Subject :Sales Management

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AEREN FOUNDATION’S                                                           Maharashtra Govt. Reg. No.: F-11724

 

Name : UMER MUQUTHER S A                                                                                                       Marks : 80

Course : Specialisation

Subject :Sales Management

Answer the following question.

Case 1

(20 Marks)

Auckland Engineering plc Jim Withey, sales manager for Auckland Engineering plc, a wellestablished engineering company based in the Midlands, had been contemplating the memo he had received two days earlier from his newly appointed marketing director.

Memo To: J Withey, sales manager From: D C Duncan, marketing director Date: 16 January 2008 Subject: Preparation of annual marketing plan You will recall that, at our series of preliminary meetings to discuss future marketing plans for the company, I suggested that I was unhappy with the seemingly haphazard approach to planning.

Accordingly, you will recall it was agreed between departmental heads that each would undertake to prepare a formal input to next month’s planning meeting. At this stage, I am not seeking detailed plans for each product market, rather I am concerned that you give some thought to how your department can contribute to the planning process. Being new to the company and its product/markets, I am not entirely up to date on what has been happening to the market for our products, although as we all know our market share at 3.5 per cent is down on last year. I would particularly like to know what information ‘our department could contribute to the analysis of the situation.

To help you in your own analysis I have summarized below what I feel came out of our first planning meetings.

• Business definition. It was agreed that the business needs redefining in customer terms. An appropriate definition for our company would he as follows: ‘Solutions to engine component design and manufacturing problems.’

• Strengths, weaknesses, opportunities and threats, i.e. SWOT analysis. The main strengths of our company are as follows.

— We have excellent customer awareness and an image of reliability and quality.

— Our sales force is technically well qualified.

— Our manufacturing flexibility is second to none. We can respond quickly and effectively to individual customer needs. Our main weaknesses are as follows.

— Our prices are approximately 10 per cent above the industry average.

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— We are spending a far higher proportion of our turnover on advertising than some of our main competitors.

— Our sales force is not skilled in generating new leads. Major opportunities are as follows.

— Some of our major competitors are having difficulty keeping their customers because of quality and delivery problems. Buyers in the industry seem particularly prone to switching their suppliers.

— Recent legislation in the industry means that our research and development programme on the new TDIX component with its emphasis on lower exhaust emission levels, should prove advantageous.

— Recent and forecast trends in the exchange rate should help our export marketing efforts. Major threats are shown below.

— Our largest customer is threatening to switch to another supplier because of our higher average prices.

— Apart from the TDIX programmer, we have not been keeping pace with the rapid technological change in the industry.

— Some of our major export markets are threatened by the possibility of import restrictions.

• Objectives. Financial.To increase our return on capital employed by 5 per cent after taxes.

— Our net profit in the forthcoming year to be £2.0 million. Marketing.

— Sales revenue to be increased to £18 million in the forthcoming year.

• Marketing strategy. Target markets.

— Major manufacturers of diesel engines worldwide. Positioning.Highest engineering quality and aftersales service in the supply of specialist lowvolume diesel engine components.

I would of course welcome your comments on my analysis of the situation, together with ‘our views on the appropriateness of the objectives I have set. In addition, for the next meeting, I suggest that as sales manager you give some thought as to where the relative emphasis should be placed in our promotional effort. As I have already mentioned in my summary of our preliminary meetings, we seem to be spending an excessive amount on advertising compared with our competitors. Perhaps you could appraise me of your thoughts on this, as I understand that you were instrumental in raising our advertising budget from 3 per cent to 5 per cent of our turnover last year. As you are well aware, from a limited budget we must decide where to place the relative emphasis in our promotional mix. Perhaps, you would indicate what you feel are the major considerations in this decision.

Answer the following question.

Question.1. Give a brief outline of the ways in which you as sales manager can contribute to the marketing planning process atAuckland Engineering.

Answer:The basic methodology of business planning is identifying causes and effects, according to your relevant business requirements (financials and ethics) and strategic drivers (what we are actually aiming to achieve).

