Jagannath University

Department of Marketing

Case Study on United Cosmetics, Inc. and McDonald Sporting

Goods Company

Course Tittle: Selling and Sales Management

Course Code: MKT 4104

Submitted to:
Mr. Mahmudul Hasan Fouji
Associate Professor
Department of Marketing
Jagannath University
Submitted by:
Epic Growth Squad
14th batch
Department of Marketing
Jagannath University

Date of Submission: May 30, 2024

 Group Information

Serial
Name ID Comment
Number

1 Robiul Hasan B190204015

2 Md Sohag Mondal B190204023
3 Bulbul Ahamed B190204025
4 Abdul Hakim B190204026
5 Nimul Islam B190204044
6 Fahim B190204046
7 Md. Naeem Hossain Bepari B190204057
8 Sanaulla Islam Sanu B190204064
9 Toriqul Islam Patwary B190204088
Case 03: United Cosmetics, Inc.: Creating a Staffing Program

Summary of Findings of Case Studies

Background:

Al Kantak has started his new role as Field Sales Employment Manager at United Cosmetics,
Inc. (UCI), a national manufacturer and marketer of consumer goods primarily sold to retail
grocery stores. On his first day, he meets with Sparky, the Executive Vice President of Sales,
to discuss urgent recruitment and training issues reported by the regional sales managers.

Challenges:

Vacant Territories: UCI experiences significant sales losses, estimated at $10 million
annually, due to 2,700 days of vacant sales territories while district managers (DMs) recruit,
hire, and train new employees.

High Recruitment Costs: The company is spending $5,000 per hire, primarily through
employment agencies, which is considered too costly.

High Turnover: Many new hires leave shortly after joining, resulting in repeated recruitment
and training cycles.

Inefficient Training: Training is decentralized and inconsistent, with DMs often unable to
provide adequate training due to their workload. New hires frequently feel unprepared and
unsupported, leading to further turnover.

Time Drain on Managers: DMs spend excessive time on recruitment and training, detracting
from their ability to support their existing sales team.

Lack of Screening Training: DMs receive minimal training in screening and interviewing
candidates, contributing to high turnover and recruitment inefficiencies.

Objectives Set by Sparky:

• Decrease the cost per hire.

• Establish a uniform recruitment program.
• Increase the quality of new hires.
• Reduce the time DMs spend on recruiting.
• Decrease the number of vacant territory days per year.
• Eliminate dependence on employment agencies.

Immediate Task:

Sparky requests Al to outline a new sales employment program within three weeks for a
meeting with regional sales managers. Al proposes developing a comprehensive five-year plan
to address these issues, with major improvements expected within the first few years. He
emphasizes the need to primarily recruit from college campuses across the United States.

Al’s Initial Steps:

• Developing a detailed plan to present to the regional sales managers for their input and buy-
in.
• Outlining a strategy to streamline recruitment, improve training, and enhance retention
through a focused college recruitment program.

Question: Assume you are Al Kantak. What would be your recommended

college recruitment program?

Solution:

Recommended College Recruitment Program for United Cosmetics, Inc.

1. Identify and Target Key Colleges and Universities

• Selection Criteria: Identify colleges and universities with strong business, marketing,
and sales programs. Focus on institutions with a history of producing high-quality
graduates and a strong career services infrastructure.

• Geographic Coverage: Ensure a mix of national and regional institutions to cover

diverse geographic areas and create a wide talent pool.

2. Build Strong Relationships with Colleges

• Career Services Partnership: Establish partnerships with career services departments

to gain insights into the best ways to engage students.

• Faculty and Student Organizations: Connect with faculty members and student
organizations related to business and sales to increase brand visibility and build trust.

3. Develop a Comprehensive Internship Program

 • Internship Opportunities: Offer internships that provide hands-on experience in sales
and marketing roles. This allows students to gain practical experience and a clear
understanding of UCI’s operations.

• Pathway to Employment: Use the internship program as a pipeline for full-time hires.
Provide clear pathways from internship to full-time employment, ensuring a smooth
transition for successful interns.

4. Standardize Recruitment and Selection Processes

• Clear Job Descriptions: Develop detailed job descriptions that outline the roles,
responsibilities, and career progression opportunities at UCI. Ensure these are
consistent across all recruitment channels.

