Fundamentals of Selling 13th Edition by Charles Futrell

Exercise 1

When Jones returned from his field tour, he asked Mead's product manager to meet with him. The product manager for the standard product line indicated that the current sales "run rate" was on target for the year, and she was satisfied with the sales force's efforts this year and last. The product manager for the customized product line was not satisfied. He noted that sales results for his products were, on average, 50 percent below target. He pointed out that Mead made significant investments last year in manufacturing and envelope design capabilities to support the sale of customized products. This product manager was concerned that the sales force is not comfortable with computer-based envelope design-an essential part of the sales process-for accounts for which significant new sales have been booked. He pointed out that in virtually every large account for which Mead has won new, customized business, he has had to play a role in the sale, particularly in analysis of the need, design of the solution, and the business case for the pricing.
Brief Analysis of Sales
After meeting with the product managers, Jones looked over his sales numbers for the year and the growth projections that top management had given his predecessor for next year. What he saw was discouraging. The sales force was well behind its $106 million goal for the year. Standard product sales, which represented 80 percent of the business, appeared to be on target; but customized product sales, projected to be $21 million, were well below target. In fact, as the product manager had pointed out, actual sales were running at about half of the year's goal. What Jones found particularly disturbing was that while customized projects were projected to be 20 percent of the current year's business, next year's forecast showed they were supposed to be 30 percent of the business, and the total goal for the business was set at $118 million. This meant that the customized product sales goal would be $35 to $36 million, or slightly more than three times greater than the current sales rate.
With his previous employer, Jones found everyone felt that any sales performance problems were always related to compensation. At least today, Hal is unsure of the way to improve sales. "I do not see how pay is the problem here," thought Jones. Just then the telephone rang in Hal's office. It was his boss's secretary saying that he wanted to see Jones next Monday at 9 in the morning. Hal was hired to improve sales growth. What is he going to tell his boss
What are the reasons that compensation plans fail