MM02

Sales & Distribution Management

Assignment I

Assignment Code: 20100MM02B1 Date of Submission: 30th September 2010

Maximum Marks: 100

Attempt all the questions given at the end of the Case. All questions carry equal marks.

Section A

1. What is sales management? What are the various functions of sales management?

2. What are some sales closing techniques? How can a salesperson confront an objection in a sales
presentation?

3. What are major considerations that affect the choice of sales organization structure?

4. What tools does a hiring organization have at its disposal when attempting to select a new sales person?

Section B

5. Case Study

Sumit Product Ltd.

Sumit Products Ltd. Is a company that produces and markets steel cups, teaspoons, knives and forks for the
catering industry. The company was established in 1958 in response to the changes that were taking place in the
catering industry. The growth of the fast-food sector was seen as an opportunity to provide disposable eating
utensils which would save on manpower and allow for speedy provision of utensils to cater to the fast customer
flow. In addition, SUMIT Products has benefited from the growth in supermarkets and sells consumer packs
through four large supermarket groups.

The expansion of sales and outlets has led Rakesh Mohan, the sales manager, to recommend to S Kumar, the
general manager, that the present sales force of two regional representatives be increased to eight.

Rakesh Mohan believes that the new recruits should be experienced in selling fast-moving consumer goods since
essentially that is what his products are.

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S Kumar believes that the new recruits should also be familiar with steel products since that is what they are
selling. He favours recruiting from within the steel industry, since such people are familiar with the supply,
production and properties of steel and are likely to talk the same language as other people working at the firm.

Case Questions

1. What general factors should be taken into account when recruiting salesmen?
(10)

2. Do you agree with Rakesh Kumar or S Kumar or neither?

(10)

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 MM02
Sales & Distribution Management

Assignment II

Assignment Code: 20100MM02B2 Date of Submission: 15th November 2010

Maximum Marks: 100

Attempt all the questions given at the end of the Case. All questions carry equal marks.

Section A

1. Which factors affect the motivational needs of salesmen?

2. What is sales forecasting? Why it is necessary? What are the various methods of sales forecasting?

3 a) What are sales quotas or targets? What are the various methods of fixing quotas?

b) Why territory planning is essentially required to plan the sales functions smoothly.

4 a) What are the various channels of distribution in a consumer durable sector, FMCG Sector and Services
sector?

b) What are the various methods of inventory management? Explain each one of them in brief?

Section B

5. Case Study

Gupta Rentals – Equipment Hire

Since 1990, Gupta Rentals suffered from cash constraints. The analysis of the performance of the company
carried out by Rajesh Jain and Associates highlighted the reasons as under

1. Addition of small petrol engine repair line to the existing business.

2. Increase in manpower to handle engine repair division.

3. Finances required for the purchase of parts and inventory maintenance. Presently this is also
managed through existing cashflows and accounts payable.

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To overcome the financial constraints, a plan has been made which specifically addresses several methods that
will be used to correct the cashflow. Profitability and equity deficiencies. Several changes have been initiated
which have stared showing positive results. The next phase of plan requires changes in two categories.
Management and Financial. It is felt that when changes are introduced, the company will return to industry norm
within two years.

In 1985, the family of guptas thought of starting a family business. Since they had most of their relations at
Chandigarh, they started thinking in terms of settling close to their relations. They started exploring the
possibilities of potential business opportunities. Gupta was a senior executive with a public limited company
which manufactured equipment like generator sets, pumps, etc. He studied the market in and around Chandigarh
and found that there were five equipment rental companies. Their equipment was obsolete, sub-standard and the
people who hired equipment from them were not satisfied.

Before starting the business venture, the Guptas considered the following points:

• Providing long-term financial opportunity and to provide adequate standards of living.

• To go into business where competition could be and would be limited

• To be in business with long-term growth
• To be in business which could ultimately be taken over by the next generation

After a careful analysis, the Guptas decided to go in for the equipment rentals business. The following issues
were quite prominent with regards to these market offerings.

Product and Service Offering/Primary Service Mix

`If you have a job to do, we have a tool to make it easier and quicker. Service to our customers, both professional
and “Do-it-yourselves” is a primary part of our daily operation’.

