Assignment Number 2 EDMM 2011 Gargi Banerjee SID: DM11017 1.

To avoid a negative outlook, it is important that as a manager, I convey the right message to the sales reps. Instead of saying that the company is looking at a costcutting measure, one could convey that the company expects increased efficiency from the sales force, and one of the measures is to lower the selling expense ratio. As a manager, I could : Ensure that each sales persons routes (travel plans) are planned efficiently. For example, he could cover as many places as possible during a single tour. If he from Chennai, and is travelling to Bangalore, and has a customers in Hubli as well, he could save lodging expenses by taking an overnight train to Hubli and so on. Give him appropriate guidelines for better time management. Prioritizing customers according to the categories they belong to, for example. Include selling expense ratio as a part of KPI Devise some means of incentivizing those who are able to reduce selling expense ratio remarkably. Financial incentives may be difficult since the firm is facing a cash crunch, but other forms of appreciation recognitions like Most effective employee of the quarter etc can be suggested to the management. Proper monitoring is required. As a manager, it is important to review the performance of the sales force w.r.t new evaluation parameters, and suggest ways to improve as necessary.

2. Performance based on sales quota

Branch A B C D

Sales (Rs. Million) 32.85 39.55 38.23 23.85

Quota (Rs. Million) 33.90 38.80 36.20 25.50

Difference(Rs. Million) -1.05 0.75 2.03 -1.65

Performance 96.90% 101.93% 105.6% 93.53%

Performance based on industry sales Branch A B C D Industry Sales 103.25 132.0 108.50 84.00 Sales 32.85 39.55 38.23 23.85 Percentage Share 31.81% 29.96% 35.23% 28.39%

Performance over last year Branch A B C D Conclusions: a) All branches have achieved more sales over last year b) Two branches (A and D) have not met their sales quota, while two of them (B and C) have exceeded theirs. c) Branch Cs performance has exceeded the rest on all counts. Therefore, branch C is the most effective. d) Branch B is a close second on all counts apart from industry share where it comes third. Last Year 29.50 33.75 31.50 21.22 Current Year 32.85 39.55 38.23 23.85 Percentage Change + 11.35% +17.18% +21.36% +12.3%

e) Branch Ds performance is the weakest, thought it has improved by 12.3% over last year.

3. i) Vijays District Performance Criteria Product Product B 1200000 1209000 100.75% of target Net Sales Total 2000000 1977000 98.85% of target (Quota) New Calls Sales Expense 20000 20100 Exceeded by Rs 100.

A Quota 800000 Actuals 768000 Performance 96% of target (Quota)

Customers 8 560 8 590 100% 105.35% of target

Sales expense ratio

= (20100/1977000) * 100 = 1.01%

Sales volume per call Avg cost per call

= 3350.08 ( 3571.42 if on target) = 34.06 (35.71 if on target)

Based on the figures above, the following inference can be drawn: a) Vijay has not met the net sales quota and the sales quota for product A. He has been successful in acquiring 8 new customers, which is as per target. b) Vijay has exceeded the target for product B. c) The number of calls exceeds the quota, but that has not resulted in higher sales. On the contrary, he has met only 98.85% of his quota. As a result his sales expense ratio is higher than what is expected, and the sales volume per call is lower.

d) He has managed to keep sales expenses under control. The average cost per call is lower than what it would have been had he stuck to the quotas. e) Vijays performance has been adversely affected by Ashoks poor performance, since he has not been able to meet his targets. f) On the whole, Vijays district performance has been fair. There is, of course, much scope for improvement. 3. ii) It is rather obvious from the data supplied that 3 out of the 4 territories in Vijays district has performed well. It is only Ashoks territory that has brought down the overall performance of the district. Vijay should take adequate measures to ensure that Ashoks performance improves, alternatively, he can decide if he needs to terminate Ashoks services and look for a replacement. He should analyse why Ashok has not been able to perform wellwhy he has not been able to acquire customers etc. The number of calls Ashok has made is also rather low, but his avg sales per call is high. It is possible that he has not been able to manage his time well. To determine that, Vijay should take a look at Ashoks travel plans, and how much time he has spend on each customer, and the time he has taken for non-selling activities. Vijay should suggest some remedial measures to Ashok. To assess Ashoks shortcomings better, Vijay could accompany him on calls, and use the opportunity to train him better. Vijay should also analyse the performance of the others as well. Alok, Suresh and Pradeep have performed well, but Pradeep has not met his numbers for Product A. Vijay should find out why Pradeep has failed to meet the quota. All of them have made more calls than the quota. They have also generated more net sales than the quota, but their average sales volume per call is low. Vijay should find out if his reps have been prioritizing customers according to their category (high priority customers that give the highest volumes as category A and so on) and suggest corrective action, if required. Vijay should also ensure that his reps remain motivated. He should remember to congratulate his reps for a job well done, but remind them that the results could have been better.

Vijay should evaluate the reps on other parameters as well, like number of customers retained, number of calls required for closing a call etc. These numbers would provide him with a deeper insight, and he would be able to provide more meaningful feedback 4. There are a number of options: a) Reason with the CEO. Explain that the ill-will generated due to sales of faulty pieces will affect the company in the long-run. If possible, do a cost-benefit analysis of recalling the defective pieces, and replacing the faculty unit as opposed to the loss of sales due to bad reputation. Also, cite cases where not recalling a faculty product has negatively affected the sales of a company. b) Suggest ways of finding alternate uses. Since the trouble is with the oscillating mechanism, explore if the oscillator can be jammed, and the fan can be sold as a nonoscillating fan instead. c) Extend the warranty of the defective pieces and let that be known to the dealers. If the customers come back with complaints, the machine should be repaired free of cost. Then compensate the dealers accordingly.