Sudhir Vaidya was very happy and excited. He had just secured a dealership from Blaster which was one of the world’s leading companies for construction equipment. Sudhir had to set-up his company for selling and servicing Blaster’s products in Western India – states of Maharashtra, Gujarat and Goa. At the same time, he was quite worried too as this task was quite tough. The potential customers (around 1000 at the time) comprised of contractors, construction companies etc. and were spread out over these states. He wanted his sales persons to cover important customers (around 20%) at least once a month while the others (B and C class) once in 2-4 months. He had to also provide time for training, travel, office and miscellaneous work etc. and make an estimate of the number of sales persons he needed to recruit. He expected to sell around 50 machines (Rs. 20 crores) and spare parts of around Rs. 8 crores per year to start out. Parts sales were important as they gave higher commissions (20% as compared to 3% for machines) and also had to be pushed by the sales and service engineers. He also needed to add service engineers to cover an existing population of 100 nos. machines plus what they could sell. Though, he had the initial capital of Rs. 2 crores and sales experience of over 20 years with a large Indian company in the same field, he had no previous experience in setting up his own company and sales / service organization. How do I find the right persons at the right salary – he wondered? He had to be careful with his expenses, payments, reimbursement etc. being a start-up and had to devise an appropriate compensation plan linked to sales for his sales and service team to maximize business.

1) Suggest a suitable sales organisation structure with levels, locations etc. to meet the needs with a brief explanation on the same. Make assumptions as appropriate.

2) Estimate using any suitable method the number of sales and service personnel that will be required for the task. Make assumptions as appropriate.

3) Suggest the profile of the sales and service persons that would be suitable for the jobs and the possible methods of recruiting the same.

4) Devise suitable compensation plans for the sales and service personnel in this case and briefly explain the rationale for the same.