Professional Documents
Culture Documents
Hanover Bates
Faryal Najam
Hammd Salahud Din
Mahnoor Quddous
Yilmaz Dar
Submitted to
Prof. F.A Fareedy
Section C, MBA II
Sales Force Management
24-03-2015
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HANOVER BATES
IMPORTANT FACTS
Salary
Benefits
Total
EXPERIENCED
45000
6750
51750
A commission of 0.5 percent is paid, based on dollar sales, on all sales up to established
N.C. District
150
100
50
0
A
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SCENARIO
James Sprague has been appointed Northeast district sales manager.
Northeast sales district ranked third in dollar sales but it was the worst district in terms of
profit performance or we can say that it has fewer profit margins.
James Sprague analyzing the gross profit quota
Poor results in this area reflected misallocated sales efforts either in terms of customer
focus or the mix of product line items sold
The appointment of Sprague was considered as a good investment. Because Craver
(senior sales rep) is retiring in 3 years.
PROFILE
JAMES SPRAGUE
HANK CARVER
KEY ISSUE
Reallocate district sales effort to improve district performance meanwhile retaining its most
experience sales representative.
PROBLEM ANALYSIS
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Han Carver is taking it personally and threatening to leave the Job as he is the most
senior and experience Sales Rep in the district. And losing him means losing great bit of
$20000 or more
B account
$11000 - $19999
C account
But if we compare to the benchmark (D7) the account coverage for account C is much
greater. i.e. 2118 call VS 1299 calls.
Selling expenses of district 3 are way much higher than the benchmark which is district 7.
We have calculated expense ratio of both D3 and D7
o Sales expense ratio of D3 = 552541/5109000 = 0.10
o Sales expense ratio of D7 = 452187/4657500 = 0.097
This clearly indicates that selling expenses in D3 are much higher than in D7.
POSSILE SOLUTIONS
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First Possible Solution could be to fire Carver and hire a new sales person. That will save
us some money. As he is costing us $51750 and new will cost us $37950 (Calculations
are above). So we can save up to $13800. But it has certain negatives to it which is that
the company will lose it most experience man and firing him will create a negative
potential of the market and set quotas according to that market insight.
Spending more time on certain products would help immensely. Instead of going through
the entire line of products with the customer, they should pick which ones fit the
competition.
If there happens to be an opening, they should try to fill the spot with someone who has
had a college education. That does not necessarily mean that they will be a better
salesperson, but we feel like they will be able to learn faster and adapt to fit customer
needs.
They should also begin implementing a CRM system. It would be a lot easier for their
salespeople to keep track of every single aspect of the customers. Having knowledge
about who they are selling to should help in the battle to keep a good relationship.
EXHIBIT ANALYSIS
Performance Index
District
Sales
Quota
Performance Index
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1
5859000
2
5610000
3
5109000
4
4977000
5
4815000
6
4807500
7
4657500
Exhibit 2
Active Accounts
Account
North East
Percent
53
210
313
576
Total
Active Accounts
9%
36%
54%
100%
Category
A
B
C
Total
Exhibit 6
5820000
5625000
5475000
5055000
4950000
4695000
4080000
of North Central
100.67
99.73
93.31
98.45
97.27
102.39
114.2
Percent
of
Total
42
182
218
442
10%
41%
49%
100%
Sales Calls
Account
North East
Percent
1297
3051
2118
6466
Total
Sales Calls
20%
47%
33%
100%
Category
A
B
C
Total
Exhibit 6
of North Central
Percent
of
Total
1030
2618
1299
4947
21%
53%
26%
100%
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Total Sales
North East
North Central
43%
57%
2118
North East
2618
North Central
3051
1030
1297
0
500
1000
1500
2000
2500
3000
3500
Gross Profit
Account
North East
Percent
of North Central
Category
Total
A
B
C
Total
Gross Profit
29%
$
50%
$
21%
$
100%
$
$
$
$
$
534,000
934,500
390,000
1,858,500
Percent
of
Total
495,000
1,087,500
382,500
1,965,000
25%
55%
19%
100%
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Exhibit 5
North East
Category
A
B
C
Total
Exhibit 5,6
$10,075
$4,450
$1,246
$15,771
Percent
of North Central
Percent
of
Total
Total
Gross Profit
63.88%
$11,786
28.22%
$5,975
7.90%
$1,755
100.00%
$19,516
60.39%
30.62%
8.99%
100.00%
8,000
6,000
4,000
$5,975
$4,450
2,000
$1,246
$11,786
$10,075
North East
$1,755
North Central
North East
$412
$306
$184
North Central
$481
$415
$294
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North East
$
552,541
North Central
$
452,187
10 | P a g e