1. Discuss the steps involved in personal selling.

Ans:- These are the following steps in personal selling:-

1. Prospecting:
Searching for prospects is prospecting. Here, prospect is a person or an institution who is
likely to be benefited by the product the salesman wants to sell and can afford to buy it.
Prospecting is the work of collecting the names and addresses or persons who are likely
to buy the firms products and services. Provide encompasses even the discovery of
special needs and multiplying the sales with existing clientele.
While collecting the details, suspects must be separated from prospects to avoid or
reduce waste of time, treasure and talent. There are definite methods of prospecting.
1. Endless chain method,
2. Centre of influence method,
3. Personal observation method,
4. Spotters method,
5. Cold-canvas method;
6. Direct mail and
7. Telephone method.

2. Pre-approach:
Pre-approach is to get more detailed facts about a specific individual to have effective
sales appeals on him or her. It is a record round effort to get details regarding the prospect
such as his ability, need, authority, accessibility to buy; it is a closer look of prospects,
likes and dislikes, tastes, habits, financial status, social esteem, material status, family
background and the like. The objectives of pre-approach are to providing additional

qualifying information; to design an effective approach strategy; to better the planning

information; to avoid serious errors and to build-up confidence.
The sources of information are his fellow salesmen, customers, local newspapers, special
investigators, sales office, directories, observation and the prospect.

3. Approach:
Approach means the meeting of the prospect in person by the salesman where he makes
face to face contact with prospects to understand them better. Approach is such a delicate
and critical stage of the sales process that the sales are either won or lost.
Approach is stepping stone for sales presentation. It is because of this delicacy that sales
are likened to a chain where break of one link will break it into useless lump of hooks.
Success follows the salesman who possesses courage, courtesy and confidence. The
objectives of approach are: To help the salesman to make a favourable impression; to
amplify the detailed information obtained by the salesman at pre-approach level; to
convert the favourable attention of the prospect easily and smoothly into the sales
proposition.

4. Presentation and demonstration:

Presentation implies an array and decoration of articles in the shop. It is the heart of
selling process. Effective presentation has the capacity to convince the customer of his
sales proposition. It creates and holds the interest of customers towards the products. It
would be wrong to assume that all those who enter the shop do buy the products.
Normally, most of the prospects visit the shop to see prior to their decision to buy. This
casual visit can be a commitment visit provided products are displayed, presented and
demonstrated by the salesmen in an appealing manner. Demonstration is a part of
presentation because, more description is not enough.

Demonstration is the crucial task of providing the proofs and providing the statements
about quality, utility, performance and service of a product by evidences of experiment,
operation or a test.
The significance of demonstration lies in reducing the sales talk, facilitating the
comparison, appealing to senses, fortifying the sales talks and convincing the fastidious
customers. Here, A-I-D-A approach works wonders.

5. Overcoming objections:
For a creative and persuasive salesman, the process of selling really starts when the
prospect raises objections. In absence of sales resistance the salesman is merely an order
booking clerk. For every action of salesman there is prospects pro-action or reaction that
is, approval or disapproval.
Each salesman should understand the reasons as to why prospects raise objections
because; each objection has its roots in the buying decision. An objection is the
expression of disapproval of an action taken by salesman; it is an adverse reason or an
argument indicating clearly that the prospect is not yet ready to buy.
These objections may be genuine or mere excuses. Overcoming objections is really a
delicate stage that makes or mars the unbroken chain of selling process.
Being a very crucial aspect, the experts have a set procedure for overcoming the
objections namely, listen to the prospect cushion the jolt anticipate the objections and
prevent their occurrence. It is the creative task of bringing the customer to the sales track
once again.

6. Closing:
All the earlier stages of sales talk namely, prospecting, pre-approach; approach,
presentation and handling the objections have been designed to induce the prospect to
make decision to buy so that a sale can be concluded.

The success in earlier stages will lead to the last stage of closing the sale and clinch the
deal. Here, close means the act of actually getting the prospects assent to the sales
proposal or he gets an order.
The underlying point of closing sale is to persuade the prospect to act right now than
postponing or delaying the action. It is here that the prospect is turned into a customer
desire into demand.
Though it sounds very easy, it is the most difficult task. It is the positive attitude and selfconfidence that plays a decisive role in converting wish into desire and desire into
demand. A poor closer is a poor salesman and salesman who cannot close well will have
to close the line.

2. why after sales service an important aspect of selling?

Ans:-

After sales service refers to various processes which make sure customers are satisfied with the products and
services of the organization.
The needs and demands of the customers must be fulfilled for them to spread a positive word of mouth. In the current
scenario, positive word of mouth plays an important role in promoting brands and products.
After sales service makes sure products and services meet or surpass the expectations of the customers.
After sales service includes various activities to find out whether the customer is happy with the products or not? After sales
service is a crucial aspect of sales management and must not be ignored.

Why After Sales Service is an important aspect :After sales service plays an important role in customer satisfaction and customer retention. It generates loyal customers.
Customers start believing in the brand and get associated with the organization for a longer duration. They speak good about
the organization and its products.
A satisfied and happy customer brings more individuals and eventually more revenues for the organization.
After sales service plays a pivotal role in strengthening the bond between the organization and customers.

After Sales Service Techniques

Sales Professionals need to stay in touch with the customers even after the deal. Never ignore their calls.

Call them once in a while to exchange pleasantries.

Give them the necessary support. Help them install, maintain or operate a particular product. Sales professionals
selling laptops must ensure windows are configured in the system and customers are able to use net without any
difficulty. Similarly organizations selling mobile sim cards must ensure the number is activated immediately once
the customer submits his necessary documents.

Any product found broken or in a damaged condition must be exchanged immediately by the sales
professional. Dont harass the customers. Listen to their grievances and make them feel comfortable.

Create a section in your organizations website where the customers can register their complaints. Every
organization should have a toll free number where the customers can call and discuss their queries. The customer
service officers should take a prompt action on the customers queries. The problems must be resolved
immediately.

Take feedback of the products and services from the customers. Feedback helps the organization to know the
customers better and incorporate the necessary changes for better customer satisfaction.

Ask the customers to sign Annual Maintenance Contract (AMC) with your organization. AMC is an
agreement signed between the organization and the customer where the organization promises to provide after
sales services to the second party for a certain duration at nominal costs.

The exchange policies must be transparent and in favour of the customer. The customer who comes for an
exchange should be given the same treatment as was given to him when he came for the first time. Speak to him
properly and suggest him the best alternative.

3. What are the factors of designing a sales organization?

Ans:4. Discuss with example the role of whole seller.
Ans:- (also called jobbers) usually do no marketingthey simply receive and process orders from libraries
and retailers. The publisher or distributor is responsible for generating demand. However, some wholesalers
offer collection development services to libraries, and some offer advertising opportunities to publishers.
Most wholesalers dont stock a book unless it is in high demand; for lower volume titles they order from the
publisher or distributor as necessary to fulfil orders. Library wholesalers often offer discounts to libraries and
some provide other library services such as cataloguing.

Functions of a whole seller:-

(i) Buying and Assembling:

The wholesaler purchases goods in large quantities from different manufacturers and
assembles them at one place and stores them in his warehouse and resell to the retailers.

(ii) Warehousing:
By preserving the goods received from different manufacturers in stores, the wholesaler
performs the function of warehousing. The storage of goods is needed on account of time
lag between production and consumption of goods.

(iii) Grading and Packaging:

The assembled goods are graded in accordance with their quality and packed in different
containers before supplying to the retailers. In this manner, the wholesaler performs
important marketing functions of grading and packing.

(iv) Transportation:
The wholesalers purchase goods from manufacturers and carry them to his godowns and
then supply the same to the retailers. He may employ his own vans or hire vehicles for
carrying the goods on account of bulk purchases. They can avail of economies in freight.

