(a)Explain five reasons why a manufacturer may engage in personal selling. (b) Explain five characteristics of Sole Proprietorship.

Answer Details

(a) Five reasons why a manufacturer may engage in personal selling

1. To explain and demonstrate complex products: Technical goods such as machinery need face-to-face demonstration that only a salesperson can give.
2. To provide immediate feedback: Direct contact allows the salesperson to answer questions, overcome objections and gather customers' reactions on the spot.
3. To persuade and close sales: Personal contact enables the seller to persuade the buyer directly and secure an actual order.
4. To build customer relationships: Regular personal contact creates goodwill and lasting relationships that encourage repeat purchases.
5. To reach industrial and bulk buyers: Where customers are few but place large orders, personal selling is more effective and economical than mass advertising.

(b) Five characteristics of Sole Proprietorship

1. Single ownership: The business is owned and controlled by one person who provides the capital.
2. Unlimited liability: The owner is personally liable for all the debts of the business, extending to his private property.
3. No separate legal entity: The business and the owner are regarded in law as one and the same.
4. Sole enjoyment of profit and risk: The owner takes all the profits and also bears all the losses alone.
5. Easy to form and dissolve: It requires little capital and few legal formalities to start or wind up.