Page 138 - DMGT205_SALES_MANAGEMENT

Sales Management

Notes The agents wanted the company to share advertising expenses in Bangladesh and also
wanted a long term agreement with the company rather than a contract on two-year
renewals which was existing at the moment.
Questions
1. What should Martin Corporation do to motivate the agents?
2. What do you see as the main problem and how would you solve it?

9.10.1 Straight Salary Plan

This is the simplest compensation plan. Under it, sales persons receive fixed sums at regular
intervals (companies than consumers' goods companies. Firms that previously used the straight
salary plan have switched over to combined basic salary with a variable element.

Advantages
1. There is control and direction over the sales personnel.

2. There is flexibility in adjusting the work.
3. Sales persons cooperate more if paid straight salary rather than commissions.
4. It is simple and economical to administer.

5. More stability of income.
6. Sales persons are relieved of much burden of planning their own activities.

Disadvantages

1. Since there is no direct monetary incentive many sales persons do only an average rather
than an outstanding job.

2. There is tendency to under compensate productive sales persons and to over compensate
poor performers.
3. If this exists for long, the turnover rate rises.

4. The morale of the sales persons is affected.
5. It is difficult to adjust to changing circumstances.

Self Assessment

Multiple Choice Questions:
12. To maximize the performance of their field sales forces, companies
(a) Review expense accounts

(b) Retrain in sales techniques
(c) Develop a strong marketing plan
(d) Develop a strong advertising plan

13. Which of the following is an advantage of using a commission form of sales compensation?
(a) The salesperson will be highly motivated.

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