LAHORE SCHOOL OF ECONOMICS

SALES FORCE MANAGEMENT

Written Analysis of Case Study

Case Study: Hanover-Bates Chemicals Corporation

Submitted to: Professor Fareedy

Table of Contents
1.

Introduction:........................................................................................................ 3

2.

Qualitative Facts................................................................................................... 4

3.

Quantitative Facts:................................................................................................ 5

4.

Problems & Issues:................................................................................................ 7

5.

Core Problem & Justification:.................................................................................. 8

6.

Solutions & Recommendations:................................................................................ 9

Page 2 of 9

1. Introduction:

Company:
Industry:
Products:
Market Presence:
Spain, Norway & UK)
Local Distribution:
Key Success Factor:
Major Competitors:

Competitor
Interiors
Touchwood (Jail
Road Lahore)
Heaven
Furniture Pvt.
Limited
(Islamabad)
Mohkam
Designers and
Furniture
(Gulberg
Lahore)
Bashir Sons
(Gujrat &
Lahore)

Interwood Pakistan
Furniture
Home and Office Furniture
Both National and International (India, Middle EAST, Africa,
Islamabad, Karachi, Lahore, Gujrat, Rawalpindi, Jhelum,
Faisalabad, Quetta, Multan and Gujranwala.
Research & Development and Skilled Sales Force
Interiors Touchwood (established 30 years ago)

Time since
Established
30 years

1974

Products
Residence and
Corporate
Office
Furniture
Furniture and
Interior
Decoration
Furniture,
Kitchen,
Wardrobes,
Doors &
Floors
Office, School
& Home
Furniture

Customer
Type
High End
Consumers

Major Clients
P & G, Castrol,
Standard Chartered

Government Centaurus Islamabad,

/ Commercial Joint Staff
Headquarters, Army
Messes etc
High End
PC Hotel, Mobilink
Commercial
Head Office, Punjab
Group of Colleges,
Hameed Lateef
Hospital.
-

Page 3 of 9

2. Qualitative Facts

Name of General Sales Manager Umar Sohail.

The benchmark region was Lahore region.
The divisions of Furniture Industry are as follows:
Home Use Market
Corporate Client (Contract) Market high share
This segment has various revenue sources like hostels, restaurants, public facilities
and government organizations.
Major products consist of 2 product types by raw material: Metallic and Wooden
Furniture (attractive industry).
The industry is at peak in first (40% sales) and last quarter (30% sales) of year and is
greatly influenced by marriages and seasonality effect. Only 10% of sales occur in 3rd
quarter. This trend is consistent in both Gujranwala and Lahore region.
NOTE: Refer to Table 2 on page 5 for supporting figures.
The industry is strong, has specialized labor and availability of raw material eventually
making it an attractive industry.
The products of the company are sub divided as follows:
Category
Life-wares

Corporate &
Education Clients
Hotels

Products
Home Furniture and
accessories, kids furniture and
flooring.
Office, classrooms, libraries,
Laboratories Furniture
Kitchens, Doors & Hotel
Wardrobes

Clients
Domestic housing and local offices

MCB, Faysal Bank, Barclay, FFC,

Descon, NUST, Lums, KSBL &
more
Avari, Pearl Continental etc

It is important to be noted that 30% of sales are from Lahore region and only 5% of sales
are from Gujranwala.
The commission rate of Gujranwala region was 8% compared to Lahore region which
was 2% of sales.

Page 4 of 9

3. Quantitative Facts:
The following section shows the important analysis of provided exhibits:
Exhibit 1:
City
Lahore
% of total
Gujranwala
% of total
Total

