The Buffalo Bisons are a Triple A affiliate of the New York Mets—players on this
ID: 449412 • Letter: T
Question
The Buffalo Bisons are a Triple A affiliate of the New York Mets—players on this team are one level below the Major Leagues where salaries can be huge. In the early days of the team’s most recent in- carnation, sell outs were very common. Filling 20,900 seats was fairly easy in the early 90’s when the stadium was still new and the team was a perennial contender. In recent years the selling effort has become more difficult. Typical attendance is about 8,000 per game. (The following information is a fictional, but realistic, account of the sales plan used by the Bisons.) The VP of Operations, Michael Salamone, wants to design a sales incentive plan that will rein- vigorate the fan base for the Bisons. He recognizes several realities: 1. Three staff members serve as full-time sales agents. They have two major jobs: a. Sell tickets to games. Because the Bisons had a weak team last year, projections are that it will be difficult to exceed an average of 14,000 seats no matter what the plan design is. Further, architecture of the stadium makes sales above 12,000 more challenging because the seats are not as desirable. If last year is any indication, fans will buy less expensive seats, then switch to premium seats that are unoccupied after the game begins. For PR reasons, staff look the other way when this occurs, unless late-arriving fans find their seats occupied. The goal for Mike Salamone is to focus on sale of premium seats, thus reducing the “seat shifting” by fans buying standard and bleacher seats. Statistics for last year are as follows:
Type of Seat Cost to Fan Number of these seats Average paid occupancy
Premium $12 6000 1500
Standard $9 13000 6000
Bleacher $7 1900 500
b. Sell advertising—Advertising dollars come from placement of product information throughout the stadium, including on billboards, outfield fences, scoreboards, even dugout roofs. The dollar amount sold last year was $908,013.
2. Increases in advertising sales are dependent on team performance. Team performance drives ticket sales. In turn, advertising depends on number of seats sold.
3. The three staff members are heavily dependent on the total administrative team (7 other individuals) for ancillary activities in the selling event (e.g., they send out brochures, answer phone queries, provide follow-up information after the initial sales contact, etc.). Mike Sal- amone wants to have a simple plan for advertising sales that rewards the total group yet still motivates the three sales staff. QUESTIONS
1. Of the above information, what is most important in your design of a sales incentive plan for the three sales staff? How does this information affect your plan design?
2. Your book talks about unit rate plans. Which of these types of plan would you use for sales of tickets. Which plan might be appropriate for sales of advertising? Why?
3. What factors influence the dollar amount you can pay for increases in ticket sales?
Explanation / Answer
1.Of the above information, what is most important in your design of a sales incentive plan for the three sales staff? How does this information affect your plan design?
The most significant aspect in the design of a sales incentive plan is make the organizational strategy.
Organizational Strategy : An organizational strategy is the figure of the actions a corporation intends to get to achieve long-term objective. Together, these actions create up a company's strategic plan. Strategic tactics take at least a year to total, requiring participation from all company levels.
“Salespeople must be acquainted with when to pressure customer service and is most successful when everybody involved has an open mind and is eager to take a step back and look at the strategy of the corporation and the sales process. The sales compensation strategy will reproduce the level of complexity to close the sale and the skills necessary to sell the product.
A company's sales power is the main link with the customer and, so, the company's revenue watercourse. The sales force must please customers' wants with the organization's harvest and services. The dynamic natural world of today's business earth makes it possible for the sales forecasts to alter quickly and radically, making it even more important for a corporation to periodically appraisal its sales compensation strategy.
The design of the sales compensation diagram must align with the company's commerce objectives. There are two factor involved: the in general cost of sales and how person orders are compensated. Depending on the manufacturing, sales compensation can variety from 3 to 10 percent of total sales quantity and it may represent up to three-quarters of the sum sales section budget.
Sales compensation has a sole vocabulary to describe the a variety of program characteristics. subsequent are some ordinary characteristics
2. Your book talks about unit rate plans. Which of these types of plan would you use for sales of tickets. Which plan might be appropriate for sales of advertising? Why?
For the sales of ticket plan, I would employ the ramped charge. The more tickets a sales being sells the additional money they are clever to earn after a sure a goal has been met.“Ramped rates labor well when there are not too a lot of tiers and big sufficient jumps in the rates at each tier to reason the rep to get excited to go to the next level. The rep will observe how much additional they can make once the share is achieved. This tiered rate approach.
Encourages and rewards the agent for the extra time and attempt it takes to go beyond their quota” (Spence, 2012).For sales publicity, I would use the joint commission plan this plan “recognizes that a sales being works as part of a side” (Milkovich, Newman,& Gerhart, 2014). Having a joint commission plan would permit for the sales team to not now reward the sales superstars but offer the entire team a stake in the victory of the business each month and as advertising sales are needy on team performance this diagram would be ideal.
3) What factors influence the dollar amount you can pay for increases in ticket sales?
The issue that would influence ticket sales are advertising, Promotion , branding etc if advertising/marketing is downward ticket sales may be on the refuse as well.
Other factors are the economy , Inflation rate , buying power of public.
if the economy has in use hit, populace aren’t going to buy into amusement as frequently and could also see a refuse in sales.
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