LITERATURE REVIEW

Sales refer to the exchange of goods or services for an amount of money or its comparable in kind. Selling helps an organization achieve its business goals. Thus, managing sales in an organization is a critical activity. A sales manager needs to ensure that the sales people are motivated to perform the selling function in a way that will help the organization achieve its goals. The sales team incessantly monitors the changes taking place in the external environment regarding competitors, customers, government and other assertive agencies, advances in technology, and industry trends. This provides the sales personnel with imperative information regarding trends in organizational sales, product development, and budgets. By offering the management vital inputs pertaining to such information, the sales team helps the management to develop plans regarding sales, production, and design. Over the years, significant changes have taken place in the selling environment, leading to changes in the sales function. The trends that have shaped the sales function include shorter product life cycles, longer and more complex sales cycles, reduced customer loyalty, strong competition among manufacturing firms, rising customer expectations, increasing buyer expertise, electronic revolution in communications, and the entry of women into the sales force. In addition to having a strong sales function, companies

should also have efficient distribution channels to make the products available to the end consumer. Management of distribution channels involves efficient channel design, conflict management and implementation of complicated channel information systems which will improve the process of making the products available to the end consumer in a timely manner. This book, Sales and Distribution Management provides an overview of the sales and distribution function. It discusses various aspects of the sales function ranging from various

sales organization structures to the role of the sales manager in improving sales by hiring, training, motivating and leading the sales force. The second half of the book deals with the distribution function and discusses logistics and channel management. Control is one of the most critical functions performed by a sales manager as it measures the performance of the system and helps the manager take corrective action if the performance of the system is not in agreement with the formulated plans. The present day dynamic marketplace has forced sales managers to shift their focus in sales control from sales volume single-handedly and to lay equal emphasis on costs incurred in implementing the sales effort. The objective of sales control is to ensure that the company's sales efforts are in tune with its sales plan by taking necessary measures in case of deviations. The sales control function measures the performance of the sales force and identifies the problems and opportunities that the firm is exposed to. The process of sales control involves setting goals, comparing actual with the targets, and taking up corrective action if necessary. The sales efforts of a company can be studied through a sales analysis that involves assembly classifying, comparing, and studying the sales data of the company. A typical sales analysis involves deciding on the purpose of evaluation, comparing the sales figures with some standards and processing the data to generate reports. A sales analysis can be most informative when the sales data is broken down hierarchically. An analysis of volume of sales by categories is very helpful in identifying the root causes of the problems in the sales activities of the firm. Though a sales analysis helps identify the problems associated with the sales activities of the firm, it is also bound by a few limitations like dependency on accounting records, inability to reflect the profitability of sales, etc. Sales analysis involves analyzing the sales volume or the total sales of the company. It includes

the total sales of the company by territory, customer, and product category. A sales audit is periodically taken up by the sales management to examine the entire selling operations of the firm. The audit involves an audit of the sales organization, the sales environment, planning systems, and sales management functions. While a sales analysis measures the sales volume achieved, the marketing cost analysis looks into the costs and expenses incurred to achieve the sales volume and their justification. A cost analysis involves spreading the natural costs, allocating them to functional units, studying the profitability of the units, and implementing appropriate action depending on the findings of the analysis. Just as a sales audit examines the entire sales operations of a firm, a marketing audit evaluates and enhances the effectiveness of a firm's marketing operations by studying its marketing strategies, policies, and practices. Sales managers use profitability analysis to relate the sales revenues to marketing costs. This helps sales managers to take necessary measures to ensure higher profitability of the firm's sales transactions. A number of principles such as the iceberg principle, the 80/20 principle and cross-classifications guide sales managers in conducting effective sales and cost analysis. These principles reveal the behavior of sales data and the actual reasons underlying them. They forewarn sales managers of impending dangers and help them to take measures to counter them. Everyone, at some time or the other, must surely have been sold a product that he or she did not need. Selling is a profession that has been widely criticized for the unethical dimensions associated with it. Ethics is the set of rules or standards that govern the conduct of a person or members of a profession. Ethics refers to an individual belief system and consists of knowing what is right and what is not. It forms a very important part of sales and is essential for lending integrity to a salesperson's behavior. No discussion on ethics is complete without a reference

being made to social responsibility. Social responsibility exemplifies ethical behavior and is defined as an individual's or institution's concern for the consequences of his/its actions as these might affect the interests of others in the society. Companies doing business with no regard to social responsibility run the risk of attracting the attention of environmental groups, earning negative publicity, and losing the goodwill of society. Therefore, companies try to instill a sense of ethics in their employees and conduct business in a socially responsible way. Indian companies are now more concerned with corporate social responsibility than ever before. Companies in the past were concerned more about making profits than anything else. But in recent times, firms have realized the importance of corporate social responsibility. Corporate social responsibility has been defined as the commitment made by businesses to contribute to sustainable economic development, to work with employees, their families, the local community, and society at large to improve the quality of life. CSR is a process that helps a firm to function ethically and make a positive contribution to the welfare of society. All companies are expected to imbibe values pertaining to corporate social responsibility in their mission and make CSR a part of the organizational policies. In order to fulfill their social responsibility, companies need to effectively communicate to the public about the company's ethical policies, set high ethical standards for themselves, and evaluate themselves on ethical performance from time to time through means of ethical audits. Several countries have passed declarations and policies regarding CSR. The Indian Government has amended the Indian Companies Act, 1956, making it mandatory for companies to conform to certain provisions of this law in order to be accepted as responsible corporate. Although Indian companies have been indulging in philanthropic activities of some kind or the other, corporate social responsibility is a totally different field altogether. There is a much wider scope for corporate social responsibility in the

Indian corporate scenario with its coverage extending to human rights, labor standards, as well as environmental issues. Companies in the current scenario are operating in an intensely competitive environment. Especially during the past 20 years, competition has been rapidly increasing due to globalization. According to the US Chamber of Commerce, companies may conduct business on any of the following four levels of social responsibility obeying the law, meeting public expectations, anticipating new social demands, and leading the way. The ethical behavior of an individual is influenced by that individual's stage of moral development. An individual passes through three levels of moral development -preconvention, conventional, and principled. In organizations, the management is largely responsible for the ethical or unethical behavior of its employees. A sales manager faces ethical issues that cover the ethical dilemmas of his sales people as well as the ethical aspects pertaining to his decisions regarding hiring and evaluating of salespersons, assigning territories, etc. The ethical issues facing a sales manager may be studied with regard to the sales manager's relationship with his subordinates, the company, customers, and competitors. On the other hand, the ethical issues facing a salesperson pertain to the salesperson's accountability to the top management, and his relationship with other salespeople and with customers References 1. www.davekahle.com/article/distarticles.html Articles on sales & distribution by Dave Kahle providing valuable insight ... with a problem, the customers are instructed to call the sales person first. ... SM-D-14 Myths of Sales Management: The Entrepreneurial Salesperson by Dave Kahle... 2. www.optuminsight.com/.../sales-and-distribution-management-consul... Sales and Distribution Management Consulting ... finding answers and

solving problems for leading organizations in the public, nonprofit and private sectors. 3. www.scribd.com/doc/25524063/Sales-and-Distribution-Management Sales

and Distribution Management ... probe customers to learn more about their problems, adjust the marketing offer to fit the special needs of each customer,