Sales & Distribution Management

PART A (Descriptive Type) = 16

PART B (Case Study) = 2
PART C (Short Question) = 40
PART C (Multiple Choice) = 40
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PART A
Descriptive Type Question
Question 1 Highlight how the sales executive plays a 'linch pin' role in the marketing
'wheel' of the organisation.

Question 2 Define Sales Management. What are the objectives of Sales Management?

Question 3 Identify the theories of selling. Which one, in your opinion is the best. Why?

Question 4 What are the different types of sales organisation? How are they different
from each other in terms of interaction of sales department with other departments?

Question 5 What is the difference between the recruitment and selection process of
sales personnel?

Question 6 What are the different training methods adopt ed for training of sales
people? Elaborate.

Question 7 What is the most critical aspect of the distribution system in any
organisation? What should the manager keep in mind while setting up a distribution
system?

Question 8 What are the different trends in retailing and wholesaling? Elucidate with
example.

Question 9 Identify channels used while launching of a new product? Are they effective
in the Indian context ? Why/Why not?

Question 10 Explain the AIDAS Theory of Selling with the help of suitable examples.

Question 11 What is the purpose of a Sales Organization? What steps you will take for
setting up of a Sales Organization? Explain with the help of suitable example.

Question 12 What are the different sources of Sales Force Recruits? Illustrate with the
help of suitable examples.

Question 13 Write short notes on any three of the following:-
(a) Requirements of a Good Sales Compensation Plan
(b) Quantitative Performance Standard
(c) The emergence of global retailing
(d) Planning Sales Training Programs
(e) Sales Quotas and Sales Territories.

Question 14 Explain Merchandise Planning and Control with the help of suitable
examples.

Question 15 What is wholesaling? Explain the different marketing functions performed
by wholesaler-distributors for manufacturers with the help of suitable examples.

Question 16a) Describe Physical Distribution Concept. What is Physical Distribution
Cycle? Give your answer with the help of suitable examples.

Question 16b) What do you mean by managing marketing channels? Explain the three
stages of managing the Marketing Channels. What are the criteria for choosing channel
partners from the supplier's viewpoint?

PART B
Case Study 1
MODERN ENGINEERING WORKS LIMITED
Mr Ramesh Chauhan, General Manager of Modern Engineering Works Umited (MEW),
Jaipur, recommended a sales contest to improve declining sales performance. This was
his response to, first-quarter results that saw sales fall substantially below quota. Mr
Chauhan believed that a sales contest would, among other things, provide the incentive
to get sales up to or beyond territorial quotas:
MEW distributed a complete line of electrical motors, pumps, ports, switch-gear and
accessories in the state of Rajasthan. Its sales force of sixty persons operated out of ten
branch offices located at Jaipur, Ajmer, Jodhpur, Bikane, Udaipur, Sriganganagar,
Alwar, Bharatpur, Kota and Pali, in Rajasthan.
The sales force's compensation plan consisted of a base salary and a bonus. The
bonus was based upon the territorial quota, which was set by the general manager, in
consultation with the branch sales manager. Mr Chauhan proposed a sales contest
which would, in his opinion, motivate sales personnel to achieve their quotas.
The details of the contest were as under:
(a) The duration of the contest would be a quarter, i.e., 13 weeks.
(b) There would be a weekly sales volume quota for each salesperson determined by
the general manager and respective branch manager.
(c) Each of the ten branches would also have a bra nch sales volume quota for the
quarter.
(d) A cash bonus of Rs 500 each week would go to the sales person exceeding his/her
quota by the greatest percentage. Mr Chauhan wanted to use total sales volume
instead of percentage but settled for the percentage eventually.
(e) Each sales person who achieve the quarter-quota would get a bonus of Rs 1000.
(f) A cash bonus of Rs 2000 would be paid to the sales person exceeding his/ her
quarterly sales quota by the greatest percentage. Bonus of Rs 1000, Rs 750 and Rs
500 would go to sales persons in second, third and fourth places respectively.
(g) In the competition amongst branches, the branch exceeding its quota by greatest
percentage would receive Rs 4000 as prize which would be shared equally among the
sales persons associated with that branch. Second, third and fourth places in a the
inter-branch competition would receive Rs 3000, Rs 2000nd Rs 1000 respectively.
(h) All sales persons, who achieve their quotas and those who are to receive bonuses at
the end of the quarter, would be invited for a grand award function at Hotel Rajputana
Sheraton, Jaipur, a leading 5-star hotel. The award would be handed out by Mr Naresh,
the Executive Director of MEW.
When Mr Chauhan formally proposed his plan for a sales contest, many objections were
raised. All these objections related to usual objections in sales contests like
disappointment and frustration amongst sales persons who would not win, disruption in
normal pace of work, over aggressiveness amongst some people, the likely fall in sales
during the quarter succeeding the contest-quarter and so on.
Mr Chauhan felt that a contest would correct the poor sales performance, raise and ce
kindle a competitive spirit amongst its sales for give them an opportunity to get their
achievements recognised, an raise the morale of the entire sales force.
In spite of a disagreement, Mr Chauhan scheduled a meeting of his staff and branch
managers to discuss the advisability of conducting a sales contest.
Questions for Discussion
1. Should Modern Engineering Works Limited go ahead with a sales contest to
motivates it sales personnel to better sales performance? Why or why not?
2. What is the purpose of organising a contest amongst branches? Should individual
performance based contests be run concurrently with group-performance based
contests? Why or why not?
3. Could you suggest some other proposal to motivate sales personnel to achieve a
their saes quotas? Give your reasons with details of the proposal, s to how would it be
better than the sales contest?




