Case 1 Zenith Computer Terminals, Inc.

(A): Development of a Total Business Plan This case helps prepare students for what is to come in the course. Several of the future cases require them to develop a budget. It also relates directly to the chapter. The student assumes the role of a "consultant" working within one organization (ZCT) to help implement the objective-setting process at the corporate level. The student is challenged first to establish corporate budget objectives for each of five major departments, and will work with the five department managers to develop supporting operational objectives. I assign the case and have the students write up and turn in answers to the three questions at the end of the case. I then use the case as the "example" part of my lecture over Chapter 3. Students like it because it is simple, straight forward, and has simple "numbers" they can use to get a specific answer. It seems too early in the course to have one or more students present a case. I generally wait until Chapter 5 or after to have students begin presenting cases. By discussing cases, students get a good feel for what is expected of them in their presentations. Questions for Discussion: 1. Develop a new budget based on how the ideal profit and loss statement should look if it reflects the president's bottom-line objective for ZCT. Justify your expenses for each of the five budgeted expense areas. Here's how the "ideal" profit and loss statement should look if it is to reflect the president's bottom-line objective for Zenith Computer Terminals, Inc.: SALES Less Expenses: Sales Production Marketing Administration Service Justification For Establishing Budget Objectives: Sales--$1,000,000 in extra sales should be achieved by normal 10% growth. Another $1,000,000 can be gained by adding four sales reps at a cost of $300,000. Therefore, add $300,000 to last year's expense to get new budget goal of $1,800,000. Production--Last year's expense ($6,000,000) is increased by cost of new production line $400,000; $125,000; $325,000. New budget goal is $6,850,000. Administration--Eliminating three clerical jobs will reduce the clerical overhead by one-fourth, or $50,000, bringing next year's goal down to $450,000. Service--A target ratio of 3-1 (sales-service), with a projected sales force of 24 means three new service reps at a total cost of $120,000. Add $30,000 for tools and budget goal is $400,000. $12,000,000 $1,800,000 6,850,000 1,500,000 450,000 + 400,000

- 11,000,000 $ 1,000,000

2. What would be the net profit of sales?

A. Remained at $10 million and budgeted expenses increased to the projected levels. SALES Less Expenses: Sales Production Marketing Administration Service $10,000,000 $1,800,000 6,850,000 1,500,000 450,000 + 400,000

- 11,000,000 $ - 1,000,000

B. Increased to $14 million and budgeted expenses increased to the projected levels. SALES Less Expenses: Sales Production Marketing Administration Service $14,000,000 $1,800,000 6,850,000 1,500,000 450,000 + 400,000

- 11,000,000 $ 3,000,000

3. Determine the four most important objectives for each department. Be specific by detailing what should be done and the time frame for reaching the objection. A. Sales Department Major objective: Increase sales volume to $12,000,000 next year, within budget of $1,800,000. Four objectives: 1. Hire four new sales reps by (2) January 31. 2. Complete training of four new reps by March 31. Personally handle the first month of classroom training. Use senior sales reps to coach each rep for three of the required four weeks of field training. 3. Increase sales 10% by spending 96 coaching days in field (four days per year per sales rep) to upgrade individual performance. 4. Sell 1,000 units (2) of new terminal (3) during fourth quarter (4) by training sales force last week of September. B. Production Department Major objective: Increase production to 12,000,000 units for next year within budget of $6,850,000. Four objectives: 1. Have new production line installed and running (2) by April 1. 2. Run four production lines on second eight-hour shift (2) for three weeks (3) during first quarter (4) to produce about 600 units. NOTE: For (4) allow full credit if within 10%. Three-month loss on new production line is about 625. Existing lines can produce about 200 per week. 3. Recruit and hire 10 production workers by (2) second week of March (or March 15). 4. Train 10 new production workers by (2) March 31. C. Marketing Department Major objective: Support sales force efforts to achieve $12,000,000 sales volume by providing sales leads and new product, within budget of $1,500,00.