2009
16521164
85.93750089
2703463
14.06249911
19224627

2010
18503704
86.69950905
2838636
13.30049095
21342340

2011
21094222
87.61954725
2980568
12.38045275
24074790

Gujranwala
Year
2009
% of total
2010
% of total
2011
% of total

Q1
1081385
39.9999926
1135455
40.00000705
1192227
39.99999329

Q2
540693
20.0000148
567727
19.99998591
596114
20.00001342

Q3
270346
9.999988903
283864
10.00001057
298057
10.00000671

Q4
811039
30.0000037
851591
29.99999648
894170
29.99998658

Total
2703463
100
2838637
100
2980568
100

Year
2009
% of total
2010
% of total
2011
% of total

Lahore
Q1
6608466
40.00000242
7401482
40.00000216
8437689
40.00000095

Q2
3304233
20.00000121
3700741
20.00000108
4218844
19.9999981

Q3
1652116
9.999997579
1850370
9.999997838
2109422
9.999999052

Q4
4956349
29.99999879
5551111
29.99999892
6328267
30.0000019

Total
16521164
100
18503704
100
21094222
100

Page 5 of 9

Exhibit 2:
Lahore 2010
Sales
Current
Rep
Sales
Kamran 6476296
% of
34.9999978
total
4
Junaid
4996000
% of
26.9999995
total
7
Waqas
3700741
% of
20.0000010
total
8
Ahsan
3330667
% of
18.0000015
total
1
Total
18503704

Current
Quota
6400000
32.9426828
7
4953121
25.4951709
9
4150000
21.3612709
2
3924562
20.2008752
2
19427683

Expenses
358223
27.620502
32
358223
27.620502
32
257500
19.854334
72
323000
24.904660
64
1296946

Quota
Achievement
101.192125
-

Expenses to
Sales
5.531294431
-

100.8656966
-

7.170196157
-

89.17448193
-

6.958065966
-

84.8672285
-

9.697757236
-

Exhibit 3:
Gujranwala 2010 Sales Rep Performance
Sales Rep Current
Current
Expenses
Sales
Quota
Shamshad 766432
1074510
50822
Kamran
789425
1128236
79822
%
3.0000052 5.00004653 57.061902
Variation
19
3
33

Quota
Achievement
71.32851253
69.96984673
-1.904800407

Expenses to
Sales
6.63098618
10.1114102
52.48727608

Exhibit 4:
Gujranwala 2010 Sales Rep Salary
Sales Rep
Basic Monthly Salary
Shamshad
100000
Kamran
200000
% Variation
100

Commission
61315
63154
2.999266085

Exhibit 5:
Kamran's Salary Comparison
Region
Base
Lahore
120000
Gujranwala
200000
% Variation
66.66666667

Commission
129526
63154
-51.24222164

Total
249526
263154
5.461555108

Page 6 of 9

4. Problems & Issues:

1. The sales of the Gujranwala region were relatively too low i.e. only 5%
2. It was a wrong decision of company in promoting Kamran and shift from Lahore to
Gujranwala as interim Regional Manager.
3. During probation period, there were not sufficient support for any reasons to make a
favorable decision for Kamran but definitely it was the capability of region itself but not
the sales representative which was problematic.
4. The quota set by company was higher for Kamran than for previous representative
5. There was a lack of motivation faced by Kamran because of the capability of the region
itself and unattractive market compared to Lahore region
6. The company was judging the competent sales person not based on sales of region but not
the effort of the sales representative himself. The appraisal method was completely
incorrect. Kamran achieved 3% more sales than Shamshad (previous employee) and 5%
more quota.
7. Kamran was considering switching to another furniture company which was again an
issue.
8. It was a misconception of the company that doubling the salary of Kamran would also
boost the sales of Gujranwala region.

Page 7 of 9

5. Core Problem & Justification:

The core problem in the case was that the unrealistic quotas were set by the company despite
low sales potential in the region.

The justification regarding the core problem can be emphasized through following points:

The region was already unable to achieve high sales and more quotas were increased
later on.
The company failed to recognize the capability of region to generate sales when
considering quota allocation.

Page 8 of 9

6. Solutions & Recommendations:

The recommended solution for growth in sales are as follows:
1. Change Performance Metrics:
The company should change its performance metric when evaluating its employees. Based on
just performance of short period, it cannot be finalized that Kamran was not performing
because his sales increased by 3% and quota achievement by 5% which supports that there
was no problem with the sales executive.

2. Retain experienced sales executives:

The company should not dismiss Kamran based on performance in Gujranwala only because
if we compare his performance in Lahore, he was putting all the required effort. Similarly he
was also performing well in Gujranwala.

3. Revise quota allocation system:

The company was focusing solely on high commission rate where the sales potential was low.
Instead the company should allocate quota wisely and it should not increase quota especially
where the current sales level are not yet even met.

Page 9 of 9