Case Study 2
Hiring the Right Person
Andrew Pharmaceutical Limited was engaged in formulations and some bulk drugs and
had its factory and head office in Bangalore. The company has grown at thirty per cent
for the last three years and had a turnover of Rs. 26 cores last year. The company
employed 25 managerial and 150 non-managerial staff at their factory located at
Bangalore. A, sales force of 65 sales representatives was managed by 16 district sales
managers, further reporting to five regional managers of regional offices located in
Delhi, Mumbai, Calcutta, Hyderabad and Indore.
However, a sudden rise in the number of sales force created problems regarding
monitoring, coordination and administration of sales representatives, stockists and
dealers. A need was felt to revamp the system as the marketing director was unable to
handle the overall marketing function. It was felt that the general management cadre
must be introduced to take charge so that the marketing director will be free to
concentrate on the strategic and development activities.
A high level meeting of directors discussed the issues and a decision was taken to
introduce general manager-marketing, and personnel department was asked to initiate
the process and one Mr. Ravi Saxena was chosen for the new position. Mr. Ravi
Saxena had a decade of managerial experience in marketing and product development
though his direct sales experience was negligible. However his planning and execution
skills were good and thus he was considered the best option for developing systems of
market information, dealer and representative relations etc. His profile, as briefed to him
by Marketing Director, Chandra Mohan, included management of sales and distribution
and product development. Ravi made a six monthly plan and started the work and
initiated an extensive communication with dealers, stockists and representatives for an
effective market information system. Within six month's time, however, things began to
worsen at the marketing department. The interaction between Marketing Director and
Mr. Ravi Saxena was minimum and often ended in confrontations. Mr. Ravi Saxena had
in the past six months tried unsuccessfully to change some policies and systems related
to payments and training dealers and sales representatives. Every time he proposed
any such change, it was rejected by Chandra on the plea that the systems had worked
well in the past and hence no change is required. On the other hand Mr. Ravi Saxena
felt that he cannot be held responsible for results, when he has no power or authority to
improve the system. As a result of such a conflict Mr. Ravi Saxena began
to withdraw from making plans, meetings were conducted with customary interaction
amongst two seniors and thus created an environment of confusion and uncertainty for
managers and representatives. Mr. Ravi Saxena gradually became more defensive as
the initial work done on market information system also suffered. In spite of lack of
support from Mr. Chandra, Mr. Ravi Saxena made significant improvements in the area
of training for sales staff and product development. The product launches, promotion
and literature improved considerably in quality and the regular training improved the
motivation of sales staff all around the five regions. The regional managers and sales
people, very subtly began to appreciate his efforts and he enjoyed a good rapport with
his people.
Mr. Chandra Mohan, however, was convinced that delays in decisions and inadequate
control of sales force were becoming major issues and blamed Mr. Ravi Saxena for this,
but he decided not to communicate with Mr. Ravi Saxena. As the time passed, their
'relations worsened.
A regional manager created some troubles in the meantime. Mr. Ravi Saxena insisted
that some action against the manager will put forth the company's stand but Chandra
didn't care. As a result everything went out of control, the coordination collapsed and
fake medicines were recovered from a stockist in a police raid. Later, an enquiry
revealed that the regional manager in connivance with a rival company had done some
activities which led to the fake medicines racket.
The company suffered a loss of name and its credibility in the market. The Managing
Director, Subhash Jain was anguished and ordered sacking of the regional manager
and also demanded explanation on how things went this far.
Questions:
(a) What are the major issues in this case?
(b) What reasons led to a conflict between Mr. Ravi Saxena and the Marketing Director
Mr. Chandra Mohan? Did these conflicts arise due to unclear policies of the company?
(c). How can the conflict in these two positions be minimized? Give your
recommendations.


