Pilgrim Case Analysis

1. Decision to Be Made: Syracuse Division Sales Manager, David Thomas, must decide how to
re-assign sales territories that optimize market objectives and effectively enforce company policy
while preserving long established employee morale.

2. Recommended Decision: Michael Taylor and Clifford Nelson will split Brooks’ preferred
clients since they are the highest performing salesmen and also geographically close. Reps that
rank behind them in performance will distribute leftover workload. Trainees will job shadow
with experienced reps in the new territories.

3.Reason For Recommending The Option

It’s important that Brooks’ territories are well taken care of after his retirement. Many of the
older sales reps feel they deserve his profitable accounts because of the loyalty and longevity
they have with the company. Brooks was in charge of three territories, two of which he already
shared with Nelson. Nelson feels he deserves to take over them exclusively since he has worked
hard for the company for 35 years and had already discussed the matter with Brooks should one
of them leave the company for any reason. This causes a change in strategy for David, as he not
only is trying to increase profit for the company with territory reassignment, but now also has to
fairly distribute Brooks’ prized, profitable accounts. This also causes tension among the
employees, decreasing morale if individuals do not have their needs met. Sales reps all have
different expectations and trainees feel they have been neglected from the beginning as the
previous sales manager, Harry L. Schultz, did not adequately prepare them for success. For
example, he assigned them uncontacted accounts causing two trainees to seek out other
companies with more opportunity. One of the newer sales reps, Mike Taylor, is doing really well
in his assigned accounts and of twenty nine accounts he was given, all are active making him the
only rep to achieve 100% retainment. Therefore, dividing the territories evenly between Mike
Taylor and Clifford Nelson seems to be the logical thing to do, since they are the best performing
sales reps at the moment for the Syracuse Division.

4. Decision Options:
1. Give Nelson all of Brooks’ territories
2. Give Nelson the territories of Brooks’ that he desires and the rest go to other sales reps
near those regions
3. Evenly split territories between sales reps and trainees that can handle extra load.
Nelson neither loses nor gains any new clients.
4. Taylor and Nelson split Brooks’ preferred clients since they are the highest performing
salesmen. Reps that rank behind them will distribute workload leftover.
5. Decision Criteria
1. Market Strategy (Company Objectives and Division Performance): Because of the
wide range of products retail druggists offer, sales reps find difficulties pitching their line
efficiently. For that reason, David Thomas went with each sales rep to see how they managed
their accounts and took note on how most of the reps didn’t follow the three steps to increase
profit. So Thomas held a meeting and suggested “With reorganization, the division could
increase its share of the wholesale business by 20%” (Pilgrim Drug Company, pg.11). As shown
in the charts from pgs. 13-15, the newer sales reps are performing extremely well in their
assigned territories (with the exception of Harrington) and feel they can do much better than the
senior sales reps to achieve company objectives. Evenly splitting sales territories would allow the
company to see how employees adjust to new assignments. A negative result of reasigned
territories might reveal the how inexperienced and underpreapred the trainees are due to Schultz’
insufficient attention. In contrast, the newer sales reps and sales trainees might excel like
Michael Taylor.
2. Longevity: Pilgrim Drug Company divided their territories based on sales experience
and longevity with the company. Since Brooks is retiring, Nelson and Jackson feel that Nelson
has priority because of how long he has been with the company and his relationship with the
prospects. They both fear they are going to lose Brooks’ territories to a newer sales rep or
inexperienced trainee, causing the veterans to miss out on profits. As brought up in pg. 8 of the
case, Nelson had a conversation with David Thomas stating that he and Brooks had already
decided how the territories would be split and feared Thomas’ ideas for territory reassignment
would hinder those plans.
3. Company Morale: “The prospect of territorial reassignments led to a wide range of
reactions among the salespeople- some favorable, others unfavorable”( Pilgrim Drug Company,
pg.1). Jackson feels that giving Nelson the territories would be consistent with current company
morale and Schultz’ decision-making, something he insisted should remain the same (Pilgrim
Drug Company, pg. 9). However, from the perspective of the newer reps and trainees, morale had
actually been an issue and they see this reassingment plan as a favorable opportunity for growth
and equity. The sales trainees want to be given the chance to prove themselves instead of just the
frustrating : “Schultz really gave the trainees the short end of the stick when he put us on
territories. He either gave us a territory of uncontacted accounts where it’s like beating our heads
against a wall…some of us actually quit, like the two reps who trained with me…or, Schultz
gave us replacement territories where some of the best accounts had been handed over to the
older reps” (Pilgrim Drug Company, pg. 11).
4. Equity regarding financial potential and workload: This puts all positions and
territories into consideration regardless of employment duration and fully supports each sales rep
in order to provide an equal opportunity for qualified employees to achieve full potential. MBA
trainees will still be required to build upon lower accounts to prove themselves, but will be given
more attention. All other sales reps’ geographical location, sales performance, and workload will
determine the number of accounts assigned. Key drivers in determining who receives which
accounts will be sales force motivation and implementation of Pilgrim’s strategy and sales
tactics.

Proof of Recommended Option: Split territories between Taylor and Nelson, leftover
territories will be divided evenly.

Criteria Explanation

Market Two key changes to the current strategy would be to enforce the three-
Strategy step plan for increased profit and to implement new sales calendars.
(Company Syracuse division’s share is 20% compared to the 48% of the other
Objectives divisions’. Thomson feels that implementing the three step plan could
and Division increase that share to 40% (Pg. 11). Having calendar promotions would
Performance) provide the sales force with a clear idea of specific items are the most
attractive to the clients and focus on specializing in those.