(v) Financing:
The wholesaler provides credit facilities to the retailers and manufacturers. They
sometimes give advance to the manufacturers for the goods to be received later. By
selling goods on credit they help the retailers.

(vi) Risk Bearing:

A wholesaler performs the marketing function of risk bearing also. Goods are exposed to
many risks such as destruction and spoilage in warehouses on account of many avoidable
and unavoidable reasons. The wholesaler is also confronted with many other risks viz.,
sudden changes in demand of the product, prices of the products going down and non
recovery of payment from retailers in (bad debts) etc.

(vii) Providing Marketing Information:

The wholesaler imparts valuable information to both the manufacturer and the retailer. He
keeps informing the manufacturer about the tastes, preferences, likes and dislikes of the
customers. He gathers this information from the retailers. At the same time he informs the
retailer about the goods produced by the manufacturer. In order to gather the information
the wholesaler conducts various market surveys.

(viii) Dispersion of Goods:

The wholesalers sell goods to largely scattered retailers. When the stock of retailers is
exhausted, they approach the wholesalers for purchasing the goods. In this process, the

wholesaler provides valuable service in the disposal of goods. The wholesaler also
undertakes extensive advertisement and also sales promotion techniques for the dispersal
of the goods.
8. what factors are important in deciding a distribution channel?
Ans:- Some of the factors to consider while selecting a channel of distribution are: (1)
The Nature of the Product (2) The Nature of the market (3) The Nature of Middlemen (4)
The nature and size of the manufacturing unit (5) Government Regulations and Policies
and (6) Competition.
Distribution of goods is as important as production. Existence of an organisation largely
depends upon a proper and well organised system of distribution. It is therefore,
necessary than utmost attention should be paid in selecting a channel of distribution.
Various constituents of the marketing mix like promotion etc., are closely related to the
channels of distribution. A wrong choice of distribution channel ultimately increases the
price of the product. Deciding a proper channel of distribution is not an easy task. It
involves a careful study and consideration of many factors stated below.

(1) The Nature of the Product:

These factors include physical characteristics of a product and their impact on the
selection of a particular channel of distribution.
(a) Perishability:
Products which are perishable in nature are distributed by employing a shorter channel of
distribution so that goods could be delivered to the consumers without delay. Delay in
distribution of these products will deteriorate their quality.
(b) Size and weight of product:

Bulky and heavy products like coal and food grains etc. are directly distributed to the
users involve heavy transportation costs. In order to minimise these costs a short and
direct distribution channel is suitable.
(c) Unit value of a product:
Products with lesser unit value and high turnover are distributed by employing longer
channels of distribution. Household products like utensils, cloth, cosmetics etc. take
longer time in reaching the consumers.. On the other hand, products like jewellery having
high product value are directly sold to the consumers by the jewellers.
(c) Standardisation:
Products of standard size and quality usually take longer time by adopting longer channel
of distribution. For example, machine tools and automobile products which are of
standard size reach the consumer through the wholesalers and retailers. Un-standardised
articles take lesser time and pass through shorter channels of distribution.
(e) Technical Nature of Products:
Industrial products which are highly technical in nature are usually distributed directly to
the industrial users and take lesser time and adopt shorter channel of distribution. In this
case after sales service and technical advice is provided by the manufacturer to the
consumers.
On the other hand, consumer products of technical nature are usually sold through
wholesalers and retailers. In this manner longer channel of distribution is employed for
their sales. After sales services are provided by the wholesalers and retailers. Examples of
such products are televisions, scooters, refrigerators, etc.
(f) Product Lines:
A manufacturer producing different products in the same lines sells directly or through
retailers and lesser time is consumed in their distribution. For example, in case

automobile rubber products this practice is followed. On the other hand, a manufacturer
dealing only in one item appoints sole selling agents, wholesalers and retailers for selling
the product. For example, in case of Vanaspati Ghee longer distribution channel in
undertaken.

(2) The Nature of the market:

This is another factor influencing the choice of a proper channel of distribution. In the
words of Lazo and Corbin Marketing managements select channels on the basis of
customer wants-how, where and under what circumstances. The number of buyers of the
product affects the choice of a f channel of distribution.
Following factors are considered in this regard:
(a)Consumer of industrial market:
In case of industrial markets, number of buyers is less; a shorter channel of distribution
can be adopted. These buyers usually directly purchase from the manufacturers.
Marketing intermediaries are not needed in this case.
But in case of consumer markets, where there are a large number of buyers, a longer
channel of distribution is employed. Distribution process cannot be effectively carried out
without the services of wholesalers and retailers.
(b) Number of prospective buyers:
If the number of buyers is likely to be more, the distribution channel will be long. On the
other hand, if the number of consumers is expected to be less, the manufacturer can
effectively sell directly to the consumers by appointing salesmen.
(c)Size of the order:
If the size of the order placed by the customers is big, direct selling can be undertaken by
the manufacturer as in case of industrial goods. But where the size of the order is small,
middlemen are appointed to distribute the products.

(d) Geographic concentration of market:

Where the customers are concentrated at one particular place or market, distribution
channel will be short and the manufacturer can directly supply the goods in that area by
opening his own shops or sales depot. In case where buyers are widely scattered, it is very
difficult for the manufacturer to establish a direct link with the consumers, services of
wholesalers and retailers will be used.
(e) Buying habits of customers:
This includes tastes, preferences, likes and dislikes of customers. Customers also expect
certain services like credit and personal attention and after sales services etc. All these
factors greatly influence the choice of distribution channel.

(3) The Nature of Middlemen:

Marketing intermediaries are vital components in the distribution of goods. They greatly
influence the marketing of goods.
Important factors relating to the selection of a particular middleman are explained
as under:
(a) Cost of distribution of goods:
Cost of distribution through middlemen is one of the main considerations to be taken into
account by the manufacturer. Higher cost of distribution will result in the increased cost
of product. The manufacturer should select the most economical distribution channel.
In finalising the channel of distribution, services provided by the intermediaries must be
kept in mind. It may be pointed out that the manufacturer can select an expensive
marketing intermediary because that may ensure various marketing services which cannot
be offered by others.

(b) Availability of desired middlemen:

Sometimes desired middlemen may not be available for the distribution of goods. They
may be busy in dealing with the competitive products. Under such circumstances the
manufacturer has to make his own arrangements by opening his branches or sales depots
to distribute the goods to the consumers.
(c) Unsuitable marketing policies for middlemen:
The marketing policies of the manufacturer may not be welcomed by the middlemen the
terms and conditions may not favour the middlemen. For example, some wholesalers or
retailers would like to act as sole selling agents for the product in a particular area or
region.
(d) Services provided by middlemen:
The manufacturer should select those middlemen who provide various marketing services
viz, storage, credit and packing etc. At the same time the middlemen should ensure
various services to customers.
(e) Ensuring greater volume of sales:
A manufacturer would like to appoint that middlemen who assure greater sales volume
over the long run.
(f) Reputation and financial soundness:
In appointing middleman, the manufacturer must take into consideration the financial
stability and reputation of the middleman. A financially sound middleman can provide
credit facilities to customers and make prompt payment to the manufacturer.

(4) The nature and size of the manufacturing unit:

The nature and size of manufacturing unit has a great impact on the selection of a
distribution channel.

