Q.1 a. Explain the different types of sales organizations.Ans.

: Different types of Sales Organization 1 1) Organizing the Sales Force :An effective sales force is a powerful asset for any company. Doctors & physicians in UnitedStates have consistently ranked Pfizers sales force as one of the best in the pharmaceuticalindustry. As a result, when ParkeDavis launched its blockbuster cholesterollowering drug,L i p i t o r , i t e n t e r e d i n t o a n a l l i a n c e i n w h i c h P f i z e r s s a l e s f o r c e h e l p e d s e l l i n g t h e d r u g t o physicians throughout the United States.A companys management process is fundamentally affected by the firms overall businessstrategy and its strategy for accessing its target markets. The relationship between businessstrategies, a firms marketing strategy, and a firms strategic sales force program is discussed inthis unit.Sales force organization is primarily a function of properly sizing the sales organization to assurethat customers and prospects receive appropriate coverage, company products get proper representation, and the sales force is stretched but not overworked. The appropriate planning of the sales force will also depend on the size of the opportunity a firm faces and its expected saleslevel.1 2 2) Roles & Structure of the Sales Force: To be successful and produce profitable results, the sales force must implement a firms businessstrategy and market access strategy. In other words, strategic plans are implemented through theactivities and behaviors of the sales force. Key sales force behaviors include calling on certaintypes of customers and prospects, managing customer relationships and creating value for individual customers. The role of the sales force in implementing a firms market access strategyis very important.To meet customer needs efficiently and effectively and to sell the firms products and services, asales force must be well organized. Sales force structure decisions influence how customers seethe firm because sales force structure will affect the selling skills and knowledge level required of salespeople. In turn, sales management activities such as compensation, recruitment, training,and evaluation are affected. 13) Building Sales Competencies: Sales managers are responsible for hiring salespeople with the a p p r o p r i a t e s k i l l s a n d backgrounds to implement the sales strategy. Good sources must be found for new hires, andthose who are weak in these areas must be carefully screened out. In addition to hiring qualifiedpeople, salespeoples competencies are usually developed through training before they are sentinto the field. Sales managers are responsible for making sure that training is completed, andthey often conduct some of the classes. Most initial training programs are designed to familiarizesalespeople with the companys products, services, and operating procedures, with some timedevoted to development of selling skills. Because sales training is expensive, the sales manager is responsible for selecting the most cost-effective methods, location, and materials.1 2 4) Leading the Sales Force: Effective sales managers know how to supervise and lead their salespeople. Sales managersprovide leadership by inspiring people to grow and develop professionally, while achieving therevenue goals of the firm. Good leaders provide models of behavior for employees to emulate

often developing strong mutual trust and rapport with subordinates. Leadership styles vary, buteffective leaders are adept at initiating structure that is, organizing and motivating employees,setting goals, enforcing rules, and defining expectations. In addition to leading the sales force inbusiness results, sales managers are also expected to lead by example in encouraging ethicalbehavior within the sales force. Salespeople are continually confronted with ethical dilemmas.Sales managers use a variety of tools in their efforts to motivate salespeople to work moreefficiently and effectively.1 2 5) Goal directed effort: There are many techniques that have proved to be effective motivators, including sales meetings,quotas, sales contests, and recognition awards. The most powerful motivator for salespeople isoften a well-designed compensation package. Money is an important consideration for attractingand motivating people to work hard. A key task for sales managers is to devise an effective mix of salary, bonuses, commissions, expenses, and benefits without putting the firm s profitability in jeopardy. 16) Evaluate the performance of the sales force: The final step in the sales management process is to evaluate the performance of the sales forceand develop the skills of their people. This involves analyzing sales data by account, territory, andproduct line breakdowns. It also means reviewing selling costs and measuring the impact of salesforce activities on profits. b. Define sales quotas with 2 examples.Ans.: Sales Quotas Sales quotas are a way of life for the sales force. All activities of the sales force revolve aroundthe fulfillment of sales quotas. Sales quotas are targets assigned to sales personnel. They signifyt h e p e r f o r m a n c e e x p e c t e d f r o m t h e m b y t h e o r g a n i z a t i o n . S a l e s q u o t a s h e l p i n d i r e c t i n g , evaluating and controlling the sales force. They form an indispensable tool for sales managers tocarry out sales management activities. Sales quotas are prepared on the basis of sales forecastsand budgets. Sales quotas serve various purposes in organizations.They provide targets for sales personnel to achieve & also act as standards to measure salesforce performance and help motivate the sales force. Compensation plans are invariably linked toquotas. The commission and bonuses given to sales persons are based on their meeting quotasset for them. The four categories of sales quotas widely used are: Sales volume quotas, Expense quotas, Activity quotas and Profit quotas.Sales quota should be fair, challenging yet attainable, rewarding, easy to understand, flexible andmust satisfy management objectives.It must also help in the coordination of sales force activities. Setting motivating and easy tounderstand quotas is essential to obtain the cooperation of the sales force. Various methods areused to set sales quotas, among which, quotas based on sales forecasts and market potential aret h e m o s t c o m m o n . S k i l f u l a d m i n i s t r a t i o n b y s a l e s m a n a g e r s i s r e q u i r e d f o r e f f e c t i v e implementation of quotas. Convincing salespeople about the fairness and accuracy of quotashelps the sales management to successfully implement quotas.Sales quotas have certain limitations such as being time consuming, difficulty in comprehending if complicated statistical calculations have been used and focusing on attaining sales volumes atthe cost of ignoring important non-selling activities. Quotas may reduce risk-taking among salespersonnel and may influence them to adopt unethical selling practices. With changes in thecompetitive environment and variations in customer expectations, many companies have started

