Category: University of Mumbai BMS Notes

Coping Strategies

• Take a time-out. Practice yoga, listen to music, meditate, get a massage, or learn relaxation techniques. Stepping back from the problem helps clear your head.
• Eat well-balanced meals. Do not skip any meals. Do keep healthful, energy-boosting snacks on hand.
• Limit alcohol and caffeine, which can aggravate anxiety and trigger panic attacks.
• Get enough sleep. When stressed, your body needs additional sleep and rest.
• Exercise daily to help you feel good and maintain your health. Check out the fitness tips below.
• Take deep breaths. Inhale and exhale slowly.
• Count to 10 slowly. Repeat, and count to 20 if necessary.
• Do your best. Instead of aiming for perfection, which isn’t possible, be proud of however close you get.
• Accept that you cannot control everything. Put your stress in perspective: Is it really as bad as you think?
• Welcome humor. A good laugh goes a long way.
• Maintain a positive attitude. Make an effort to replace negative thoughts with positive ones.
• Get involved. Volunteer or find another way to be active in your community, which creates a support network and gives you a break from everyday stress.
• Learn what triggers your anxiety. Is it work, family, school, or something else you can identify? Write in a journal when you’re feeling stressed or anxious, and look for a pattern.
• Talk to someone. Tell friends and family you’re feeling overwhelmed, and let them know how they can help you. Talk to a physician or therapist for professional help.

Fitness Tips: Stay Healthy, Manage Stress

For the biggest benefits of exercise, try to include at least 2½ hours of moderate-intensity physical activity (e.g. brisk walking) each week, 1¼ hours of a vigorous-intensity activity (such as jogging or swimming laps), or a combination of the two.

• 5 X 30: Jog, walk, bike, or dance three to five times a week for 30 minutes.
• Set small daily goals and aim for daily consistency rather than perfect workouts. It’s better to walk every day for 15-20 minutes than to wait until the weekend for a three-hour fitness marathon. Lots of scientific data suggests that frequency is most important.
• Find forms of exercise that are fun or enjoyable. Extroverted people often like classes and group activities. People who are more introverted often prefer solo pursuits.
• Distract yourself with an iPod or other portable media player to download audiobooks, podcasts, or music. Many people find it’s more fun to exercise while listening to something they enjoy.
• Recruit an “exercise buddy.” It’s often easier to stick to your exercise routine when you have to stay committed to a friend, partner, or colleague.
• Be patient when you start a new exercise program. Most sedentary people require about four to eight weeks to feel coordinated and sufficiently in shape so that exercise feels easier.

6 long-term strategies for coping with anxiety

If anxiety is a regular part of your life, it’s important to find treatment strategies to help you keep it in check. It might be a combination of things, like talk therapy and meditation, or it might just be a matter of cutting out or resolving your anxiety trigger.

If you’re not sure where to start, it’s always helpful to discuss options with a mental health professional who might suggest something you hadn’t thought of before.

Identify and learn to manage your triggers

You can identify triggers on your own or with a therapist. Sometimes they can be obvious, like caffeine, drinking alcohol, or smoking. Other times they can be less obvious.

Long-term problems, such as financial or work-related situations, may take some time to figure out is it a due date, a person, or the situation? This may take some extra support, through therapy or with friends.

When you do figure out your trigger, you should try to limit your exposure if you can. If you can’t limit it like if it’s due to a stressful work environment that you can’t currently change using other coping techniques may help.

Some general triggers:

• A stressful job or work environment
• Driving or traveling
• Genetics anxiety could run in your family
• Withdrawal from drugs or certain medications
• Side effects of certain medications
• Trauma
• Phobias, such as agoraphobia (fear of crowded or open spaces) and claustrophobia (fear of small spaces)
• Some chronic illnesses like heart disease, diabetes, or asthma
• Chronic pain
• Having another mental illness such as depression
• Caffeine

Adopt cognitive behavioral therapy (CBT)

CBT helps people learn different ways of thinking about and reacting to anxiety-causing situations. A therapist can help you develop ways to change negative thought patterns and behaviors before they spiral.

Do a daily or routine meditation

While this takes some practice to do successfully, mindful meditation, when done regularly, can eventually help you train your brain to dismiss anxious thoughts when they arise.

If sitting still and concentrating is difficult, try starting with yoga.

Try supplements or change your diet

Changing your diet or taking supplements is definitely a long-term strategy. Research shows certain supplements or nutrients can help anxiety reduction.

These include:

• Lemon balm
• Omega-3 fatty acids
• Ashwagandha
• Green tea
• Valerian root
• Kava kava
• Dark chocolate (in moderation)

However, it can take up to three months before your body is actually running on the nutrition these herbs and foods provide. If you’re taking other medications, make sure to discuss herbal remedies with your doctor.

Keep your body and mind healthy

Exercising regularly, eating balanced meals, getting enough sleep, and staying connected to people who care about you are great ways to stave off anxiety symptoms.

Ask your doctor about medications

If your anxiety is severe enough that your mental health practitioner believes you’d benefit from medication, there are a number of directions to go, depending on your symptoms. Discuss your concerns with your doctor.

