planning Effect on channel of inventory Coordination of demand and supply Increase in sales volume
36
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 5
DATA ANALYSIS AND RESULTS
37
CHAPTER-5
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
DATA ANALYSIS
Q: 1 Result
Are you aware of the sales and distribution system followed in your branch? 98% is aware of the present system of sales and distribution 2% are unaware of such a system being followed.
Awareness of sales and distribution system No 2% Yes 98%
38
Respondents' Observation Yes No
TOTAL
Percentage Respondents 98% 2%
100%
Of
Yes 98 %
Interpretations:
Most of the respondents are found aware when they have been asked about the sales and distribution techniques. The company sales and distribution system is much strong. There are several reasons of the awareness like the growing competition in the market, marketing mix stratigies that are made through proper analysis of the market. The company has many kind of the electronic products and different kind of the sales and distribution techniques are planned. It is very important that company must have a managed sales and distribution system to improve the performance level of the company.
39
Q: 2 Result
Are sales and distribution techniques marketing strategies? 99% agrees to the fact but 1% not agrees
used to make perfect
No 1%
Yes No
YES 99%
Respondents' Observation Yes No
TOTAL
Percentage Respondents 99% 1%
100%
Of
40
Interpretations: According to the respondents of the strategies of the company and planning of the company are made after the market analysis which provides strategic information about what consumer need and requirement. Marketing programs are designed to make all the functions in the proper way. The marketing strategies of the company provide help to made good advertising, sale promotion, pricing and the product planning. To the achievement of the company objectives specific kind of the sales and distribution techniques must be applied because these techniques always provide better utilization of the resources.
Q:3 Result
Does sales and distribution techniques works to organize the market segmentation ? 93% employee are agree but 7%are not agree
No 7%
Yes No
Yes 93 %
Respondents' Observation Yes No
TOTAL
Percentage Respondents 93% 7%
100%
Of
41
Interpretations: As the respondents replied that the segmentation is done after the
proper analysis of the sales and distribution techniques of the company the nature and type of customers and size of market are important considerations in the choice of a channel of distribution. For example, if the market size is large, there may be long channels, whereas in a small market direct selling may be profitable. The nature and type of consumers include factors such as desire for credit, preference for the stop shopping, demand for personal services, amount of time and effort the customer is willing to spend. It also includes factors like age, income group, sex, and religion of customers.
Q:4 Result
Do you clearly understand it? 93% employees in L.G. clearly understand the present system, while 7% lack the understanding of system. Understanding the Present system No 6%
Yes No
Yes 94 %
Respondents'
Percentage
Of
42
Observation Yes No
TOTAL
Respondents 94% 6%
100%
Interpretations: Most respondent believe that understanding of the proper distribution channel and sale techniques is most important because of the organizational performance level improved. Resources are limited and that in order to grow they need to take the maximum from the minimum. They thus try to exploit these resources. Interpersonal. In the past, most research on sales and distribution techniques has focused on the type of company and product.
Q: 5 Result
Does the sales and distribution gives an idea of what targets are to be achieved? 98% is aware of what is expected of them and targets to be achieved. 2% are not aware of the targets to be achieved.
Yes 98%
Yes No
No 2%
Respondents'
Percentage
Of
43
Observation Yes No
TOTAL
Respondents 98% 2%
100%
Interpretations: The respondent strongly believe that the sales and distribution
techniques always helps in the target achievement of the company. The importance of sale and distribution management to a company, the way salespeople go about setting objectives and strategies and plan of action to achieve the objectives. Sale and distribution management serves the primary function of ensuring the product and service is made available to the consumer. The sales and distribution channels used by destination managers have been influenced significantly over the last decade with the rise in internet usage. While traditional methods of sales and distribution such as travel shows, tour wholesalers and travel agents still play a real part in converting potential visitors, the trend toward online conversion has been the focus of much attention in the future of sales and distribution techniques in the industry. Q: 6 Result Does any steps have taken place in your organization that focuses on improving your overall sales and distribution system? 82% feel that organization takes steps to improve overall performance but 18% does not feel so.