The various considerations in this regard are as follows:

(A) Manufacturer Reputation and Financial Stability:
Reputed and financially sound manufacturing concerns can easily engage middlemen as
compared to lesser reputed and newly established units. Usually a manufacturing unit
having a sound financial base can easily distribute the goods without appointing
middlemen by opening their own sales depots and branches. A financially weaker unit
cannot operate without the help of middlemen.
(B) Ability and Experience of the Undertaking:
Industrial undertakings having ample marketing ability and experience can effectively
manage their distribution activities themselves. They have lesser dependence on
undertaking intermediaries. On the other hand, marketing units possessing lesser
marketing ability and experience depend more on middlemen for the distribution of
goods.
(C) Desire for Control of Channel:
A manufacturer may resort to a shorter distribution channel in order to exercise effective
control over distribution. This is suitable in case of perishable goods and is helpful in
establishing direct link between the manufacturer and the consumer. The cost of
distribution may be more by adopting such a channel of distribution.
(D) Industrial Conventions:
Industrial conventions followed influence the selection of distribution channel. If a
particular mode of distribution is adopted in an industry, the same will be followed by
every manufacturing unit in that industry in distribution their products.
(E) Services Provided By the Manufacturers:
The selection of marketing intermediaries is also influenced by various services provided
by the manufacturer. These services include extensive advertisement for the product, after

sales services and facilities of credit. The manufacturers providing these services can
easily avail the services of reputed retailers and wholesalers.

(5) Government Regulations and Policies:

Government policies and regulations also influence the choice of distribution channels.
The Government may impose certain restrictions on the wholesale trade of a particular
product arid takeover the distribution of certain products. All these restrictions have a
direct impact in selecting the channel of distribution.

(6) Competition:
The nature and extent of competition prevalent in a industry is another deterimental
consideration in selecting a distribution channel. Different manufacturers producing
similar products may employ the same channels of distribution.
11. what is logistic and logistic planning what are the activities involved in it?
Ans:- Logistics - Logistics is defined as a business planning framework for the management
of material, service, information and capital flows. It includes the increasingly complex
information, communication and control systems required in today's business environment.

Logistic planning:Logistics process planning starts with the supplier and takes into consideration the entire logistical chain,
all the way up to handover of the final product to the customer. Both the complete material flow and the
flow of information are planned logistically. This includes upstream logistics functions such as distribution
centre management, WOW (warehouse on wheels), container yards, trailer yards, consignment stores,
transhipment points, hubs, and consolidation centers as well as all stages of the material flow
from warehouse planning, picking, and sequencing to intra-company transportation, production supply,
packaging, and shipping.

In the area of logistics process planning, Ingenics is able to cover and plan the entire spectrum of services,
or just parts of the whole chain. The challenge always lies in the complexity of logistics processes and the
specific requirements that exist in terms of performance and flexibility. The aim is therefore first to gain an
overview of the complexity and then to develop efficient logistics processes that meet the requirements.
Furthermore, it is important to find the simplest possible solutions to integrate employees into the system
and to involve them in planning processes.

Key Logistics Activities

Logistics facilities the flow of products from point of origin to point of consumption. In the sphere of logistics the following
activities are considered as part of the overall logistics process.

Customer Services

Demand Forecasting / Planning

Inventory Management

Logistics Communications

Materials Handling

Order Processing

Packing

Parts and Services Support

Plant and warehouse Site Selection

Procurement

Return Goods Handling

Reverse Logistics

Traffic and Transportation

Warehousing and Storage

12. what are the difference between logistics and supply chain management?
Ans:- Logistics

Management is a small portion of Supply Chain

Management that deals with management of goods in an efficient way.
Although, if we talk about Supply Chain Management, it is a broader term
which refers to the connection, right from the suppliers to the ultimate
consumer. People are quite puzzled between these two concepts.
BASIS FOR

LOGISTICS

SUPPLY CHAIN

COMPARISON

MANAGEMENT

MANAGEMENT

Meaning

The process of integrating

The coordination and

the movement and

management of the supply

maintenance of goods in and chain activities are known as

out the organization is

Objective

Logistics.

Supply Chain Management.

Customer Satisfaction

Competitive Advantage

The concept of Logistics has Supply Chain Management

Evolution

been evolved earlier.

is a modern concept.

Single

Multiple

How many
organizations are
involved?

Logistics Management is a Supply Chain Management

One in another

fraction of Supply Chain

is the new version of

Management.

Logistics Management.

Key Differences between Logistics and Supply Chain Management

The following are the major differences between logistics and supply chain
management:
1. The flow and storage of goods inside and outside the firm is known as
Logistics. The movement and integration of supply chain activities is
known as Supply Chain Management.
2. The main aim of Logistics is full customer satisfaction. Conversely, the
main aim behind Supply chain Management is to gain
substantial competitive advantage.

3. There is only one organization involved in Logistics while a number of

organizations are involved in Supply Chain Management.
4. Supply Chain Management is a new concept as compared to Logistics.
5. Logistics is only an activity of Supply Chain Management.
13.what are the various mode of transportation in India ? what factors effect
transportation cost?
Ans:- Transportations System in India:
1. Road Transport:
2. Rail Transport
3. Water Transport:
4. Air Transport:
Transportation cost elements / Factors Influencing Transportation costs:
The following are some of the important elements that are included in the cost of transportation:
a) Mode of trans1port
For an organization, the decision regarding selecting the particular mode or modes of transport for distributing its finished
products is very critical. In the case of distribution of its products, the company has to think of

1.

The transit time, or the time lapse between the production of goods and its ultimate sale.

2.

The amount of transportation costs involved.

Normally speaking there is an inverse relationship between the transit and transportation cost i.e. lower the transit time,
higher is the transportation cost. This is because to cut down on transit time. The company would like to transport its goods
faster by possibly a combination of various modes of transport. This would definitely increase its cost of transportation. But
as stated this need not be a generalization. E.g.: If a company decides on slower transit time to reduce transportation costs
then unsold inventory would pile. Thus there would be higher inventory cost for the organization.

b) Transit Capital

When goods are in transit, the capital of the company (i.e. money) is locked up. The company would like to convert goods
into cash as quickly as possible so that the cash (i.e. capital) so generated can be put to profitable use. Hence the company

must ensure that the transit time of goods is kept to minimum level. Here an effective and planned transportation should be
evolved within the companys logistical system so that the overall transit time is kept at the minimum level.

c) Obsolescence

When a company is tied down to a slow or say an erratic mode of transport (E.g.: Roadways in monsoons) it is
necessary for the company to maintain a higher level of inventory at depots/ware houses/distributors. This required so that
the customer can be assured of continuous and uninterrupted supply of companys products. However in case the designs of
the products change rapidly or the wants/desires of the customers change, the goods of the company will remain unsold
which may become time barred and obsolete (E.g.. medicines and drugs). Again, rapid changes and innovations in
technology (E.g.: electronic items and computers) will be the technical obsolescence of the goods. Any goods in the process
of manufacture or, which are in transit to the depots/warehouses, will realize a lower sales value when new models arrive.
Hence, with proper coordination and planning involving logistics the company has to decide on swifter more efficient modes
of transport to avoid possible obsolescence of goods/products.

d) Packaging

Packaging can be considered as an inevitable factors which needs due consideration before goods are transported from one
place to another. The mode of transport (apart from the type of the product) very often influences the type of packaging
required. E.g.: Long distance transport by road will require different sort of packaging for a product, as compared to the
same product being transported by air. Hence, the mode of transport determines the type of packaging required. This can
increase the cost of the product since packaging costs have to be incorporated in profitability calculations. Also, more the
packaging means more weight and volume, which will increase the cost of transportation. Hence, design of packaging has
become very important in logistical planning.
e) Insurance

Insurance risks are based on the modes of transport, transit time as well as on the possibility of damage to the goods on
route. In case the transit time for the goods is smaller and the handling of the goods by the transport companies is skilful
there will possibly be no damage to the goods. Proper management of the goods in transit by efficient staff is also essential.
Insurance premiums paid would be lower since less or no damage to the goods is expected.

f) Breakages

The cost of the breakages of the products during transport has to be considered by any company while calculating cost
incurred on goods transported. Insurance companies do cover damages, cost to the goods due to breakages during transport.
The company cannot overlook this cost. Apart from the high premiums paid during transport (called transit insurance), the
delay in, establishing and receiving claims, the cost involved in making replacements, and consequent loss of established
customers and market will prove very expensive to the company.