Some of the stress reducing strategies from individual’s point of view are:

1. Knowledge About Stress. In the first stage, an individual should become knowledgeable about stress. He should know about the process and effects of stress. He must find out the major sources of his stress. He must anticipate stressful periods and plan accordingly in advance. He must be honest with himself and decide what he can cope with what he cannot.
2. Physiological Fitness. Exercise in any form can help people in coping with the stress. Non competitive physical exercise such as aerobics, walking, jogging, swimming, riding a bicycle, playing softball or tennis have been recommended by physicians as a way to deal with excessive stress levels. There is evidence to suggest that individuals who exercise are much less likely to suffer from certain types of stress related exercises. With proper exercise, diet control and non-smoking habits, blood pressure and cholesterol become controlled and the body becomes more resistant to pressures. People are more likely to get physically sick or emotionally depressed if they are over weight or poorly nourished.
3. Time Management. Most of the people are very poor in managing their time. They don’t know that what must be done and when it would be desirable to do so. The result of poor time management is feeling of work overload, skipped schedules and tension. A well organised person can often accomplish twice as much as the person who is poorly organised. Therefore, an individual must understand how to manage his time so that he can cope with tensions created by job demands. A few of the well known time management principles are :

• Preparing a daily list of activities to be attended to.
• Prioritizing activities by importance and urgency.
• Scheduling activities according to the priorities set.
• Knowing your daily schedule and handling the most demanding parts of a job when you are most alert and productive.

4. Assertiveness. An individual should become assertive. He should not say ‘Yes’ when he wants to say ‘No’. He should start saying No to people or managers who demand too much of his time. Being assertive is an important factor in reducing stress.
5. Social Support Network. Every person should have people to turn to, talk to and rely upon. Good friends become highly supportive during times of stress and crisis. Social net work includes friends, family or work colleagues. Expanding your social support system can be a means for tension reduction because friends are there when needed and provide support to get the person through stressful situations.
6. Readjust life Goals. Every individual must know what he really wants to do. This should relate to not only the major decisions of the life but to all activities in our life. He must know what is important for him. Because of the severe competition in life to go ahead, most individuals set very high standards and goals for themselves. These high expectations and limited resources to reach such expectations result in stress. Accordingly, every person must readjust his goals and make sure he has the ability and resources to reach such goals. Perhaps the goals should be established after the resources have been analysed.
7. Relaxation Techniques. Every individual must teach himself to reduce tension through relaxation techniques such as Yoga, mediation, hypnosis and biofeedback. 15-20 minutes a day of deep relaxation releases tension and provides a person with pronounced sense of peacefulness. Deep relaxation conditions will bring significant changes in heart rate, blood pressure and other physiological factors. Yoga is probably the most effective remedy for stress. Studies have revealed that Yoga has cured several stress related diseases.
8. Plan your life in Advance. So many times, people create situations which induce stress because they either did not plan or did a bad job of planning. The traditional Indian attitude of “whatever will be, will be” a way of accepting the unexpected difficulties in life. This attitude may be relevant in those situations over which we do not have any control like death in the family, but for other events in life, it is better to plan in advance, so that we can confront them with confidence when they occur.

Individuals may design their own strategies to reduce stress, but it is a must for the organisations to develop programmes that will help the employees in reducing their stress. This will lead to less employee turnover, absenteeism and as a result productivity will improve.

Some of the measures which organisations can take are:

1. Selection and Placement. Individuals differ in their response to stress situations. We know that ‘Type A’ individuals are more prone to stress. On the other hand, in the organisations there are certain jobs which are more stressful as compared to other jobs. While doing the selection and placement of the employees, these factors must be kept in mind. The individuals who are more prone to stress should not be put on jobs which are stressful. The individuals who are less prone to stress may adapt better to high stress jobs and perform those jobs more effectively.
2. Goal Setting. Based on extensive amount of research it has been concluded that individuals perform better when they have specific and challenging goals and they receive feedback on how well they are progressing towards those goals. Goal setting can reduce stress as well as provide motivation. It will result in less employee frustration, role ambiguity and stress.
3. Improved Communication. Sometimes due to lack of effective communication from the superiors, the employees do not know what they have to do and how they have to do it. This result in role ambiguity. Similarly, when two or more persons have contradicting role demands from an employee, it leads to role conflict if there is lack of proper communication. Effective communication with employees reduces the uncertainty by lessening role ambiguity and role conflict.
4. Redesigning Jobs. Organisations should redesign the jobs in such a way as to give employees more responsibility, more meaningful work, more autonomy and increased feed back. This will help reduce the stress caused by monotony, routine work, work overload or underload and role ambiguity. Job redesigning enhances motivation, reduces the stress among the employees and enhances “Quality of work life“.
5. Participative Decision Making. If the organisations give the employees participation in those decisions that directly affect them and their job performance, it can increase employee control and reduce the role stress. The main reason of role stress is that employees feel uncertain about their goals, expectations and how they will be evaluated. These uncertainties can be reduced by the management by giving the employees a right to participate in the decision making.
6. Building Teamwork. The management should try to create such work environment in which there is no provision for interpersonal conflict or inter group conflict. Such conflicts are the causes of stress, such should be prevented from building or eliminated if they develop. Accordingly such team work should be developed that groups and the members are mutually supportive and productive. Members of the group should consider themselves as members of the same family and seek social support from each other.
7. Personal Wellness Programmes. These personal wellness programmes focus on the employees total physical and mental condition. Organisations can provide facilities at their premises for physical fitness such as gyms, swimming pools, tennis courts etc. as well as psychological counselling. They should hold seminars or workshops to make the employees understand nature and sources of stress and the possible ways to reduce it. These workshops should help those individuals who are already under stress. Moreover, a supervisor can impact personal wellness of his subordinates through positive example, encouragement and by practising the basic concepts and techniques of human resource management.

To get ahead in your career, deliver your projects successfully and to get a promotion or a pay rise, you must learn to consistently focus on the activities that add the most benefit to your projects and your clients. The better you are at maintaining focus and managing your time, the more you will achieve, and the easier it will be for you to leave the office on time. Not only do effective time management skills allow you to get better results at work, but it also help you withstand stress and live a more fulfilling life outside of work.

The following strategies will help you get the right things done in less time.

