Unit-2

(KMBNMK03 B2B and Services Marketing)

Role of Marketing Communications in B2B Markets

Various marketing communications tools are used by B2B companies is to retain existing customers, connect
with new customers and focus on helping to turn prospective customers into sales.

Therefore understanding the buying behaviour of your market, targeting the right prospects and providing the
right information/messages at the right time, through the right channels is of the upmost importance. And as
your B2B buyers are more likely than B2C buyers to research and seek out information on the products they
buy, it’s important that any communication your buyer receives is targeted, highly relevant and easily
accessible.

There are many ways you can reach out to your target market, both off line and online. According to industry
reports on where buyers go to gather information on products or services, it seems that websites still remain the
most popular destination with nearly half of people saying they go straight to a company’s website if they are
interested in finding out more (B2B Marketing and Base One: Buyersphere report 2013).

Although it’s also good to know that traditional methods remain important with many buyers still relying on
material such as sales brochures or downloading pdfs for their information gathering. Additionally, tools such as
Social media are a growing influencer and source of knowledge so should also be considered an important part
of your marketing mix.b2b marketing communications tools Below, we’ve put together a check list of the b2b
marketing communications tools you should be using to connect with your customers and enhance your sales

1. Website – A B2B website helps buyers connect with manufacturers, wholesalers and
exporters and vice versa. It acts as your online shop window and is the most likely go-to place
for any prospective customer or end user wanting to investigate your services or products.
B2B buyers aren’t shoppers they’re researchers and therefore you need to ensure that your
website not only communicates the right level of information but also appeals to your
customers as well as end users – two distinct audiences with two distinct demands. Your trade
customers will require detailed, easily accessible information on products, whilst your end
users tend to take a broader approach, being, attracted to you as a company, your
professionalism and what you have to offer. Therefore building an easy to navigate,
information rich, professional and clearly branded website to satisfy all channels is essential.
Taking into account how they use the site and on what platform – mobile/tablet/laptop – also
goes without saying.
2. Branding – Branding is said to directly affect lead generation and ultimately sales. Get it
wrong, by using the wrong messages and images and you’ll turn potential customers away.
Create, develop and use it in the right way and your brand will attract the right people for the
right reasons.
3. Social media – As of 2012, 91% of B2B marketers now use social media but its how you use
it that counts. For B2B companies, businesses should go deep, not broad. It’s better to become
a master of one or two channels than struggle in many. Social platforms allow you to establish
your expertise and credibility and also provide a method for feedback and discussion. Social
networks are more like a real-world networking event. Think about Facebook, YouTube
Twitter, LinkedIn, Google+ and possibly Pinterest. It’s beneficial to choose one platform and
one network to focus on initially, and really n engage with your ideal customers there. As you
master those channels, you can then start to expand into other realms.
 4. Technology – Treat technology and technological advances as your ally and you could
seriously improve your marketing communications. From developing product Apps that your
sales people can use as demonstration tools to mobile websites, dealership sites, improved
direct mail logistics and 3d printing, new technologies allow you to easily and effectively
target and connect with potential customers and improve your ‘pulling power’.
5. Lead Generation – Building a database from your own leads, gives you a powerful
marketing tool. Using a range of marketing techniques both online and offline to generate and
nurture leads will help to increase your potential customer base, communicate to existing and
potential customers and promote your company’s offering. Your website, social media
channels, targeted email marketing, direct mail, exhibitions and telemarketing are all tools to
aid data capture and build your customer relationship marketing (CRM).
6. Email Marketing – Used as an important CRM tool, it will help you retain as well as gain
customers. Well executed, targeted email campaigns to potential buyers in the market or
regular e-newsletters are an effective way of engaging and staying in touch with existing and
potential customers.
7. The Right Sales Team Support – Statistics show that a high percentage of sales reps are
typically not well enough prepared for initial sales meetings. Making sure that your sales team
or dealers are equipped with the most relevant information is essential, so give them easy
access to product details and tech info through dealership sites, product apps; mobile friendly
websites and up-to-date, well branded sales literature and brochures. The right information,
accessible at the right time can make the difference between a sale and a fail.
8. Traditional Marketing Techniques: Print, direct mail, and telemarketing can still be a very
effective way to target prospective customers in the B2B world. Correctly targeted and
effectively produced direct mail can be more effective than email at converting potential
customers, whilst trade shows and exhibitions offer face to face meetings, data collection
possibilities, strong brand messages and the demonstration of new products and initiatives.

Consumer communication and persuasion is an essential part of any

Marketing Strategy. In fact, it is the starting point of all improvement as
consumer voices provide companies with the data such as where they are lacking and
what all they could do to improve the product or service.

Do all companies listen to the consumer voices? Not really. It is only the ones which have an
effective consumer communication process in place, that are really able to focus on consumer
needs. Are you one of them? Let us take a look at the consumer communication process at
Suntory to understand the Consumer Communication Process.
This company has set up a Customer Centre which takes up all inquiries, complaints, and proposals from
customers. Though most of the queries are answered, the customer voices are sent across to related departments
of the company. These departments analyze the gap between the customer needs and the products and services.
After doing so, the quality improvements are suggested and the product development takes place in keeping
with the customer demands.

Consumer communication should be used effectively to drive maximum benefits to the company. You
must be thinking how. Let us look at few ways which will help you market effectively even in a downturn.

1. When economy is changing, it is all the more important to get the customer feedback. It is not
a good idea to fill their inboxes and mobiles with promotional messages. More so, you can
use online surveys to understand how they are thinking and what they want. You can then
make changes in your strategies, processes and so on to deliver the product that your
consumers are aiming for.
2. It is just not important to feed information to your consumers. Having a dialogue with them
from time to time is also important. You can use the email marketing newsletters to invite
them for such conversations. Apart from understanding their concerns, showing your
consumers that you care is also very important. This will have far-reaching consequence and
will benefit your company’s image.
3. Try and co-host an event with another local business. This will highlight your product’s
image in a positive manner. This is a kind of customer relationship building activity where
you interact face-to-face with the consumer and show him your expertise.
4. Consumers are becoming more and more environmentally aware these days. Anything against
the environment would put you in a bad light. So focus that your product or service is
following all the environment friendly standards. You can also show your concern by teaming
up with local charity and involving your consumers in the event too.

The above points can also be used for consumer persuasion too. Face-to-face meetings are more effective in
persuading people to buy your stuff. People can judge easily whether what you are saying has substance or not.
Therefore, try your level best to portray the positive image of your product in a positive fashion. Once you learn
the essence of consumer communication, you would never have to look back.

Elements of the Communications Process

 The Message Initiator (the Source)

 The Sender
 The Receiver
 The Medium
 The Message
 The Target Audience (the Receivers)
 Feedback – the Receiver’s Response
 Medium can be:
 Impersonal (mass media)
 Interpersonal (with salesperson or a friend)
 Interactive (direct feedback possibility exists)

Marketing communications is essentially a part of the marketing mix. Promotion is what marketing

communications is all about.

Marketing communication aims at conveying a firm’s message as effectively and accurately as possible.
The process is as follows:  Sender, Encoding, Transfer Mechanism, Feedback, Response and Decoding.

 Source: A source is also referred to as a sender.  The sender has a message to convey to
others. The sender can be anyone from a brand manager (in a major corporation such as Nike
or Budweiser) to a salesperson in a smaller organization.  At times, celebrities are used to
endorse products and act as a sender for the product.  It is always important to make sure that
the source is credible and trustworthy.
 A direct source can be a salesperson delivering a message about a product.
 An indirect source uses a well known public figure to draw attention to a product.
 Encode: The source encodes or translates ideas into a message.  For example, a brand
manager decides to     promote a new product.
 Message: After defining the target market, the marketer designs an effective message that
will achieve the communication objectives.
 Receiver: The receiver is the person or group with whom the sender attempts to share ideas. 
Marketers want a response, the reactions of the receiver, after being exposed to the message:
for example, a consumer receiving the message about the new product.
 Decode: The receiver decodes or interprets the message. For a message to be decoded by a
receiver the way it was intended by the sender, the sender and receiver need to have common
experiences.  In other words, a receiver may not decode a message the way it was intended to
if her background and experience differ greatly from the sender’s.  A marketer has to be
sensitive to the intended audience.
 Noise: Noise interferes with or disrupts effective communication.  This can include a poor
television or     radio signal.
 Feedback: Feedback is monitoring and evaluating how accurately the intended message is
being received.  This can be done by conducting market research. Essentially, this involves
asking consumers if they have seen the message, if they recall the message, and what their
attitude was towards the product.

Brand expression
Branding has many functions that go beyond its most basic requirement of identification of a
product.  Branding, when done well, frames what consumers can expect from a product and can
become an important part of the proposition itself.  While creating a brand experience independent of
the product is not always the goal of marketing, creating distinctive brand positioning is needed.

 Coke stands for Happiness

 Apple stands for Creativity
 Harley-Davidson stands for Freedom

How your brand expresses itself from its name, logo, corporate ID, packaging design and copy, web
design and copy all the annoying rules that fill its style guide is the most tangible manifestation of
your brand’s essence; intimations before purchase of the brand’s soul, validation and reminder of its
promise after trial.

No matter what industry, changing the culture is hard, lonesome, demanding work. But in our
experience, most higher education brands don’t need to change their culture as much as they need to
capture it and create a consistent “Brand Experience.”

Brand as motivational tool

The roar of the dotcom revolution, reduced to the whimper of de-listed penny stocks, left behind at
least one important legacy. It changed forever the employer/employee dynamic.
Maybe it’s not as easy as it was to quit on Friday and find a better job by Monday, but the revolving
door of employee turnover hasn’t slowed dramatically.

Employers need to earn the loyalty of their employees. Employees need to be reminded why they
should get up and go to work. Off-site vision quests, benefits and perks only go so far.

Brand design extends your ad budget

If you’ve got an unlimited ad budget, skip this section. The rest of you, trying to squeeze every ounce
of value from each hard-fought penny, listen up.

In this world of fractured media the number (and cost) of messages needed to hit your target
between the eyes increases every season. Consumers are multitasking and zoning out from ad
saturation (or digitally avoid your messages entirely). But these same consumers are meeting your
brand face-to-face on shelf or online.

Brand design protects turf

The current cycle of innovation is constant. The time you can afford to rest on the laurels of product
superiority is shorter than a pit stop. Today’s improvement is tomorrow’s price of entry. No wonder
companies are becoming addicted to the heroin of R&D, minute “product improvements” and
promotions. Again, brand design can help.

Your consumers’ connection with your brand results from its behaviour over time. But the connection
is sustained at the level of look, feel and voice. If your consumers know most of the brands in the
category are alike, what criteria do they have left with which to make their choice?