Hence, the logistic manager must select that mode of transport which will reduce or eliminate the loss due to breakages in
transit. The firm must ensure that handling systems are sophisticated during transit, also if possible special containers should
be used to safeguard products from breaking. If direct door to door delivery is possible by the transport company, it would
ensure less multiple handling thereby safeguarding the goods from breakage:

g) Pilferage
The Problem of pilferage of goods during transport-whether it be rail, truck or water, is very common in our country. The
cost involved due to loss suffered because of pilferage is enormous, especially when the products are expensive. Practically
speaking, the problem of pilferage is difficult to be eliminated from our country. But is can be attempted to be reduced by
proper storage containers that are pilter proof, adequate security arrangements during transit, etc. But the loss due to
pilferage during transit is real and has to be taken into account during cost benefit calculations.
h) Deterioration :- Many goods that are transported over long distance by rail, water and truck get deteriorated due to
various reasons. First, the goods may not have been protected against adverse weather conditions like heavy rains or
scorching sun. Second, the roads may be extremely bad making it difficult for the truck to move smoothly, the rough seas
may make water transport dangerous, long waiting times at railway yards can be a cause of concern about the conditions of
the goods. Deterioration during transport can prove to be expensive. Again, to avoid losses due to deterioration in terms of
special packages, conditioning, etc. may add to the cost of the goods, making them expensive.

15. is training of sales force is important important- comment.

Ans:- For Increased Revenue: The sales department is the main revenue-generating department in
an organization. The others merely have support functions. In this highly competitive environment,
where a lot of companies are vying for customers attention, the onus is upon the sales people to offer
the right product to the right customer at an opportune time. By providing training to the sales staff,
organizations ensure no time is wasted in trial and error methods that individuals might adopt if left to
themselves.
For Enhanced Product Knowledge: Information on ones own products as well as those of
competitors is fundamental for sales. A new sales person needs to be well versed with the product or
service that he is going to sell. A training program will give an opportunity to organizations to inform
the staff about the products or services that the organization provides. Information can be passed on in
an authentic way, leaving no room for ambiguity or misinformation that might arise if the staff is left
to learn about it on their own.
For Procedural Compliance: Sales training, imparts knowledge on the fundamentals: it includes the
basics of sales procedure prospecting, needs identification, providing solutions and closing the sale.
Additionally, in many industries, organizations need to follow certain rules and regulations while
selling a product or a service. It is particularly true in the service sector such as the insurance industry

where employees have to adhere to the norms set by the local regulatory bodies. If employees are not
made aware of these rules and regulations, companies may be answerable to the regulatory
authorities. Hence sales team needs to be well-versed with all the mandatory requirements.
For Soft Skills Training: Selling is both an art and a science as it involves analytical skills as well as
creative skills. By providing training in leadership, team-building and communication skills,
employees will be better equipped to showcase companies products/services and use their persuasive
skills to convince potential customers that their product/service best meets the requirements of the
customer. This ultimately helps in more sales and thereby more revenue for organizations.
For Motivating Sales Teams: Sales is a high pressure job that leads to frustrations among the sales
team very easily. Sales training also provides an opportunity for managers to keep their sales team
motivated. With team-building activities and morale boosting workshops, managers ensure that the
sales team does not lose focus of the sales targets and organizational goals. It reduces employee
turnover and increases productivity.
For Ensuring Business Values and Ethics: With increasing sales targets, there is a risk of employees
compromising on organizational business values and ethics. For an organization to succeed in the long
run, it has to ensure that its employees follow the business values it stands for and training is an
appropriate platform to drive home this message to the sales force.
In short, a sales training program:

increases the efficiency and productivity of a sales person

helps in accessing the abilities of a sales person
improves the organizations ROI
To summarize, one can say that sales training is an investment that will helps organizations remain
sustainable and competitive in the long run. It also motivates the team and helps them to remain upto-date with respect to the companys products, market and competition.

16.what skills are essential to be an effective sales person? What roles does
a sales manager play?
Ans:- SALES SKILLS: 18 SKILLS EVERY SALESPERSON SHOULD MASTER:166

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The sales profession is undergoing some pretty radical changes. The buyer is in charge, field sales is
moving inside, technology is transforming the profession. Its so bad that some people are predicting that
15M sales jobs will disappear in the coming years. To survive in this environment, salespeople need a new

set of skills. Weve identified a core set of 18 sales skills by analyzing these trends and watching what
makes some of the worlds best salespeople successful in the new sales environment. The best salespeople:
1.

Understand what the buyer wants

2.

Sell in a buyer-responsive manner

3.

Use psychology to engage the buyer

4.

Establish trust with the buyer

5.

Communicate succinctly

6.

Act on what the customer is saying

7.

Demonstrate subject matter expertise

8.

Help (as opposed to close) their prospects

9.

Tell really compelling stories

10. Are great copywriters

11. Sell effectively over the phone
12. Are socially active with target buyers
13. Personalize their interactions
14. Use a variety of marketing skills
15. Help prospects achieve next steps
16. Are more productive because of sales technology
17. Tie daily activities to quota achievement
18. Manage their pipeline like a portfolio

Heres some detail on each of the aforementioned sales skills.

UNDERSTANDING THE BUYER

The most important of todays sales skills is simply understanding the buyer. Its the foundation of
effective selling. But it involves more than just understanding who the buyer is. As my partner Craig
Rosenberg likes to say, This isnt just about knowing what brand of coffee the buyer drinks. Instead, its
about identifying the experience that the buyer wants to have as they consider making a purchase in your
market. You buyer has a set of expectations about that experience and your job as a salesperson is to
exceed those expectations. You cant exceed them if you dont understand the experience that the buyer
wants to have.

BUYER-RESPONSIVE SELLING
When a salesperson understands the buyer, they can engage in whats called buyer-responsive selling. The
idea here is to provide the buyer with what they want, when they want it. For example, if your buyer needs
a trial to evaluate your product but cant allocate more than 30 minutes to it, give them a free trial. But
dont just give them any free trial. Give them a free trial that is easy to set up, easy to use, and really
demonstrates the value of your product in five minutes or less. One other point buyers like salespeople
who have skills!

THE PSYCHOLOGY OF BUYER ENGAGEMENT

Its remarkable how few salespeople know how to use psychology to more effectively engage the buyer.
There are a variety of techniques you can use to create deeper engagement with your target buyers. One
really effective tip is to make sure that the customer knows that you wont take too much of their time. To
see a full list of psychological techniques you can use, make sure you read our post on Customer
Engagement and Psychology.

ESTABLISHING TRUST WITH THE BUYER

Buyers like to do business with people they trust. The stereotypical used car salesman just isnt relevant
anymore. Good salespeople view their ability to establish trust with the buyer as a core sales skill. Helping
the buyer goes a long way in this regard, as does understanding what the buyer wants.

CONCISE COMMUNICATIONS
Given how busy the average buyer is today, a critical sales skill is to make sure that you communicate
succinctly. The days of the silver-tongued, overly verbose salesperson are coming to an end. Buyers value
how information is presented more than the information itself. Today, the preferred form of presentation is
conciseness. A good rule here is to never try to communicate more than three important points in a single
conversation with a buyer.

CUSTOMER-DRIVEN RESPONSIVENESS
A lot of sales leaders and pundits like to talk about good salespeople are good listeners. We think that goes
without saying and that the best salespeople take action based on what they hear from their customer. Its
not good enough to just listen. You need to internalize what the buyer just said and then do something
about it.

SALES SUBJECT MATTER EXPERTISE

Salespeople arent just vacuous portals anymore. They actually need to be subject matter experts in two
areas. First, they need to understand the buyer. This involves knowing about the pressing issues that the
buyer is facing and what the buyer wants as they work their way to a purchase. Second, salespeople need
to know a lot about their own product or service.

