SALES AND ITS ORGANIZATION

• 1. Sales: concept, tasks, structure.

• 2. Sales channels: concept, functions, types, levels.

• 3. Types and systems of distribution.

• 4. Wholesale trade: functions, methods of organization and development trends.

• 5. Retail trade: functions, methods of organization and development trends.

• 6. Marketing decisions made in trade.

SALES AND ITS ORGANIZATION

• The most important component of marketing is sales and its organization in a certain place, (third "R"" marketing ,place).

• Sales – this is the activity carried out by producers to form commodity flows and direct them to consumers.

• Sales begins when the product is ready for sale or delivery and ends when finite the consumer receives the product.

• In other words, Marketing is the movement of goods in economic, legal and physical space.

Tasks sales are:

• 1) transportation of goods;

• 2) storage and protection of goods;

• 3) accumulation, sorting and placement of products;

• 4) making transactions;

• 5) transfer of ownership and possession of goods;

• 6) conducting marketing research

• Solving these problems requires costs, sometimes very high.

Sales channels

• Sales channel is the path along which goods move from producers to consumers. It includes all individuals and legal entities associated with the movement of goods and their exchange.

• Relationships between distribution channel participants can be built either on an oral agreement between the manufacturer and the seller, or on a detailed written contract between them.

Functions of sales channels

• 1) research (collection of information necessary for the successful sale of a product, primarily about consumers);

• 2) stimulating (creation and distribution of information about the product that activates purchases);

• 3) contact (establishing and maintaining connections with actual and potential buyers);

• 4) adaptable (adaptation of the product, “tailoring” it to the requirements of customers;

• 5) meeting room (conducting negotiations between manufacturers and sellers to agree on prices and other terms of sale):

• 6) organizational (organization of product distribution, i.e. transportation, warehousing and storage of products);

• 7) financial (finding and using funds to cover the costs of operating the channel);

• 8) risky (taking responsibility for the functioning of the channel).

Types of distribution channels: straight And indirect

• Direct channels associated with the movement of goods and services from producers to consumers without the use of independent intermediaries.

• The direct channel scheme is simple:

• producer  consumer.

• Direct channel is also called channel zero level.

• Sales channel level is the number of independent intermediaries who consistently stand between producers and consumers.

Indirect sales channels

• associated with the movement of goods and services from the manufacturer to an independent participant in the distribution of goods, and then to the consumer

• Typical indirect channel schemes are:

• a) first level channel:

• manufacturer  retailer  consumer;

• b) second level channel:

• manufacturer  wholesaler  retailer  consumer;

• c) third level channel:

• manufacturer  wholesaler  small wholesaler  retailer  consumer.

Distribution channel measurement

• Sales channels are measured length And width.

• Channel length is the total number of independent intermediaries in a sequential chain.

• Channel width – this is the number of independent intermediaries at one level or another.

• Channels of the zero and first levels are called short, and the channels of the second and all subsequent levels are long.

• Channels that have more than two intermediaries at each level are called wide, two or less intermediaries - narrow.

Sales types

• Sales type- a set of distribution channels chosen by the company

• The following types of sales are known:

• exclusive

• selective

• intensive

Selecting a distribution channel

• depends on three main factors:

• 1) consumers;

• 2) goods;

• 3) efficiency (cost-effectiveness).

• The economic efficiency of a distribution channel refers to the ratio of costs associated with the operation of the channel (C) and profits ( P) which he brings. This ratio is called cost-return (R) and is measured by the formula:

• R=P/C (V %).

• The higher the cost-effectiveness, the more effective the distribution channel.

Sales systems

• 1. Traditional (conventional) sales system.

• 2. Vertical distribution system.

• 3. Horizontal sales system

• 4. Multi-channel sales systems

Wholesale

• Wholesale - this is a link in the sales system associated with procurement parties goods directly from manufacturers or traders for the purpose of their further resale other resellers.

• Wholesale trade is not associated with the end consumer, except in cases of sales of industrial products. Therefore, the product here can be resold two, three or more times, in contrast to retail trade, where the product is sold to the end consumer only once.

