:ABC limited:

Observations for data given: 1. Loss of market share every year means competitors are going very strong or lack of strategy at our end. 2. Customers are divided into their category A, B& C according to their potential. 3. Direct sales channel means no limitation regarding the territory or no territory block to serve a customer. 4. D zone is the zone of highest sales every year & also B zone is growing very fast at the rate of 67% in last year. 5. We can address all the enquiries from the customer through our product range for all given customer. Assumptions & calculations: 1. Total salary in the year 2007 is considered as 10, 00,000. So 40% is sales expense & hence = 400,000 Total production cost/machine =60,000 + sales expense (including salary) Nos achieved in 2007 is 125 and sales price of product is 1, 00,000. So total cost of machine = 60,000 + (1400, 000/125) = 71,200 Hence profit/machine = 28,800, so net profits are 41% of the cost price. Now total no. of A category customer = 23 nos, B = 178 & c = 150. Now potential/cust in each category: A = 13.04 lakes/annum, B = 1.12 lakes/annum & c = 33000/annum Ans 1.So now calculating the market growth from the year 2005 & accordingly sales growth in same trend the targets for the year 2008 comes to be: 177nos. Basic territories to be covered include all territories except Bihar & Jharkhand: Reason: the only territory in the north east region & even with very low potential. Now customer coverage plan includes covering: A category = 22 nos, B category = 163, C = 134 So total prospect value comes out to be 472 lakes (considering equal potential of all customers with in the same category) & hence the strike rat should be 177/472 x 100 = 35% (approx.)

Now finding out the No. sales people required for the set target Calculating from the formula: (No.of customers x required call frequency) / (average daily call rate x no. of working days /year) Assuming 8 hours & 6 days working in a year: Calculating as per customer category: 1. For A category sales manager will be responsible: Sales manager required 4 nos for frequency of 96 nos/year & daily call rate = 2 2. For B category sales executive will be responsible: Sales executive required 5 nos for frequency of 36 nos/year & daily call rate of 4. 3. For C Category salesman will be responsible: Salesman required is 3 nos with frequency of 24 nos/year & daily call rate of 4. Now budget for the salary is taken as 20 lakes as against 10 lakes of previous year also the sales expense will increase in the same proportion as sales therefore 8 lakes. Now new cost of the machine will be 60000 + 2800000/177 = 75819 & hence to maintain the same margins this year: No. of machines to be sold = 36, 00,000 (net profit generate in 2007) / 24181 (new net profit) Almost 150 machines & we have targeted 177 machines that means additional profit of 6, 53,000. Now assuming strike rate for different categories: A = 25% so total sales 75 lakes, B = 40% so total sales = 80 lakes & C = 40% so total sales = 22 lakes.

Allocation of time:
For A category: daily calls 2nos For B category: daily calls 4 nos For C category: daily calls 4 nos

Prospect to closure ratio: = potential offered / min. target to be achieved Category A : (3, 0000,000 /75, 00,000) x 100 = 25% Category B: (2, 00, 00000 / 80, 00,000) x 100 = 40% Category C: (50, 00,000 /22, 00,000) x 100 = 40% Reason: 1. Category A is the highest margin & focused category so competition is also very active for this category. 2. Category B offers less potential & only can be addressed with adequate amount of sales force. 3. Category C is upcoming market on which competitor may be less focused hence can be easily captured with adequate sales force.

Calls required for close the deal: = ( no. of hous available/time given to each call)/target to be achieved Category A: (2240/4)/75 = 8 calls Category B: (2240/2)/80 = 4 calls Category C: (2240/2)/22 = 13 calls