• Campus Recruitment Events: Host information sessions, workshops, and interview

days on campus to engage with students directly and streamline the hiring process.

• Screening and Interviews: Implement a standardized screening process that includes

initial assessments, behavioral interviews, and situational judgment tests to identify
candidates who fit UCI’s culture and role requirements.

5. Centralized Training Program

• Onboarding Process: Develop a comprehensive onboarding program that includes

company orientation, product training, sales techniques, and role-specific training.
Utilize a mix of online modules and in-person sessions.

• Continuous Development: Offer ongoing training and development opportunities to

ensure new hires continue to grow and adapt to their roles. This could include advanced
sales training, leadership development programs, and mentorship opportunities.

6. Mentorship and Support System

• Mentorship Program: Pair new hires with experienced sales professionals who can
provide guidance, support, and knowledge transfer during their initial months.

• Regular Check-Ins: Conduct regular check-ins with new hires to monitor their
progress, address any challenges, and provide feedback and support.

7. Performance Metrics and Continuous Improvement

 • Track Key Metrics: Monitor recruitment metrics such as time-to-hire, cost-per-hire,
retention rates, and new hire performance. Use this data to identify areas for
improvement and make data-driven decisions.

• Feedback Mechanisms: Establish mechanisms for collecting feedback from new hires,
mentors, and managers. Use this feedback to continuously refine and improve the
recruitment and training processes.

8. Marketing and Employer Branding

• Employer Brand Development: Develop a strong employer brand that highlights

UCI’s culture, values, and career opportunities. Use social media, the company website,
and promotional materials to attract potential candidates.

• Employee Testimonials: Share success stories and testimonials from current

employees and recent hires to create a positive image of UCI as an employer of choice.

Implementation Timeline

• Short-term (0-6 months):

• Identify and establish relationships with target colleges and universities.

• Develop and launch the internship program.

• Standardize job descriptions and recruitment processes.

• Plan and schedule campus recruitment events.

• Medium-term (6-18 months):

• Implement the centralized training program.

• Roll out the mentorship and support systems.

• Track and analyze recruitment and performance metrics.

• Long-term (18 months – 5 years):

• Continuously refine the recruitment program based on feedback and performance data.

• Expand partnerships with additional institutions.

• Ensure ongoing development opportunities for new hires.

Conclusion

By implementing this structured college recruitment program, UCI can achieve the following
objectives:

• Decrease the cost per hire.

• Establish a uniform recruitment program.

• Increase the quality of new hires.

• Reduce the time and resources DMs spend on recruiting and training.

• Decrease the number of vacant territory days.

• Eliminate dependence on employment agencies.

Case 05: McDonald Sporting Goods Company: Determining the Best
Compensation Program

Summary of Findings of Case Studies

McDonald Sporting Goods Company (MSG) is looking to improve their sales force
compensation plan in order to increase sales. The company manufactures and distributes
sporting equipment and has a sales team of 11 people. The current compensation plan consists
of straight commission with tiered rates, per diem allowances, and incentive awards. However,
sales have remained flat, and MSG is concerned about attracting and retaining qualified
salespeople.

Background:

✓ McDonald Sporting Goods Company (MSG) has been experiencing stagnant sales despite
satisfactory profits.

✓ Hudson McDonald, president, seeks to improve the salespeople’s compensation plan,

considering it a fundamental weakness in marketing operations.

✓ MSG manufactures and distributes sporting equipment, clothing, and accessories, with 700
products grouped into fishing supplies, hunting supplies, and accessories lines.

✓ Sales volume for the current year is $7,529,806, with 35% from MSG's products, 50% from
imports (primarily Taiwan), and 15% from other domestic producers distributed by MSG.

✓ Sales are primarily to 6,000 retail stores in small and medium-sized cities across 17 states
in the northeastern United States.

✓ MSG's sales force plays a crucial role in marketing, with no advertising except for a
merchandise catalog.

Salespeople Compensation:

✓ Salespeople are paid straight commissions on sales volume, ranging from 5% to 7%, with
a weekly draw against commissions.

✓ Additionally, there are two sales incentive plans: Annual Sales Increase Awards and
Weekly Sales Increase Awards.
✓ Some salespeople have guarantees of $900 per week against commissions, while others do
not.