ALWAYS BE HELPING
Buyers dont want to be closed; they want to be helped. Thats why always be helping is the new always be
closing (we just published a post on Always Be Helping). ABH is more of a mindset than a skill. A lot of
salespeople struggle with this, but you should try to remember it every time you interact with a buyer.

COMPELLING STORYTELLING
Buyers also dont want to hear about your product or service. Good salespeople know this and weave the
product or service theyre selling into larger story that has an arc and ends with the customer receiving
what they want (which is usually not your product). For example, when a business buys phone system,
they dont really want to buy a phone system they want to grow their revenues and recognize that the
phone is an effective tool for doing that.

SALESPEOPLE AS COPYWRITERS
Salespeople must be able to write. Its one of todays most important sales skills given how much sales
now uses email to communicate with buyers. There are a few rules to keep in mind when it comes to sales
copywriting. First, the less you write, the better. Try to keep written communications short and sweet.
Second, avoid using generic copy. You should take the time to personalize as many of your
communications as possible. Third, use bullets to format your copy lists are just easier for customers to
digest. Finally, start and conclude your written communications with a call to action that asks the buyer to
take a next step.

PHONE-BASED SALES
Field sales are definitely moving inside and the face-to-face meeting is quickly becoming the 60 minute
teleconference. As a result, salespeople need to be effective at managing sales calls using the phone. This
requires different skills such as the ability to read the tone of someones voice or measure the cadence of
the conversation to determine whether the prospect is satisfied or not. One important tip here is to make
sure that you can use tools such as Clear slide to bring as much of the face-to-face experience to the phone.

SOCIAL ENGAGEMENT WITH BUYERS

Social media has given rise to the field of social selling. A lot of good salespeople now view their
participation on Facebook, Twitter, and LinkedIn as one of the more effective sales skills. Thats all fine
and good, but were not just talking about tweeting every now and then. Were talking about really
engaging your buyers socially. Some of the best salespeople out there do things like organize dinners for
groups of buyers that they are interested in getting to know. Theres very little selling that takes place at
these mini-events. And its the salesperson who organizes them; not the company they work for.

PERSONALIZED INTERACTIONS
A lot of buyers want context when they have an experience with sales or marketing for that matter. They
dont want the generic message or sales pitch. They want something thats specific to them. One way to do
this is to weave messaging and content that is specific to the buyers demographics into your sales efforts.
In a B2B setting, this might involve using specific industry examples when selling. On the consumer side,
this might involve tailoring how you communicate with a buyer depending on their age and gender. You
can also reference recent events in the buyers personal or professional life (depending on the sales
context) to personalize your interactions.

MARKETING SKILLS IN SALES

Some very smart people think that marketing is eating sales. Were not willing to go quite that far, but we
do agree that sales has a lot to learn from marketing and that sales people who possess advanced marketing
skills will fare well. For example, content selling (you can learn more by reading our post on content
selling) is an emergent, but important sales skill that salespeople can use to move the buyer through the
buying cycle. Some sales organizations are also using a campaign format to structure how they conduct
traditional sales activities like prospecting. These activities used to be unorganized and non-standardized.
Now, sales management is borrowing from marketing and enforcing campaign-like structure on many sales
activities.

HELPING PROSPECTS ACHIEVE NEXT STEPS

The buyer has less attention to give to you than ever before. Thats why its no longer good enough to
agree on next steps. You actually need to help the buyer achieve those next steps. Lets say a buyer that
youve been working with needs to get the CEOs approval before they can make the final decision. You
should help the buyer achieve this next step by providing them with the information, content, and tools
they need to persuade the CEO that your product or service is the right one.

USING SALES TECHNOLOGY TO BOOST PRODUCTIVITY

Many sales organizations are using technology to become more efficient and shorten the length of the
average sales cycle. Salespeople are actually busier than ever as evidenced by a recent CSO Insights report
that shows that salespeople only spend 37% of their time actually selling. The salesperson that can use
technology to become more productive has a significant advantage over their peers they are able to spend
more time selling. For more on what technologies are helping sales increase productivity, check out our
post on Sales Productivity.

LINKING DAILY ACTIVITIES TO QUOTA

Achieving quota isnt something that magically happens at the end of the quarter or increasingly at the end
of the month. The best salespeople focus on the daily tasks or activities that they know will set them up to
achieve their quota. This sales skill is usually learned over time, but its invaluable. For example, a sales
professional might know that if they have a certain number of meetings with prospects this month, that this
will allow them to achieve quota next month. Its like the old Zen proverb on how to achieve enlightment:
chop wood, carry water.

MANAGING THE PIPELINE LIKE A PORTFOLIO

The best salespeople manage their pipeline much like a hedge fund manager would manage their portfolio.
They invest time in a number of opportunities knowing that some will close and some will not. They track
the performance of each opportunity, as well as the aggregate performance of their entire pipeline on a
weekly, if not daily, basis. They are also able to conduct a bottoms up analysis of their pipeline at any
time to determine where they sit relative to their quota target.

roles of sales manager A sales manager plays a key role in the success and failure of an organization. He
is the one who plays a pivotal role in achieving the sales targets and eventually generates revenue for the
organization.
A sales manager must be very clear about his role in the organization. He should know what he is supposed to do at the
workplace.

Let us understand the roles and responsibilities of a sales manager:

A sales manager is responsible for meeting the sales targets of the organization through effective planning and
budgeting.

A sales manager cant work alone. He needs the support of his sales team where each one contributes in his best
possible way and works towards the goals and objectives of the organization. He is the one who sets the targets for
the sales executives and other sales representatives. A sales manager must ensure the targets are realistic and
achievable.

The duties must not be imposed on anyone, instead should be delegated as per interests and specializations of the
individuals. A sales manager must understand who can perform a particular task in the most effective way. It is his
role to extract the best out of each employee.

A sales manager devises strategies and techniques necessary for achieving the sales targets. He is the one who
decides the future course of action for his team members.

It is the sales managers duty to map potential customers and generate leads for the organization. He should
look forward to generating new opportunities for the organization.

A sales manager is also responsible for brand promotion. He must make the product popular amongst the
consumers. A banner at a wrong place is of no use. Canopies must be placed at strategic locations; hoardings
should be installed at important places for the best results.

Motivating team members is one of the most important duties of a sales manager. He needs to make his team
work as a single unit working towards a common objective. He must ensure team members dont fight amongst
themselves and share cordial relationship with each other. Develop lucrative incentive schemes and introduce
monetary benefits to encourage them to deliver their level best. Appreciate whenever they do good work.

It is the sales managers duty to ensure his team is delivering desired results. Supervision is essential. Track their
performances. Make sure each one is living up to the expectations of the organization. Ask them to submit a report
of what all they have done through out the week or month. The performers must be encouraged while the non
performers must be dealt with utmost patience and care.

He is the one who takes major decisions for his team. He should act as a pillar of support for them and stand by
their side at the hours of crisis.

A sales manager should set an example for his team members. He should be a source of inspiration for his team
members.

A sales manager is responsible for not only selling but also maintaining and improving relationships with the
client. Client relationship management is also his KRA.

As a sales manager, one should maintain necessary data and records for future reference.

19.Explain sales quota and type of sales quota, what problem are faced in
fixing sales quota?
Ans:-

Sales Quota

Any kind of sales figures given to any particular person or region or distributor is called Sales Quota.
It can be measured either in terms money or the stock of goods sold. It is particularly an amount of
target sales that is assessed on daily or monthly basis. To assess the performance of an individual sales
person, his/her ability is looked to meet the given target.

