k 11 Online Assignments k 11 Online Assignments Schmidt Case Read the case on pa

Question

k 11 Online Assignments k 11 Online Assignments Schmidt Case Read the case on page 646 Answer the following questions- 1. Contrast Rosann Schmidt's strategy and thoughts about her salespeople with their apparent views of her stra?egy and especally their role in t (5 pts) 2 What are the pros and cons of the type of compensation method that she is currently using (5 pts) 3 Is there any valuable information in Tables 1 and 2 which can be used to help Renee with her decision? Explain (10 pts) 4. What should she do now? Explain. (5 pts)

Explanation / Answer

1. Rosann rightly believes that their has been a stagnation in sales due to lackluster approach towards the sales by her team. She believes that making a more involved approach towards the sales conversion might help customers make a quick purchase decision and thus driving the sales figure upwards. Moreover, she was absolutely correct about targeting the budget furniture segment as this is the segment with the highest customer base. In the contrary, her salespeople believed that too much intrusion in the the life of the customer for sales conversion is not the right approach. Moreover, with the compensation package having such a low variable component, the salespeople preferred selling the premium furniture more rather than concentrating on budget furniture.

2. Inclusion of variable component to drive sales is the only identifiable pro in the compensation structure. But with just focus on the margin in the compensation structure, it has caused a lackluster attitude in the salespeople towards budget furniture. They must have found the sale of lower count of premium furniture to be enough to achieve their commission targets.. They could have easily earn the commission of 5 budget furniture by selling just one premium furniture.

3. The table clearly justifies the points being spoken by Rosann. We can clearly see that the lower income group don't undertake exhaustive comparison of products by visiting various shops, etc and thus captivating these customers on their first visit to the shop should be given high priority. In addition to this, we can also see a need from the customer side about more involvement of salespeople in helping them make the right decision.towards the purchase.

4.She should implement a structured commission compensation technique. This technique should be created in such a way that the salespeople will be required to sell a particular number of furniture to be eligible for a section of the commission. In addition to this, Rosann should also decrease the fixed component to a small extent and include that amount in the variable section. The minimum sale quantity will ensure that salespeople give equal importance to all types of furnitures and thus improving the shop's customer base. On the other hand, lower fixed component in the compensation structure shall encourage the salespeople to be little more aggressive while interacting with client. Last but not the least, she should also undertake session to curate her team's orientation and bring them in sync with her thoughts.

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