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MILFORD INDUSTRIES

Protagonist

The protagonist in this case is Harrison Oates who was suddenly promoted to district sales
manager of the Capital District for Milford industries. Oates had hitherto been product
manager based in Milfords home office in Chicago. Oates replaced the incumbent Samuel
Goldberg who unexpectedly expired. On assuming office, Oates during his meetings with
the regional sales manager was briefed about the challenges he would face in his new task.

Macro Industry Analysis

Milford Industries was one of the worlds largest manufacturers of tools and accessories, its
sales in 1982 amounted to $540 million. The products of the company were :-
(a)| Stationary metal working power tools
(b) | Stationary wood working power tools
(c)| Portable power tools
(d) | Hand tools-general shop
(e)| Masons, plasterers and bricklayers tools
(f) | Measuring instruments

The company utilised three separate sales forces to sell hand power tools to different
customers.
(a)| The Industrial sales force called on large end users, industrial distributers, and
mill supply houses.

The private label sales forces sold to a few large retail organisations such as Sears
Wards etc.
(c)| The commercial sales force called on all other retailers including department
stores, hardware stores, discount stores and other outlets.

Milfords commercial sales force consisted of 103 sales persons and 12 district managers
who reported to 3 regional managers who reported to the national sales managers.

The regional sales manager had three prime tasks : (1) Participate in the making of sales
management and marketing policies,(2) call on major accounts within the region, and 9#)
supervise the district sales managers. The 12 district managers were responsible for
recruiting and selecting, training, evaluation and supervision of the sales force. Each also
made calls on major accounts within the district but did not have actual sales responsibility.
 The sales force was typically experienced and believed to be in high morale. Age ͛s
ranged from mid 20 to 65. Most were college educated especially the younger ones .

Sales people were paid a combination of salary and commission which was generally
2% of sales. Each salesperson were expected to make five to six calls per day. Brief reports
were required for each call. Milfords͛s management believed the call reports to be
relatively accurate because of a stringent company policy requiring dismissal for falsifying
records.

Micro Industry Analysis

The district under study Capital District consisted of Delaware, the District of Columbia,
Maryland, Virginia, and West Virginia. As per surveys conducted the area under Capital
District had a very good potential for sales as the regions Buying Power Index formed 5.7 %
of the potential of the nation. Despite this the sales revenue generated by Central district
was low, The average sales per salesperson was only 62% of the average sales per sales
person in the US. Moreover the average growth percentage of Capital was 6.5% as against
12.05 of the region and 11.1 % of USA. This state was attributed to the lack of proper
control of the sales force by the predecessor of Oates.

Pro lem Identification

The main problem was that the sales revenue generated by Central district was not living up
to its potential, though the area was touted to be vibrant and growing. The reason
attributed to this state was that Oates predecessor Sam had not controlled/managed the
sales force properly resulting in lack of control and indiscipline.

In this scenario Oates who has no prior experience in managing a sales force has been
thrust upon the task to revive / turnaround t he sales revenue of Central District. Moreover
even the incumbent regional sales manager is on his was out and the required support and
guidance would not be forthcoming. Even the newly appointed regional sales manager has
given Oates a free hand to run the show. The sales team of Central District is a mixed bag of
sorts with some potential winners and some without the right attitude. So the real problem
is how an inexperienced manager in Oates with very little help or guidance ( except for
some data handed over would turnaround the sales revenue of Central districts with the
existing bunch of sales persons.

Possi le Alternatives

Since it is almost a perform or perish sort of situation for Oates, for if he lets the situation to
continue the sales revenue in the district would dip ever more. So, Oates has to quickly get
down to the task of understanding the situation, the market and the sales person. For this
he has to firstly analyse the set of data given to him to get to understand the nature/
history of the problem and also have a fair understanding of the sales force, though he must
be careful in not letting the information of the sales persons bias him. Later he must tour
extensively each market with respective sales persons. This would give him a fair
understand of both the market and the sales person. After this he should in consultation
with the sales person set targets. Following this each salespersons performance is to be
monitored closely, in case set targets are not being met, the reasons for the same are to
analysed, again with the sales person, where required, needful assistance/ mentoring may
be offered. In case no improvements are forthcoming, to incompetence or lack of proper
attitude, such persons should be placed on probation i.e the salesperson has to notified
that if his performance does not improve within a set period his services would be
terminated. For this a good understanding of each sales persons attitud es, personality and
attitude to work is important.

critical Evaluation of Alternatives

The only alternative i.e to perform is the need of the hour, the only way for Oates is to
straight away get down to business get to know the market and his sales persons and
marshal all the resources to achieve his target his target some of the areas. To start off he
could equip himself with analysis of the data given to him eg. From exhibit 1 the sales of
stationary wood working tools, portable power tools, hand tools ʹ general shop are showing
a negative sales trend, reasons for the same are to be analysed and remedial measures are
to planned.

The sales of a firm could be only as good as the sales team, hence a great deal of effort is to
be made to handle them properly . From Exhibit 8, the foll owing inferences could be made:-

(a)| Alderson: Good potential, needs to be aggressive, should be given targets of

open big accounts
(b) | Burke: Good Potential, to be coaxed to toe companies line, focus on discipline,
should be given increased targets.
(c)| Caplan: Not hard working , to be counselled for improving performance, should
be put on probation if there is no improvement in performance.
(d) | Durfee: Developing into a good performer, however needs to be coun selled to
focus on larger stores in addition to smaller stores.
(e)| Eaton: Very good performer though old, morale to be kept high and utilise
eagerness to work to improve sales.
(f) | Furness: Good potential, presently facing problems on personal front, not to be
lost, needs counselling / mentoring.
(g)| Gibson: Losing interest in job due to business in real estate, needs to be put on
probation if performance does not improve.
(h) | Harlow: An average performer with experience, needs to worked upon to
improve performance.

Care should be taken to base final opinion on each after they have been proved true first
hand.

Recommendation

A Management by Objective(MBO) approach, wherein both the sales manager and the sales
personnel together set targets for each sales person and jointly review performance and
find reasons for the gaps and institute remedial measures is best suited for the situation at
hand. Setting of targets should be based on the data on sales wherein products which have
potential but not performing well have to focused. Sales must match t he buying
power/sales potential of each region and targets should be set accordingly. With the
implementation of measures recommended it can be hoped that Oates would be able to
turnover the sales revenue of Capital district.