What is the central issue(s) to address or problem(s) to solve? What course of a
ID: 461820 • Letter: W
Question
What is the central issue(s) to address or problem(s) to solve? What course of action do you recommend that Jean implement now to address this issue or solve this problem and justify based on factors indicated in the case.
Action Furniture Store
Jean Mead, owner of Action Furniture Store, is discouraged with her salespeople and is thinking about hiring new ones. Mrs. Mead has run Action Furniture Store for 10 years and has slowly built the sales to $5,500,000 a year. Her store is located on the outskirts of a growing city with a population of 325,000. 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.
Mrs. Mead 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 newspaper advertising seems to attract her target customers, 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 well- suited to her target market, but notices that her salespeople don’t close more sales with potential customers.
She has discussed this matter several times at regular sales meetings with her 10 salespeople. The employees seem to feel they should treat all customers alike—the way they personally want to be treated. They argue that their role is to answer questions when asked, not to make suggestions or push customers into making decisions. They think this approach would be too “hard sell” for something like furniture.
Mrs. Mead counters 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 other groups. Moreover, Mrs. Mead is convinced that some customers actually appreciate more help and suggestions than the salespeople themselves might.
To support her views, she showed her staff the data from a study of furniture store customers (Tables 1 and 2). 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 her employees should cater to the needs and attitudes of their customers—and think less about how they would like to be treated themselves.
At the last sales meeting, Mrs. Mead 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 $27,000 per year plus a 5 percent commission on each sale.
Contrast Mrs. Mead’s strategy and thoughts about her employees with their apparent view of her strategy and their role in it. What should she do now?
Table 1
In shopping for furniture I found (find) that:
Group
A
Group
B
Group
C
Group
D
I looked at furniture in many stores before I made a purchase.
78%
72%
52%
50%
I went (am going) to only one store and bought (buy) what I found (find) there.
2
5
10
11
To make my purchase I went (am going) back to one of the stores I shopped in previously.
63
59
27
20
I looked (am looking) at furniture in no more than three stores and made (will make) my purchase in one of these.
20
25
40
45
I like a lot of help in selecting the right furniture
27
33
62
69
I like a very friendly salesperson.
23
28
69
67
Table 2: The Sample Design
Demographic Status
Group
Demographic characteristics
Group A
Upper class
13% of sample
Managers, proprietors, or executives of large businesses.
Professionals, including doctors, lawyers, engineers, college professors and school administrators, research personnel.
Sales personnel, including managers, executives, and upper-income salespeople above level of clerks.
Household income over $50,000.
Group B
Middle class
37% of sample
White-collar workers including clerical, secretarial, salesclerks, bookkeepers.
School teachers, social workers, semiprofessionals, proprietors or managers of small businesses; industrial foremen and other supervisory personnel.
Household income between $35,000 and $50,000.
Group C
Lower middle class
36% of sample
Skilled workers and semiskilled technicians.
Custodians, elevator operators, telephone linemen, factory operatives, construction workers, and some domestic and personal service employees.
Household income between $15,000 and $40,000.
No one in this group had above a high school education.
Group D
Lower class 14% of sample
Nonskilled employees, day laborers, some factory operatives, and domestic and service people.
Household income under $20,000.
None had completed high school.
Some had only grade school education.
In shopping for furniture I found (find) that:
Group
A
Group
B
Group
C
Group
D
I looked at furniture in many stores before I made a purchase.
78%
72%
52%
50%
I went (am going) to only one store and bought (buy) what I found (find) there.
2
5
10
11
To make my purchase I went (am going) back to one of the stores I shopped in previously.
63
59
27
20
I looked (am looking) at furniture in no more than three stores and made (will make) my purchase in one of these.
20
25
40
45
I like a lot of help in selecting the right furniture
27
33
62
69
I like a very friendly salesperson.
23
28
69
67
Explanation / Answer
As the case suggests, there are following issues with the salespeople of the furniture store:
1. Attitude problem
2. Complacency
3. Not being proactive at the time of sales
Thus, the central issue is the approach taken up by the sales people when somebody visits to their store. Table 1 and table 2 data suggest that more of blue collar people are targeted by the store and these people often don’t go to many stores before buying a furniture. Thus, proactive approach with accurate understanding of the need of customers while knowing their requirement should make sales people to suggest the best possible furniture. It will not only help people to buy the right furniture, but also it will come in their budget.
The above approach will definitely help in increasing sales because blue caller people may not be very talkative in nature and potential sales opportunity will be missed out.
Thus, the sales team has to reach out to the customers and start conversation regarding their requirements rather they should wait for them to come out and ask questions.
Mrs. Mead is right in her justification and approach of the employees responsible for the sales. She has the research data that approve her view. Also, her strategy to approach customers in a proactive manner is also suitable in the given scenario.
To bring in the desired change, Mrs. Mead should take up following steps:
1. Organizing sales training for their sales team with a focus on new approaches to sales
2. Bring in attractive compensation structure with more focus on variable component that also focuses upon the their overall approach to sell product
3. Enthuse new blood to bring in freshness and new ideas to the sales team
Mrs. Mead can go for complete re-engineering of the sales team / department, if the above solutions don’t work.
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