Four objectives: 1. Implement a monthly direct mail program (2) capable of producing 8,640 inquiries during year (about 360 per sales rep). NOTE: For (2), allow full credit if within 10%. 6,000 leads last year equals 300 per rep. Add 20% increase (60) for total of 360. Expanded sales force of 24 multiplied by 360 equals 8,640. 2. Select vendor (consultant) to develop Alpha Terminal (2) by March 31. 3. Have consultant design approved by Alpha Terminal (2) by September 30. 4. Begin development of new brochure (2) by June 1, (3) to be available for sales meeting introduction (4) last week of September. D. Administrative Department Major objective: Cut back overhead costs from $500,000 to $450,000 and continue to provide efficient, administrative support to other departments. Four objectives: 1. Terminate three clerical staff members, (2) one by January 15, (3) one by January 31, (4) and the third by February 15. NOTE: January 1, January 15, and January 31 are acceptable dates for (2), (3), and (4). 2. Train staff to take up workload of terminated employees during these three periods, (2) January 1-15, (3) January 15-31, (4) January 31-February 15. 3. Evaluate Joe Wallace (2) by January 31, or sooner, and make decision to replace or retain. 4. Start task force computer study by May 1, (2) complete by December 1. E. Service Department Major objective: To handle all service calls efficiently within specified budget of $400,000. Four objectives: 1. Hire and train three new service reps (2) by January 31. 2. Satisfactorily handle 6,880 projected service calls (2) within 24 hours. 3. Design a new maintenance contract program (2) by June 30. 4. Implement new maintenance contract program during last six months of year with objective of (2) eliminating approximately 1,110 service calls. NOTE: 7,400 + 1,480 (projected) = 8,880 and translated to 4,440 calls during last six months x 25%, or 1,110 calls saved. 4. Write up your recommendations to the president in a memorandum format. Assign this question if you want to require students to write up a report and turn in to you.

Case 2 Zenith Computer Terminals, Inc. (B): Strategic Business Plans Fail--Sales Decline Students need to forecast sales and recommend a plan of action. 1. Forecast next years total sales volume using both the naive and 3-year moving average forecast methods. Take a look at the following table: Exhibit 1 Percentage of Sales for Each Region West West East Central Central 100% 75% 50% 20% 20% 15% 30% 20% 30.0a 33.3 13.0 21.7 1,805,000 1,738,500 0% 25% 25% 20% 25% 15% 20% 20% East Sales 0% 0% 10% 30% 25% 30% 20% 30% 20.0 18.3 4,061,250 2,536,500 Total

Prior Year Prior Year Prior Year Prior Year Prior Year Prior Year Last year Present Forecast (%) Naive = 3-Yr. = Forecast ($) Naive = 3-Yr. =
a b

0% 0% 15% 30% 30% 40% 30% 30%

$250,000 750,000 2,100,000 6,500,000 8,000,000 9,000,000 10,000,000 9,500,000 45.0 26.7 9,025,000c 9,500,000

2,707,500a1,173,250 3,163,500b2,061,500

Naive = $2,707,500 + 1,173,250 + 1,805,000 + 4,061,250 = $9,747,000 3-Yr. = $3,163,500 + 2,061,500 + 1,738,500 + 2,536,500 + $9,500,000

Forecasting using total sales = $9,025,000 but adding the 4 columns + $9,747,000. This is not a mistake.

Naive Method 9,500,000 Next Year's Sales = $9,025,000 = 9,500,000 * 10,000,000 Moving Average Forecast Period 1 2 3 4 Sales Volume 6,500,000 8,000,000 9,000,000 10,000,000 Period 6 Forecast Sales for 3-Year Period ----------------------------23,500,000 27,000,000 = 3-Year Moving Average ----------------------------9,000,000.0 9,500,000.0 $9,500,000.0

Caution: How to Do Calculations Not Shown in Text Trend Projection Year 1983 1984 1985 1986 1987 1988 1989 1990 Time Period 1 2 3 4 5 6 7 8 Sales (Thousands of Dollars) $250 750 2100 6500 8000 9000 10000 9500

Trend projection = $12,433,333.3 How do you find a forecast for each region? I took the percentage forecast for each region and multiplied it by the total sales forecast. Naive = 30.0% x $9,025,000 = $4,707,500. NOTE: When you add up the Naive's method 4 regional forecasts you get $9,747,000. The forecast using total sales equals $9,025,000. Why do we get $9,747,000 instead of $9,025,000? Look at the "East's" naive sales forecast. The percentage increased from 20% to 30% resulted in a % forecast of 45%. This is certainly wrong. However, we used the formula correctly. The lesson: You need to understand what you're doing when forecasting. Forecasting methods have their advantages and disadvantages. 2. Henry has been told to increase sales to $12 million, regardless of past sales. Based upon the information presented, what actions could Henry take to increase sales? This is the third case in the Zenith series. There is not enough information given to answer this question. Henry doesn't have a chance unless the present year was a fluke and sales will increase. Henry needs to examine each region. West Central's sales dropped 10%. Maybe this is the problem.