Forms of organizing wholesale trade

• Wholesale activities of manufacturers (through sales offices and/or branches ) ;

• Commercial wholesale activities;

• Agents and brokers.

Agents, brokers, dealers (2)

• Dealers are independent intermediaries acting on their own behalf and for your check.

• Dealers purchase goods from manufacturers with all rights to them and resell them to other intermediaries, and sometimes to final buyers. Dealer income is derived from the difference in purchase and sale prices

Forms of wholesale trade

• stock trading

• auctions

• trade fairs

Commodity exchange

• Commodity exchange- is a permanent wholesale a market where mass quantities of so-called commodities(timber, coal, oil, grain, wool, cotton, metals, etc.). There are only 60-70 items of such products.

• A characteristic feature of an exchange commodity is its uniformity And non-specificity(impersonality).

• Exist specialized And universal exchanges. Only one type of exchange commodity is traded on specialized ones, while various types are traded on universal ones.

Retail

• Retail is the sale of consumer products to end consumers.

• Retail trade closes the distribution chain.

Retail functions :

• selection of goods, their sorting and compilation of the necessary assortment;

• providing customers with information about products;

• storage, labeling of goods;

• setting prices for goods;

• payment for goods accepted from suppliers;

• providing customers with various services (credit, delivery, etc.).

Cost structure in Russian retail trade

• Modernization and renewal of equipment - 33%

• Advertising - 30%

• Marketing research - 24%

• Increase in retail and warehouse space - 9%

• Creation of branches - 4%

Types of retail trade

• By way trade organization: organized and unorganized

• Organized trade

• a) stationary(through shops, tents, kiosks, vending machines);

• b) mobile(through auto shops, peddling, home sales);

• c) parcel(via mail, through catalogues).

Main types of stores

• Department stores (supermarkets)

• Hypermarkets

• Duty stores

• Department stores

• Specialty stores

• Varied stores(mini department stores).

• Discount stores(incl. second hand).

Retail Methods

• Traditional trade (trade from the counter).

• Sale with open access to the product:

• a) according to the displayed samples;

• b) self-service.

Forms of mobile trade:

• Direct sales. This is door-to-door trading. It is conducted by sales agents who visit buyers at home.

peddling . The seller with his goods travels along a certain route. This is how ice cream, newspapers, some types of sweets, etc. are sold. One of the most ancient types of trade (peddlers). IN modern conditions this type of trade is most often represented traveling trade through auto shops, which reach the most distant and remote settlements.

Forms of parcel trade:

• Trading by catalogues.

• Trade by mail.

• Trading through computer networks.

Unorganized retail trade

• trade in bazaars;

• trading in spontaneous markets;

• trade at flea markets.

• Here, the buyer and seller meet face to face, and the prices for the goods, as well as other terms of the transaction, are set by mutual agreement of the parties.

Basic marketing decisions made in wholesale and retail trade

• Identifying your target market, those. buyers with whom traders will work. The selection is carried out using marketing research.

• Product mix decision. This is the selection of the most profitable product groups and the selection of a range of services for which there is the greatest demand from customers. Services can be: pre-sales, after-sales, additional.

Sales of goods can be carried out in such forms as marketing and sales. What are they?

1. a systematic, orderly process within which the sale of goods produced by the enterprise is carried out;
2. the procedure for transferring goods from the seller to the buyer through established mechanisms and stable channels;
3. a set of activities of the company related to servicing and ensuring the functioning of channels for transferring goods to clients and customers.

All of these types of sales, as a rule, do not imply active actions by the company’s management aimed at creating and maintaining a permanent mechanism for selling goods. Such as, for example, searching for clients and conducting negotiations with them in order to conclude contracts for the purchase of company products. If such actions are carried out, sales turns into sales (more precisely, into one of their subtypes). Let's study their features.

What are sales?

