Biomed Case Analysis
Problem: Ponlerd Chiemchanya, the new general manager of Biomed, needs to realign the sales compensation system to fit with the new marketing strategy that Biomed’s parent company, Thai Drugs Co., Ltd., had just revised. Chiemchanya feels that with the change in the compensation system, there might be high company risk and high personal risk.
Diagnosis: Chiemchanya is the new general manger who needs to design an appropriate sales compensation plan but is concerned there may be some risk with the change. Chiemchanya’s concern of risk is based off two main reasons being: the implementation of the new plan, as well as ensuring the success of the new market strategy. The implementation of the new plan potentially can have an impact on the sales rep’s wallet, so careful thought needs to be given to the communication of the proposed changes. This new plan requires changes in behavior and the sales reps may feel that their income would be at risk as a result. Also, Ponlerd senses that, although important in supporting the new strategy, there are many other things required from the sales program in order to ensure the success of the new market strategy. Chiemchanya needs to consider whether or not all the sales reps are suitable for the new sales role because selling on volume rather than contribution to a focused market segment with a focused set of products are two different selling techniques.
Proof of Diagnosis:
“Sales representatives would have to learn how to convince customers to purchase the items upon which Biomed wanted to focus. This would change the conversation when visiting customers. Sales reps would have to sell versus simply taking orders for any products that the customer wanted.” (pg. 341)
WHY: This is important because before the new market strategy was developed, sales reps were able to call on any customer where they thought they could have a sale. Biomed had such a wide...
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