Identifying and Solving the Problems at Gardnov Limited.
Table of Contents
1.1Poor Sales Performance and Falling Market Share2
1.1.2Male Sales Force2
1.2Falling Customer Satisfaction and Poor Brand Equity3
1.2.3Range of Products3
1.3The Present Salary-Only Compensation Plan3
1.3.1Low Sales Effort3
1.3.3High Performers and Retention4
1.3.5Management Time Cost4
2.1Meetings with Salespeople and Previous Sales Manager4 2.2Environmental Auditing4
2.4Demand and Portfolio Analysis5
2.5The Buying Situation5
3.1Motivating and Enabling the Sales Effort5
3.1.2Salary plus commission6
3.1.4Responsibility and Recognition6
3.2Optimising Sales and Sales Management Processes6
3.2.1Training and development6
3.2.3E-Commerce and Sales Channels7
This report outlines the problems which Gardnov Limited is suffering from and provides recommendations on further research as well as solutions.
There are a few key areas where Gardnov Ltd is not performing as effectively or efficiently as it could. These are outlined below.
1 Poor Sales Performance and Falling Market Share
At present an annual catalogue is sent to all customers regardless of whether or not they are existing customers (Gardnov Limited, 2006). The fact that it is sent once a year means that Gardnov can only inform prospective clients of changes annually. Also, without a frequent reminder of Gardnov’s presence within the market, competitors could be gaining sales.
Secondly, it could be seen as an unnecessary cost to send existing customers the catalogue. However, it would still be important to keep them informed of new products and changes in prices.
2 Male Sales Force
Having an all male sales force (Gardnov Limited, 2006) may not be capitalising on the benefits of diversity. Diversity within the sales force has a clear effect on sales performance (Joshi et al, 2006) so the idea of having several female salespeople should be seriously considered.
3 Sales Skills
Due to the fact that 90% of sales are through the company’s sales force (Gardnov Limited, 2006) the competencies of the sales force are critical. It is apparent after Richard talked to recent customers that the salespeople are ‘more like order-takers rather than order-makers’. According to Jobber and Lancaster’s model, the sales team should be more like order-getters (Front line sales people). This involves a lot of personal selling, but for an experienced sales team, this should not be a problem.
The sales team has managed to increase sales by 5% annually, however, with the market growing at an annual rate of 10% (Gardnov Limited, 2006) the poor sales performance is reflected.
One of the more important problems that is apparent is the overall lack of motivation of the sales team. They have been described by Richard Booth as being ‘lethargic’ and more concerningly by customers as showing ‘little interest’ and ‘little enthusiasm’. This not only has a negative effect on sales but also on customer relationships and so it is imperative that a solution be found to this problem.
Moreover, the career path is currently based on the time spent within the company. This offers no reward or recognition for outstanding sales performance and may be contributing to the low motivation levels. Furthermore, turnover within the company is very low....