Under sales may be understood:

1. the company’s activities aimed at generating sales - in any of the 3 interpretations we discussed above, through various communications with the client, advertising promotion, PR and other tools;
2. a well-functioning legal mechanism for concluding transactions between the seller and the buyer (in which the parties determine their rights and obligations taking into account the provisions of the law).

If the word in question is used in the singular (as “sale”), then it can also be understood as a separate transaction for the sale of goods. But regardless of the application of the concept of “sales,” they are carried out subject to the performance by responsible managers and employees of the company of certain actions aimed at creating a permanent mechanism that allows the company to consistently generate revenue.

Comparison

The main difference between marketing and sales is that the first procedure does not involve the management and employees of the company taking actions aimed at stimulating revenue. As part of sales, the actual delivery of goods under existing contracts is carried out. If negotiations with clients are conducted, then, as a rule, they concern organizational issues of supply - related to the cost of delivery of products, payment, and service support for the sale of goods.

In turn, sales are aimed precisely at successfully concluding relevant contracts and creating the company’s need to organize effective sales - through negotiations with clients, advertising, and PR.

Having determined what the difference is between sales and sales, we will reflect the conclusions in the table.

Wholesale trade is the purchase and sale of goods. Workers in this activity provide communication between producers and consumers. Sometimes a whole organization becomes a client of a wholesale enterprise. She is essentially both a buyer and a consumer. But most often there are one or more intermediate links. Until a product makes its way from the wholesaler to the consumer, it usually passes through 2-3 intermediaries (retailers).

Wholesale marketing includes any type of activity related to the sale of services and products to people who will resell them or use them for personal or business purposes.

What is wholesale trade?

Wholesale trade is one of the types of economic activity that helps to establish relationships between suppliers and buyers. During their interaction, each has its own benefit. Buyers receive affordable goods, sellers receive profit.

On this moment Wholesale trade is developing very rapidly, suppliers and the scope of their activities are expanding day by day. This is due to constant profit, good income. In addition, the emergence of new suppliers is also beneficial for buyers, since the range and competition between them is growing. This invariably leads to lower production costs and, as a consequence, lower prices at final retail outlets.

Wholesale sales do not have a fixed quantity of goods supplied. An agreement is concluded between the supplier and the buyer, which specifies the amount and number of products. The only thing we can say for sure is that trade is carried out in batches. Typically, delivery is focused on subsequent resale to the final buyer.

Wholesalers and their differences from retailers

A wholesaler is a company or individual that carries out related activities. It provides its services not only to retail organizations, but also to manufacturers and their sales offices.

A wholesale trade center and the people involved in this activity differ from retail centers in several ways:

• Minimizing advertising. A wholesaler deals with professional clients who independently collect information about the product. Only end consumers are interested in advertising.
• Maximum transaction size, as well as a large trading area. Compared to retailers, these parameters are several tens (or even hundreds) times higher.
• Different positions regarding legal norms and taxation by the state.

Sometimes manufacturers bypass wholesalers and market the goods themselves. But this is aimed mainly at small businesses. Large manufacturers prefer not to waste time searching for customers.

Wholesale trade and its essence

The wholesale trade center initially interacts with manufacturers. He goes to the sales office, where he “picks up” a certain amount of products (sometimes the entire product). Then it goes to retailers, and we distribute the shipment between them. Again, sometimes all the goods are picked up by one representative or company. After this, the products are supplied directly to personal consumption.

Most important task of this type economic activity is the regulation of supply and demand. Trade centers, in fact, can successfully cope with it, since they are the so-called intermediate link. They hold back some of the goods, then the demand for them will increase. Also, to increase supply, the products are supplied to the market in abundance.

It should be noted that wholesale trade activities are significantly limited. She can only work with the data that is given to her. It cannot influence the sphere of production or final sales. And it certainly doesn't have any direct impact on consumers.