We’ve all stayed with brands we suspect have lost their original claim to superiority because of an
emotional connection. Their “voice” speaks to us. Or, they make up for their deficits (or parity) with a
great personality. We like them more.

Brand design or voice can’t cover up for product flaws. Bill Bernbach said: “Nothing is worse for a bad
product than good advertising.” But investment in brilliant brand design can provide as much
insulation against encroaching competition as investment in product improvement R&D.

Strategies:

 Discover an ideal in one of five fields of fundamental human values.

 Build your culture around your ideal.
 Communicate your ideal to engage employees and customers.
 Deliver a near-ideal customer experience.
 Evaluate your progress and people against your ideal.

Communication Mix: Components

The marketing communication mix, sometimes referred to as the promotion mix, is a set of five tools that
businesses use to communicate with their customers, prospects and stakeholders. It doesn’t matter how large or
small your organization is, or what kind of products or services you sell, utilizing an effective marketing
communication mix can help you increase your revenue.
Elements of the Marketing Communication Mix

There are five key elements of the marketing communications mix: advertising, public relations, sales
promotion, personal selling and direct marketing. Some organizations also add a sixth component, which is
events and sponsorship.

Advertising refers to any paid promotion of products, services or ideas by an identified sponsor. Organizations
can advertise in a number of ways, such as on television, radio, magazines, newspapers, billboards and online.
It’s an effective way to reach large quantities of people, but it can be very expensive as well.

1. Advertising
We are very well with the impact that advertising has on our purchase
behavior. Advertising may be in many forms but the two most common
forms are ATL advertising which includes television, radio and print and
the other type is BTL advertising which majorly includes out of home
advertising.

Advertising is strongly used by brands who have deep pockets or who

have a lot of competitors in the market. Advertising requires that you have
a unique advertising message as well. The more unique and impactful the
message, the more is the connect between the brand which is advertising
and the consumers.

2. Personal Selling
Personal selling is the second most common method to communicate the
benefits of your products to the end customer and convert him from a lead
to a prospect and ultimately to your customer. This is the reason that many
top companies and even small businesses nowadays are focused on
personal selling.

If you enter a branded retail outlet, you will many times find that the
company promoter is already present in the retail outlet. The reason that
the company appoints their own brand promoter is because this ensures
that the customer will have better attention from their individual brand.
Along with this, the company’s salesman will also have more knowledge
of product and competition as he has been dedicatedly hired by the brand.

If instead of a brand promoter, there was the retailers own salesman, he

would have promoted any brand on the shelf. At the same time, the
retailers salesman might not be as knowledgeable as the brand salesman
because he has so many brands and products to sell. He gets overloaded
and ultimately forgets the features of products he is selling. So, if a
company wants to communicate the benefits of its products, convince and
convert the customer, then personal selling with hand picked and trained
executives is the best option.

3. Sales Promotion
There are many different ways of running sales promotions and many
different tips and tactics present depending on the sector you are in. Where
trade discounts and freebies work very well in FMCG, in consumer
durables, free services and value addition (free installation) works better
then discounts.

Sales promotion also involves providing the consumer with an incentive

for the purchase of the product. At the same time, it may involve giving
incentives to dealers or distributors to get the product selling & moving in
the market. The expenses in Sales promotion is lower and the investment
is very less because it gets the product moving.

Sales promotions is increasingly being used as a tool especially after the

rising popularity of E-commerce and online sales. Every other day you
will see a “Sale” or “Deal” online which will be time bound and which
customers will impulsively purchase. Due to some discount being given
for certain amount of time, online retailers can move huge quantities of
products across the country or the region they are selling in.

4. Public Relations
Public relations is the art of spreading the news about your products or
services in the public domain so that some hype is created and people talk
to each other about it. One of the most commonly observed public
relations exercise is when there is some news related to a Movie or related
to a product which is published in the newspapers just before the movie is
supposed to be released or the product is supposed to be launched.

Similarly, there are multiple public relation exercises which can be carried out by a brand. In today’s date, social
media is one of the biggest platforms for public relations exercise. You will see a lot of news being published
with regards to what is trending. Similarly, press conferences, face to face interaction with consumers,
newspaper advertorials, involving the community are various ways that public relations exercises can be
implemented.

Public relations is an important part of the communications mix. It helps in building a strong brand image and a
brand can slowly release the information therefore keeping the public attention intact. In fact, if you notice,
information about a movie which is going to be big starts coming in newspapers much before the movie launch
date is announced.

This is nothing else but Public relations wherein the marketing manager wants the public to be hooked to what’s
about to happen in the movie. They want to create hype. Off course, some movies (like the latest star wars
franchise) would rather hide their details then show it to public.

5. Direct marketing / Internet marketing

In the last few years, Digital marketing was giving tough competition to television advertising as well as
newspaper advertising. As of end quarter of 2016, digital marketing has practically overtaken Television
advertising and has a major spend amongst all media.

Off course, the benefit of digital advertising is that even small businesses can get involved and it is not as costly
as Television advertising. As a result, the overall revenue generated from digital advertising is much more then
television or newspaper. But even then, not only small businesses, even top brands take part in digital marketing
because it helps the brand in reaching the end consumer.

The key attraction of digital marketing is the personal connect that the brand makes with the consumer. Your
email box, your facebook wall, your twitter feed are your private space and via social marketing, brands can
enter this private space and make a connection. The brand which really does good campaigns can actually walk
away with a large population of digital followers.

6. Packaging

Although packaging is supposed to be a part of the marketing mix and not the communications mix, lately, due
to competition and the increasing rivalry between businesses, even packaging is considered as an important
medium of communicating with your consumers.
The packaging of the product is the last point of sales for the company. When the consumer is standing in a
retail aisle, he or she has a plethora of products in front of them to choose from. Many a times, the decision is
made looking at the overall packaging of the product as well as the information written on the product.

If a customer wants an aloe vera shampoo, he might look at the packaging and decide against an Anti dandruff
shampoo. However, if the packaging is poor, and the distinguishing feature is not mentioned clearly, the
consumer might ignore the product altogether. As a result, BECAUSE even packaging communicates to the
consumer, it is now considered as an element of the communications mix.

So overall, the above 6 media vehicles are the ones which are considered as the communications mix. Whenever
a brand wants to communicate to their consumers, they will use one of the above methods to do the same.

Customer acquisition process

Customer acquisition is the process of acquiring new customers for business or converting existing
prospect into new customers. The importance of customer acquisition varies according to the specific
business situation of an organization. This process is specifically concerned with issues like acquiring
customers at less cost, acquiring as many customers as possible, acquiring customers who are
indigenous and business oriented, acquiring customers who utilize newer business channels etc. The
whole process should concentrate on following considerations:

 Primarily it is important to determine and focus on psychology of customers, like how

the customers feel and think and then selecting the product segment to be
presented to them.
 Concentrating on how the customers are influenced by the surrounding environment
like the business culture, technology, media etc.
 Analysis of customer behavior and tendency while buying specific range of product.
 Studying the customer’s limitation of knowledge processing power which influence
the decision making power.
 Finally it’s very important to engage best strategies for effectively convincing new
customers and improving marketing campaigns.

Customer acquisition techniques change with technological changes. There is always a need to
optimize and upgrade the traditional ways of marketing channels available. Exploring new methods to
entertain customers is important to remain in competition and have high acquisition rate.

It allows the business to:

 Cover the cost of its expenses, including the cost of labor.

 Increase its profits over time.
 Reinvest in its own growth.
 Show evidence of growth to partners, investors, influencers and other outside
parties.

Acquiring a customer depends on how effectively the organization is able to build a comprehensive
relationship with that customer. When suppliers have healthy relationship with customers, the
revenue of the organization always increases as customers tend to buy more and more. There is
possibility that a satisfied customer seek to buy special category of related products apart from the
regular ones from that particular supplier. For instance if a satisfied and loyal customer has a home
insurance policy from an insurance company then there are positive chances that he could also insure
his property and car if he is fully satisfied with the services of that insurance company. This will
definitely result in growth of business.
While acquiring, the nature of response provided to acquisition is the key aspect to create an
impressive opinion in customer’s mindset. Hence, the suppliers should always have prompt,
responsive and experienced executives to serve customers. For example, if a customer calls and asks
about some critical features of any product and the executive fails to explain it or being non-
responsive to most of his questions then the customer could probably divert his way to some other
organization for better response which could definitely result in end of the deal and relationship with
that customer.

Improving customer acquisition is the primary challenge which an organization faces. Hence it is
important to identify critical approaches to enhance customer acquisition power. This includes
acquiring more number of customers or more number of attractive customers at low cost. One of the
best strategies to acquire new customers is performing promotional campaigns. These campaigns
should be efficient and well targeted to customers. Encouragement of customer referrals can also
attract new customers. It is always a cost-free advocacy by customers to provide referrals to supplier
when they feel satisfied and encouraged and when they have a healthy relationship with customers.
These referrals or customer’s reference of other customers act like a piece of cake for suppliers as
there is no cost and struggle involved in this.

Process:

Identify the target customers

The first step in the customer acquisition process is to identify your target audience, the people who
are most likely to purchase your products and services. Unless the product or service your business
sells meets a universal need, the best way to promote your products and grow your business is by
identifying one or two of the best market segments for your business.

Identify where your target audience is

To enhance your customer acquisition process, you need to know where to find your customers both
online and offline. Once you identify the places your target audience frequents, you can then develop
strategies to target them there. As an example, if your ideal audience frequents a particular social
media site, you may want to consider advertising there.

If you’re unsure where your target audience spends time, consider polling your existing audience.
You could also reach out to potential customers individually to learn more about them, their interests
and what sites they spend the majority of their time on.

Start a blog

Blogging on your website is a highly effective customer acquisition method that allows you to discuss
different topics, demonstrate how much you know about the industry and establish yourself as a
source of authority. It also allows you to regularly engage your audience, providing them with a
resource they can go to for information related to your niche. You could write for the blog yourself,
task a member of your team with doing the writing or outsource to a freelancer.

Create video content

Video content is very popular online, which is why you should consider creating videos as part of your
customer acquisition strategy. Create a mixture of educational and entertaining videos. Your
educational videos should provide your target audience with valuable information about your industry,
topics that are relevant to your industry and your products and services. Your other video content
should focus on entertaining and engaging your target audience online.

Optimize your website for the search engines

Search marketing is also another important strategy that you should prioritize. Also referred to as
search engine optimization (SEO), this strategy involves modifying your content to increase the
likelihood that it will rank in the search engines. While this strategy takes longer to grow than some
of the others, once you optimize your content, you can see a steady flow of clients into the business.

Build an email list

Email marketing is an effective way to maintain contact with customers as well as potential buyers
who have expressed interest in your products and services. As you email your list, it’s important to
monitor the behavior of your subscribers. For example, take note of the links that your subscribers
are clicking on within your emails.

