Collegiate Promotions a Sales Examination Exercise Collegiate

Collegiate Promotions

A Sales Examination Exercise

Collegiate apparel is perhaps one of the most popular in terms of clothing and accessories in the United States. Sports team apparel is also quite high, but collegiate apparel does seem to take over the lead, for it appeals to so many more people-males and females alike. In fact, collegiate apparel is rated on internet websites, which can provide links to the best places where to buy these kinds of clothes. The exercise below aims to reference a sales study that was involved with various collegiate items, and will answer the five questions relating to strategy and profit.

The first question was whether the compensation system at Collegiate Promotions was effective in this particular exercise. In order to answer this question, one must examine this compensation system. In this case study, the company did not set an absolute price for products, according to the short summary provided. Instead, Collegiate Promotions utilized a "wholesale plus" pricing strategy so that its sales representatives could sell within a certain range. This range was from 30 to 50% higher than the wholesale price for these various items, which included mugs, clothing, and others. For example, according to this case, if the wholesale price for a mug is $10, the representative can sell it between $13 and $15 and receives a commission of half of the amount charged over the wholesale price so if a mug sells for $13, the representative will receive $1.50. However, because they are independent from the company, this compensation is all the sales representatives receive, which clearly means they must sell a lot of merchandise.

The next question required that I discuss reasons a sales representative would try to sell at both the top and the bottom of the price range. From the analysis above provided by the case study, it is easy to see why the sales representative would try to sell at the top of the price range. This could happen because the higher the price for an item, the more compensation a sales representative would receive. I do not think any representative will try to sell at the bottom of the price range, unless a person would want a huge order of merchandise which could make up for the fact that the price would be lower. However, if the order is just one or two items, I think the sales representative would try to sell at the very top of the range.

The next item addresses whether most sales are made at the top or bottom of the range of possible prices. As stated above, I would predict that most representatives will try to sell at the very top. If not $15 then at least at $14, for this particular case because, again, this way they will receive more money in the pocket. As the sales representatives receive no other commission, this is understandable, especially since they are trying to make the $300 already invested back, according to the case study, and probably trying to make some money on top of that to cover their personal expenses. When an employee sees that he or she receives outcomes for something within his or her line of sight, he or she will be more motivated to, in this case, keep selling at higher prices and thus make profit, according to Stewart and Brown. So, due to all these reasons, I would believe that a representative would try to always sell at the top of the price range.

The next issue was to discuss how the lack of geographically protected sales areas affects salesperson's behavior. This can be quite a bad idea, because it takes away from the other team players and can allow others to steal customers, as we have seen in the other resource by Stewart and Brown. In this way, one salesperson can literally take over another's territory, so a salesperson will constantly try to first protect their territory, but also encroach upon another's. This is quite a paradoxical issue because it not only allows a form of stealing but it also promotes competition, which is quite healthy. However, a sales representative must always be vigilant, which would maybe not happen in the non-independent model.