Masters of Business Administration – MBA Semester 3

MK0001 – Sales, Distribution and Supply Chain Management

Assignment Set- 1

Q1A -Describe the various activities involved in the selling process?

Answer- Setting Personal Selling Roles & Objectives
· Activities in the Selling Process:
The selling process is a set of activities undertaken to successfully obtain an order and begin building
long-term customer relations.
The selling activities undertaken by professional salespeople include:
1. Generating Sales Leads
2. Qualifying Leads
3. Preparation for the Sales Call
4. The Sales Meeting
5. Handling Buyer Resistance
6. Closing the Sale
7. Account Maintenance
1. Generating Sales Leads
Selling begins by locating potential customers. A potential customer or “prospect” is first identified as
a “sales lead”, which simply means the salesperson has obtained information to suggest that someone
exhibits key characteristics that lend them to being a prospect.
For salespeople actively involved in generating leads, they are continuously on the lookout for
potential new business. In fact, for salespeople whose chief role is that of order getter, there is virtually
no chance of being successful unless they can consistently generate sales leads.
Sales leads can come from many sources including:
· Prospect Initiated – Includes leads obtained when prospects initiate contact such as -when they fill
out a website form, enter a trade show booth or respond to an advertisement.
· Profile Fitting – Uses market research tools, such as company profiles, to locate leads based on
customers that fit a particular profile likely to be a match for the company’s products. The profile is
often based on the profile of previous customers.
· Market Monitoring – Through this approach leads are obtained by monitoring media outlets, such
as news articles, Internet forums and corporate press releases.
· Canvassing – Here leads are gathered by cold-calling (i.e., contacting someone without pre-
notification) including in-person, by telephone or by email.
· Data Mining – This technique uses sophisticated software to evaluate information (e.g., in a
corporate database) previously gathered by a company in hopes of locating prospects.
· Personal and Professional Contacts – A very common method for locating sales leads uses
references. Such references may come at no cost to the salesperson or, to encourage references,
salespeople may offer payment for references. Non-paying methods including asking acquaintances
(e.g., friends, business associates) and networking (e.g., joining local or professional groups and
associations). Paid methods may include payment to others who direct leads that eventually turn into
customers including using Internet affiliate programs.
· Promotions – The method uses free gifts to encourage prospect to provide contact information or
attend a sales meeting. For example, offering free software for signing up for a demonstration of
another product.
2. Qualifying Sales Leads:
Not all sales leads hold the potential for becoming sales prospects. There are many reasons for this
including:
· Cannot be Contacted – Some prospects may fit the criteria for being a prospect but gaining time to
meet with them may be very difficult (e.g., high-level executives).
· Need Already Satisfied – Prospects may have already purchased a similar product offered by a
competitor and, thus, may not have the need for additional products.
· Lack Financial Capacity – Just because someone has a need for a product does not mean they can
afford it. Lack of financial capacity is major reason why sales leads do not become prospects.
· May Not Be Key Decision Maker – Prospects may lack the authority to approve the purchase.
· May Not Meet Requirements to Purchase – Prospects may not meet the requirements for
purchasing the product (e.g., lack other products needed for seller’s product to work properly).
The process of determining whether a sales lead has the potential to become a prospect is known as
“qualifying” the lead. In some cases, a sales lead can be qualified by the seller prior to making first
contact. For instance, this can be done through the use of research reports, such as an evaluation of a
company’s financial position using publicly available financial reporting services.
3. Preparation for the Sales Call:
A salesperson’s next task is to prepare for an eventual sales call. This activity in the selling process has
two main objectives:
· Learn More About the Customer-While during the lead generation and qualifying portion of the
selling process a seller may have gained a great deal of knowledge about a customer, invariably there
is much more to be known that will be helpful once an actual sales call is made. The salesperson will
use their research skills to learn about such issues as:
- Who is the key decision maker?
- What is the customer’s organizational structure?
- What products are currently being purchased?
- How is purchase decisions made?
Salespeople can attempt to gather this information through several sources including: corporate
research reports, information on the prospect’s website, conversations with non-competitive
salespeople who have dealt with the prospect, and by asking questions when setting up sales meetings.
Gaining this information can help prepare the salesperson for the sales presentation. Having more
information about a prospect allows the salesperson to be more confident in his/her presentation and,
consequently, come across as more knowledgeable when meeting with the prospect.
· Arranging Prospect Contact-With some information about the prospect in-hand, the salesperson
must then move to make initial contact. In a few cases a salesperson may be fortunate to have the
prospect contact her/him but in most cases salespeople will need to initiate contact. In many ways
arranging for contact is as much as selling effort as selling a product.
There are two main approaches to arranging contact:
- Cold Calling for Presentation – A challenging way to contact a prospect is to attempt to conduct a
sales meeting through a straight cold call. In this approach the intention is to not only contact the