Also, pay attention to the emails that have the highest open rates or unsubscribe rates. This
information can help you create better content that your audience is interested in, which can help you
to increase customer acquisition and conversions.

Produce quality content frequently

Another effective customer acquisition strategy is to establish yourself as a trustworthy source of

information in your industry or niche. One way you can accomplish this is by creating high-quality,
useful content on a regular basis. Many companies use social media, blogs or even email newsletters
to establish themselves as a reliable source of information and build trust for their brand.

Create gated content

Gated content is a different type of content marketing strategy that typically involves creating an in-
depth and highly valuable piece of content that potential customers can access in exchange for
personal information like their name and email address. Relevant, gated content is an important part
of a customer acquisition strategy since it can help you grow your email list and generate more leads
and, ultimately, sales.

Create a referral strategy

Referrals are a great way to increase the profitability of your business while keeping marketing costs
low. For this reason, a referral program is a powerful method for acquiring new customers. The
easiest way to encourage customers to refer your products and services to your family and friends is
by offering some kind of incentive. Many businesses, for example, offer extra features or discounts to
customers who successfully refer other people to their products and services.

Track your customer acquisition

Once you have different types of content in place, it’s important to monitor incoming leads to identify
the acquisition channels for your new customers. Monitoring will make it possible for you to
determine which channels are most effective for generating quality customers. It also helps you
monitor word-of-mouth referrals and determine whether the feedback from customers is positive.
This can guide your company decision-making to ensure any word-of-mouth referrals you receive are
positive.

Identifying the Sales to Marketing Effort

Relationship and its Modeling
Sales and Marketing are both working towards the same goal: securing business and helping their company
grow.

Sales is a direct process in which the salesperson talks to the customer and steers them towards making a
purchase. This might be in person, over the phone, or using a digital communication medium like email or even
social media. The process might be very long, taking place over multiple conversations in which the salesperson
learns about the customer and their pain points, and helps them understand how the product on offer can help
solve them.

It could also be a very short process consisting of a single conversation in which the salesperson lays out the
terms of the deal and processes the sale.

Marketing is a much more holistic process that is designed to increase awareness of a brand or product to the
target consumer as a whole. Rarely will a marketer deal one-on-one with a customer.

The methods, tactics, and channels used by the marketing department look very little like they did even 15 years
ago. It’s primarily digital, including (but not limited to):

 Content marketing
 Social media marketing (SMM)
 Email marketing
 Organic traffic and search engine optimization (SEO)
 PPC ads
 Influencer marketing

1. Collaborate on sales content creation

A recent CSO Insights study showed that 32% of a sales rep’s time was spent looking for or creating sales
content. Creating content that sales teams can use in their proposals and throughout the selling process is a
major factor in an outstanding sales enablement strategy.

Both sales and marketing need to work together to understand their audience and create targeted content that
speaks directly to customers.

2. Inform outbound emails

In an ideal world, all sales would be inbound with customers lining up to get their hands on your product or
service. But the reality is that, at some point, sales needs to be in charge of sourcing and contacting their own
leads.

To effectively do this, sales should work with marketing to be knowledgeable on what marketing materials are
already readily available. Marketing and sales can also work together to create new, dynamic material that
focuses on the winning strategies of each department. This creates a unified brand image and voice.
 3. Systemize lead scoring

Marketing and sales teams need to have an ongoing conversation about lead conversion — what’s working,
what’s not, who it’s working for, etc. Creating and converting MQLs to SQLs and, ultimately, to win deals is an
always moving target — that’s why it’s important to ask these questions, to figure out why it’s working or not
working.

Those changing results and targets of a company’s “why” increase the urgency for clear communication and
getting on the same page. Both sales and marketing teams need to create one system for scoring and evaluating.
The system is entirely conditional and depends entirely on the product, the audience, and the buying cycle.
Turning an MQL into an SQL too soon can hurt conversion, so you need to find the sweet spot in the life cycle.
This can only be found by trial and error, communication, and evolution.

4. Develop buyer personas

Sales is the front line of any successful company. They know who’s buying and why those customers are
motivated to buy in the first place. Marketing understands the industry at large and who they should be
targeting. The best buyer personas are born from a mixture of marketing research and insights from your actual
customer base.

The sales team can provide important insights and generalizations on the leads they’re interacting with the most,
while marketing research can inform broader insights like patterns and commonalities. Sales and marketing
must direct their efforts at the same prospects and be completely aligned on decisions and pricing.

Together, sales and marketing need to create comprehensive buyer personas to better target their ideal customer,
increase acquisition, and create targeted ads and pitches that are symbiotic.

5. Leverage marketing to showcase your sales team’s expertise

Ideally, sales teams are brilliant at lead generation and closing sales but aren’t always their own best advocates
when it comes to selling themselves. That’s why they need your marketing team’s power to create materials that
showcase their expertise.

6. Hold regular meetings

Even the most amicable and aligned departments need actual face time to develop their internal relationships
and sense of how the other works. Hold regular meetings to discuss new strategies, go over the results of current
campaigns, and learn more about each team’s processes. An added benefit is getting marketing’s feedback and
insight on the sales team’s agenda, and vice versa.

7. Break down barriers

Aligning your sales and marketing teams may require more than weekly meetings, and it might take a refresh in
terminology and perspective. Break down departmental barriers and replace the concept of a sales funnel with a
revenue cycle.

Work through the foundation of what that revenue cycle should look like. This is the time when both sales and
marketing get to flex their muscles and bring their expertise to the table.

8. Use collaborative analysis

When you’re trying to align two departments, it’s not enough to just focus on KPIs and collaborative practices.
When you’re breaking down departmental barriers, the lines will likely blur between what the marketing and
sales teams are working on.

It’s important to analyze and measure the results as a team, which will help everyone get on the same page about
ROI and understand how collaborative efforts are impacting your bottom line. Your team ROI may require both
departments to analyze email campaigns or lead generation data to determine what’s working and what’s not.
Looking at these numbers individually just pushes your teams back into a silo situation where the work becomes
fragmented.

MARKETING MIX MODELING (MMM)

Marketing mix modeling (MMM) is statistical analysis such as multivariate regressions on sales and marketing
time series data to estimate the impact of various marketing tactics (marketing mix) on sales and then forecast
the impact of future sets of tactics. It is often used to optimize advertising mix and promotional tactics with
respect to sales revenue or profit.

The techniques were developed by econometricians and were first applied to consumer packaged goods, since
manufacturers of those goods had access to good data on sales and marketing support.[citation needed]
Improved availability of data, massively greater computing power, and the pressure to measure and optimize
marketing spend has driven the explosion in popularity as a marketing tool. In the recent times MMM has found
acceptance as a trustworthy marketing tool among the major consumer marketing companies. Often in the
digital media context, MMM is referred to as attribution modeling.

Marketing mix modeling is an analytical approach that uses historic information, such as syndicated point-of-
sale data and companies’ internal data, to quantify the sales impact of various marketing activities.
Mathematically, this is done by establishing a simultaneous relation of various marketing activities with the
sales, in the form of a linear or a non-linear equation, through the statistical technique of regression. MMM
defines the effectiveness of each of the marketing elements in terms of its contribution to sales-volume,
effectiveness (volume generated by each unit of effort), efficiency (sales volume generated divided by cost) and
ROI. These learnings are then adopted to adjust marketing tactics and strategies, optimize the marketing plan
and also to forecast sales while simulating various scenarios.

Components of Marketing mix modeling (MMM)

Marketing-mix models decompose total sales into two components:

 Base Sales: This is the natural demand for the product driven by economic factors like
pricing, long-term trends, seasonality, and also qualitative factors like brand awareness and
brand loyalty.
 Incremental Sales: Incremental sales are the component of sales driven by marketing and
promotional activities. This component can be further decomposed into sales due to each
marketing component like Television advertising or Radio advertising, Print Advertising
(magazines, newspapers etc.), Coupons, Direct Mail, Internet, Feature or Display Promotions
and Temporary Price Reductions. Some of these activities have short-term returns (Coupons,
Promotions), while others have longer term returns (TV, Radio, Magazine/Print).

Elements measured in Marketing mix modeling (MMM)

(i) Base and incremental volume

The very break-up of sales volume into base (volume that would be generated in absence of any marketing
activity) and incremental (volume generated by marketing activities in the short run) across time gain gives
wonderful insights. The base grows or declines across longer periods of time while the activities generating the
incremental volume in the short run also impact the base volume in the long run. The variation in the base
volume is a good indicator of the strength of the brand and the loyalty it commands from its users.

(ii) Media and advertising

Market mix modeling can determine the sales impact generated by individual media such as television,
magazine, and online display ads. In some cases it can be used to determine the impact of individual advertising
campaigns or even ad executions upon sales. For example, for TV advertising activity, it is possible to examine
how each ad execution has performed in the market in terms of its impact on sales volume.

(iii) Trade promotions

Trade promotion is a key activity in every marketing plan. It is aimed at increasing sales in the short term by
employing promotion schemes which effectively increases the customer awareness of the business and its
products. The response of consumers to trade promotions is not straight forward and is the subject of much
debate. Non-linear models exist to simulate the response. Using MMM we can understand the impact of trade
promotion at generating incremental volumes. It is possible to obtain an estimate of the volume generated per
promotion event in each of the different retail outlets by region. This way we can identify the most and least
effective trade channels. If detailed spend information is available we can compare the Return on Investment of
various trade activities like Every Day Low Price, Off-Shelf Display. We can use this information to optimize
the trade plan by choosing the most effective trade channels and targeting the most effective promotion activity.

(iv) Pricing

Price increases of the brand impact the sales volume negatively. This effect can be captured through modeling
the price in MMM. The model provides the price elasticity of the brand which tells us the percentage change in
the sales for each percentage change in price. Using this, the marketing manager can evaluate the impact of a
price change decision.

(v) Distribution

For the element of distribution, we can know how the volume will move by changing distribution efforts or, in
other words, by each percentage shift in the width or the depth of distribution. This can be identified specifically
for each channel and even for each kind of outlet for off-take sales. In view of these insights, the distribution
efforts can be prioritized for each channel or store-type to get the maximum out of the same. A recent study of a
laundry brand showed that the incremental volume through 1% more presence in a neighborhood Kirana store is
180% greater than that through 1% more presence in a supermarket.[6] Based upon the cost of such efforts,
managers identified the right channel to invest more for distribution.

(vi) Launches

When a new product is launched, the associated publicity and promotions typically results in higher volume
generation than expected. This extra volume cannot be completely captured in the model using the existing
variables. Often special variables to capture this incremental effect of launches are used. The combined
contribution of these variables and that of the marketing effort associated with the launch will give the total
launch contribution. Different launches can be compared by calculating their effectiveness and ROI.