PART C
Short Question Set 1
1. What do you mean by distribution channel?
2. What is a retailer? What's a distributor?
3. Elements of communication mix consist of
4. List 2 strengths & 2 limitations of personal selling
5. List 2 reasons as to why personal selling is important in India?
6. What is 'Tender method' of selling?
7. List the process of personal selling?
8. Give the formula for sales force size determination?
9. What is recruitment?
10. What is Orientation?
11. What is the purpose of training?
12. Calculation of salesman's contribution to profit is done by?
13. List the different methods of compensation?
14. What is a supermarket ?
15. Distinguish between department and chain stores?
16. What is role of special incentives to channel?
17. What do you understand by motivation?
18. What do you understand by 'sales call'?
19. What is the role of distribution channel?
20. What are non conventional channels?
21. List the different types of intermediaries?
22. What is the difference between retailer and distributor?
23. List the different types of wholesaler?
24. List the different types of retailers?
25. What is a super market?
26. What is the role of C&F agent?
27. What is AIDA?
28. What do you understand by dual distribution?
29. What is the difference between trade discount & quantity discount?
30. What is the concept of a utomatic vendor?
31. What do you mean by conflict?
32. What are discount stores?
33. How does sales executive co-ordinate?
34. What are the objectives of sales management?
35. What are the steps in prospecting?
36. Give an example of a line & staff department organisation. Draw a diagram for the
above.
37. How is sales department and Research & Development related to each other?
38. What are the different interview methods? Explain any two.
39. What are the short comings of Maslow need hierarchy theory in relation to sales
department?
40. What are the qualities of a good compensation plan?