prospect but to also give a sales presentation during this first contact period. This approach can be
difficult since the prospect may be irritated by having unannounced salespeople interrupt them and
take time out of their busy work schedule to sit for a sales meeting.
- Cold Calling for Appointment – A better approach for most salespeople is to contact a prospect to
set up an appointment in advance of the sales meeting. The main advantages of making appointments
is that it gives the salesperson additional time to prepare for the meeting and also, in the course of
discussing an appointment, the salesperson may have the opportunity to gain more information from
the prospect. This way also has the added advantage of having the prospect agree to sit for the
meeting, which may make them more receptive to the product than if the salesperson had followed the
Cold Calling for Presentation approach.
4. The Sales Meeting:
The heart of the selling process is the meeting that takes place between the prospect and the
salesperson. At this stage of the selling process the salesperson will spend a considerable amount of
time presenting the product.
Additionally, the meeting is not just about the seller discussing the product, rather much more takes
place during this part of the selling process including:
· Establishing Rapport with the Prospect – Successful salespeople know that jumping right into a
discussion of their product is not the best way to build relationships. Often it is important that, upon
first greeting the prospect, the salesperson spends a short period of time in a friendly conversation to
help establish a rapport with the potential buyer.
· Gaining Background Information – The salesperson will use questioning skills to learn about the
prospect and the prospect’s company and industry.
· Access Prospect’s Needs – Taking what is learned from the prospect’s response to questions, the
salesperson can determine the prospect’s needs. To accomplish this task successfully, sellers must be
skilled at listening and understanding responses.
· Presenting the Product – The salesperson will stimulate a prospect’s interest by discussing a
product’s features and benefits in a way that is tailored to the needs of the customer. Part of this
discussion may include a demonstration of the product.
· Assess the Prospect – Throughout the presentation the seller will use techniques, including
interpreting non-verbal cues (e.g., body language), to gauge the prospect understands and acceptance
of what is discussed.
5. Handling Buyer Resistance:
It is a rare instance when a salesperson does not receive resistance from a prospect. By resistance we
are referring to a concern a prospect has regarding the product (or company) and how it will work for
their situation. In most cases the resistance is expressed verbally (e.g., “I don’t see how this can help
us.”) but other times the resistance presents itself in a non-verbal fashion (e.g., prospect’s facial
expression shows disinterest).
To overcome resistance, salespeople are trained to make sure they clearly understand the prospect’s
concern. Sometimes prospects say one thing that appears to be an objection to the product but, in fact,
they have another issue that is preventing them from agreeing to a purchase. Salespeople are rarely
able to make the sale unless resistance is overcome.
6. Closing the Sale:
This part of the selling process is the most difficult. Closing the sale is the point when the seller asks
the prospect to agree to make the purchase. It is also the point at which many customers are unwilling
to make a commitment and, consequently, respond to the seller’s request by saying no.
Closing the sale is actually fairly easy if the salesperson has worked hard in developing a relationship
with the customer. Unfortunately some buyers, no matter how satisfied they are with the seller and
their product, may be insecure or lack confidence in making buying decisions. For these buyers,
salespeople must rely on persuasive communication skills that help assist and even persuade a buyer to
place an order.
The use of persuasive communication techniques is by far the most controversial and most
misunderstood concept related to the selling process. Many people think that the act of persuasion is
an attempt to manipulate someone into doing something they really do not want to do. However, for
sales professionals persuasion is a skill for assisting someone in making a decision. Many times buyers
take the lead in closing a sale since they are convinced the product is right for them.
For salespeople, understanding when it is time to close a sale and what techniques should be used
takes experience. In any event, the close is not the end of the selling process but is the beginning of
building a relationship.
7. Account Maintenance:
While account maintenance is listed as the final activity in the selling process, it really amounts to the
beginning of the next sale and, thus, the beginning of a buyer-seller relationship. In selling situations
where repeat purchasing is a goal (compared to a one-time sale), following up with a customer is
critical to establishing a long-term relationship.
After a sale, salespeople should work hard to ensure that the customer is satisfied with the purchase
and determine what other ways the salesperson can help the customer be even more satisfied with the
purchase. The level and nature of after-sale follow-up will often depend on the product sold.
Expensive, complex purchases that require installation and training may result in the salesperson
spending considerable time with the customer after the sale while smaller purchases may have the
seller follow-up with simple email correspondence.
By maintaining contact after the sale the seller is in a position to become more accepted by the
customer, which invariably leads to the salesperson learning more about the customer and the
customer’s business. With this knowledge the salesperson will almost always be presented with more
selling opportunities.
Q1B- What do you mean by enterprise relationship?