Ans.: Origin and Definitions of Logistics: The term "logistics" originates from the ancient Greek "logos" means ratio, word, calculation,reason, speech, and oration". Logistics is considered to have originated in the military's need tosupply themselves with arms, ammunition and rations as they moved from their base to a forwardposition. In ancient Greek, Roman and Byzantine empires, there were military officers with thetitle Logistics- who were responsible for financial and supply distribution matters."Logistics means having the right thing, at the right place, at the right time."Logistics, the synonymous term of physical distribution, involves planning, implementing, andcontrolling the physical flow of materials from the point of origin to the point of the consumer at aprofit. The role of logistics is to get the right amount of product to the right places in the right time.Logistics is defined as a businessplanning framework for the management of material, service,information and capital flows. It includes the increasingly complex information, communicationand control systems required in today's business environment. Logistics the process of planning, implementing, and controlling the efficient, effective flow andstorage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirementsLogistics is the science of planning and implementing the acquisition and use of the resourcesnecessary to sustain the operation of a system.T h e t w o l o g i s t i c s a c t i v i t i e s v i t a l t o o r d e r f i l l i n g a r e t h e c o m m u n i c a t i o n o f c u s t o m e r o r d e r information to the order filling area and the actual process of picking out of the inventory the itemsordered. In the order information stage, communication can reduce errors in transferring order information from the order to the warehouse receipt. Communication with customers is vital tomonitoring service levels relating to dependability.Customer communication is essential to design of logistics service levels. The communicationchannel must be constantly open and readily accessible to all customers. W ithout customer contact, the logistics manager is unable to provide the most efficient and effective service.Communication must be a two-way process. The seller must be able to transmit vital logisticsservice information to the customer. In addition many customers request information on thelogistics status of shipments. The customer who needs information to plan operations expects thelogistics manager to provide answers on a timely basis. Importance of Logistics : The logistics function includes sourcing and procurement, productionplanning and scheduling, packaging and assembly, and customer service. It is involved in alllevels of planning and execution strategic, operational and tactical. Logistics management is anintegrating function, which coordinates and optimizes all logistics activities, as well as integrateslogistics activities with other functions including marketing, sales manufacturing, finance andinformation technology. Logistics is much more and much wider than mere physical handling of goods. Logistics involvesseveral other functions such as purchasing, plant location, plant layout, etc., and even thedisposal of wastes. It covers astonishingly varied professional disciplines. They are:11) Facility location22) Planning33) Forecasting and order management44) Transportation: the mode and the route55) Inventory management: all

