The company has only 42 Sales Reps and having in mind the population of Great Britain (Wales, England, Scotland) together with Ireland we can see that the sales reps are not enough to cover the population.
The not proper physical coverage is also a hindrance to future expansion of the company
The Great area of South East Division is under strength. Having in mind the coverage and the concentration of the population in that part of UK we can see that we loose a very large part of the market.
Until now no distinction was drawn between major key accounts and small accounts, as they all have the same level of customer service, which is completely wrong policy because as I have stated in (paragraph 1.2.3.) the company should emphasize in the Large Key Accounts (such as Pubs and Brewers).
Lack of proper Marketing Research in order to decide the size of the sale force and how it could be assigned to geographical areas, specific accounts, key accounts and in general to be able to end up a system that sales results could be evaluated and controlled such as :
- Coverage per type of customers, geographic areas, size of customers possible to be served e.t.c.
- How the suggested coverage could be compared with the one of competition in terms of intensity and patterns? Warren needs to develop a competitive advantage.
- What is customer’s location, concentration or dispersion into account? We need to improve selling time and effectiveness
- What we could do for prospect customers; Can we have a programme for developing new accounts? We need also to exchange information with the rest of saleforce all over Great Britain.
- Can we eliminate the factors facing Warren Calling on wrong customers or calling on wrong time or calling twice ? Need proper pre-call analysis and that is part of the selling skills training.
- Need for alignment of sales territories properly by volume, types of accounts, potential market, etc. Company need to implement a policy for alignment of Sales territories every two or three years depending on the development of each territory.
- Last but not least every change that the company has to do has to Hassles and internal rivalries (see the Manchester case)
- The company takes the view that almost anybody could be recruit to be a sale representative and trains him/her.
2.3. Channels of Distribution
Following the above proposed coverage analysis the company needs to investigate and customer customarily buys from the selected distribution channels. Warren’s marketing division should work closely with the selected channels of distribution.
Different channels of distribution are required for different types of sizes of customers of vending machines. Although the channels in theory might be effective in proactive, however might be costly to keep them.
There is no any national objective and a way to control the channels.
There is not any levels of influence by customer or territory, expect Scotland for consistent promotion, communication e.t.c.
There is no any direct or indirect communication and sales effort with channels of distribution or even the end user/customer.
ALL the above lead to the point that WARREN is not in a position to know whether the existed channels of distribution are doing the sales job Warren wants to perform. Lot of Selling time is lost on the road and the very good training programme misses its importance and lead to high salesmen turnover passing thus skills to competition.
2.4. Communications (Promotion, Advertising, Publicity)
There is not any proper integrated/national communications programme which functions to make the prospect aware of and interested in Warren product offering, provide incentive to distribution, and motivate the direct sales force. Sales promotional plan is not existed facilitated by advertising or any other promotional activity that would help push sales and positioning the Brand Name.
2.5. Sales Training
The existed Sales training is particularly concentrated on products hands on and field training just for the salesforce to know the low of communication to the customer, however there is not any indication of general Basic sales Skills Management Training Techniques applied to Saleforce or even to the Divisional Managers with Result, within the limit of the territory, traffic and tourism uncontrollable factors, Saleforce to loose valuable selling and travelling time, trying to develop systems or teams themselves which most of them lead to negative motivation and people leave the company to competition.
So Summarizing training is too long, expensive and sometimes wasted time because not all trained saleforce stay in the end in the company.
The minimum and necessary content of training should include:
- How to set his/her objectives and plan activities (including Daily pre-Call and post call Analysis)
- Time Management
- How to identify and motivate the customer
- How to develop the territory
- How to develop skill for negotiations and overcome objections
- How to get information from prospect customers and establish criteria for ordering
- How to close the Sale
- How to keep the customer continue “Sold”
Liase activities with other departments and keep control of customer’s credits
- TO THE DIVISIONAL MANAGERS
- Develop Skills on Recruitment and Selection
- Staff Development
- Time Management
- How to develop a territory
- Sales Management
- Team Building and controlling salesforce
- Employee appraisal
Although the existed Sales training model that Warren Company use, helps sale force to understand the product difficulties internal and external communication of the Company it is not actually needed.
