Jul 5, 2016

WHY WE NEED DISTRIBUTION NETWORK?

WHY WE NEED DISTRIBUTION NETWORK?


THESE SYSTEMS OF NETWORK BOOST SALES AND ENHANCE MARGIN BY,

Establishing the network and our targeted goal.

To have good expanded and established contacts.

New production introductions and launching.

Taking the maximum utilization of time and place in a particular place.

DISTRIBUTION SPREAD OUT OUR REACH

Industrial distribution businesses need sufficient skilled manpower and strong support to cover the entire market which can be fulfilled by industrial distribution so as to expand to reach the marketplace. Through this distribution any manufacturer can share the costs of going to market with many manufacturers who have the same problem.

DISTRIBUTION OFFERS ESTABLISHED CONTACTS

There may be more businesses with fewer customers by distribution. But the relations and contacts that he has established with customers may bring strong and good relationships forever in the near future.

The small distributor in any country with few lines and with no salesperson enjoys some very strong relationships with those customers who give him most of his business.

The value of company’s product line to distribution provides the foundation for exceptionally strong relationships. If, as a distributor, you are supplying more products to fewer customers, than the relationship becomes quite interdependent. You must continue to bring value to your customers by reducing his or lowering his acquisition costs and introducing new concepts that actually saves the customer money. You can bring such valuable processes in to the distribution system.

Good service starts with teaching the customer how to save money by incorporating your company’s processes in your manufacturing units.

NEW PRODUCTION INTRODUCTIONS

Sometimes Research and Development develops materials for very specific Original Manufacturers markets with a limited number of customers. Those opportunities are best exploited by selected distributor salesperson with account contacts and selected your company’s salesperson.

Other new product developments, such as parts or components which require assembling the main component or assembly in a particular design have much broader application possibilities. In situations where a new product development has broad market appeal, then a sell sheet, a sample of product or component or demonstration parts, and a team of salespeople can have major impact on the market place in a very short period of time. Salesperson should talk about new products through industrial distribution network.

USE OF TIME AND PLACE

People like to buy locally. They like to deal with a known distributor who can offer a level of support they trust. The individual distributor must therefore handle inventory, receivables, service and advice. And that is a fine for any company as he handles this more cost-effectively than we could ever manage.

Distribution is the most successful mechanism ever created to lower the cost of the company’s acquisitions, either as individual consumers or as companies.

TYPE OF COMPANIES MAKE GOOD DISTRIBUTORS

The distributor must talk to the customer. End users must include manufacturing and maintenance people who are involved with assembly- those who use or could use your products- as well as purchasing people. It makes sense to select distributors who have already had the right relationships.

Your selection process must distinguish between distributors who talk with end users and those who talk to other distributors. While the distinction between wholesaler and distributor is very clear in few countries, it is very unclear in several countries. Existing distribution in few countries falls into several categories.

WHOLESALERS WHO TALK TO ONLY RESELLERS

Major account suppliers, who provide just-in-time deliveries to many locations of a single account, and service the rest of the areas through resellers.

Those who serve the general industrial base where they have a presence and service the rest of the area through re-sellers.

Multi line, short line or sole distributors of your product.

All these distribution procedures have the advantage of making the product available in the market place. Remember, though, that wholesalers don’t talk to the end-users. Their customers are other distributors and their function is simply to sell the products line to all distribution.

Open distribution, direct from the factory or through wholesalers, means that any customer can buy your product from any distributor, regardless of who provides the support. These results in a line that distribution supplies but not a line they sell. And if this situation is not managed properly, then you have to bears sole responsibilities for creating new end user demand.

A product XZY, for instance, is sold very successfully through indirect marketing efforts. The manufacturers seek no sales effort from its distribution, only time and utility. Thus they have open distribution and offer relatively low gross margins.

However, we must use face to face selling techniques to create end users demand. Indirect marketing tools such as advertising and direct mail are very successful marketing tools if the customer knows he wants the products – and his decision is only when and which brand.

Yet indirect approach is unlikely to create new end users demand if the customer doesn’t clearly understand that he has a need. As long as you are in, this cut of product life cycle you will need salesperson, factory or distributor, to carry the word. Your new product development effort must succeed in keeping you in this position. When you are no longer missionary or value added salesperson, it is unlikely you will commend the profits you currently enjoy.

Your company expects its distributors to be knowledgeable about its products, capable of recognizing company’s application and in most cases recommending a product. Company expects them to create end users demand on their own and in partnership with us, working diligently to surface ever more opportunities.

As the line grows in importance to your distributors, company must manage the distribution- resale equation. It is not realistic for your distributors to work in partnership with company if the product is available on every street corner. Finding the right balance between selective and open distribution will be critical to your success.

