Johnson Drug Analysis

Analysis and Recommendations: First, management should establish marketing/sales objectives which are consistent with the company strategy of “systems selling. ” Currently, the sales force sees Its long-term objectives only In terms of Increasing Individual sales revenues to a million dollars. This objective could easily conflict with the goal of selling the “system. ” Because of the compensation plan, the salesperson is encouraged to concentrate on selling particular high margin items, rather than concentrating on the customers’ overall needs.

One alternative would be to work toward the goal of customer profit improvement via the system’s contributions to lowering costs or increasing revenues. Of course, meeting customer needs should also lead to achieving company objectives. 2. Management must consider the possibility that the salespeople currently on the payroll do not have the capabilities necessary to Implement the systems selling strategy. The role and functions of the salesperson under the new strategy should e defined and present people evaluated to determine If they have the aptitudes and skills required for carrying out the new distribution strategy.

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The company should consider a compensation plan which offers a salary plus 3.

Commission. The commission, or a part of the commission, should be tied to the sale of “the system. ” Perhaps during this transitional period, an additional commission could be paid on all of those orders which are placed through the system. Additionally, the Johnson Company should consider paying part of the salesperson’s expenses. Under this type of plan, the company can exercise more control over the salesperson In the field, directing his efforts toward those activities which further company goals.

Greater emphasis could be placed on the oneself functions such as customer service and management consulting.

Concurrently, the evaluation of the salespeople should reflect the importance of “systems selling” and the sales manager should be provided with appropriate reports to evaluate the salesperson’s system selling efforts. 4. Training is another area in which an added emphasis on “systems selling” is needed. Currently, the initial training activities do not help the salesperson develop the knowledge and skills necessary to sell the “system. Although the salespeople must gain a “working knowledge of the equipment utilized,” this does not necessarily teach them the benefits of the drug service system or how to sell the system.

The training program should first include a portion which Is devoted to increasing the salesperson’s knowledge of retail drug operations from a “profit management” respective. Then, specific attention should be devoted to increasing the service system.

If necessary, the company should encourage (and reimburse) the salespeople to attend special adult education classes devoted to basic business concepts, offered by one of the local colleges. These programs should be mandatory for those current salespeople who are not well-founded in terms of systems selling. 5.

The role of the sales manager should be redefined to correspond to the new strategy. A major portion of his effort should be allocated to helping the sales force adopt the new selling strategy.

The complete sales management process should be analyzed and revised to help implement and manage the systems selling approach. 6. Finally, management should assess its source of new salespeople. Promotion from within as the primary source of people needs to be reevaluated.

It is unlikely that all people with the required capabilities to implement the new concept can be found within the company. The selection process needs some changes as well. For example, why is the credit manager doing the interviews?