Decision Sheet for Consolidated Drugs Inc. Case Problems: Syracuse division of Consolidated Drugs Inc.

has shown some increase in sales over the past few years but that is because of only changing market conditions and is much less than what is expected. Some of the prospective reasons as observed by Mr. Trucks are: The older salesmen do not use merchandising equipment, do not follow weekly sales plans, and show less interest Asa Bush and John Jameson have been earning the same commission for many years that is they have not increased their sales. While assigning trainees to territories in the old system of assigning, they were given a territory of uncontacted accounts or a territory where somebody has to be replaced and where the best accounts are given to an older salesmen New sales Manager Mr. Trucks think that by reorganizing the territories they can tap at least 40% of the potential market as compared to 20% now. The older salesman Asa Bush and John Jameson are not happy with the decision of reorganization while the younger salesman want this to be done.

Should the territories be reorganized? Yes, the territories have to be redrawn and reassigned. As mentioned in the case Present salesmens territories have been formed without careful regard for the number of stores in those areas, the sales potential or the travelling involved. The salesmen do not have adequate time to do a thorough selling job in each store. To make Syracuse capture more shares and become more profitable, greater selling time should be dedicated to each store. The expense of delivering to an account is fixed and if higher proportion of business could be obtained from each account, Syracuse can make higher profits.

Recommendations: Syracuse has tapped less than 40% of market potential in all territories except one handled by Pepper which is around 43% (exhibit 2).

All areas where Syracuse has a potential to reach 40% should be mapped. Total potential sales is $9335000 (Exhibit 2) and there are 12 sales men (assuming that Asa bush leaves), each should be given $780000 sales to handle. A target of 40% should be set for all accounts. Currently the margins are around 2.5%. Increase in share from the current levels should be given a margin of 3% and special bonus on reaching 40%.

The territory allotted should be such that combined potential of the stores for each sales man should be $780000 and they are close by to minimize delivery expenses. Each sales person should be compelled to use sales plans designed by sales manager and make sure that merchandising equipment should be used.