However the one-day training of Saleforce on the vending machine is not enough to make them productive and effective and that is why they cannot allocate their time properly in new contract, but rather serving the machines. In fact they should pass from the same sales management training with those Retail/ wholesale selling force.
As an opportunity I would also suggest once a month in the agenda of meeting to be included a Roll – Play exercise training that would territory salesmen to exchange messages of the current successful and unsuccessful sales cases.
A general inter-company magazine is not available that would allow information to flow from territory to territory and from person to person inter-company.
However the excellent training services would not be passed to competition as with the proposed re-organisation and changes in the Sales management styles the salesmen turnover it is expected to be minimized.
2.6. Sales Management
Managers have not been training on the basic Selling skills to select, recruit, train, motivate and control both Saleforce and distribution channels as well as to secure and optimum quality of service offered to end users and distributors. There are not standardised intercompany policies on topics discussed with result differences to be created between Saleforce within the same territory. (e.g. Manchester case)
With the proposed territory re-organisation, additional training need explained above, standardized remuneration and motivation plan, as well as a yearly appraisal for both Salesforce and affiliated Retailers and Distributors. (Hendry, Johnson, 1993)
2.7 Motivation and Fringe benefits (Remuneration, Pension e.t.c.)
As I have identified in the Situation Analyses the majority of the Sales Representatives require encouragement and special incentives. Especially in the field Selling. According to Jim Blythe (2000) “someone who has a talent for selling but not motivation will not sale, whereas someone who with little talent but great deal of motivation will sell”. For example in the case study we can see the field reps wanting a simple Company Logo in their Car in order to give the encourage and to feel secure that the company supports them in what their doing (Kotler 2000)
So we can see in the company:
2.7.1. Remuneration is standardised to 80% by Salary and 20% by
Commission, however it creates differences with the one of vending machines, disappointment and high sales turnover.
2.7.2. Remuneration of venting machines Saleforce is only via direct commission on value of sales and one off 100 pounds for each placement.
2.7.3. Sales motivations are varied between territory divisional managers. This creates disappointments between territory salesforce people. According to Herzberg (1966) the payment method must be seen to be fair if demotivation is to be avoided ; the payment method is not in itself a good motivator. (Herzberg,1966)
There is an important need for all motivations to be standardised for the same type of employee, however building up criteria for performance, distances, region difficulties e.t.c.
2.7.4. No promotional provision is foreseen for the vending machines saleforce who are motivated, feel alienated and at the same time leave the company.
2.7.5. There is not any territory, except for Scotland, or national sales competition or incentives for both salesforce or divisional managers.
2.7.6. Salesforce for retail/ wholesale section could drive a Vauxhal Vectra car where as the vending machine saleforce could only purchase their own by getting a low interest loan from Warren Company. This last creates an additional capital cost for the salesforce and if in a month they do not meet their profit expectations are disappointed and leave the company. One opportunity might exist for Warren to pay also the miles to the saleforce of vending machines.
2.7.7. Pension Scheme is applied to all staff based on sales targets expect for the vending machines Saleforce and what creates inequalities. An opportunity exists for Warren on a basis of vending machine target to offer a pension scheme also to those salesmen via an insurance company as long they say with Warren.(Blythe,2000)
2.8. Organization / Management Restructuring
- Territories: Are not evenly divided according:
- Population
- Customer’s structures
- Prospect Sales Value
- Unit Value
- Geographical Barriers
- Industry Growth
- Seasonality
- Prospect Social Trends and Labour/ industry mobility
Standards sales calls e.t.c.
2.9. Division Headquarters re-located to central points
Division Headquarters are not all proper located so that either Saleforce is losing lot of selling and travelling time or Social time in case meetings are taken place during weekends. The same applies to Divisional Managers.
- Easily approachable with transport means
- Least Cost
- Least travelling time
- Take least selling time
- Live enough time for Saleforce to return home.
2.10. Evaluation & Control
There not any territory evaluation or sales potential and projection for the next five years as well as actual product sales from all competition in order to be able to calculate the market share of Warren and also to be able to build up Sales Target, quotas to Saleforce and distribution channels.
Actual sales are not evaluated within the territories as well as between territories in order to be able to create average/standard salesmen sales targets.
Sales results are not evaluated in response to advertising or three/four territory promotional exhibitions in order to locate the effectiveness/ elasticity of those communication tools.
