Introduction
It may not be easy to determine the best performing product region or customers. This problem may arise and therefore calls for a close analysis of figures that are obtained from the market analysis. Chemgrow, a company that produces and sales chemicals must have a comprehensive knowledge about its markets, products and clients so that it can make viable decisions that will guarantee its success. Effective decision making is critical to the success of a business and the company has to take the decision making process seriously by examine the various data at its disposal. With such an analysis, Mr. John Kee will be in a position to make various decisions regarding the company.
The various exhibits can be used to determine the best customer, best productive region and sales person. The case shows the sales representative and their average percentage. It lets us know the aggregate contribution of the best sales representative. Exhibit 6.2 gives the gross margin margin of each product.
Decision on the best sales representative can be calculated. This is done by comparing the gross margin of each product by the sales representative averages. Apparently, Dow is the best sales person. However, his contribution is limited to a single product and not distributed among the three products as it may be desired. Since the gross margin of ammonia is so higher as compared to the rest, Dow’s contribution has exceeded the others and is the best sales figure among the sales representatives. Thums is the next best sales representative contributing heavily on ammonia and a small portion on phosphates.
There are various exhibits that can enable us to determine on the best customer and region because the show the various customer and sales figure. The best region can be calculated based on the sale figures for the various quarters compared with the past data. In the past and in 2002, the central region appears to have performed exceedingly well. In 2000, the central region exceeded the other regions by recording an aggregate sale of 170793 a figure that is way above those recorded by the other regions.
Based on the past sales and those made in 2000, the best customer can be calculated. According to the exhibit, RGC is the best customer. The customer is from the central region and appears to be very valuable to chemgrow. The other customers are relatively spread out among the four regions and may come in the following order;
- RGC 9. OSS
- EPF 1O. RAP
- MSF 11. PF
- WDB 12. RGC
- OI 13. M
- YF 14. JN
- HF 15. GCC
- FSI
Customers differ due to the fact that they are supplied by different sales persons who deal with different products. The three products ammonia, phosphates and potash have different gross margins. So, one may have bought large quantities but the margin that the company has earned is very little as compared to the gross margin of supplying just smaller quantities of a product that has a high gross margin to a customer. Comparing the various margins can enable the management to determine the most valuable customers that the company should try as much as they can to keep them since if they lose those customers the business will be affected adversely.
It is necessary for a business to always know who its most valuable customers are so that it makes sure it continuous to provide them with the best services. This will encourage the customers and they will continue being loyal to the company’s products. This will subsequently boost the sales of the company and in the process, the company may end up creating a strong customer base and make huge profit (Wasson 1998). Most businesses are out to make profit and customers must be there if the profit is to be made.
It is true that Chemgrow kept the necessary information about sales performance, customers and output of the sales person. However, the information is so disorganized to the extent that one cannot easily make a decision basing on the highly disordered information. Chemgrow should implement a computer program that will total the data as it is entered and can provide a correctly ranked list (Kangas 2003). It should be able to automatically update itself once the data is entered.
The company should ensure that certain regular reports are generated and made available to the managers so that they can be used in making various management and marketing decisions that will see the company grow rapidly. Among the reports are:
- List of the sales made per region
- Sales made by each sales person
- Amount bought by each customer and the corresponding gross margin derived by the company.
- Annual purchases made by each customer based on quantity
If chemgrow adopts modern technology, it will certainly be able to organize its information in the best manner possible. This will make it possible for managers to obtain any information that may be needed and this will speed up the decision making process. The company needs to change its way of keeping records.
References
Chemgrow case study document, 2011
Kangas, K. (2003). Business strategies for information technology management. Hershey, Pa: IRM Press.
Wasson, C. R., McConaughy, D. H., & Wasson, C. R. (1998). Buying behavior and marketing decisions. New York: Appleton-Century-Crofts.
