Sales Management

Zeus Co. Case

Topic 15

Stop! Read the Case!Answer the Questions

Chasing Lower Costs

• Information = Speed of Light• Logistics = Speed of a Truck or Boat• Flexibility vs Lowest Cost

Independent Reps vs Salespeople

• Independent Reps– Advantages– Disadvantages

• Company Salespeople– Advantages– Disadvantages

Luck or What?

• Glen Whitener – What is your letter grade?• Think this through carefully

Glen is at least an A-

• What Options Did He Have?• Limited Budget Marketing• Luck • And Taking Advantage of Luck

Price Increase

• Great Job!• But Moving Faster?• Take Advantage of this Strategically

Fad Product or Not?

How Do You Forecast Fads?

• Let me know when you figure this out• Cost of Over-Producing• Cost of Under-Producing• Which Can You Recover From?

Don’t Get Lost in Production

• Danger of Narrowly Focusing• Production or Logisitics• Sales Forecasting• Profit is Our Goal – Not what is easy or

convenient for an operational silo

Manufacturing Contract Options

• Depends on Sales Forecast• Weighted Average is Still A Guess• A More Math Intensive Answer Does Not

Make It The Right Choice• Why Dr. A Holds This Opinion

Break-Even Between Sales Forces

• Obvious Answer – Use Reps• Logically, What is the Job?• How Easy to Get Replacements?

Setting Up the Problem

• 3 Person Sales Force• $40k salary + $15k Benefits and .005

commission• Versus 12.5% Commission

Solution

• 3 ($65,000) + .005x = .125x• X = $1,375,000• Tie to Your Sales Forecast• Money On Table is Substantial For Most• Other Option (unlisted in case)

– Lower Commission Rate

Independent Rep Reaction

• Look at New College Student• Look at Experienced Rep• Minimize Cost is Offer Job to Reps

Management Bonus Pool

• How Would This Work?• Consequences Are Clear• What Are the Risks to Glen?• How Should Glen Handle This?

What Have We Learned Today?

• Not All Problems Have Math Centric Solutions

• Sometimes You Prepare For Best Guess Choice

• Examine Problems From Different Viewpoints• Run Costs

What Have We Learned?

• When Do Legal Issues Pop Up?• Politics of A Legal or Ethical Dilemma• Choose Well Luke!