Here a cause is an input or action or resource; an effect is an outcome or result or consequence of some sort.

We want to achieve xyz effect (for example a given return on investment, or a certain sales level or market share, whatever) - so what should we plan to cause this to happen?

Question.2. Looking at Mr. Duncan’s analysis of your previous meetings, what issues/problems do you see which are ofparticular relevance to the activities of the sales force?

Answer:If a company has workers who understand what round means, and a customer who agrees, the problems the company may have had satisfying the customer will disappear.

Let’s look at another example where operational definitions improve understanding within the company. In this example we measure a variable (sales), so we use the second type of operational definition.

Question.3. How would you respond to Mr. Duncan’s comments on the promotional mix and, in particular, to his commentsabout the level of advertising expenditure?

Answer:Product promotion is critical for every business due to the lasting impact promotion has on the clients. The promotion mix is essentially what promoting entails as well as how promoting is effectively done. It comprises personal selling, advertising, public relations, sales promotion, and direct marketing. Using the right blend of the promotional mix ensures that a business will continue gaining customers and achieving success in both the short and long run.

1. Personal Selling

Question.4. What is the point in conducting a SWOT analysis?

Answer:Conducting a SWOT analysis of your business is a lot more fun than it sounds. It won’t take much time, and doing it forces you to think about your business in a whole new way.

The point of a SWOT analysis is to help you develop a strong business strategy by making sure you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace.

Case 2

(20 Marks)

Swish flow Ltd.—Hiring Salespeople “Why two out of five salespersons have resigned within six months of joining the company?” asked marketing director to the sales manager, Sunil Kumar, of Swish flow Ltd. “I think, there is something wrong with our staffing process,” responded Sunil Kumar, without knowing the real reasons for the turnover of salespeople. Swish flow Ltd started manufacturing and marketing consumer durables like fans and water purifiers for household consumers and commercial firms in 1993. The sales and marketing office was located in Mumbai, the commercial capital of India. Swish flow was a newly established company and for its first year of operations, the company decided to recruit five salespersons to cover major metros and cities of Maharashtra. The staffing process included the sales manager deciding the job qualifications of salespersons based on what he learnt in the MBA programmer. The administration manager was asked to place the advertisement in the local newspapers. The resumes of applicants were forwarded to Sunil Kumar, who screened the same and sent interview calls to about ten applicants. The interviews were conducted by Sunil Kumar and the marketing director and the selected candidates were given the appointment letters. Some of the candidates had a problem of finding suitable residence, but the company policy did nor provide any consideration for the same. Sunil Kumar conducted oneweek training programmer and generally guided the new Salespersons, who reported to him directly. There was a delay in the receipt of the fans front the factory, located at Baroda in Gujarat. During this period of three months, Sunil Kumar was asked to conduct market surveys and look after advertising function of the entire group. He asked the salespersons to collect market information on various other products like water purifiers, power tillers, and so on in which the group was interested to diversify. During this period, two salespersons suddenly stopped coming to work, after collecting their salaries of the previous working month.

Answer the following question.

Question.1. What improvements do you suggest in the staffing process followed by the company?

Answer:It has been debated many times, but the question of whether recruitment is best done with internal or external resources can only be answered at an organizational level, based upon a cost-benefit analysis.

When doing this analysis, consider which method of recruitment scores higher on the following metrics:

·       Quality of hire

Question.2. Was Sunil Kumar right in getting market surveys done by the new salespersons?

Answer:Companies that hire salespeople would be wise to increase both the length and quality of training to show them how to sell effectively, according to a 2012 Salesperson Onboarding Survey that polled more than 500 sales management executives and business leaders. A whopping eight out 10 respondents are not satisfied with how long it takes their new salespeople to get up to speed.

