Marketing Management-II
Written Case Analysis
Eureka Forbes Ltd.:
Managing the Selling Efforts (A)
Submitted by: Section 'E' Group 13
Roll No Name
2013IPM117 SUPREET SINGH
2013IPM099 SURYANSH SINGAL
2016PGP402 SUVINAVA BASAK
2016PGP408 TANVI MAHESHWARI
2016PGP412 UTSAV MAHTO
I. Case Facts:
• Eureka Forbes which started in the 1980’s is selling innovative products aimed at improving the lifestyle of people. Water purifier and vacuum cleaners are two of their premium products
• Their selling system was completely new in the regards that their sales force was directly involved in interacting with the customers. There were no middlemen involved
• Selling the items required intensive customer interaction, presentation and
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It is mainly based on the subjective judgements of the people. Due to this it may be possible that an efficient EuroChamp may not be recruited due to poor judgement skills of the recruiter.
• Training received was not apt and was certainly inadequate. They focused how to increase the customers, but they ignored the art of responding to the customer objections.
• The commissions were directly related to the sales.
• Less attention given to building customer relationships.
• The job is a very high pressure job. Too much emphasis on target sales have led to psychological pressure on the sales reps.
The New compensation system- “Bettering the Best”
• The New compensation system was designed to give award points to the sales person for successful completion of various stages of selling process like making a call, giving a demo, closing the sale etc. The compensation was linked to the points scored by the salesperson
• The scheme also included daily recognition of the EuroChamp couple with a maximum monthly reward of Rs.500
II. Problem Statement:
• The current compensation system at Eureka Forbes compensation rewarded was directly depended on the number of confirmed sales by EuroChamps
Achieving maximum sales was the sole objective, how it was achieved was not emphasized
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Implementation of the new system would rely heavily on the leadership of his senior managers and the sales management team that had come up through the ranks based on the old system might not be up to the task.
III. Causes of the Problem:
• EuroChamps performed the demo in a mechanical manner. Instead of educating the prospects, EuroChamps seemed to focus only on completing their demo
• Due to poor training and support, they repeatedly missed prospects' visible cues signalling their interest to buy which created hindrance in closing the deal
• The art of responding to customer objections and doubts was missing
• Damaged and unclean demo equipment worsened the problem
• Enthusiasm among regional heads to train and coach EuroChamps was not present. They were busy in managing their daily responsibilities and sales targets
• Compensation plan was linked to the end result (closure of sales) and not to the means to achieve it
• There was no incentive for senior reps to train new recruits who encroached the territory of existing senior reps
• Market for these products was limited in a country like India
IV. Decision Criteria:
Option 1: Continuing the current system
The Current Compensation System
PROs CONs
• Result oriented as commission is impacted by
We are dwelling in an age in which everything needs to be instant. Competition is stiff, hence, any company that needs to maximize sales must use all tactics to win the attention of the
The motivation of the sales force is so low that they think that the district managers are no more that the baby sitters. No right schedule is being released by the management, there is no sales management planning in the organization. The leadership runs from the top. The employees just want to make sales without having concern about the company in that they work. Moreover, the uncertain night calls and long distance travels for the reps and frequent changes in the sales organizational structure has made problem even worse.
The impact of inefficient training will cause the loss of clients and create reduction in work and loss of profits for the company.
The employee total compensation program in Aflac is competitive with the industry market for the employees (Reed, 2009, p. 3). First, the company has a program referred to as a “Total rewards program” for the employees of this organization (p. 3). Next, the focus of the Aflac organization derives from the importance of employees through communication (p. 3). To illustrate, the company’s benefits include compensation, such as life insurance paid for by Aflac, policy for cancer paid for by Aflac, insurance for protecting accidents at a low premium for employees, and programs that provides bonuses based on profit-sharing (pp. 4,6). In addition, the organization provides a
Compensating the organizations sales staff through the use properly designed performance pay will lead to profitable sales for the organization. Once again linking compensation to performance will benefit the organization in its ability to pay. It is important to design the compensation of the sales staff in a manner that encompasses all of the organizations goals as communicating with production staff will be a key component of the High Involvement Strategy, and it is important for the organization to demonstrate a commitment to the sales team that the relationship is not just purely financial. Therefore direct compensation for them should consist of a minimum base salary upon which their commissions are added.
This report examines 3 different compensation systems that our company can develop and enforce within our company for our employees. Compensation is the most important and rewarding factor for employees, so a thorough and thoughtful approach should be taken as we think about changing the way in which this company rewards it's employees for the work they do for us each and every day.
Pay and reward systems exist in the form of pay, bonuses and benefits, financial and non-financial and designed to improve performance, increase motivation, staff retention and increase profitability. Appreciation and gratitude is widely received as reward and the opportunity for training and development for career progression.
Thesis: Lack of training and communication can cause employees to make simple, but crucial mistakes that jeopardize the success of the company and its current projects.
Buyers never want to feel pushed, manipulated, or rushed. Sales professionalism is another factor into having a buyer and seller trust based relationship. This method is a way to approach customers in a trusting and non-manipulating tactic to satisfy the long-term needs of both the customer and the selling firm. Salespeople play a critical role on the sales floor. Almost all consumers in the society who are early adopters of an innovation often rely on salespeople as a primary source of information. Given the increasing importance of building a trust bond and developing a long-term relationship is an imperative that salespeople are truthful with the customers. It is important for salespeople to
A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:
* No proper training provided for new staff. Management expects from new people to know everything already.
The employee total compensation program in Aflac is competitive with the industry market for the employees (Reed, 2009, p. 3). First, the company has a program referred to as a “Total rewards program” for the employees of this organization (p. 3). Next, the focus of the Aflac organization derives from the importance on employees through communication (p. 3). To illustrate, the company’s benefits include compensation such as life insurance paid for by Aflac, policy for cancer paid for by Aflac, insurance for protecting accidents at a low premium for employees, and programs that provides bonuses based on profit-sharing (pp. 4,6). In addition, the organization provides a leadership program to develop employees at all levels within the
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.
To further illustrate the lack of policy and guidelines managers are not afforded the opportunity of initial or continued training in which they can maintain their skills. To illustrate, Perfect Pizzeria recruits within its ranks for assistant and night shift mangers based on the capability of performing the
Salespeople can earn cash rewards under two incentive plans: the first one is a total $10,400 paid to five salespeople that had significantly increased in sales volume over previous year. The second plan is a weekly sales increase award for each week in which their sales volume compare than previous year. The company’s comptroller and production manager submit a new compensation plan proposals. The new proposal will discontinue these current incentive plans in effect.