Marketing Case Recently Abatements Furniture merged with Lea Meadows and was faced with the decision with the economic sense of merging the sales efforts of the two companies. Lea Meadows employs sales agents to represent their upholstered products and Abatements has its own sales force; Does the company give the new acquired line to existed sales force or continue to use the sales agents? Each company leader desires to leave the sales responsibility to their respective sales efforts.
Lea Meadows currently employs 15 sales agents to represent its privately owned and manufactured company. Their Net Sales were $5 million in a 15. 5 billion dollar market expected to expand next year. Sales agents employed by Lea Meadows however are not solely representing their brand, but tend to discuss lines from several of their available products with their customers. They are paid 5% of net sales and are guessed to spend 10-15% of their time on Lea Meadows products. Abatements currently has Net Sales of $75 million in the 12. Lion dollar wooden furniture market. The 10 sales representatives call on 1000 retail accounts and earn a salary of $70,000 annually plus . 5% commission. The advantage to the Abatements sales representatives Is their knowledge and respect in the industry they function In. Sales representatives were making around 10 calls per week, averaging 3 hours per call. In order to grow within the industry, Bates would like to see the call frequency be Increased to 7 calls per account per year to match Industry norms.
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Alternatives Battlement’s Vice President John Boot suggests that the Lea Meadows product line simply be given to the sales force at Abatements. Their sales force has the established relationships within the Industry that can be advantageous and only 15% of sales call time Is required to handle the Lea Meadows line. Martin Norman, Lea Meadows national sales manager suggests the line should stay In the hands of the sales agents currently employed by Lea Meadows.
HIS argument Is based on the fact that the sales agents already have established contacts with the retail outlets based if of this specific product line. These sales agents also frequently contact clients that are not covered by Abatements and In order to cover these clients Abatements would have to hire more sales representatives. Significantly, the sheer number of combinations associated with the Lea Meadows brand would require an extensive knowledge of the product line and Intensive training. Recommendation We recommend to continue with the current sales force of Abatements.
With numbers evaluated the more economic option Is to educate the current sales force ether than rely on a different sales dilutions calculation entirely. Lea Meadows employees would need to be Incorporated, and Norman would need to be either reassigned or fired which would strain personal relationships but Is a better option economically. Bates Manor By Octobers currently employs 1 5 sales agents to represent its privately owned and manufactured plus . 5% commission. The advantage to the Abatements sales representatives is their knowledge and respect in the industry they function in.
Sales representatives were the industry, Bates would like to see the call frequency be increased to 7 calls per account per year to match industry norms. Alternatives established relationships within the industry that can be advantageous and only 15% of sales call time is required to handle the Lea Meadows line. Martin Norman, Lea Meadows national sales manager suggests the line should stay in the hands of the sales agents currently employed by Lea Meadows. His argument is based on the fact off of this specific product line.