Case 3

(20 Marks)

Plastic Products Ltd Plastic Products Ltd is a company that produces and markets plastic cups, teaspoons, knives and forks for the catering industry. The company was established in 1974 in response to the changes taking place in the catering industry. The growth of the fastfood sector of the market was seen as an opportunity to provide disposable eating utensils which would save on manpower and allow the speedy provision of utensils for fast customer flow. In addition, Plastic Products has benefited from the growth in supermarkets and sells consumer packs’ through four of the large supermarket groups. The expansion of sales and outlets has led Jim Spencer, the sales manager, to recommend to Bill Preedy, the general manager, that the present sales force of two regional representatives he increased to four. Spencer believes that the new recruits should have experience of selling fastmoving consumer goods since essentially that is what his products are. Preedy believes that the new recruits should he familiar with plastic products since that is what they are selling. He favors recruiting from within the plastics industry, since such people are familiar with the supply, production and properties of plastic and are likely to talk the same language as other people working at the firm.

Answer the following question.

Question.1. What general factors should be taken into account when recruiting salesmen?

Answer:Every small business owner knows her company's productivity and profitability depend on the quality of workers she employs. Recruiting the right employees is a great responsibility that can't be taken too seriously. Consider certain factors when recruiting your ideal staff members. Look for employees with a balanced combination of people and work skills who can work well with you, other employees and customers.

Education: The education background of your potential employee is important. Check for a degree or completion of classes that complement your

Question.2. Do you agree with Spencer or Preedy or neither?

Answer:The simple answer is that i will agree to neither of them.

Spencer, who throughout her marriage had accommodated herself to her husband, as well as suffering the flagrancriesof two not very amenable daughters, had doubtless enjoyed the years with Preedy, who had accommodated herself entirely to her.

Question.3. Distinguish between the job description and the personnel specification. For an industry of your choice, write asuitable job description and personnel specification for a salesperson.

Answer:job description vsspecificationIn our earlier article, we discussed the difference between Job Analysis and Job Description. Job Description is derived from Job Analysis, in the same way, Job Specification is the output of Job Description. Job Description is a statement which explains the essential needs of a job. On the other hand, Job Specification is a statement which states the least qualifications, required in the job holder for the performance of a particular job.

Question.4. Discuss the role of psychological testing in the selection process for salespeople.

Answer:Hiring and training new employees can be an expensive process. To help keep turnover to a minimum, some companies employ psychological testing to ensure that potential employees are suitable before hiring them. Psychological tests, however, are not only used during the hiring process. Some companies use these tests to monitor the continued suitability of employees who have been on the job for some time.

Case 4

(20 Marks)

C. G. Engineering Company Achieving Quotas Ashok Desai was transferred from western region, where he worked as area sales manager of CQ Engineering Company, to eastern region as regional marketing manager —industries. He was told by the company’s general manager (Sales) that he was transferred from western region to eastern region to set things right, as eastern region was not performing well on sales and profits. Ashok’s main responsibilities were to manage effectively 11 sales engineers and achieve the sales volume and contribution (to profits) quotas. For Ashok, not only the industrial customers but also the sales engineers were new.

The sales engineers were compensated based on straight salary and perquisites like house rent allowance and medical reimbursement. There was no incentive scheme. The territory of eastern region consisted of states of West Bengal, Bihar, Assam, and Orissa. Ashok felt that the sales engineers were not covering the market adequately and were not following any system of routing and scheduling. He also thought that sales people were spending more time in travelling and less time in selling activities. After talking to sales engineers individually, he got an impression that most of them were not motivated, as they were not given adequate freedom of operations and recognition whenever they got good orders. Ashok thought that there was a good scope of applying what he had learnt in the management institute and achieve superior results as expected by the general manager (Sales).

Answer the following question.

Question.1. If you were Ashok, what would you do to achieve the sales volume and contribution quotas?

Answer:The variable compensation portion of your sales compensation plan can be made up of three components:  commissions, bonuses and performance awards.  Commissions are earnings tied to sales.  The more sales your sales representative makes, the more commissions the sales representative earns.  Bonuses are earnings tied to pre-defined goals.  You may pay bonuses for surpassing quota, achieving target product levels or

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