Advantages and disadvantages in sales activities. Advantages and disadvantages of various distribution channels
Sales activity of an enterprise, sales is a type of commercial activity carried out after the completion of production, including the sale of goods to the buyer, delivery to the consumer and after-sales service. This view interprets sales in a broad sense, in contrast to the narrow interpretation of sales as the sale of goods.
The sales system of a manufacturing enterprise is a set of subjects of sales activities and certain organizational and legal relationships and interrelations between them.
The sales system is characterized by certain forms and methods of sales.
The form of sales of an enterprise is determined by the organizational and legal relations of the subjects of the sales system. Depending on the form of sales, the following sales systems are distinguished.
the enterprise's own sales system;
connected distribution system;
independent distribution system.
Let us present the distinctive features of these types of distribution systems.
Own sales system involves the implementation of sales functions by entities dependent on the enterprise in organizational, legal and economic relations, that is, its divisions, branches, etc.
The linked sales system is focused on the implementation of sales functions by legally independent but economically dependent intermediaries. Coordination of the activities of the subjects of the sales system is carried out within the framework of contractual relations.
An independent sales system presupposes complete independence of intermediaries from the manufacturer, both legally and economically, when they carry out sales functions
Depending on the presence or absence of intermediaries, the following sales methods are distinguished:
direct sales method;
indirect (mediated) sales method;
combined (mixed) sales method.
Let us consider the essence, advantages and disadvantages of these methods.
The direct marketing method involves the direct sale of products to the final consumer. Accordingly, they are connected by a direct sales channel. Its distinctive feature is the ability for the manufacturing company to control the path of the product to the final consumer, as well as the conditions for its sale. However, in this case, the company incurs significant non-production costs due to the need to create expensive inventory, spends a large amount of resources on the function of directly bringing (selling) the goods to the end consumer, while assuming all the commercial risks of product distribution. At the same time, from the position of a manufacturing company, the advantage of this form of sales is its right to the maximum amount of profit that can be earned from the sale of manufactured products (services). The commercial benefit of a direct sales channel is enhanced by the opportunity to directly study the market for one’s goods, maintain close relationships with consumers, conduct research to improve the quality of goods, and influence the speed of sales in order to reduce the additional need for working capital.
Direct sales are carried out using the following belonging to the manufacturer:
regional sales branches with a staff of qualified specialists who know the local market, competitors, and are able to offer conditions for the sale of goods and services that meet the needs of consumers;
sales offices or services without creating inventory, performing the functions of concluding “made-to-order” transactions, studying the market and maintaining contacts with consumers;
special agencies with or without the right to conclude transactions, whose functional responsibilities, among others, include demonstrating the goods to the client;
retail network (kiosks, shops, salons, etc.).
Indirect sales are carried out on the basis of indirect connections (services of various types of intermediaries). In the case of indirect distribution, the manufacturer cannot fully control to whom and how his products are sold, but the use of intermediaries allows in some cases to best offer goods to the target market. Using their connections, experience, specialization advantages and high quality work, intermediaries can often bring more benefits to the manufacturer than if he sold his products himself.
During the analysis of the sales policy at the enterprise, the following pros and cons were identified. Pros:
The management structure of the sales department meets methodological requirements; there is a functional connection between all employees of the sales service of DeutschAvto Trade House LLC, which allows for faster data processing and order acceptance.
The company annually conducts marketing research into product markets, which allows the company to occupy new markets, taking into account the demand in the melon markets.
Trade House Deutsch-Auto LLC's own sales network is focused exclusively on selling German-made products. In addition, such a sales system allows the company to maintain direct contact with product manufacturers.
The sales system of LLC TD Deutsch-Avto products is extremely simplified, since the company sells products through its own showrooms and through dealers.
The company actively uses various methods of sales promotion and conducts advertising campaigns.
Activities are being carried out to create the image of the company - branding. All advertising activities are scheduled by month, how advertising activities intersect with each other is compared, the most effective directions for advertising are determined, taking into account the characteristics of the products being sold and market conditions, the entire range of advertising activities for products is assessed to build trust and respect for the manufacturer.
The financing of the advertising campaign and the use of allocated funds are regularly checked.
The marketing department of LLC TD "Deutsch-Auto" widely uses a comprehensive influence on the buyer - using not only advertising, but also other means, which can be somewhat loosely translated as "Demand formation and sales promotion."
The company pursues a service policy (warranty repairs, repairs, etc.), which contributes to the commercial success of the company and increases its prestige.
There are much fewer disadvantages in the sales policy of TD Deutsch-Auto LLC than advantages, because, as already mentioned, the company uses “advanced” methods of organizing sales. Therefore, the main disadvantage is that the enterprise has not fully identified the market opportunities of the enterprise, incl. Surveys of buyers and potential consumers are rarely conducted. The company also needs to strengthen its technological base in order to increase sales volumes. Thus, improvement of the sales policy of LLC TD "Deutsch-Auto" must first of all be carried out in these areas.
The company’s specialists annually work to expand and update the range, improve product quality, packaging design, and the use of packaging materials.
Based on the study, the following recommendations were developed:
1) when organizing product sales, it is necessary to conduct research in the field of marketing - to systematize data on what consumers prefer to buy. One of the most suitable methods for conducting this type of research, taking into account the fact that the sale of goods is carried out over the counter, is an oral survey and questionnaire. Using such methods, it is possible to identify consumers’ desires to buy goods from a particular manufacturer without significant costs;
2) pay special attention to the quality and appearance of products. Taking into account the fact that goods that reach the store counter travel a long way from the manufacturer in Germany to Chelyabinsk. Sometimes this route passes through Moscow or other Russian cities. It is subject to repeated reloading and, as a result, the integrity of the packaging becomes defective, which negatively affects its appearance and subsequently causes consumers to have an unfavorable attitude towards the company as a whole. In this case, if the product itself is not damaged, and only the packaging is defective, you can invite the company to package the product itself.
3) to increase sales, it is necessary to provide high-quality personnel training. Since the company deals with automobile spare parts, which are complex technical products, the personnel must be highly qualified and knowledgeable in this field of activity. Each employee of TD Deutsch-Auto LLC undergoes a specialized product knowledge test when hired. In addition to the company's corporate test, you can offer training for sales consultants in additional courses on business communication with clients. Well, these people directly deal with the company’s clients, this will help improve the company’s image and, as a result, increase sales.
4) when setting prices, it is necessary, if possible, to adhere to the strategy of unrounded prices. In each assortment group, the company needs to determine the basic product that satisfies the basic needs of consumers.
5) intensify advertising and other methods of product promotion and sales promotion. The company LLC TD "Deutsch-Auto" is currently placing its advertising in various print publications in Chelyabinsk and the Chelyabinsk region, which are specialized automotive magazines and newspapers. An additional means of advertising can be company business cards, which can be distributed both at gas stations and in service centers and repair shops.
All proposed measures will improve the financial condition of Deutsch-Auto Trade House LLC.
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DIRECT SALES CHANNEL(mail order; telephone sales; catalog sales; personal sales; own retail network) Advantages:
A simple distribution structure that provides control over distribution channels;
No need to share profits;
Possibility of direct communication with consumers and obtaining information about their reaction to the product Flaws:
The complexity of the organization (including organizational, financial and management aspects of the issue).
INDIRECT SALES CHANNEL(short channel, if there is only one link between the manufacturer and the consumer - the retailer; long channel, if, along with the retailer, a wholesaler appears in the chain) Advantages:
Ensuring broad audience coverage (this is difficult to do using a direct channel);
Increase in turnover rate and gross income;
Specialization: each participant in the distribution channel performs its own function.
Flaws:
Lack of control over the distribution channel, poor ability to control prices and sales conditions, dependence on intermediaries;
Lack of direct communication with customers.
Functions of distribution channel participants: Marketing research; Product advertising and sales promotion; Contacts with buyers, negotiations (coordination of prices and terms of payment and delivery); Adaptation of goods (any actions to ensure the availability of goods in quantity and form that meets the needs of customers: sorting, packaging, cutting, actions to create sets of specialized and/or complementary goods, installation); Transportation of goods; Warehousing and storage of goods; Taking on risks associated with the sale of goods; In addition to these basic functions, intermediaries can also provide loans, provide guarantees, provide delivery, repairs, maintenance, etc.
Marketing axiom: You can get rid of the middleman, but you cannot get rid of his function.
Current trend: 1) an increase in the share of retail chains (changes in the structure of traffic channels; in large cities, traffic channels are reduced and work is carried out directly. Distributors, in order not to lose profits, begin to engage in production. 2) An increase in the share of online trade (an increase of 50% per year).
The creation of a commodity distribution network is a fundamental key to the success and efficiency of doing business. Today it is no longer enough to simply produce a high-quality and inexpensive product. A much more pressing problem is how, given the presence of a large number of alternative interchangeable types of products on the market, induce the buyer to purchase your product.
7. Stages, tasks and pricing factors. ANYA FRIZORGER.
The pricing process includes six stages: (1) setting the pricing problem; (2) determining demand for a product; (3) cost estimation; (4) analysis of costs, prices and offers of competitors; (5) choice of pricing method; (6) final price determination.
First stage: formulation of the pricing problem
Five main tasks.
Survival (sales support). A short-term goal that is set when a company is faced with overproduction, intense competition, or changing customer needs.
Maximizing current profits. To maximize profits, companies use alternative product prices to estimate demand and costs and set the price that provides the highest levels of profit, cash flow, or rate of return on investment (ROI).
Maximizing market share. Logic: effect of scale => in the long term - long-term increase in profits.
Market retention. The company implements it when it wants to maintain its existing position in the market. The company carefully monitors the market situation and price dynamics. It does not allow excessive overstatement or understatement of prices and strives to reduce production and distribution costs.
Second phase: determination of demand
Each value of the price of a product creates a certain level of demand and, therefore, has a different impact on the company’s marketing objectives. The relationship between alternative price levels and current demand is reflected by the demand curve. In a normal situation, demand and price are inversely proportional, i.e. the higher the price, the lower the demand. However, the demand curve for prestige goods sometimes has exactly the opposite dynamics, since some buyers perceive high prices as an indicator of improved properties and high quality of the product. But if the price of such goods is set too high, the level of demand may decrease.
Price sensitivity. The demand curve shows the possible volume of sales at various prices, that is, it reflects the final reaction of many individual buyers, each of whom is characterized by strictly individual sensitivity to price. Therefore, the first step to determining the level of demand involves analyzing the factors affecting consumer sensitivity:
The product is positioned separately from others (has no analogues);
Consumers are unaware or little known of substitute products;
It is difficult for consumers to compare the quality of different substitutes;
Consumers' costs for the product are relatively small compared to their income;
Consumer costs for the product occupy a very small share of their total costs (which is why, in particular, car spare parts are relatively expensive);
Consumers may share part of the cost of a product with someone else, such as members of their cooperative;
The product can be used in a system with previously purchased and mastered products;
The product is attributed higher quality, prestige and exclusivity;
Consumers cannot store the product for long.
Thanks to the power of the Internet, some (not all) consumers have become more price sensitive.
Methods for estimating demand curves. One of three main methods can be used to analyze demand curves. The first is a statistical analysis of current prices, achieved sales volumes and other factors influencing their relationships.
The second approach is to conduct experiments with prices. For example, setting different prices for the same product in several regions.
The third technique involves conducting a survey of customers to find out the quantity of a product that they are willing to purchase at various price levels.
Price elasticity of demand- an indicator of the degree of sensitivity (reaction) of consumers to changes in the price of a product. If, despite a slight change in price, the demand for a good remains almost unchanged, we say that it is inelastic. If demand changes significantly, it is customary to talk about its elasticity.
The likelihood of a decrease in demand elasticity occurs when:
(1) there are no (or few) substitute products or competitors for this product;
(2) buyers do not immediately notice the price increase;
(3) consumer stereotypes change relatively slowly, and consumers are in no hurry to start looking for cheaper goods;
(4) an increase in price is perceived by consumers as evidence of an increase in the quality of the product or an indicator of natural inflation, etc.
Third stage: cost estimation
The maximum price of a product is determined by consumer demand, the minimum by the company's costs. Each supplier strives to set a price that would cover all costs of production, distribution and sale of goods and would provide a satisfactory rate of profit.
Types of costs and production levels. There are two types of costs: fixed and variable. Fixed costs (or overhead costs) are expenses that remain unchanged regardless of the volume of production or sales (rent of premises, heating, interest on loans, administration salaries, etc.).
The amount of variable costs is directly related to the company's production level.
Total costs are the sum of fixed and variable costs. Average cost is the cost per unit of production = dividing the value of total costs by the volume of output.
Fourth stage: competitor analysis
Fifth stage: selection of pricing method
1. Costs plus premium. The simplest method of pricing is to charge a standard markup on production costs per unit of production.
