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February 2011

Master of Business Administration MBA Semester 3 MK0010 Sales, Distribution and Supply Chain Management 4 Credits Assignment Set 1 60 Marks
Note: Each question carries 10 Marks. Answer all the questions. Q.1 Mr. Suresh Jha is a sales manager of a reputed company. He wants to explain to new sales recruits about their responsibilities as sales personnel and also make them aware about the role of sales manager. Assume you are Suresh Jha and carry out this task. [10 marks] Answer: The job of sales personnel involves a number of responsibilities. It is the income producing division of a business. The salesperson is responsible for: Providing profit contribution Creating a proper image for the company and it's products/services Achieving the sales targets of the organization Satisfying the customers and participating in marketing activities He/she is responsible to the customer and society for continuing growth of the organization. He has multifarious activities, including setting goals and achieving them, building sales organizations and managing them. For example, in Eureka Forbes Pvt. Ltd. they called their sales force as sales champs (champions) as they are responsible for the direct marketing of companys products and revenue generation. Qualities of good sales personnel Sales people are the backbone of the organization because they have to face customer and interact with them. Some people say, salesmen are born salesmen, while others believe that training can help in making good salesmen. Irrespective of these opinions, good salesman has certain qualities and abilities as a result he is able to perform better than others. In this section, we will discuss qualities of a good sales person. Philip Kotler has identified two basic qualities of a good sales person namely, empathy and persuasion. Some of the qualities of a good sales person are as follows: Ability to estimate customer's needs and desires: He is alert and quickly determines what the customer wants and the best way to sell.

Ambition: He likes to do a good job and is interested in getting ahead with companys goals and sales objectives. Appearance: Appearance means a lot today and the successful salesman is neat and organised. He presents himself well in person. Also, he keeps his desk books and manuals neat and ready for use. Business sense: He is quick to learn the strengths and weaknesses of the company and makes an effort to improvise on the companys strengths. Courtesy: He reveals a sincere desire to help customers and treats them as guests even when he visits their places of business. Creativeness: Imagination, vision and the ability to create ideas make your man dynamic. Enthusiasm: A salesman must radiate enthusiasm during and after the sales call. Figure sense: He should have the mathematical ability to figure and fill up order form correctly and to make the necessary reports. Flexibility: A good salesman is able to adapt himself to a variety of customers. Each contact may require a adapting the sales talk, speech habits and even appearance. Friendliness: A salesman should be able to make people like him and he must like to meet people. Health: Good health generates energy and energy is needed to sell. Poor health prevents many salesmen from fulfilling their potentials. Integrity: A salesman must be trusted to do his job well. He cannot help but he successful when his customers trust him. Interest in his job: He likes selling and working for the company. Knowledge: In some business, sales person must also have a through knowledge of the highly specialized products or services his employer offers. In some cases, this knowledge can be gained only by years of experience. Loyalty: He must be able to impress upon his customers the idea that his company is the best in the business. Mental abilities: He has the intelligence to understand your products and those of your competitors. He must know how to use words, to understand and direct people and to remember names and faces. He should also be able to understand prospective customers and know how to act under varying conditions.

Motivation: He must have more than just an interest in selling. They live in the present and not in the future. They do want power over others and prefer not to work under Full answer after payment, visit

Q.2 Explain these terms with examples: Sales forecasting, Sales budget, sales quotas and sales territories. [10 marks] Answer: Sales Forecasting Sales forecasting, according to Cundiff and Still, is an estimate of sales during a specified future period which is tied to a proposed marketing plan and which assumes a particular set of uncontrollable and competitive forces. Methods of sales forecasting The various methods of sales forecasting are: Survey method: The survey method is based on the opinion of buyers and consumers. It is useful with respect to industrial products but not as far as consumer goods are concerned. According to this method, a company first of all selects potential buyers/consumers. It then collects their opinions for forecasting. Expert opinion: According to this method, a company invites the opinions of executives and consultants who are acknowledged experts in studying sales trends. On the basis Full answer after payment, visit

Q.3 What are the different ways through which sales force of an organisation can be compensated? Mention their merits and demerits. [10 marks] Answer: Compensating the Sales Force Compensation is an extremely important managerial area because the compensation plans: (a) Helps attract potential salespersons (b) Impact a salespersons motivation (c) Is a determination of status and value (d) Determine lifestyle and purchasing power

There are a number of ways in which sales force can be compensated. These range from salary to fringe benefits and perks. Each method can be employed to aid a company in achieving the desired results. Requisites of a good and effective compensation plan for the sales force are: 1. Compensation plans should provide enough motivation to the sales force to put in heir best efforts. 2. Compensation plans should be sufficiently flexible. 3. Job evaluation must be done scientifically. 4. Compensation plans must always be consistent with overall organisational plans and programmes. 5. Compensation plans and programmes should be in conformity with the social and economic objectives of the country like attainment of equality in income distribution and controlling inflationary trends. 6. Compensation plans and programmes should be responsive to the changing local and national conditions. Various Modes of Compensating the Sales Force 1 Salary A straight salary payroll is set amount of money based upon hour or days worked. Deductions for provident fund, income taxes and other fringe benefits are fixed and the work of accounting is reduced. The security of salary is a strong factor in lowering turnover in a salesforce. Applicability of salary method This method is commonly used by: Highly seasonal industries High-tech industries Trade salespeople Route salespeople Missionary and educational salesmen Group selling 2 Straight commission Paying a commission is a variable expense rather than a fixed one. A straight commission pay plan has many advantages. Straight commission is adopted by the performance-oriented firm that pay sales person for their achievement. In this each person is paid a percentage of their sales. It is desirable for a company suffering from a severe cash shortage since the commission need not be paid until proceeds are received from a sale. Flexible commission rates can be a strong incentive and many organizations are successful because the sales force enjoys a liberal commission schedule. For example, sales agents working for various insurance companies are paid commission on the basis of policies received. 3 Target commission

A straight commission is paid on sales volume. On a fixed commission base, a fixed percentage of sales volume is paid to the sales force. Other plans call for increase in Full answer after payment, visit