Types of Sales Quotas:

This can include many things from cold calling, Marketing emails, advertisements, invitation to
executives for events and many more things. Its always in the interest of the sales team as to how
they should get the stuff out.
1. Sales volume quota: This always includes sales in monetary terms or units sold for a specific
period of time. This type of sales quotas is always set for a given year. The sales teams are then
assigned their yearly quotas to be accomplished. These quotas are set in the areas mentioned below:
(i). Product line
(ii). Product range
(iii). Branch offices
(iv). Individual sales person
2. Profit quotas: This type of quotas is very useful for FMCG companies as various products add to
varying levels of profits. The advantage of this type of sales quota is that the sales person can use his
time optimally. Hence he/she can strike a balance between high and low profit yielding products.
3. Expense Quotas: These are linked to selling costs with a realistic time frame. Few companies set
quotas for expenses to different sales levels achieved by the sales person. The sales team may be
given an expense budget which is a percentage of a particular regions sales volume. He/She should
spend only that sum as expenses.
4. Activity Quotas: Under such quotas the sales team is required to execute other activities that will
have a long term bearing on the companys goodwill. Here certain objectives related to the job are set
in attaining the performance targets of the sales force. When it comes to the Indian companies we
have few common types of these quotas as mentioned below:
(i). Quantity of sales presentation made
(ii). Amount of calls made
(iii). Number of dealer visits
(iv). Recovery calls made
(v). New clients procured
The given below graph represents the percentage of sales by using cold calling methods. We can
easily find out the number of attempts with percentage success. It is relevant from the picture that
more the number of attempts more are your success percentage.

Now let us see the various methods to calculate Sales quotas:

Any previous years regional sales numbers.

Cost to the company administration plus gross margin.
Revenue goals dedicated in the beginning.
Top sales persons percentage achieved in his region.

Problems faced in fixing sales quota:- Sales quotas are a common metrics used to motivate and asses
salespeople on the level of sales volume they generate in a month, quarter or year. While quotas do provide tangible
goals and measurement tools, they also create some problems for both sales reps and companies that rely on sales
staff.

Unreasonable Expectations
One common problem comes from companies that generate sales quotas randomly or arbitrarily. In essence,
companies often pick numbers out of the air or base standards on what they've seen or heard other companies do.
Unrealistic, excessive or demanding sales quotas put undue stress and pressure on sales staff and set both the rep and
company up for disappointment.

Manager-Employee Tension
Tension can arise between sales representatives and their managers when quotas exceed reasonable thresholds of
performance. Sales managers may feel compelled to institute quotas even they find excessive. Sales reps may blame
or feel angst toward managers that assign quotas and then put significant stress on them to constantly perform. This
tension can detract from the ability of a manager to create a positive, team-oriented work culture.

Reduced Revenue and Profit

Sales quotas may actually lead to lower revenue and profit performance in a given period. Salespeople often find
loopholes or ways to manipulate the quota system that benefits them in the long run, but harms the company in the

short-term. Salespeople that are over their current period quota may put off sales to essentially "sandbag" for the next
month or quarter. Similarly, those that will miss the current period quota may delay sales to get off to a good start the
next period.

Interpersonal or Intra team Conflict

Sales quotas can contribute to interpersonal conflicts between salespeople or group conflicts between sales teams.
Salespeople may step on each others' toes, steal prospects or clients, fight for walk-in clients and engage in other
activities that boost their own performance at the expense of others. In the long run, this can lead to a lack of internal
support and low morale.

20. What is sales forecasting and what are the various sales forecasting techniques?

Ans:-

Sales Forecasting

Sales forecasting is the process of estimating future sales. Accurate sales forecasts enable
companies to make informed business decisions and predict short-term and long-term performance.
Companies can base their forecasts on past sales data, industry-wide comparisons, and economic
trends.
It is easier for established companies to predict future sales based on years of past business data.
Newly founded companies have to base their forecasts on less-verified information, such as market
research and competitive intelligence to forecast their future business.
Sales forecasting gives insight into how a company should manage its workforce, cash flow, and
resources. In addition to helping a company allocate its internal resources effectively, predictive
sales data is important for businesses when looking to acquire investment capital.

Sales forecasting allows companies to:

Predict achievable sales revenue;

Efficiently allocate resources;

Plan for future growth.

Top 9 Methods of Sales Forecasting

The following are the various methods of sales forecasting:

1. Jury of Executive Opinion.

2. Sales Force Opinion.
3. Test Marketing Result.
4. Consumers Buying Plan.
5. Market Factor Analysis.
6. Expert Opinion.
7. Econometric Model Building.
8. Past Sales (Historical Method).
9. Statistical Methods.

1. Jury of Executive Opinion:

This method of sales forecasting is the oldest. One or more of the executives, who are
experienced and have good knowledge of the market factors make out the expected sales.
The executives are responsible while forecasting sales figures through estimates and
experiences. All the factors-internal and externalare taken into account. This is a type
of committee approach. This method is simple as experiences and judgement are pooled
together in taking a sales forecast figure. If there are many executives, their estimates are
averaged in drawing the sales forecast.
Merits: (a) This method is simple and quick.
(b) Detailed data are not needed.
(c) There is economy.
Demerits:
(a) It is not based on factual data.

(b) It is difficult to draw a final decision.

(c) More or less, the method rests on guess-work, and may lead to wrong forecasts.
(d) It is difficult to break down the forecasts into products, markets, etc.

2. Sales Force Opinion:

Under this method, salesmen, or intermediaries are required to make out an estimate sales
in their respective territories for a given period. Salesmen are in close touch with the
consumers and possess good knowledge about the future demand trend. Thus all the sales
force estimates are processed, integrated, modified, and a sales volume estimate formed
for the whole market, for the given period.
Merits:
(a) Specialized knowledge is utilized.
(b) Salesmen are confident and responsible to meet the quota fixed.
(c) This method facilitates to break down in terms of products, territories, customers,
salesmen etc.
Demerits:
(a) Success depends upon the competency of salesmen.
(b) A broad outlook is absent.
(c) The estimation may be unattainable or may to too low for the forecasts as the
salesmen may be optimistic or pessimistic.

3. Test Marketing Result:

Under the market test method, products are introduced in a limited geographical area and
the result is studied. Taking this result as a base, sales forecast is made. This test is
conducted as a sample on pre-test basis in order to understand the market response.
Merits:

(a) The system is reliable as forecast is based on actual result.

(b) Management can understand the defects and take steps to rectify.
(c) It is good for introducing new products, in a new territory etc.
Demerits:
(a) All the markets are not homogeneous. But study is made on the basis of a part of a
market.
(b) It is a time-consuming process.
(c) It is costly.

4. Consumers Buying Plan:

Consumers, as a source of information, are approached to know their likely purchases
during the period under a given set of conditions. This method is suitable when there are
few customers. This type of forecasting is generally adopted for industrial goods. It is
suitable for industries, which produce costly goods to a limited number of buyerswholesalers, retailers, potential consumers etc. A survey is conducted on face to face basis
or survey method. It is because changes are constant while buyer behaviour and buying
decisions change frequently.
Merits:
(a) First hand information is possible.
(b) Users intention is known.
Demerits:
(a) Customers expectation cannot be measured exactly.
(b) It is difficult to identify actual buyers.
(c) It is good when users are few, but not practicable when consumers are many.

(d) Long run forecasting is not possible.

(e) The system is costly.
(f) Buyers may change their buying decisions.