Any calculation method that does not take into account the level of demand, the perceived value of the product and the level of competition does not allow reaching the optimal price. Pricing using the cost plus markup method is advisable only when the established price ensures the sales volume planned by the supplier.
2. Return on Capital Method The method is based on the fact that a percentage of the invested capital is added to the total costs per unit of production.
When applying this method, product profitability is calculated using the following formula:
During periods of inflation, loan interest rates are subject to a high degree of uncertainty, which makes the use of this method much more difficult.
The return on capital method is intended for enterprises with a large range of products, some of which are new to the market.
3. Method of determining prices based on demand(otherwise – a method for assessing customer reaction or consumer assessment). - orientation when setting prices not on production costs, but on the consumer’s perception of the product. The manufacturer proceeds from the fact that the consumer determines the relationship between the value of the product and its price and compares it with similar indicators of competitors.
4. Setting a price in accordance with the current price level. When pricing based on the current price level, the company is based on the current prices of competitors. A firm can set the price of its products above, below, or at the level of its main rival's price.
The mark-to-market pricing method is useful when it is difficult to calculate costs or predict how competitors will react.
5. Setting a price for a group of buyers. Buyers (both individuals and legal entities) can join groups in order to receive a discount on the price. The Internet makes it easy to find partners for such transactions.
Sixth stage: final price determination
PRICING FACTORS -
J.B. Evans, V. Berman identified five main factors that have the greatest influence on the pricing process: consumers, government, distribution channel participants, competitors, production costs. All these factors can be divided into two main categories - internal and external.
Internal factors include:
Special properties of the product;
Type and method of production (its labor intensity, quality of materials and labor);
Mobility of production;
Focus on market segments;
Product life cycle;
Duration of the product distribution cycle;
Service organization;
Reputation of the enterprise (firm) in the market.
It is necessary to take into account that a product with special properties and unique characteristics will have a higher price, reflecting its quality. Thus, the price of a product largely depends on the scale of production. The type and method of production determine the serial production of products. As a rule, small-scale products, and even more so unique, one-off products, have a higher cost and price. The costs of producing mass-produced goods are usually insignificant, so relatively low prices are set for them. The enterprise's development of several market segments determines price differentiation in order to satisfy the needs of different categories of customers with different incomes. The duration and stage of the product life cycle also influence the price level. Typically, products have a higher price if they have a short life cycle and a relatively low price if they have a long life cycle. The increase in the number of intermediaries in the “manufacturer-consumer” chain leads to a significant increase in the final price of the product. The company's image, well-functioning service and after-sales service allow it to set higher prices.
External pricing factors determined by the market in which the company operates. If there is strong competition in the market and there are a large number of goods of similar quality, then the company usually sets lower prices, sometimes even less than the full cost, to conquer it. If a company begins production of a completely new and, to some extent, unique product, then when setting prices it may not take into account market competition, but must keep in mind that the buyer needs to get used to the new product, so its task becomes to create consumer demand. And in this case, prices set for products should be quite flexible. Thus, to make the final decision on setting the price, it is necessary to have a good knowledge of the market situation, i.e. buyer needs.
The structure of external factors can be presented as follows:
Political stability in the country;
Provision of basic resources;
The scale of government regulation of the economy and, accordingly, prices;
General inflation rate;
Foreign economic policy of the state;
Perfection of tax legislation;
the nature of demand for products (consumer preference for high quality or low price; seasonality of consumer demand).
8. Price structure. Lower and upper price limits. ANYA FRIZORGER.
The price includes several elements.
Wherein price composition- these are its constituent elements, expressed in absolute terms (for example, cost and profit indicators expressed in rubles).
Price structure- these are its individual elements, expressed as a percentage. The price structure reflects the share of each element in the total price of the product. The following are usually identified as the main elements of price.
1. Cost price- these are the costs of production and sale of goods, expressed in monetary form.
2. Profit- an indicator of the efficiency of economic activity, expressed in monetary form.
This is the difference between the price and costs of production and (or) sale of a product. The sum of manufacturing cost and manufacturer's profit represents the manufacturer's price of the product. It is also called the wholesale price of the enterprise without VAT.
3. Excise taxes and VAT. Excise taxes are established on excisable goods and are included in the manufacturer's price. The sum of the cost of manufacturing goods, manufacturer's profit, excise tax and VAT represents the wholesale selling price of the enterprise.
4.Wholesale organization surcharge. Wholesale organizations are, as a rule, that link on the path of movement of goods from producer to consumer, through which most of the manufacturer’s products are sold. The amount of the markup for a wholesale organization is, as a rule, less than the markup for retail organizations, because They receive the necessary profit due to the large turnover of goods, savings on retail space, etc. The trade markup of a wholesale organization includes the profit of the wholesale organization and the distribution costs of the wholesale organization. The sum of the manufacturer's wholesale selling price and the trade markup of the wholesale organization constitutes the price of the wholesale organization.
5. Retail organization allowance. Through retail trade organizations, the manufacturer's products reach the consumer directly. The trade markup of retail organizations includes the profit of the retail organization and its distribution costs. The sum of the price of the wholesale organization and the markup of the retail trade organization constitutes the retail price of the product at which the end consumer purchases the product.
Information about the price structure is important in the process of developing pricing strategies and tactics. If the cost structure takes the largest share in the price structure, this indicates a decrease in competitiveness. As a result, the firm cannot fully participate in price competition. A large share of profits and taxes and a low share of costs indicate the opposite - the enterprise is competitive and can use price reductions in competition. The price structure shows what contribution each participant in the distribution of goods makes to the price level. The more intermediaries there are on the way of movement of goods from the manufacturer to the final consumer, the more times elements such as the purchase and sale prices of a wholesale intermediary will appear in the price structure of the goods, which will lead to an increase in the share of supply and distribution markups in the retail price.
LOWER AND UPPER PRICE LIMITS - consumers will not buy above the upper limits, and producers will not sell below the lower ones.
The maximum price of a product is determined by consumer demand, the minimum by the company's costs.
Problem Sat s commercial activities of the organization
Introduction
The current trend in the development of the domestic economy is its evolution into a consumer economy. The ongoing changes have led to a change in the Russian buyer, who is becoming more demanding, since he has the opportunity to choose a seller who can ensure the implementation of the expected level of consumer preferences. Therefore, one of the important topics for organizations is the effective sale of products, which can only be achieved by satisfying the requests and needs of customers. Indeed, in conditions of ever-increasing competition, it is not enough to produce a product better than competitors; you need to be able to sell it profitably. Today, the winner is the company that is focused on solving the client’s problems and on long-term and mutually beneficial cooperation with him.
In this regard, the topic of this diploma project “Managing the sales activities of an organization” is relevant, since product sales play a key role in the production and economic activities of the organization, and it is the company’s sales that act as an indicator of the effectiveness of business activities. And the process of managing sales activities, which includes, in addition to sales policy, also product, pricing, and communication policies, is aimed both at solving the problems of increasing the organizational level of the management system and at reducing the uncertainty in the functioning of the management object.
In this diploma project, the object of research is the Ryazan company LLC “Trading House “Tibet”, the main activity of which is wholesale and retail trade in household chemicals, cosmetics and perfumes. The subject of the study is the management of the sales activities of LLC "Trading House "Tibet".
The main goal of the diploma project is to study and analyze the current state of the organization and develop measures and recommendations to improve the management of the sales activities of the company Tibet Trading House LLC.
In accordance with this goal, the following tasks are set:
Study scientific and educational literature, as well as various publications on the organization and management of the company’s sales activities, thereby considering theoretical aspects related to the topic of this diploma project;
Study and analyze the state of affairs in the company “Trading House “Tibet” LLC over the past two years; draw conclusions about the management of sales activities in a given company and identify existing shortcomings;
Develop the main directions for improving the management of sales activities at LLC Trading House Tibet; propose specific measures to improve the efficiency of the company’s sales activities.
The sources of information on the topic of the diploma project were: educational and scientific literature; periodicals; Internet publications; internal documentation of LLC "Trading House "Tibet".
The topic of managing the sales activities of an organization is considered by many domestic and foreign authors. So, for example, on issues of organizing sales, one can highlight the works of the following authors: Zavyalov P.S., Demidov V.S., Golubkov E.P., Dikhtl E., and others. Issues of organizing product distribution are quite widely described in the works of such authors as Kotler F., Armstrong G., Ambler T., Evans J. These works present materials on the types of distribution channels, their advantages and disadvantages; about the types of supply chain intermediaries.
Management of sales activities in a trading company is examined in detail by V.M. Kondrashov. The book talks about the process of sales management; the goals and objectives of sales management in the organization are considered; The composition and functions of the sales staff of a trading organization are presented in detail. Sales promotion techniques are reflected in the works of E.I. Mazilkina, A.P. Markov, V.V. Kevorkova. and other authors.
The diploma project consists of an introduction, three chapters, a conclusion, a list of references and applications.
The first chapter reflects the theoretical aspects of managing the sales activities of an organization: goals, objectives of sales management; types of distribution channels and types of intermediaries; composition and functions of sales personnel; forms and methods of sales promotion.
The second chapter is an analysis of the management of the sales activities of Tibet Trading House LLC. It includes: characteristics of the company; analysis of the main financial and economic performance indicators; environmental assessment of the company; analysis of marketing and sales activities.
1. The economic essence and content of managing the sales activities of an organization
1.1 Goals, objectives and content of management of the organization’s sales activities
Sales of products is an integral part of the activities of organizations in market conditions. A company can count on real commercial success only if the sales of its products are rationally organized. In the “production-distribution-exchange-consumption” chain, marketing activities account for the last three links.
The effective functioning of any company is impossible without a properly organized sales service. To sell goods, an organization must carry out a set of targeted actions to ensure the movement of goods in the market space.
At the same time, high productivity in product sales can only be achieved if sales activities are professionally managed.
Economists distinguish two approaches to determining the essence of sales. There are interpretations for understanding this term - broad and narrow.
Sales operations, in the broad sense of the word, begin as soon as the product leaves the production complex and end with the transfer of the goods to the buyer. This interpretation represents the process of selling manufactured products in order to convert goods into money and satisfy the requests and needs of customers.
Sales, in the narrow sense of the word, covers only the final phrase - direct communication between the seller and the buyer, and all other operations in the field of sales relate to product distribution. Moreover, the buyer is not necessarily the final consumer; he can purchase the product for subsequent resale.
When organizing commercial activities, companies identify goals, objectives and the content of sales management.
The goal is to bring a specific product and the required consumer properties to the end consumer; to the required extent; at the exact time (deadline); in a certain place; with minimal costs.
When determining the task in managing sales activities, it is necessary to consider the tasks facing the sales department personnel, namely, conquering and expanding market share. This is searching for customers, working with existing clients. Consequently, the main task in the field of sales is to determine the final result of all the company’s efforts aimed at developing the business and obtaining maximum profits.
Modern literature examines various options for constructing a sales management system and process. Of greatest interest are those options that are based on management functions, because the essence of management is revealed in its functions.
Thus, C. Futrell, considering sales in a trading organization, evaluates sales management as the effective and efficient achievement of goals set for sales personnel through planning, selection, training and management of personnel, as well as control of organizational resources. [24, 26]
This definition, in his opinion, includes two important ideas: firstly, there are five initial management functions - planning, personnel selection, training, direction and control; secondly, the goals of the organization must be achieved efficiently and effectively, which is facilitated by the performance of these functions.
Sales planning is one of the functions of sales management, which is the process of determining goals and ways to achieve them. The specific functions of planning determine the allocation of resources, adaptation to the market environment, internal coordination and strategic foresight. It's about building cost-effective, customer-focused sales teams.
Staffing is the activity associated with attracting, developing and maintaining an effective sales force. It includes two tasks: planning personnel requirements for sales activities and planning their employment. When solving the first problem, it is determined which personnel and in what quantity are needed. Employment planning includes processes such as selection and socialization into a group of sales workers.
Training of sales personnel is actions aimed at developing in employees the necessary organizational culture and knowledge that contributes to effective sales. Training is provided to improve customer satisfaction.
Leadership is the ability to influence individuals and groups of people to direct their efforts toward achieving organizational goals. It involves directing sales personnel to achieve the desired results.
Control is monitoring the activities of the sales apparatus, allowing you to determine whether the company is achieving its goals or whether adjustments need to be made to its work.
The sales management process is presented in Figure 1.
Figure 1. Sales management process
Some authors consider sales management as management of sales personnel and sales processes, and recommend including the following elements in the sales management system: [15.67]
1) identification of target customers to whom sales of products are directed:
Target segments (needs, prices, channels, requirements);
Strategic and supporting niches;
Strategy and tactics for entering new market niches.
2) distribution channels used:
Types of distribution channels used;
Collecting information on channel members.