Distributors engage in a consistently different mix of business. A good mechanical seal or shaft distributor, for example, will have excellent relationships with major Maintenance Repairs and Overhauling users yet would be unlikely to call on a hospital or hotel as their product line is too short to justify a sales call.

On the other hand, big mill supply houses concentrate on a broader business base. Their wider product line offering will easily justify perusing a hotel account.

Yet neither mill supply nor seal are focused on the OEM product business In this case you should target one of an emerging – and successful – group of particular product distributors. It is in our best interest to identify these suppliers as potential your company’s distributors.

The objective in each case is to identify the distributor best suited to the particular marketing area.

Company pricing must balance the cost of teaching people how to exploit this technology with the benefits derived. Pricing to value provides the maximum amount of resources to teach people how to use these products to save money. If we could price everything exactly right the customer would save enough money to justify the change and enjoy some savings, while your company would maximize its income to fund ongoing product development and customer training needs.

It therefore follows that we have a responsibility to our customer and to our ourselves to contain all costs which do not increase the number of successful applications or increase the capabilities of our product line, i.e. if we spend too much on warehousing we will fall short of the optimum recourses to add applications through our process engineering effort. Thus we will fail to maximize the growth.

Price to value must recognize that to maximize the results, both warehousing and marketing must be efficient. Thus distribution has to be part of the mix. Multi line houses spreading their costs over many lines provide the most cost effective solution to effective market access.

The concept of price to value must strike a balance between the values of your product in a particular application with the relative size of the end user.

Distributor and company’s activities are the only common sense approach to managing distributor’s relationships when the manufacturer expects more than time and place utility. This partnership is not a mystical. It requires planning and commitment. A plan should be written with all those distributors you expect to work with in the coming year at least 3 and probably not more than 8. The plan must be an easily understood one or two page document which summarizes the action steps agreed on by your company and you. It is no more acceptable to set a distributor growth target without a plan, than it is to accept a salesperson’s growth sales target without a plan.

TO CREATE THE PARTNERSHIP GROWTH PLAN…….

The plan must deal with three areas:

Retaining the existing businesses.

Project closed recently or being worked on.

Other growth activities.

Taking care of existing business is the number one priority. It doesn’t make a lot of sense to work on new opportunities while an equal quantity falls out of the bottom of the funnel. That simply supports your competitors. If taking care of existing business is the number one priority for you, then it must be his priority in establishing the distributor partnership planning. You must know who and how much their existing your company’s customers buy. Existing customers should be ranked and those customers that give the distributor 80% of his business should be included in the plan. The plan must define who will do what to maintain this important business.

PROJECTS CLOSED RECENTLY OR BEING WORKED ON

In a well managed territory, the company salesperson and your distributor salesperson will close the projects during the year, which in turn provide built-in growth.

There will be projects or application on the salesperson’s project list that will likely close in the current year. These projects must be reviewed, plans established and a forecast prepared. Again, this will most likely be a short list. If this year’s list is expected to generate a sum amount and, on average, will have six months of production, then a sum % of increase can be added to the forecast, bringing it to a total previous amount plus additional growth among, other Growth Activities.

Once you have set your plan to keep existing business, forecasted sales growth from projects closed in the previous year and expected sales from pending projects, it is time to turn your attention to additional growth activities.

The good opportunities is that your bag of alternatives to grow the business exceptionally deep.

You have leads from advertising.

You have leads from trade fairs.

You have target market plans.

You have distributor promotions.

You can conduct seminars and training to customers.

You can conduct in house seminars (plant seminars)

You have direct mail opportunities, product or market oriented.

Each of these activities has a value. Measurement and experience will allow you to forecast the value of each of the above with reasonable accuracy.

We demand great things of ourselves. Those demands should include a distributor partnership plan to ensure successful results.

















Jul 4, 2016

DISTRIBUTOR CALL

DISTRIBUTOR CALL

Good marketing means getting the right product to right place at the right time. All the work done to achieve this can fail at the last post – when you have to deliver the goods.

Sales and marketing people have balance the promotional mix to achieve the best value. These trades – offs are mirrored in delivery.

With advertising, the objectives are market supply and customer service. Advertising moves people to products and selling moves products to people. Physical distribution links these two.These are the basics that every salesperson must know about marketing, advertising and any other sales promotional activities to promote their products or brands in a systematic way by contributing their ideas, skills and strategy in the interest of the company. They have to work with company’s marketing people before taking any decision and must follow the policy and procedure of the company. Such sales people can handle any objections professionally to the entire satisfaction of the customer. Overall to say Sales and Marketing people must support each other in the interest of the organization. Don’t forget to consider your area distributor to have more support in the matter.