5. Market Factor Analysis:

A companys sales may depend on the behaviour of certain market factors. The principal
factors which affect the sales may be determined. By studying the behaviours of the
factors, forecasting should be made. Correlation is the statistical analysis which analyses
the degree of extent to which two variables fluctuate with reference to each other.
The word relationship is of importance and indicates that there is some connection
between the variables under observation. In the same way, regression analysis is a
statistical device, which helps us to estimate or predict the unknown values of one
variable from the known values of another variable.
For instance, you publish a text book on Banking, affiliated to different universities.
The permitted intake capacity of each and the medium through which the students are
taught are known. Is it a compulsory or an optional subject? By getting all these details
and also by considering the sales activities of promotional work, you may be able to
declare the probable copies to be printed.
The key to the successful use of this method lies in the selection of the appropriate market
factors. Minimizing the number of market factors is also important. Thus the demand
decision makers have to consider price, competitions, advertising, disposal income,
buying habits, consumption habits, consumer price index, change in population etc.
Merits:
(a) It is a sound method.
(b) Market factor is analysed in detail.
Demerits:

(a) It is costly.
(b) It is time-consuming.
(c) It is a short run process.

6. Expert Opinion:
Many types of consultancy agencies have entered into the field of sales. The consultancy
agency has specialized experts in the respective field. This includes dealers, trade
associations etc. They may conduct market researches and possess ready-made statistical
data. Firms may make use of the opinions of such experts. These opinions may be
carefully analysed by the company and a sound forecasting is made.
Merits:
(a) Forecasting is quick and inexpensive.
(b) It will be more accurate.
(c) Specialized knowledge is utilized.
Demerits:
(a) It may not be reliable.
(b) The success of forecasting depends upon the competency of experts.
(c) A broad outlook may be lacking.

7. Econometric Model Building:

This is a mathematical approach of study and is an ideal way to forecast sales. This
method is more useful for marketing durable goods. It is in the form of equations, which
represent a set of relationships among different demand determining market factors. By
analyzing the market factors (independent variable) and sales (dependent variable), sales
are forecast. This system does not entirely depend upon correlation analysis. It has great
scope, but adoption of this method depends upon availability of complete information.

The market factors which are more accurate, quick and less costly may be selected for a
sound forecasting.

8. Past Sales (Historical method):

Personal judgement of sales forecasting can be beneficially supplemented by the use of
statistical and quantitative methods. Past sales are a good basis and on this basis future
sales can be formulated and forecast. According to Kirkpatrick, todays sales activity
flows into tomorrows sales activities; that is last years sales extend into this years sales.
This approach is adding or deducting a set of percentage to the sales of previous year(s).
For new industries and for new products, this method is not suitable.
(a) Simple Sales Percentage:
Under this method, sales forecast is made by adding simply a flat percentage of sales so
as to forecast sales as given below:
Next year sales = Present year sales + This year sales/Last year sales
or = Present year sales + 10 or 5% of present sale
(b) Time Series Analysis:
A time series analysis is a statistical method of studying historical data. It involves the
isolation of long time trend, cyclical changes, seasonal variations and irregular
fluctuations. Past sales figures are taken as a base, analysed and adjusted to future trends.
The past records and reports enable us to interpret the information and forecast future
trends and trade cycle too.
Merits:
(a) No guess-work creeps in.
(b) The method is simple and inexpensive.
(c) This is an objective method.
Demerits:

(a) Market is dynamic is not considered.

(b) No provision is made for upswings and downswings in sales activities.

9. Statistical Methods:
Statistical methods are considered to be superior techniques of sales forecasting, because
their reliability is higher than that of other techniques.
They are:
(i) Trend Method
(ii) Graphical Method
(iii) Time-series Method:
(a) Freehand method
(b) Semi-average method
(c) Moving average method
(d) Method of least square
(iv) Correlation method
(v) Regression method.
NB:
The above statistical methods can easily be studies with the help of any statistics book.
Apart from the above, the following factors may also be considered:
1. Availability of raw materials
2. Plant capacity
3. Government policies

4. Buying habits of consumers

5. Fashion changes
6. Distribution system
7. Financial capacity
8. Market competition
9. National income movement
10. Sales promotions.

23. in determining the optimal sales force size what is work load method?
Ans: According to this method the basic assumption is that all sales personnel should shoulder equal workloads.
Management estimates the total workload involved in covering entire companies market and divides by the workload that an
individual sales person should be able to handle, thus determining total number of sales people required. The companies
applying this approach generally assume that the interactions of three major factors customer size, sales volume potential
and travel load then determine the workload involved in covering the entire market.

26. what is warehousing and why it is important in distribution?

Ans:- A warehouse is a large, spacious and secured building intended for commerce and government
use. It functions as a storage place for large quantities of goods. Warehousing is not simply about
storage though. It also covers the administration and manual labor required in storage such as
delivery, documentation, examination and certification.
There are three types of warehouses: public, owned by third party logistics (3PL) and companyowned. The government through its arm uses public warehouses to store shipments and contrabands
they confiscated temporarily. The business sector usually resorts to company-owned or 3PL-owned
warehouses to meet their storage needs. Wholesalers, exporters, importers and manufacturers are the
common clients of warehousing service providers. Raw materials and finished goods alike are kept in
warehouses.

There are different reasons for warehousing. The cheese making and wine-making (also known as
viniculture) industries require an extensive time to produce their products. Warehouses are good
places for their products to mature.
This business operation also ensures the sufficiency of supply. As a result, the prices of the goods
involved are less likely to fluctuate.
Warehousing may also cover the completion of goods before distribution. The components and
packing materials are just delivered to the building. The assembly and packing of the goods will be
done in the warehouse. By doing so, the product cover will still look new and enticing upon delivery
to distribution centers. If you pack the goods before bringing them to the warehouse, the packaging
may be damaged while on the way.

Distribution
In the business language, distribution refers to the delivery of finished goods to buying centers such as
shopping centres, markets and retailer stores. Some manufacturers deliver their goods directly to their
accredited retailers. This is advantageous if the retailers business establishments are just nearby the
manufacturers places.
Direct delivery of goods to retailers can save you from warehousing costs. However, if you are far
from distribution centers, you have to deal with trucking costs and inventory frequently.
Thus, it is safe to say that warehousing and distribution go hand-in-hand in providing a more costeffective way of delivering goods. There are even businesses that literally combined these two
business operations.
Some warehouses are also utilized as a buying or retailing center while maintaining its original
function. In fact, the Germans still have warehouse-like department stores. The architecture of some
of these buildings is one of the causes for their dual functions. Excessive beautification of warehouses
makes them appealing for shopping.
Impact of Improper warehousing and distribution
Major and minor mistakes alike in warehousing and distribution can result to high losses. Incorrect
storage can damage the goods. If the damaged goods are sold, they will either be sold in a much lower
price or not be sold at all. The manufacturers will not be able to get back their investments.
Failure to deliver the goods to the right destinations will cause the business to cover another round of
delivery costs to do two things: to bring back the wrong goods and to deliver the right ones. Due to
delays, goods can get damaged and intended recipients may not want to accept and pay for the
delivery.
Another adverse effect of wrong warehousing and distribution is that it can destabilize the prices of
goods. If there is not enough supply due to the incompetence of the warehousing management, the
prices of goods may rise to meet the unchanged demand of the consumers.
27. explain vertical and horizontal marketing system.

Vertical Marketing System &

Horizontal Marketing Strategy
Ans:-

(a) Vertical Marketing System:

Manufacturers, sales executives. Distributors and retailers, should form the
vertical marketing system and act in an unified manner to eliminate the
Middleman and Agent system for the sales and marketing of products and
services in order to enhance profitability.
Vertical Marketing System (VMS) holds the promise to overcome the
unproductive conflicts which results when the above agencies work
independently instead of an unified manner. VMS can achieve economies of
scale through their size, bargaining power and elimination of duplicated services.