Wholesale functions

Wholesale trade enterprises are sources of communication between individual regions of the country, and also in a global sense they contribute to interaction between states, both neighboring and distant. This is their main function. But there are also minor ones:

• Incentivizing manufacturing enterprises to create new products, modernize old models and widely introduce modern technologies.
• Participation in creating a range of goods and services, monitoring market conditions.
• Assumption of commercial risk. Some products may become unsaleable. Therefore, there will be no demand for them among retailers. It will not be possible to return the invested funds.
• Organization of warehouse operations, providing all conditions for storing certain products.

Finally, it should be pointed out that wholesale trade in products is intended for another function. She delivers goods to retail chains. Otherwise, they will not see the end consumer.

Retail and consumer service levels

Wholesale and retail trade are very similar. Both of these concepts imply that sales activities will be carried out. But retail sales are the sale of products to end consumers who will use them for personal purposes that are far from commercial.

There are several levels of service in the activity under consideration:

1. Self-service. It implies that a person will independently choose products and their names.
2. Free selection of products. Indicates that the consumer will be offered many goods of the same purpose, among them he will choose those that he likes best.
3. Limited service.
4. Full service (like in a restaurant).

There are a huge number of enterprises engaged in retail trade. These include various shops, catering establishments and others.

It has long been known that competition is the engine of progress. Nowadays, numerous competition in the product sales market forces sellers to resort to in various ways attracting customers in order to improve sales efficiency and increase product sales.

What is the difference between sales and distribution? There are several points of view, according to one of them, sales and sales are completely different concepts. Selling occurs when you try to sell a product using various marketing methods and tools. Even when the client didn’t even think about buying, your task is to interest him and convince him of the need for this particular purchase. Sales occur when customers find your products on their own without you having to resort to oratory or effort. special forces to attract buyers. According to another point of view, sales are a type of marketing. But in any case, the goal is the same - to effectively increase sales of goods.

One of effective ways increasing sales is establishing contacts with customers. The best way to establish contacts with potential clients is through personal meetings. When you see a person, look him in the eye and smile, you put the client in a positive mood and thereby create a friendly atmosphere for communication and cooperation. In turn, you have a greater chance of influencing the client and getting him to agree to the deal.

No less effective are presentations that are aimed at introducing a wide range of potential buyers to the beneficial properties of the product being offered. This marketing tool will help you present beneficial features products, their purpose and features of use, and also contributes to the establishment of personal contacts and further long-term cooperation. To win over the audience, it is important not only to prepare an informative report and present it in an interesting way, but also to look good accordingly.

Telephone conversations have always been and remain a relevant means for promoting products on the sales market. Of course, it is quite difficult to get a client over the phone, since this is blind communication. Therefore, the most valued specialists are those who have the skill to use so-called cold calls, the end result of which is to achieve personal meeting with the client and subsequently persuade him to buy. They received this name because, having called for the first time and offered cooperation, the manager usually encounters a number of obstacles, including cold communication and reluctance to continue the conversation with stranger. How to convince a person who begins to object to you and deny the need for a purchase? The task is not easy. First of all, you need to fully listen to the client and agree with him, this way you can win the person over and start a conversation, and then offer him a good deal and influence a positive decision-making. Understanding the psychology of sales will help persuade a person to mutually beneficial cooperation. A buyer is, first of all, a person who has his own desires and goals, and the motives of his behavior are explained by the desire to achieve these goals and satisfy urgent needs. Knowledge of personality psychology, ability to identify needs and present them correctly useful information information about a product always promises a positive conclusion to the transaction.

Every manager understands that sales performance depends on how the sales department is structured, in other words, on the management team, which must have the appropriate personal qualities and professional skills. These include activity, communication skills, initiative, flexibility, perseverance, as well as the ability to beautifully present information about a product, find and attract customers, knowledge of the basics of marketing, psychology, etc. Moreover, it is of no small importance to staff the department with specialists, so that there are not many or few of them, but a sufficient number according to the approved staff, depending on the size of the enterprise.

Trade is one of the areas of entrepreneurial activity and represents a certain type of commodity-money relations between the seller and the end consumer. Let's consider the specifics and features of retail and wholesale trade, as well as their main differences.

Retail trade – what is it?