Yes 82%
Yes No
No 18%
44
Respondents' Observation Yes No
TOTAL
Percentage Respondents 82% 18%
100%
Of
Interpretations: The respondent replied that according to the company product
demand and the growing competition sales and distribution techniques are planned and by the time many changes occur. The competitive market place is becoming more globalized, product life cycles are getting shorter, and competitive boundaries are blurring. At the same time, customers are buying from fewer suppliers, their service and performance expectations are increasing, and their power is increasing so that they can not only demand but also obtain higher service and offerings from suppliers. As a result of these forces, the selling process is becoming more focused on relationship selling, selling teams are often necessary to fully address customer needs, people are spending more of their time on internal selling and marshaling resources to develop customer solutions, and sales force success is increasingly measured in terms of productivity and profits as opposed to topline revenues.
Q: 7 Result
Does sales and distribution techniques help to fulfillment the consumer needs? 99% agrees to the fact but 1% not agrees
45
No 1%
Yes No
Yes 99%
Respondents' Observation Yes No
TOTAL
Percentage Respondents 99% 1%
100%
Of
Interpretations: Respondents answered that the good sales and distribution system
always help to the fulfillment the consumer demand. As the market is growing the competition is also becoming the main the problem in front of the managers. In the global environment the consumers expectation towards the product, price and place becoming more specific. Company like this must have the systematic approach in the sales and distribution system.
Q: 8 Result
Are you aware of sales techniques objectives like price, promotion, and place? 99% agrees to the fact but 1% show unawareness towards the specific organization’s objectives.
46
No 1%
Yes No
Yes 99%
Respondents' Observation Yes No
TOTAL
Percentage Respondents 99% 1%
100%
Of
Interpretations: Most of the respondent replied that there is much effect of the sales
and distribution in the marketing mix. Marketing mix is a combination of product, price, place, promotion. The respondents were clear about the marketing mix. All the strategies are made under the consideration of sales and distribution channel. These strategies are helpful in the decision making.
FINDINGS
47
1. Respondent are aware of the sales and distribution techniques followed by the company. 2. Respondent are satisfied by the method applied by the company. 3. Management makes effort to improve if they know where they are lacking. 4. Sales and distribution techniques in the company helps to match organizational objective. 5. Sales and distribution techniques of the company give rise to competition among the same level. 6. Respondents feel that sales and distribution is a tool for increasing the efficiency. 7. Proper sales and distribution techniques increase the strengths. 8. Sales and distribution techniques helps to make effective marketing strategies. 9. Sales and distribution techniques give idea to segmentation. 10. Sales and distribution techniques help to fulfillment of the consumer and organizational need and improve efficiency against competitors.
48
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 6
LIMITATIONS
49
CHAPTER-6
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
LIMITATIONS OF THE STUDY
Though the research has been conducted with full sincerity and lot of hard work, but still there were certain limitations faced while carrying on this research. 1. The study is meant for L.G. electronics. 2. Though census survey was conducted, it consist very few members. 3. The study is done to the employees available during the study period and is willing to participate in the study 4. Specially meant for L.G. electronics and not applicable to any other organization. 5. The data collected was not sufficient for carrying out a very in-depth analysis of the subject matter. 6. Data was subjected to bias responses. Hence, accuracy of the information collected can’t be proved. 7. Limited time was available for the study to be conducted.
50
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
CHAPTER – 7
RECOMMENDATIONS AND CONCLUSION
51
CHAPTER-7
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
RECOMMENDATIONS –
1. Explore the recent sales and distribution techniques in the company 2. To discuss about the market trends and customer needs. 3. Marketing strategies must be adopted according to the sales and distribution techniques. 4. Make proper research program to improve the techniques. 5. Don’t leave room for compromise. 6. Break the pack and do something different. 7. Proper understanding the nature of industry within which the organization is functioning. 8. Discover the extent to which a company is powerful to influence its environments. 9. Analysis of the results of the sales and distribution techniques.
