Alex Fernandez, VP Sales of Cyngagae Ltd has difficult times with the non performance of the sales force in terms of the achievement of the company sales objectives. An exploratory study emanates the following findings:

Customer complaints about the insufficient dissemination of technical know-how which lead to alow degree of customer convert.

In certain industry sectors the company is performing badly vis--vis the competition and customers have certain issues regarding the salesperson bandwidth and sectoral knowledge.

The sales people have an apathy to large accounts as they are difficult nuts to crack and with a lot of expectations

Poor customer retention record.Many customers switched back to the competitors and very few sales leads are generated

The administrative, sales documentation requirements are quite high for the sales people

Salespeople spend too much of time on giving out information that is accessible from the company websites, product brochures, or internal systems. Too much focus on low potential accounts; high travel costs.

Cyngage corporation is a multinational giant and started its operation in India in 2009.They have a range of office supplies, technology, furniture, and paper product lines.They sell to institutions of various kinds and industry.The sales team of Cyngage is dispersed geographically with a geographical reporting structure(Fig. 1).Sales force coordination is effected by a Command-and-Control approach.The sales executive of Cyngage has to call prospective customers in his/her allocated geographical area to sell the range of Cyngage offerings. They segment the institutions,according to potentials and match the products/offerings they are responsible to sell to achieve the sales targets. Every 6 months, the company arrange sproduct training for the sales representative to brush up their product knowledge. Whenever, any new product is launched(average launch per year is 1 per category), an extensive training is given to the sales force to penetrate the market within specific geographical boundaries.

The customers of Cengage products are of multiple types in size and nature. 65% of the revenue comes from the upper echelon of Type A customers mostly dispersed in the urban areas. 20% of the revenue comes from the Type B customers mostly based in the Semi urban and rural base; 10% revenue comes from Type C customers dispersed in both urban and rural belts. 5% revenue comes from small businesses. A diagrammatic presentation can be found in Table 1. Alex was wondering whether the problem lies in the companys sales force structure and restructuring is required. Next Friday, he will be meeting Jeff Kelly, the CEO and discuss the problem.

Questions

1.What are the findings of the exploratory study indicates?As a manager what will be your suggestion to alleviate the problems

2.Find out the sales force size for Cyngae on the basis of the given input data and assumptions.

Assumptions 1

Work hour estimate: Each sales person work 40 hours/week and 45 weeks/year. Out of the total no. of working hours selling activity consumes 60% time while non selling activity (admin work) and travelling consumes 20% and 20% time respectively.

Assumptions 2

Yearly cost estimate for each sales person is as follows (hypothetical)

COST	VALUE(RS)
RECRUITMENT AND HIRING COST	10000
COMPENSATION	110000
On the JOB COST	5000
Facilities Cost	5000
Account Investment Cost	5000
Sales Support Cost	5000
TOTAL	150000

Executive VP Sales & Marketing VP Sales VP Marketing Sales Director Northeast Sales Director Mid- Sales Director South Sales Director Central Sales Director West District Managers (8) District Managers (6) District Managers (7) District Managers (7) District Managers (8) Salespeople (68) Salespeople (47) Salespeople (57) Salespeople (52) Salespeople (58) Table 1: Customer Types Location Revenue Customer Type Purchase of Products Sectoral specificity Service/Band width Requirement s Urban Urban Semi Urban/Rural Semi Urban/Rural TYPEA ++++ ++ ++++ + YES ++++++++ 1-2 Product Lines TYPEB ++ ++++++ ++ ++++++ YES ++++ TYPEC ++ ++ ++++ NO ++ Range with mid volume Range with low volume Sporadic; Very low TYPED + NO + Assumption 3: Value of Coverage (Rs.) Segment Type AS1 Type AS2 Type AS3 Type B Type C Value 1045000 1235000 995000 10250000 120000 Executive VP Sales & Marketing VP Sales VP Marketing Sales Director Northeast Sales Director Mid- Sales Director South Sales Director Central Sales Director West District Managers (8) District Managers (6) District Managers (7) District Managers (7) District Managers (8) Salespeople (68) Salespeople (47) Salespeople (57) Salespeople (52) Salespeople (58) Table 1: Customer Types Location Revenue Customer Type Purchase of Products Sectoral specificity Service/Band width Requirement s Urban Urban Semi Urban/Rural Semi Urban/Rural TYPEA ++++ ++ ++++ + YES ++++++++ 1-2 Product Lines TYPEB ++ ++++++ ++ ++++++ YES ++++ TYPEC ++ ++ ++++ NO ++ Range with mid volume Range with low volume Sporadic; Very low TYPED + NO + Assumption 3: Value of Coverage (Rs.) Segment Type AS1 Type AS2 Type AS3 Type B Type C Value 1045000 1235000 995000 10250000 120000