Ans- Enterprise Relationship:In recent years, customers have been downsizing their supplier base
and replacing their multiple vendors with a very small number of possibly long-term relationships
offered only to a select few suppliers. A widely quoted figure is that customers are working today with
one-third fewer suppliers than they did 10 years ago. Combined with merger trends and market
consolidation, the trend toward purchasing from fewer suppliers has resulted in customers capable of
leveraging the volume of their purchases for enhanced services and cost-cutting opportunities. The
response of many sellers to the emergence of very large and powerful customers has been to develop a
system of enterprise relationships to better meet the needs of their major customers.
An enterprise relationship is one in which the primary function is to leverage any and all corporate
assets of the supplier in order to contribute to the customer’s strategic success. In such a situation, both
the product and the sales force are secondary, and the customer must be of strategic importance to the
selling organisation. To achieve successful enterprise relationships, the supplier must deliver
exceptional customer value while also extracting sufficient value from the relationship. This is always
challenging, especially when the customer has large needs.
• Suppliers are involved in the early stages of need identification, specification, and new product
development.
• In conventional relationships, the primary players were the salesperson, the customer service
representative, and perhaps a design engineer. With enterprise relationships, the supplier fields a team
that interfaces with the customer on a regular basis, and includes a variety of functional areas and
management levels.
• In enterprise relationships, there is an unusually high degree of intimacy resulting in immediate
responsiveness from suppliers, sharing of information, radical empowerment of suppliers, and
termination of the relationship as a remote and difficult option.

Q2A-Differentiate between sales quotas and sales territories?

Ans-Sales quotas-

1. It is a target based assignment to sales personals.

2. It helps management to carry out sales activities, sales forecast and budgets.

3. It is a time consuming process.

4. Current market share.

Sales territories-

1. It is a geographical set area to temporary creates sales.

2. It helps in customer coverage and foster equity.

3. There is a time bound process.

4. Drawing the borders.

Q2B-Briefly explain the functions of logistics management?

Ans-Functions of Logistics Management

Meaning of Logistics management-Logistics management is that part of the supply chain which
plans, implements and controls the efficient, effective forward and reverse flow and storage of goods,
services and related information between the point of origin and the point of consumption in order to
meet customers’ requirements. A professional working in the field of logistics management is called a
logistician.
Logistics management activities typically include inbound and outbound transportation management,
fleet management, warehousing, materials handling, order fulfillment, logistics network design,
inventory management, supply/demand planning, and management of third party logistics services
providers.
Logistics Functions-The logistics function includes sourcing and procurement, production planning
and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning
and execution – strategic, operational and tactical. Logistics management is an integrating function,
which coordinates and optimizes all logistics activities, as well as integrates logistics activities with
other functions including marketing, sales manufacturing, finance and information technology.
Logistics is much more and much wider than mere physical handling of goods. Logistics involves
several other functions such as purchasing, plant location, plant layout, etc., and even the disposal of
wastes. It covers astonishingly varied professional disciplines.
They are:
· Facility location
· Planning
· Forecasting and order management
· Transportation: the mode and the route
· Inventory management: all inventories
· Warehousing
· Protective packaging
Raw material and finished products had always to be moved, though on a small scale. Things began
changing with the advance in transportation. Population began moving from rural to urban areas and to
business centres. No longer did people live near production centres, nor did production take place near
residence centres. The geographical distance between the production point and consumption point
increased. Since the early 1990’s, the business scene has changed. The globalization, the free market
and the competition has required that the customer gets the right material, at the right time, at the right
point and in the right condition at the lowest cost. This is "globalization" and is not unusual today.
Here are some of the logistics functions that allowed this to happen:
1. Purchasing – of raw materials, assembled products, finished products from all over the world.
Where can you get the quality you want at the best price?
2. Manufacturing operations – how should the machines be organized, how many workers do you
need, where do you stock your materials and finished products, how many products do you
manufacture on each production run, etc.
3. Transportation – domestic and international, from raw materials to finished product; that moves
what, and when, and for what price?
4. Warehousing – product is either moving (transportation) or not (warehousing). This is becoming a
very sophisticated area and a key to shortening the time to market for products.
5. Inventory control – how much product is on hand, on order, in transit, and where is it? Inventory
drives logistics.
6. Import/export – international regulations and documentation can be complex. It takes a specialist to
understand the best way to get product across borders.
7. Information systems – globalization on today’s scale is possible because there is technology that
transfers the needed information.
Logistics functions are unavoidable costs to a company, but today they are recognized as crucial to a
company’s competitiveness and profitability.
Q3A-The marketing manager of hasan group ltd Mr. Arjun was thinking about designing a new
distribution channel strategy so as to improve the distribution system. What key factor should
he consider when designing a strategy related to distribution channel?

