Page 103 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 5: Organising Sales Effort

accordingly. This calls for periodic review of the quotas and make any necessary Notes
adjustments.

Task Suppose you are the sales manager of a leading bank based and operating
in Mumbai (or you can choose any other metropolitan city). Your bank has
recently entered into mutual fund retailing. You have recruited new
candidates for your mutual funds team. How would you allot target to
your sales team in order to maximise your revenues?

Case Study Swatantra Company

watantra Company was established in 1940 to market office equipment in the entire
country. They carried the entire product line manufactured by its parent company in
SUK. After the partition of the country, the company’s activities were confined to
India. In keeping with the government’s policy, the company started manufacturing some
of the products in the country. However, it continued to market the products under the
brand name of the company. The company had a sales force of more than 100 sales
representatives who were responsible for promoting the sales in their respective territories.
With a view to keeping the sales force sufficiently motivated, the company compensated
the salesmen on the basis of salary-cum-commission. The salaries varied according to the
length of service, experience and performance of non-selling functions. The commission,
on the other hand, was calculated on the basis of the percentage of the quota achieved.
Thus, if a person achieved 130 per cent of the quota fixed, his commissions worked out to
30 per cent of his salaries for the year. But in case a person failed to accomplish his target,
he was not entitled to any commission.
The quota in case of a new territory was fixed at 10,00,000 per annum and in subsequent
years it was raised by 10 per cent of the quota achieved.

Mr. Kapur had joined the company in 1970 immediately after his graduation. After an
initial training period of three months, he was allotted the newly created territory of
South Delhi. During the period 1970-80, Kapur was consistently successful in achieving
the sales quota fixed for the year. In 1980, Mr. Arora, a young man of 21, joined the
company and after 3 months of training in Faridabad, was given the new territory of
Faridabad. During the year 1981, Mr. Arora, who was employed on an initial salary of
500/- per month, received a pay packet of 1,000/- which consisted of his salary
( 500/-) and a commission of 500/- (since he achieved a sales target of 200 per cent).
Mr. Kapur’s emoluments for the same year, however, worked out to 950/- only, since he
was just able to achieve the target fixed for the year.
Mr. Kapur (on entering the room): Sir, I am sorry to say that it is no longer possible for me
to continue with this company any further where ....
Branch Manager: (interrupting him) Hold on, Kapur, calm down. Have a seat.
Mr. Kapur: (sitting on the chair) Sir, how can you expect me to keep calm, if I find that after
10 years of my service in this company I am no better than a youngster, who has joined
only a year ago?
Contd...

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