52
CONCLUSION -
The sales and distribution techniques decision are very important aspects faced by the manufacturers. It is very important decision as the involved in use of channel becomes the part of the price the customer has to pay and also it affects other decision like product line and pricing. We’ve talked about the sales management process, but you may be wondering what it takes to be an outstanding sales manager. So, let’s look more closely at the competencies that managers need in order to succeed. Sales management competencies are defined as sets of knowledge, skills, behaviors, and attitudes that a person needs to be effective in a wide range of industries and various types oforganizations.13 People use many types of competencies in their everyday lives. Here we focus on six competencies that you will need for today’s sales management responsibilities. Keeping these six sales management competencies in mind will help you remember how the material you are studying can improve your performance on the job. The competitive market place is becoming more globalize, product life cycles are getting shorter, and competitive boundaries are blurring. At the same time, customers are buying from fewer suppliers, their service and performance expectations are increasing, and their power is increasing so that they can not only demand but also obtain higher service and offerings from suppliers. As a result of these forces, the selling process is becoming more focused on relationship selling, selling teams are often necessary to fully address customer needs, people are spending more of their time on internal selling and marshaling resources to develop customer solutions, and sales force success is increasingly measured in terms of productivity and profits as opposed to topline revenues. Selling has great significance in all type off organization, whether it is private or public small or large. The importance of selling can not be overemphasized. In pursuit of a prudent policy, an organization can derive maximum befit by giving selling the importance that it rightly deserves. It can helps boost sales if wisely used and bring in a human touch while carrying out a transaction. The importance of sale and distribution management to a company, the way salespeople go about setting objectives and strategies and plan of action to achieve the objectives. Sale and distribution management serves the primary function of ensuring the product and service is made available to the consumer.
53
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
BIBLIOGRAPHY
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
54
REFRENCE
1. Kotler Philip, (2008.)“Marketing Management – Text and Cases”, Pearson Education a south Asian perspective, 13th Edition 2. Krishna K Havaldar, Vasant M Cavale (2010) “Sale and distribution Management”, Mc Graw Hill, 8th Edition. 3. P. Subba Rao,(2009) “Essentials of Human Resource Management and Industrial Relations”, Himalaya Publishing House, 3rd revised and enlarged edition. 4. Robbins, Stephen P. (2008) Organizational Behavior, and New Delhi: Prentice Hall of India. 5. Johnson, (2010) “Sales Management”, Mc Graw Hill, 7th Edition. 6. S.J. Poliwoda, “International Marketing”, New Delhi, Prentice Hall of India. 7. Gordon Lewis, (1995) “Direct Marketing Strategies and Tactics”, New Delhi, Vision Book. 8. Mary Robert, (1995) “Direct Marketing Management”, London: Prantice Hall, 2nd Edn.
55
WEBLIOGRAPHY
1. www.lgelectronics.com 2. www.lg.com 3. www.yahoo.com 4. www.google.com 5. www.wikipedia.com 6. www.amazen.com 7. WWW.FREEBOOKS.COM
56
A STUDYOF SALES AND DISTRIBUTION TECHNIQUES
APPENDICES
57
Appendix-A
Questionnaire
Dear Sir/Madam, I am a management student of BM College of Management and Research. As part of course I am undertaking this project study. I would a request you to kindly answer a few questions. This questionnaire gives you the opportunity to express your opinion regarding various aspects of sales and distribution techniques. The results shall be submitted to the university in the report format for the usage of researchers and other concerned authorities. As is the case for entire study, no individual will be identified. Only group averages will be reported. Personal Profile of the Respondent 1. (a) Place of survey.................................. (b) Name............................................. (c) Address........................................... (d) Male/Female................................
Q: 1 Are you aware of the sales and distribution system followed in your organization? (a) Yes (b) No
Q: 2 Do you clearly understand sales and distribution system? (a) Yes (b) No
Q: 3 Are you satisfied by the present techniques being followed?
