GROUP MEMBERS

ANUPAM GARG CHETAN MATHUR JATINDER

CRESTLIGHT PAPER COMPANY

Established in late 1940s and added a whole range of photographic and reproduction paper and supplies Started acquisitions in 1964 and added specialty paper merchant and a major form printing house Five principal divisions: Equipment, Supplies, Paper, Education and Formss

EDUCATION DIVISION
Formed in 1970 to give special attention towards the increasing demand from education sector After 9 years, the division carried a range of 1000 items and sold directly to Local Education Authorities, Central Supplies Departments, Universities and Schools Gross margin for supply to LEA was 40% while for wholesalers it was only 26%

 Rises to top management position very fast Interested in understanding others viewpoints Follows unexpected approach and direct manner

DAVID FARREL

ANDREW SMYTHE
Bachelors degree in Economics from Nottingham and MBA from Manchester Business School Sales Management Trainee with a branded food company prior to MBA Degree Joined as assistant to Group Marketing Director at group head office at Crestlight

CRESTLINE EXISTING EVALUATION METHOD

Mr. Andrew smith the existing divisional sales manager used subjective evaluation for performance evaluation.
Factors considered in subjective evaluation Degree of acceptance by customers (indicated from Andrews statement about Halbert that how well he is liked by the customers) Amount of effort for new business (indicated from his comment about Jennings commitment as how he didnt let his marital problem affect his work) Ability to acquire business (statement about Verker & Anderson for low sales volume) Amount of service given to customers Dependability : supervision needed (statement about Thompson about needing guidance) Resourcefulness (indicative from depraved statement about Ian Campbell regarding his unexciting, quite and unimaginative sales technique and also from supportive statement towards John Randall for is ability to think up new ideas)

Salesman Halbert jennings Bindon Vereker Prince Anderson Randall Thompson Campbell

Commision 3870 3585 2340 1680 2310 1680 2310 1845 2145

The effect of subjective evaluation and statements regarding each salesman is evident on the amount of commission given to them

PROBLEMS WITH SUBJECTIVE EVALUATION Lack of outcomes Ill defined personality traits Halo effect Leniency of harshness Central tendency Interpersonal bias

Problems at Crestlight paper company

The growth of about 20% above the year 1977 was mainly represented by prices increases rather than volume indicating the sales persons are failing to add new customers. No fixed sales quota for salesman, so there is no proper criteria to evaluate the performance of salesman Current performance evaluation is suffering from Fundamental attribution error
Mr. wesely is neglecting background information such as differences in territory and its difficulty. The perception of sales force is based on Person factors.

Expenses Ratios

The sales expense ratio combines both salespersons inputs and results produced by those inputs in a single number
Sales expense ratio = expenses/sales Cost per call ratio = total costs/ number of calls

ACCOUNT DEVELOPMENT AND SERVICING RATIOS

Salesman Halbert jennings Bindon Vereker Prince Anderson Randall Thampson Campbell Total accounts accounts sold available 239 570 509 1060 476 934 353 653 413 566 398 699 202 531 364 423 317 529 account sales/ account penetration ratio ratio 0.42 1079.50 0.48 469.55 0.51 327.73 0.54 317.28 0.73 372.88 0.57 281.41 0.38 702.97 0.86 337.91 0.60 451.10

These ratios reflect how well the salespeople are capturing potential business that exists in their territories Account penetration ratio = accounts sold / total number of accounts available. Sales per account ratio = sales dollar volume / total number of accounts sold

CALL ACTIVITY OR PRODUCTIVITY

Salesman Halbert jennings Bindon Vereker Prince Anderson Randall Thampson Campbell Calls per territory account ratio area 5.15 1600 2.29 25600 2.21 44600 3.99 28200 2.90 13000 3.64 7300 5.80 15400 3.35 15400 3.58 78800

THE RESULTS OF OBJECTIVE MEASURE ARE CONTRADICTING TO THE SUBJECTIVE MEASURE ADOPTED EARLIER AT CRESTLIGHT

It measure the effort and planning salespeople put into their customer calls activities and the success they derive from it Calls per account ratio = No. of calls / number of accounts

LIMITATIONS OF RATIOS
Sales Expense Ratio Expenses depend on many factors like area, number of accounts, travelling required etc. Cost per call ratio Remuneration are included in costs, so higher remuneration lead to higher ratio. Account penetration ratio Affected by presence of competitors, buying habits of students in the area etc. Sales per account ratio - Number of students in each account affect this ratio. Call conversion ratio - Depends on the number of new accounts as new accounts may require more calls than old ones as they need more convincing