1. Start your day with a clear focus.

The first work-related activity of your day should be to determine what you want to achieve that day and what you absolutely must accomplish. Come clear on this purpose before you check your email and start responding to queries and resolve issues. Setting a clear focus for your day might require as little as five minutes, but can save you several hours of wasted time and effort.

2. Have a dynamic task list.

Capture the tasks and activities you must do on a list and update it regularly during the day. Revisit this list frequently and add new items as soon as they appear. Make sure your list gives you a quick overview of everything that’s urgent and important, and remember to include strategic and relationship-building activities as well as operational tasks.

3. Focus on high-value activities.

Before you start something new, identify the activity that would have the most positive effect on your project, your team, and your client if you were to deal with it right now. Resist the temptation to clear smaller, unimportant items first. Start with what is most important.

• To help you assess which activities to focus on first, ask the following:
• What does my client or my team need most from me right now?
• What will cause the most trouble if it doesn’t get done?
• What is the biggest contribution I can make right now?
• Which strategic tasks do I need to deal with today to help us work smarter tomorrow?

4. Minimize interruptions.

The more uninterrupted time you get during the day to work on important tasks, the more effective you’ll be. Identify the activities that tend to disrupt your work, and find a solution. Basically, one of the most essential time management skills is to not get distracted. For example, avoid checking emails and answering the phone when you’re in the middle of something important. Once you have broken your flow, it can be difficult to reestablish it. Instead, discipline yourself to work on a task single-mindedly until it’s complete.

5. Stop procrastinating.

If you have difficulties staying focused or tend to procrastinate, you may benefit from creating an external commitment for (deadline) yourself. For instance, schedule a meeting in two days’ time where you’ll be presenting your work and by which time your actions will have to be completed. It’s also very effective to complete the most unpleasant tasks early in the day and to allow yourself small rewards once you’ve completed them.

6. Limit multi-tasking.

Many of us multi-task and believe we’re effective when we do so, but evidence suggests that we can’t effectively focus on more than one thing at a time. In order to stop multi-tasking, try these tips: Plan your day in blocks and set specific time aside for meetings, returning calls and for doing detailed planning and analysis work at your desk. Whenever you find yourself multitasking, stop and sit quietly for a minute.

7. Review your day.

Spend 5-10 minutes reviewing your task list every day before you leave the office. Give yourself a pat on the back if you achieved what you wanted. If you think your day’s effort fell short, decide what you’ll do differently tomorrow in order to accomplish what you need to. Leave the office in high spirits determined to pick up the thread the next day.

8. Say “no” and delegate

Everybody has their limits. We simply cannot do everything people want us to. It will lead to burnout and work anxiety. That’s why it’s so important to be assertive and say “no” when people want to assign you additional tasks.

Remember, there is nothing wrong with refusing to do things you’re not able to do. As well as with delegating tasks. Especially if there is someone, who can do the work better than you.

9. Focus and block distractions

Notifications, pop up messages, e-mails, colleagues constantly talking to you. It all pulls your attention away from work.

There are many ways to stay focused. You can put your phone away, turn off social media notifications or block distracting websites. But the best way is to concentrate and do what you have to do. It’s worth to limit your presence in social media to the minimum because it takes a lot of your time and doesn’t bring much value into your life.

10. Goals

Set goals and you will exactly know which direction you’re heading to. Goals are part of the organization process but they are extremely important in time management.

11. Stop multitasking

Often see job offers which set multitasking as one of the key skills of the candidate. But it’s better to throw such offer right to the bin. The truth is, multitasking damages our brain.

It seems that juggling several tasks at one is a great time management technique. In fact, it dramatically decreases productivity. The study conducted at Stanford University has shown that “When they’re [multitaskers] in situations where there are multiple sources of information coming from the external world or emerging out of memory, they’re not able to filter out what’s not relevant to their current goal. That failure to filter means they’re slowed down by that irrelevant information.”

12. Allocate your time

Do you know how much time you spend on particular tasks? Gotcha! You’re probably among the majority of people who have no idea how their daily work looks like in terms of work hours.

13. Create a morning routine

What’s the first thing you do when you wake up? If it’s making a bed, you’re on the right track. But if it’s checking social media, you’re doing it wrong.

Having your own morning routine will unquestionably power you up for the rest of the day. It’s the first thing you do in the morning that determines the outcomes you will achieve during the day. Try from making your bed, then have a healthy breakfast, and leave social media for the end of the day.

A widely accepted definition of stress, attributed to psychologist and professor Richard Lazarus, is, “a condition or feeling experienced when a person perceives that demands exceed the personal and social resources the individual is able to mobilize.”

This means that we experience stress if we believe that we don’t have the time, resources, or knowledge to handle a situation. In short, we experience stress when we feel “out of control.”

This also means that different people handle stress differently, in different situations: you’ll handle stress better if you’re confident in your abilities, if you can change the situation to take control, and if you feel that you have the help and support needed to do a good job.

Signs of Stress

Everyone reacts to stress differently. However, some common signs and symptoms of the fight or flight response include:

• Frequent headaches.
• Cold or sweaty hands and feet.
• Frequent heartburn, stomach pain, or nausea.
• Panic attacks.
• Excessive sleeping, or insomnia.
• Persistent difficulty concentrating.
• Obsessive or compulsive behaviors.
• Social withdrawal or isolation.
• Constant fatigue.
• Irritability and angry episodes.
• Significant weight gain or loss.
• Consistent feelings of being overwhelmed or overloaded.

1. Action-Oriented Approaches

With action-oriented approaches, you take action to change the stressful situations.

Managing Your Time

Your workload can cause stress, if you don’t manage your time well. This can be a key source of stress for very many people.

