Master of Business Administration (MBA) Examination

III Semester

(Sales and Distribution Management)

Time : 3 Hours]                                                                                               [Max. Marks : 80

Section A

1.         Briefly describe the personal selling process. How would the sales presentations differ in the following cases :

(a)        Selling a Life Insurance Policy.

(b)        Selling Office Computers.

2.         What do you mean by Distribution Channel? What performance considerations would you use in the selection of channel structure for a newly introduced brand of frozen vegetables?

3.         Explain the concept of Retailing. There is an argument that modern retail formats can never match the customer service flexibility of the corner grocery store. Discuss.

4.         What is a Sales Territory? Why do firms establish sales territories? Can you think of a reason why a firm might not want to have sales territories?

5.         Discuss the following :

(a)        Sales Budget

(b)        Meaning and Objectives of Physical Distribution.

Section B

Analyse the following case and answer the question given at the end:


ABC company was a producer of several kinds of industrial equipment listed in Exhibit. It developed in the late 1940s form the efforts of a gifted engineer and inventor, Srirang Pandey, who patented several of his ideas for variations on standard products. He founded and was active in the firm for more than twenty six years until his death.

Pandey's fatal interest was in the sales activity of his company and he had a strong sense of professionalism that he used in personally selecting people for this sales force. He managed the sales force until it grew to a large size, of which time he secured the services of Hiren Shah as Sales Manager.

Before Shah's arrival and for several years thereafter, Pandey punctually told the salesman the names of the firms he wanted them to cell on. His concern rot the reputation of his company included product characteristics as promised. delivery on time (critical to cutomers for these goods) and ethical. highly removed business conduct by the salesman.

However., his concern for reputation was not restricted to these factors only. Pandey also wanted to have those who enjoyed the finest reputations as. his customer for example, he told his salesmen never to solicit the orders of a small firm them know by the name of Rohan and Lovely, for he considered the owners advertisement of theirs he once saw in a weekly business news paper. He also instructed his salesmen not to call on Kapoor Glow Ltd. because it had been turned down for a loan by the bank that Pandey used. This was despite the fact that Kapoor glow Ltd. found credit at another bank.

Not all the instructions were negative, however, Pandey had the salesmen, all of whom were engineers, visit Comden Mills, Stone & Kruger, and south Indian Metals repeatedly even though all three were committed to other sellers and other product designs. He wanted ABC Company to be a name that firms such as these must knOw and respect. He also several large national companies. Such as Combustion Engineering, Indian Machine and Foundary, Westinghouse and Melpar.

After Pandey's death, Shah continued these policies for the be,' er part of a year. At that point Jevan vats, the new President hired from outside, had a long talk with the sales manager and explained that he thought some changes were desirable. The firm should try to maximise sales and abandon all other ' notions and pretentions', as he termed them. The salesmen should be put on a combination salary plus commission. The two other executives in the company, the finance man and the production man, spoke up with thorough endorsements of such changes. The existing policy was straight salary.

With some misgivings, shah devised a new compensation structure for his four salesmen. Under this plan he estimated that a salesman would earn about 80 percent of his compensation through salary and about 20 per cent through commission. The plan was announced on August 1 and the men were told it would go into effect in 30 days, Sales in August slumped to about 17 percent from the same month one year earlier and 14 per cent from the same month two years earlier.

One month after the compensation plan came into force, the sales manager conducted a preliminary inquiry into the results of the new compensation policy. The results appeared to be that the easier to sell items in the product line were moving well, those of average difficulty to sell were moving adequately. and the one item that was rather difficult to sell (the dryer) was moving very poorly. Exhibit 1 given the comparison of September to the last month under the old policy (July) and to September one year before. Shah presented his analysis to vats but cautioned him about premature inferences from these data. The sales manager said that he would repeat his comparison after another month. In the meanwhile, the President told the sales manager to urge the salesmen to solicit orders for dryers.



Product                   September      July                  September               September

                                                                              Last year                 Two Years Before

                                (Rs.)               (Rs.)                (Rs.)                        (Rs.)

Dryers                     2,10,000         3,45,000          3,50,000                  3,22,000

Sprayers                  77,000            75,000             80,000                     78,000

Planers                    41,000            43,000             40,000                     39,000

Power Saws            32,000            30,000             30,000                     31,000

Drills                       42,000            42,000             40,000                     39,000

Sanders                   95,000            73,000             72,000                     70,000

Metal Buffers         75,000            49,000             50,000                     48,000

Questions :                                         

1.         Do you think, as a promoter, pandey, was right in promoting the kind of sales policies he did? Justify your comment.

2.         Evaluate the compensation package in the light in the facts given in the case. What are the suggestions you would have for an ideal compensation plan in this case?