Ans-Designing Marketing Channels

· Factors considered for designing Distribution Channels:
Like most marketing decisions, a great deal of research and thought must go into determining how to
carry out distribution activities in a way that meets a marketer’s objectives. The marketer must
consider many factors when establishing a distribution system. Some factors are directly related to
marketing decisions while others are affected by relationships that exist with members of the channel.
The following are the key factors to consider when designing a distribution strategy. We can group
these into two main categories:
– Marketing decision issues and
– channel relationship issues.
Marketing Decision Issues: Distribution strategy can be shaped by how decisions are made in other
marketing areas as under:
· Product Issues
The nature of the product often dictates the distribution options available especially if the product
requires special handling. For instance, companies selling delicate or fragile products, such as flowers,
glass articles, etc., look for shipping arrangements that are different than those sought for companies
selling extremely tough or durable products, such as steel rods.
· Promotion Issues-Besides issues related to physical handling of products, distribution decisions are
affected by the type of promotional activities needed to sell the product to customers. For products
needing extensive salesperson-to-customer contact (e.g., automobile purchases) the distribution
options are different than for products where customers typically require no sales assistance (i.e., bread
purchases).
· Pricing Issues-The desired price at which a marketer seeks to sell their product can impact how they
choose to distribute. The inclusion of resellers in a marketer’s distribution strategy may affect a
product’s pricing since each member of the channel seeks to make a profit for their contribution to the
sale of the product. If too many channel members are involved the eventual selling price may be too
high to meet sales targets in which case the marketer may explore other distribution options.
· Target Market Issues-A distribution system is only effective if target customers can obtain the
product. Consequently, a key decision in setting up a channel arrangement is for the marketer to
choose the approach that reaches target customers in the most effective way possible. The most
important decision with regard to reaching the target market is to determine the level of distribution
coverage needed to effectively meet customer’s needs. Distribution coverage is measured in terms of
the intensity by which the product is made available. For the most part, distribution coverage decisions
are of most concern to consumer products companies, though there are many industrial products that
also must decide how much coverage to give their products.
The marketer must take into consideration many factors when choosing the right level of distribution
coverage. However, all marketers should understand that distribution creates costs to the organisation.
Some of these expenses can be passed along to customers (e.g., shipping costs) but others cannot (e.g.,
need for additional salespeople to handle more distributors). Thus, the process for determining the
right level of distribution coverage often comes down to an analysis of the benefits (e.g., more sales)
versus the cost associated with gaining the benefits.
· Levels of distribution coverage: There are three main levels of distribution coverage – mass
coverage, selective and exclusive.
- Mass Coverage – The mass coverage (also known as intensive distribution) strategy attempts to
distribute products widely in nearly all locations in which that type of product is sold. This level of
distribution is only feasible for relatively low priced products that appeal to very large target markets
(e.g., FMCG products). A product such as Coca-Cola is a classic example since it is available in a
wide variety of locations including grocery/provision stores, convenience stores, vending machines,
hotels and many, many more. With such a large number of locations selling the product the cost of
distribution is extremely high and must be offset with very high sales volume.
- Selective Coverage – Under selective coverage the marketer deliberately seeks to limit the locations
in which this type of product is sold. The logic of this strategy is due to the size and nature of the
product’s target market. Products with selective coverage appeal to smaller, more focused target
markets (e.g., air conditioners) compared to the size of target markets for mass marketed products.
Consequently, because the market size is smaller, the number of locations needed to support the
distribution of the product is fewer.
- Exclusive Coverage – Some high-end products target very narrow markets that have a relatively
small number of customers. These customers are often characterized as “discriminating” in their taste