(vii) Competition

The impact of competition on the brand sales is captured by creating the competition variables accordingly. The
variables are created from the marketing activities of the competition like television advertising, trade
promotions, product launches etc. The results from the model can be used to identify the biggest threat to own
brand sales from competition. The cross-price elasticity and the cross-promotional elasticity can be used to
devise appropriate response to competition tactics. A successful competitive campaign can be analyzed to learn
valuable lesson for the own brand. television & Broadcasting: the application of MMM can also be applied in
the broadcast media. Broadcasters may want to know what determine whether a particular will be sponsored.
This could depend on the presenter attributes, the content, and the time the program is aired. these will therefore
form the independent variables in our quest to design a program salability function. Program salabibility is a
function of the presenter attributes, the program content and the time the program is aired.

Functions and Responsibilities of Sales Person

A salesperson is an important sales management position maintaining vital link between an enterprise and
customers, society, distributors, retailers and others. Nature of roles played by a sales person is given as follows.

(i) Diagnostic

This involves a salesperson probing and finding the cause of a problem, i.e., why a customer often changes a
brand or why a customer is loyal to a particular brand.

(ii) Analyst

le:

A farmer prefers a motorcycle compared to a scooter, so marketer must segment rural middle class for various
types of motorcycles.

(iii) Information Provider

A salesperson is also an intelligent agent. He keeps the management informed of any significant development in
his territory, i.e., any strategic change of competitor etc.

(iv) Strategist

A salesperson being in the forefront of sales organization can command on time and route plans of sales
organization.

For Example:

A salesperson may at time make the announcement of a price change in his territory in such a way that it will
give him maximum benefit. Likewise, evolving a strategy to sell to an aggressive customer is the role of a
salesperson.
(v) Tactician

He is a tactician in the sense that he (or she) evolves tactics to win over the customer or enhance
distribution/retailer satisfaction. A tactic is a short-term action plan and is part of a strategy, which is a long-
term concept.

(vi) Change Agent

A salesperson acts as a Change Agent in his territory. For it is he who introduces new product ideas and
influences the life styles and consumption pattern by making new products and services available in the territory
and influencing opinion of manager to accept and recommend the same to other salesperson.

Thus, the modern society owes a lot to salespersons, for it is they who help upgrade life style and quality of
living. The Selling process or The Selling Theories on which the salespersons depend are Stimulus- Response
Theory, Product Oriented Selling and Need-Satisfaction Theory.

Other Functions Performed by a Sales Person

(a) Line functions

i. Achieves volume of sales

ii. Responsible for enhancing market share

iii. Responsible for profitability of the organization

iv. Attends to customer service.

(b) Staff functions

i. Provides assistance for ware housing In charge

ii. Provides assistance for Transport Department

iii. Provides assistance to Production Department regarding Product knowledge and knowledge about specific
customers.

(c) Line and staff functions

i. Helps General Sales Manager with sales fore-cost, market information and information about competitors

ii. Helps Corporate Management in respect of product development, Diversification and information about
market and competitors.

Responsibilities of Sales Person

The duties and responsibilities of a salesman differ from one business to another depending upon the nature of
the business, the size of the business, the type of selling job, the sales policies of the concern, etc. However,
there are certain duties and responsibilities which are common to all types of business.
Responsibilities of a Salesman

1. Selling

The fundamental duty of a salesman is selling. This duty includes meeting the prospects, presenting and
demonstrating the products, inducing the prospects to buy, taking orders and effecting sales.

2. Guiding the buyers

A salesman should guide the buyers in buying the goods they want.

3. Attending to complaints

A salesman should attend to the complaints of the customers immediately and try to settle their grievances
quickly and sincerely.

4. Collection of bills

Sometimes, a salesman may be required to collect the outstanding bills relating to the goods sold by him. In
such a case, he has to collect the bills and remit the amount to his firm.

5. Collection of credit information

A salesman may, sometimes, be required to collect information about the credit-worthiness of the customers. In
such a case, he has to collect detailed information and submit it to his firm in time.

6. Reporting

A salesman, especially a traveling salesman, is required to send daily, weekly or monthly reports to his firm,
providing information about the calls made, sales effected, services rendered, route schedule, expenses incurred,
business conditions, competition, if any, etc.

7. Organizing

A salesman, i.e., a traveling salesman, is required to organize his tour programme. He has to prepare the route
and time schedules for his tour so as to systematize his sales efforts.

8. Attending sales meetings

A salesman is required to attend the sales meetings convened by his employer at periodical intervals to discuss
the marketing problems, sales promotion activities, sales policies, etc.

9. Touring

A traveling salesman has to undertake touring regularly to cover the sales territories assigned to him.

10. Arranging for packing and delivery

A salesman, i.e., a counter salesman, has to arrange for the packing of the goods sold and the delivery of the
packages to the buyers.
 11. Window and counter displays

A salesman, i.e., an indoor or counter salesman, has to arrange for the window and counter displays of the
products in an attractive manner so as to attract or induce the prospects to buy.

12. Promotion of goodwill

Every salesman has to build up satisfied clientele (i.e., customers) for his employer and thereby promote the
goodwill of his firm.

13. Recruiting and Training

Recruiting new salesmen, imparting training, by accompanying them while making sales calls.

14. Working with Middlemen

Salesmen establish direct relations with middlemen — distributors, wholesalers, etc., and collect market
information and pass it on to their firm.

Relationship Communication
Marketing focuses mainly on Establishing, Developing, Maintaining
successful exchanges with customers. In marketing vertical every
relationship is an exchange process where each one gives
something in return for a payoff perceived to be or of greater
value.

Types of Relationships

 Value Added Exchanges

 Transactional Exchanges
 Collaborative Exchanges
Transactional Exchange

Centers on timely exchange of basic products at highly competitive

market prices. These types of transactions are autonomous in
nature i.e. there is little or no concern as to the needs of buyer or
seller.

Example: A person goes in a shop and buys a toothpaste. The

buyer wants a toothpaste and the seller sells him one.
Transactional Exchanges

Packaging machines and products, cleaning and sanitizing technology and Products, Commodity type
products, Service activity where bidding is applied. Transactional exchanges employ a type of arms-
length relationship.

Collaborative Exchange

Exists when alternatives are few, market is dynamic, the purchase is complex and the prices are high.

Main features include close information, social, and operational linkages and mutual commitments.

Switching costs are highly esssential to collaborative customers. Trust is the main factor and it there
when one party has complete confidence in their partner’s ability and integrity.

Managing Buyer Seller Relationships

a) Switching Costs

b) Value Drivers in Collaborative Relationships

c) Increasing Collaborative Relationships

d) Improving Transactional Customer Loyalty

Motivate the Employees

Dedicated employees are the key to a successful customer relationship strategy.

1. Hire good people.

2. Invest in them to increase their value to the company and its customers.
3. Develop challenging careers and align incentives to performance measures.

Precaution to be Care:

Take care of your tone and pitch as well. Make sure you are not too loud or too soft. Being loud
might hurt the other person. Speak softly in a convincing way. The other person must be able to
understand what you intend to communicate.

An individual must interact with the other person regularly for the relationship to grow and reach to
the next level. Speaking over the phone. SMSing are ways of communicating and staying in touch
especially in long distance relationships where individuals hardly meet.

Choice of words is important in relationships. Think twice before you speak. Remember one wrong
word can change the meaning of an entire conversation. The other person might misinterpret you
and spoil the relationship. Be crisp. Express your feelings clearly. Do not try to confuse the other
person. Being straightforward helps you in relationships.
Try to understand the other person’s point of view as well. Be a patient listener. Unless you listen
carefully, you will never be able to communicate effectively.

Be polite. Never ever shout on your partner even if he has done something wrong. Discuss issues and
try to sort out your differences amicably. Abusing, fighting, criticizing spoil the relationship and in
adverse cases might end it as well. Being rude is a crime in relationships.

Call preparation
Before you start making sales calls, it’s a good idea to prepare for them. A lack of preparation means
a much higher chance of things not going according to plan when you make the call. Of course,
preparing for a sales call can’t promise a favourable outcome, but it’ll increase the chances of getting
what you want from the call.

Before you pick up the phone or charge into someone’s office to try and sell something, do a little
preparation. The idea is to develop a comfortable framework where you have enough knowledge to
get started and to ensure that you’re prepared for certain eventualities on the call itself.

Steps:

Define Your Goals

Make your objectives clear. What do you want to accomplish before the call ends? What does your
potential customer want to achieve during this call?

Write down specific, targeted questions that are relevant to your potential customer’s business,
industry, pain points, needs, and buying behaviors. Be ready to listen and take notes so that you can
react to what the potential buyer says. Limit your questions so that the meeting feels like a
conversation, not an interview.

Call objectives include:

 Finding out the name (and other contact details) of the person who buys services
like yours.
 Scheduling a meeting with the person who buys services like yours.
 Getting the person to request marketing materials (such as your portfolio, CV,
corporate brochure, etc.).
 Getting the person to ask for a quotation on a particular project
 Closing a sale.

Structure the Call

Creating an informal itinerary for the conversation will help you maintain control. First, practice how
you’d start the meeting to point it in the right direction. Then, map out how to shift the conversation
from topic to topic so that you reach all defined goals.

Know Your Value

The truth is that your potential customer is extremely busy. They only have a small window of time to
devote attention towards their buying decision. That means they want to feel like they spent their
time wisely when they talk to you.

Do you know the value you can provide to this potential buyer? How can you inspire them to speed
up their buying decision or move them to the next step in the sales process?

Provide information that answers their questions, speaks to their needs, or explains any concerns
they may have. The call should end with your potential customer having actionable steps to carry out
and feeling positive about the experience.

Basic information on your potential customer is essential, but it’s not always enough. Sometimes you
need to do your homework in order to understand the big picture as well as the details about the
specific challenges they face and how you can provide the solution.

Before every sales call, you should check out the company’s:

 LinkedIn page as well as your potential customer’s professional profile

 Twitter stream
 Website, particularly the About Us and News sections
 Their previous conversations with your company as recorded in your CRM

Visualize Success

Think of how athletes prepare for an Olympic race. They control their breathing, stretch and shake
out their arms and legs. They visualize each step around the track, picturing how hard to swing their
arms, how wide to make each step, and how much energy will be needed to push through the finish
line.

This is how you should approach your sales calls. Like an athlete, a balance of adrenaline and oxygen
is what you need to maintain performance and focus.

Value Selling and Consequences

Value-based selling is a process of defining the real needs, measurable objectives, possible impact on
the potential customer’s bottom line, and pricing accordingly to the value our product can deliver.

Value selling is a hot concept in the technology industry, and one that sales leaders are researching
and discussing frequently. Outcome selling is trending on a similar curve. Unfortunately, too many
leaders think these two motions are similar and interchangeable.