✓ Salespeople provide their own vehicles and receive per diem for travel expenses.

Proposed Plans:

1. Comptroller's Plan:

• Reduce guarantees to $450 per week, in addition to regular commissions.

• Motivate sales force to increase sales rapidly.

2. Production Manager's Plan:

• Increase per diem to incentivize salespeople to travel further, resulting in better territory
coverage and increased sales.

3. Consultant's Ten Percent Self-Improvement Plan:

• Introduce a monthly bonus commission of 10% on all sales over the previous year's
sales for the same month.

• Discontinue existing sales incentive plans to fund this proposal.

Question: Which of these plans, if any, should the company use to compensate
its salespeople? Why?

Solution:

McDonald Sporting Goods Company: Determining the Best Compensation Program

Analysis of the Problem:

McDonald Sporting Goods Company (MSG) is facing stagnant sales growth and wants to
improve its compensation plan to incentivize salespeople. The current plan offers a mix of
straight commissions, per diem allowances, sales incentives, and guaranteed income for some
salespeople. However, it hasn't yielded the desired results.

Here's a breakdown of the issues with the current plan:

• Low Salesperson Motivation: The commission structure might not incentivize

salespeople enough, especially for exceeding targets.
• Uneven Sales Coverage: The per diem plan might encourage salespeople to focus on
nearby accounts, neglecting further territories.

• High Cost of Guarantees: Some salespeople with guarantees are underperforming,

leading to financial losses for MSG.

• Ineffective Incentive Plans: The current sales incentive plans might not be motivating
enough or have overlapping benefits.

Evaluating the Proposed Plans:

1. Comptroller's Plan (Reduced Guarantee + Commissions):

o Pros:

▪ More commission-based income could motivate higher sales.

▪ Lower guaranteed pay-outs could save the company money on underperformers.

o Cons:

▪ Sudden reduction in guaranteed income might lead to low morale and turnover.

▪ Salespeople might prioritize short-term sales over long-term relationship

building.

2. Production Manager's Plan (Increased Per Diem):

o Pros:

▪ Increased per diem could incentivize salespeople to travel further and cover
territories more uniformly.

o Cons:

▪ Higher per diem costs might not translate directly to increased sales.

▪ Focus on travel expenses might incentivize quick visits over in-depth customer
interaction.

3. Consultant's Plan (Self-Improvement Bonus):

o Pros:

▪ Bonus on incremental sales could motivate exceeding targets.

 ▪ Retains the familiar commission structure and guarantees.

▪ Elimination of existing incentive plans could save some costs.

o Cons:

▪ Bonus might not be a strong enough motivator for significant sales growth.

▪ Doesn't address the uneven sales coverage issue.

Recommended Approach:

Here's a suggested compensation plan that combines elements from the proposals and addresses
the identified issues:

1. Hybrid Commission Structure:

o Implement a tiered commission structure with a base commission rate and increasing
rates for exceeding sales targets. This incentivizes consistent sales and rewards
exceeding expectations.

2. Territory-Based Travel Bonuses:

o Offer a travel bonus based on the distance traveled within the territory. This
encourages venturing further and covering the entire territory effectively.

3. Revised Guarantee System:

o Maintain a temporary guarantee for new salespeople while they learn the territory.

o Gradually reduce the guarantee as they reach sales milestones, transitioning them fully
to commissions.

o Monitor performance and potentially remove guarantees from consistently

underperforming salespeople with alternative solutions (e.g., training or territory
adjustment).

4. Retained Bonus Option (Optional):

o Consider keeping a modified version of the consultant's bonus plan with a clear target
and a higher bonus percentage for exceeding goals significantly.
Additional Considerations:

• Sales Training: Invest in ongoing sales training to improve product knowledge and
selling skills. This will enhance salespeople's ability to generate higher sales.

• Performance Reviews: Conduct regular performance reviews to track progress, offer

feedback, and identify areas for improvement.

• Non-Monetary Incentives: Explore non-monetary incentives like recognition

programs, awards, or additional vacation days for top performers.

This combined approach addresses both base income security and sales motivation while
incorporating strategies for improved territory coverage and salesperson effectiveness.
Remember, a well-rounded compensation plan goes beyond just money and considers factors
like training and support to create a successful sales environment.