Take our time management quiz to identify where you can improve, and make sure that you use time management tools such as To-Do Lists, Action Programs, and Eisenhower’s Urgent/Important Principle to manage your priorities.

Then use Job Analysis to think about what’s most important in your role, so that you can prioritize your work more effectively. This helps you reduce stress, because you get the greatest return from your efforts, and you minimize the time you spend on low-value activities.

Also, avoid multitasking, only check email at certain times, and don’t use electronic devices for a while before going to bed, so that you use this time to “switch off” fully.

2. Emotion-Oriented Approaches

Emotion-oriented approaches are useful when the stress you’re experiencing comes from the way that you perceive a situation. (It can be annoying for people to say this, but a lot of stress comes from overly-negative thinking.)

To change how you think about stressful situations:

• Use Cognitive Restructuring, the ABC Technique, and Thought Awareness, Rational Thinking, and Positive Thinking
• to change the way that you perceive stressful events.
• Take our positive thinking quiz
• To learn how to think more positively.
• Use Affirmations and Imagery to overcome short-term negative thinking, so that you feel more positive about stressful situations.

3. Acceptance-Oriented Approaches

Acceptance-oriented approaches apply to situations where you have no power to change what happens, and where situations are genuinely bad.

To build your defenses against stress:

• Use techniques like meditation and physical relaxation to calm yourself when you feel stressed.
• Take advantage of your support network, this could include your friends and family, as well as people at work and professional providers, such as counselors or family doctors.
• Get enough exercise and sleep, and learn how to make the most of your down time, so that you can recover from stressful events.
• Learn how to cope with change and build resilience, so that you can overcome setbacks.

Anxiety is an emotion characterized by an unpleasant state of inner turmoil, often accompanied by nervous behavior such as pacing back and forth, somatic complaints, and rumination. It is the subjectively unpleasant feelings of dread over anticipated events. Anxiety is a feeling of uneasiness and worry, usually generalized and unfocused as an overreaction to a situation that is only subjectively seen as menacing. It is often accompanied by muscular tension, restlessness, fatigue and problems in concentration. Anxiety is closely related to fear, which is a response to a real or perceived immediate threat; anxiety involves the expectation of future threat. People facing anxiety may withdraw from situations which have provoked anxiety in the past.

Anxiety disorders differ from developmentally normative fear or anxiety by being excessive or persisting beyond developmentally appropriate periods. They differ from transient fear or anxiety, often stress-induced, by being persistent (e.g., typically lasting 6 months or more), although the criterion for duration is intended as a general guide with allowance for some degree of flexibility and is sometimes of shorter duration in children.

Symptoms

Anxiety can be experienced with long, drawn-out daily symptoms that reduce quality of life, known as chronic (or generalized) anxiety, or it can be experienced in short spurts with sporadic, stressful panic attacks, known as acute anxiety. Symptoms of anxiety can range in number, intensity, and frequency, depending on the person. While almost everyone has experienced anxiety at some point in their lives, most do not develop long-term problems with anxiety.

Anxiety may cause psychiatric and physiological symptoms.

The risk of anxiety leading to depression could possibly even lead to an individual harming themselves, which is why there are many 24-hour suicide prevention hotlines.

The behavioral effects of anxiety may include withdrawal from situations which have provoked anxiety or negative feelings in the past. Other effects may include changes in sleeping patterns, changes in habits, increase or decrease in food intake, and increased motor tension (such as foot tapping).

The emotional effects of anxiety may include “feelings of apprehension or dread, trouble concentrating, feeling tense or jumpy, anticipating the worst, irritability, restlessness, watching (and waiting) for signs (and occurrences) of danger, and, feeling like your mind’s gone blank” as well as “nightmares/bad dreams, obsessions about sensations, déjà vu, a trapped-in-your-mind feeling, and feeling like everything is scary.

The physiological symptoms of anxiety may include:

• Neurological, as headache, paresthesias, fasciculations, vertigo, or presyncope.
• Digestive, as abdominal pain, nausea, diarrhea, indigestion, dry mouth, or bolus.
• Respiratory, as shortness of breath or sighing breathing.
• Cardiac, as palpitations, tachycardia, or chest pain.
• Muscular, as fatigue, tremors, or tetany.
• Cutaneous, as perspiration, or itchy skin.
• Uro-genital, as frequent urination, urinary urgency, dyspareunia, or impotence, chronic pelvic pain syndrome. Stress hormones released in an anxious state have an impact on bowel function and can manifest physical symptoms that may contribute to or exacerbate IBS.

Types

There are various types of anxiety. Existential anxiety can occur when a person faces angst, an existential crisis, or nihilistic feelings. People can also face mathematical anxiety, somatic anxiety, stage fright, or test anxiety. Social anxiety refers to a fear of rejection and negative evaluation by other people.

Existential

The philosopher Søren Kierkegaard, in The Concept of Anxiety (1844), described anxiety or dread associated with the “dizziness of freedom” and suggested the possibility for positive resolution of anxiety through the self-conscious exercise of responsibility and choosing. In Art and Artist (1932), the psychologist Otto Rank wrote that the psychological trauma of birth was the pre-eminent human symbol of existential anxiety and encompasses the creative person’s simultaneous fear of and desire for separation, individuation, and differentiation.

The theologian Paul Tillich characterized existential anxiety as “the state in which a being is aware of its possible nonbeing” and he listed three categories for the nonbeing and resulting anxiety: ontic (fate and death), moral (guilt and condemnation), and spiritual (emptiness and meaninglessness). According to Tillich, the last of these three types of existential anxiety, i.e. spiritual anxiety, is predominant in modern times while the others were predominant in earlier periods. Tillich argues that this anxiety can be accepted as part of the human condition or it can be resisted but with negative consequences. In its pathological form, spiritual anxiety may tend to “drive the person toward the creation of certitude in systems of meaning which are supported by tradition and authority” even though such “undoubted certitude is not built on the rock of reality”.