Cost savings and financial outcomes are only part of the story. In fact, anchoring around value selling
can be detrimental to your sales efforts when used at the wrong time and with the wrong buyer.

Here’s an example: let’s say you’re a hardware company selling a new Managed Services offering.
You formulate a calculation of how much money a customer will save over the course of the next
three years if they pay you to operate their infrastructure rather than purchasing and managing it
themselves. Maybe your numbers are solid, and you’re confident you can stand behind your ROI
calculations. 
Outcome selling is a new and better approach to enterprise technology sales that centers around two
objectives:

 Allowing the supplier to demonstrate how their solution contributes to the

achievement of the outcome.
 Providing priority business outcomes that your customer is trying to achieve.

Outcome selling is about leading with insights; sharing your knowledge of what other similar
companies are doing and then building the connection between your offering and their highest
priority business outcomes. And here’s the thing you (the supplier) are providing insight and input as
to what those outcomes should be.

It’s not about saying that you understand their business better than they do; that can come across as
arrogant and alienating. However, you’re in a position to share your insights and experience based on
the fact that you’ve worked with dozens, or even hundreds, of similar companies before. It is obvious
why this approach would be far more strategic and valuable to the customer.

Outcome-based selling is about being able to confidently articulate how your solution contributes to:

 Financial goals
 Operating KPIs
 Priority business outcomes

Strategies:

Elevate The Conversation to A Business Level

The first key to effective value selling is to elevate your conversations to business-level discussions.
The conventional approach to sales is to identify a problem and sell your solution to that problem. So,
if you sell technology that delivers a manufacturing solution, the easy or conventional wisdom is that
you go in and uncover problems that you can solve with that solution. Then, you have a conversation
with your prospect about manufacturing problems or supply chain problems.

Requalify Every Opportunity in The Pipeline

In any crisis, sales leaders will take stock and reevaluate current opportunities; this is the second key.
Lately, we’ve been talking to our clients about their pipelines and the fact that every opportunity must
now be requalified. Business priorities have shifted. Staff has changed. Some companies have had to
adjust their business models or make changes to their supply chain.

Ask Smart Questions

The third key explains how to best execute point one (driving a valuable business conversation) and
point two (continuous qualification). This third key focuses on the questions you ask your prospect
and your ability to understand their point of view and circumstances and the context of the issues
they face. To gain these insights, you should ask thoughtful, deliberate questions that go beyond
merely scratching the surface of open-ended questions. You should prepare to approach a
conversation with pointed and specific probing questions in mind, as well as confirming questions to
ensure you have a mutual understanding.
By asking smart questions, you can position yourself to direct a value-based conversation. This
conversation is not about the product or service you are selling, but instead is a discussion built on
questions that uncover your prospect’s point of view around the business issue and how this impacts
their position and their company’s results. Asking smart questions also lends itself to establishing your
credibility as someone they want to do business with.

Principles:

Focus on the value of solving their problem

That’s why the first principle of value-based selling is to focus on the value to the prospect of dealing
with the issue they have identified. If the prospect cannot articulate the costs and consequences of
the problem and the value of solving it, their chances of getting their organisation to agree to invest
in any solution is remote as are your chances of winning.

It’s dangerous to assume that your prospect is fully aware of all of these costs and consequences. In
fact, a key role of the sales person in these early stages must be to help the prospect recognise the
full horror of sticking with the status quo. Almost always, this will involve drawing their attention to
aspects of the problem they may not have recognised or even better introducing high-impact issues
that they may not have previously been aware of.

But if, despite all your efforts, the value of solving the problem remains unclear or weak, it’s usually
best to qualify out the “opportunity” and defer it for future nurturing even if you appear to have a
good solution fit.

Be specific about the value you offer

Marketers sometimes make a great deal of fuss about articulating your company’s “unique value
proposition”. But no matter how agonisingly carefully they are crafted, these can only ever be generic
statements designed to appeal to your target market as a whole. Value-based selling requires that
you get very specific about the value you offer each prospect in effect you need a personally tailored
unique value position.

Rather than a broad description of all that you can offer, you’ll get much more traction by selectively
identifying and highlighting the small subset of your total capabilities that are most relevant to
successfully addressing the issue you have identified. And you need to clearly explain how you deliver
unique and relevant value to every member of the decision-making team.

Create and capture mutually meaningful value in every interaction

If your contacts are serious decision-makers with substantial workloads, they will not appreciate
being involved in conversations and meetings that leave them wondering why they just wasted their
valuable time. So, the third core principle of value-based selling is to seek to establish mutually
meaningful value in every customer interaction.

This value might be expressed by responding their questions simply, directly and completely rather
than leading them around the houses with an ambiguous or deliberately obfuscated response. Or it
might be expressed by sharing an insight that causes them to think differently or by revealing a
relevant fact they were previously unaware of.

Facilitate their buying process, not your sales process

Conventional sales processes are all-too-often designed around the needs of the seller, not the buyer.
So, it’s hardly surprising that things the sales person sees as important are often regarded by the
prospect as irrelevant or (even worse) profoundly irritating, while at the same time their interests and
concerns are being poorly served by the sales person.

That’s why your sales approach and the key stages in your sales pipeline and CRM system must be
designed around the key stages and milestones in your prospect’s buying decision journey. Your sales
activities, sales enablement tools and shareable content must be designed to advance a well-qualified
opportunity through their buying decision process.

If you can’t contribute distinctive value, qualify out

The final principle is simple: if your solution doesn’t offer a distinctively different and higher-value
approach solving to the prospect’s identified problem than any of the other options they are
considering, you need to either do something about it or qualify out.

Order fulfilment, Relationship building

Order fulfilment

The method by which a company processes a sales order to the customer’s specifications, that
understates its importance. Customers hold more power than ever, are more informed and have
higher expectations. Efficient order fulfillment is key to your brand’s reputation, your company’s
profits and your ability to retain clients.

Order fulfillment is a process consisting of receiving and processing goods for distribution to
customers.

Order fulfillment means fulfilling a sales order to the customer’s specifications. That is, delivering
goods as promised at the time of sale. There are three main steps in this process: receiving,
processing and shipping.

Companies make money by selling goods, products and services to businesses or direct to
consumers. No matter whether you’re B2B or D2C, the sale is not complete until the sold items are
received by that customer. Order fulfillment is how companies complete the sale and it’s at the heart
of every business.

Process

Receiving inventory

Goods may come from a third party, another company department or a company warehouse; a
pipeline (as with oil, fuel, water or some other fluid product); as digital data from a database; or in a
variety of forms from other external or internal sources.

In any case, the incoming inventory must be counted, inspected and inventoried to ensure the proper
amount was received and the quality is acceptable. SKUs or bar codes on the arriving products are
used in the receiving and storage processes, and to retrieve goods from internal storage later.

Inventory Storage
Once goods are received in the fulfillment center, they are inventoried and either immediately
disbursed or sent to short- or longer-term storage. Items are ideally stored just long enough to help
organize the orderly distribution of goods for existing sales, rather than to hold product for future
sales.

Order Processing

An order processing management system dictates the product picking and packing activities per each
newly received customer order. In the online marketplace, order management software can be
integrated with the shopping cart on an ecommerce website to automatically initiate order processing.

Picking

A picking team or automated warehouse robots select items from the warehouse according to a
packing slip’s instructions. The packing slip contains specific information, such as a list of item SKUs,
product colors, sizes, number of units and location in the distribution center’s warehouse.

Packing

Packing materials are selected by a packing team or automated fulfillment robots to achieve the
lowest practical dimensional weight, which is calculated by multiplying package length times width
times height. Since space on delivery trucks is at a premium, optimizing dimensional weight (or DIM
weight) is important to speed transport while also potentially lowering shipment costs.

Further, packing teams often include return shipping materials and labels in case the customer wishes
to exchange or return the item for a refund later.

Shipping

The order is sent to a transportation channel or shipping node to be shipped to the customer.
Shippers and carriers be they freight lines or airlines, FedEx, UPS, the U.S. Postal Service (USPS) or
other carriers determine freight billable costs by whichever is greater: actual package weight or its
dimensional weight.

Even if the actual weight is low, such as with a t-shirt, packing it in the lowest DIM is often worth it to
keep the packaging from adding significantly to the overall package weight. Also, most carriers have
packaging rules to optimize their own profits from the shipping space they have available. Failing to
meet those requirements can delay shipments if carriers refuse to accept the order.

Delivery

It is common for shipping routes to include more than one carrier. For example, FedEx may pick up a
package at the fulfillment center that will later be delivered by the USPS to the customer’s home.
There are many reasons for these hybrid shipping methods. One common example is that the USPS
delivers even to remote areas where most other commercial carriers do not. It’s simply more practical
to use the USPS for the last mile of delivery in those cases.

Relationship building
Relationship building skills are a combination of soft skills that a person applies to connect with others
and form positive relationships. In the workplace, relationship building skills are essential for getting
along with coworkers, contributing to a team and building an understanding between yourself and
others.

The following skill sets can typically be considered as essential skill sets to developing successful
relationship building skills:

Non-verbal communication skills

Non-verbal communication can have an impact on how you build relationships with others. For
instance, learning how to read body language can help you pick up on other people’s emotions.

Interpersonal skills

Relationships are people-centered. To form successful and strong work relationships, you should
possess effective interpersonal skills. Being able to understand another person’s perspective, showing
respect when you feel it’s unwarranted or showing compassion for your team can all be attributed to
developing interpersonal skills.

Listening skills

Active listening is an essential part of communication, however, developing active listening skills can
sometimes be more effective than learning how to speak in a meeting. Active listening encompasses
making eye contact, being aware of non-verbal cues and asking questions that show you are invested
in the conversation. This not only shows that you respect your team’s ideas, it can also show that you
care about all perspectives.

Verbal communication skills

Verbal communication is also essential to building strong relationships. For instance, if you join a
meeting with your colleagues, you can practice your verbal communication by finding opportunities to
contribute ideas and ask questions. This can show that you are interested and open to hearing your
team’s ideas as well as motivated to contribute your thoughts, too.

Emotional intelligence

Emotional intelligence can be beneficial to develop overall and not just in the workplace. However,
being emotionally intelligent can mean that you observe the dynamics in the office and find ways to
contribute to your team, help solve conflict and generally work from a place of understanding.

Empathy

Empathy is another key aspect of effective relationship building skills. Having empathy for your
friends and co-workers means you seek to understand their feelings and emotions. When you actively
practice empathy in the workplace, you can show your teammates and managers your dedication to
maintaining your work relationships.

Networking skills
Building successful work relationships can also benefit from developing your networking skills.
Meeting new people, exchanging ideas with other professionals and offering assistance to other
business professionals can all help to boost your networking skills. With effective networking skills,
you can increase your professional reach as well as form lasting professional relationships.