There is lack of salesmen cost control both per territory and national level.
There is not any marketing intelligence report per territory and national levels
2.11. Benchmarking/ Monitoring of Sales force Efficiency
According to :
3.RECOMMENDATIONS
Taking into account the opportunities discuss above and in order to improve Warren’s Position I would recommend the Following that shall help Warren to change Emphasis on Sales Management and Directors. The market is there and the company should optimise resources in order to achieve targets following a proper marketing measurable sales and profit objectives to Divisional Managers and subsequently down to the roots of Saleforce.
The size of the sales force should be assigned to geographic areas and/or specific accounts.
3.1.Territories
Divide Territories equally and have the division’s Headquarter in the middle of the geographical area or at least at a convenient from transportation point of view location.
Divisional Managers and Saleforce might resist as they might lose their old contracts.
Divisional Managers should have a sales and profit target which should be delegated to the saleforce accordingly. (Blythe, 2000)
3.2. Salesforce (Retails/ Wholesalers)
On the basis of the territory potential and follow the Market Research recommended on paragraph 2.2.of Salesforce Coverage above standards should be implemented for making calls, visiting various types of customers, offering various types of products e.t.c.
Each Saleforce should draft a Weekly/Monthly activity report against the monthly/ yearly measurable objectives set by the Divisional Manager.
A monthly plan should be available to make planned visits to Retailers or wholesalers.
A given/ Budgeted expense cost should be allocated to the saleforce on the basis of last month sales for minimum promotional aspects. Also the small Budget on exhibitions should be increased.
Saleforce might resist to pressure or additional job done. Daily and weekly reports should be faxed or e-mailed to the divisional Managers.
I would also suggest the need of one salesman per territory to handle the Major accounts – pubs as well as the rest of the new segments. The duties of the key accounts salesmen could additionally be done by the existed saleforce with an extra sales motivation.
3.3. Saleforce (Vending Machines)
Following a Market Research required and stated above in the opportunities of paragraph 2.2. Saleforce should have or draft an extended list of prospect customers and keep a daily and weekly record, which should be sent to the divisional managers also for action. Get a report from rest of the region vending machines saleforce just in case various companies have branches elsewhere.
A monthly plan should be available to make planned visits for new contracts to specific segments specified in the objectives of the vending machines sales team.
3.4. Channels of Distribution
Potential market per channel of distribution per territory must be investigated.
Agreement has to be signed between Warren and the channels regarding the targeted monthly/ yearly sales/ objectives.
Saleforce has to work very closely with the distributor/retailer and to run common promotional activities.
Retailer’s staff should have training on presenting effectively Warren’s Products.
Local/territory events should be created in order to bust sales and consumption.
Saleforce should secure good position of Warren’s Product in Retailer’s shops.
The channels has to be broaden to include key Accounts, pubs, Restaurants and fast food and for this reason saleforce has to work many times at night build up relationships and to support this type of segment.
3.5. Communications (Advertising, Promotion, Publicity)
National advertising should be implemented followed by a territory one to support both Retailers/ Wholesalers as well as the vending machine market.
Territory events and prices should be implemented with great publicity to bust sales.
For the reasons the Territory Manager should have a budget to spend based on the percentages of actual sales rather on the budgeted sales.
A Marketing Database report should be implemented to crate Marketing intelligence information free on certain rules to salesforce/retailers/ wholesalers and in full to Divisional Managers. This report should be also integrated to the Electronic reports handle by the division managers who are managing the saleforce.
A quality/ Hygiene and claims system should be available to satisfy and type of complain on the spot in order to build up customer’s confidence on the product and company.
3.6. Training
As suggested on the training opportunities above, Salesforce (both for the Retails/wholesalers or even the vending machines ones) and division managers should pass from training specified is paragraph 2.5. What they all have so far, expect the vending machine on the product training missing the selling skills techniques as well the sales management education to organise themselves effectively.
Although according to Blythe (2000) the Soft Drinks products that the Warren company is offering are simple products, for consumer markets, with low value and normally we would think that one-week would be enough for training. (Blythe, 2000)
I would recommend a two months training duration for the Retailers /wholesalers and Key account training rather than three months.