Trade has long been considered popular and profitable view human activity. Its main goal is to generate income by satisfying the needs of the end customer.

The seller is the connecting link between the buyer and the manufacturer of the product: the entrepreneur purchases all kinds of goods in bulk and sells them at retail to customers with a certain trade margin, while benefiting himself.

If you give short definition retail trade, then this is the sale of goods to the final consumer to satisfy his personal goals not related to commercial activities. Retail offers customers the following types services:

• selection of goods among products of a similar purpose (for example, a certain type of alcohol from different manufacturers);
• independent selection of various goods at retail outlets (self-service stores);
• comprehensive (full) service (assisting the buyer at all stages of the purchase, up to free delivery);
• mixed type – sale of goods in small wholesale and retail (large stores, supermarkets).

Today, consumers have the opportunity to purchase any goods in stores on their own, make purchases in online stores, and also receive them at home via courier delivery. The main functions of retail trade include:

• commodity market monitoring;
• competitor pricing analysis;
• determining consumer demand for a certain type of product;
• search for products that meet consumer demand;
• formation of prices taking into account the cost of goods, advertising, storage, delivery.

Supermarkets and hypermarkets widely use the model of wholesale and retail trade in food, household goods and other consumer goods. If we consider outlets According to the range of products offered, they can be conditionally divided into specialized stores, department stores, supermarkets, as well as retail enterprises offering consumers various services:

• Specialized retail stores offer a narrow product range. An example of them would be retail outlets selling books, flowers, building materials, sporting goods or clothing. There are also stores with a limited product range, where they can sell jeans, underwear, children's toys, men's shirts, etc.
• Supermarkets are large retail establishments specializing in self-service for visitors. Such stores are characterized by high sales volumes, low costs and average profitability. Mostly consumers visit them to buy food, household goods or household chemicals.
• Department stores have several product groups at the same time. Customers can purchase all kinds of clothing, household goods, tools and equipment for household needs, as well as everyday household goods at such outlets. A feature of such retail outlets is the presence of product departments in which a certain group of products is located.
• The service provided by retail service enterprises is in great consumer demand. This should include cinemas, medical institutions, educational establishments, banking organizations, restaurants, hotel complexes, hairdressers, repair service enterprises.

Important: according to statistics, the number of organizations providing retail services is steadily growing and is an order of magnitude greater than the number of retail outlets for food and consumer goods.

Wholesale trade – what is it?

The commercial activity of enterprises aimed at selling goods in certain quantities (both large and small) is called wholesale trade. Such organizations mainly cooperate directly with manufacturers of all kinds of products, purchasing them in bulk for the purpose of further resale to the retail chain.

The rapid development of wholesale trade enterprises is easily explained by the high demand for various goods among consumers and continuously growing profits. This type of commodity-money relations is of great benefit to buyers: increased competition and product range invariably entails a reduction in the cost of various product groups, which ultimately leads to lower selling prices in retail stores.

Without wholesale trade organizations, it is difficult to imagine the full-fledged operation of most enterprises producing all kinds of products. This is due to the fact that products are released in certain cities, and find required quantity consumers in one locality is not possible.

In turn, wholesalers facilitate the distribution of products across various regions, significantly increasing the consumer network. Please note that the business itself that produces goods or food is a wholesaler. Products can be sold at special prices through special wholesale stores or through an agreement with the sales department of the manufacturer.

Thus, a product can be resold several times between different organizations before it reaches the end consumer through retail stores. Wholesale trade enterprises pursue the following goals:

• development of sales channels for goods;
• searching for suppliers of products for retail chain enterprises;
• creation of reserve financing for the flow of goods;
• purchasing large quantities of goods from manufacturers;
• increasing the number of intermediate buyers of goods (wholesale);
• monitoring and detailed analysis of trade turnover in the retail network.

Wholesale trade enterprises perform a number of important functions that form the relationship between producers and the end consumer. They also provide regional communication within the state. It is worth noting that wholesale trade organizations stimulate the work of manufacturing plants to create new products.