According to Viktor Frankl, the author of Man’s Search for Meaning, when a person is faced with extreme mortal dangers, the most basic of all human wishes is to find a meaning of life to combat the “trauma of nonbeing” as death is near.

Depending on the source of the threat, psychoanalytic theory distinguishes the following types of anxiety:

• Realistic
• Neurotic
• Moral

Risk factors

A marble bust of the Roman Emperor Decius from the Capitoline Museum. This portrait “conveys an impression of anxiety and weariness, as of a man shouldering heavy [state] responsibilities”.

Anxiety disorders are partly genetic, with twin studies suggesting 30-40% genetic influence on individual differences in anxiety. Environmental factors are also important. Twin studies show that individual-specific environments have a large influence on anxiety, whereas shared environmental influences (environments that affect twins in the same way) operate during childhood but decline through adolescence Specific measured ‘environments’ that have been associated with anxiety include child abuse, family history of mental health disorders, and poverty. Anxiety is also associated with drug use, including alcohol, caffeine, and benzodiazepines (which are often prescribed to treat anxiety).

Prevention

The above risk factors give natural avenues for prevention. A 2017 review found that psychological or educational interventions have a small yet statistically significant benefit for the prevention of anxiety in varied population types.

Distribution costs are bound to go up not only with increase in the volume of sales but also with the efforts towards achieving higher market share through better coverage and penetration into new markets. Complete elimination of distribution cost is not possible.

(a) How far is the distribution channels-mix adequate to enable the company to improve upon its market share?

(b) Whether the total cost of distribution is kept to the minimum.

As regards the minimizing the cost of distribution the following aspects are to carefully consider:

(i) The major elements of distribution cost, are transportation, warehousing including storage insurance, material handling, credit and collection, finance and administration (invoicing, data processing) and interest on inventory carried at different selling points.

(ii) Distribution costs may be classified as fixed (Salaries of distribution staff, warehouse rent), semi-variable (travelling of staff, stationary and telephone charges) and variable packaging, insurance, transportation, interest on inventories. Budgets and norms should be established for each such major item of expense, under each category, and actual figures watched regularly may be on monthly basis.

(iii) Use of material handling equipment in warehousing, mechanized invoicing system, inventory control methods will help in cost reduction.

(iv) The overall distribution systems should be subjected to a thorough and objective review at regular intervals. This review will show up the resources of inefficiencies. Any significant change in the mode of distribution should be subjected to a detailed financial evaluation by cost benefit analysis.

(v) Optimum Channels of distribution—Many alternative channels are available and the choice made will greatly affect distribution costs and efficiency. Moreover as a firm’s output grows, it is necessary to reconsider what channels can provide more efficient distribution and to revamp the structure of discounts and commissions.

(vi) Adopt profit and loss system for branches, individual salesman, product departments.

A distribution policy is the strategy applied by a company for the correct shipment of its products from the production chain to its positioning in the market.

Distribution policies refer to the measures taken by a company, from manufacturing to packaging and final transport stages, to ensure the product reaches the most appropriate channels and points of sale; and does so within the planned launch and product replenishment times.

Like all processes having a lot of intermediaries, it’s important to design a good strategy to get your product into the hands of the customer quickly and avoiding bottlenecks.

Depending on your type of business and product, it may be that there are fewer phases than those we mentioned; and that, for example, you sell your catalog directly to retailers.

It doesn’t matter how many people or steps there are in your distribution chain. The key is for you to define clearly in advance, how they will communicate with each other and how products will be passed on at each stage.

Types of distribution policies

A distribution and sales policy is classified according to the number of intermediaries involved, which makes it more (or less) complex to manage.

Direct policy: You sell your products directly to the customer and by means of a simple strategy, as a single sales channel (that is, your own physical or online store).

Indirect policy: You distribute your products through several intermediaries and channels.

Intensive policy: This is the most wide-ranging strategy, as it includes a larger number of intermediaries and channels. Its degree of complexity depends on how ambitious you are: do you want to sell internationally, for which you will need diverse distributors? Will you be betting on an all-channel strategy that integrates physical and digital channels, in which case you’ll need to direct more effort towards your warehouses and contacting a large number of sellers?

Selective policy: You only distribute your products through a limited number of channels (such as, only physical stores or only online marketplaces), or in a small geographical network (a country or a city).

Exclusive policy: This involves you granting the distribution rights of your products exclusively to one channel or outlet. It can be your branded online store or a retailer with whom you reach an agreement. This type of distribution is common in brands with a very specific target or selling luxury products, in order to feed their image of prestige; for example, certain Bulgari jewelry that can only be found at Harrods in London.

Factors to consider for policy Design

• What kind of product it is, because if it’s made of perishable material you’ll need faster distribution to avoid accumulating expired stock. If the product is delicate or hazardous, you’ll need special insurance and transport for it.
• Where your end customers buy, whether through physical or digital channels, or both.
• Whether your product needs demonstrations and tutorials in person, by sales reps.
• Whether your product supports customization, and how you can best offer this (yourself or through another participant).

Members participating in a distribution and sales policy:

• Representatives: These agents can speak for your business and bring your products closer to customers, companies and/or other intermediaries. As reps are the public face of the company they should be well trained in sales goals and brand philosophy as well as familiar with the product, thus enabling them to identify opportunities for new channels of distribution or sales. They can also handle logistics and special contracts.
• Wholesalers and distributors: These are the intermediaries who purchase your products in large quantities to distribute them among other sellers or channels. Study carefully what their work networks are like and whether they will position your products in the places that interest you most.
• Retailers or Sellers: Retailers purchase products from wholesalers or distributors in order to sell them in their physical stores or through digital channels (an online store, or a marketplace dealing with a variety of brands).
• Partners: These act as sales reps, although they will not sell your product directly. It is increasingly beneficial to include marketing agents in a distribution strategy, as your partner network can act as an ambassador for your product or brand to other companies or customers.