Multiple Choice Question Set 1
1. From the sales management point of view, gross margin is equal to--
(a) Cost of sales + sales
(b) Sales - cost of sales
(c) Profit + cost of sales
(d) None of these
2. From the sales management point of view, net profit is equal to--
(a) Gross margin + expenses
(b) Sales - cost of sales
(c) Gross margin - expenses
(d) None of the above
3. Franklin Evan researched buyer-seller dyads in the ______________ business.
(a) Insurance
(b) Banking
(c) Communication
(d) Aviation
4. From the sociologist's point of view, 'dyad' means--
(a) A situation where only buyers are there.
(b) A situation where only sellers are there.
(c) A situation in which two people interact.
(d) None of the above.
5. From the salespersons point of view, the objective factors are--
(a) Education, age, income
(b) Income, religion, education
(c) Income, height, education
(d) None of these
6. AIDAS theory talks about--
(a) Attention, interests, desire, action and satisfaction
(b) Attitudes, interests, desire, action and satisfaction
(c) Agreement, interests, desire, action and satisfaction
(d) None of the above
7. From the AIDAS theory point of view, the __________goal is to intensify the
prospect's attention so that it evolves into strong interest.
(a) Attention.
(b) Inducing actions.
(c) Gaining interest.
(d) None of the above.
8. The mental process involved in a purchase is--
(a) Need (or problem) > solution > sale
(b) Need (or problem) > solution > purchase
(c) Need (or problem) > solution > output
(d) None of these
9. Buying Formula is also known as--
(a) Theory of Buying
(b) Theory of Selling
(c) Theory of Profit
(d) None of the above
10. The four essential elements of the learning process included in the stimulus
response model are--
(a) Drive, cue, response and reinforcement
(b) Response, drive, cue and enforcement
(c) Reply, drive, cue, and reinforcement
(d) None of the above
11. ________ is a weak stimuli that determines when the buyers will respond.
(a) Drive
(b) Cue
(c) Response
(d) None of the above
12. ____________ is any event that strengthens the buyer's tendency to make a
particular response.
(a) Drive
(b) Cue
(c) Reinforcement
(d) none of the above
13. There are _______ steps in prospecting.
(a) Three
(b) Four
(c) Two
(d) None of the above
14. Marketing management in consultation with sales management determines
_______________ exact role in the promotional program.
(a) Publicity's
(b) Personal Selling's
(c) Sales Promotion's
(d) None of the above
15. Stocking and promoting the product line is a qualitative objective of--
(a) Publicity
(b) Sales Promotion
(c) Personal Selling
(d) None of the above
16. ______________ is an estimate of the maximum possible sales opportunities
present in a particular market segment and open to all sellers of a good or service
during a stated future period.
(a) Sales Potential
(b) Sales forecast
(c) Market Potential
(d) None of the above
17. The first step in analyzing a product's market potential is to identify its--
(a) Product
(b) Price
(c) Promotion
(d) Market
18. Using market factors for analyzing market potential is a _________ process.
(a) Two-step
(b) Three-step
(c) Four-step
(d) One-step
19. ______________ is a procedure for estimating how much of a given product (or
product line) can be sold if a given marketing program is implemented.
(a) Buyers Interests
(b) Sales Forecasting
(c) Market Potential
(d) None of the above
20. ____________ is one statistical technique for short-range sales forecasting,
(a) Chi-square
(b) Exponential Smoothing
(c) Factor Analysis
(d) none of these
21. _________________ analysis is a statistical process, used in sales forecasting,
determines and measures the association between company sales and other variables.
(a) Conjoint
(b) Regression
(c) Chi-square
(d) None of the above
22. Tasks of line administration are sub-divided among the new assists in one of
_______ ways.
(a) Four
(b) Five
(c) Three
(d) None of the above
23. A large firm with far-flung selling operations is likely to subdivide line authority
______________.
(a) Geographically
(b) Politically
(c) Economically
(d) Socially
24. The third scheme for subdividing line authority is by type of ______________.
(a) Customer or purchase channel
(b) Seller or marketing channel
(c) Customer or marketing channel
(d) None of these
25. Non-personal selling techniques are the province of the __________ department.
(a) Purchase
(b) Advertising
(c) Selling
(d) None of the above
26. Product Development Committee works in coordination between _________ and
___________ departments.
(a) Purchase and R&D
(b) Sales and R&D
(c) Sales and Finance
(d) Sales and Accounting
27. Sales force management is a specialized type of _____________ management.
(a) Marketing
(b) Personnel
(c) Operations
(d) None of the above
28. The qualifications needed to perform the job are detailed in the ____________.
(a) Job Specifications
(b) Job Analysis
(c) Job Satisfaction
(d) none of these
29. The method that breaks down subject matter into numbered instructions units called
frames, which are incorporated into a book or microfilmed for use with a teaching
machine is--
(a) On the Job Training
(b) Programmed Learning
(c) Impromptu Discussion
(d) None of the above
30. Initial sales training is a--
(a) Line function in some companies and staff function in other organizations.
(b) Line function.
(c) Staff function.
(d) None of the above.
31. The three types of compensation plans are--
(a) Straight salary, straight commission, and a combination of salary and variable
elements.
(b) Salary, commission and other miscellaneous elements.
(c) Salary, commission and perks.
(d) None of the above.
32. ______ is an auxiliary device capable of transmission of sight and/or sound stimuli.
(a) Advance assignments.
(b) Training aids.
(c) Printed materials.
(d) None of the above.
33. Needs that are inborn or physiological needs for food, water, rest, sleep, air to
breathe, sex, and sun, the fulfillment of which are basic to life itself. These needs are--
(a) Secondary needs
(b) Primary needs
(c) Auxiliary needs
(d) None of the above
34. A sales compensation plan has as many as ______ basic elements.
(a) Two
(b) Three
(c) Four
(d) None of the above
35. ________ account provides the salesperson with a stipulated sum to cover all
expenses during a given period, such as a month or week.
(a) Flexible expense account.
(b) Flat expense account.
(c) Miscellaneous account.
(d) None of the above.
36. __________ measures the effectiveness of sales personnel in securing orders.
(a) Average cost ration
(b) Call-frequency ration
(c) Order call ration
(d) None of the above
37. ________________ market share on a territory-by-territory basis.
(a) General.
(b) Territorial.
(c) Augmented.
(d) none of the above
38. From the emerging global retailing point of view, the "tough three" are--
(a) Italy, South Korea and Japan
(b) South Korea, Japan and China
(c) Japan, China and India
(d) None of the above
39. From the emerging global retailing point of view, the "torrid three" are--
(a) Mexico, Argentina, India
(b) Mexico, Turkey and Argentina
(c) Turkey, India, Brazil
(d) None of the above
40. "Formidable four" means--
(a) Greatest political and economic risks with a poor retail infrastructure, but
rapidly growing middle classes hungry for consumer goods.
(b) Rapid but volatile economic growth with an undeveloped retail sector.
(c) Strong economies with large middle classes.
(d) None of the above.
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