Team-building skills

Working as part of a team will almost always require effective relationship building. Develop your
teamwork skills by practicing effective communication, showing respect for others’ ideas and
contributing and assisting where it’s needed.

Relationship with Customers

Be transparent in your dealings. Keep your customers well informed. Communicate with them
through mails, SMses or over the phone. Your client has all the rights to know even the minutest
detail of a product. After all he /she is paying for the same. Do not hide anything from them. They
would in any case come to know about it and it is always advisable if they come to know through you
rather than from others.

Do not be after your client’s life to take quick decisions. Give them time and space. Too much of
phone calls will definitely spoil your relationship with the other person. Moreover, if you are
constantly bothering your client, in due course of time, he/she would stop attending your calls.
Rather than calling up the other person every single day, a gentle reminder either through SMs or
email can do the trick. After all, if someone is convinced about your product, he/she would invest in
any case; no matter you call him/her once or twice.

Be polite in your conversations. Never use foul words in your speech. It is completely unethical and
unprofessional. For maintaining a healthy relationship with your clients, you need to learn to keep a
check on your words. Never be rude to your clients.

Be a patient listener. Listen to what your clients have to say, rather than imposing your own ideas on
them. Do not go unprepared in any of your business meetings. Remember, your client can ask you
anything. If you do not know something at that point of time, it is always better to check and get
back to him/her later rather than lying. Try to resolve all your client’s queries.

Try to give a personal touch in all your business meetings. Help your clients in taking decisions. Give
them the right suggestion.

Never speak ill about your competitors and their products. Such a behaviour is completely unethical.
If your products are genuinely good and have an edge over competitors, your client would definitely
invest in them. You do not have to be too pushy.

Never ignore your client’s calls. If you have missed any of their calls, make sure you call them later.

Do remember to take proper feedbacks. After sales service is one of the major factors which plays a
crucial role in maintaining healthy and long term relationship with your clients. If your client is not
satisfied with any of your products, replace the same immediately. Action needs to be taken at the
earliest. Do not keep issues pending for long.

Always maintain a folder of personal information of your clients. Wish them on their birthdays,
anniversaries or any other special occasion. It would further strengthen your bond with your client.
Moreover, if you share a healthy relationship with your client; trust me they will always come back to
you. In fact they would not even think of going to your competitors. Networking is the key to success
in today’s business scenario. Contacts help in the long run. Always remember to take business cards
of people you meet on a daily basis. Even if you are through with your deal, make sure you are in
constant touch with your client. Drop him at his office sometimes or call him to your office for a cup
of coffee.

Marketing Distribution: Distinctive nature

Industrial distribution is unique as there are several different methods of channeling the products and
services to industrial consumers. The type of product, the selling price of the product and technical
knowledge required to sell the product all play a considerable role in selecting the proper sales or
distribution channel. Unlike consumer organizations, the decisions taken by the industrial
organizations on distribution channels is of great significance as the decisions involved are of long-
term nature that cannot be changed frequently.  The industrial organizations carry on certain
important functions till the products reach the consumers like utilizing the services of transportation
companies for distribution, the services of warehouses for safe storage of goods, inventory control,
order processing and selection of marketing channels. This necessitate taking important decisions like
devising effective communication tools, planning promotional activities, managing finances etc that
help in serving the consumers better.

 Size: Unlike consumer markets, the industrial markets tend to have fewer channels
of distribution. Even the industrial channel is shorter in size as organizational buyers
expect immediate product availability, technical expertise and prompt after-sales
service. This indirectly demands investment in training and physical facilities for the
industrial organizations.
 Geographical Distribution: The industrial distributors are concentrated highly in
the industrial markets they serve and certain other places that have large number of
industries like large towns and cities.
 Mixed channels: A combination of direct and indirect channels is used by some
industrial marketers to cater to different market segments or when they have some
resource constraints. To cater to large-volume customers, industrial firms generally
use their own sales force, and to cover small scale organizations, they use
independent distributors. In case of large geographical territories, due to resource
constraints they use their agents called as ‘manufacturers representatives’.
 Intermediary characters: The intermediaries involved in industrial marketing are
technically qualified who maintain very close relationship with industrial
organizations. Industrial manufacturers tend to depend more heavily on each
member of the channel and may do more to support that channel member.
Industrial distributors, brokers and agents are some types of intermediaries used by
industrial marketers to reach customers.

Types of Industrial Middlemen

The industrial middlemen are the intermediaries used by the manufacturers to deliver their products
to the end users. They are categorized based on the number and the extent to which they specialize
in the performance of certain functions. Different types of industrial middlemen are manufacturers
representatives (also called agents), brokers, commission merchants, industrial  dealers or
distributors, value-added resellers (VARs), jobbers and drop shippers.
 Brokers: Brokers are the middlemen who represent either the buyer or the seller.
They help the manufacturer to find potential buyers and vice versa and take the
commission when sales process is complete.
 Manufacturers Representatives: The manufacturers’ representatives (sales
agents or manufacturers agents) are very commonly seen middlemen who secure
orders from existing and potential customers. They provide relevant information on
market conditions to the manufacturers as well as customers. They are paid a certain
amount of pre-specified commission on sales and other tasks performed to make the
sales. Generally small and medium-sized industrial firms use the services of agents in
territories with low market potential. Agents are cost-effective for them because
commission is paid as per the orders generated. The agents particularly have good
knowledge about the product, their target market apart from excellent contacts with
the buyers.
 Commission Merchants: They deal with large quantities of items like raw
materials. They are paid commission by the manufacturers when they perform
certain functions. Their general functions include getting the raw materials inspected,
negotiating during sales and finally close the sales. They receive the commission
based on the net sales value as is compensated to agents and brokers.
 Industrial Distributors: Industrial distributors are the important and most
preferred middlemen that are typically small and independent serving narrow
geographic markets. They perform functions like buying, transportation and
warehousing, promotion and selling, and offering credit. Because of such varied
functions, they are sometimes referred to as full function intermediaries. They are
offered trade discounts on the price list of the products as their compensation.
Industrial distributors are categorized as general line distributors or mill supplies
houses that stock wide variety of products and sell to a diversified group of
customers. They are referred to as the supermarkets of industry. The products
stocked by them include maintenance repair and operating (MRO) supplies, original
equipment manufacturer (OEM) supplies, and equipment used in the operation of a
business, such as hand tools, power tools and conveyors etc. The second type of
distributors known as specialized distributors specializes in products they handle or
customers they serve. Because of increase in specialized markets, their numbers are
increasing. Specialized distributors limit their inventories to specific product range
like bearings, office equipment and supplies, electrical equipment and supplies, or
abrasives etc. The third category called the combination house sell directly to
industrial customers as well as some other retailers or dealers.
 Value-added Resellers (VARs): They add some value or feature to an existing
product and sell to end-users as a new package. This is found often in the computer
industry, where a company purchases computer components and builds a fully
operational personal computer. By doing this, the company has added value above
the cost of the individual computer components. Customers would purchase a
computer from the reseller to either save time or if they do not have the skills to
build a unit themselves.
 Drop Shippers: When an online marketer has certain concerns like where to get
the goods from, where to store them until they are sold, and what amount to charge
for shipping the goods to the customers, then drop shippers come to the rescue of
such marketers who work with  merchants to move the products. Drop Shipping is
generally used by web site owners, shop owners and mail order firms who do not
stock inventory of the products sold for future delivery through mail order, catalog
and internet advertising. Middlemen send single unit orders for products to
manufacturers, or major stocking distributors, who in turn drop ship the merchandise
direct to the customers of the middlemen. Manufacturers providing drop shipping
 services can gain additional sales, shift advertising costs to middlemen, offer
advertising material and reduce inventory requirements. Middlemen who initiate drop
ship orders shift the risks of stocking inventory to the supply source, including
storage, insurance, overhead, and personnel by spending nothing on inventory.
 Jobbers: They get orders from the customers and pass them to the manufacturers.
Though they do not handle the goods physically in any form, they take the title to
the products they sell. Jobbers specialize in marketing bulky products like coal, iron
ore etc, that are transported in huge quantities and do not require assorting or
grouping of products.

Channel Strategy and design

Marketing channels are set of mutually dependent organizations involved in the process of making product or
service available for utilization. It is established in academic studies that Marketing channels are the means by
which goods and services are made available for use by the customers. All goods go through channels of
distribution, and marketing will depend on the way goods are distributed. The direction that the product takes on
its way from production to the consumer is imperative because a marketer must choose which channel is best for
his particular product. It can be said that channel is the link between manufactures and purchasers. Decisions
about the marketing channel system are decisive for management.

The marketing channels chosen by marketers influence all other marketing decisions. The firm’s sales force and
advertising decisions depend on how much training and inspiration dealers need. Further, channel decisions
involve comparatively long-term commitments to other firms. Holistic marketers guarantee that marketing
decisions in all these different areas are made to jointly maximize value.

Channel of distribution (Marketing channel)

In current competitive climate, big companies are using hybrid channels in

any one area. The firm must choose how much effort is needed to assign to
push versus pull marketing. A push strategy uses the manufacturer’s sales
force and trade promotion to encourage intermediaries to carry, promote,
and sell the product to customers. This is suitable where there is low brand
loyalty in a category, brand choice is made in the store, the product is
desired item, and product benefits are well understood. In a pull strategy,
the manufacturer uses advertising and promotion to influence customers to
ask intermediaries for the product, thus inducing the intermediaries to
order it. This is suitable when there is high brand loyalty and high
involvement in the category, people perceive differences between brands,
and people choose the brand before they shop. A marketing channel
executes the work of moving products from producers to consumers, beat
the time, place, and possession gaps that separate goods and services from
those who need or want them.

Channel level: The producer and the final customer are part of every
channel. There are numerous channels by which goods and services are
distributed. It is divided into direct and indirect channel. In direct channel
also known as zero-level channel, manufacturer and customer deal directly
with each other. There is no middleman in this channel. It consists of a
producer selling directly to final customers through door-to-door sales,
Internet selling, mail order, telemarketing, home parties, TV selling,
manufacturer-owned stores, and other methods.

In indirect channel, companies manufacture products in huge scale and sell

these products to middle man for example whole seller and retailers. This
channel can be very expensive.

Manufacturer to Customer: Manufacturer produces the goods and sells

them to the customer directly with no mediator, such as a wholesaler,
agent or retailer. Goods come from the manufacturer to the user without an
intermediary.

Manufacturer to Retailer to Consumer: Purchases are made by the seller

from the manufacturer and then the retailer sells the products to the
consumer. This channel is used by manufacturers that specialize in
producing shopping goods.