Distribution costs (also known as “Distribution Expenses”) are usually defined as the costs incurred to deliver the product from the production unit to the end user.

For any company which is involved in distribution, distribution cost is a major bottleneck. There are many different distribution expenses which must be taken care of. Furthermore, these expenses are not consistent and may change from time to time thereby changing the distribution cost as well.

Distribution expenses: The individual expenses made by the company for various reasons is known as Distribution expenses. These are individual or repeated transactions happening over time. An example may include – Rent, Salaries, Administrative expenses etc. All these are individual transactions or repeat transactions and these transactions can be called distribution expenses.

Distribution cost: The combination of all distribution expenses made by a company is known as Distribution cost. So continuing the above example – the total of rent, salaries, and administrative expenses will be considered as distribution cost. In terms of Formula

[The sum of all Distribution Expenses] = Distribution cost

1) Direct Selling Expenses

Any expense made towards selling the product to the target customer is a direct selling. Many manufacturers, wholesalers, and distributors carry out direct selling in the regions that they want to expand. They also would like to know the distribution cost of that region. Thus, they consider all direct selling expenses as the primary expense made by the firm.

Such Expenses will include: Salary of Field Salespeople (only for target customer sales), Travel of salespeople, Entertainment for sub-dealers, Training costs, Postage or office supplies needed for sales etc. All these different headers are categorized as direct selling expenses. They are one of the major contributors to distribution cost. The more you spend in sales, ultimately the more profit you will have.

2) Advertising & Sales promotion expenses

If a company wants to establish itself in a new region, it needs to have OOH advertising, it needs to run in-store branding, it needs to run ads in local newspapers or local channels. Thus, the company will be spending a lot towards advertising and promotions which are various forms of distribution expenses.

3) Product and Packaging expenses

The product packaging was good but was not strong. As a result, the packaging suffered a huge wear and tear by the time it reached the customer and the customers returned the product.

This caused a huge loss to the company and they ultimately came up with a plan to have a different and sturdy form of packaging for Online sales. Such packaging is obviously a cost to the company and should be added as one of the distribution expenses. Besides this, some other forms of product costs include raw materials, depreciation of the product in stock, salaries for employees involved in product development or related to product and packaging.

4) Trade discounts

Besides sales promotion exercises like advertising and marketing, a company launches several trade promotional exercises as well. This includes giving discounts to retailers, distributors, and suppliers on achieving certain targets.

Other type includes discounts on picking certain quantities of products (example picking a bulk of 1000 units will give 2% additional discount). Thus, Quantity discounts, sales allowances, and other such trade discounts are considered as distribution expenses and ultimately distribution cost.

5) Credit, Outstanding and Overdue

A distributor who operates in a regional market needs the huge amount of money to conduct business. To arrange this money, the distributor takes a loan from the banks. This is known as an Overdue account. Hypothetically, If the distributor takes 1 lakh from the bank, within 30 days he should give back 1 lakh + 1% interest. Thus, a dealer suffers a loss when his money does not come back from the market in time.

As a result, Overdue accounts, Market outstanding and credit are given in the market to contribute to the distribution cost. The more credit given in the market, the higher is the value of interest applied. There are also expenses towards collecting the outstanding from the market and to close all bad debt. Thus, all these distribution expenses related to credits, outstanding and overdue contribute to distribution cost and must be taken into account.

6) Market research

When reputed companies like Samsung, LG or Sony want to establish themselves in a new market, they buy market research reports from the likes of IMRB or Nielson. These reports may cost hundreds or thousands of dollars. Not only in a new market, even in an old market, a company might want to conduct a satisfaction survey or a survey of new ideas regarding distribution.

The company might find in this survey that the time taken for delivery is quite high. Or it may find that other companies are giving higher credit, therefore resulting in loss of sale for a parent company. In all this, the market research costs are generally kept up to a percentage of the total profits or revenue of the company. So market research cost for a branded company might be 1% of revenue.

7) Warehousing and handling within warehouse

Warehousing is a major cost of distribution. When a company expands to newer markets, it needs to have new warehouses in each new territory. Domino’s or McDonald’s practically have warehouses for every 3-4 towns so that they can supply to local retail outlets very fast. Because of Domino’s and McDonald’s handle frozen goods (burgers or fries), their expenses are even higher because they need cold rooms and cold chains to deliver the products.

8) Shipping and Delivery

With the rise of E-commerce, delivery is a huge focus area for all manufacturers. The stock must be in the market – whether it is on an E-commerce portal or in a retail outlet or with the distributor. Everyone knows that if there is no stock on display, the sale will not happen and this creates friction between the different distribution channels.

Thus, Shipping and delivery are important to the firm and hence companies ensure they are operating above capacity. Companies can choose to use their own transportation and company-owned trucks or they can use outsourced transportation. Retail chains generally use their own transportation within warehouses due to regular movements of goods. Consumer durables and FMCG use outsourced transportation because the movement of goods is erratic.

9) Commercials & Accountancy

It is a government requirement to present all your sales and purchases as well as balance and profit sheets to the government to determine profit earned by your firm. Furthermore, these statements are also important for the firm itself to note the growth year on year as well as to determine the performance and future potential. Thus, commercials and accounts are documented precisely in any firm.

The distribution expenses towards commercials and accountancy include, Processing of orders and maintaining accounts receivables, sales invoices, payment proof’s, clerical jobs, invoicing and accountancy software, printing and stationery expenses, utility expenses. All these expenses together form the distribution cost of commercials and accountancy.

