Chapter 04

Case 4.1 : C. G. Engineering Company

Main Issues / Problems

 Achievement of sales and profit contribution quotas.

 Application of motivational tools.

Question 1

If I were Ashok Desai, I will take the following actions to achieve sales and profit
contribution quotas:

 I would ask sales engineers to get information, after their discussions with the existing
and prospective customers, on sales potential. They should then estimate the expected
company sales for the next year.

 Based on above information, the customers would be classified into high (A), average
(B), and low (C) potential customers. The sales engineers would be asked to prepare a
‘call plan’, keeping in mind higher frequency of visits to ‘A’, followed by ‘B’ and ‘C’
class customers. Ideally ‘A’ class customers should be visited 4 times a month, ‘B’
class customers 2 times a month, and ‘C’ class customers, once a month.

 I will also visit ‘A’ and ‘B’ class customers along with the sales engineers, as per their
call plans, keeping 50 percent time for customer meetings and balance 50 percent for
sales administration work in the office.

 The sales engineers would be motivated by giving them freedom of planning their
visits to customers, appreciation and recognition for the good work done by them.

 I would also recommend to the management to introduce an incentive scheme for

salespeople by linking the sales performance with commission to the extent of 30
percent and balance 70 percent as fixed salary component.

 I would arrange for training program for sales engineers on selling and negotiation
skills as well as use of the concepts of “sales funnel” and efficient routing plan.

 I would organize technical seminars for business customers’ senior technical persons
on ‘ state-of-the-art technical topics ‘to establish good relationship with them.
 Case 4.2 : MM Marketing Company

Main Issues / Problems

 Designing sales territories and assigning salespersons to territories.

 Setting or establishing sales quotas.
Question 1

If I were Krishna Kumar, I would do the following:

1. Designing sales territories. I would focus on Mumbai and other nearby major
cities like Pune, Baroda, and Ahmedabad, who have high sales potential for selling a
volume of 1,00,000 numbers in the first year and growth of 50 percent in subsequent
years. The control unit is the city and I would forecast the sales potential of fans for
each city in numbers and value.

I would estimate the sales volume expected from each salesperson, considering market
segments of household customers, commercial organizations and institutional
customers. Minimum sales volume expected from each salesperson would be 15,000
nos. of fans per year, at the average price of Rs.1000 per fan, based on which the sales
value works out to Rs.15 million per year.

2. I would assign two salespersons each to Mumbai, Ahmedabad, and Baroda, and one
to Pune. The assignment of specific salespersons to these territories would be based on
their selling skills, knowledge of local language and culture, as well as market
knowledge.

3. For deciding sales quotas, three factors would be considered – sales volume,
selling expenses, and sales calls per day. Assuming an average price of the fan as Rs
1000, for a sales volume of 1,05,000 numbers, the sales budget would work out to Rs
105 million per year.

Sales quota for Mumbai salesperson per year would be as follows:

Type of Quota Quota / year Weight Remarks

Sales Volume (Nos) 15,000 3
Selling Expenses (Rs) 150,000 2 1 % of sales revenue
Sales Calls per day (Nos) 6 1 Includes dealers and
business customers

A similar quota system can be made for salespersons in Pune, Ahmedabad, and Baroda.
 Case 4.3 :Guhring India Pvt. Ltd.

Main Issues/Problems

 How should Pradeep cover his assigned territory?

 Can he cover the additional territories of Karwar district and Goa state?

Question 1

Krishnamurthy is required to visit North-Karnataka and discuss as well as advise Pradeep on

how to cover the current and new territories assigned to him.
There are three activities that need discussion: (i) planning efficient routes for Pradeep, (ii)
scheduling Pradeep’s time and (iii) using time management tools.

(i) Planning efficient routes reduces travel time and cost, and improves the territory
coverage. For setting up a routing plan, first Pradeep should classify each existing and
prospective customer into (‘A’ class) high sales potential, (‘B’ class) medium sales
potential, and (‘C’ class) low sales potential by finding out each customer’s yearly
requirements in Rs. value. Thereafter, customers are placed in the descending value of
their requirements (i.e. sales potential) by placing the customer with the highest sales
potential first, then the customer with second highest sales potential and so on till all
customers are placed in a vertical list. All the customers’ sales potential values are added
to make the total sales potential. Thereafter, the top few customers, whose sub-total of
sales potential works out to 70 percent of the total sales potential, are classified as ‘A’
class customers. Next number of customers’ sales potential are added to make it 20
percent of the total sales potential and these customers are categorized as ‘B’ class. The
balance customers have low sales potential and are called‘C’ class.

The road map of Karnataka state, which is shown in the case, indicates the location of the
specified districts and Goa state approximately as follows`:
Belgavi
Dharwad-Hubbali
Goa
Ca

 Koppal
Karwar

Shivamogga
 Pradeep should build his route plan around locations of high sales potential customers in
the above districts and Goa state. Medium (‘B’ class) and low (‘C’ class)customers would
fall into place near ‘A’ class customers. Some time should be allowed to prospective
customers. Pradeep should start from home at Belgavi and should go to Goa, then to
Karwar district, and Shivamogga to Koppal, and thereafter to Dharwad - Hubbali twin
cities, before returning to Belgavi. This route plan would save a lot of time and cost.

(ii)Scheduling of Pradeep’s time is basically a time allocation issue. He should spend more
time face-to-face selling and servicing class ‘A’ customers, slightly less time with class ‘B’
customers and still lesser time with class ‘C’ customers. Pradeep should spend travelling time
early morning or late evening, as far as possible, so that prime time is spent face-to-face or on
phone with customers for selling. He should try to minimize waiting time.

(iii) Time management tools like smart phone and laptop computer should be used by
Pradeep. Sales force automation (SFA) software, which is a part of customer relationship
management (CRM) system,should be used by Guhring India Pvt. Ltd., if not done already.
SFA system would help Pradeep higher conversion from enquiries to orders and better sales
performance. It also gives benefits of reduced selling costs, improved customer relationship
and higher salesperson’s productivity. Ultimately, the company is benefited with improved
sales revenue and productivity.