And They Say "The Sales happen only because of US"!!!

Disclaimer: Contents in the blog are strictly based on my opinions and are not meant to offend anyone. You are most welcome to agree or disagree on any of the points. Also please ignore the grammar mistakes, if any.

Hi guys, as you all know that currently two summers are going on. One is the season and the other is the internship of MBA students.

So guys those of you who are currently working in Marketing & Sales profile, you might have heard this line many times, “Sales department is the most respectable department as we are the people who generate money for the company.” Here, I am specifically talking about those companies which are selling products meant for sale to end customers via distributors/retailers.

Before moving ahead, let’s first understand the working of Sales department. Their basic job is Channel Management i.e. to make sure that whether their company’s products are available with the distributors/retailers or not. They just try to push the products to dealers. They are not involved in the final transaction between retailer and customer. It is the dealer’s responsibility to sell that company’s products.

Now, let’s understand the dealer’s point of view. What is the dealer's incentive to sell your product first compared to other brands? It generally depends on two things. One is the margin, which the dealer is getting by selling your product and second is the service provided by the company to the customers.

In today’s competitive market, generally the margin is kept almost equal by the competitive brands. So the focal point is service. Now, there are different criteria on the basis of which a company provides the service. One can be the Direct Service Centre of the company. Customers directly call there and get their complaints resolved. In this manner, dealers feel safe as the relationship between them and customers remain intact. Other way is that customers need to register their complaint with the dealers (from where they purchased the product), then the dealers will call the company. Then a service person will come from the company, will examine the product, and then take the product with him for further checking. During all this, customers need to wait and they get frustrated when that product comes in daily use. This also puts the relationship between customers and dealer at risk. Because if there will be delay from the company side, then the customer will hold the dealer responsible and this will affect their relationship. So, it’s simple. Dealers will prefer to sell that brand which will give a considerable margin and best in class after sales service.

Now, what happens is that local brands (talking about brands which have strong roots only in specific regions) generally offer comparatively more margin and better after sales service to their customers which put branded products on the back-list. According to me, either make your branding so strong and after sales service so good, that customers are not swayed by anyone and directly ask for your brand or make good relationship with the dealers so that they give first preference to your brand. But it is better to give priority to first option as it won’t leave anything on chance, although you should maintain good relationship with your dealers as well.

Actually, it’s the Branding/Marketing (in some companies, Branding is a separate department) department which creates the need among the customers, which makes the customers aware about the brand, etc. etc. Let me clear one thing that at the end it’s also not the Branding alone but the Holistic Marketing which is responsible for generating revenue for the firm. Sales department job is to make sure of the availability of the products at the purchase point and rest everything depends upon your Branding, Marketing, etc. etc So, making the product available at the retailer’s end does not ensure sales but also if there is no availability of product at retailer’s end then the Branding won’t do any good.

Finally, we can conclude that it is not the Sales department alone which is responsible for the sales but the Marketing department as a whole. And this absolutely doesn’t mean that Sales department is of no use. They are the ones who have to listen a lot from the dealers, have to do a lot of field work, lot of phone calls, etc. So, yes they are respectable.

Thank You

Rishabh Bhardwaj

PGDM 2013-15

IIM