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Hanover-Bates Chemical Corporation Sales Volume - Profit Margin for the 7 districts Essay Example

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Hanover-Bates Chemical Corporation Sales Volume - Profit Margin for the 7 districts

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Hanover-Bates Chemical Corporation Sales Volume - Profit Margin for the 7 districts. The northeast district has many problems which need to be worked upon in order to improve the performance of the company. The northeast district has many problems which need to be worked upon in order to improve the performance of the company.  The first of these is high direct costs of making the sales. The district is having the second-highest direct costs a major portion of which is the sales salary. Sales representative expenses is another major head with a significant contribution towards direct costs. The high costs result in a less profit margin which makes it necessary to make more sales in order to achieve the desired gross profit. Another issue with the Northeast district is the inability of the sales force of the region to convert the calls to active customers.

A much larger proportion of potential accounts are not being converted to actual accounts. This needs to be changed in order to get more actual customers. This has also resulted in the failure of Northeast salesman to achieve their sales target. The sales team in the northeast is not able to effectively convert calls into potential calls which imply that a lot of effort is being wasted in targeting customers which might not turn into actual customers. Suggestions for the Management Based on the analysis, it is clear that the major focus area of the management shall be to control the direct costs of sales. One head which requires significant focus from the management is the higher sales representative overhead expenses. The costs of sales can be increased by incorporating the use of tight budget and strictly pursue it.  There is also a need to redefine the salary structure of the district. The salary of the manager is the highest in the northeast district. There needs to be a strong relationship between the salary of the performance of the district and the district sales manager. Same is to be done for the incentives of the salespeople. The incentives need to be linked with the profit as well rather than just sales figure. . Hanover-Bates Chemical Corporation Sales Volume - Profit Margin for the 7 districts.

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