10) Customer Service

In the industrial segment, there exist industrial distributors who take care of both – Sales and service of the product. In such cases, it is the distributor who must take care of the service of the product as well. As a result, customer service expenses become distribution expenses and contribute to distribution cost.

The running of a customer service centre, the salaries of customer service executives, the utilities and tools required, specialized equipment, rent, electricity, administrative and clerical expenses are all various distribution expenses filed under customer service.

11) Sales returns

If a dealer or a retailer rejects a material, then the material comes back to the manufacturer provided it is in the returns policy of the company. This returned material may have come back due to cosmetic conditions (it was damaged or dented) or it may have come back due to performance issues. In any condition, the returned product is a cost to the company.

The company can either repair the cosmetic damage, reutilize the product again or sell it off at a discounted rate. In case of performance issues too, the product can be repaired or recycled or sold off. The distribution expenses of sales returns include freight of bringing damaged products back, repairing of the product, loss due to discounted sale, loss due to recycling of the product, bad inventory in stock, clerical or other administrative expenses towards handling sales return.

1. Factors Related to Products:

Product is a prime factor in channel selection. Product-related factors are among most relevant and powerful factors affecting channel decision. Channel must be fit the type and nature of company’s products.

• Perishability of Product:

Perishable products must be sold and consumed immediately after production. So, for perishable products, normally, direct or short channel is advisable. For durable products, indirect or multilevel channel is preferable. However, due to availability of rapid means of transportation and advanced cold storage facilities, the perishable product can also be sold by long-indirect channels.

Technical Aspects:

Technical products cannot be used without sufficient information and direct supervision. Even, they need more frequent services. It is advisable to adopt indirect and multilevel channels to assist consumers to use the technical product properly and safely. For simple products, direct channels can be used.

• New v/s Existing Product:

Consumers need more information and attention for new products. More efforts and time are required to convince consumers. As a result, a company may opt for indirect channel to take help of middlemen in this task. For existing products, the company can use direct and/or indirect channels.

Complexity and Risk Related to Use of Product:

Complex and risky products are sold via middlemen as consumers expect more direct supervision and assistance.

• Size of Product:

In case of heavy and bulky products, direct or short channel is more suitable. This is due to difficulties related to physical movement of the product.

• Divisibility of Product:

Mostly, indivisible products are distributed directly to customers. Divisible products can be conveniently distributed by middlemen.

• Unit Price of Product:

Precious products, like gold, jewellery, certain chemicals, software, etc., are distributed using direct or short channels of distribution. Use of direct and short channel can minimize risk of theft or robbery.

• Legal Aspect:

Quite obviously, permitted (legal) products can be distributed by any convenient channel of distribution. But, illegal products are distributed by direct channels for secrecy purpose.

2. Factors Related to Company:

Company’s internal situations have direct impact on choice of marketing channel. Manager has to analyze company-related factors to decide the best fit channel(s).

• Company’s Financial Position:

Financially sound companies can maintain separate and well-equipped departments for distribution of products. Such companies can open and manage own retail outlets and can hire salesmen to manage distribution effectively. They do not require services of middlemen and, hence, can distribute the product directly. But, financially weak companies have to opt for indirect channels to share resources and expertise of channel members.

• Product Mix of Company:

A company’s product mix consists of product lines and product items in each product line. Many product lines and several product items/ varieties in each of the product lines can enable the firm to offer multiple choices to a large number of consumers. Even, the firm can take benefit of the scale of economy. In such case, direct channels are more advisable. Small companies with limited product lines and/or product items should distribute products via wholesalers and retailers, who sell products of many companies.

• Desire for Control:

If a company desires to have direct and close control over production and selling activities, direct channels are preferred and vice-versa.

• Experience and Expertise:

Successful distribution needs considerable experience and expertise. If a company possesses necessary experience, expertise, and staff, it can manage selling activities by its own. When a company lacks such experience and skills, it has to involve middlemen, and prefers indirect channels.

• Facilities and Staff:

Sufficient facilities and capable staff are essential for effective distribution of products. If a company manages for needed facilities and staff, direct channels are used, otherwise indirect channels are used.

• Company’s Past Experience:

A company’s past experience can also affect channel decision. When a company has favourable and satisfactory experience to work with middlemen, it may continue working with them. In case, if it is not satisfied with terms and services of middlemen, it would shorten its channel of distribution.

3. Factors Related to Middlemen:

Companies consider several middlemen-related factors while deciding on channels.

Most common factors include:

• Creditworthiness of Middlemen:

Middlemen’s credibility is an important criterion to decide on the channel. If middlemen have good reputation and creditworthiness, a company can multiply its gain and, as a result, prefers to involve them in their distribution activities. Creditworthiness is a critical aspect while offering dealership or franchise for definite area.

• Attitudes of Middlemen:

Positive attitudes of middlemen make companies to involve them in distribution activities. Companies like to select indirect channel with one or more levels. Opposite situation leads companies to select direct channels.

• Services Rendered by Middlemen:

Channel decisions depend on number and quality of services offered by middlemen to customers. When the channel members are ready to provide several services to customers, like home delivery, free repairing, credit facility, installment payment schemes, and other post-sales services, the manufacturers like to involve them in distribution to avail such services to their customers. When middlemen do not provide the useful services to customers, companies prefer direct channels.

• Financial Capacity of Middlemen:

Strong financial capacity of middlemen attracts manufacturers. This is due to the fact that strong financial position benefits both manufacturers and customers. Strong financial position results into speedy recovery of bills receivable, less chances of bad debts, immediate payment, credit facility to customers, and also advanced payment.