PREPARING FOR THE DISTRIBUTOR CALL

Distributor is the bridge between the organization and customer. He is also the Partner of your Business as he would agree on company’s Yearly Business Plan. He is the local leading person for building up good contacts and relation with customer.

He also builds up strong reputation with company on behalf of any organization for which he deals. He is the immediate solution and service provider by maintaining a good amount of stock and skilled sales representatives. He has good territory knowledge and customer base to tap the potential area. He would communicate the company on behalf of customer for the supply of product, service, billing, and transport etc without any delay.

Distributor would identify new application, new customer segment etc. in the interest of the company. He will also participate in trade exhibition, seminars kind of sales promotional activities in consent with the company.

His effort and contribution towards the success of the company is incredible to the organization. Therefore a salesperson must give equal importance to distributor’s call too. He should have a proper planning before consulting the distributor. Few instances are given below:

PRE – CALL

Salesperson should know the purpose for calling on the distributor.

Partnership Meeting.

Resolve a problem.

Schedule a Sales Meeting.

Talk about new products or promotions.

What do you want to accomplish and how do you plan to achieve this goal?

What problems or objections are you likely to encounter.

How will you resolve the problems and overcome the objections?

Plan the amount of time you spend.

Do not plan your schedule too tightly. You may have to spend more time that you have planned for.

Your time and selling skills are the basis of your existence.

THE FIRST CALL

You are making your first call on a distributor.

What is your objective? Be as specific as possible.

Plan your visit in advance.

Know who you want to see and know why you want to see them.

President.

Sales Manager.

Sales Engineer/Salesperson/Executive.

Branch Manager.

Purchasing Manager/Accounts Department.

Store Manager.

All of the above.

DON’T MAKE A COLD CALL

Call for an appointment.

Be known as a person who is “On Time”, it will help to get them to be on time for you.

KNOW SOMETHING ABOUT THE DISTRIBUTOR

Purchase History.

Are they good partners?

Are there any current problems?

If you don’t know, ask your manager and/or customer service representative early.

DON’T EXPECT TOO MUCH

The I.D. does not know you.

I.D. principals don’t automatically trust you.

You have to earn their trust and respect.

You may not accomplish all your goals on the first visit: this will help you plan future effective sales calls.

PROVE YOURSELF- SO BE STRAIGHT WITH THEM
Start to build up a business relationship. “Rome wasn’t built in a day:” neither will you build a sound business relationship on the first call. It takes time.

Offer to help them with a common problem.

START WITH THE BASICS


Check literature supply.

Check for current price lists.

Offer to check inventory and remove bad stock.

Ask to schedule a brief sales meeting so you can meet the sales staff.

Review any plans already scheduled.

Review any current problems. Do give immediate answers. On hard questions, tell them you will look in to it and attend to it as early as possible.

DON’T COMMIT TO MORE THAN YOU CAN DELIVER

Talk too much – be a good listener.

Make promises you cannot keep.

Any questions referred to the I.D. policy.

Offer to review questions with your supervisor/ manager/ customer service representative.

Overstay your welcome.

POST-CALL


Review what happened on the call.

What went right and why?

What went wrong and why?

What action steps where decided upon?

Take action. Write a letter to the distributor confirming the meeting and action steps agreed upon by each party.

Always follow up.

DISTRIBUTOR CALL

The normal distributor call does not differ greatly from your first call.

DO’s

Have a specific objective.

Make an appointment.

Pre- call exercise.

Plan to check inventory.

You are not keeping up our end of the partnership if you don’t periodically check the distributor’s inventory and suggest that slow moving inventory be replaced with active stock as per provided by policy.

Check literature.

Keep updated on personal changes.

Advice field promotions of mailing list changes.

REVIEW PARTNERSHIP BUSINESS PLAN

Schedule activities.

Success or failure of past activities plus corrective actions you can work on together to repeat success or stop failure.

Plan for activities.

Be a good listener.

DON’T

Say them goodbye.

Make a cold call.

Arrive unprepared.

Discuss business with other distributor’s you are working with.

Forget to take inventory.

Be afraid to discuss problems that you may have in working with your distributor.

Overstay your welcome.

Review action steps and leave.

If you have a problem to discuss with the distributor don’t forget to think it through. Remember, it I not only what you to say, but how you say it that will determine the outcome of the meeting. Assertive is not the same as Aggressive.

Don’t be discouraged if distributor doesn’t want to actively support partnership business plan. This is a very successful back to business planning process. You may have to sell and prove to them that it works. If they still do not want to participate, that is okay. You have other distributor’s who will.

ALWAYS FOLLOW UP

No matter how experienced you are, each time you do the pre call and post call exercises, you are becoming a more professional salesman.

Remember, even the most accomplished performer has rehearsals before going in front of the audience.