58
(a) Very satisfied (b) Satisfied (c) Neutral (d) Not satisfied (e) Very dissatisfied
Q: 4 Does the sales and distribution system helps in achieving targets? (a) Yes (b) No
Q: 5 What kind of distribution system followed urban areas? (a)Manufacturer-representative-wholesaler-retailer-consumer (b) Manufacturer-representative--retailer-consumer (c) Manufacturer-representative--consumer (D) Manufacturer--wholesaler-retailer-consumer (e) Manufacturer-retailer-consumer (a) (b) (c) (d) (e)
Q: 6 Do sales and distribution techniques increase the sales volume? (a) Always (b) Sometimes (c) Rarely (d) Never (d) Can’t say
Q:7 What kind of competition do you have with other organization? (a) Extremely healthy (b) Healthy (c) Unhealthy (d) Extremely unhealthy (e) No competition
59
Q:8 Are you satisfied with the present sales and distribution system? (a) Very satisfied (b) Satisfied (c) Neutral (d) Not satisfied (e) Very dissatisfied
Q:9 Does distribution system control the cost? (a) Always (b) Sometimes (d) Never (d) Can’t say
(c) Rarely
Q:10
What kind of distribution system followed rural areas? (a)Manufacturer-representative-wholesaler-retailer-consumer (b) Manufacturer-representative--retailer-consumer (c) Manufacturer-representative--consumer (D) Manufacturer--wholesaler-retailer-consumer (e) Manufacturer-retailer-consumer (b) (a) (d) (c) (e)
Q:11 Does the sales and distribution system improve organizational performance level? (a) Always (b) Sometimes (c) Rarely (d) Never (d) Can’t say
Q:12 Does any steps have taken regarding improvement of the sales and distribution system ?
60
(a) Yes
(b) No
Q:13 Is there any relation between relation sales and distribution? (a) Yes (b) No Q:14 Does sales and distribution techniques help in product planning ? (a) Yes (b) No (c) Sometimes (e) Never (d) Rarely
Q:15 Are you aware of major physical distribution system? (a) Yes (b) No
Q:16 Does sales and distribution affect the price of the product? (a) Yes (b) No (c) Sometimes (d) Rarely (e) Never
Q:17 Do you feel competition in market effects sales and distribution system? (a) Yes (b) No (c) Sometimes (d) Rarely
61
(e) Can’t say
Q:18 Does it impact on the product strategies ? (a) Yes (b) No
Q:19 How much sales and distribution techniques are beneficial in customer point of view? (a) Low (b) Very high (c) High (d) Moderate (e) Very low
Q: 20 Do you think that the sales of L.G. products sale can be improved by proper management of channel of distribution? (a) Yes (b) No (c) Sometimes (d) Rarely (e) Can’t say
62
Appendix-B
Respondent Sheet I
63
Q.2 R:1 R:2 R:3 R:4 R:5 R:6 R:7 R:8 R:9 R:10 R:11 R:12 R:13 R:14 R:15 R:16 R:17 R.18 R.19 R.20 R.21 R.22 R.23 R.24 R.25 1 1 1 1 1 1 1 1 1 2 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1
Q.4 1 1 2 2 2 1 1 1 1 1 2 2 1 1 1 1 2 1 1 2 2 2 1 2 1
Q.6 2 4 2 1 1 3 2 2 2 2 4 3 1 1 1 2 2 2 1 1 1 3 3 2 2
Q.7 1 2 2 2 1 2 2 1 2 2 2 2 2 1 1 2 2 2 1 2 2 2 2 1 2
Q.8 1 1 2 3 2 3 2 1 1 3 2 2 2 1 1 1 4 2 3 2 1 1 3 2 2
Q.9 3 1 1 1 2 3 3 3 1 1 1 1 1 2 2 3 1 1 3 2 3 1 2 3 2
Q.11 1 1 1 1 2 2 3 3 1 1 1 2 2 2 3 1 1 2 2 2 3 1 1 2 1
Q.14 1 2 1 3 3 3 1 1 1 1 1 1 3 1 3 1 1 2 3 2 1 2 1 1 1
Q.16 1 2 1 1 3 1 1 1 1 1 1 3 2 3 1 1 1 3 1 1 1 2 2 1 1
Q.17 1 3 3 1 1 1 1 1 3 1 1 1 2 1 1 3 1 1 1 3 1 1 1 1 2
Q.19 2 3 2 2 3 4 2 2 2 2 2 2 2 3 3 3 2 2 3 3 2 2 2 3 2
Q.20 1 1 1 1 2 3 1 3 4 2 1 1 3 3 1 1 1 1 1 1 1 1 1 1 3
Appendix-C
APPENDIX
64
PERCENTAGE ANALYSIS Questions Percentage Analysis Q:1 Q:2 Q:4 Q:12 Q:13 Q:14 Q:15 Q:16 Q:17 Q:18 Q:20 Yes 98% Yes 93% Yes 98% Yes 82% Yes 67% Yes 85% Yes 96% Yes 99% Yes 86% Yes 93% Yes 87% No 2% No 7% No 2% No 18% No 33% No 15% No 4% No 1% No 14% No 7% No 13%