for products and seek to satisfy some of their needs with high-quality, though expensive products.
Additionally, many buyers of high-end products require a high level of customer service from the
channel member from whom they purchase. These characteristics of the target market may lead the
marketer to sell their products through a very select or exclusive group of resellers. Another type of
exclusive distribution may not involve high-end products but rather products only available in selected
locations such as company-owned stores. While these products may or may not be higher priced
compared to competitive products, the fact that these are only available in company outlets give
exclusivity to the distribution.
While these three distribution coverage options serve as a useful guide for understanding how
distribution intensity works, the advent of the Internet has brought into question the effectiveness of
these schemes. For all intents and purposes all products available for purchase over the Internet are
distributed in the same way – mass coverage. So a better way to look at the three levels is to consider
these as options for distribution coverage of products that are physically purchased by a customer (i.e.,
walk-in to purchase).
· Marketing Channel Alternatives:
For many products and services, their manufacturers or providers use multiple channels of distribution.
A refrigerator, for example, might be bought directly from the manufacturer, either over the telephone,
direct mail, or the Internet, or through several kinds of retailers, including independent appliance
stores, franchised company stores, and department stores. In addition, large and small businesses may
make their purchases through other outlets.
Channel structures range from two to five levels.
· Two Level Structures: The simplest is a two-level structure in which goods and services move
directly from the manufacturer or provider to the consumer. Two-level structures occur in some
industries where consumers are able to order products directly from the manufacturer and the
manufacturer fulfills those orders through its own physical distribution system.
· Three Level Structures: In a three-level channel structure retailers serve as intermediaries between
consumers and manufacturers. Retailers order products directly from the manufacturer & then sell
those products directly to the consumer.
· Four Level Structures: A fourth level is added when manufacturers sell to wholesalers rather than
to retailers. In a four-level structure, retailers order goods from wholesalers rather than manufacturers.
· Five Level Structure: Finally, a manufacturer’s agent can serve as an intermediary between the
manufacturer and its wholesalers, creating a five-level channel structure consisting of the
manufacturer, agent, wholesale, retail, and consumer levels. A five-level channel structure might also
consist of the manufacturer, wholesalers, agents, retail, and consumer levels, whereby agents service
smaller retailers not covered by the large wholesalers in the industry.
· Selecting Channels:-Given the importance of distribution channels it is important to make a careful
assessment of the channel alternatives. In evaluating possible channels, it may be helpful first to
analyse the distribution channels used by competitors. This analysis may reveal that using the same
channels would provide the best option, or it may show that choosing an alternative channel structure
would give the firm a competitive advantage. Other factors to consider include the company’s pricing
strategy and internal resources. As a general rule, as the number of intermediaries included in a
channel increase, producers lose a greater percentage of their control over the product and pay more to
compensate each participating channel level. At the same time, however, more intermediaries can also
provide greater market coverage.
The alternative channels a company can choose from are:
· Direct Sales (which provides the advantage of direct contact with the consumer);
· Original Equipment Manufacturer (OEM) sales (in which a company’s product is sold to another
company that incorporates it into a finished product); – manufacturer’s representatives (salespeople
operating out of agencies that handle an assortment of complimentary products);
· Wholesalers (who generally buy goods in large quantities, warehouse them, then break them down
into smaller shipments for their customers – usually retailers);
· Brokers (who act as intermediaries between producers and wholesalers or retailers);
· Retailers (which include independent stores as well as regional and national chains); and
· Direct mail
Ideally, the distribution channels selected by a company should be close to the desired market, able to
provide necessary services to buyers, able to handle local advertising and promotion, experienced in
selling compatible product lines, solid financially, cooperative, and reputable.