Question 1: What are advantages and disadvantages of sales forces structure?

Do you think this system will be suitable for ABC Company if it wants to expand its market? If not, propose your solutions for ABC Company. 1. Advantages of sales forces structure - Sales person for ABC company have knowledge about region that administrating: They is able become expert on a given region - Customer known exactly who to speak: Due to decrease cost and time for customer to looking for information and consultation from salesman. Salesman also more negative to meet customer - Easier to administer: Salesman know exactly about geographic, region culture to adequately covered and structure is also simple to administer 2. Disadvantages - Difficult to know the full line: The salesman only focus on the product suitable for that geographic , they dont know full line and also difficult to depth in specific product - Difficult to provide proper service for each customer if there a many types - Difficult to push for a product: When salesman want advertising and increase one specific product, they face difficulties because of not specializing about any product, beside they much take time to organize network 3. When ABC Company expand its market, this system will not be suitable. This structure is one salesman cover 6 province, but from may region of nation. Due to when expand they can not cover all its market, salesman will be out of control. The solution: The Company still maintaining Geographic organization, but restructure: A sales man must manage some province that proximity. And hierarchy in manage each region.

Question 2: What are advantages and disadvantages of current channel choice? Do you think this system will be suitable for ABC if it wants to expand its market? If not, propose your solutions for ABC.

1. Advantages of current channel choice - Current channel choice has fairly simple structure, granting 4 units Nghe An Pharmaceutical Company, General Hospital of Nghe An, Wholesales and Private Company equal right and responsibility. Therefore, competition among units in sale of products is more severe. - Salesman in charge of Nghe An Province area can directly manage 4 subordinate distribution units, and thus can have a deep understanding of the situation, timely solve arisen problems and make suitable adjustments - Customers being individuals, business households and retailers have many options of place and company to buy products 2. Disadvantages That 4 distribution units have equal right and responsibility to distribute may lead to

imperfect competition. For example, they may collide to create monopoly - Salesman in chare of Nghe An Province area takes time, costs, and human resource to mange 4 subordinate unites simulataneously. This may result in out of control 3. This system will not be suitable for ABC if it wants to expand its maket. When the company wants to expand its market and develop, it is necessary to restrucutre distribution channel as per diagram below

Head Quater

Nghe An Province Nghe An Pharmaceutical Company

Wholesales Wholesales Wholesales

General Hopistal of Nghe An

Discription: - Nghe An Province directly manages only 2 units in order to reduce time and costs, and to manage more effectively especially when expanding the market. - Remove Private Company because this unit is unnecessary in the distribution network and because this removal reduces unwildiness and makes it more convenient to manage. - General Hopistal of Nghe An: As this unit is a hospital, a great amount of medicine is consumed here. Hence, this unit will be the direct subordinate of Nghe An Province but has no function to distribute to smaller channels

Question 3: What are advantages and disadvantages of current reward systems for sales forces? Do you think this system will be suitable for ABC if it wants to expand its market? If not, propose your solutions for ABC. 1. Advantages - They attract sales reps who have skills beyond just pure selling. - They help retain employees during tough times while maintaining a variable compensation element in the pay plan. - They help sales management direct salespeople to perform nonsales activities. - They provide a tight link between pay and performance. - Companies can begin to construct career paths based on both selling and nonselling skills. 2. Disadvantages - They can become overly complex and therefore difficult to understand and administer. - The emphasis on the most important results can be diluted when management designs plans that try to micromanage the sales force. - They increase the level of fixed compensation cost relative to commission-only plans. - All territories are assumed to be equal in size in order to yield equal commission payouts for equal selling skill and effort.

- They share some of the disadvantages of commission-only plans, including limiting management's ability to realign territories or reassign accounts while rewarding salespeople merely for having large territories. 3. The system will be not suitable for ABC when they want to expand its market According to the article, business environment has changed and ABC is facing more competition, which may reduce annual growth rate that ABC did attain. As a result, I propose to adjust Sales Compensation Plan as follow: SR Income = Basic salary + Commission (10% of sales volume) + Bonnus ( end of quarter, end of years) Reasons for this adjustment: - Raising commission will boost productivity, motivate sales force and therefore increase revenue. - Limit the possibility that personnel moves to rival companies offering better salary. - Bonus for sales force is essential when the company wants to expand the market. In this current competitive environment, every company gives bonus to its employees