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Eddington Sales & Service

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Suresh, the new regional business head, asked state manager Alex to increase sales growth in his mature territory from 12% to 25% for the coming year. Alex argued this was unrealistic given the declining market in his area. Suresh told Alex to review sales data from his team more closely to find how to achieve the 25% target. The data showed variability in performance across Alex's sales executives' territories in key metrics like calls, presentations, closures, order size, and after-sales revenue. Suresh questioned Alex's view of a declining market, noting many offices in the area were still not being sold to.

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Caselet written by Prof S K Palekar for class discussions in Pfizer MDP Feb 2013. For internal circulation only. Eddington Sales & Service Private Limited The company sells photocopiers, printers, faxes & computers to offices under its own brand name. Situation Sitting in his office in January 2009 Alex DeSouza was wondering how his life had suddenly become stressful after Suresh Pradhan joined as the new Regional Business Head. Till now he was being treated in the company as a genius State Manager but now Suresh treated him as if he was a rookie! As the State Manager (SM) of the company, he had built up a good reputation within the company for the last 4 years as someone who always met his targets. He was known to work hard and it was considered an achievement that in a mature territory of South Mumbai he had achieved a CAGR of 12% in the past. Once he had said; mature market is a word invented by the MBAs in the marketing department. My market is not mature, it is declining! Conflict Last week, when he met Suresh Pradhan for setting targets for the new year 2009-2010, Suresh was not at all happy with the 12% target set by Alex. In fact he had asked him to consider a target of 25% growth in the coming year. Alex had said; Boss, not only the market is declining in my territory but the marketing this year does not seem to be planning anything new by way of new products or more schemes or more advertising. There is no basis whatsoever for planning this kind of growth. Instead of asking me to grow in a declining market, why dont you ask the people from central and north Mumbai to sell more? The offices are shifting to suburbs and it will be easier to sell there! To this, Suresh had replied; In a short span of last few months I have seen that your decisions are more guided by emotions than by facts. I suggest you please undertake a systematic review of what your own people are doing and you will come to know how you can achieve 25% growth next year. In fact I asked your own assistant Veena Talpade to get a few facts out from your own databaseand I suggest you come back after studying it and tell me how you will achieve 25% growth. No less please!.
Caselet written by Prof S K Palekar for class discussions in Pfizer MDP Feb 2013. For internal circulation only. The figures he gave are as per Appendix attached. Background Alex was a fair person and was looking back whether he had been wrong all these days with his mature market assumption. He recalled that in the annual conference held in April 2008, there was a big discussion on the likelihood of dwindling market size in his territory. In fact the CEO had mentioned at that time that in other metro cities of India too similar mature territories existed and he had, in fact, asked the head of Brand Management Kanika Surpur to study and recommend whether the marketing department should be organized around market type rather than product types. Currently the company follows a Product Management system wherein each type of product category has a manager and all report to Kanika. The starting point of this discussion was the point made by Alex forcefully in the 2008 conference as follows; The real estate boom in Mumbai has now created millions of square feet of office space in central Mumbai like lower Parel and also further north in Bandra Kurla Complex, Andheri, Vikhroli etc. The costs and rents are cheaper in these new locations and there seems to be a flurry of movement to these locations. The number of offices are actually declining in my territory. When Alex had repeated all this to Suresh last week, he had only one response; There are still many offices where you are not selling. Products The products are imported from China but specifications are decided and enforced by the company through its own office in China. All products are inspected before being shipped from China. The company says it ensures that its products are seen by the customers as being no less in quality than its MNC competitors. In any case, even the MNCs are these days getting their products made in China anyway. Organization Alex has 5 territories under him; each headed by an executive. The names of the executives are Q ( Quentin), M (Murali), B (Banerjee), W (Wadhwa) and K (Kapoor). Each is responsible for sales as well as service from their designated territories. The sales orders, once booked, are passed on to the local warehouse to execute. The service orders ( sales of annual service contracts and consumables and repairs) were passed on to the Mumbai service center to manage and execute.
Caselet written by Prof S K Palekar for class discussions in Pfizer MDP Feb 2013. For internal circulation only. Appendix EDDINGTON SALES AND SERVICE PRIVATE LIMITED 5 SALES EXECUTIVES UNDER ALEX PARAMETER UNIT Q M B W K POTENTIAL INDEX 110 160 90 150 130 CALLS pm Number 50 30 40 30 50 PRESENTATIONS pm Number 15 23 20 12 30 CLOSURES pm Number 12 11 13 10 11 ORDER SIZE / CLOSURE Rs L 1.03 1.10 1.23 0.98 1.00 TOTAL SALES REVENUE pm Rs L 12.36 12.10 15.99 9.80 11.00 AFTER SALES CALLS pm Number 12 23 20 30 10 PRODUCTIVITY OF AFTER SALES CALLS pm % 30% 30% 20% 40% 20% ORDER SIZE / AFTER SALES REVENUE Rs L 0.30 0.35 0.20 0.40 0.15 AFTER SALES REVENUE pm Rs L 1.08 2.42 0.80 4.80 0.30 TOTAL REVENUE pm Rs L 13.44 14.52 16.79 14.60 11.30 AFTER SALES REV % ALL REV % 8% 17% 5% 33% 3% SHARE OF NEAREST COMPETITORS % 40% 30% 60% 30% 60% Question What would be your response if you are Alex ? What would be your response if you are Suresh ?

