SECTION A – Answer All Questions

SOLUTION:
Cash sales has been preferred method of business by Adam for his home appliance store.
Major advantages of cash sales are:
The biggest advantage of cash sales is that the customer pays Adam for purchased products
on the spot. The customer has the advantage that Adam has been earning very little profit and
thus a full payment at the time of sale creates no issues for recovery of the amount due for
sales of electronic items and thus no bad debts for Adam. By using the cash payment method
Adam can settle his financial liabilities to his vendors in full without any payments being
missed due to delay and he is able to avoid any interest payments/late payment surcharge.
Another major advantage of cash sales is better working capital. Adam gets the cash instantly
thus having the money with him to settle his liabilities without any delay. Adam saves
interest cost as he does not need to take a credit facility from any financial institution to settle
his liabilities towards his vendors

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Customers may prefer the new store as compared to Adam’s store even though the prices are
higher as the new store may offer better or bigger variety of products. A customer may be
tempted to change his old but working appliance if they see a better and newer product to the
one they are already using. Bigger, better and attractive display for new, innovative and
efficient products may entice the customers to change their old and outdated appliances.
Home appliances are high priced items and cash sales usually work on low valued day to day
items and not expensive products like cars or home appliances which have a longer working
life. Customers may be going to new store with higher prices as the new store may provide
the customers with credit facility. Customers may be able to get an expensive product without
churning out all his savings/cash. A customer may want to change his appliance but can not
do so if he does not have the cash for an upfront payment, however credit sales are an easier
way to acquire new products without a hefty upfront payment. Credit sales helps the
purchaser to pay for the appliance in installments making is easier for the customer.
Credit sales by the new store will also help longer relations with good customers due to credit
facility being available for returning customers. This will help increase sales as customers of
home appliances store may change their working product over time even though the product
is still in working condition due to being outdated or older models. This relationship building
will turn a good customer to a loyal customer through better store-client relationship.
Adam can revive the sales for his store by offering credit facility to the existing loyal
customers. As the customers are loyal, they can be trusted for the credit facility at premium
pricing to cover the cost of financing/interest at which the products will be procured by
Adam. This will result in increase in sales.
Adam can also spend some money to uplift the shop/premises and may also provide
demonstrations instore and through social media for marketing purposes. Informative videos
may be presented for operational use of the products along with any troubleshoot videos to
help the customers acclimatize with the product and get will working knowledge of the
product.
Incentives can be provided to customers like free delivery and installation, yearly servicing,
replacement offer to buy back their old product at a trade-in value. This will help Adam to
revive the sales and get more customers in who may replace their old products with the new,
innovative and efficient products. Adam can also give customers a delayed payment option
for example pay the store after 30 days of buying the product. Free delivery and installation
along with old product buy back also provides customer a chance to buy product without
thinking of removing and selling their old appliance which will be covered in the installation
of new product.
Package deals are also an effective method for increasing sales. Adam can offer package
deals like buy 2 products get 10% off, buy 3 get 15% off, buy 4 get 20% off etc. This will
reduce the profit per item, but increased turnover will increase absolute profit. This helps
satisfy the need for bargaining power for the customer and help sell more appliance and
generate more revenue.
E-commerce website along with social media presence for online marketing through
Facebook, Google, Instagram, OLX etc. are also an effective tool to increase sales in this day

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and age. This helps customer compare different products for prices, value, feature and
functions of the appliance to make an informed decision.
Credit sales in collaboration with a local banking partner will also help increase sales. This
will help the Adam to use banking expertise for checking credit history for the customer
before selling products on credit. This will not only increase sales but also protect Adam
against risk of bad debts.
All the above initiatives will help Adam revive his sales and increase margins to cover the
overhead cost like rent, salary and other payments.

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SOLUTION:
SamTeng implemented personal selling promotion strategy. In applying personal selling as a
promotion strategy, SamTeng directed resources towards consumers to make them aware of
the new product and to help them compare the detergent with other brands and highlight
difference. By applying this strategy SamTeng was able to differentiate their product and in
turn not only made new customers but also part time sales representative who after training
were willing to perform sales for detergent through house visits.
Advantage of personal selling promotion strategy is focused marketing. As in the case Sarah
and her neighbors are targeted for sales with an event which included a full meal. Through
this marketing strategy the audience feel important as all the activities in the event are
targeted towards making them feel special creating an emotional bond with the company and
this in turn helps create a preferable opinion for the product.
Information about product is provided to the customers and they are able to differentiate the
new product launched by SamTeng with other brands. Presentation, pictures and videos can
be used to differentiate the product with competitive products to highlight the new features
and also provide product quality and price comparison to steer the audience towards the new
product. Help create a perception in the audience mind for the innovation in the product thus
providing better results than the product already in use.
It promoted word of mouth marketing by engaging Sarah and neighbors to do the bidding for
SamTeng in respective close circles in daily conversations. This is free form of marketing