Case 3 Zenith Computer Terminals, Inc. (C): Redesigning Sales Territories This case has numerous answers -- all of which could be correct. Students are asked to redesign the sales regions of a small company with 19 salespeople, 4 regional managers, and projected sales of 9,500,000. Henry Butler, Zenith's VP of Sales, wants the regions to be divided equally. One group presenting this case in my class used the following approach. You could use it in your discussion of "one-way" to handle the case. Questions for Discussion: 1. Redesign Zenith's sales territories following Henry's guidelines. A. First, you must determine sales for each state. To do this multiply each state's percentage by $9,500,000. The results are shown in Table 1 of this case comment. B. Determine each region's total sales. $ 2,375,000 4)$ 9,000,000 C. Merge states together until sales in each region are approximately equal. Here is one way to do it. WEST REGION State California (50%) 9.5 Nevada Oregon Idaho % $ State 5 475,000 0.5 380,000 47,500 % $

902,000Washington 0.5 5.0 0.5 47,500 475,000Utah 47,500

Montana 4

EAST REGION State Maine New Hampshire 0.0 Vermont Massachusetts New York Rhode Island Connecticut New Jersey Pennsylvania 0.0 0.0 10.0 1.0 0.0 2.5 3.0 % 0.5 0 $ State 0.0 5.0 % 0 475,000 0.0 0 0.0 2.0 1.0 0.0 0 190,000 95,000 0 0 $

47,500 Delaware Washington 0 0 950,000 95,000 0 237,500 285,000

Maryland Virginia 0.0 W. Virginia Ohio N. Carolina S. Carolina

WEST CENTRAL REGION State Nebraska North Dakota South Dakota Wyoming % 0.5 0.5 0.5 0.5 $ 47,500 47,500 47,500 47,500 State Colorado New Mexico Arizona 3.0 % 18.5 2.0 285,000 902,500 807,500 190,000 $

California(50%) 9.5

EAST CENTRAL REGION State Michigan Indiana Tennessee Georgia Florida Alabama Mississippi Wisconsin Illinois 1.0 % 4.0 2.0 0.0 95,000 3.5 0.5 0.5 0.5 2.5 332,500 47,500 47,500 47,500 237,500 $ 380,000 190,000 0 State Arkansas Louisiana Texas Kentucky 0.0 1.0 0.5 1.0 0.5 1.0 0.5 2.0 % 47,500 190,000 8.0 760,000 0 95,000 47,500 95,000 47,500 95,000 $

Oklahoma Kansas Minnesota Iowa Missouri

Case 4 Zenith Computer Terminals, Inc. (D): Setting Quotas Facing Decreasing Sales 1. A. B. C. 1. 2. D. The types of quotas that can be set based upon the case are: Sales volume Expense quota which is related to profit quotas Activity quotas: Number of sales calls Increase order-call ratio Combination of quotas -- Certainly sales volume, and activity quotas should be set.

The large increase in this region's sales quota will require a lot of hand work. Adjustments for the better will have to be made across the board. It is difficult to know exactly what should be done by the data given. 2. You may skip this if you wish and have students skip to question 3. I sometimes have the entire class do this and the case presenters do question 3.

