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des Distribution Channel Performance UCC Company has been selling its industrial clothing across Canada for over 25 years. It has 4 employee sales reps, 3
des Distribution Channel Performance UCC Company has been selling its industrial clothing across Canada for over 25 years. It has 4 employee sales reps, 3 are in Ontario and 1 is in Quebec. Company sales in Ontario & Quebec 2020 was $3.9 million. Total Industry sales for competing products in Ontario & Quebec was $15.8 million The company also has 9 manufacturer's agents, who are paid an 8% commission on sales but no salaries and benefits). Their 2020 performance is: Territory # of Agents Sales Market Share British Columbia 2 $ 886,458 17.5% Alberta 2 $ 742,458 13.49 Sask & Manitoba 2 $1,244,553 19.5% Atlantic Canada 3 $ 937,887 26.3% Total 9 $3,811,356 The manufacturer's agents that sell your clothing sell between 3 and 8 other non-competing product lines. One of the agents in British Columbia has complained about the commission she is being paid and informed you that your major competitor is paying its agents 10%. You are now rethinking your channel strategy. The direct selling costs (salaries/benefits for each sales rep you might hire as an employee outside of Ontario and Quebec would be $90,000 (but no commission) - and you would need 1 sales rep for each territory. Assignment 1. Based on current sales data, and using the current 8% commission rate, perform a territory-by-territory simple revenue and profitability analysis. Do this again assuming a 10% commission rate. 2. What managerial decisions might you make as an outcome of your analytical results from question #1? Justify your decisions. 3. What if you were to use your own sales force instead of manufacturer's agents, and were able to achieve the same market share across Canada as you currently have in Quebec and Ontario? Calculate revenue and direct selling costs - assuming a 10% commission rate for the manufacturer's agents. 4. What managerial decisions might you make as an outcome of your analytical results from question #3? Justify your decisions
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