The reason for that kind of training is simple we need to capture the Key Accounts such as Pubs and in order to do so we need to very good trained personnel.
3.7. Sales management
Following the training to both saleforce and divisional managers saleforce has to manage the quality of service at retailers/ wholesalers level being able to set objectives, participate to common promotions with the network, offer them bonuses for exceeding targets and make sure that retailers/ wholesalers selves are always full of Warren’s products.
Weekly/ Monthly/ Yearly results should be communicated to divisional managers or to a centralised computer system for evaluation and action in order to be able for Warren to discover shortages, trends, and other opportunities for growth. The emerge of new technological improvements within the business environment such as video-conferencing, Mobile phone, FAX, and other internet email systems could help the saleforce and the managers to communicate and exchange important information fast, secure and reliable without travelling and losing personal time, money and the opportunity lost of selling products instead of travelling.
Divisional Managers following their own training needs on paragraph 2.5. regarding recruitment and selection, staff development motivation and control should be able to manage both territory and saleforce via the daily/ weekly reports compare them with standards or objectives.
In this case an integrated computerized saleforce management system is required to give instantaneous report to both salesperson as well as to the logistics of Warren Company in order to avoid shortages and at the same time help the company to plan ahead.
Important also is to build a customers/ Suppliers Databases in order to crate Catalogue Marketing with Sample offerings to target potential customers and suppliers.
Via the Electronic Sales Management System monthly meeting could eliminated to ONLY ONE where all saleforce from territory meets together make a presentation of their actual sales, review target if any and play the suggested role play.
The data of the rest THREE WEEKS are fed into the Divisional Manager system and there should be an agreed time with each one saleforce the manager could exchange information, set objectives and tactics to follow. This corresponds to a Bank of information that belongs to particular salesman.
Division Manager then should give weekly guidelines to both to individual and the team as a whole.
The system could be extended to orders taking by saleforce the following:
- A full market report, as stated above, regarding potential market by segment, market concentration special events, e.t.c.
- Following that report a machine plan of action should be drafted and instructions for:
- Existed placements of machines and consumables
- Relocation of vending machines, if any, in case of low consumption
- New placement as a strategy for growth to new sales points and segments.
All Divisional Managers should have a sales budget as well as a profit one which should be reviewed or rolling on in every quarter.
Four times a year a Divisional meeting should exist to review total National Sales, set up new objectives, correct deviations, and implement new strategies for Warren’s growth. Following the quarter meeting the first week of the quarter the Division manager should set the new targets or suggest the corrective action to be done in order to meet or exceed objectives.
Having all above info a FULL TERRITORY GEOGRAPHICAL SALES/ ASSET MANAGEMENT SYSTEM (GIS) could be implemented to give both saleforce and divisional managers the whole vision and control happenings in the territory.
3.8. Motivation
A motivation plan should be implemented across the Warren company. Regarding:
Remuneration
Division Managers on the same basis 80/20
Saleforce and Key Account basic Remunerations 80%
Saleforce and Key Account commissions 20% on targets Vending Machines initial placement contract Vending Machine servicing
Car allowances
Allow Freedom to Saleforce to choose any brand of certain CC horsepower, however of same sale value.
As above for the divisional Managers
Car fuel allowances according to miles run for the company according to activity report.
Promotions – Recognition of Achievement
Vending Machine Salesforce if they bit their targets might have opportunities to pass to normal salesforce.
Create Saleforce grades like Territory Supervisors e.t.c. based on achievements.
4. Planning For Growth
There are many ways to look for opportunities for growth. It is sure with the above recommendation sales and profits shall be increased, as certain costs should be minimised due to duplication of efforts in the past. In order of priority I should also Suggest:
4.1. From the Existing Business in the Existed Markets.
Optimisation of resources as recommended above.
4.2. From Existing Business in the New Markets/ Segments
Should concentrate in new segments like Pubs, Key Accounts etc
4.3. New Business Into the Existed Markets / Segments
Build up alliances and distribute other products via Warren Channel (not competitive)
4.4. Plan for radical product changes in existed and new markets.
4.5. Plan to Export to other countries.
4.6. Leave Servicing of vending machines to be done by existing owners
With these way the company will lose wasted time that the company’s
Reps use for servicing the machines and gain opportunity lost time in
selling
4.6. Last but not least to “Build Alliances”
Allow other companies that operate in the same Soft Drinks Sector to use our fridge and at the same time to build up relationships with similar small companies in order to compete the large one such as COCA COLA e.t.c.