Exhibit 1 Eastern Region's Sales and Profits for the Year Person Williams Sales Cost of goods sold Gross Margin Expenses Net Profit Sales-Net Ratio (%) 550,000 620,000 675,000 625,000 550,000 450,000 Calabrese Gonzalez Wong Rao Stark

440,000 110,000 66,000 44,000

496,000 124,000 65,000 59,000

540,000 135,000 60,000 75,000

500,000 125,000 65,000 60,000

440,000 110,000 90,000 20,000

360,000 90,000 90,000 0

8.00

9.52

11.11

9.60

3.64

Cost of goods sold = 80% of Sales Sales-Net Profit Ratio = Net Profit/Sales * 100

Exhibit 2 Eastern Region's Yearly Sales Volume Sales % Performance Person of Region Sales Quota Sales Actual Difference Dollar Index

Calabrese Gonzalez Wong Rao Stark Williams Total

15 16 15 16 20 18 100

540000 576000 540000 576000 720000 648000 360000

550000 620000 675000 625000 550000 450000 3470000

10000 44000 135000

101.85 107.64 125.00 49000 108.51

-170000 -198000 130000

76.39 69.44 98.14

Exhibit 3 Customer Activities for the Eastern Region No. of Calls Calabrese Gonzalez Wong Rao Stark Williams 1500 1475 1450 1500 1200 1100 8225 No. of Orders 1050 1300 1300 1200 650 575 6075 OrderCall Ratio 70% 88% 90% 80% 54% 52% 72% Actual Sales 550000 620000 675000 625000 550000 450000 3470000 Average Order Size 523.81 476.92 519.23 520.83 846.15 782.61 611.59

3. The following is based only on the $4 million sales quota: Exhibit 1 Eastern Region's Sales and Profits for the Year Person Calabrese Gonzalez Wong Rao Stark Williams

Sales Cost of goods sold 464,000 Gross Margin Expenses Net Profit Sales-Net Ratio (%)

600,000

780,000

740,000

640,000

660,000

580,000

480,000 120,000 65,000 55,000 156,000 65,000 91,000

624,000592,000 148,000 53,000 95,000

512,000 128,000 70,000 58,000 132,000 89,000 43,000

528,000 116,000 91,000 25,000

9.17

11.67

12.84

9.06

6.52

4.31

Cost of goods sold = 80% of Sales Sales-Net Profit Ratio = Net Profit/Sales * 100 Exhibit 2 Eastern Region's Yearly Sales Volume Person Sales % of Region Sales Quota Sales Actual Dollar Difference Performance Index

Calabrese 111.11 Gonzalez Wong Rao 111.11 Stark 91.67

15 16 15 16 20

540000 576000 540000 576000 720000

600000 780000 740000 645000 660000

-60000 -204000 -200000 135.42 137.04 -64000 60000

Williams 89.51 Total

18 100

648000 360000

580000 4000000

68000 -400000 112.64

Exhibit 3 Customer Activities for the Eastern Region No. of Calls Calabrese Gonzalez Wong Rao Stark Williams 1350 1500 1400 1450 1100 1000 7800 No. of Orders 945 1275 1260 1015 660 500 5655 Order-Call Ratio 70% 85% 90% 70% 60% 50% 71% Actual Sales 600000 780000 740000 640000 660000 580000 4000000 Average Order Size 634.92 611.76 587.30 630.54 1000.00 1160.00 770.75

4. If actual sales percentages are representative of each territorys sales potential then this method would work. 5. Expenses go up with sales. Salespeople will have to increase the size of orders and their order-call ratio. New customers will be a must! 6. Alice must work with each person all she can to help and to see what they are doing. Sales must increase $1,150,000. This 28.75% increase is a lot to ask for one year.

