Question

Mr. Khanna is a Marketing Manager of LMN Equipments Limited. The products of the company include refrigerators, washing machines, air conditioners, TVs etc. For the last 2-3 years, Mr. Khanna is worried about performance of his department which he believes is not proper. Although there are no apparent problems and the top management ( Including Managing Director Mr. Manchanda ) are not at all unhappy with Marketing department. Still Mr. Khanna is observing some negative symptoms. Following are some worrisome symptoms as per Mr. Khanna:

Sale is increasing but at lesser rate than growth rate of industry. The last year, sale increased by 8 % & top management was very happy. Not Mr. Khanna because he knew that industry demand increased by 20 % and many competitors in fact registered 20-25 % growth. This means that market share of company is reducing in spite of growth. • Similarly, profit targets are not met with even though company is meeting sale targets.

of sales team sales-men and area sales managers are increasing. According to Mr.

this increase is not justified even if steep increase in petroleum price is considered. These

lodging were traveling expelled Distributors (wholesalers ) are not paying in time. The expenses were The recovery of money is a present level of debtors are & boarding, and communication expenses. to 3 months of sale. Mr. Khanna decided to make direct calls to distributors to demand recovery of outstanding amounts. To his shock & surprise, dealers told him that salesmen were sending excessive material which was not ordered by dealers Mr. Khanna found that the sales-men usually did so in the month-end to meet targets. Because of this reason, the dealers decided not to pay in time. In fact, M/s Rajesh Machines, a dealer in Chandigarh told Mr. Khanna: "We should get Rs. 5000.00 per month from the company as you are using our space as

your

go

down."

To check further why profits were declining, Mr. Khanna tried to find out average price realized for various products by the company. He found that average sale price has decreased for all the products. Many times, sales-men were selling products at very high discount to dealers. When inquired many sales-men replied that they got verbal permission from the Assistant Marketing Manger Mr. Rahul Jalan. Mr. Jalan said he never gave such verbal permissions. Mr. Khanna now sincerely believed that the sales-men were conveniently relying on price reduction and excess dumping of material with dealers. They did not put any efforts in marketing.

Mr. Khanna believed that competition in the industry has increased. Many multi-national companies are now operational. To his surprise, not a single sales-man has so far reported about this. There are no reports about activities of competitors, their pricing, their product features, their marketing schemes, appointment of new dealers etc. Not even as an excuse, such information was sent by sales-men. For example, the company has not appointed a single new dealer in last 3 years.

Mr. Khanna was the Marketing Manager but his friend Ajay Mehta was a CA. Ajay has worked almost for 15 years in internal audit department. He offered that it was possibie to develop a good control system to ensure better result from sales team

1. Do you see any problem with planning function with the company? If yes, give your suggestions to

overcome these problems.

2. Identify various control areas as per objectives set in planning. 3. Suggest procedure guidelines for various activities of Marketing Department. If possible, suggest

formats of various reports & documents.​

Answer 1

Answer:

exchanges of ideas.

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