Assumptions made base on the Growth Matrix Ansoff Theory
Appendix 1. Summarized Divisional Situation Analysis
Wales & The West Division
Sales Reps : 12
Geographically : Strewsbury to Gloucester to bath to Southampton
Seasonality : high/ Tourist areas
Cities : Bristol, Cardiff, Exeter, Plymouth, Southampton
Headquarter: In Birmingham – Easy to travel
Divisional Headquarters: Bristol
Transportation : Long Lines, Stretched
Meetings : once a month – Loose two workings days on traveling on the field meetings
The South East Division
Sales Reps : 8
Geographically : 4 Sales Reps covering London
4 Sales people are covering Canterbury, Reading Luton And
Ipswich
MIDLAND from Birmingham to Leicester to King’s Lynn
Seasonality : important
Cities Coverage : London, Cantebury, Reading, Luton, Birbingham, Leicester
and King’s Lynn
Headquarter : In Birmingham – Easy to travel / Share HQ
Divional HeadQuarters : Luton (the office in the center of division)
Transportation: Stretched and salespersons under strength
Meetings : weekly meeting held every Monday Morning.
North of England
This area produces one-third of company’s overall sales.
Sales Reps : 12
Geographically: 4 Sales Reps covering London
4 Sales people are covering Canterbury, Reading Luton &
Ipswich
Transportation : Little Stretched
Meetings : Weekly meetings held every Friday afternoon\
Main Problems: - Disputers not clear definition and care of customers
- Lots of waste of sales traveling
-No proper sales coverage
SCOTLAND
Sales Growth very high although sales per rep are still low
Sales Reps : 10
Geographically : Business is done via wholesalers
Seasonality : Important
Cities : Glasgow and all the North areas up to Inverness
Headquarter : In Birmingham – Easy to travel / Share HQ
Divisional Headquarters : Glasgow long distance from Inverness
Transportation : Long
Meettings : weekly Meetings held every Friday Morning and yearly events.
Problems : Reps close relationship with Managers works as a team
Appendix 2. SWOT Analyses
Reference:
- Donaldson, B. (1998) “Sales Management Theory and Practice”. London. Mc Millan Business
- John Hendry and Gerry Johnson, (1993) “Pavlof Theory of Learning, Strategic Thinking, Leadership & Management of Change”, Willey
- Kotler Philip (2000) “Marketing Management” Millennium Edition , Pages Page 631-632, & 705 (Matrix)
- Herzberg, F. (1966) “Work and the Nature of Man”, published London by William Collins.
- Jim Blythe, (2000) “Sales & Sales Management” , Blackball Publishing, Page 101-106
- Jim Blythe (2000) “Marketing Communications”, Published by Financial Times, & Prentice Halls Page 218 - 219
- H. IGOR ANSOFF (1985) “Corporate Strategy- An analytic approach to Business Policy for Growth and Expansion ”, Published by Penguin Books, pages 98-99 (for Growth Vector Matrix)
Donaldson, B. (1998) “Sales Management Theory and Practice”. London. Mc Millan Business
John Hendry and Gerry Johnson, “Pavlof Theory of Learning, Strategic Thinking, Leadership & Management of Change”, (1993) Willey
Kotler Philip (2000) “Marketing Management” Millennium Edition , Page 631-632
Herzberg, F. (1966) “Work and the Nature of Man”, published London by William Collins.
Jim Blythe, (2000) “Sales & Sales Management” , Blackball Publishing, Page 101-106
Kotler Philip (2000) “Marketing Management” Millennium International Edition, Page 705
Jim Blythe (2000) “Marketing Communications”, Published by Financial Times, & Prentice Halls Page 218 (About Sales Territory Management)
Jim Blythe (2000) “Marketing Communications”, Published by Financial Times, & Prentice Halls Page 219 (Matrix Factors Relating to length of training of Sales staff)
H. IGOR ANSOFF (1985) “Corporate Strategy- An analytic approach to Business Policy for Growth and Expansion ”, Published by Penguin Books, pages 98,99 (for Growth Vector Matrix)