inventories66) Warehousing77) Protective packagingRaw material and finished products had always to be moved, though on a small scale. Thingsbegan changing with the advance in transportation. Population began moving from rural to urbana r e a s a n d to business centers. No longer did people live near production centers, n o r d i d production take place near residence centers. The geographical distance between the productionpoint and consumption point increased.Since the early 1990's, the business scene has changed. The globalization, the free market andthe 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 unusualtoday. Here are some of the logistics functions that allowed this to happen:11. 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?22. Manufacturing operations how should the machines be organized, how many workers doyou need, where do you stock your materials and finished products, how many products do youmanufacture on each production run, etc.33. Transportation domestic and international, from raw materials to finished product; thatmoves what, and when, and for what price?4 4 . W a r e h o u s i n g 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 . I n v e n t o r y c o n t r o l h o w m u c h p r o d u c t i s o n h a n d , o n o r d e r , i n t r a n s i t , a n d w h e r e i s i t ? Inventory drives logistics.6 . I m p o r t / e x p o r t 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 technologythat 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. b. Name the various costs involved in distribution with examples.Ans.: Costs involved in distribution: In discussing selling and distribution expenses withwinery owners, they often start their list with the increased cost of labor, over-generous discounts,or high commissions. These discussions usually center upon tasting room sales or winery directsales to local restaurants or wine shops. However, even if a winery does not maintain its ownsales force or uses outside brokers and salespeople, there can be hidden sales and distributionexpenses involved on the wholesale level. Consider some of the following : 1)Compliance and licensing fees.2)The cost of samples (including shipping).3 ) W i n e l i s t c h a r g e b a c k s . 4 ) M a r k e t v i s i t s . 5 ) I n t e r n a l e m p l o y e e e r r o r s . 6 ) P r o m o t i o n a l e x p e n s e s . These additional costs can impact profit levels if not anticipated when projecting net profits.Once accurate production costs per case are established for each wine, pricing and profit levelscan be projected. However, sales and distribution costs must be determined in order to identifyexpenses attributed to the cost of sales. Regardless of whether wineries maintain their ownsalespeople, use outside sales teams, or develop a wholesaler network, there are expensesincurred when attempting to sell their wines to restaurants and retailers. These selling costsusually involve activities surrounding the storage, distribution, and selling of bottled case goods.If case storage is not at the winery, storage and distribution expenses begin with wine stored inan off-site warehouse location--or several locations--convenient for local and interstate trucks topick up, consolidate, and deliver wines to customers. Monthly case storage (by varietal andvintage), can add up--especially if sales are not moving at as fast as

projected. Storage costscontinue until a vintage is completely sold out, and is one of the most commonly overlookeddistribution expenses.

Q. 6. Examine the recent trends in sales management. 1 Ans.: Recent Trends in Sales Management:1) Wholesaling Wholesaling refers to the activities involved in selling to organizational buyers who intend to either resell or use for their own purposes. A wholesaler is an organization

providing the necessarymeans to: 1) allow suppliers (e.g., manufacturers) to reach organizational buyers (e.g., retailers,business buyers), and 2) allow certain business buyers to purchase products which they may notbe able to purchase otherwise.According to the 2002 Census of Wholesale trade, there are over 430,000 wholesale operationsin the United States.While many large retailers and even manufacturers have centralized facilities and carry out thesame tasks as wholesalers, we do not classify these as wholesalers since these relationshipsonly involve one other party, the buyer. Thus, a distinguishing characteristic of wholesalers is thatthey offer distribution activities both for a supplying party and for a purchasing party. For our discussion of wholesalers we will primarily focus on wholesalers who sell to other resellers suchas retailers. 2) Retailing The term retailing refers to the activities involved in selling commodities directly to consumers. Definition Retailing consists of the sale of goods or merchandise for personal or household consumptioneither from a fixed location such as a department store or kiosk, or from a fixed location andrelated subordinated services.Defined here as sales of goods between two distant parties where the deliverer has no directinterest in the transaction, the earliest instances of distance retailing probably coincided with thefirst regular delivery or postal services. Such services would have started in earnest once manhad learned how to ride a camel, horse, etc. Why? When individuals or groups left their community and settled elsewhere, some missed foodstuffsand other goods that were only available in their birthplace. They arranged for some of thesegoods to be sent to them. Others in their newly adopted community enjoyed these goods anddemand grew. Similarly, new settlers discovered goods in their new surroundings that theydispatched back to their birthplace, and once again, demand grew. This soon turned into aregular trade. Although such trading routes expanded mainly through the growth of travelingsalesmen and then wholesalers, there were still instances where individuals purchased goods atlong distance for their own use. A second reason that distance selling increased was through war.As armies marched through territories, they laid down communication lines stretching from their h o m e b a s e t o t h e f r o n t . A s w e l l a s g a r n e r i n g g o o d s f r o m w h i c h e v e r l o c a l i t y t h e y f o u n d themselves in, they would have also taken advantage of the lines of communication to order goods from home.I n c o m m e r c e , a r e t a i l e r b u y s g o o d s o r p r o d u c t s i n l a r g e q u a n t i t i e s from manufacturers or importers, either directly or through wholesaler s , a n d t h e n s e l l s i n d i v i d u a l i t e m s o r s m a l l quantities to the general public or end-user customers, usually in a shop, also called a store.Retailers are at the end of the supply chain. Marketers see retailing as part of their overalldistribution strategy.Shops may be on residential streets, or in shopping streets with few or no houses, or in shoppingcenters. Shopping streets may or may not be for pedestrians only. Sometimes a shopping streethas a partial or full rooftop to protect customers from precipitation. Online retailing, also known ase-commerce, is the latest form of non-shop retailing.S h o p p i n g generally refers to the act of buying products. Sometimes, this is done to obtainnecessities such as food and clothing; sometimes, it is done as a recreational activity.

Recreational shopping often involves window shopping (just looking, not buying) and browsingand does not always result in a purchase