Page 139 - DMGT205_SALES_MANAGEMENT

Unit 9: Motivating and Compensating Sales Personal

(b) Marketing information will be regularly collected by the salesperson. Notes
(c) The account will be serviced on a regular basis.
(d) All of the above
14. Which of the following areas of training for sales managers is most frequently neglected?

(a) Forecasting and budgeting techniques
(b) Accounting principles
(c) Marketing principles
(d) Management principles

15. Which of the following communication strategies does NOT involve direct communication
between sales managers and salespeople?
(a) Manipulation

(b) Threats
(c) Persuasion
(d) Promises

9.10.2 Straight Commission Plan

In this, sales persons are paid according to productivity. This method provides for progressive
or regressive changes in commission rates as sales volume rises to different levels. Others
provide for different commission rates for sale of different products, to different categories of
customers, or during given seasons.
Straight commission plans fall into one of the two broad classifications:
1. Straight commission with sales persons paying their own expense. Advances may or may
not be made against earned commissions.
2. Straight commission with the company paying expenses, with or without advances against
earned commissions.

For this method non-selling duties are unimportant, rather getting order is the main objective.

Advantages

1. It provides maximum direct monetary incentives.
2. It provides means of cost control.
3. The straight commission plan is also characterised by great flexibility for revising
commission rates for different products.

Weaknesses

1. Only customer orders are set by sales persons and they are careless about transmitting
reports.
2. Sales persons neglect to follow up leads. They resist reduction in size of sales territories.

3. Sales persons push the easier to sell low margin items and neglect harder-to-sell high
margin items.

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