UNIVERSITY OF NAIROBI

SALES MANAGEMENT

D33/26400/2009

Introduction National telecommunication Corporation was founded in 1963, and operated successfully for 5 years in creating a microwave link between St. Louise and Kansas City. After which they expanded and in the 70s it entered into a very competitive market, where their major competitor was AT&T which had captured almost 69% of the said market. This paper will answer two main questions in the text. Question 1: Description of the company; Product Mix

Product mix, also known as product assortment, refers to the total number of product lines that a company offers to its customers. In this case, National Telecommunication had one product, implementing a microwave link between St. Louise and Kansas City. As it expanded and renamed to National Communications of America inc, and ventured into interconnects and services. They further introduced National Mail and Comnet and was seen as an innovator in this market. After acquisition of Vericom Global Communication, National expanded its portfolio into international telex and data transfer service. Including its local communication products, it had now captured a new market, international services, including long distance calls. Competitive Position

This is about is about defining how you will differentiate your offering and create value for your market. National Communications strives to carve a spot in this market by offering services which are not emphasized by AT&T. They managed to do so by providing services which are flexible, reliable and cost effective. National communications main selling point was always being cost effective as opposed to AT&Ts superior customer service notion. National now has captured 12% of the market, establishing it in over 10 countries, and has enjoyed the highest profit of $6.4 billion. Sales organization structure

A sales organization defines duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective execution of the sales function. National communication has a vertical organizational structure in its Midwest division. Its other divisions include: West, Southwest, Pacific, Mid-Atlantic, Southeast, Northeast, and International. All of them have a similarity to the Midwest division. This structure includes: Account

executives at the bottom of the hierarchy who reports to Area sales manager, answerable to State sales manager who in turn is at par with other state manager and Major account rep. All the three are under the two major directors overseeing the east and west areas. They all answer to the vice president of that division who reports to the president of sales along with president of sales of other departments. At the top of the hierarchy is Corporation President. This reflects all divisions structure, however in divisions with larger market has much longer horizontal hierarchy to cater for lower managers span of control. Quota system and Compensation structure

National Communication has a very satisfactory monetary compensation system for all level of managers. Starting with the Major accounts representatives have a base salary ranging from $26000 to $32000 per year with 20% commission on total of customer billing. Account executives both new and who have been in the organization for at least 5 years, base salaries of who ranges from $20,000 to $24,000 plus commission based on customer billing. Same goes for the new executives whose salary ranges from $18,000 to $22,000 plus rolling average commission. The quota system has been divided into 2 types: Calling quotas and Activity quotas. Calling quotas include 12 calls to customers per day to sell new services or if they are not National communication customers they try get them to join National Communications. After which they have achieve 10 person to- person interviews. Here they usually try to land large companies or big accounts. Activity quota is based on long distance revenue a new account will generate, and this would get the executive upto $4000 per month for new executives and $5000 to old once. Therefore, they enjoy a base salary plus commission on rolling billing and quota commissions.

Question2: Issues with Dan, Management actions and it justification Issues with Dan

Dan worked for 2years at National Communications and was on his 3rd year. This year came with changes to Dan. 1994, overall the company was going well and its sales were high. In order to keep that, the company seemed to tighten its handle on sales department. Dans main problem was to create new business at the same time provide customer service to his current accounts so as not to lose it. This created a crisis for him, as he could not attend to his customers due to failed equipments and continue getting new customers. Dans manager was also being harsh by providing him with a warning letter to cover herself, despite knowing the management was the problem due to which sales was almost non-existent. In order to keep their reliability motto alive, Dan ensured that all his customers are satisfied with their services and thus, being reliable all the time. The managers did not notice this and Dan kept doing a job which did not fall under his responsibilities. Management Action

The management after seeing Dan was not doing well and not able to reach some of his quotas issued a warning letter which prescribed clearly that if he wouldnt improve, it might lead to disciplinary action or maybe even get fired. The manager dam answered to may have been to quick to act before formally conducting an investigation as to why Dans performance was at a lower level. This might be because she wanted to save her job and place the blame on a subordinate, and thus, eventually laying Dan off. Was management fair to Dan?

According to the text and my own opinion, the management was not fair to Dan. He was a hardworking employee who met all his quotas and also signed 2 largest accounts. He was in line to be awarded with one of the most prosperous organizational sales award. He was ranked 13th in his division and 58th all round. Laying him off was a major mistake on part of the management. How they should have resolved it.

The management should have first carried out an investigation to find out the reason behind the inconsistent performance. Dan has been in the organization for 2 years and all his past performance did not amount to inconsistency, therefore, there was something amiss. After the investigation they would have discovered that Dans inconsistent sales performance was because he was doing task outside his job description, which was supposed to be done by customer service sector. By giving his enough backup support in order to give reliable service to his major customers would have put him at peace and thus able to meet his quotas. Conclusion: Issues facing Dan ware brought on due to inefficient management of that department, and management firing Dan was not fair, they should have gone to the core of the matter and resolved it, instead of blaming Dan for inconsistent performance.