CASE STUDY- 1

GRS COMPANY LTD.

Case:
Hemanth Kumar, sales executive of GRS Company was a worried person. He could not achieve the sales target
for the previous three month from April to June 2008. He wondered if he could retain his job. What reasons
could he give his boss, Alisha Khan, the area sales manager of Delhi branch when he was to meet him the
following week for performance review? Was it because of the unfavourable economic situation like slowing
down of the demand for FMCG that his company was manufacturing and marketing? Or was it that his efforts
were inadequate? Hemanth was confused and was not sure why he could not achieve the sales goals for the first
quarter of the year 2008-09

ABOUT THE COMPANY:

GRS Company was a multinational company with its headquarters in UK. The company had a range of non
durable (FMCG) products like detergents, soaps, hair oil, cold cream, shaving cream and shampoo. These
products and brands had good reputation in Indian and International markets. The Company’s manufacturing
plants were located at Ahmadabad (Gujarat), Kolkata (West Bengal) and Mumbai (Maharashtra). The physical
distribution of the company’s products was carried out, as shown in Exhibit 1.

The stockists were selected by GRS Company for different geographical areas and were responsible to cover
all retail outlets in specified geographical areas.

EXHIBIT: 1- Physical Distribution of the Products

Company Company Stockist's

Factory Warehouse warehouse

Retail
consumers
outlets
Each stockist had employed a group of sales person who were responsible to book orders from the retail outlets.
The stockist’s sales person was assigned a number of retail outlets which he was required to visit once a week.
The retail outlets (also called as the retail environments) consisted of retail shops, such as kirana stores, general
stores, departmental stores and even pan shops. The stockists had agreements with GRS Company to exclusively
re-distribute the company products and not to deal with competitor’s products.

Products manufactured at various factories of GRS Company were dispatched to the centrally located regional
warehouses of the company. From the company’s warehouse the goods were shipped to the warehouses of
various stockists, based on the orders obtained by the company’s sales executives.
SALES ORGANISATION:
The company had a typical geographical sales organisation, as shown in Exhibit 2. The sales function was
headed by Vice president (VP) sales. Regional sales manager who handled different states reported to the VP.
Area managers who looked after different districts within a state reported to regional sales managers and finally
sales executives who were assigned different cities reported to area sales manager. The sales targets set for VP
(sales) were divided into different states, districts and cities in a top-down approach in a goal setting meeting
which was normally held in January of every year. Each person in the sales structure was responsible for
achieving his target.

EXHIBIT:2- GRS Company’s Sales Organisation Structure

VP (SALES)

REGIONAL SALES
MANAGERS

AREA SALES MANAGERS

& SALES EXECUTIVES

Sales executives were directly responsible for field selling activities, and looked after a set of
stockists in assigned cities or towns.

RESPONSIBILITIES OF SALES EXECUTIVES:

The major responsibilities of Sales executives were as follows:

 TASK RESPOSIBLILTY: It was achieving the quarterly and yearly targets, which included among
the other parameters product- wise sales volumes and total sales value. The performance evaluation of
the sales executive was done based on the yearly targets and the incentives were paid depending upon
the quarterly performance in relation to quarterly goals. Promotions and increment decisions of sales
executives were determined by their yearly performance against qualitative and quantitative goals.
 SALESMEN TRAINING AND DEVELOPMENT: Some other responsibilities consisted of training
stockists salesperson in selling skills, routing plan ( to reduce travel time and increase selling time),
and rearranging the shelves of retailers to improve visibility of the company’s product categories. “If
the salespeople do postman like calls on retailers then achieving the company set targets would become
a nightmare.” Said Hemanth Kumar, while stressing the importance of salesmen training and
development.
 MANDATED ASSORTMENT: It means placing the right product category in the right retail
environments based on market importance and demand. This would ensure that retailer’s money was
not blocked by holding stocks of unsold product categories. It also included ensuring “market
hygiene”, i.e. taking back damaged or expired goods from retail shops.
 FIELD PROMOTIONS: The sales executives should also ensure that the stockists implemented
promotions and “visibility elements” in an effective manner. The visibility elements included posters,
 billboards or hoardings and hangers that were put up at the retail outlets, for which the company paid to
those retailers who supported field promotions.

Hemanth Kumar thought that he performed all the above tasks in past three months, ever since he completed the
initial training programme. GRS Company conducted the initial training programme for all the sales executives
who were recruited from the leading management institutes. Hemanth was satisfied with the three months
training programme which included classroom and on-the-job training. The company had announced quarterly
incentive scheme that was linked to the sales executive’s performance on achievement of sales targets and
responsibilities. Senior sales and marketing executives of the company had explained to the sales trainees about
the leadership position of many of the company’s brand in the market.