(b) Horizontal Marketing Strategy (HMS):

ITC Ltd. s partnership with the Khadi & Village Industries Commission to source
and distribute the laters agarbatis signifies a successful working of a Horizontal
Marketing System. It is a lot more than the lofty ideal of a private enterprise
supporting predominantly rural enterprise.
It is a sound business sense wherein a manufacturer and a corporate with all
India distribution network come together to derive better value for both. A better
appreciation of this emerging paradigm is necessary to take Indias promising
manufacturing prospect forward.
Successful working of such HMS would make retailing no longer an appendage
to manufacturing. HMS is a business in its own right, albeit a high volume-low
margin one. Future enhance scope of HMS may force manufacturing to change.
The Wal-Mart and the Tescos, epitome of modern retailing, have succeeded
because they provide loads of commodities under one roof and that too at very
competitive prices. To do so, they have invested in sophisticated infrastructure
and cultivated low-cost quality producers.

What India needs is to invite mega retailers so that wider manufacturing gets an
incentive to become even more competitive, which would in turn help India
become a global manufacturing, the way China has become.
New manufacturers including these in SME Sector would then be spared the
pains and costs of investment in distribution networks to reach their goods to
consumers. Much of that burden and associated risk would devote on to the
retailers, leaving them with the core task of manufacturing.

28. what is channel conflict how are they managed?

Ans:- The Channel Conflict arises when the channel partners such as manufacturer,
wholesaler, distributor, retailer, etc. compete against each other for the common sale
with the same brand. In other words, there is a conflict among the channel partners
when one prevents the other from achieving its objective. It results in a huge loss
for all the partners in the channel.

Types of Channel conflict

1.

Vertical Channel Conflict: This type of conflict arises between the different
levels in the same channel.

E.g.The conflict between the manufacturer and the wholesaler regarding price,
quantity, marketing activities, etc.
2.

Horizontal Channel Conflict: This type of conflict arises between the same
level in the same channel.
E.g. The conflict between two retailers of the same manufacturer faces disparity in
terms of sales target, area coverage, promotional schemes, etc.

3.

Multichannel Conflict: This type of conflict arises between the different

market channels participating in the common sale for the same brand.
E.g. If a manufacturer uses two market channels, first is the official website through
which the products and services are sold. The second channel is the traditional
channel i.e. through wholesaler and retailer. If the product is available at a much
lower price on a website than is available with the retailer, the multichannel conflict
arises.

Causes of Channel conflict

Following are some of the causes

that give birth to

the channel conflict:

Goal incompatibility: Different partners in the channel of distribution have

different goals that may or may not coincide with each other and thus result in
conflict.
E.g. The manufacturer wants to achieve the larger market share by adopting the
market penetration strategy i.e. offering a product at low price and making the
profits in the long run, whereas the dealer wants to sell the product at a high cost
i.e. market skimming strategy and earn huge profits in the short run.

Ambiguous Roles: The channel partners may not have a clear picture of
their role i.e. what they are supposed to do, which market to cater, what pricing
strategy is to be adopted, etc.
E.g. The manufacturer may sell its products through its direct sales force in the
same area where the authorized dealer is supposed to sell; this may result in the
conflict.

Different Perceptions: The channel partners may have different perceptions

about the market conditions that hampers the business as a whole thereby leading
to the conflict.
E.g. The manufacturer is optimistic about the change in the price of the product
whereas the dealer feels the negative impact of price change on the customers.

Manufacturer dominating the Intermediaries: The intermediaries such as

the wholesaler, distributor, retailer, etc. carry the process of distribution of goods and
services for the manufacturer. And if the manufacturer makes any change in the
price, product, marketing activity the same has to be implemented with an
immediate effect thereby reflecting the huge dependence of intermediaries on the
manufacturer.
E.g. If the manufacturer changes the promotional scheme of a product with the
intention to cut the cost, the retailer may find it difficult to sell the product without
any promotional scheme and hence the conflict arises.

Lack of Communication: This is one of the major reasons that lead to the
conflict among the channel partners. If any partner is not communicated about any
changes on time will hamper the distribution process and will result in disparity.
E.g. If retailer urgently requires the stock and the wholesaler didnt inform him
about the availability of time may lead to the conflict between the two.

Managing the Channel Conflict

In order to overcome the destructive channel conflict some solutions are listed
below:

Subordinate Goals: The channel partners must decide a single goal in terms
of either increased market share, survival, profit maximization, high quality,
customer satisfaction, etc. with the intention to avoid conflicts.

Exchanging employees: one of the best ways to escape channel conflict is

to swap employees between different levels i.e. two or more persons can shift to a
dealer level from the manufacturer level and from wholesale level to the retailer
level on a temporary basis. By doing so, everyone understands the role and
operations of each other thereby reducing the role ambiguities.

Trade associations: Another way to overcome the channel conflict is to form

the association between the channel partners. This can be done through joint
membership among the intermediaries. Every channel partner works as one entity
and works unanimously.

Co-optation: Under this, any leader or an expert in another organization is

included in the advisory committee, board of directors, or grievance redressal
committees to reduce the conflicts through their expert opinions.

Diplomacy, Mediation and Arbitration: when the conflict becomes critical

then partners have to resort to one of these methods.
In Diplomacy, the partners in the conflict send one person from each side to resolve
the conflict.
In Mediation, the third person is involved who tries to resolve the conflict through his
skills of conciliation.
In Arbitration, when both the parties agree to present their arguments to the
arbitrator and agree to his decision.

Legal resource: When the conflict becomes crucial and cannot be resolved
through any above mentioned ways, the channel partners may decide to file a
lawsuit.

Thus, it is a fundamental responsibility of every organization to maintain harmonious

relations with its channel partners as the conflict between these may result in huge
losses for each involved in the channel including the manufacturing company.
31. distinguish the difference between modern trade and traditional trade, how does
it effect distribution?
Ans:-

Traditional

Trade

vs

Modern

Trade

Right from the ancient times when barter was the only form of trade, as there was no money
to make profit, trade has gone through a number of changes, both monetarily and
technologically. If we include barter in traditional forms of trade and compare it with modern
forms of trade such as buying and selling products on the internet, we find a host of
differences between the two. Not getting to see the face of the shop owner, choosing product
on ones own and getting it billed electronically is another important difference between
traditional and modern trades. Let us take a closer look at the situation.
Traditional Trade
More than half of the worlds population of 7 billion lives on a paltry $2 per day (or less) and
comes from developing (read poor) countries. This segment still buys and sells through
traditional means of trading, which has been stagnant for quite a few decades now. This
populace still buys items in retail stores, which are far smaller and much less sophisticated
than the glitter and technology of modern retailing. The word traditional trade is collective
representation of these small, simple stores.
Traditional trade also includes roadside vendors and food stalls on highways, cities and
villages in all parts of the world. All markets in cities having single shops also come within
the purview of traditional trade. There are countless examples of people opening up shops in
the garage, or in the front section of their homes to do retailing in the traditional manner.
Modern Trade
All big retail chains in the form of hyper stores and malls coming up in middle class cities
after they have saturated in metro cities of countries like India, China, Brazil, Indonesia, and
of course the developed world represents modern trade around the world. The big change to
retail has come through multi-brand shops in malls and the way businesses are conducted;
electronically on the net, with far less constraints of space and infrastructure. The marketing
and supplying these electronic stores and big malls is totally different from the demand and
supply chain of the traditional markets.

What is the difference between Traditional Trade and Modern Trade?

In traditional markets, the shop owners are actually no more than gate keepers

though they get to keep profit involved in transactions. On the other hand, there is
virtually no owner to be seen by customers in modern trade such as multi-brand
stores in big malls and electronic stores.

When the entire market is in front of a customer in the shape of a 2X2 mobile
screen, it makes all the difference between the way people bought in traditional
markets and the way they do today in the modern world.

Modern trade can be conducted at any time anywhere in the world even when
the consumer is flying over skies or inside a moving train. On the other hand,
traditional trade requires the presence of the customer in the shop and the
display of all items on sale.

Self service is the main feature of buying in modern trade while, in traditional
trade, the onus of display and selling was on salesman and shopkeeper.