Sales, Distribution & Retail Management Assignment

CASE PROBLEM
Faculty: Dr. Meher Karuna
Submission date: 16-March-2011

Submitted By:
Sukesh Sanghi
PGDM-100-sec B
CASE:
Ronald Mc Mains is 23 years old and works for Metropolitan Financial Bank in the information
services department. He was employed part time while attending college and decided to accept a
full-time position after graduation.
The position in information services offers an opportunity to learn a great deal about banking, a
secure income, a good insurance and retirement program two weeks of vacation a year, and 15
days of sick leave a year if needed. There also will be opportunities to move into supervision
within the next couple of years because the company is expanding rapidly.
Ron has been thinking about changing jobs and has been described by his friends as an
opportunist – a person who seeks out opportunities and takes advantage of them. He sees himself
the same way and someday hopes to earn well above the average income.
Ron has been interviewing for several positions. One company has offered him a position that
involves calling on potential dealers for a new line of fiberglass boats. The manufacturer has a
patent on an improved fiber glassing technique that is setting new standards for boat strength.
The boat has proved to be a success and has sold extra ordinarily well in the five territories that
the company already ahs opened. Letters are coming from dealers all over the country expressing
an interest in taking on a dealership. The company has decided to open up new territories in the
southern half of Wisconsin and northern half of Illinois. The latter is the territory they have
offered to Ron.
The specific responsibilities of the position include calling on marinas and boat dealers in the
territory and setting up the better ones as distributors of the new line of boats. Ron would
evaluate each potential distributorship and would select and appoint the new distributors. The
company’s excellent training programme would teach Ron how to help each new dealer set up a
promotional program to sell the boats.
The company has offered Ron a commission programme that includes a “draw against
commission” form of compensation. In this type of programme a drawing account enables the
salesperson to receive a set amount either weekly or monthly that is later subtracted from earned
commissions. Ron’s draw would equal his present salary, including his overtime pay. Ron’s
commissions would be based on the number of boats his dealers sold. The company expects this
territory to be cone of the best; and if Ron is successful, his income could be well into the $
50,000 to $ 60,000 range within the second year, if not sooner.
Ron would have to relocate about 100 miles from where he now lives. The company has offered
relocation expenses to cover the cost of the entire move. Ron realizes he would be away from
home on the average of one night a week, and this poses no problems. The company will cover
all of Ron’s travel and lodging expenses and will provide him with new car.
Question:
1. List the pros and cons of this job opportunity.

Pros and Cons of the job opportunity

I. PROS

1. The new job is offering him a huge potential to grow up the ladder

2. The compensation from the new job is much higher when compared to the bank job.

Since with the new job, his commission equals to his previous salary

3. In the new job the commission is depended on Ron’s potential of selling the boat. So

if Ron thinks that he has the potential to sell the boat fiber glass he can make it “BIG”

4. This new job is going to place Ron in the territory which is sought to be the best

among all the territory, hence the job will have more responsibility which will equip

him with more skills in the business

II. CONS

1. The fiberglass boats are selling because of the breakthrough in technology that has

created by them. So on the onset it is difficult to say that the boats are selling because

of Ron’s potential of selling or not

2. Ron’s part time work experience as a banker is not at all useful in the present new job

offering. Hence he has to undergo all the training and study once again.
 3. Ron has to relocate to a new territory, away from his family. Though much of his

relocating expenses are taken care of by the company but Ron has to put in more time

in doing his routine work like cooking etc on own. Since in case it is not mention that

all such expenses are also taken care off.

4. After the training if Ron doesn’t like his new job, it will result in waste of his time,

company training costs and loss of previous job of bank

2. On the basis of the information given, should Ron accept the new job? Why or why not?

No, Ron should not accept the new job. The reason behind such a rationale is the position in

information services offers an opportunity to learn a great deal about banking, a secure income,

and a good insurance and retirement program two weeks of vacation a year, and 15 days of sick

leave a year if needed. There also will be opportunities to move into supervision within the next

couple of years because the company is expanding rapidly. Whereas the new fiberglass company

is looking to establish itself in a new place and it is expanding because it want to en cash its new

technology as early as possible before it become outdated in the market and the product reach its

maturity stage. Though the picture shown here is based on the commission that Ron can earn

through achieving the sales, but the forecasted data of sales are not figured out in the case. What

if the product fails in the new territory, wh0 will bear the loss and in what proportion are not

mentioned in the case. Some day or the other the product becomes obsolete and the sales start

declining which means there will be declining in the earning of Ron, which in case wouldn’t

have happened if he keep himself associated with the bank. In the new job the perks and break up

of costs are not mentioned as in the case of the banker perks which will make it difficult to assess

which company is more beneficial in terms of monetary value. The bank job is providing Ron

with opportunity to learn and explore various fields in banks, which is not the case with
fiberglass boats. Hence when an equity balance is tried to reach between the banker job and job

of calling the marinas for purchasing the fiberglass boats it can be find that benefits associated

with the banker jobs are far superior compared to the selling boat job.