A STUDYOF SALES AND DISTRIBUTION TECHNIQYES
65
SYNOPSIS
A Synopsis for Masters of Business Administration Session ~ 2008-10
66
“A STUDY OF SALES AND DISTRIBUTION TECHNIQUES WITH SPECIAL REFERENCE TO L.G. ELECTRONICS”
Submitted to Devi Ahilya Vishwavidyalaya, Indore
Research Supervisor
Mrs. Richa darshan
Researcher
Anand urmaliya
Roll No. 82374620010
-------------------------------------------------------------------
BM College of Management, Indore
Research Centre
CONTENTS
1. 2. INTRODUCTION PURPOSE OF THE STUDY
67 3. OBJECTIVES 4. 5. SCOPE OF STUDY INTRODUCTION OF COMPANY
6. METHODOLOGY 7. RESULTS
8. CONCLUSION 10. SUGGESTION 11. WEBLIOGRAPHY 12. REFERENCE
INTRODUCTIONThe study is based on sales and distribution techniques with the example of L.G. electronic product. To know the influences of the techniques of sales and distribution it is important to prepare a study which provides the result of the better sales and distribution methods and techniques.
68 Selling is one of the oldest professions in the world. Selling can be done by many ways but the two most popular ways are 1. Personnel selling, 2. Direct marketing. The selling process can only be successful if the company knows the taste, preference and needs of their customers and consumers that mean what they want from the company and how they can be satisfied then only the company produce, sale their product in the market and rich to its target set objectives and have maximum profit. Selling has great significance in all type off organization, whether it is private or public small or large. The importance of selling can not be overemphasized. In pursuit of a prudent policy, an organization can derive maximum befit by giving selling the importance that it rightly deserves. It can helps boost sales if wisely used and bring in a human touch while carrying out a transaction. Distribution is all about gating your product and service to the right people at the right time with special consideration for profit and effectiveness. Distribution is one of the four aspects of marketing. Distribution is meant that way which the entitled owner adopts in sending the goods or products from the producer to the final consumer or the industrial consumer.
PURPOSE OF THE STUDY – The main purpose of of the study is to find whether sales and distribution techniques really influences the sales of L.G. product.
69
\\
OBJECTIVES The main objectives of the project are: ? To find out the influence of sales and distribution techniques in the L.G. electronics
? To find the most effective tool of Sales and distribution to entice customers used by electronics product.
? To study various sales and distribution techniques used by L.G.
? To find out the ranking of L.G. with its relative competitors as per the customers.
? To find certain new techniques that L.G. can adopt to improve its services
SCOPE OF STUDY-
This study will explore the best techniques of the sales and distribution. The study of sales and distribution techniques is helpful to know the result of sales and
70 distribution techniques with example of L.G. electronics product. There are some important scope of this study ? Designing and managing of sales force. ? Sales force authority. ? Target setting. ? Sales forecasting. ? To achieve coordination or balance ? To assure that all the necessary activities are performed
In the competitive environment these aspects of study would motivate the sale force.