3) channel management:
Sales planning across channels and between participants of the same channel;
Managing channel members;
Communications management;
Assessing channel participants and adjusting conditions and customer base.
4) organization and strategy of the sales department:
Tasks, structure, staff and functions of the sales department;
Functional division of labor in the sales department;
Technical support of the sales department.
5) sales department management:
Planning and monitoring the work of the department and its employees;
Recruitment, selection, adaptation of employees;
Employee motivation;
Training, exchange of experience;
Employee performance evaluation.
6) personal selling skills and relationship management:
System for searching potential clients;
Effective selling skills;
Service level;
Accounting and analysis of personal sales data.
7) adjustment of the sales system:
Assessment and adjustment of the entire sales system.
Thus, the essence of sales management is revealed in such basic management functions as planning, organization, motivation and control. The objects of application of these functions are, for example, resources involved in the sales process, personnel, company clients, product promotion channels, and organizational forms of sales management.
Planning is the conscious, systematic process of making decisions regarding the sales goals and objectives that sales personnel must follow. Each of the identified functions requires advance planning.
Organization of sales activities - formalization and regulation of interactions between departments and employees in the management process. The key points of this process are the delimitation of functions when forming goals and a sales plan; preparation of sales development documents; organizational structure of the sales service.
Motivation is the encouragement of participants in the process of buying and selling goods to take actions that ensure a mutually beneficial conclusion of the transaction. Company employees must be able to adequately serve customers, and customers must be able to satisfy their needs through this product. Most well-known approaches to sales motivation focus on both the company’s personnel and its customers.
Control of sales activities is a function through which the achievement of sales goals is ensured. During control, a number of sales management activities are monitored. Firstly, the problems that arose when analyzing the organization’s position in the market and sales planning are explored. Secondly, sales volumes in all market segments and compliance with their planned indicators are subject to control. Thirdly, control of the passage of orders and instructions from top to bottom, feedback and quality of work is carried out. This is the basis for corrective actions on the sales management system.
The methodological justification for managing sales activities is a system of principles that has been developed by theory and practice. This system includes general and specific principles.
General principles relate to the very essence of management and are constant in any management environment. The general principles of management include: scientific approach, systematicity, complexity, efficiency, flexibility, the principle of an optimal combination of centralized and decentralized management, and unity of command.
Particular principles are relevant for specific actions and arise from the characteristics of the control object. In this case, the following particular principles can be distinguished:
The principle of market orientation means that the criterion for making sales decisions should be the consumer and his behavior patterns;
The principle of an inextricable connection between sales and marketing, which reduces the uncertainty of the sales management environment;
The principle of organizational flexibility requires that the sales management system acquire the ability to flexibly respond to market changes and develop effective measures to adapt to the market;
The principle of professionalization of sales requires special training of sales personnel, since only with professional management can significant results be achieved;
The principle of prioritizing, which is aimed at constantly studying and knowing all the features and details of sales management and identifying the highest priority management impacts that contribute to achieving high sales performance;
The principle of focusing on risk management, according to which the company's management must have the ability to anticipate and anticipate risks arising from the high uncertainty of the sales environment;
The principle of personal initiative assumes that each sales employee must not only follow job descriptions, but also show initiative;
The principle of responsibility for accepted powers, which ensures high sales performance, and, consequently, a high reputation for workers in this area;
The principle of organizational optimization, which aims to create an effective, at the same time flexible and adaptive sales management structure.
Thus, sales is a variety of activities through which the seller communicates with the buyer. Selling techniques and the art of communicating with the buyer are very different. Therefore, the company must properly organize and manage sales activities to achieve its goals.
1.2 Organization of product distribution and the place of wholesale and retail trade in the market infrastructure
Product distribution refers to a system for ensuring the delivery of goods to places of sale at a precisely defined time and with the highest possible level of customer service. In other words, product distribution is the activity of planning, implementing and controlling the physical movement of products from their places of origin to places of sale, in order to satisfy the needs of consumers and for the benefit of the manufacturer.
The main result that is achieved in product distribution is the level of customer service.
The level of service depends on the following factors: speed of order fulfillment; Possibility of urgent delivery of goods upon special order; readiness to accept back the delivered goods if a defect is found in them and replace them with a good quality one as soon as possible; a well-organized warehouse network and a sufficient level of stock of goods across the entire range; ability to use the most suitable mode of transport; highly efficient service support; the price level at which services are provided or goods are provided to customers.
None of these factors in and of themselves are critical to creating an excellent merchandising system, but they all affect the level of service to one degree or another.
Therefore, an integrated approach to organizing product distribution is necessary, especially since neglecting any of the elements of the system can seriously disrupt its functioning and have a sharply negative impact on the prestige of the company, its position in the market and competitiveness.
The distribution of goods is carried out through channels that include all organizations or all people associated with the movement, exchange of goods and services, and considered as channel participants or as intermediaries.
A distribution channel can be simple or complex. It may be based on a verbal agreement between a small manufacturer and a local retail store or require detailed written contracts between manufacturers, wholesalers or retail stores.
Many companies interested in broad distribution need independent retail stores to sell their products and improve their financial performance. Other firms want direct contact with consumers and do not use independent distribution channels.
Every company manager always faces the question: whether to engage in direct sales or use the services of intermediaries. In this case, it is necessary to take into account the length and width of the channel. The concept of channel length refers to the number of independent participants. The width of the channel determines the number of independent participants at any stage of product distribution. With a narrow channel, the product is sold through several sales participants; with a wide one - through many.
There are two main basic types of distribution channels: direct and indirect.
Direct sales do not imply the presence of intermediaries, since the sale of goods and services is carried out directly to consumers on the basis of direct contacts with them (Figure 2). This includes selling goods through your own retail network, selling through media advertisements or through your own established trading house.
Figure 2. Direct sales
Direct channels are used by companies that want to control their entire marketing program, want close contact with consumers, and have limited target markets.
Indirect marketing involves the sale of goods through intermediaries. (Figure 3).
The types of indirect sales channel are: intensive, selective, exclusive.
Intensive sales means connecting all possible resellers to the sales program, regardless of the form of their activity. Firms use a large number of wholesalers and retailers. The main advantage of this type is the presence of a very dense sales network, but the disadvantage is that a large number of small buyers complicates control over their solvency.
Figure 3. Typical indirect distribution channels
Selective sales, on the contrary, involves limiting the number of resellers depending on the type of consumers, the possibility of servicing and organizing warranty repairs and servicing of goods. With this kind of distribution, the company uses an average number of wholesale and retail stores and tries to combine control over the channel, a prestigious image with good sales volumes and profits. This sales is applicable when selling technically complex goods that require special service and trained personnel.
In exclusive distribution, the firm sharply limits the number of wholesalers and retailers in a geographic region. May operate one or two retail stores in a specific shopping area. The company strives for a prestigious image, control over distribution channels and a high share of profits, and is willing to accept lower sales volumes than with other types.
There are other possibilities. Firstly, the company can use dual distribution channels. In doing so, it enters retail market segments or diversifies its activities by selling through two or more different channels. Second, a firm may move from exclusive to selective to intensive marketing as the product moves through its life cycle. But this process cannot happen in reverse. Third, the company can use a new way of marketing and achieve success.
At the same time, it is very useful to organize a foreign branch (representative office) of a company that has warehouses for finished products and spare parts, and a service department. In this case, the company is a mixed joint-stock company, in which one of the two general directors is a foreign citizen. Such a company is registered and is the official importer of the goods of the manufacturer.
There are many types of intermediaries.
Broker is an independent wholesale intermediary involved in the sale of goods and services, who does not directly participate in transactions either with his own name or his own capital; who does not receive ownership rights to the types of goods and services he sells. He acts at the expense of the supplier or on his behalf, receiving remuneration for intermediation.
Distributors are wholesale and retail intermediaries conducting operations on behalf of the manufacturer and at their own expense. The manufacturer grants the distributor the right to sell its products in a certain territory and for a certain time. The distributor does not own the products. Under the agreement, he acquires the right to sell it.
A dealer is an independent retailer who purchases proprietary goods from the manufacturer or his agents and then sells it for personal use to consumers. Dealers are used by the company to effectively reach small and medium-sized consumers in the region. The procedure for interaction with them is determined by the company’s management, as well as the market strategy and existing relationships. Dealers prefer trade credit and are more loyal, ready to make advance payments, which suits the supplier more. Creating a dealer network always has the goal of increasing the company’s income by attracting additional consumers; increasing sales volumes in a specific region. Whenever possible, the company's relations with dealers should be based on the principle of partnership. Also relevant are the issues of support and control over the dealer’s policies on its territory.
Sales agents are a company or person who, on the basis of contracts with a company, receives the right to facilitate the conclusion of contracts for the sale of goods and services for a relatively long period. They do not purchase or sell goods or services, but act only as official representatives of the manufacturer. It is promising to consider agents as participants in an affiliate program and build relationships with them on a long-term basis: the agent searches for consumers. The company pays him a remuneration for the sale of goods by the agent.
When resorting to the services of intermediaries, you should always remember that the fewer of them, the greater the chances the company has to control the situation and carry out prompt interaction with them, but the greater the company’s dependence on intermediaries, which means that in the future this can cause serious commercial damage to it . It is no coincidence that various mixed forms of organizing product distribution are used in practice.
Wholesale trade enterprises not only buy goods, but also sell them to wholesale buyers, thus performing the functions of intermediaries. Commercial work in the distribution of goods of a wholesale company involves the implementation of various operations, the main ones of which are: selection of wholesale buyers; establishing economic ties with them; negotiation of terms and conditions and conclusion of contracts; control over the fulfillment of contractual obligations. Wholesale buyers can be both retail trade enterprises and structures engaged in wholesale trade. The following factors influence the choice of buyers:
location (the closer to the wholesale enterprise the buyer is located, the lower the transportation costs for delivering goods);
the range of goods sold by the buyer and the size of the population served (the size of the optimal batches of goods depends on this);
the opinion formed in the market about the buyer, that is, his reputation.
In the process of searching for buyers, it is advisable for wholesale enterprises to proceed from the possibility of establishing long-term economic relations with them, since this is beneficial to both parties.
At retail trade enterprises, the trade and technological process of product distribution is completed. Commercial work at retail enterprises consists of the following interrelated operations: study and analysis of customer demand; formation of a product range; inventory management; advertising and information activities for the sale of goods. The specificity of performing these operations is that the consumer of goods and services in retail trade is the population. Therefore, it is necessary to take into account the diversity of psychological types and other individual characteristics of buyers and their constantly changing needs. This is based on the study of various types of consumer demand for the purpose of its subsequent analysis and use of the results obtained to take the necessary measures aimed at improving the work on creating an assortment of goods at retail enterprises. [20, 42]
The effectiveness of the distribution channel largely depends on interaction with intermediaries, which can be called the basis of sales management.
1.3 Composition and functions of sales personnel of a trading organization
The effective functioning of any company is impossible without a properly organized sales service, the most important task of which is to help achieve set goals for products and gain market share.
One of the main characteristics of management, including management of sales activities, is the identification of the subject of management. In this case, sales personnel will be considered. These are managers and specialists who perform functions in this area of the company’s activities.
Sales managers are the key employees of a trading company. The determining factor in the work of a sales manager is the level of the organizational hierarchy at which he is located. Typically there are three levels of management:
1. Senior executives or strategic managers are managers at the highest organizational level who define the mission, philosophy and sales policy. Typical positions for senior executives are president, chief executive, and vice president of sales.
2. Tactical managers or middle managers are managers who work at the middle level of management of an organization and are responsible for the work of specific categories of employees. These include sales managers for a region, a country, or a specific zone.
3. Operations managers or lower level managers are the managers directly responsible for selling products. Their main responsibility is to ensure the desired sales efficiency through the application of certain rules and procedures. Their job title is usually Assistant Regional Sales Manager or Regional Manager.
Lower level managers are often called supervisors. Subordinate to the supervisor, as a rule, is a group of workers, the number of which rarely exceeds 15-20 people. They exercise operational control and guidance over their wards, analyze trade turnover and reporting, identify weak and strong sales representatives, to whom they apply a system of fines and bonuses, respectively; identify product items that are not in demand, and inform their subordinates about this.
The work of a sales manager is subject to certain requirements, knowledge and skills in various areas: concentrating efforts on creating and improving the work of a team; selection and training of sales personnel; ability to build relationships with clients and more.
Three categories of skills are especially important for performing sales management functions: abstract thinking and decision-making skills, people skills, and technical skills.
Abstract thinking and decision-making skills are the manager’s ability to perceive the organization as a whole and see the relationships between individual parts of the organizational structure. Having these skills means that a manager can develop strategic plans and solve strategic problems.
The ability to work with people is the ability to effectively complete assigned tasks with the help of subordinates. These skills are determined by how a manager interacts and works with subordinates and colleagues, including his abilities to motivate, support, lead, communicate, and resolve conflicts.
Technological skills are the ability to perform specialized tasks that require knowledge of a specific method or process. These include knowledge and mastery of sales methods and techniques. Technical skills also refer to specialized knowledge, analytical abilities, and various methods of solving problems in certain areas.
Sales representatives are primarily responsible for the practical implementation of sales marketing strategies, performing various functions:
generating sales, that is, searching for potential clients, planning contacts with consumers, conducting sales presentations, organizing client lending;
customer service, that is, organizing consultations and providing assistance to customers;
territorial sales management, namely the collection and analysis of information about consumers and competitors, participation in the development of plans, processes, budgets and sales strategies;
Professional Development - Participating in sales meetings, training programs, training new recruits and performing administrative duties.
Sales representatives are not simple order collectors, but equal partners and advisors to both their clients and manufacturers. Their specific function is to understand and solve the problems of both parties, creating trust between suppliers and consumers.
The principle of distribution of responsibilities between sales staff usually comes down to one of two options: by region or by type of product. If the goods are relatively identical, then the principle of division by region is applied; if these are complex technical products or complex services, then by product.
When introducing a new product or service to the market, the position of a brand manager is often introduced, who directly reports to the head of the sales department.
The efficiency of the sales apparatus will primarily still be determined by a transparent environment for recording relationships with consumers and partners and the team spirit within it.
1.4 Goals, functions, forms and methods of sales promotion
In a relationship marketing system, the key element is the company's client. In the process of working with clients, each company sets two main goals: attracting new customers (expanding the customer base) and retaining existing customers (loyalty management).[ 28, 43 ]
These processes are reflected in sales promotion.
Sales promotions are short-term measures of a monetary or material nature that encourage the purchase of a product.
The purpose of sales promotion is to attract consumers to the product; explain why this needs to be done immediately; satisfy requests.
The following classification of sales promotion goals can be distinguished:
1. Strategic: increase the number of consumers; increase the quantity of goods purchased by one consumer; increase turnover compared to previous years.
2. Specific: speed up the sale of the most profitable product; increase the turnover of any product; get rid of excess inventory; counteract emerging competitors; revive the sale of goods whose sales are stagnating.
3. One-time: benefit from annual events (Christmas, New Year and others); take advantage of a special opportunity (for example, the anniversary of the organization’s creation); support the advertising campaign.
Forms of sales promotion are varied:
Providing free product samples. Gives consumers the opportunity to form the most complete impression of the product. Attracts new consumers. Promotes faster perception of the product, allows customers to get acquainted with new products or products of brands not yet known to them. Associated with significant costs. Does not allow you to get an accurate picture of the prospects for implementation. Samples (in small containers) of food products, perfumes, cosmetics and other goods are usually distributed free of charge during presentations of new products or brands, as well as as an addition to other products;
Distribution of coupons is possible with the help of sales agents, by mail, through newspapers and magazines;
Premium selling drives sales growth. Minor additional distribution costs. Insufficient incentive for regular customers;
Price discounts increase sales, but can undermine the prestige of the brand;
Contests and lotteries help increase trust in the brand. A limited number of consumers participate;
Displaying products at the point of sale is an effective means of attracting customers' attention.
Let's take a closer look at several of the sales promotion methods.
Discounts
Price discounts are a commonly used technique used by product manufacturers and retailers to reduce the original price to attract new customers. The introduction of any types of discounts should be aimed at consolidating the company’s position in the target market.
Refund or compensation – provides a partial refund of the purchase price. To generate trial purchase intention, the consideration must be perceived by the customer as providing immediate value. In fact, he receives money after he purchases the goods and demands, on the basis of an offer of reimbursement, payment of the due amount. Compensations can encourage trial purchases of any high-value items. When using the refund method, customers should not be allowed to perceive the refund as a simple discount - this could damage brand sentiment.
Bonus packages are the offering of a larger quantity of a product to the consumer through the use of larger packaging or increased units of the product offered at the price of one unit or at a reduced price. Can be used to encourage trial purchases or to increase sales. The product must be divisible into units that can be combined into a bonus package. Bonus packages are more appropriate as sales promotions when engagement is low.
Direct price reduction is when the buyer receives a discount directly upon purchase.
The following main types of discounts will be distinguished:
Discounts for paying for goods in cash are provided to the buyer in the form of a price reduction for prompt payment of the invoice. As a rule, it is set at 1-1.5 percent of the total cost of the goods, and discounts for advance payment can reach from 3 to 5 percent, depending on the length of the period calculated from the date of payment to the date of delivery. Providing such discounts improves the financial situation, since in the practice of market relations, payment terms for invoices for shipped goods range from 30 to 60 days. [15, 155]
A quantity discount is a reduction in price for the purchase of large quantities of goods. The size of the discount, which is sometimes also called wholesale, can vary widely and reach up to 20-30 percent of the wholesale price of the product. [15, 155] Selling and transporting goods in such batches reduces the manufacturer’s sales costs. Quantity discounts can be simple or total. Simple discounts are provided to the buyer for a one-time purchase of a large number of products. Total discounts are established taking into account purchases made during a certain period of time.
Trade or dealer discounts are provided by manufacturers to dealers for services related to the promotion of goods to the end consumer. When determining the amount of the discount, the manufacturer must compare it with the amount of funds it needs to sell in another way. The amount of such discounts can vary over a fairly wide range, from 10 percent and above. [15, 155]
There are also other types of discounts: seasonal discounts are provided to customers who make off-season purchases, which allows them to maintain a stable level of production throughout the year; discounts for certain categories of consumers; discounts on outdated product models; flash sale discounts; discounts when purchasing a new product, provided that the old model of the product is returned.
Premiums are products that are offered to the buyer for free or at a lower price as an incentive to purchase one or more units of the product. There are two types of awards:
Free premiums are various inexpensive goods. Used during an advertising campaign;
Self-liquidating premiums are advance payments for very expensive goods.
Premiums should not only stimulate trial purchases, but also create a privileged position for the product in the eyes of consumers.
Coupon is a certificate that gives the consumer the right to a discount. It represents more than just a price reduction and is perceived by the buyer as a small gift from the manufacturer of the product.
Sampling
Providing free samples can be used in all areas of sales. Encouraging trial purchases by providing samples is an expensive but effective promotional method. This is such an effective method of attracting new customers that, having decided to try the product once, a potential buyer is likely to make future purchases.
Providing samples is one of the promotion methods that automatically creates an advantage for the manufacturer in the eyes of buyers. Receiving a sample immediately creates awareness of the company, and trying it builds attitude towards the brand and influences purchase intention.
Contests and lotteries
This method of sales promotion is becoming a general cultural norm, consisting in the fact that thanks to it a person most effectively achieves his consumer goals. There is a large group of buyers who want to try their luck in prize draws and lotteries.
When starting to develop a sales promotion program, it is necessary, first of all, to consider its feasibility within the framework of the overall marketing plan; choose the most successful period and the means used to carry it out. (Table 1.)
Table 1.
Sales promotion program
Planned promotions must be tested for their effectiveness for target groups according to the following criteria:
A) attractiveness: is the promotion attractive to the target audience and does it meet expectations;
B) distinctiveness: is the promotion noticeable to the target audience and is it sufficiently advertised through various means of communication;
C) brand advantage: whether the promotion is an additional advantage of the brand or at least emphasizes them;
D) harmonization: is the promotion consistent with other elements of marketing;
E) uniqueness: does the promotion have qualities that will allow it to stand out from similar ones;
E) timeliness: does the promotion coincide with the advertising campaign;
G) simplicity: the promotion mechanism should not be overly complex for the consumer to understand;
H) accessibility: are the conditions for participation in the promotion as simple as possible;
I) expressiveness: how easy it is to reflect the essence of the promotion using design means in the advertising text;
K) rewards: the best promotions are those in which every participant receives a reward; it should be beneficial to everyone who is affected in one way or another (from the end consumer to partners, agents, promoters).
Merchandising
This is a marketing activity at a retail outlet that includes product placement, development and placement of advertising materials that contain information about the product at the point where the consumer is ready to make a purchase. The result of merchandising is to stimulate the desire of consumers to choose and buy a product.
As a method of sales promotion, merchandising is based on the balanced distribution of buyers’ cognitive resources in time and space of the sales floor and the creation of an atmosphere of a retail outlet that is adequate to the psychological state of the visitor.
Currently, sales promotion is a diverse set of techniques throughout the entire life cycle of a product.
Highlight the advantages and disadvantages of sales promotion.
Advantages:
Leads to short-term sales growth; complements advertising and personal selling;
Attracts attention and contains information that can lead the consumer to the product;
Contains a clear inducement to purchase by offering some kind of concession or benefit that provides value to the consumer;
Contains a specific offer to make a purchase immediately.
Flaws:
Can only be used as an additional type of promotion;
Often shifts emphasis from quality factors to secondary factors;
Cannot be used permanently.
2. Analysis of the management of sales activities of the organization LLC "Trading House "Tibet"
2.1 Analysis of the state of affairs in the market of household chemicals, cosmetics and perfumes
Currently, in Russia, the market for household chemicals, perfumes and cosmetics, according to its participants, has already been formed.[ 30 ] Manufacturers and importers, through joint efforts, fully satisfy the existing solvent consumer demand; Distributors try to get the product to as many outlets as possible, and retailers try to sell the product as much as possible.
Over the past five years, the saturation of the household chemicals market has occurred mainly through the efforts of domestic manufacturers. The stable demand for domestic household chemicals is due, first of all, to the reasonable price of domestic goods. The share of domestic products in the market is growing due to the expansion of the range of existing brands.
Import market players have also been identified. These are Henkel, Prokter&Gamble, Unilever, Colgate-Palmolive, Wella, Garnier, Beiersdorf and others.
Importers and manufacturers have already completed the formation of their sales structures. Currently, approximately 80% of household chemical goods on the domestic market are sold through dealer networks.[ 30 ] The rest is sold at retail through wholesalers.
Experts say that the key to successful sales is the well-functioning work of distributors. But with the development of supermarket chains and stores, for example the Cash&Carry company, the need for distribution channel intermediaries may disappear. Therefore, only reliable distributors can survive in the competition.
In addition, according to distributors, it is almost impossible for new companies to make money selling household chemicals today. Distribution companies have firmly occupied all possible retail and wholesale sales outlets.
According to experts, in the coming years, sales of household chemicals will increase by 10-15%. [ thirty ]
The main profit for traders will continue to be provided by products in the mid-price segment. However, the most promising category in terms of sales growth is the category of expensive goods. Experts confirm the possibility of expanding the geography of dealer networks through the development of regions. Accordingly, the share of sales of household chemicals through retail chains and supermarkets will increase.
In the Ryazan region, the number of large companies engaged in wholesale and retail trade in household chemicals, cosmetics and perfumes is about ten. And there are four distributor companies of the most famous domestic and imported manufacturers: TD Tibet LLC, Vector Plus LLC, Hercules LLC, Alidi LLC.
Among the largest retail chains in the city of Ryazan and the Ryazan region, we can highlight such as “Trading House “Bars”; Trading network "Soroka"; Retail chain “Meat, Poultry and Fish”; Retail network "World of Products"; chain of perfume stores "Laguna"; Retail chain "Galaktika"; Alfavit pharmacy chain; "Spray"; "Central"; as well as markets and smaller stores - and all of them are places of purchase for consumers in our city and region.
Let's take a closer look at the activities of one of the companies - Tibet Trading House LLC.
2.2 Brief description of the organization LLC “Trading House “Tibet”
Limited Liability Company "Trading House "Tibet" operates on the Russian market of household chemicals, perfumes and cosmetics.
Abbreviated corporate name: TD Tibet LLC.
Legal and actual address: 390047 Ryazan, 4th Dobrolyubova passage, building 1.
The company was registered by the Registration Department of the Administration of the city of Ryazan on September 05, 2001.
LLC "TD "Tibet" is a legal entity from the moment of its state registration and has separate property, has an independent balance sheet, acquires rights on its own behalf and bears responsibilities, has a current and other bank accounts, a round seal containing its full corporate name on Russian language and indication of location.
TD Tibet LLC is liable for its obligations with all its property. The property consists of fixed assets and working capital, as well as other valuables, the value of which is reflected in an independent balance sheet.
All property, products, income received and other valuables are the property of TD Tibet LLC.
The relationships of the participants among themselves and with the organization are regulated by the constituent agreement, charter and current legislation.
LLC "TD "Tibet" was created and operates in order to meet public needs for products, works, services and make a profit.
TD Tibet LLC occupies an office building and a warehouse for finished products. The office and warehouse are located at the same address.
LLC "TD "Tibet" can carry out the following types of activities:
Trade and purchasing, wholesale, retail, commission activities in industrial goods, including household chemicals;
Mediation activities;
Organization of networks of own outlets for retail and wholesale trade;
Implementation activities;
Organization and holding of exhibitions, sales exhibitions, fairs;
Transportation of goods by all types of transport, including international transport, both on our own and on hired vehicles;
Provision of warehousing services;
Other types of activities not prohibited by the current legislation of the Russian Federation.
The main activities carried out by TD Tibet LLC are wholesale trade and retail trade in household chemicals, cosmetics, perfumes and household appliances.
The main principle of the company is an individual approach to each client, a flexible system of discounts, fast and high-quality service.
More than 5,000 products are presented in the exhibition sales area: synthetic detergents; body and hair care products; hygiene products; cleaning products; household appliances, dishes and much more.
TD Tibet LLC is a distributor in Ryazan of such companies as Colgate-Palmolive; "Arnest"; "Nevskaya Cosmetics"; "Harmony Plus"; "Stupinsky Chemical Plant"; "Johnson"; "Spring"; "Helen Harper"; "Scarlett"; "SEB".
All of the above companies are the main suppliers of TD Tibet LLC, relations with which are built on a contractual basis. Under the distribution agreement, TD Tibet LLC, being an intermediary in the distribution channel, acquires the right to sell the products of the supplier-manufacturer in the specified territory for a certain time.
Due to constant purchases of the required volume, suppliers provide price concessions. First of all, these are discounts on prices and retro bonuses for volume, which in the form of monetary compensation at the end of the month or the beginning of the next are credited to the company’s account.
Manufacturing companies provide TD Tibet LLC with promotional material and certificates for their products; conduct presentations of new products; inform about price changes; product design; provide support in the form of payment of the bonus part of the wages of personnel involved in the sale of this type of product.
In addition to the above companies, TD Tibet LLC, to maintain its assortment, purchases other groups of goods from a certain range of suppliers, the largest and most competitive, from which deliveries are made as needed.
Being an intermediate link between the manufacturer and the consumer, TD Tibet LLC is aimed at optimizing the selection of suppliers, establishing their permanent composition, establishing mutual understanding and partnerships with them on a long-term basis.
Management of TD Tibet LLC is carried out by the general meeting of participants and the director. The executive body is also the director. The director represents the interests of the society; makes transactions on behalf of the organization; issues orders and instructions that are binding on all employees; opens bank accounts. The director makes decisions on the formation, reorganization and liquidation of structural divisions.
The commercial director of TD Tibet LLC performs functions related to the commercial activities of the company. Takes part in planning the work of the sales apparatus; the company's sales volume; resource distribution. Organizes the distribution of responsibilities; gives recommendations on optimizing the activities of employees; supervises the work of staff; financial resources. Conducts timely inspections of current activities; meetings to identify deviations in the company’s performance indicators; makes necessary adjustments during ongoing work; makes decisions about working with suppliers and clients.
Documentation support for the management activities of TD Tibet LLC is the tasks of the secretary. In addition, he carries out the organization of office work, information and reference services on documents; operational and organizational support for the company's management.
Accounting LLC "TD "Tibet" maintains the company's accounting records.
The HR department of TD Tibet LLC maintains and prepares personnel documentation. Introduces new employees; maintains personal files and labor statistics; conducts job analysis; monitors staff performance; develops a system of remuneration and incentives for company employees.
The purchasing department of TD Tibet LLC determines the nomenclature, volume, and timing of purchases based on the forecast of sales fluctuations and forms orders from suppliers. Orders are subject to confirmation from the company's commercial director. The purchasing department interacts with all suppliers of the main product range: finds out the terms of delivery (availability of goods, price); places orders and monitors their implementation; clarifies issues of product quality; ensures return of defects as necessary. The department analyzes sales statistics on the basis of which it makes orders. Provides a guaranteed supply of goods in the finished goods warehouse. Finds out from suppliers information about the availability of new products. The department maintains relations with the sales apparatus; receives and analyzes current reports. The department maintains and creates a price list for consumers.
The sales department of TD Tibet LLC is subordinate to the commercial director. The department ensures the implementation of product delivery plans on time according to the product range in accordance with the concluded agreement and received applications from consumers; Ensures the replenishment of the revenue side of the sales budget on time. The department is searching for new consumers; regulates relationships with them; develops measures to increase and stimulate sales volumes; offers recommendations on the formation of pricing policy; prepares and concludes contracts with consumers for the supply of products. Forms sales plans and analyzes their implementation.
The department for working with wholesale clients of TD Tibet LLC carries out work on accepting and processing orders exclusively from wholesalers of the city and region.
The sales department of VTP LLC TD Tibet works with retail stores and retail chains in the city and region; monitor the work of the company's sales representatives; analyze the reports they provide; draw up route sheets and carry out operations related to logistics.
The finished products warehouse of TD Tibet LLC is designed for storing goods and is divided into eight sections. Loading and unloading of products is carried out at the warehouse; assembly of orders into packaging and delivery from the warehouse using company vehicles.
The cash desk of TD Tibet LLC works with cash and cash documents of the company.
The average number of employees of TD Tibet LLC is 92 people.
The organizational structure is presented in Figure 4.
Figure 4. Organizational management structure of TD Tibet LLC
The primary tasks of the company's sales apparatus are: sales of products; increase in sales; increasing profitability; increase in the number of clients; expansion of market share; increasing the company's prestige
The most important task of each employee is to promote the products of TD Tibet LLC to the market; offering oneself to the client as a consultant and presenting the company to him in the image of a reliable supplier.
The company's sales managers are middle-level managers who are responsible for the work of specific categories of employees. These are sales managers by type of product, by city, by region, by manufacturing company. They monitor the work of sales personnel directly responsible for the sale of a given type of product, city zone, region; forecast sales situations; analyze sales statistics
Supervisors are responsible for the direct sale of goods. A group of sales representatives is subordinate to the supervisor. The supervisor's responsibility is to ensure the required sales efficiency. They exercise control over sales representatives; analyze trade turnover and reporting; identify strong and weak employees, to whom a system of fines and bonuses is applied accordingly; set up a sales plan for sales representatives; form optimal route sheets. Supervisors report to the head of the sales department.
Sales representatives have primary responsibility for selling products; its promotion and ensuring maximum distribution of manufacturing companies through wholesale and retail trade channels in Ryazan and the region. The main responsibilities of sales representatives are: promoting products to the retail network, ensuring the constant presence of goods at the point of sale and their display in accordance with standards. A sales representative works in a territory subordinate to him. He compiles and maintains individual documentation for current and potential clients to create a database. Establishes partnerships with key clients; provides assistance as an expert in sales and product promotion. Collects and provides information on the work of competitors. Completes daily progress reports and participates in regular sales representative meetings.
Managers of the wholesale department carry out sales to wholesale clients while in the company's office: by e-mail, by telephone or during a personal visit to the client of the company. They coordinate the work of wholesale clients in Ryazan and the region. Maintain sales reports.
Territory development managers plan sales promotion; draw up a budget; control the execution of work; maintain and analyze reports.
Logisticians carry out the necessary logistics operations in product distribution: when placing orders; during their picking at the warehouse; when planning routes for delivering goods to the client.
Sales floor employees - operators and consultants - are involved in the sale of goods, both through sales representatives and through personal contacts with consumers. Operators form orders taken by sales representatives into delivery notes and prepare the necessary documents for them: invoice, power of attorney. Sales floor consultants help customers who contact the company in choosing goods, and operators properly place orders for these customers.
The company, namely sales managers, supervisors, territory development managers, sales representatives, gives bonuses to the fixed part of the salary for the implementation of the sales plan and the territory expansion plan. The size of the bonus part of the salary is set by the manufacturing company, in the sale of which products this or that employee is involved. The bonus portion is transferred by the manufacturer to the account of TD Tibet LLC, and then issued to employees. On average, the size of one bonus for fulfilling one category of the plan is 3,000 rubles. Employees traveling to retail outlets, as well as sales representatives working with personal vehicles, additionally receive compensation for a car in the amount of 4,000 rubles every month. The salary of the rest of the company's employees is a fixed salary.
2.3 Analysis of financial and economic indicators of the activities of TD Tibet LLC
The analysis is carried out on the basis of the reporting of LLC TD Tibet for 2006 (Appendix 1, Appendix 2, Appendix 3).
Let's conduct a horizontal (comparative) analysis of the balance sheet assets of TD Tibet LLC for 2006 and display the data in Table 2.
Table 2.
Analysis of the balance sheet assets of TD Tibet LLC for 2006, thousand rubles.
| Title of articles | Line code | For the beginning of the year | At the end of the year | Absolute changes (gr.4-gr.3) | Relative changes, % |
| Intangible assets | 110 | - | - | - | - |
| Fixed assets | 120 | 839 | 667 | -172 | -1,05 |
| Construction in progress | 130 | - | - | - | - |
| Long-term financial investments | 140 | - | - | - | - |
| Deferred tax assets | 145 | - | - | - | - |
| Other noncurrent assets | 150 | - | - | - | - |
| Total about section 1. | 190 | 839 | 667 | -172 | -1,05 |
| Reserves | 210 | 27127 | 32614 | 5487 | 33,56 |
Value added tax on purchase shadow values |
220 | 2461 | 3948 | 1487 | 9,09 |
Accounts receivable ity (payments for which a swarm is expected in 12 months. after the reporting date) |
230 | - | - | - | - |
Accounts receivable ity (payments for which swarms are expected within 12 months. after the reporting date) |
240 | 9744 | 18424 | 8680 | 53,08 |
Short-term financial high investments |
250 | - | - | - | - |
| Cash | 260 | 937 | 1751 | 814 | 4,98 |
| Other current assets | 270 | - | 56 | 56 | 0,6 |
| Total for section 2. | 290 | 40269 | 56793 | 16524 | 101,05 |
| Balance | 300 | 41108 | 57460 | 16352 | 100 |
Based on the analysis performed, conclusions can be drawn about the size of the property of TD Tibet LLC.
The total amount of property increased at the end of the reporting year by 16,352 thousand rubles. The increase in property value was mainly due to an increase in the amount of current assets by 16,524 thousand rubles, while the decrease in the amount of non-current assets amounted to 172 thousand rubles.
The increase in the value of current assets was caused by an increase in inventories by 5,487 thousand rubles, VAT by 1,487 thousand rubles, and accounts receivable by 8,680 thousand. rub., cash for 814 thousand rubles. and other current assets for 56 thousand rubles.
The data of the vertical analysis of the liabilities side of the balance sheet of TD Tibet LLC will be reflected in Table 3.
Table 3.
Analysis of the balance sheet liabilities of TD Tibet LLC for 2006, thousand rubles.
| Title of articles | Line code | For the beginning of the year | In % of total | At the end of the reporting year | In % of total | Changes |
| Authorized capital | 410 | 11 | 0,02 | 11 | 0,02 | 0 |
| Extra capital | 420 | - | - | - | - | - |
| Reserve capital | 430 | - | - | - | - | - |
Retained earnings (uncovered) loss) |
470 | 16318 | 39,7 | 21878 | 38,07 | -1,63 |
| Total for section 3. | 490 | 16329 | 39,72 | 21889 | 38,09 | -1,63 |
| Long-term loans and credits | 510 | 4776 | 11,62 | 4964 | 8,64 | -2,98 |
| Deferred tax liabilities | 515 | 15 | 0,04 | 3 | 0,005 | -0,035 |
Other long-term new obligations |
520 | - | - | - | - | - |
| Total for section 4 | 590 | 4791 | 11,65 | 4967 | 8,64 | -3,01 |
| Short-term loans and credits | 610 | 3000 | 7,3 | 3000 | 5,22 | -2,08 |
| Accounts payable | 620 | 16988 | 41,32 | 27605 | 48,04 | 6,72 |
| Debt to participants for payment of income | 630 | - | - | - | - | - |
| revenue of the future periods | 640 | - | - | - | - | - |
Reserves to come total expenses |
650 | - | - | - | - | - |
Other short urgent obligations |
660 | - | - | - | - | - |
| Total for section 5 | 690 | 19988 | 48,62 | 30605 | 53,26 | 4,64 |
| Balance | 700 | 41108 | 100 | 57460 | 100 | 0 |
Based on the analysis performed, it is possible to draw conclusions about the structure of the sources of formation of the property of TD Tibet LLC.
Own sources of property formation by the end of the reporting year changed downward by 1.63% and amounted to 38.07% in percentage terms, or 21,878 thousand rubles.
Borrowed funds at the end of the reporting year amounted to 35,572 thousand rubles. or 61.9%, which is 1.63% higher than the beginning of the year. Long-term liabilities in the amount of 4964 thousand rubles. at the end of the year, decreased by 3.01% compared to the beginning of the period, and amounted to 8.64% of all sources of property formation at the end of the reporting year.
Short-term liabilities, the amount of which at the end of the year amounted to 30,605 thousand rubles, increased by 4.64% and by the end of the reporting year amounted to 53.26% of all sources of property formation.
1) Own working capital (SOS)
SOS = p.490 – p.190 (f.1)
SOS beginning of the year = 16329 – 839 = 15490 thousand rubles.
SOS end of year = 21889 – 667 = 21222 thousand rubles.
2) Own and long-term borrowed funds (SDOS)
SDOS = SOS + line 590 (f.1)
SDOS beginning of the year = 15490 + 4791 = 20281 thousand rubles.
SDOS end of year = 21222 + 4967 = 26189 thousand rubles.
3) The total value of the main sources of the formation of reserves and costs of the company (OC)
OOS = SDOS + p.610 + p.621 + p.622 + p.627 (f.1)
OOS beginning of the year = 20281 + 3000 + 16572 + 188 +0 = 40041 thousand rubles.
OOS end of year = 26189 + 3000 + 27179 + 279 + 0 = 56647 thousand rubles.
4) Inventories and costs (IZ)
ZIZ = line 210 + line 220 (form 1)
ZIZ beginning of the year = 27127 + 2461 = 29588 thousand rubles.
ZIZ end of year = 32614 + 3948 = 36562 thousand rubles.
5) Financial indicator F1
F1 = SOS – ZIZ
F1 beginning of the year = 15490 – 29588 = -14098 thousand rubles.
F1 end of year = 21222 – 36562 = -15340 thousand rubles.
6) Financial indicator F2
F2 = SDOS – ZIZ
F2 beginning of the year = 20281 – 29588 = -9307 thousand rubles.
F2 end of year = 26189 – 36562 = -10373 thousand rubles.
7) Financial indicator F3
F3 = OOS – ZIZ
F3 beginning of the year = 40041 – 29588 = 10453 thousand rubles.
F3 end of year = 56647 – 36562 = 20085 thousand rubles.
Based on the analysis of the financial condition of TD Tibet LLC, the following conclusions can be drawn.
The indicator of own current assets, which is the difference between equity capital and non-current assets, increased in dynamics. This means that the company does not lack its own working capital, because SOS > 0.
The amount of own and long-term borrowed funds at the end of the reporting year increased compared to the beginning.
The total value of the main sources of inventory formation and costs increased at the end of the reporting year by 16,606 thousand rubles. This indicator characterizes the sufficiency of sources for the formation of reserves and costs. Inventories and costs are characterized by the presence of inventories and costs in an unfinished state for conducting normal financial and economic activities, which increased at the end of the reporting period. This is likely due to large balances of goods in the warehouse.
An analysis of the financial condition of TD Tibet LLC based on financial indicators F1, F2, F3, reflecting the sufficiency of SOS, SDS, OOS for financing ZIZ, indicates an unstable financial condition, because F1< 0, Ф2 < 0, Ф3 >0. This financial condition is characterized by periodic delays in mandatory payments and settlements.
And, although the SOS and SOS indicators at the end of the reporting year increased, this is not enough to finance inventories and costs. In the next financial year there should be an increase in SOS and SDS to guarantee the solvency of the company.
We will analyze the financial stability of TD Tibet LLC for 2006 by calculating financial ratios and comparing them with standard values.
1) Autonomy ratio or equity capital concentration ratio (K5)
K5 = page 490 / page 300 (f.1)
K5 beginning of the year = 16329 / 41108 = 0.397
K5 end of year = 21889 / 57460 = 0.381
2) Financial dependence ratio or debt capital concentration ratio (K6)
K6 = (p. 590 + p. 690) / p. 300
K6 beginning of the year = (4791 + 19988) / 41108 = 0.603
K6 end of year = (4967 + 30605) / 57460 = 0.62
3) Debt to equity ratio (K7)
K7 = (p. 590 + p. 690) / p. 490
K7 beginning of the year = (4791 + 19988) / 16329 = 1.517
K7 end of year = (4967 + 30605) / 21889 = 1.625
According to the analysis, it is possible to draw conclusions about the financial stability of TD Tibet LLC.
The values of coefficients K5 and K6 at the beginning and end of the reporting year total 1 (100%), although K5 is lower than the recommended criterion (not lower than 0.6). K6 increased in dynamics, which indicates an increase in the share of borrowed funds in the financing of the company. The growth of K7 is insignificant, but it indicates increased dependence on external creditors and a decrease in financial stability.
An analysis of the business activity of TD Tibet LLC for 2006 showed the following trends:
1) Labor productivity or output per 1 worker (P)
SCN = 92 (average number of employees for the reporting period)
P = page 010 (f.2) / SSCh
P 2005 = 349458 / 92 = 3798.46 thousand rubles.
P 2006 = 392772 / 92 = 4269.26 thousand rubles.
2) Capital productivity (F)
Ф = page 010 (form 2) / page 120 (form 1)
F 2005 = 349458 / 839 = 416.52 thousand rubles.
F 2006 = 392,772 / 667 = 588.86 thousand rubles.
3) Inventory turnover (Q3) in revolutions
Q3 = page 020 (ph.2) / page 210 (ph.1)
Q3 2005 = 331399 / 27127 = 12.217
Q3 2006 = 371923 / 32614 = 11.404
Duration of inventory turnover (in days)
2005 = 360 / 12,217 = 29,47
2006 = 360 / 11,404 = 31,57
4) Accounts payable turnover (Ok), in days
Ok = page 620 (f.1) * 360 / page 020 (f.2)
Ok 2005 = 16988 * 360 / 331399 = 18.45
Ok 2006 = 27605 * 360 / 371923 = 26.72
5) Accounts receivable turnover (Receivables), in revolutions
Od = page 010 (f.2) / page 240 (f.1)
Od 2005 = 349458 / 9744 = 35.86
Od 2006 = 392772 / 18424 = 21.32
Duration of receivables turnover in days
2005 = 360 / 35,86 = 10,04
2006 = 360 / 21,32 = 16,89
6) Equity turnover (Okap)
Okap = page 010 (f.2) / page 490 (f.1)
Ocap 2005 = 349458 / 16329 = 21.4
Ocap 2006 = 392772 / 21889 = 17.94
Based on the analysis of business activity, the following conclusions can be drawn. The labor productivity indicator, which characterizes the efficiency of using labor resources, increased by 470.8 thousand rubles compared to the previous year. This was achieved by increasing sales revenue.
The capital productivity indicator, characterized by the efficiency of use of fixed assets, increased by 172.34 compared to the previous reporting year. This indicates an increase in the efficiency of use of fixed assets. The increase in capital productivity was achieved due to an increase in sales revenue and a decrease in the residual value of fixed assets.
Inventory turnover in (turnovers) characterizes the duration of inventory passage through all stages of sales. In this case, the indicator decreased, which indicates insufficiently efficient use of reserves. The duration of inventory turnover in days has also increased. It is necessary to increase inventory turnover (in revolutions) and reduce the duration of turnover in days.
Accounts payable turnover (in days), which characterizes the speed of repayment of accounts payable, has increased, which slows down its repayment.
The turnover of receivables, in comparison with the previous reporting year, decreased in turnover, and increased in days. This indicates a low rate of repayment of receivables due to insufficiently established interactions with debtors and unclear sales work.
Equity turnover decreased compared to the previous year. This indicates problems with the sale of products.
An analysis of the possibility of bankruptcy must be carried out for firms with an unstable financial situation. To carry out such an analysis for TD Tibet LLC for 2006, we calculate the following coefficients:
1) Current ratio (K1)
K1 = page 290 / page 690 – (page 630 + page 640 + page 650) (f.1)
K1 beginning of the year = 40269 / 19988 – (0 + 0 + 0) = 2.02
K1 end of year = 56793 / 30605 – (0 + 0 + 0) = 2
2) Equity ratio (K2)
K2 = (page 490 – page 190) / page 290 (f.1)
K2 beginning of the year = (16329 – 839) / 40269 = 0.4
K2 end of year = (21889 – 667) / 56793 = 0.37
3) Loss of solvency coefficient (K4)
K4 = (K1 + 3 / T (K1 – 2)) / 2
K4 beginning of the year = (2.02 + 3 / 12 (2.02-2)) / 2 = 1.013
K4 end of year = (2 + 3 / 12 (2 – 2)) / 2 = 1
From this analysis, conclusions can be drawn. Coefficients K1 and K2 are within the normative limits, therefore the balance sheet structure is satisfactory, and TD Tibet LLC is solvent.
Data from the K4 coefficient indicate that Trading House Tibet will not lose solvency in the near future.
2.4. Environmental assessment and analysis of marketing activities of TD Tibet LLC
The target market segments of TD Tibet LLC are:
Wholesalers;
Retail networks of the city and region;
Retail stores and kiosks;
Private individuals.
Wholesalers purchase goods from TD Tibet LLC under certain conditions: discounts on prices from 5% to 7%; bonus payments depending on the volume of products purchased. Such companies include: IP Marycheva, IP Filina, IP Menchikov, UniS LLC, Vector Plus LLC, Alidi LLC, Hercules LLC. These clients purchase goods for resale in retail outlets in the city and region.
Retail chains - supermarkets, pharmacies, specialty stores: TD "Bars", "Soroka", "Laguna", "Bolshaya Stirka", "World of Products", "Meat, Poultry and Fish", "Alphabet", "Alphabet-Health", "Spray" , "Tsentralnaya Pharmacy" - purchase the same group of goods as wholesalers, but under different conditions. Work is carried out through sales representatives; discounts from prices 3-4%; participate in promotions; merchandising; listing and other methods of sales promotion.
Retail stores and kiosks are staffed by sales representatives; they purchase goods from the same group, but under different conditions: price discounts from 1% to 3%, no bonus payments.
Private individuals are those who buy goods for personal use. Orders are placed through the sales floor operators.
With wholesalers, retail chains and other LLCs and individual entrepreneurs, TD Tibet LLC enters into a sales agreement, which stipulates the obligations of the parties.
The company TD Tibet LLC applies a market coverage strategy in the form of differentiated marketing (Figure 5).
Figure 5. Market coverage strategy of TD Tibet LLC
TD Tibet LLC has an established reputation in the market segments it serves. The company creates its own marketing mix for each segment.
Being an intermediary in the distribution channel, TD Tibet LLC, when selling products, chooses both direct and indirect sales.
The direct distribution channel is the movement of goods to the consumer without the participation of intermediary organizations. This is the sale of goods at retail to customers who buy them for personal use.
An indirect distribution channel is the movement of goods with the participation of intermediaries. This is sales to wholesale companies that resell products to organizations and stores, and only after that the product reaches the end consumer. Another option is to sell goods to stores, and they, in turn, sell it to end consumers.
The structure of sales channels can be represented as a diagram in Figure 6.
Figure 6. Structure of sales channels of TD Tibet LLC
The main competitors of TD Tibet LLC are distributor companies operating in the city of Ryazan in the field of trade in household chemicals: Vector Plus LLC, Alidi LLC, Hercules LLC.
The company has about 5,000 items in its product range. Products included in the assortment can be classified:
Product types:
household chemicals;
Appliances.
Assortment groups distinguished in accordance with the leading features:
Toothpastes;
Hygiene products;
Hairsprays; and others.
Within each product group, a product line is distinguished (Appendix 4).
Group “Toothpastes”: “Watercolor”, “Aquafresh”, “Silka”, “Bolgania”.
Group “Hygiene products”: “OV”, “Regina”, “Bella”, “Libero”, “Natalie”, etc.
The remaining product groups are divided into product lines using the same principle.
Each line has separate items.
For example: Silka toothpaste contains:
Children's salary banana 75ml,
Children's salary calcium 50ml,
Children's salary strawberry 75ml,
Family 125 ml without fluoride,
Arctic White 100ml,
Fresh mint 100ml,
Good morning 100ml,
Good night 100ml,
Herbal white 100ml,
Sea breeze 100ml,
Winter green 100ml,
Complete vitamin 100ml,
Best care + aloe 125ml,
Propolis energy 125 ml.
Another classification of product nomenclature is the identification of assortment groups of goods by distribution. Namely:
Product type:
household chemicals;
Appliances.
Assortment groups:
"Nevskaya Cosmetics"
"Seb East"
Colgate-Palmolive
"Arnest"
"Johnson."
Product line, for example, the Colgate-Palmolive product group (Appendix 5).
shower gel,
deodorant Lady,
Menen deodorant,
toothpaste,
toothbrushes,
shaving and aftershave products,
Names of products within the product line, for example, shaving and aftershave products:
Menen p/br 100ml Lightning,
Menen p/br 100ml Flame of the Earth,
Menen p/br 100ml Cyclone,
Menen p/br 100ml Blue cool,
Menen p/br 100ml Black black,
Palmolive gel d/br Menen sensitive,
Palmolive foam for Menen Avalanche 2 in 1,
Palmolive foam for Menen for skin feeling,
Palmolive foam d/br Menen flame of the earth New,
Palmolive foam for Menen cyclone.
