63 SELF ASSESSMENT QUESTIONS 1 What is meant by the term Journey Cycle What are

63 self assessment questions 1 what is meant by the

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6.3 SELF ASSESSMENT QUESTIONS 1. What is meant by the term 'Journey Cycle'? What are it’s usefulness? 2. What is the full form of 'PJP'? Explain the concept of a PJP, and describe it’s use and applicability. 3. Explain a 'Criteria Based' evaluation process. 4. How would one quantitatively evaluate a sales man’s control over and rapport with retailers in a particular market? 112
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SALES FORCE EVALUATION REFERENCE MATERIAL Click on the links below to view additional reference material for this chapter Summary PPT MCQ Video Lecture 113
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WORKING CAPITAL Chapter 7 WORKING CAPITAL Learning Objectives After going through this chapter you should be able to understand: Understand and appreciate the role and importance of working capital in a marketing setup. Get an idea of the several components of working capital and how to control them. Appreciate the criticality of inventory and credit management. Structure: 7.1 Credit Checks 7.2 Stocks/Inventory 7.3 Summary 7.4 Self Assessment Questions Any marketing set up must also factor in how much investment has gone in to the business. Working capital in simple terms means the capital required for day to day running of the business. In accounting terms the amount is the difference between current assets and current liabilities. Any business will need money to invest in stocks and inventory. Stocks are required to service orders from customers. The nature and amount of stocks may vary business to business, depending upon the specific business requirements and procedure of procurement. Inventory, stocks, block fund and hence they are investments. Similarly, sales may also at times have to be made on credit. This means the stocks are sold but the payments are not received. Which in turn means, the money paid in obtaining, and manufacturing goods are not recovered simultaneously with sales, resulting in blockage of the funds for some more time. Sales on credit are usually made to increase sales, in case the buyers are not willing to buy against cash payments. 114
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WORKING CAPITAL But sometimes sales on credit may have to be resorted to, when industry conditions require the same. Particularly if competitors are offering credit, it may be very difficult for an organization to continuously sell against cash. At times credit may have to be extended to a particular customer to forestall a competitor making inroads. This would normally be common in the B2B i.e., business to business market. However, when extending credit, one must be very careful that the recovery is secured. Particularly, in the case of sales to intermediaries, i.e., resellers viz. Distributors, stockists, and large retailers, it should not happen that items sold on credit only go and block the inventory space of the buyer. The primary sales must be commensurate with the secondary off take.
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