INTRODUCTION OF COMPANY –
71
LG Electronics was founded in 1958 at Seoul, South Korea. This multinational company is the 2nd largest electronic products maker of South Korea and third largest appliance maker in the world. LG manufactures, develops and sells Digital Display, Digital Appliances, Digital Media and Mobile Communication products in international market. LG Electronics is a project of LG Group which earns a revenue of USD$68.8 billion. Yong Nam is the CEO & Vice Chairman of the company who is making it possible to spread the network of LG througout the world. Headquarter of LG Electronics is in LG Twin Towers at Seoul, South Korea. There are more than 75 subsidiaries of the compnay in the world which designs, manufactures, market and sells televisions, different electronic products, home appliances and telecommunication devices. LG Electronics is the owner of Zenith Electronics and have a joint venture with Philips Electronics under the name of LG Display. Both the companies are putting their effort in manufacturing and developing the quality of their products. Some important subsidiaries of LG Group are LG Electronics, LG Telecom, LG Chem and Zenith Electronics in more than 80 countries. In early years of 2000 the company acquired popularity in new makrets and earned more revenue. In 2005 and 2006 the company did a record business in the market of electronic products. LG is the largest plasma manufacturer of the world and LG Display is the largest manufacturer of liquid crystal displays. In 2006 the company focused its attention on mobile phones and introduced LG Chocolate. The company develops the designs and functions of its mobile phone and marketed LG Shine and LG Prada which became very successful. LG Electronics picked as "The Design Team of the Year" by Red Dot Design Award in 2006 and 2007. It is also called “new Apple” & “new Sony” in the communities due to its products and management. LG Electronics was established in 1958 as Gold Star. It was a manufacturer of refrigerators, TVs, air conditioners and washing machines. LG Group is the merger of Lucky and Gold Star, two Korean companies. L is taken from Lucky and G from Gold Star which formed LG Group. "Life's Good" is the slogan of the LG Electronics. Before the name of LG Electronics, Electronic goods were sold under the name of Lucky and similarly home appliances were sold under the name of Gold Star. Gold star produces Interactive Multiplayer which was costly but it was very successful. In 1995 Gold Star was renamed as LG Electronics and owned Zenith Electronics of USA. LG Electronics sponsors sports in different fields such as football, cricket and racing etc.
LG Electronics of USA has introduced a variety of handsets which became very successful. The company is producing a large number of handsets and it is expected that it would become the fourth largest handset maker of the world in 2008. The mobiles of LG are becoming popular in the telecommunication market due to its quality and
72 advance features. The division of home appliances manufactures products such as air conditioners, refrigerators, ovens and washing machines for home users. North America is the larges market for home appliances division of the company. In display divisions LG Electronics is very prominent. The company manufactures, LCD TVs, Monitors, Plasma TVs, OLED Panels, Flat Panel Monitors and USB Memory. The company has launched many products in the field of digital media such as DVD Recorders, CD RW, Home Theatre Systems, Notebook PCs, MP3 Players, Desktop PCs; PDAs etc. LG has introduced a series of air conditioners which is successful in the market of electronics.
73
METHODOLOGY
There are two types of methods which i use for this topic. D. Primary data collection method E. Secondary data collection method F. Statistical tools . a. Primary data collection method: In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods include:
d) e) f) g)
questionnaires interviews focus group interviews observation
b. Secondary data collection method:
•
All methods of data collection can supply quantitative data (numbers, statistics or financial) or qualitative data (usually words or text). Quantitative data may often be presented in tabular or graphical form. Secondary data is data that has already been collected by someone else for a different purpose to yours
74
RESULTS
CONCLUSION
SUGGESTIONS
75
WEBLIOGRAPHY
1. www.lgelectronics.com 2. www.lg.com 3. www.yahoo.com 4. www.google.com 5. www.wikipedia.com 6. www.amazen.com 7. WWW.FREEBOOKS.COM
76
REFRENCE
1. Kotler Philip, (2008.)“Marketing Management – Text and Cases”, Pearson Education a south Asian perspective, 13th Edition 2. Krishna K Havaldar, Vasant M Cavale (2010) “Sale and distribution Management”, Mc Graw Hill, 8th Edition. 3. P. Subba Rao,(2009) “Essentials of Human Resource Management and Industrial Relations”, Himalaya Publishing House, 3rd revised and enlarged edition. 4. Robbins, Stephen P. (2008) Organizational Behavior, and New Delhi: Prentice Hall of India.
5. Johnson, (2010) “Sales Management”, Mc Graw Hill, 7th Edition. 6. S.J. Poliwoda, “International Marketing”, New Delhi, Prentice Hall of India. 7. Gordon Lewis, (1995) “Direct Marketing Strategies and Tactics”, New Delhi, Vision Book. 8. Mary Robert, (1995) “Direct Marketing Management”, London: Prantice Hall, 2nd Edn.
77
doc_432069197.doc