The philosophy of the Guptas was:

- Provide equipment in good working condition

- Provide equipment when it is needed
- Provide “How to” instructions verbally and in writing
- Provide pick up and delivery
- Must be with the customer when he is in problem
- In addition to this, the Guptas provided sale or rent of accessories needed with the equipment
- At a payment of an extra 100%, a damage waiver facility.

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 - Gupta are agents of Raj Equipments Movers, a premier transport company specializing in equipment
movement. They could move the complete range of equipment of various dimensions and sizes.

Guptas are dealers of Kirlosker Cummins, HMT, Eicher, Escorts and have inventory of vast tractor and engine
lines. Because of this they have a supply contact division catering to the Agricultural and Mining industry.

Market Potential and Competition

The Guptas have been in business for the past 13 years and have maintained detailed financial information. The
company is making its projections and devising the marketing plan based on historical data augumented with the
latest charges that are outlined in the plan. In addition, they have maintained complete information on the
requests they have not been able to meet and reasons thereof. This gave them knowledge about the market
demand forecasts.

Before starting the business, Guptas made an extensive market analysis with the help of a local agency who was
conversant with regional needs and locations. This helped them to make up their minds.

Today the Guptas know that the demand is going to be up as many new construction avenues have opened and
industrial growth is moving at a fast pace. They see a better future.

Bankers had been considerate to Guptas as their past records were flawless and they helped them by giving
attractive refinancing schemes. They accepted these schemes, now finance was no problem to enhance business.

Market Analysis

Gupta Rentals has several areas where they maintain a competitive advantage as they are the only service
providers in the area for the equipments sought by the customers. They face competition only in one area where
Satish Rentals are providing similar services but are not expanding their territory.

Marketing Strategy

The goal of Gupta Rentals are

• Best service and equipment to our customers

• Competitive prices to prevent competition at the present business location and surrounding areas.

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Target Marketing

Guptas have been concentrating on supplying the equipment on rent to small contractors, the industrial sector and
also house owners. The major share of the market is of small contractors who account for fifty-five per cent of
business followed by industrial sectors accounting for thirty per cent.

Since most of the business at present is coming from small contractors and the industrial sector, homeowners are
not being paid sufficient attention. In the coming year plan, services to homeowners are gaining attention.

Sixty-five per cent and twenty-five percent of this business is accounted for people moving out of the town,
people moving in the town and commercial moves respectively. They have acquired the leaders’ position in this
segment.

The sales parts division earns a revenue of fifty per cent, fifteen per cent and thirty five per cent from industrial,
institutional and homeowner markets respectively.

Sales Plan

The Guptas have made the following plans to enhance sales

• Identifying and targeting the homeowner market to gain ten per cent sale over the previous years.
• Enhance the sales of `moving needs’ by creating more moves
• Parts division will continue selling parts.

Promotional

To achieve the targeted sales as per market plan for the year 1998, radio and TV advertising shall be dropped and
door-to-door flyers and direct mail will be used for homeowners. This decision was taken by Gupta as they had
sufficient database about their customers and also about themselves. They propose to direct the mailing to the
neighbourhood areas as discount offers to study the effectiveness. They propose to “start a thanks giving scheme”
to all the equipment users in the past and with this they will offer a discount of 10% of the next rental. The
technical expertise possessed by the Guptas shall be highlighted to create trust about technical capability and back
up services. Door-to-door campaigning shall be introduced as a trial to convey the following messages

• Where we are?
• What we have?

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 • How they can use us to their advantage?

Another scheme which will be introduced in 1999 shall be to make the equipment available for rent on the rental
outlets of the respective companies’ e.g. Kirlosakar engine will be available for rent on Kirloskar outlets. For
meeting the moving needs, a cash incentive shall be offered to the person bringing the customer to them.

Since the year closing for the company is March 1999, the campaign for the year 1999 shall be completed by
middle of May 1999. The campaign shall be budgeted by the type of media used and itemized by the type of
equipment and service for the promotional period. The complete information technology cell, website, Internet
and answering machine facilities shall be made available for access of information any time, any where.

Case Questions

1. What market offerings have the Guptas planned and why? (4)

2. Explain the service mix elements used. (3)

3. What was the competition and how was it outsmarted? (4)

4. Carry out the market analysis for the following:-

i) Market niche selected

ii) Marketing strategies used
iii) Target market and market share (4)
5. What sales plan was devised to stay competitive? (2)

6. What promotional strategies were used? In your opinion what will bring positive results? (3)

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