During the past two 2 monthly meetings of sales executives with the area sales manager, it was noticed that
only one out of 6 executives had achieved the sales goals. Various issues like field promotions, mandated
assortment and salesmen training were discussed in the meetings. However, specific reasons for unsatisfactory
performance with respect to each sales executive were not discussed. Hemanth Kumar was, therefore, not sure
what corrective steps were needed to improve his performance.

QUESTIONS:
1. What might be the reasons for unsatisfactory performance of Hemanth Kumar?
2. If you were the Area Sales Manager what would you do to improve the sales performance of sales
executives?

SOLUTION TO THE CASE STUDY:

SUMMARY:
The above case talks about Hemanth Kumar who is the sales executive of GRS Company. Hemanth was a
worried person as he could not achieve the sales target for the previous three months from April to June 2008.
He was worried if he could retain his job as he was confused as to why he could not achieve the given target.
GRS Company is a multinational company with its headquarters located in UK. The Company deals in non
durable FMCG products and has its plants located at Ahmadabad, Kolkata and Mumbai. The stockists were
selected by GRS Company for different geographical areas. The above exhibit:1 depicts the physical distribution
of the products. The stockist had employed a group of sales persons who were responsible to book orders from
the retail outlets. The products would were dispatched from GRS factories to their warehouses and were further
shipped to the stockists warehouses based on the orders received.
The exhibit: 2 depict the organisational structure of GRS Company. They followed a top-down approach with
VP having the most authority and the lower managers and executives were answerable to the VP.

The following responsibilities listed in the case are considered as the major ones:
 Task Responsibility
 Salesmen training and development
 Mandated statement
 Field promotions

Hemanth Kumar thought that he performed all the above tasks ever since he underwent the initial training
programme but was unable to achieve the targets although he was satisfied with the three months training
programme. The case ends with a dilemma of Hemanth not being sure about what corrective steps were needed
to improve his performance.
INTENSITY OF THE CASE:

Urgent and Important Urgent and not important

 Discussion of reasons for the  Looking at the organisational
unsatisfactory performance by structure and culture.
Hemanth Kumar.
 Corrective steps that you would take
as area manager.

Important and not urgent Not important and not urgent

 Are the responsibilities being met by  The stockists chosen by GRS
the sales people. Company.
 Quarterly sales scheme.

Open ended case:

The above given case study is an open ended one as the questions asked at the end of the case prompts us to
answer with sentences, giving deeper and new insights. It allows us give a free form answer and find more than
what we anticipate.

ANALYSIS WITH RECOMMENDATION AND SUGGESTION:

The case deals with Hemanth Kumar’s confusion for not finding the reasons for him to achieve the target. His
problems are not been personally discussed by the management although training programme is parted to him.
The case clearly mentions that he is unable to achieve the targets from the last three months only which means
earlier his performance was up to the mark. The area manager needs to address the root cause of the problem by
first approaching Hemanth to know if there are any personal problems. A solution can be developed which is
stated below to improve the performance of Hemanth and other sales executives.

1. The reasons for unsatisfactory performance of Hemanth Kumar are:

 Hemanth has probably been the wrong sales talent in the wrong role.
 Hemanth was not personally called by the area sales manager to discuss the specific reasons for not meeting
the target.
 Hemanth may be dealing with something personal or may have some technical issues which should have
been asked by the management to him.
 Inadequate training program given to Mr.Hemanth due to which he fails to understand the main objectives.
 Lack of field training and practical knowledge.
 Increased pressure to compete on price even when more value was offered.
 Too little leadership where he was not producing results up to his full potential.
 One of the major reasons could also be the unrealistic forecasting.
 Not well versed with the new products launched by the company.
2. If I was the area sales manager I would perform the following functions to improve
the performance of sales executives:

 Firstly I would have a personal discussion with each executive to know from them why they are
unable to achieve the given or set targets.
 I as a manager would conduct regular seminars and send them to various companies to get insights
and practical knowledge of the working of a business.
 Rigorous training and development will be given to the sales executives to place the right product
category in the retail stores and to understand the market trend. Training would also enable the
executives understand the needs and preferences of the consumers and act accordingly.
 I would run more effective sales meetings.
 Would indulge the executives in group discussions and send them on team outings so that they
network regularly.
 I will implement cold calling systematically.
 Make use of consultative selling techniques to increase sales.
 Be an inspirational sales leader.

CONCLUSION:
The case has no ending and states the confusion of Hemanth. However in my opinion the above mentioned
suggestions can be adopted by the sales manager to improve the performance of the sales executives.

The main solution of the root cause of the problem can be fixed only by having a personal one to one discussion
with the executive to know where and what went wrong and take the corrective steps accordingly.