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through customers and in which customer spread awareness for the product and its long
lasting as comes from an acquaintance rather than a company staff.
The biggest disadvantage of personal selling is that it may not be effective enough to change
the customer perception about the new product. If the perceptions do not transform during the
event than product may not take off from the introduction stage and product may perish.
Higher costs, another very big disadvantage, may render the personal selling program
ineffective. As the cost for event, commission and compensation to temporary sales
representatives can drive the overall project cost high with little turnout and marketing not
reaching the masses may render this strategy ineffective.
Personal selling cannot save a bad product. If the product is high priced as compared to the
competitive products or if the features are not better or if the new features are not exiting
enough for customer to take notice than product will fail to deliver its perceived potential.
Personal selling is a short-term strategy as product is pushed through word of mouth and if
the product fails to deliver on the word of mouth the product may collapse. The product may
also fail to deliver its potential once the compensation and rewards are taken away from part-
time representatives. Once the company removes part-time sales representatives the product
sales may also decline as less sales representatives are left to covet the sales via house visits.
The temporary sales representative may not be properly trained and are not able to provide
fully answers to all the questions about the product. This will also create a bad brand image
and perception about company brand may be damaged.
Other form of promotion that can be applied are Advertising, Public Relations, sales
promotions and Sponsorships.
Advertising is a promotional strategy to bring product in the knowledge of the consumers.
Advertising can be done through print media, billboards, TV ads, social media etc.
Advertising can be used effectively to reach masses and may help with reducing cost per
impression on the targeted audience.
Sales promotions can also be effective to increase the sales of a product by create a push for
the product. Through this strategy the company offers discounts, incentives or other offers.
This type of promotion activity is done in collaboration with retailers and resellers in which
the company product is promoted through better visibility in store, placed in open to see as
soon as you enter the store, through specific branded shelves in store. By doing this and
offering other discounts to customers high sales can be achieved in a short span.
Public Relations can also be used to promote new product. If SamTeng has already gotten a
product in the market and are responsible organization through social responsibility projects,
they can leverage their favorable impression in public and use that trust to promote the new
product. This can benefit them with a better reach in initial stages of the product launch but if
the product is not up to the mark or as promised it may also tarnish the image and ultimately
the brand value.
Sponsorship is another form of advertising in which company pays for an event or promotes
and organization involved in charities or social responsibility projects. This can improve
public image of the company and in turn increase sales.

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SOLUTION:
Munesh has been running the grocery store by his old methods and a laid-back approach. The
grocery store has not been gaining attention from customers as it lacks the pull factor to
engage and invite the customers. The goods are not arranged in properly and neatly. Dust has
settled on products which have not been used. The staff including Munesh are not acting
professionally. Their demeanor is not conducive for running a grocery store. Munesh is not in
a professional attire wearing shorts and sleeveless shirt. Munesh is also resting and sleeping
in business hours of the store which does not leave a good impression and does not set a very
good example for the two employees who are earning USD 600 per month and are slacking in
their job. They chat with each other in the official business hours and are not welcoming and
assisting customers coming in the store during that time. The employees work without any
order in the store and they do not have set of responsibilities to perform in the store during
working hours. This irresponsible and careless attitude of Munesh and the employees is the
main reason for less customers coming in the store and decreasing profits margin.
Munesh can rehabilitate the store and increase customers and ultimately earn higher profits.

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The first thing that Munesh should do is improve the outlook of the store by creating a clean
atmosphere and a welcoming environment, so the customers feel comfortable and at ease
when visiting the store. This will make customers feel safe and open and spend more time in
the store so they can purchase more items that they originally intend to while coming to the
store.
The shelves should be well stocked and cleaned daily so that no dust is accumulated. The
store floors and checkout counters should be cleaned thoroughly daily and when something is
accidently spilled on the counters and floors. Any spillage of product should be cleaned
immediately to avoid any accidents. Cleanliness should a top priority in the store.
Munesh should have a proper uniform or matching outfits for the staff working in the store
which he should also wear when in store so that the store staff can be easily identifiable by
the customers to engage incase any help is required. The staff along with Munesh should be
friendly and should always lend a helping hand for example helping customers especially
elderly to get items from top shelves, bagging up groceries, helping parents with kids etc. All
the employees should be working with set of defined responsibilities. Munesh can assign
alternating responsibilities/daily duties to his employees, so they have a knowledge of all
aspects of running the grocery store. This will also help in-case of increased footfall and both
employees can perform different duties for example, stocking shelves, cleaning, cash
collection, checking out, bagging etc. and in turn help the customers.
Munesh should use an effective inventory management system to track and trace the
movement of the inventory. High turnover and daily use products should be identified and
kept in abundant quantity as to not create a shortage. If customers do not get a daily use
product from Munesh’s store they may go to other store and take their business elsewhere.
Inventory management system will also help identify slow moving stock and help Munesh in
getting rid of the inventory before expiry i.e., by running discounts on items which are near
expiry will help to move the slow moving stock. Inventory management system will help also
to track the items available in store and order quantity when the item is running low.
E-commerce websites along with social media marketing including free delivery over a
specific amount of order can help Munesh revive sales. Customers who cannot reach store
can order from home and save time and energy. E-commerce websites can also help to know
customers purchasing patterns and Munesh can plan the inventory according to these
patterns. Marketing for slow moving products or products which are complimentary to each
other can help move items for example Amazon displays item frequently bought together to
increase cross selling and move inventory items.
To rehabilitate the store, Munesh can change the store from sole proprietorship to a
partnership. A partnership is business owned by at least 2 or more individuals but cannot
exceed a maximum of 20. The partners or owners can contribute in different forms i.e.
finances, labor, skill etc. and share the profit and loss in the business and limit the risk of sole
proprietor. Partnerships should only be done with like-minded people as difference in opinion
can arise which may result in conflicts and ultimate dissolve the business.

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