ASSIGNMENT

Name Biswajit Mishra

Roll No. 520945482

Course MBA Semester-III

Sales, Distribution and

Subject Supply Chain
Management

Subject Code MK0001 Set-I

Q.1 a. What is personal selling? Discuss its benefits and limitations?

Personal selling is a promotional method in which one party (e.g., salesperson) uses skills and
techniques for building personal relationships with another party (e.g., those involved in a
purchase decision) that results in both parties obtaining value. In most cases the “value” for
the salesperson is realised through the financial rewards of the sale while the customer’s
“value” is realised from the benefits obtained by consuming the product. However, getting a
customer to purchase a product is not always the objective of personal selling. For instance,
selling may be used for the purpose of simply delivering information.
Because selling involves personal contact, this promotional method often occurs through
face-to-face meetings or via a telephone conversation, through newer technologies allows
contact to take place over the internet including using video conferencing or text messaging
(e.g., online chat).
Personal selling has a vital role in service, because of the large number of service businesses
which involve personal interaction between the service provider and the customer, the service
being provided by a person not a machine and ‘people’ becoming part of the service product.
Many customers of service firms have a close and on-going relationship with the service
providers. Under these circumstances, selling has a pivotal role in the communication mix. In
certain services, selling is the pre-eminent element in the communication mix.
Selling of services include prospect identification, sales call planning, preparation of
presentations, handling objectives and closing a sale.
Advantages of Personal Selling

One key advantage personal selling has over other promotional methods is that it is a two-
way form of communication. In selling situations the message sender (e.g., salesperson) can
adjust the message as they gain feedback from message receivers (e.g., customer). So if a
customer does not understand the initial message (e.g., doesn’t fully understand how the
product works) the salesperson can make adjustments to address questions or concerns. Many
non-personal forms of promotion, such as a radio advertisement, are inflexible, at least in the
short-term, and cannot be easily adjusted to address audience questions.
The interactive nature of personal selling also makes it the most effective promotional
method for building relationships with customers, particularly in the business-to-business
market. This is especially important for companies that either sell expensive products or sell
lower cost but high volume products (i.e., buyer must purchase in large quantities) that rely
heavily on customers making repeat purchases. Because such purchases may take a
considerable amount of time to complete and may involve the input of many people at the
purchasing company (i.e., buying center), sales success often requires the marketer develop
and maintain strong relationships with members of the purchasing company.
Finally, personal selling is the most practical promotional option for reaching customers who
are not easily reached through other methods. The best example is in selling to the business
market where, compared to the consumer market, advertising, public relations and sales
promotions are often not well received.
Disadvantages of Personal Selling

Possibly the biggest disadvantage of selling is the degree to which this promotional method is
misunderstood. Most people have had some bad experiences with salespeople who they
perceived were overly aggressive or even downright annoying. While there are certainly
many salespeople who fall into this category, the truth is salespeople are most successful
when they focus their efforts on satisfying customers over the long term and not focusing
own their own selfish interests.
A second disadvantage of personal selling is the high cost in maintaining this type of
promotional effort. Costs incurred in personal selling include:
• High cost-per-action (CPA) – CPA can be an important measure of the success of
promotion spending. Since personal selling involves person-to-person contact, the
money spent to support a sales staff (i.e., sales force) can be steep. For instance, in
some industries it costs well over (US) $300 each time a salesperson contacts a
potential customer. This cost is incurred whether a sale is made or not! These costs
include compensation (e.g., salary, commission, bonus), providing sales support
materials, allowances for entertainment spending, office supplies, telecommunication
and much more. With such high cost for maintaining a sales force, selling is often not
a practical option for selling products that do not generate a large amount of revenue.