It is important to understand that wholesalers take risks and may incur large financial losses. This is primarily due to products that are not in demand among consumers, and therefore retail stores do not buy them. The wholesaler will not be able to return the money invested in the product.

Like retail stores, wholesale trade enterprises purchase products from manufacturers in a certain range, taking into account consumer demand. Wholesalers in mandatory accumulate various products depending on the season, and also provide its storage. For this purpose, specialized terminals and warehouses are used.

Wholesale companies ensure the process of goods distribution not only within a certain state, but also far beyond its borders. In addition, they control the quality of the goods that are supplied to the retail chain.

Products can be delivered to retail stores with a deferred payment for a certain period of time, which is a kind of lending and stimulates the growth of purchase volumes.

What is the difference between wholesale and retail?

Let's figure out what differences exist between wholesale and retail. By definition, retail enterprises interact with a specific category of consumers, who can be both organizations and individuals, as well as separate divisions of various companies.

Important: if the buyer is not engaged entrepreneurial activity and purchases certain products under standard conditions, they will be sold at retail. No one can determine the exact volumes of goods for them to be considered a wholesale batch. In many ways this question is regulated by the type of contract (wholesale trade enterprises enter into shipping agreements with buyers).

Wholesale and retail trade differ from each other in their documentation. Retail enterprises use cash and sales receipts, as well as other documents confirming payment. Wholesalers working for OSNO draw up contracts with customers, provide them with invoices, delivery notes, and also maintain a purchase ledger and a sales ledger.

Both types of trade differ from each other in the purpose of the goods. If a retail store sells to the end customer a product that will be used by him for personal purposes without pursuing a commercial purpose, the wholesale company sells for the purpose of obtaining commercial gain.

Both retailers and wholesalers accept cash and non-cash form payment when paying for products. They also have the right to cooperate with individuals and legal entities.

What is retail?

Retail sales of all kinds of products to the end consumer (without further resale of the goods) is called retail. In the territory Russian Federation trade relations between retail participants are regulated by the Consumer Rights Protection Law.

Retail trade can be organized if available at the outlet cash register and issuing a receipt to the consumer for the purchase made. Today it is customary to distinguish several types of retail:

1. The classic type of organization of work of a retail trade enterprise is street retail. This includes shops located on pedestrian streets of populated areas, as well as retail outlets located on the ground or first floors of buildings and residential buildings. Today, shopping centers are direct competitors of street retail, since they have a large number of various trade enterprises (shops, boutiques, mini-markets, as well as retail service enterprises) and a large assortment of various goods is presented. Location of street shops and lack of shopping centers, large markets and supermarkets are the main conditions for the successful functioning and development of street retail.
2. Retail trade in food products, the quantity of which is located in large retail areas, is usually called food retail. It is distinguished by the constant income of its owners, because food products, regardless of the financial solvency of the population, will be in daily demand. Supermarkets and megamarkets are successful food retail projects.
3. Retail trade in non-food consumer goods ( Appliances and chemistry, sporting goods, clothing, building materials, household goods) is a format of the so-called non-food retail. In food stores, this group of products is called related products. The range of such products is selected taking into account seasonal consumer demand or upcoming holidays.
4. Selling goods through virtual stores or one-page websites is called online retail. Payment can be made using cash or non-cash payments.
5. Providing operator services cellular communications population is called mobile retail. The large increase in profits in this trade segment is easily explained by the demand for communication services.
6. A set of stores, the design and operation of which consist of a single format and within a certain trading concept, is called chain retail. In other words, this is a network of retail outlets of one owner (less often several), which are easily recognizable by their corporate identity. This trading enterprise has a unified logistics system responsible for delivery and wholesale purchase of products. Chain retail offers potential buyers attractive prices for goods and a wide range of products. As a rule, such enterprises receive considerable profit due to the volume of sales from all points of the network.

Retailers – what are they?

Supermarkets, different kinds stores, markets and other retail outlets that carry out retail sales of goods to the end consumer are called retailers. These organizations operate in various segments of commodity turnover. The main ones include: