Q.1 Answer all the questions.
(I) What do you mean by sales organization?
Ans. Sales organization is an organizational unit that sells and distributes products, negotiates terms of sale, and is responsible for these transactions. It is also responsible for business daily operations as well as legal obligations also.
One company code can have number of (many) sales organizations. It means one sales organization should be assigned to only one company code. So the relationship between company code and sales organization is one to many.
A sales organization cannot share any master data with other sales organizations. The master data must be created separately. The data for a distribution channel or a division can, however, is created for several distribution channels or divisions.
(II) Enlist four limitations of personal selling.
Ans. The serious weaknesses of personal selling are:
- It is expensive
- Limited reach
- Sales force conflict
- Inconsistent messages
(III) Note down the ethical challenges faced by in context of sales and distribution management in India.
Ans. Ethical challenges faced by in context of sales and distribution management in India are:-
- Marketing issues in channels
- Pricing issues
- Target market issues
- Level of distribution coverage
- Relationship issues in channels
(IV) Compare Sales Management with Marketing.
Ans. Marketing is trying to get the company produce what the customer wants whereas sales is trying to get the customer to what the company produces.
Marketing is much wider concept and sales is a narrow concept.
Marketing revolves around needs and interests of buyers whereas sales revolve around needs and interests of seller.
Marketing creates pull whereas sales is a push.
Marketing involves a set of activities and sales is a part of marketing process.
(V) Write a brief note on functions of distribution channels.
Ans. Functions of distribution channels are as follows: –
- Inventory management
- Order processing
- Material handling
Note: Answer any two questions. Each question carries 5 marks (Word limits 500)
Q.2 Discuss the importance of selling function and sales force management in today’s global world.
Ans. Importance of Selling
Selling is an important element of promotion mix and an effective promotional tool. Personal Selling offers the following compensation.
(i) It is a flexible tool: Selling involves individual and personal communication as compared to the mass and impersonal communication of advertising and sales promotion. Therefore, selling is most flexible in operation.
(ii) It involves minimum wasted effort: In selling, a salesman can select the target market and concentrate on the prospective customers. He need not communicate with the people who are not the real prospects. Therefore, personal selling involves minimum wastage of effort.
(iii) It results in actual sale: A salesman can find prospective buyers, demonstrate the product, explain its operation, and convince customers to buy it, install it at the customer’s place and provide after-sale service.
(iv) It provides feedback: Selling involves two-way flow of communication between the buyer and the seller. It is a useful method of understanding the needs and behaviour customers. It provides knowledge about the tastes, habits and attitudes of the prospective customers.
(v) It complements advertising: Advertising attracts customers but their doubts and questions about the product are answered by salesmen. In this way selling supports advertising.
(vi) It educates customers: A salesman provides: information, education and guidance to customers. He handles their complaints and assists them in getting value for their money. He can clear their doubts on the spot.
(vii) It assists the society: Salesmen help to increase aggregate sales and production in the country thereby increasing employment opportunities. They help to maintain equilibrium between demand and supply.
Management of Sales force
Sales force is directly responsible for generating sales revenue.
- Establish Sales force objectives:- Similar to other promotional objectives
Demand oriented or image oriented, Major objective is persuasion, converting consumer interest into sales.
Sales objectives; expected to accomplish within a certain period of time.
Give direction and purpose and act as a standard for evaluation.
Set for total salesforce and each individual salesperson.
- Organizing the Salesforce
- In-house vs. independent agents (manufacturer’s sales agents).
- Organize by: Geography (simplest, but not suitable if product(s) are complex or customers require specialized knowledge), Customer: Different buyers have different needs, Product: Specific knowledge re: products is needed
- Marginal analysis, or determine how many sales calls/year are needed for an organization to effectively serve its customers and divide this total by the average number of sales calls that a person makes annually.
- Recruiting and Selecting Salespeople: – Need to establish a set of required qualifications before beginning to recruit. Prepare a job description that lists specific tasks the salesperson should perform and analyze traits of the successful salespeople within the organization.
Recruitment should be a continual activity aimed at reaching the best applicants.
- Training Sales Personnel: -Use formal programs, or Informal on-the-job training. It can be complex or simple.
Training should focus on:
- The company
- Selling techniques.
- Compensating Sales People: – To attract, motivate and retain sales people, that facilitates and encourages good treatment of the customers. Need to understand personalities of sales people. Strive for proper balance of freedom, income and incentives.
Need to determine the best level of compensation required, and the best method of calculating it.
- Straight salary
- Straight commission (selling insurance)–single percentage of sales or sliding rate
- Combination plan
- Motivating Sales People:- Need a systematic approach, must also satisfy non-financial needs:
- Job security
- Working Conditions
- Opportunities to succeed
Q.4 Define transportation. What are its means and modes? Also describe the criteria for selecting the effective mode of transport.
Ans. Transport or transportation is the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road,water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations. Transport is important because it enables trade between people, which is essential for the development of civilizations.
Transport infrastructure consists of the fixed installations including roads, railways, airways, waterways, canals and pipelines and terminals such asairports, railway stations, bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel stations) and seaports. Terminals may be used both for interchange of passengers and cargo and for maintenance.
Modes of transport
- Road transport: – Road transport forms an essential part of any transport activity, whether rail, sea or air. It is essential as a supplementary and complementary mode of transport to complete movement by other modes of transport. Eg. From one terminal i.e. the railway station the goods have to be carried to the destination by road.
- Water transport: – One of the oldest modes of transportation is water. In terms of time factor, they may be slow. But, they Water transport could be of inland can carry more shipment, at reduced cost over longer distance. Water transport could be of inland type or oceanic transport.
- Rail transport: – Railways are composed of a traced path on which wheeled vehicles are bound. In light of more recent technological developments, rail transportation also include monorails and maglev. They have an average level of physical constrains linked to the types of locomotives and a low gradient is required, particularly for freight. Heavy industries are traditionally linked with rail transport systems, although containerization has improved the flexibility of rail transportation by linking it with road and maritime modes
- Air transport: – Air transport though new as compared to other modes of transportation, has gained large popularity in transporting various commodities. The basic advantage of Air transport is its high speed. By air, the time required may be just a few hours, which may be days by other modes of transport. However this being a major advantage, air transport also has various disadvantages. These are:
- Air transport is a costly affair.
- Air transport is limited by ‘lift capacity’ i.e. goods upto certain load (weight) can be transported by aircrafts.
Selection of mode of transport depends on: –
- The speed which the mode exhibits
- The reliability that the mode demonstrates in its ability to fulfil service requirements
- The flexibility that the mode exhibits
- The comparative unit costs, which the modes incur
Speed and reliability will have a major impact on the ability to deliver humanitarian aid effectively and efficiently to where it is needed.
Other considerations in the selection of a transport mode are:
- Required delivery date
- Cost of transport service
- Reliability and service quality
- Shipment size
- Transit time
- Number of transhipment points
- Item type
- Possibility of damage
- Range of services