Case 5 Wallis Office Products: Defining New Sales Roles Overview: The sales executive, like John Stevens, who faces what seems to be an unreasonably high sales quota, cannot simply do more of the same.1 Often the sales organization is working flat-out; there is no more water to squeeze from this particular stone. What you must do is first understand the customer's buying process and the company's four selling opportunities: retention, penetration, conversion, and new market selling. These opportunities change as the business moves through the growth cycle. For a brand new business, there is no retention selling because there has been no selling at all. For a mature business, there may be little new market selling because the company has no new products (which may be another kind of red flag for top executives). Moreover, we find that the different kinds of selling demand different sales personalities, different training, and different compensation. Without clear, well-defined sales roles, the company runs the risk that it will not attract and retain the salespeople it needs to meet management's growth objectives. To see how the sales resources may be organized differently, consider this a five-step process. 1. Formalize the sales strategy and quantify the sales opportunities that exist. 2. Map out the sales process required to sell different products/services and the roles of current sales and service personnel in the process. 3. Use the five W's---who, what, where, when, and why---to determine if these sales processes require different sales roles. 4. Identify any gaps that exist between the current sales process and the desired sales process. 5. Formulate and implement new sales roles to fill the gaps. The sales executive who takes these five steps is now in a position to take advantage of the company's sales growth opportunities. Questions: 1. Formalize the Sales Strategy and Quantify the Sales Opportunities That Exist The breadth and depth of WOP's product line and the size of the geographic market that John's organization must cover requires a clear sales strategy, one that defines the sales opportunities in the context of this type of business. WOP can take two actions to sustain this business: First, they can assure a high quality of service delivery - on time, complete, and responsive - so that current customers are not motivated to cancel or reduce service because of operational deficiencies. Second, they can maintain close contact with these customers - relationship management - to understand how changes in the ways customers are doing in business may require either new solutions or new responses on WOP's part. John and his managers should estimate the additional business they could get from selling additional storage and processing services and value-added services to their current accounts. The first is user penetration selling, selling more storage and processing and value-added services to the current buyers at the current sites. The second box is account penetration selling, selling both core products and services to new buyers, that is, new sites in the current accounts. WOP can sell its current products and services to prospective accounts - targeting its competitors' accounts and winning new sales with companies that are already familiar with the current products and services offered. They can also sell something to a customer or a prospect they have not previously bought. In WOP's situation, there are actually two types of new concept selling opportunities. First is the opportunity to sell SARS 1000 to customers that are using the current core or traditional WOP storage and processing
1

products. Second is the sales opportunity to sell SARS 1000 and Document Flash to new sites within current accounts or to prospects (accounts that have not done business with WOP). 2. Map Out the Sales Process Associated With the Different Products/Services and the Roles of Current Sales and Service Personnel in the Process Too often managers assume the sales process associated with retaining and expanding business is the same with all customers. Of course this is not the case. WOP has at least three different sales processes it applies to its products and services. In mapping out the sales process for WOP's core products, John Stevens and his sales staff determined that they should develop a sales process to win new customers for the current core products. The process should include an account executive (AE) leading the process, and later steps require a service representative (SR) to be involved. Successfully delivering WOP's services on an ongoing basis earns the account executive the opportunity to do account penetration selling. John and his salespeople determined that once an account is up and running, the service representative is the WOP employee most likely to identify opportunities to sell value-added services Through careful examination of accounts where WOP had successfully sold its new products and services, John and his staff learned that the sales process was really much different than the process they used to sell the core products. For example, the sales process required more meetings, the involvement of both the account executive and service representative throughout the process, and a system trial before the customer would make a final commitment to do business with WOP. 3. Use the Five W's to Determine If the Sales Process Requires Different Sales Roles Using the five W's, John and his sales staff determined answers to each of the five questions for WOP's three product categories. For example, the basis for making a buying decision, the "why," differs for each offering. For the core products, the "why" is price and responsiveness; for the value-added services, it is ease of use and price; and for the new products, it is cost savings and accessibility.

4. Determine the Gaps That Exist Between the Current Sales Process and the Desired Sales Process As a result of their analysis, John and his salespeople began to see some gaps between how they were selling and the opportunities to sell more. They identified several shortcomings in their current practices: Service representatives were instrumental in maintaining contact with current accounts, although account executives were also involved in this type of work. John wondered if this lack of role clarity was contributing to the less-than-satisfactory performance in customer retention - 85 percent retention compared to best practices in the range of 90-92 percent. Account executives may not have the skills and experience necessary to sell SARS 1000 products and services to the identified buyers, senior executives. Account executives may be stretched too thin across the number of selling activities and opportunities.

5. Formulate and Implement New Sales Roles John and his staff concluded that the current configuration of jobs - account executive and service representative - was no longer an appropriate way to address the sales opportunities they identified as available to them. To grow the business in the future, they concluded they would have to specialize their resources. This would require new sales roles. These include: Account executive. The account executive's job should be changed to focus on new account core product sales, with a secondary emphasis on selling SARS 1000. This will allow the account executives to spend less time on postsale service and SARS 1000.

