GROUP B4

CONSOLIDATED DRUGS INC.

SITUATION ANALYSIS
Syracuse divisions market share (20%) lower than other divisions

Consolidated Drugs (HQ: NY)

Only two local competitors

one has only limited product range

Syracuse Division

Threefold plan for increasing profitability:

Sales of larger average value per line of the order were encouraged - processing costs

Sales of larger total value were encouraged as the delivery costs constant
Sales of products carrying higher margin encouraged

Divisional Manager: Burton

Business Profitability :
Net annual sales of the division had risen but difficult to ascertain competitive situation Martins view: Increase at the expense of competitors District Sales managers view: Division may have actually lost ground

Sales Manager: Trucks

Salesman (9)

Trainees (4)

MAJOR CONCERNS
Human Resource concerns: Abrupt retirement of Senior salesman Mr. Bush Struggle between New and Old Salesforce
Jameson blackmailing on the basis of close relationship with retailers and seniority Jim Peppers with other new salesmen hinting at quitting the company.

Low Salesman morale owing to restructuring rumors

Low motivation levels of senior Salesforce

Not keen to adopt new merchandising techniques

MAJOR CONCERNS
Sales Concerns: Low market Share of Syracuse division as compared to other divisions Over dependence on sales person personal connections highly important Target to improve sales in the Syracuse regions Almost 50% of the accounts inactive in districts like Chenango, Tompkins, Tioga etc.

Current Sales force Organization:

Babbidge Chenango Tompkins Broome
Tioga

Trucks

Bush Jefferson Lewis Oswego

Carmack Onodonga Madison Cortland

Dangler Onodonga

Jameson St. Lawerenc e Jefferson Oswego

Means Onodaga

Pepper Onodaga

Smith Herkimer Oneida

Waller Cayuga Seneca Wayne

SALESMAN PROFILE
Salesman Age College Educate d
Y 25 29 24 65 Y Y Y N N

Assigned Accounts
29 36 44 104 55 53

Account Conversion %
96.5 72.2 72.7 53.8 89.0 86.8

Sales Penetration %
42.4 21.5 24.3 11.9 27.3 33.9

Comments

Pepper Waller Carmack Smith Bush Jameson

Very ambitious & aggressive Still on salary, bad territory Good use of merchandising Confused, high workload Very small sales growth, concern over pension Rushes calls, does not like Trucks, needs training on merchandise

Dangler
Babbidge Means

43
48 40

N
N N

44
90 48

75.0
43.3 60.4

33.9
9.7 24.2

Personal touch, family friends with Burton

Easy going, appreciates inputs Cribs, liked by customers

4 trainees

Eager to sell, unsure of readiness

TRUCKS CONCERNS
Sales territory restructuring:
Interpersonal Conflicts Senior Salesman feel threatened by college Wonder boys Young salesman given less profitable accounts Burton unwilling to get involved Young Salesman feel they could do much better with old guys territories Motivated to use new merchandising techniques. Sell high margin products

Initially territories allocated without thinking through. Senior Salesman credit themselves for developing the territories Salesman have been servicing the same areas for a long time. Salesman represent the company to customers New salesman feel that they get less profitable accounts

RECOMMENDATIONS
Retirement of Bush: Allow Bush to retire considering his age and long term planning Jameson has vast experience of 25 years. Considering 86% account conversion rate which is quite high, he could be given some of the Bushs accounts. Goodwill will boost morale of senior salesmen.

Interpersonal conflicts:
Older workforce unwilling to bring changes to territory allocation

Younger lot wants more responsibilities despite some of them struggling with the current work load
Reassign territories without a drastic shakeup as per the following plan:

REORGANIZATION PLAN
County Jefferson Current Salesman Bush New Salesman Jameson Rationale Already being partially covered by Jameson, excellent account conversion by Jameson in the county (100%)

Oswego

Bush/Jameson

Pepper

Geographic Proximity to Peppers county Onondaga, Jameson's presence is negligible and Pepper has excellent account conversion record
Smith is unsure and overworked. Carmack makes good use of merchandising techniques and thus has good potential. They together can manage this large territory better.

Oneida

Smith

Smith/Carmack

Lewis

Bush

Smith

Geographic Proximity, Oneida is now shared with Carmack and Smith can get some breathing space by taking this smaller county
Geographic Proximity, Waller has good potential but still on salary owing to bad territory and unprofitable accounts. So a good chance for him to prove himself

Tompkins

Babbidge

Waller

TRAINEE ALLOTMENT
All the four trainees have shown high potential and expected to be allocated eritorries on completion of training
Salesman Trainee for Rationale
Pepeer is to be assigned additional responsibilities and a trainee can take care of 2 by stores. Druggists all know Pepper Poor account conversion owing to heavy workload. Trainee can help improve penetration Potential sales is very high to be ignored and poor account conversion currently Liked by customers by poor account conversion possibly due to lower outreach. Trainee can help there

Pepper

Onondaga

Smith

Oneida

Babbidge

Broome

Means

Onondaga

CHANGES IN TRUCKS WORKING STYLE

Needs to develop an understanding of workers expectations Company has obligations towards senior employees given the number of years they have devoted in service Make use of their experience to increase sales in high-priority areas.

Giving exposure to younger workforce to work on their own in smaller territories.

Make radical changes slowly and after taking workers into confidence
Discuss the benefits of reallocation rather than announcing it in the first talk itself

Connect with the employees

Need to connect well with the employees as J.K. martin did

Understand the softer aspects of business

New in the role of sales manager; personal relations important

THANK YOU