Manufacturer to Wholesaler to Customer: Consumers can buy directly

from the wholesaler. The wholesaler breaks down bulk packages for resale
to the consumer. The wholesaler reduces some of the cost to the consumer
such as service cost or sales force cost, which makes the purchase price
cheaper for the consumer.

Manufacturer to Agent to Wholesaler to Retailer to Customer: This type of

distribution involves more than one intermediary involves an agent called
in to be the middleman and help with the sale of the goods. An agent
receives a commission from the producer. Agents are useful when
products or services need to move rapidly into the market soon after the
order is placed.

Market channels by which goods and services are distributed

Characteristics of Marketing Channels

Link between Producer and Consumer.

Flow of Goods

Remuneration.

Classification-Direct and Indirect.

Activities- Financing, Credit Facility

It is important to consider some factors when choosing appropriate

marketing channel such as product, market, company. It is observed that
middle man plays vital role in distribution of product in market channel.
The core responsibility of intermediaries is to deliver products to
customers in their desired location. To accomplish this objective, they
purchase goods and store these and then ship to customers.

Marketing channel function performed by middleman.

Designing a Marketing Channel System

Designing a marketing channel system entails factors such as analysing

customer needs, establishing channel objectives, identifying major channel
alternatives, and evaluating major channel alternatives.

Analysing Customers’ Desired Service Output Levels: The marketer must

recognize the service output levels which its target customers want.
Channels produce five service outputs:
 1. Lot size: The number of units the channel allows a particular
customer to buy at one time.
2. Waiting and delivery time: The average time consumers of
that channel wait for receipt of the goods. Customers
generally prefer fast delivery channels.
3. Spatial convenience: The extent to which the marketing
channel facilitate for customers to obtain the product.
4. Product variety: The variety provided by the channel.
Usually, consumers prefer a greater collection, which
enhances the chance of finding what they need.
5. Service backup: The add-on services such as credit,
delivery, installation, repairs provided by the channel.
Providing greater service outputs denotes increased channel costs and
higher prices for consumers. The triumph of discount resellers (online and
offline) designates that many consumers will accept lower outputs if they
can save money.

Establishing Objectives and Constraints

Another factor in designing a marketing channel system is that marketers

must declare their channel objectives in terms of targeted service output
levels. In competitive conditions, channel institutions should coordinate
their functional tasks to reduce total channel costs and still offer desired
levels of service outputs. Generally, planners can recognize several market
segments that want different service levels. Successful planning needs to
determine which market segments to serve and the best channels for each.
Channel objectives differ with product characteristics. Channel design is
also affected by numerous environmental factors as competitors’ channels,
monetary conditions, and legal regulations and limitations.

Channel Design Decisions, Selecting Channel

Members
CHANNEL DESIGN DECISIONS

Designing a marketing channel system involves analyzing customer needs, establishing channel objectives,
identifying major channel alternatives, and evaluating major channel alternatives.
Marketing channels are set of mutually dependent organizations involved in the process of making product or
service available for utilization. It is established in academic studies that Marketing channels are the means by
which goods and services are made available for use by the customers. All goods go through channels of
distribution, and marketing will depend on the way goods are distributed. The direction that the product takes on
its way from production to the consumer is imperative because a marketer must choose which channel is best for
his particular product. It can be said that channel is the link between manufactures and purchasers. Decisions
about the marketing channel system are decisive for management.

Selection, Motivation and Evaluation of

intermediaries
Identify Major Channel Alternatives

Other decisive factor in developing market channel is to recognize alternatives. Companies may select array of
channels to approach customers, each of which has distinctive strengths as well as limitations. Each channel
alternative is explained by

(i) The types of available intermediaries

(ii) The number of intermediaries needed; and

(iii) The terms and responsibilities of each channel member.

Types of Intermediaries entails a firm needs to discover the types of intermediaries available to run its channel
work. Some intermediary merchants such as wholesalers and retailers buy, take title to, and resell the products.
Agents such as brokers, manufacturers’ representatives, and sales agents chase customers and may bargain on
the producer’s behalf but do not take title to the merchandise. Facilitators, including transportation companies,
independent warehouses, banks, and advertising agencies, help in the distribution process but neither neither
take title to goods nor negotiate purchases or sales.

Companies should recognize pioneering marketing channels. Number of Intermediaries indicates that to choose
intermediaries to use, companies can adopt one of three strategies: exclusive, selective, or intensive distribution.
Exclusive distribution means severely limiting the number of intermediaries. Selective distribution depends on
more than a few but less than all of the intermediaries willing to carry a particular product. In intensive
distribution, the producer places the goods or services in as many outlets as possible. This strategy is usually
used for items such as snack foods, newspapers, and gum. Terms and Responsibilities of Channel Members
signify that each channel member must be treated courteously and given the opportunity to be lucrative. The
main constituents in the “trade-relations mix” are price policy, conditions of sale, territorial rights, and specific
services to be performed by each party. Price policy assists the producer to ascertain a price list and schedule of
discounts and allowances that intermediaries see as equitable and sufficient.

Evaluating the Major Alternatives

The Company must assess each alternative against suitable economic, control, and adaptive criteria. The firm
should verify whether its own sales force or a sales agency will create more sales and it estimates the costs of
selling different quantities through each channel.

Managing Marketing Channel

In order to maximize profit, companies must manage their marketing channel effectively. Management of
marketing channel refers to the process of analysing, planning, organizing and controlling its marketing channel.
In marketing channel two different activities occur. One is the establishment of physical distribution system and
other is management of marketing objectives. Management of marketing channel involves all functions of
marketing mix which include product, price, physical distribution, program and people. The physical
distribution system and channel structure is established through which products flow in the marketing channel.

Marketing Mix Activities In Marketing Channel Management: (McCalley, 1996)

To Mange marketing channel, firms must adopt motivational strategies such as paying higher slotting
allowances, offering higher trade discount, providing strong promotional and advertising support,
training channel member sales people, giving high level logistic support. Management professional stated
that after a firm has selected a channel system, it must select, train, motivate, and evaluate individual
intermediaries for each channel. It must also modify channel design and arrangements over time.

Selecting Channel Members: For successful management, Companies must have to choose talented channel
members cautiously because for customers, the channels are the company. Producers should decide what
features distinguish the better intermediaries and scrutinize the number of years in business, other lines carried,
growth and profit record, financial strength, cooperativeness, and service reputation of potential channel
members. If the intermediaries are sales agents, producers should assess the number and character of other lines
carried and the size and quality of the sales force. If the intermediaries want exclusive distribution, the
manufacturer should assess locations, future growth potential, and type of customers.

Training and Motivating Channel Members: It is a major responsibility of a company to examine its
intermediaries in the same way it views its customers. It needs to establish intermediaries’ needs and build a
channel positioning such that its channel offering is tailored to provide superior value to these intermediaries. To
enhance intermediaries’ performance, the company should offer training, market research, and other capability-
building programs. The company must also continually strengthen that its intermediaries are to jointly gratify
the needs of end users. Producers differ greatly in channel power, the ability to change channel members’
behaviour therefore the members take corrective actions. Often, gaining intermediaries’ collaboration is a major
challenge. Sometimes, Producers try to forge a long-term affiliation with channel members. The manufacturer
must talk clearly what it expects from its distributors in the way of market coverage and other channel issues
and may ascertain a compensation plan for adhering to these policies. Motivating channel members takes
numerous forms in order to gratify the requirements at each level in channel. Profitability is major Motivational
force for whole seller for product selection. When profit motivation is satisfied, whole seller will look for
marketing programs offered by producers to sell products to retailers. Whole seller checks the credit option and
terms of payment when assessing the profit option for business when dealing with particular supplier. Retailers
are mainly concerned with maintenance of product supply and availability. It is observed in market that when
customers cannot get product in one retail shop, they immediately search for it in another retailers. But retailers
do not want to lose customers. Another interest of retailers is profitability of the product.

Motivational consideration for channel members: (McCalley, 1996)

Evaluate Channel Members: To successfully manage market channel, producers must assess intermediaries’
performance at regular intervals against such standards as sales-quota attainment, average inventory levels,
customer delivery time, treatment of damaged and lost goods, and cooperation in promotional and training
programs. A producer will occasionally determine that it is paying particular intermediaries too much for what
they are actually doing. Producers should establish functional discounts in which they pay specific amounts for
the intermediary’s performance of each agreed-upon service. People who are not performing must be given
extra training or counselling.

Modifying Channel Arrangements: Channel arrangements must be reassessed regularly and altered when
distribution does not work as planned, consumer buying patterns change, the market develops, new competition
occurs, inventive distribution channels appear, and the product moves into later stages in the product life cycle.
No marketing channel remains successful over the entire product life cycle. Early purchaser might be willing to
pay for high-cost value-added channels, but later buyers will change to lower-cost channels. In highly
competitive markets with low entry barriers, the best channel structure will transform over time. The company
may add or drop individual channel members, add or drop particular market channels, or develop a new way to
sell merchandise. The process of adding or dropping an individual channel member needs an incremental
analysis to decide profitability of company. Additionally, marketers adopt data mining to analyse customer
shopping data as input for channel decisions. The most complicated decision is whether to modify the overall
channel scheme. Channels can become old-fashioned when gap occurs between the existing distribution system
and the ideal system to gratify customer’s needs and wants.

The most challenging face of channel management is the maintenance of control over all parts of distribution
flow and marketing activities. Marketers have to undergo legal issues in controlling marketing channels
therefore they need to develop successful channel programs that will stimulate the action planned without
creating conflict among competitive channel members.

To summarize, market channel is medium through product from raw material move to costumer. In designing
market channel it is important to comprehend customer’s need. The task of managing marketing channel falls to
marketing and sales managers. These people directly involve with channel members and company’s
competitors. They know how to find valuable information for good management decisions. To organize
marketing channel, it is imperative to gather relevant information. It assists in writing accurate and detail market
profile statement. Most marketing channels are created with one or more intermediaries between the
manufacturer and consumer.

Business Marketing Channels: Direct and

Indirect Distribution Channels
Distribution channels in marketing are one of the classic “4 Ps” (product, promotion, price, placement a.k.a.
“distribution”). They’re a key element in your entire marketing strategy — they help you expand your reach and
grow revenue.

B2B and B2C companies can sell through a single distribution channel or through multiple channels that may
include:

 Wholesaler/Distributor
 Direct/Internet
 Direct/Catalog
 Direct/Sales Team
 Value-Added Reseller (VAR)
 Consultant
 Dealer
 Retail
 Sales Agent/Manufacturer’s Rep

Here are three examples of distribution channels in marketing:

Business Marketing Channels: Direct and
Indirect Distribution Channels
Distribution channels in marketing are one of the classic “4 Ps” (product, promotion, price, placement a.k.a.
“distribution”). They’re a key element in your entire marketing strategy — they help you expand your reach and
grow revenue.