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Eddington Sales & Service

  • 1. Caselet written by Prof S K Palekar for class discussions in Pfizer MDP Feb 2013. For internal circulation only. Eddington Sales & Service Private Limited The company sells photocopiers, printers, faxes & computers to offices under its own brand name. Situation Sitting in his office in January 2009 Alex DeSouza was wondering how his life had suddenly become stressful after Suresh Pradhan joined as the new Regional Business Head. Till now he was being treated in the company as a genius State Manager but now Suresh treated him as if he was a rookie! As the State Manager (SM) of the company, he had built up a good reputation within the company for the last 4 years as someone who always met his targets. He was known to work hard and it was considered an achievement that in a mature territory of South Mumbai he had achieved a CAGR of 12% in the past. Once he had said; mature market is a word invented by the MBAs in the marketing department. My market is not mature, it is declining! Conflict Last week, when he met Suresh Pradhan for setting targets for the new year 2009-2010, Suresh was not at all happy with the 12% target set by Alex. In fact he had asked him to consider a target of 25% growth in the coming year. Alex had said; Boss, not only the market is declining in my territory but the marketing this year does not seem to be planning anything new by way of new products or more schemes or more advertising. There is no basis whatsoever for planning this kind of growth. Instead of asking me to grow in a declining market, why dont you ask the people from central and north Mumbai to sell more? The offices are shifting to suburbs and it will be easier to sell there! To this, Suresh had replied; In a short span of last few months I have seen that your decisions are more guided by emotions than by facts. I suggest you please undertake a systematic review of what your own people are doing and you will come to know how you can achieve 25% growth next year. In fact I asked your own assistant Veena Talpade to get a few facts out from your own databaseand I suggest you come back after studying it and tell me how you will achieve 25% growth. No less please!.
  • 2. Caselet written by Prof S K Palekar for class discussions in Pfizer MDP Feb 2013. For internal circulation only. The figures he gave are as per Appendix attached. Background Alex was a fair person and was looking back whether he had been wrong all these days with his mature market assumption. He recalled that in the annual conference held in April 2008, there was a big discussion on the likelihood of dwindling market size in his territory. In fact the CEO had mentioned at that time that in other metro cities of India too similar mature territories existed and he had, in fact, asked the head of Brand Management Kanika Surpur to study and recommend whether the marketing department should be organized around market type rather than product types. Currently the company follows a Product Management system wherein each type of product category has a manager and all report to Kanika. The starting point of this discussion was the point made by Alex forcefully in the 2008 conference as follows; The real estate boom in Mumbai has now created millions of square feet of office space in central Mumbai like lower Parel and also further north in Bandra Kurla Complex, Andheri, Vikhroli etc. The costs and rents are cheaper in these new locations and there seems to be a flurry of movement to these locations. The number of offices are actually declining in my territory. When Alex had repeated all this to Suresh last week, he had only one response; There are still many offices where you are not selling. Products The products are imported from China but specifications are decided and enforced by the company through its own office in China. All products are inspected before being shipped from China. The company says it ensures that its products are seen by the customers as being no less in quality than its MNC competitors. In any case, even the MNCs are these days getting their products made in China anyway. Organization Alex has 5 territories under him; each headed by an executive. The names of the executives are Q ( Quentin), M (Murali), B (Banerjee), W (Wadhwa) and K (Kapoor). Each is responsible for sales as well as service from their designated territories. The sales orders, once booked, are passed on to the local warehouse to execute. The service orders ( sales of annual service contracts and consumables and repairs) were passed on to the Mumbai service center to manage and execute.
  • 3. Caselet written by Prof S K Palekar for class discussions in Pfizer MDP Feb 2013. For internal circulation only. Appendix EDDINGTON SALES AND SERVICE PRIVATE LIMITED 5 SALES EXECUTIVES UNDER ALEX PARAMETER UNIT Q M B W K POTENTIAL INDEX 110 160 90 150 130 CALLS pm Number 50 30 40 30 50 PRESENTATIONS pm Number 15 23 20 12 30 CLOSURES pm Number 12 11 13 10 11 ORDER SIZE / CLOSURE Rs L 1.03 1.10 1.23 0.98 1.00 TOTAL SALES REVENUE pm Rs L 12.36 12.10 15.99 9.80 11.00 AFTER SALES CALLS pm Number 12 23 20 30 10 PRODUCTIVITY OF AFTER SALES CALLS pm % 30% 30% 20% 40% 20% ORDER SIZE / AFTER SALES REVENUE Rs L 0.30 0.35 0.20 0.40 0.15 AFTER SALES REVENUE pm Rs L 1.08 2.42 0.80 4.80 0.30 TOTAL REVENUE pm Rs L 13.44 14.52 16.79 14.60 11.30 AFTER SALES REV % ALL REV % 8% 17% 5% 33% 3% SHARE OF NEAREST COMPETITORS % 40% 30% 60% 30% 60% Question What would be your response if you are Alex ? What would be your response if you are Suresh ?