• Terms and Conditions:

When terms and conditions laid down by middlemen are not favourable, the manufacturers don’t like to involve them in distribution activities. They prefer direct distribution channels.

4. Factors Related to Market:

Market (consumer behaviour) is a crucial factor in channel selection.

Main factors related to market include:

• Size of Market:

In case of a large and concentrated market, it is economically affordable for a company to manage its own distribution setup. When market is small, it is advisable to assign distribution task to middlemen.

• Geographical Concentration:

When firm’s customers are highly concentrated (living in nearby area) in particular region, it can directly deal with customers by using any of the direct channels. But, when customers are scattered in several regions, it is not convenient to use direct channels. Middlemen can do better job with less costs.

• Services Expected by Market:

Number and types of services expected by the target market, and company’s capacity and readiness to meet them are important issues to be considered in this connection. For example, if the market expects a lot of services, and the company is unable and/or unwilling to satisfy them, indirect channels are preferred to avail the services from middlemen.

• Habits of Consumers:

Distribution channels must be fit with habits of consumers. Manager should find out why, how, when, where and from whom the consumers like to buy. For example, if consumers are habituated to buy a little quantity frequently from nearby retailer on credit, a company must involve retailers (along with wholesalers) to avail products at all the places where consumers reside.

• Current Market Trend:

Firm’s distribution system must be compatible with the recent market trend. Trend includes a number of variables like policies and practices of giant national and multinational companies, functioning of departmental stores and corporate retailers, cyber marketing and network marketing, business partnering with banking, insurance, and other service providers, customers’ awareness, and so on. Manager must observe these reforms and innovative practices minutely and accordingly a suitable channel should be selected.

5. Factors Related to Competition:

Current and anticipated competition affects company’s decision on marketing channel. Relevant competition-related aspects must be analyzed while selecting the channel.

Competition-related factors include:

• Intensity of Competition:

When there exists a severe competition in the market, a company must consider competitors distribution strategies and practices while selecting marketing channels. In case of less competition, a company choice will be independent of competition.

• Response and Reactions of Competitors:

Reactions and response of the close competitors must be taken into account while deciding on distribution channel. A company must select such channels that can help availing competitive advantages.

• Company’s Competitive Position in Market:

A leader company can design its own distribution network. It can select a specific channel of distribution as per its requirements. But, the follower companies have to follow market leader. Their choice depends on leader’s practice.

• Factors Related to Environment:

Marketer has to consider overall business environment while deciding on marketing channel. Domestic and global environmental forces have direct or indirect impact on company’s activities and operations.

Main environmental forces that affect channel decision include:

• Economic Condition of Country:

Country’s economic condition affects firm’s operations. In economically poor countries, short or direct channels are used to sell product at low price. In developing and developed countries, normally, indirect channels are used to distribute products.

• Phases of Trade Cycle:

Phases of trade cycle, like recession, recovery, prosperity, etc., indicate the country’s economic condition. Normally, in prosperity stage, long and indirect channels are used due to need for mass distribution and willingness of people to pay high price for the product. Direct and short channels are more suitable when the economy is passing through recession phase as direct and short channels keep the selling price low.

• Legal Provision:

Government policies and legal provisions have direct or indirect implication on firm’s distribution activities. Manager must identify relevant provisions affecting distribution activities and, accordingly, an appropriate channel(s) should be selected. Taxes, charges, administrative procedures, restrictions, and other issues are worth noted in this regard.

• Availability of Facilities:

Availability, costs, and quality necessary facilities play decisive role in channel selection. Facilities like transportation, communication, warehousing, banking, insurance, supporting government agencies at national and international level, degree of harmony among states of the country, and relations among nations at large affect firm’s channel decisions.

Many companies have secured appropriate audit provisions from their distributors. Companies have to exercise these audit clauses to maintain their credibility and commitment to risk mitigation, and should include distributors in the development of its annual audit plan. The key here is to conduct compliance and financial audits using a range of tools and strategies. A company that limits its audits to only formal, financial audits is unnecessarily restricting its audit capabilities to mitigate risks.

New and cutting-edge monitoring strategies are being developed to ensure that companies focus on high-risk distributors and flag those for follow-up inquiries and audits. With the advent of third-party management technologies, companies can free up resources to develop monitoring tools to capture and mitigate high-risk distributors.

To address distributor risks, companies rely on a mix of mitigation strategies, including comprehensive written representations and warranties; training; annual certifications; and monitoring of activities; and audit programs.

Companies have to move beyond “standard” contract provisions that have become “routine” over the last few years. Of course, a company has to secure appropriate compliance representations and warranties, and audit and termination provisions. As risk assessments and third-party strategies evolve, companies should look to tailoring additional provisions to the “specific” risk for a distributor.

Additional provisions have to be crafted for distributors’ relationships with sub-distributors, and sub-sub-distributors. Assuming that the company is only in privity with the distributor, the company has to leverage its relationship with the distributor to impose requirements on the distributor to exercise oversight responsibility of the sub and sub-sub-distributors in its distribution chain. In this area, companies should consider requiring distributors to seek company approval of a sub-distributor before engaging the sub-distributor to sell the company’s products.

This audit report focuses the distribution sales process, including: current distributor contracts and compliance with established parameters, credit memo data over a six-month period, and internal processes for validating distributors’ credit memo claims. Objectives include: evaluate internal control effectiveness/efficiency, identify areas for improvements, and provide analysis scorecard of the company’s practices against “best practices”.

The following are key observations noted during the review:

• Inventory validation counts on company inventory in distributors’ warehouses are not performed on a regular basis.
• Distributor audits have been performed in the past, but are not done on a consistent basis.
• Invalid ship-and-debit credits are being issued for invalid claims by distributors.