Any product range is characterized by four characteristics: breadth, depth, richness, harmony. Let's consider them in relation to the assortment of TD Tibet LLC.
Breadth of product range. “TD “Tibet” offers a fairly wide product range, i.e. number of product groups, including various synthetic detergents; toothpastes; soap; body, skin, hair care products; household appliances and dishes. About 30 product groups can be distinguished.
Depth of product range. Here we are talking about the number of positions in each product group and line (by packaging, by variety). For example, Silka toothpaste is offered in four packages of 50 ml, 75 ml, 100 ml, 125 ml and in sixteen varieties.
Saturation of the product range, i.e. the total number of components of the assortment of individual groups. TD Tibet LLC sells 7 product lines in the toothpastes group; 11 lines in the group of hygiene products; 12 brands of soap; 14 SMS stamps; 5 product lines of hairsprays; 11 assortment matrices of household appliances and kitchen utensils.
Harmony of the product range of “TD “Tibet”, i.e. the degree of similarity between goods of different product groups in terms of their end use, terms of sale, distribution channels and other indicators is manifested in the sense that all consumer goods are intended for sale to the same customers.
As for the product strategy, TD Tibet LLC is gradually trying to create new assortment groups and thereby expand its product range.
The company's prices depend on the prices of the product manufacturer. Prices of TD Tibet LLC are based on agreements signed between companies. These agreements are accompanied by a basic price list with a breakdown of prices and discounts. The company adds a trade margin of 15% to the received price.
For goods purchased from the manufacturer, TD Tibet LLC sets prices taking into account the initial price and factors influencing pricing.
Consumers. Prices depend on their perception of the value of goods.
Competitors. Prices for goods that have distribution do not exceed the prices of competitors, because they purchase these goods from the Tibet Trade House.
Members of distribution channels. Product manufacturers provide a share of the profit for TD Tibet LLC by offering special conditions for reducing prices, and TD Tibet offers similar conditions to its clients.
Prices for wholesale and retail trade are determined in the price list of TD Tibet LLC.
The “6th column” price is the initial price, mainly intended for retail sales, or to customers whose one-time sample is less than 3,000 rubles. This price may be reduced depending on the discount system used by the company.
The discount system is one of the methods of stimulating sales. Discounts are quantitative, as they represent a reduction in prices for purchasing goods by a higher amount. In this case, both one-time sampling and monthly sampling are taken into account (Appendix 6).
In addition to the discount system, TD Tibet LLC uses other methods of sales promotion when organizing product sales.
As a distributor of many companies, TD Tibet LLC has the opportunity to work with retail chains in the city and region on the basis of a shelf space rental agreement (Appendix 7).
The lease agreement is concluded, as a rule, for a period of 6 months with the possibility of extension between TD Tibet LLC and the retail chain. The contract specifies the area of shelf space on which the company's products will be presented; assortment list and payment amount for the shelf. The contract obliges the lessor to replenish the agreed assortment weekly during the contract period, regardless of changes in product prices and other sales conditions.
The cost of rented shelf space is set by the retail chain, and TD Tibet LLC transfers this amount to the bank account or in cash to the lessor.
Then, on the basis of payment documents, the manufacturing company compensates TD Tibet LLC for the spent funds and, in addition to all this, pays a bonus in the amount of 24% of the payment amount for the promotion of products by the distributor.
Another way to enter the city's networks, i.e. The introduction of a full range is the provision of a credit note to the client for maintaining the agreed list of products (Appendix 8). The credit note is provided for a period of 6-12 months and can be repeated at the end of the period. In this case, an additional agreement to the sales contract is concluded between TD Tibet LLC and the retail outlet (Appendix 9). TD Tibet LLC transfers the established amount of money to the client’s current account, which, based on supporting documents, is compensated by the manufacturing company.
The advantage of this sales promotion method is that TD Tibet LLC increases sales volume thanks to weekly orders; occupies a niche in the market for this type of product, and also replenishes its budget through awards received for promoting the product.
The disadvantage of this method is that in the event of low demand in stores for a given product during the contract period, the retail chain has the right not to renew it, but to remove slow-selling items from its product range.
To stimulate sales, TD Tibet LLC conducts promotions of the following types:
Promotion gift for purchase. Promotional products are products that are recommended by the territory development manager as a gift - products from the same manufacturer at whom the promotion is aimed, or souvenirs. The sales representative of TD Tibet LLC informs clients by providing booklets detailing the terms of the promotion. Varieties of such promotions are: “+1” (“Order 6 pieces of one type of hairspray + get 1 as a gift”); “gift of choice” (Certain conditions are set for the presentation of the product in the store, its selection during the promotion period, usually a month, in exchange for a gift that the client can choose from the list of those offered to him).
The price reduction promotion is agreed upon by the sales representative, on behalf of development managers, with the stores. The promotion can be advertised inside the store in the form of special price tags (“yellow price”), as well as with the use of additional communications - leaflets, newspapers.
Another method of sales promotion is merchandising carried out by a sales representative during a visit to a retail outlet. Merchandising involves the optimal placement of products relative to customer traffic flows; display of goods in accordance with brands and the correct selection of size and packaging. Advertising material is used in the form of printed media and explanatory notes attached to the shelf. Special branded racks and other commercial equipment are also used, indicating the manufacturing company.
Basic information about the company "TD Tibet" LLC; assortment; prices; discounts can be found on the Internet website www.tdtibet.ru.
2.5. Analysis of sales activities of TD Tibet LLC
Let's look at the sales dynamics of TD Tibet LLC over the past two years and reflect the indicators in the form of Table 4 and Table 5.
Table 4. Sales dynamics of TD Tibet LLC for 2006
Table 5. Sales dynamics of TD Tibet LLC for 2005
Let us present these indicators in the form of graphs in Figure 7 and Figure 8.
Figure 7. Sales dynamics of TD Tibet LLC in 2005
Figure 8. Sales dynamics of TD Tibet LLC in 2006
Let us analyze the implementation of the turnover plan by type of sales for 2006 in comparison with 2005, and present the resulting indicators in Table 6.
Table 6.
Analysis of the implementation of the turnover plan by type of sales
for 2005 – 2006
During the analysis, we will calculate such indicators as:
Percentage completed = actual/plan * 100%
Retail = 16582 / 20000 * 100% = 83%
Wholesale = 371334 / 375000 * 100% = 99%
Provision of services = 4856 / 5000 * 100% = 97%
TOTAL = 392772 / 400000 * 100% = 98.2%
As a percentage of last year = current year fact. / fact last year * 100%
Retail = 16582 / 15282 * 100% = 109%
Wholesale = 371334 / 331713 * 100% = 112%
Provision of services = 4856 / 2463 * 100% = 197%
TOTAL = 392772 / 349458 * 100% = 112%
Specific gravity = part/whole * 100%
Ud. current weight = fact current year / total fact current year * 100%
Retail = 16582 / 392772 * 100% = 4.2%
Wholesale = 371334 / 392772 * 100% = 94.5%
Provision of services = 4856 / 392772 * 100% = 1.3%
Ud. weight last year = fact last year / total fact last year * 100%
Retail = 15282 / 349458 * 100% = 4.3%
Wholesale = 331713 / 349458 * 100% = 95%
Provision of services = 2463 / 349458 * 100% = 0.7%
In general, for LLC TD Tibet, the percentage of completion (total) for 2006 was 98.2%, which is below the target by 1.8%, in rubles by 7228 thousand rubles. But compared to last year, the growth rate was 112.4%, a growth rate of 12%.
In retail trade, Trost = 109%, Tgrowth = 9%.
In wholesale trade, Trost = 112%, Tgrowth = 12%.
In the provision of services Trost = 197%, Tgrowth = 97%.
We present a comparison of the actual implementation of the turnover plan for 2005 and 2006 in the form of a diagram in Figure 9.
Figure 9. Fulfillment of the turnover plan of Trade House Tibet LLC for 2005 – 2006.
When studying the activities of TD Tibet LLC, a problem with the sale of products became clear.
The presence of this problem is confirmed by data from an analysis of the financial and economic indicators of the company’s activities.
When analyzing the financial condition, the indicator of inventories and costs, which increased at the end of the reporting period, indicates the presence of large balances of products in the warehouse, i.e. the presence of inventories and costs in a work-in-progress state.
When analyzing business activity, the inventory turnover rate indicates insufficiently efficient use of inventories. The indicators of accounts receivable turnover, with a low rate of repayment, and equity turnover, which decreased compared to the previous year, also indicate problems with the sale of products and unclear sales work of the company.
When analyzing the implementation of the turnover plan, in general, it turned out that the company fulfilled the plan for 2006 by only 98.2%, although compared to 2005, sales revenue increased. Failure to fulfill the plan in 2006 indicates the presence of problems in sales activities.
To solve problems related to the sales of products, you can consider proposals for improving the sales activities of LLC TD Tibet.
To improve the company's business processes, which contribute to the efficient work of staff, it is possible to propose a reorganization of the sales apparatus.
To properly build the sales process, competently serve and win customers, negotiate, present products and, thereby, improve the company’s sales, it is advisable to train personnel in sales techniques and psychology.
When selling a wide range of goods through sales representatives, TD Tibet LLC faces problems such as:
The client does not receive what he expected due to an ordering error (during pre-holiday trading, when working with a large assortment),
Empty orders (the most popular product may not be in stock, while the sales representative, not knowing about it, took an order for it, wasting his working time),
The number of operators when issuing orders does not correspond to the number of sales representatives and clients coming to the office.
To solve this range of problems also related to product sales, in my opinion, it is possible to offer a portable pocket computer to sales personnel who pick up orders when traveling to retail outlets in the city and region.
3. Directions for improving the management of sales activities of the organization LLC "Trading House "Tibet"
3.1 Implementation IP - technologies in the sales process of TD Tibet LLC
TD Tibet LLC sells a wide range of products through sales representatives, who often encounter a number of problems.
When working with a large assortment, when the invoice contains more than 200 items of goods; During pre-holiday trading periods, when operators work in an intensive mode, placing orders both brought by sales representatives and from clients, errors occur when entering order data. As a result, the client does not receive the level of service that he expects.
Such situations lead to unpleasant consequences:
A) conflicts, and sometimes the loss of a client;
B) double work is carried out on invoices - this costs the working time of operators and logisticians;
C) waste of the sales representative’s working time on delivery of changed invoices;
D) possible return due to inconsistency of orders, especially when working with large stores and chain clients;
D) creates a negative image of the company;
E) operators cannot cope with the volume of work, hence the high staff turnover.
There may be incomplete or empty orders when working with the most popular product, which has the maximum turnover.
When leaving the office for retail outlets in the morning, sales representatives have information about the remaining products in the warehouse. But for some time this product may be sold. Without knowing this, the sales representative takes the customer's order for this product. Consequently, he lost the order and did not sell anything, that is, he worked ineffectively.
The operators also cannot cope with the volume of work. One operator, on average, places fifty orders per day. Accordingly, when working with a large number of orders, it is necessary to hire four additional operators. And these are additional costs for paying wages, regardless of the stability of orders; tax payments; as well as additional jobs.
To solve this range of problems, we can suggest that the company “TD Tibet” LLC modernize some of its information technologies. Namely, to provide all sales representatives with portable pocket computers (PDAs), with an installed program for issuing and processing orders on site at the client.
The introduction of PDA will increase the efficiency of employees involved in the sales process. Wireless technologies will provide the following positive results:
Managers will be able to more effectively control the sales process;
Clear routing of the work of sales representatives, that is, the program will make it possible to place orders, first of all, only with clients indicated in the route sheet for the day. This will ensure careful control over the work procedures of sales representatives, since when visiting a retail outlet, the time of preparation of this order will be recorded;
Possession of information about warehouse balances online;
Possession of information about debts for each client;
Individual price list for each client, taking into account the assortment matrix and discount;
Reducing paper reporting and increasing the relevance of the information collected directly during visits to retail outlets: time, date of visit; the number of faces on the store shelf of a particular product; stocks for each item on the client’s shelves and warehouses; price monitoring and other reporting in the work of a sales representative;
Accelerating the entry of information into the accounting system by replacing paper document flow with electronic one;
Automatic creation of invoices without the participation of an operator, and transfer of data by a sales representative from a retail outlet to the sales floor to operators who will only check these invoices;
Reducing the number of operators when issuing orders;
Reducing transportation costs by evenly distributing orders across days of the week;
In general, in the management of a company’s sales activities, the introduction of PDAs into the sales process will increase the efficiency of obtaining information; control over operations carried out by sales representatives, which will allow the system of fines and bonuses to be correctly applied for the work done.
