Answer the following questions- 1. Contrast Rosann Schmidt\'s strategy and thoug

Question

Answer the following questions-

1. Contrast Rosann Schmidt's strategy and thoughts about her salespeople with their apparent views of her strategy and especially their role in it. (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)

Rosann Schmidt, owner of Schmidt Furniture, is discouraged with her salespeople and is even thinking about hiring some new blood. Schmidt has been running Schmidt Furniture for 10 years and has slowly built the sales to $3.5 million a year. Her store is located on the outskirts of a growing city of 275,000 people. This is basically a factory city, and she has deliberately selected blue-collar workers as her target market. She carries some higher-priced furniture lines but emphasizes budget combinations and easy credit terms.

Schmidt is concerned that she may have reached the limit of her sales growth—her sales have not been increasing during the last two years even though total furniture sales have been increasing in the city as new people move in. Her local cable TV spots, newspaper advertising, and some ads on the local newspaper website seem to attract her target market, but many of these people come in, shop around, and leave. Some of them come back—but most do not. She thinks her product selections are very suitable for her target market and is concerned that her salespeople don't close more sales with potential customers. Several times, she has discussed this matter with her 10 salespeople. Her staff feels they should treat customers the way they personally want to be treated. They argue that their role is to answer questions and be helpful when asked—not to make suggestions or help customers make decisions. They think this would be too “hard sell.”

Schmidt says their behavior is interpreted as indifference by the customers attracted to the store by her advertising. She has tried to convince her salespeople that customers must be treated on an individual basis and that some customers need more help in looking and deciding than others. Moreover, Schmidt is convinced that some customers would appreciate more help and suggestions than the salespeople themselves might want. To support her views, she showed her staff the data from a study of furniture store customers (see Tables 1 and 2) that she found on the Internet website for a furniture trade association. She tried to explain the differences in demographic groups and pointed out that her store was definitely trying to aim at specific people. She argued that they (the salespeople) should cater to the needs and attitudes of their customers and think less about how they would like to be treated themselves. Further, Schmidt announced that she is considering changing the sales compensation plan or hiring new blood if the present employees can't do a better job. Currently, the sales reps are paid $26,000 per year plus a 5 percent commission on sales.

Demographlc Groups Group B Group C In Shopping for Furniture I Found (Find) That I looked at furniture in many stores before I made a purchase. l went (am going) to only one store and bought (will buy) wat Group A Group D 7896 72% 5296 5096 10 found (find) there. To make my purchase I went (am going) back to one of the 63 59 27 20 stores I shopped in previously I looked (am looking) at furniture in no more than three stores and 20 25 45 made (will make) my purchase in one of these. I like a lot of help in selecting the right furniture. I like a very friendly salesperson. 27 62 69 23 28 69 67

Explanation / Answer

1. To contrast Schmidt's strategy and thoughts about her Sales People, I think she needs to start treating her slaes force a bit more competitively, as i understand from the case that the salesforce gets the strategy and also tries to play a part in it but not motivated enough. Team building and pshycometric understanding capabilities shall be the paramters to target for her slaesforce to get them better - Also, creating a competitive environement within the team of 10 by announcing noew bonus plans/ periodic top acheiver bonus and other perks based on highest performance level should also be tagetted. I think better employee orientation and consistent market knowedge sharing with her sales team would do the magic.

2. Pros and Cons ot current compensation method?

Pro - Everyone in the team are being tgreated the same.

Con - Creates a non competitive environment, should have additional ways of evaluation based on different levels of targets asked to be acheived and benefits given in concurrence to the output.

3. Is there any valuable info given in Table 1 and 2? - Yes the Demographic understanding and their buying pattern would help the sales personnel with an in depth perspective about the different groups of customers they cater to.

4. What should Schmidt do now ? - Explained in answer for question number 1.

Thanks and Cheers! Happy Learning!

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