ChemGrow Inc.

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1. What decisions would you make with regard to which is the most productive region, who
is the most outstanding salesperson, and who are the most valuable customers?

• Vice President of ChemGrow, Mr. John Kee needs to present the Marketing Plan and Evaluation Plan to
the President, William Joseph.

• ChemGrow deals in high analysis fertilizers and wants to expand its capacity by extending installations
and plants. There are no formal reports and data available to evaluate the past information so as to
concur on the future plans; however, Kee attempts to gather reasonable data to decide on his future
course of actions.

• The percentages of sales of 3 products sold by each Salesman in their respective zones along with their
Gross margins are depicted in Exhibit 1 and 2. Exhibit 3 refers to the overall sales by different salesmen
in 1994, 1995 and 2000.

• Kee has observed that different salespeople sell different proportion of the products and much resort to
selling easy products rather than a complete product line.

• There is no data available for call rate or customer relations of the salesmen. Sales volume and gross
margin may be a poor indicator of a salesman’s performance as it tells nothing about a sales person’s
conduct with the customer, in the company or his behavior. We cannot identify reasons of specific selling
patterns of product or amongst customers. However, in dearth of such other data, the analysis is done on
the currently available figures in the case.
Outstanding Salesperson:

• As we see from the above analysis, the maximum amounts of sales have been done by Collam, followed
closely by Parks. In the Gross margin analysis, maximum Gross margin has been attained by Parks,
followed by Thums and Cook.

• We know from the case that salesmen were observed to sell a profitable mix of the products and the
pattern indicated a specific sale trend for customers. Hence, as outcome observability is high in this
context, where actual sales can be measured, we can deduce from the available data that Collam
performed the maximum sales and hence can be the best performer. However, if we look at Gross margin
contribution, Parks was high and followed closely for amount of Sales.

Productive Zone:

• Northwest Zone figured the maximum Gross margin, however, amount of sales in this zone were only 3 rd
in position as compared to Southwest and Eastern zone.
• Eastern Zone appears to be the most productive zones of all.

2. What computer reports should be generated on a regular basis to assist the managers in their
evaluations?

As seen from the case, three are no specific reports being generated for performance evaluation currently.
Mr. Kee believes that his staff should not only take money as an incentive, but take pride in the Company.

The sales function in ChemGrow has high outcome observability, high task programmability, high behavior
observability and low TSA, hence we can apply both outcome and behavior control to evaluate
performance.
 ChemGrow Inc.

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In line with the marketing and Evaluation program which Kee has outlined, following reports should be
generated for evaluation in addition to the already existing reports being generated for Sales volume and
gross margin for every salesman, customer and region.

Quantitative Reports:

• Calls made by the Salesmen per day

• Days worked
• Selling time versus non selling time
• Direct Selling expenses in total and as a percentage of sales volume
• Territory wise Sales for each salesmen. This will ensure to have uniform distribution of sales
for customers and the pattern observed in the case can be investigated then.
• Non-Selling activities:
i. Telephone calls made to prospects
ii. Number of meetings held with customers for explanation of product profile
iii. Emails/ letters written to prospects

Low Sales volume for any specific sales executive can be pinpointed from any of the factors listed above
and can be further investigated then.

Qualitative Factors to account for during Evaluation (Transactional Specific Assets):

• Customer Relations
• Knowledge:
i. Product
ii. Company policies
iii. Customers
iv. Competitors
• Sales Person’s Efforts
i. Planning and preparation of calls
ii. Quality of Sales presentations
iii. Management of time