B2B and B2C companies can sell through a single distribution channel or through multiple channels that may
include:

 Wholesaler/Distributor
 Direct/Internet
 Direct/Catalog
 Direct/Sales Team
 Value-Added Reseller (VAR)
 Consultant
 Dealer
 Retail
 Sales Agent/Manufacturer’s Rep

Here are three examples of distribution channels in marketing:

Distribution Channels Concepts & Steps

Before you begin

You can evaluate a new distribution channel or improve your channel marketing / management at any time. It’s
especially important to think about distribution when you’re going after a new customer segment, releasing a
new product, or looking for ways to aggressively grow your business.

Evaluate how your end-users need to buy

Your distribution strategy should deliver the information and service your prospects need. For each customer
segment, consider:

 How and where they prefer to buy

 Whether they need personalized education and training
 Whether they need additional products or services to be used along with yours
 Whether your product needs to be customized or installed
 Whether your product needs to be serviced

Match end-user needs to a distribution strategy

 If your end-users need a great deal of information and service, your company can deliver it
directly through a sales force. You can also build a channel of qualified resellers or
consultants. The size of the market and your price will probably dictate which scenario is
best.
 If the buying process is fairly straightforward, you can sell direct via a website/catalog or
perhaps through a wholesale/retail structure. You may also use an inbound telemarketing
group or a field sales team.
  If you need complete control over your product’s delivery and service, adding a channel
probably isn’t right for you.

Identify natural partners

If you want to grow beyond the direct model, look for companies that have relationships with your end-users. If
consultants, wholesalers or retailers already reach your customer base, they’re natural partners.

Build your distribution channel

If you’re setting up a distribution channel with one or more partners, treat it as a sales process:

 Approach the potential channel partner and “sell” the value of the partnership.
 Establish goals, service requirements and reporting requirements.
 Deliver inventory (if necessary) and sales/support materials.
 Train the partner.
 Run promotions and programs to support the partner and help them increase sales.

Minimize pricing conflicts

If you use multiple channels, carefully map out the price for each step in your channel and include a fair profit
for each type of partner. Then compare the price that the end-user will pay; if a customer can buy from one
channel at a lower price than from another, your partners will rightfully have concerns. Pricing conflict is
common, and it can jeopardize your entire strategy, so do your best to map out the price at each step and
develop the best solution possible.

Drive revenue through the channel

Service your channel partners as you’d service your best customers and work with them to drive revenue. For
example, provide them with marketing funds or materials to promote your products; run campaigns to generate
leads and forward them to your partners.

Introduction to Logistics and Supply chain

Management
The term “Supply Chain Management” was coined in 1982 by Keith
Oliver of Booz, Allen and Hamilton Inc. But the discipline and practice
has been in existence for centuries.

The terms Logistics and Supply Chain Management are used

interchangeably these days, but there is a subtle difference that exists
between the two.

‘Logistics’ has a military origin, and used to be associated with the

movement of troops and their supplies in the battlefield. But like so many
other technologies and terminologies, it entered into the business lexicon
gradually and has now become synonymous with the set of activities
ranging from procurement of raw materials, to the delivery of the final
polished good to the end consumer.

In a typical business scenario, many organizations work in tandem

(knowingly or unknowingly) to get the final product in hand of the end
consumer. The supply chain is a network of these organizations that
coalesce with each other (downstream or upstream) to make the final
shipment successful.

A group of farmers, a cotton mill, a designer and a tailor is the least

number of stakeholders you can expect from a regular shirt you wear every
day

Introduction to Logistics and Supply Chain Management (SCM)

Logistics is generally seen as a differentiator in terms of the final bottom line of a typical “hard and tangible
goods” organization; enabling either a lower cost or providing higher value.

While a lower cost is mostly a one-time feel good factor and has been the traditional focus area in logistics, high
value comes into the picture much later and may be tangible or intangible in a good’s initial stages.

So while an organization like Zappos may look costly at a first glance, the extraordinary customer service due to
robust policies is a value which more than offsets the slightly higher cost.

Logistics is concerned with both materials flow and information flow. While the materials flow from the
supplier to consumer, the information flows the other way round. It is not only concerned with inventory and
resource utilization, customer response also falls under the ambit of logistics.

In simple terms, logistics can be seen as a link between the manufacturing and marketing operations of a
company. The traditional organizations used to think of them separately, but there is a definite value addition in
integrating the two due to the interdependence and feedback channel between the two.

The level of coordination required to minimize the overall cost for the end
consumer gets tougher to achieve as the number of participants in a supply
chain increase, as an extremely efficient flow of material and information
is required for optimization.

Logistics cover the following broad functional areas: network design,

transportation and inventory management.

Manufacturing plants, warehouses, stores etc. are all facilities which form
key components in the network design. Transportation: the cost and
consistency (reliability) required out of the transportation network
determines the type and mode of the movement of goods and also affects
the inventory.

Buffer (or safety) stock is the reserve stock held to safeguard against
shortages or unexpected surge in demand, to avoid “stock-outs”. Fewer
inventories with negligible stock-outs — the hallmark of an efficient
logistical system

Basic concepts of Logistics and SCM

Inventory Planning

Organizations want to minimize the inventory levels due to its almost linear relationship with the cost. Yet if the
demand is forecasted accurately, there would ideally be no need for inventory and the goods will move
seamlessly from warehouses to customers.

 That would have been awesome, but it is deep into the ideal world zone. In the real world, the
forecasted numbers can only take you so far and some inventory has to be maintained to
satiate any surges in demand; the cost of unhappy consumers who are not serviced is often
huge, and is immeasurable in most cases.
 Yet overstocks lead to increase in working capital requirements, insurance costs and blocked
resources which could have been productive someplace else.
 Making a business forecast has largely been a gut-based process, but is changing rapidly in
the era of data-based decision making. The forecast depends on the historical baseline for
sales, seasonality (soft drinks have higher sales volume in May), recent trends (Samsung is
losing out to competitors when it comes to phones, a declining trend), business cycles
(economies go through expansion and contraction every few years), promotional offers (up to
50% off can drive the average fashionista mad) etc.

Transportation

The kind of transportation employed by an organization is a strategic decision (it usually accounts for around
1/3rdof the total logistics cost) based on the required level of risk exposure, customer service profiles, geographic
area covered etc. Truck shipments take more time for delivery compared to air transport (customers with relaxed
turnaround times); is cheaper but necessitates maintenance of higher inventory levels.

 Transportation serves the purpose of not just product movement, but storage as well (not very
intuitive). Time spent for delivery means saved time for warehousing, and many times the
cost to offload and reload shipments can be greater than the cost of letting the goods stay in
the transportation vehicles itself.
 Two basic thumb rules apply for transportation decisions: truck load (TL) shipments are
better than less-than-truckload (LTL) shipments as storage space is a perishable commodity
(just like a commercial airline does not want to fly with empty seats), and the cost per
kilometer decreases as the distance increases (two 500 km shipments is usually more
expensive than a single 1000 km shipment).
 The factors which determine the economies of transportation decisions include but are not
limited to: distance between the starting and destination points, and density (higher density
products take less space — space constraints outweigh weight constraints by a huge margin),
stow ability (spherical packaging will lead to more empty spaces compared to cubical) and
 volume of the goods. Different modes of transport serve different strategic ends (rail, road,
air, water etc).
 FlipKart has eKart for its logistical operations and warehousing, whereas smaller e-commerce
players generally outsource their operations to specialized logistics players such BlueDart,
DHL and now Delhivery.

Packaging

The end goals differ: can either be done for end consumers or for logistical considerations. The packaging will
then depend on the end goal; form factor plays the lead role when packaging goods for the end consumers, while
function plays the lead role in packaging for logistical operation.

Warehousing

It is the back-end building for storing goods. Based on the needs of the organization, it can be in-house or
outsourced.

 Primary functions of a warehouse are product movement and storage. Activities such as
offloading of the goods coming from the suppliers, the intermediate packaging (if required),
and shipping to other destinations (retailers or end consumers) are handled in the warehouse.
Similarly, they can also serve as a storage house for handing peak consumer demand to avoid
stock out of items, and acts as a buffer between the starting point (usually manufacturing
plant) and ending point (think about a typical retail outlet).

Different distribution strategies can be adopted by an organization based on its needs and infrastructure in place,
namely:

 Cross-Docking: Relies on minimal processing at the warehouse level and facilitate seamless

connection between “incoming” and “outgoing” goods through technologies such as bar code
scanners; becoming increasingly important due to established structured communication
between retailers and manufacturers; best for high velocity goods with predictable demand
patterns.
 Milk Runs: The delivery guy is out to deliver items from a single supplier to multiple
retailers or to pick up items from multiple suppliers for a single retailer (An Indian
Doodhwala can literally teach a thing or two about this, hence the naming we think).
 Direct Shipping: A supplier directly ships to a particular retailer without any intermediaries.
Mostly happens with big-name stores with huge good volumes, and very frequent
replenishments. Big savings on time.
 Hub and Spoke Model: Hub serves as the central node for nearby places, and the spokes
depend on the hub for their needs (think of a metropolitan and various tier-2 cities in its
proximity).
 Pooled Distribution: Region is the most important factor driving this strategy. Delivers to
every destination point in a geographical area, smart for handling peak time loads and LTL
shipments. Plus one for the planet as a bonus!

Human : Arteries :: Logistics : Information

Traditional paper-based information systems are increasingly on their way out, and electronic exchanges are
making rapid inroads into the logistical process flow. The initial investment in electronic systems is recouped
quickly by cost savings due to better operational efficiency and enhanced customer service. Advances in
electronic data interchange (EDI), artificial intelligence and wireless communication is partly responsible for
this intelligent shift.
  The principal information flow can be subdivided in two main streams: one for planning
(looking into the future) and the other for operational flows (in the past and present). Plans are
to be made for production, storage and movement of goods. Manufacturing constraints
(internal) and expected sales (external) are the key areas focused upon. Operating flows refer
to the information generated (or required) to serve the orders to the customer.
 Enterprise Resource Planning (ERP) is a fancy term used by IT people for one-stop,
integrated packages to support multiple functions across an organization. It serves as a central
destination to capture data which aids in making optimal decisions, while also serving as a
repository to better understand the current business scenario and plan for any future needs.

Green Supply Chain Management: Lean Practices

Green is the new way to go about things, and the myth that profits and environment cannot go hand in hand is
evaporating fast. Commitment to lean practices is a promise to do away with inefficiencies in the system to
reduce wastes and have a minimal impact on the environment.

The emphasis on continuous product flows, standardization within the organization/industries and a greater
integration between producers and consumers — all these have contributed to efficient supply chains with
gradually decreasing waste levels.