• Training Costs – Most forms of personal selling require the sales staff be extensively
trained on product knowledge, industry information and selling skills. For companies
that require their salespeople attend formal training programs, the cost of training can
be quite high and include such expenses as travel, hotel, meals, and training
equipment while also paying the trainees’ salaries while they attend.
A third disadvantage is that personal selling is not for everyone. Job turnover in sales is often
much higher than other marketing positions. For companies that assign salespeople to handle
certain customer groups (e.g., geographic territory), turnover may leave a company without
representation in a customer group for an extended period of time while the company recruits
and trains a replacement.
b. Explain the term “Sales Quotas” with examples?
Sales quotas are a way of life for the sales force. All activities of the sales force revolve around the
fulfilment of sales quotas. Sales quotas are targets assigned to sales personnel. They signify the
performance expected from them by the organization. Sales quotas help in directing, evaluating and
controlling the sales force. They form an indispensable tool for sales managers to carry out sales
management activities. Sales quotas are prepared on the basis of sales forecasts and budgets. Sales
quotas serve various purposes in organizations.

They provide targets for sales personnel to achieve act as standards to measure sales force
performance and help motivate the sales force. Compensation plans are invariably linked to quotas.
The commission and bonuses given to sales persons are based on their meeting quotas set for them.

The four categories of sales quotas widely used are –

1. Sales volume quotas,

2. Expense quotas,
3. Activity quotas
4. Profit quotas.

Q.2 a. Distinguish between Data mining and Data Warehousing?

Generally, data mining (sometimes called data or knowledge discovery) is the process of analyzing
data from different perspectives and summarizing it into useful information - information that can be
used to increase revenue, cuts costs, or both. Data mining software is one of a number of analytical
tools for analyzing data. It allows users to analyze data from many different dimensions or angles,
categorize it, and summarize the relationships identified. Technically, data mining is the process of
finding correlations or patterns among dozens of fields in large relational databases.

Although data mining is a relatively new term, the technology is not. Companies have used
powerful computers to sift through volumes of supermarket scanner data and analyze market
research reports for years. However, continuous innovations in computer processing power,
disk storage, and statistical software are dramatically increasing the accuracy of analysis
while driving down the cost.

For example, one Midwest grocery chain used the data mining capacity of Oracle software to
analyse local buying patterns. They discovered that when men bought diapers on Thursdays
and Saturdays, they also tended to buy beer. Further analysis showed that these shoppers
typically did their weekly grocery shopping on Saturdays. On Thursdays, however, they only
bought a few items. The retailer concluded that they purchased the beer to have it available
for the upcoming weekend. The grocery chain could use this newly discovered information in
various ways to increase revenue. For example, they could move the beer display closer to
the diaper display. And, they could make sure beer and diapers were sold at full price on
Thursdays.
Data are any facts, numbers, or text that can be processed by a computer. Today,
organizations are accumulating vast and growing amounts of data in different formats and
different databases. This includes:
• operational or transactional data such as, sales, cost, inventory, payroll, and
accounting
• nonoperational data, such as industry sales, forecast data, and macro economic data
• meta data - data about the data itself, such as logical database design or data
dictionary definitions
The patterns, associations, or relationships among all this data can provide information. For
example, analysis of retail point of sale transaction data can yield information on which
products are selling and when.
Information can be converted into knowledge about historical patterns and future trends. For
example, summary information on retail supermarket sales can be analyzed in light of
promotional efforts to provide knowledge of consumer buying behavior. Thus, a
manufacturer or retailer could determine which items are most susceptible to promotional
efforts.

Data Warehouses
Dramatic advances in data capture, processing power, data transmission, and storage
capabilities are enabling organizations to integrate their various databases into data
warehouses. Data warehousing is defined as a process of centralized data management and
retrieval. Data warehousing, like data mining, is a relatively new term although the concept
itself has been around for years. Data warehousing represents an ideal vision of maintaining a
central repository of all organizational data.

Data warehouse is a repository of an organization’s electronically stored data. Data

warehouses are designed to facilitate reporting and analysis.
Centralization of data is needed to maximize user access and analysis. Dramatic
technological advances are making this vision a reality for many companies. And, equally
dramatic advances in data analysis software are allowing users to access this data freely. The
data analysis software is what supports data mining.

The definition of data warehouse focuses on data storage. However, the means to retrieve and
analyse data, to extract, transform and load data, and to manage the data dictionary are also
considered essential components of a data warehousing system. Many references to data
warehousing use this broader context. Thus, an expanded definition of data warehousing
includes business intelligence tools, tools to extract, transform, and load data into the
repository, and tools to manage and retrieve metadata.

b. Briefly explain the procedure involved in selection of sales personnel?

