Business 100
Chapter 11
Sales, Distribution, and Customer Relationship Management
Distribution Channel – the specific method a company uses to sell and deliver its
products to customers.
1. Downstream activities involved in selling and delivering a product:
a. Advertising
b. Negotiating
c. Shipping, installation, delivery
d. After-sales service and product support
2. There are 4 main players in distribution channels:
a. Distributors – companies that distribute, sell, and service a product within
a geographical area
i. Licensed Distributors – independent companies that buy the
rights to distribute, sell, and service products.
Exclusive dealerships are licensed to stock and sell only
one brand of a product
ii. Company-Owned Distributors – company owned distributors
that distribute, sell, and service products
b. Wholesalers – intermediaries (or brokers) that buy products from
manufacturers and then resell them to other companies such as retailers
c. Retailers – intermediaries who sell other companies’ products to the final
customer
d. Direct Distributors – companies deliver and sell products directly to
customers
3. Companies that own their distribution network have total control over their downstream value chain including activities like advertising and promotion, product
pricing, financing, delivery, installation, and after-sales service.
4. Factors affecting which distribution channel is chosen
a. Product characteristics
b. Need to customize the product
c. Importance and expense of purchases
5. Common Distribution Channel Choices:
a. Companies selling complex, expensive, or customized products usually
use wholly owned or licensed distributors
b. Companies selling standardized, inexpensive products usually use
intermediaries like wholesalers or retailers or sell directly to customers
6. The Internet is leading to the emergence of a new distribution channel: large retail
chains with buying power such as Wal-Mart
Personal Selling – direct face-to-face communication by salespeople with existing
potential customers to promote a company’s product.
1. Approaches to Selling
 Technical Selling – selling that requires a company’s sales representatives
to impart detailed technical information to their customers
 Missionary Selling – selling that occurs when a salesperson educates
customers, builds goodwill, and performs promotional activities to
encourage them to purchase a product at a later date
 Creative Selling – selling that requires salespeople to combine their
technical knowledge and personal selling experience to craft creative and
unique ways to better meet the needs of their customers
 Trade Selling –Manage the sales of one company’s products to other
companies (done through intermediaries such as wholesalers and retailers)
 Retail Selling – selling to the final customer (the person who buys a
product for his own use)
 Telemarketing – a sales method used to contact prospective customers
exclusively by phone (becoming less effective)
2. Stages in the Selling Process
 Prospecting for Customers:
i. researching to find new customers
ii. getting referrals from satisfied customers
 Making the Initial Contact:
i. target the most likely prospects first
ii. a Cold Call is the first contact a salesperson has with a customer,
either by e-mail, phone, or in person.
 Making the Sales Presentation:
i. be enthusiastic and excited
ii. use active listening – gear the presentation to the needs of the
customer
iii. don’t make potential customers feel uncomfortable by pressing
them for the sale (may take 5 – 10 contacts before they are willing
to commit)
iv. don’t be shy about asking for the customer’s business
 Handling Objections:
i. be able to read what is not being said
ii. objections are a way for customers to get more information about
the product
 Closing the Sale
i. when the customer asks about availability, price, financing,
warranties, or delivery time they are alerting the salesperson to
their intention to buy
ii. learn when to end the sales presentation (don’t give too much
information)
iii. learn to balance between what freebies you need to give to make
the sale

After Sales Service and Follow-up
i. improves customer loyalty and future referrals
ii. be sure to follow through on promises
iii. buyer remorse – when a customer feels he has make a poor
purchasing choice
Customer Relationship Management System – an IT-based knowledge management
system designed to track a company’s customers:
 what they are buying,
 how satisfied they are,
 how their demands are changing.
CRM monitors the selling efforts of the firm’s salespeople, the delivery of products
via the firm’s distribution channels, and its after-sales service