Let's calculate the costs of implementing a PDA:
The cost of one PDA, on average, is 17,000 rubles;
The number of sales representatives is 16 people.
Therefore: 16 x 17000 = 272 thousand rubles.
Maintenance of one PDA per month: 500 rub.
per year: 6000 rub.
Maintenance of all PDAs per year: 6000 x 16 = 96 thousand rubles.
Thus, the costs of introducing a PDA into the sales process for the first year will be:
272 thousand rubles. + 96 thousand rub. = 368 thousand rubles.
Let's calculate the results that the company will receive thanks to the implementation of the PDA:
Operator salaries:
average salary of one operator per month: 8,000 rubles;
salary of four operators per month: 32,000 rubles;
per year: 384 thousand rubles.
Transport costs of the company:
uniform distribution of orders by day of the week will reduce transportation costs by about 5,000 rubles. per month; 60,000 rub. in year.
Thus, the company’s results obtained from the introduction of PDAs into the sales process for the first year will be:
384 thousand rubles. + 60 thousand rubles. = 444 thousand rubles.
Let's calculate the economic effect of introducing PDAs into the sales process for the first year:
E ef. = 444 thousand rubles. / 368 thousand rubles x 100% = 120.7%
3.2 Reorganization of the sales service of TD Tibet LLC
During the sales process at TD Tibet LLC, sales representatives collect funds from customers purchasing products on the terms of cash payment for a commercial loan.
Sometimes situations arise when the client cannot pay the entire amount at once, and pays it in installments two or three times. Then the sales representative has to visit this retail outlet several times a week.
The sales representative, in this case, spends additional time collecting funds and tracking payment deadlines, when he should be selling goods and increasing the company's customer base. Consequently, the time spent collecting funds reduces the company's sales.
Let's consider the working conditions of a sales representative:
The client base of one sales representative is 70 clients.
Working day: 9.00 – 17.30
Sales representative working hours:
9.00 – 14.00, that is, 5 hours a day – this is work in the “fields”. Therefore, there are 100 hours per month.
Of these: 90 hours – for visiting clients to collect orders, that is, 4.5 hours a day 9.00 – 13.30;
10 hours – to collect cash, according to the payment schedule, that is, 0.5 hours a day 13.30 – 14.00.
14.00 – 14.30, that is, 0.5 hours a day – lunch break (10 hours per month);
14.30 - 17.30, that is, 3 hours a day - this is work in the office: placing orders, depositing funds at the cash desk, preparing daily reports. Therefore, 60 hours per month.
Thus, out of working time for visiting retail outlets, on average, 1.3 hours per month are spent per client (90 / 70 = 1.3).
In order to increase the company's sales, it is necessary to free sales representatives from the duties of collecting funds and use the freed-up time to work with additional clients or to find new ones.
To do this, it is necessary to introduce the position of a collector into the staff of TD Tibet LLC, whose responsibilities will include tracking payment deadlines, collecting funds and depositing them at the company’s cash desk.
Meanwhile, the sales representative will be able to visit 8 additional clients per month for 10 hours of additional time (10 / 1.3 = 8).
According to statistics from TD Tibet LLC, the minimum transaction amount per client per month is 3,000 rubles.
Consequently, one sales representative per month will increase sales volumes by 24 thousand rubles; per year by 288 thousand rubles.
TD Tibet LLC has 16 sales representatives on staff, who will increase the company’s turnover by 4,608 thousand rubles. in a year.
16 x 288 thousand rubles. = 4608 thousand rubles.
The cost of additionally sold products for the year will be 4,007 thousand rubles, taking into account the company's markup of 15 percent.
Let's present the financial results from this proposal in Table 7.
Table 7.
Financial results of TD Tibet LLC for the first year of reorganization of the sales service
Let's calculate the costs that are necessary to reorganize the sales service of TD Tibet LLC and show them in Table 8.
Table 8.
Costs of TD Tibet LLC for the reorganization of the sales service
The economic effect from the implementation of the project proposal for the reorganization of the sales service will be:
E ef. = 601 thousand rubles. / 420 thousand rubles. x 100% = 143.1%
3.3 Training of personnel of TD Tibet LLC in sales techniques
Mismatch between staff skills and company needs has a negative impact on the company's performance.
The needs of TD Tibet LLC, as a trading company, are to expand the existing market territory, that is, to find and retain customers; and increasing sales volumes.
The company's personnel must be able to competently serve and comprehensively advise the client.
For the successful functioning of TD Tibet LLC and increasing sales, an important condition is the development of personnel skills.
Corporate training, in a business environment, has an important task - it is a contribution to profit growth.
To improve the sales activities of TD Tibet LLC, we will determine the goals of professional training of personnel:
1. Study of sales techniques;
2. Competent business negotiations;
3. Improving product presentation skills;
4. Building work with difficult clients.
Based on the needs of TD Tibet LLC and the goals of professional training, the best option is to conduct corporate training “Technology and Psychology of Sales” once a year.
This training is a practical guide to all stages of preparation and sales. Designed for senior and middle managers of trading companies; supervisors; sales representatives, that is, personnel involved in the company’s sales activities.
The training includes the following stages of training:
1. Basics of sales technology;
2. Tactics of influence and persuasion in business negotiations;
3. Effective presentation: preparation, construction and presentation;
4. Techniques for working with difficult clients.
Each level of personnel training at TD Tibet LLC will produce results to improve the company’s sales activities. We show them in Table 9.
Table 9.
Results from the training “Technology and Psychology of Sales” for the personnel of TD Tibet LLC
Level of study |
Result |
| 1. Basics of sales techniques | Improving the quality of work of sales personnel with the client, thanks to proper contact with him (greeting, posture, speech, means of communication); Increasing the size of the order with well-constructed identification of needs, thanks to the technique of active listening. |
| 2. Tactics of influence and persuasion in business negotiations | Improving employee qualities such as influence, strength, ability to achieve goals and win in a difficult situation; Reducing the likelihood of client refusals on a particular issue during negotiations. |
| 3. Effective presentation | Improving the staff’s ability to speak professionally, to remain confident in difficult situations, to answer questions posed, that is, what is necessary in the sales process; Expanding the number of existing customers and increasing product sales. |
| 4. Techniques for working with difficult clients | Improving coordination of staff actions in dealing with customer doubts and objections; Development of professional competence of employees, confident communication skills with different types of clients, conflict neutralization skills, which will help prevent refusals and retain clients. |
The training “Technology and Psychology of Sales” is planned to be conducted in stationary conditions, in the conference hall of LLC “TD “Tibet”. The total training time is 90 hours. Classes three times a week: Wednesday, Thursday, Friday, for two hours from 17.30 to 19.30, that is, after work, without interruption from work. Based on this schedule, the training is designed for two months.
The number of trained personnel is 28 people, of which sales managers are 3 people; wholesale department managers – 3 people; supervisors – 6 people; sales representatives – 16 people.
We will evaluate the cost effectiveness of vocational training based on the following indicators:
The share of an organization's employees who have completed training is determined as the share of the number of employees who have completed training in the total number of the organization:
28 / 92 = 0.3 or 30%.
The average number of hours of professional training per employee is calculated as the ratio of the total number of hours spent on training to the number of trained employees:
90 / 28 = 3.2 hours or 3 hours 30 minutes.
Total costs for conducting training:
direct costs - payment to the trainer at an hourly rate of 500 rubles,
that is, 90 x 500 = 45,000 rubles.
The cost of training one employee is calculated as the ratio of total costs to the number of employees who have undergone training:
45000 / 28 = 1607 rub.
Although it is extremely difficult to evaluate the result of training in monetary terms, to determine the economic effect that TD Tibet LLC will receive after conducting the “Technology and Psychology of Sales” training, we will use statistical data from one of the training companies “Active Forms”. According to the experience of specialists working there, training of this nature gives results in the form of sales growth by 7-10% per year. [29].
If we take into account that the company’s sales for the year will increase by 7%, then sales revenue will be 418,467 thousand rubles. Sales income, that is, the result of the training, will be 54,582 thousand rubles.
Thus, the share of the total costs of conducting the training will be 0.083% of the result obtained.
Conclusion
This diploma project, dedicated to the problem of improving the management of sales activities in an organization, was examined using the example of the wholesale and retail trade company of household chemicals, cosmetics and perfumes in the city of Ryazan, LLC Trading House Tibet.
The topic is of economic importance for a trade organization, since the amount of profit received depends on the efficiency of the organization and management of sales activities.
The diploma project was carried out on the basis of reporting data from the economic activities of TD Tibet LLC. The analysis of the organization’s work for 2005-2006 allowed us to draw the following conclusions:
An environmental assessment and analysis of marketing activities showed that the target market segments of TD Tibet LLC are wholesalers; retail chains; shops and kiosks, as well as private individuals. The company uses a market coverage strategy in the form of differentiated marketing. As an intermediary in the distribution channel, TD Tibet LLC sells products using both direct and indirect sales. The company's product range is characterized by breadth, depth, richness, and harmony. TD Tibet LLC applies a developed motivation system for marketing intermediaries. This includes a system of discounts; providing a “Credit Note” bonus for entering the established assortment matrix of a particular manufacturer; rental of shelf space in retail outlets; carrying out promotions; merchandising at retail outlets.
An analysis of the financial and economic indicators of TD Tibet LLC gives the following results.
The total amount of the company's property at the end of 2006 increased by 16,352 thousand rubles. due to an increase in the amount of current assets due to an increase in inventories, VAT, accounts receivable, cash and other current assets.
Own sources of property formation decreased at the end of the reporting year. Borrowed funds increased by 1.63% compared to last year and amounted to 35,572 thousand rubles, long-term liabilities decreased by 3.01% and amounted to 4,964 thousand rubles, short-term liabilities increased by 4.64% and amounted to 30,605 thousand rubles .
From the analysis of the financial condition of TD Tibet LLC, it is clear that the indicator of its own current assets has increased in dynamics. The total amount of the main sources of reserves and costs increased at the end of 2006 by 16,606 thousand rubles. Inventories and costs are characterized by the presence of inventories and costs in a work in progress also increased, which is due to large balances in the warehouse. F1 indicators< 0, Ф2 < 0, Ф3 >0 indicate an unstable financial condition, which is characterized by periodic delays in mandatory payments and settlements.
An analysis of financial stability when comparing financial ratios with standard values indicates an increase in the share of borrowed funds in the company’s financing; on increasing dependence on external creditors; about a decrease in financial stability.
An analysis of business activity for 2006 showed the following trends: an increase in labor productivity and capital productivity indicators occurred due to an increase in sales revenue. The use of the company's reserves is not efficient enough, since it is necessary to increase the inventory turnover in turnover and reduce the duration of the turnover in days. The rate of repayment of accounts payable has slowed down. Low speed of repayment and receivables due to insufficiently established interactions with debtors and unclear sales activities. The turnover of equity capital has decreased compared to 2005, which indicates problems with the sale of products.
An analysis of the possibility of bankruptcy showed the values of the coefficients within the normative limits, therefore, the balance sheet structure of TD Tibet LLC is satisfactory, and the company is solvent.
An analysis of the sales activities of TD Tibet LLC for 2005-2006 showed an increase in sales dynamics by 43,324 thousand rubles. Analysis of the implementation of the turnover plan by type of sales shows the following percentages of implementation for the current year: retail trade 83%; wholesale trade 99%;
service provision 97%. These percentages show a result below the target, which indicates problems in the sale of products.
Thus, when studying the activities of TD Tibet LLC, problems in managing sales activities became clear.
In order to improve the management of sales activities and eliminate existing problems, a set of measures is proposed:
The introduction of handheld laptop computers into the sales process will improve business processes; and also increase the labor efficiency of company employees. When calculating this event, the following indicators were obtained:
Annual costs – 368 thousand rubles;
Annual results – 444 thousand rubles;
The economic efficiency of the project proposal is 120.7%.
Reorganization of the sales service will help improve interactions with debtors; receive additional revenue from sales. When calculating the supply, the following indicators were obtained:
Annual costs – 420 thousand rubles;
Additional turnover - 4608 thousand rubles;
The cost of products sold is 4007 thousand rubles;
Sales income – 601 thousand rubles;
The economic efficiency of the proposal is 143.1%.
Training sales staff in sales techniques will provide many positive results in the work of the staff; in the work of the company; and according to statistics, conducting this type of training will increase sales by 7%. Whereas the share of training costs, according to statistical data, will be 0.083% of the result obtained, equal to 54,582 thousand rubles.
The application of a set of proposed measures will eliminate existing problems and help improve the management of sales activities at LLC “Trading House “Tibet”.
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