Selecting of the right sales people involves the following steps.

• Researching Candidates:
This covers the early stages of the selection process – often called pre-selection. The
recruitment campaign would have attracted a pool of applicants from which selectors can
make their choice. If a job analysis has been conducted, the criteria or competences which
are deemed necessary have been identified. These may be well defined and focused on
experience and skills, as in the ‘right person’ approach; or general and related to education,
intellect and personality for the ‘cultural fit’ and ‘flexible person’ models.

• Application letters/CVs/resumes:
These are typically used for initial or speculative applications. The first stage in the
application will require a resume or a CV.

• Application forms (blanks):

Both letters and CV/resumes present a problem for a large recruitment programme: applicants
may not provide all the relevant information and what there is will be presented in a different
ways. Comparison of applicants is easier if data is presented in a standard application form
(blank).

• Interviewing:
The interview is a social ritual which is expected by all participants, including applicants. It is
such a ‘normal’ feature of filling vacancies that candidates for a job would be extremely
surprised not to be interviewed at least once. Despite the existence of alternatie methods of
selection most employer regard the formal selection of interview as the most important source
of evidence in making the final decision. A selection interview can be neatly defined as a
conversation with a purpose.

• Preparation for interviews:

Training for interviewers stresses the need to put the candidate at ease, have a comfortable
environment, etc. The interviewer should ensure that relevant information (e.g. application
forms) is read beforehand – it is surprising how many interviewers are found reading such
material for the first time during the interview. It is necessary to improve the interpersonal
skills of the interviewer and the interviewer’s ability to make decisions without influence
from non-job related information.
Q.3 a. As a sales manager in a retail business firm, how will you categorize your tasks
and manage your sales organization? Assume that you have 4 sales teams with 12
members in each team, out of which 5 are new sales recruits.

Sales management involves the planning, direction and control of personal selling including
recruiting, selection equipping, assigning, routing, supervising, paying and motivating as
these tasks apply to the personal sales force.

Following are the important tasks in the success of sales management in any
organization.

i. Setting personal objectives

ii. Formulating sales policies
iii. Structuring the sales force
iv. Deciding the size of the sales force
v. Designing sales territories
vi. Developing the sales territories
vii. Developing the sales forecasts and sales budget
viii. Fixing sales targets for individual sales territories/salesman
ix. Creating the sales force
x. Managing the sales force
xi. Managing the marketing channels
xii. Ensuring growth and developing new accounts
xiii. Sales communication and reporting
xiv. Sales coordination and sales controlling including sales expense control
xv. Building the sales organization
xvi. Co-ordination with marketing management in the areas like product-mix, pricing,
distribution, advertising and sales promotion
xvii. Creating and maintaining the right image for the company and its products in the
market.

The function of a personal manager usually begins with the staffing process. Someone has to
be focused on screening and interviewing persons, with an eye to placing individuals with the
right skills sets in the right position within the company. Along with placement, the HR
manager may also oversee or at least be involved in the creation of entry level training
programs, as well as continuing education opportunities for existing employees.

Determining company policies and procedures as they relate to personnel is another

important aspect of the personnel management process. HR functions often include drafting
vacation, sick leave, and bereavement policies that apply to all employees of the company.
The personnel management team often is also responsible for managing the healthcare
program provided to the employees as well.

One aspect of company organization that definitely requires the input of effective personnel
management is the drafting of a company handbook. Establishing operation policies and
procedures, requirements for employment, commendation and disciplinary procedures,
guidelines for dismissals and promotions, and even something as simple as dress code is also
a part of this function.

Sometimes overlooked in the course of personnel management is the emotional welfare of the
employees. Fortunately, this is changing, as more personnel managers understand that a well
adjusted employee is an asset to the company. To this end, many in charge of personnel
management will provide opportunities for employees who are in need of counselling to
receive support from the company. This support often involves scheduling time during
working hours for the counselling sessions, and perhaps picking up the cost if insurance does
not cover counselling. As with continuing educational programs, counselling is seen as
another way that the company invests in the future relationship between the employee and the
employer. A good HR manager understands this and will strive to make sure this sort of
support is available.