KRC is a major Tyre manufacturer.--Its market share is getting hammered all across the country.

--Ronit takes over

as Regional Sales Manager of North Zone to revive sagging fortunes-- Ronit (RSM) transferred Ramandeep Singh
(Sales Executive) from Punjab to small territory of Rajasthan with annual target of INR 200 million. Decision was
forced on the branch and was against the prevalent sentiment of Punjab branch. Ramndeep Singh was a 40 year
old executive in home territory for 18 years working with KRC. He was able to leverage his personal relationships
with dealer to bring sales. Ramandeep had been the outperformer in branch for many years and got support from
his managers. Market dynamics changed after 2004 – intensified competition, changed from seller’s market to
buyer’s market. KRC is struggling with financial performance and not willing to match discounts given by
competitors or extend credit terms. Ronit reexamines decision in solitude.
Yardsticks:
Arresting drop in Market Share. -- Expansion of Dealer network. -- Reduction in no. of days outstanding.--
Performance Review of Salesperson.-- RD’s loyalty. -- RD’s popularity and career stage.-- Overall Impact on sales
force morale.
Market and Dealer Analysis
• Total Market has grown leaps and bounds. But, both Branch target and achievement has fallen in tandem.
• KRC doesn't even seem to be setting ambitious targets for quite sometime. Company seems to be very jittery in
dealing with competition.
• Total dealers have grown but KRC’s strategy has not kept pace.
• Not only RD’s but other sales territory have not been good in network coverage. Only last year Pargat and
Harjinder has given a push.
RD's Fall
•Compared to other salesperson in branch, RD’s Sales target Achievement percentage is constantly falling from 2006.
• RD’s Dealer Conversion percentage is also constantly falling from 2005.
• Pargat and Harjinder has given a boost to dealer conversion last year.
• It is suggestive that Sales and Dealer conversion is directly proportional. The sharp uptick in red line for last year.
•RD’s No. of days outstanding has always trailed Branch average.
• Historically, RD seems to have given extra days of credit.
• In utter financial distress KRC now doesn't seem to be in a position for such magnanimity.
• Again last year Pargat and Harjinder steals a march on RD.
• RD has not realized that dealers have moved from relationship to transactional marketing.
• Even Inexperienced Pargat and Harjinder have done better than RD on all counts.
• RD’s old habits are dying hard. He is not able to reconfigure himself to changed market scenario. He has also
failed to keep his cards close to his chest.
Ronit's ACT
• Ronit seems to have taken the decision in a hurry. Hence his mental uneasiness. He also seems sorry for RD.
• However, he is a through professional who scouted the entire territory and tried to base his decision on
objectivity and feedback.
• RD’s sales performance doesn't align with Ronit’s target of Dealer Expansion and Sales revival.
• This decision may have far reaching repercussion on the sales organization across India and may be seen as a
harsh treatment meted out to a veteran star performer.
• Given RD’s popularity, old timers across the sales organization may feel insecure.
• KRC’s performance has also not been up to the mark for the last few years. The decision has implications of RD
being made a scapegoat.
Decision:
• There has been no upward mobility for RD in 18 years at KRC.
• He has attended barely 10 days of training in 18 years. It seems that he was never considered for grooming to
take on higher responsibilities.
• The need for Dealer Expansion was pointed out to him in 2007. But his next two appraisals do not suggest that
this objective was specifically highlighted as panacea to his sinking sales.
• An humanitarian consideration for his family and age was not thought through.
• He has constantly cribbed for additional discounts given by competitors. KRC may not have adequately
addressed those concerns for years.
• After 18 years, it will be difficult for RD to perform in Rajasthan as well. Those sales for KRC will also suffer apart
from Chandigarh in the near term. For a large organization as KRC he can be accommodated elsewhere. Rethink
the decision.
Alternatives

Is RD loyal to KRC
• Yes RD was loyal to KRC
• In KRC there should be a difference in taking decision on the loyal employees
- On the revenue side of the balance sheet loyal and committed employees are more likely to go "above
and beyond" to meet customer needs and are highly motivated
- On the cost side, loyal employees stay longer , resist competitive job offers, do not actively look for
other employment and recommend the company to others as a good place to work which decreases the
replacing costs
- The decision which was taken by Ronit was against the prevalent sentiment of the Punjab Branch
- The main department which should never let their morale down is the sales and that too a veteran who
was a superstar in his job
What would be the impact on the different branches
• Employee morale gets down
• Things may change materialistic
• There won’t be any loyalty left towards the industry
• Insecurity among the veterans getting fired or transferred or may be ill treated
• Fear factor increases among the sales department which may lead to employee switching to other
industries or even with their competitors
What would you do in case you took over the territory in place of RD?
• Market research to find the new dealers
• Establishing a good rapport to build a strong relationship
• Timely sales department review system
• Incentive sharing among the team
Qualitative:
• Quick learner, smart, energetic, pleasant mannered and an enthusiastic person
• Friendly relation with the dealers to achieve the sales target
• Super salesman for the years 1997 to 2002
• In the initial years he performed exceptionally well in achieving sales more than the targets given
• The % target achievement from 2006 is decreasing when compared to other branch
• Coverage might be more than other branches but the figures are gradually decreasing every year when
compared to the other branch
• He should change according to the change in market scenario but still he is not able to cover or target the
new dealers due to the old dealers relation yet they are dropping out their orders
• He always waited for one good season to give a big shot
• He was persistent to the market situation
• Different approach from April 2009
• Not able change himself from relation to transactional market
RD’s loyalty was more towards his dealer friends than towards the company
• Observing that his policies are not beneficial to company, he did not change his style of working and
was committed more to his friendship than accomplishing company’s objectives
 Quantitative:
Sales figures were in line with target till recent past but now even they are not met
• Days of sales outstanding was also the fault of appropriate authorities at Head Office because no billing
was done without their approval
• Had RD not got the flexibility, he would not have achieved even these sales numbers
• Punjab branch’s overall growth in market coverage has been in line with the growth in dealer universe
(5.08%) however RD’s territory was expanding fast at 5.62% CAGR but RD was very sluggish in
responding to expansion and expanded only at 1.11%
• Even his dealers started losing faith and believed that RD’s prime time is over
Market grew at 10.35% CAGR, Punjab branch expanded as 5.61% CAGR while his own sales figures
increased only at 3.72% CAGR
• In terms of sales target:: Excellent till 2005 as he was meeting his targets and also outperformed branch
in terms of growth-------Good/Average till 2008 but unacceptable after it
• In terms of days of sales outstanding: Good till 2007 as compared to branch (ignoring recession period--
--Poor after 2007 ---------------------------In terms of market coverage: Poor
Assigning him the task to establish a new territory to develop new dealers would decrease their research costs as
well as this act would increase the employee morale and would work comfortably without any hierarchical
pressure
Recommendations
Cancel transfer order and send for training program with strict guidelines and deadlines for improvement on
KRA’s
Observe, accompany RD and other executives in field and guide for improvement
Issue clear instructions for all other branches as well with strict KRA’s and KPI’s
Retaining an executive fro gong to a training program should be strictly discouraged throughout the company
If RD fails to perform even after given a chance to improve, then transfer him
Some nearby territory can be considered for transfer
Prevalent practices by a company receive slow response from market when move on stricter side, so should
inform about hitbacks in short-term but also educate about long term benefits