Account Manager. An account manager would focus on developing current customers. This position will allow WOP to successfully penetrate current users (user penetration) and expand to new sites within customer accounts (account penetration). SARS 1000 specialist. A SARS 1000 specialist position should be created to concentrate on selling this sophisticated product to new customers and penetrating large accounts with SARS 1000. The SARS 1000 specialist will both drive and support sales (for opportunities uncovered by the account executive or account manager). SARS system support specialist. The SARS system support specialist should assist the SARS specialist with presale technical support. Service representative. The service representative position should focus on servicing only core product customers. The service representative's new emphasis will minimize account executive involvement in servicing the core product. Additionally, the service representative may focus on expanding high penetration accounts independently and supporting the account manager on expanding low penetration accounts. SARS installation manager. An installation manager position should be created that will allow one group of technical experts to install both SARS 1000 and the core product and to service the SARS product. This change will relieve account executives and service representatives from SARS 1000 installation responsibility. Once John clearly understood the sales opportunities that existed and mapped out the sales processes necessary to sell the different products and services, it was not difficult to establish the gaps that existed between what the salespeople were doing and what they needed to do in the future. John was also able to see exactly what new sales roles were necessary if he was to accomplish his mission. He could not continue to deploy his salespeople as he had in the past, no matter how successful they had been. WOP had changed, customers had changed, it was time for new sales roles.

Case 6 Briggs Industrial Supply Company (A): Determining Who to Hire and How Many Questions for Discussion: 1. What should Jay Anderson do? Unlike the more specific questions of earlier cases, this general question may confuse some students who need specific guidance. You may wish to give them more instructions. However, if you are presenting the case, you might not want to guide them. Most will be surprised with the number of issues you discuss or ask them to discuss. Examples of Assumptions That Can Be Made 2. Turnover of existing sales personnel is 15% per year. 3. Briggs can continue to hire and retain qualified personnel at its present compensation levels even though the industry median is much higher. 4. The general managers opinion that sales will increase 25% next year is correct. 5. The sales force personality Profile using the 15 outside salespeople is statistically significant 6. The ratio of inside salespeople: western salespeople: eastern salespeople will remain the same as the sales force increases in number.

Environment: Sales Force: Strategic Plans: Manpower Estimates: A. Assuming the ratio of sales/salespeople is correct as of today, then the number of salespeople due to growth alone is: (Number of salespeople) * (Growth in sales) = 15 * 0.25 = 3.75 B. One salesperson has to be promoted to be the new sales manager. C. Using the incremental sales approach to determine any additional salespeople required. Grow by 25% Hire a sales manager to oversee the outside sales Increase inside backup to outside salespeople Coordinate outside sales Industrial Sales (Wholesaler) Serving large and small companies Initial customers were in the oil field Now customers are in non-oil fields Low technology

Salespeople Fixed and Variable Costs Base Salary Avg. Commission = Commission Rate * Total Sales Number of salespeople = 0.05 * 6,540,000 15 Total Compensation Travel & Entertainment Expenses = 12*500 Total Salesperson Expense $40,000

$21,800 $61,800 $ 6,000 $67,800

How much additional sales volume does each salesperson have to generate Total salespeople expense = $67,800 Contribution margin 1- 0.65 = $193,714

According to Jay Anderson, the following table reflects the additional revenue due to incremental increases in the number of salespeople: Additional Salespersons 16 17 18 19 20 21 22 Estimated Additional Sales Volume $380,000 300,000 225,000 165,000 100,000 95,000 83,000

Refer students to Chapter 6's Tables 4 and 5. Based upon Chapter 6's discussion of the "incremental method," you see that no more than 4 people should be hired using this incremental approach. Table 1, located below, was constructed using information from Chapter 6.

Table 1 Briggs Industrial Supply Company Additional Estimate Salespeople Additional Sales 1 2 Cost of Goods Sold 3 Gross Margin of 4 (2)-(3) $133,000 $105,000 $78,750 $57,750 $35,000 $33,250 Salary (Fixed) 5 Commissions Expenses Net Profit (Variable) (Fixed) Contribution 6 7 8 (4)-(5+6+7) $68,000 $44,000 $21,500 $3,500 -$16,000 -$17,500

