Sudhir Vaidya was very happy and excited.

He had just secured a dealership from Blaster

which was one of the worlds leading companies for construction equipment. Sudhir had
to set-up his company for selling and servicing Blasters 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.