16 17 18 19 20 21

$380,000 $300,000 $225,000 $165,000 $100,000 $95,000

$247,000 $195,000 $146,250 $107,250 $65,000 $61,750

$40,000 $40,000 $40,000 $40,000 $40,000 $40,000

$19,000 $15,000 $11,250 $8,250 $5,000 $4,750

$6,000 $6,000 $6,000 $6,000 $6,000 $6,000

D. Assuming an employee turnover rate of 15%. Briggs can expect to lose: Turnover (# of salespeople) Includes 3 counter, 3 inside sales = (0.15) (21) = 3.15

E. Briggs also needs more inside salespeople to provide support to the outside sales. Present ratio is 15:3 or 5:1, outside salespeople to inside. Hiring an additional six sales people due to sales growth and incremental sales will create a position for at least one more inside salesperson. New Outside Salespeople = 6 Ratio Out:In 5 Summarizing, Additional Salespeople to be Hired: Due to sales growth 3.75 = 1.2

One promotion to S.M Due to incremental sales Expected turnover Additional inside people Total to be hired

1.00 4.00 3.15 + 1.20 13.00

Briggs needs to hire additional 12 salespeople in order to meet its manpower objective. Analysis of Personal History Name Cahill Everest Billings Kane Dacy Kurtin Manus May Russell Saphn Walter Smith Head Holmes Reasor Overall perf. Age Marital Sts. Sex Experi. Personality Sales Apt 120 115 110 110 109 105 104 102 100 101 96 91 86 94 85 29 26 34 55 25 41 46 62 49 24 24 27 38 36 52 Ma Ma Si Ma Si Si Ma Si Si Si Ma Si Ma Ma Si M M M M* F* M** M M M M* F M M M M 5 3 10 15 3 19 20 32 20 2 1 5 9 11 10 Senser Senser Senser Intuitor Intuitor Senser Senser Thinker Intuitor Thinker Intuitor Thinker Senser Feeler Thinker 55 60 40 46 65 56 54 55 68 63 63 43 61 71 55 SCI test Wonderlic 33 55 35 43 35 54 42 42 48 43 41 49 43 46 39 26 38 36 32 30 24 23 20 29 28 20 26 18 20 20

Notes: * = African-American ** = Mexican-American

The plot of Performance Index and Experinence of the salesperson shows a mixed trend. You can see from the plot that for a low Perf. Index we have salespeople with an average experience and it can also be seen that salespeople with a high Perf. Index have a few years of experience and some among them have higher experience. The plot of Performance Index and Age of the salesperson shows a mixed trend. You can see from the plot that for a low Perf. Index we have salespeople with an average age and it can also be seen that salespeople with a high Perf. Index have a lower age and some among them have higher age. The plot of Performance Index and SCI Test shows a mixed trend. You can see from the plot that as the Perf. Index value increases so do the scores of the salespeople on the SCI Test show an increasing trend. The plot of Performance Index and Sales Aptitude Test shows a mixed trend. You can see from the plot that as the Perf. Index value increases so do the scores of the salespeople on the Sales Aptitude Test show an increasing trend.

The plot of Performance Index and Wonderlic Test shows a mixed trend. You can see from the plot that as the Perf. Index value increases so do the scores of the salespeople on the Wonderlic Test show an increasing trend.

Case 7 Briggs Industrial Supply Company (B): Creating Recruitment and Selection Procedures Both Briggs (A) and (B) cases could be assigned to one or two teams. They could be presented together during the same class period by the two teams, if you have a class of one hour and 15 minutes or longer. NOTE: The last paragraph of Briggs (B) summarizes the main issues in both cases. Please refer to the "United Cosmetics, Inc.: Creating a Staffing Program" case for ideas on creating a recruiting program at a university. Panel Interview: The panel interview is not directly related to any materials discussed within a chapter in our textbook. Retailers have been using the panel interview for some time, while sales recruiters have only recently begun to use the procedure. You will see examples of the "Obtaining New Customers" and "Negotiating with Others" interview questions which students are asked to do for the case. These are not given to the students in the case. We were asked to keep the book's length as short as possible. Thus a full discussion of a panel interview was not included. Please contact the author if you have any questions. NOTE: The author set up a sales staffing program as Dr. Hise was asked to do within the (B) case. He created these questions for the organization. For several years he has been using the questions for an inclass exercise. The students liked the exercise so well that he decided to develop it into a case for you. Role Play: You can role play an interview using these four questions. Please refer to the "Sell Yourself on a Job Interview" experiential exercise.