Company The veteran sales reps feel the need to leverage their longevity and
Longevity experience on the sales trainees get the best accounts. As observed by
Thomas, many of the sales reps “skimmed the cream” from the accounts,
selectively attaining the most profitable (pg. 3-4). Thomas believed the
current territories had been established without careful study of the
number of stores in the area. New territory assignments can achieve
company equality and retain more sales trainees.

Employee Sales force morale is a key factor in keeping all the employees happy. If
Morale the territories are divided evenly, then the sales reps will not be content
allowing sales trainees to take on bigger territories. If territories aren’t
divided evenly, trainees who are aspiring to prove themselves will feel
neglected and might eventually want to leave the company. Newer sales
reps want to earn more profits and veterans want to have priority. Morale
is threatened as each employee pulls at their own desires.

Equity Financial Potential plays an important role to the sales reps and their
regarding performance. Since many of the sales reps will have a higher workload,
financial the potential of more revenue will increase creating more revenue for the
potential and company. As the case mentions, sales calendars will increase the
workload effectiveness of promotions, ultimately helping the sales reps, efficiently
boosting sales. This also promotes equity since all reps will have an
equal amount of sales promotions distributed.
Critique of Options: Evenly split territories between sales reps and trainees that can handle
extra load; Nelson neither loses nor gains any new clients.

Criteria Explanation

Marketing With the new strategy of following the three step plan and implementing
Strategy sales calendar, a problem can arise with the other divisions. “The division
sales managers were responsible for the coordination of the activities of their
sales reps” (Pg. 3). These new responsibilities could cause the managers to
ask for increased pay so it’s important the execution is profitable. The
ultimate goal is to maximize profits and have employees follow company
policy in regards to selling practices.

Company Dividing the company equally between the sales reps and trainees could have
Longevity a negative effect as David Thomas “was concerned that Schultz neglected
their training” (Pg. 7). Since they were neglected, they lacked the proper
training and preparation to be sent out to clients. As seen before in Royal
Corporation’s case, training is just part of the learning process. Experience is
the key factor, which trainees don’t seem to have. As seen on the map of the
territories on pg. 13, the sales trainees were deployed to the smallest
territories. Giving them bigger assignments could cost the company if they
can’t activate those accounts.

Morale Morale is very important in the workforce, making or breaking a company.

Changes are expected under new management, but always keeping in mind
the benefits of the workers. David Thomas seems to want to go by the book,
which many of the sales vets do not agree with. As Jackson said “I don’t
want you to do anything to mess up morale. We never had any morale
problems when Schultz was around” (Pg.9). Comparing the previous
manager and new manager is a very complicated thing to do as each manager
might have a different style. Schultz preferred the Sales rep veterans and
trusted them with bigger assignments. While Thomas seems to be leaning
more towards dividing territories fairly based on successful assignments and
potential profitability instead of seniority.

Equity Financial potential is important to the employees and creating more profit
regarding for the business. In addition the company created the three-step sales plan to
financial increase profitability. The three-step sales plan will include the sales rep to
potential implement sales calendar that coordinate activities of the company (Pg 3) .
and This will encourage more activity from the sales rep to meet sales quotas.
workload The workload will increase giving more sales leads to reps to finish and
create an increase in financial potential across the company sales. The major
issue is Nelson and his argument that he deserves the territories. Evenly
dividing territories would promote equity with the company, but he wouldn’t
feel that way. As Nelson said in the case “I don’t want my territories chopped
up and handed to some kids” (pg. 8).

Critique of Options: Giving the Territories to Nelson

Criteria Explanation

Marketing By giving Nelson the territories, the market strategy wouldn’t change as
Strategy much. As Thomas noticed; Nelson rushes calls, carries all merchandise but
doesn’t use it, and tries to sell case lots on wanted items (Pg. 5). Since he has
been with the company for 35 years, the chances that Nelson will put into
effect a new strategy are very minimal. He is comfortable with his selling
strategy and feels that it’s working. Why fix something that isn’t broken?

Company Seniority seems to play a major factor in all cases as employees who have
Longevity been with the company for a while and feel like they deserve promotions or
raises. In the case of Nelson, he feels that he Brooks’ clients. As said before,
Brooks and Nelson agreed on who would take each other’s territories before
David Thomas arrived. When Thomas and Nelson were having a
conversation, Nelson said “A man with 35 years’ service deserves some
consideration” (Pg. 8). The biggest downfall of this is that some of the
assignments that are given to the employees who have been there longer, last
for 10+ years. By giving those assignments to the employees who have been
there the longest, means that the assignment can go unfinished. The
employee might retire or even pass away.

Morale By keeping the old strategy, the workforce morale wouldn’t change where
the trainees felt unappreciated and the sales reps felt empowered to do as
 they please. The company trainees, who could potentially be the vets in a few
years, will end up leaving looking for better opportunities. The trainees feel
that they are performing better than the vets, which is the main reason why
they are so hard on the trainees (Pg. 11).

Equity By giving Nelson all the territories, it wouldn’t promote equity for the
regarding company at all and would show that the company would stay the same way,
financial before David Thomas got there. As Michael Taylor said “Schultz really gave
potential the trainees the short end of the stick when he put us on territories” (pg. 11).
and By giving Nelson the territories, the company will keep their veteran sales
workload reps happy but will surely lose the trainees and newer sales reps. This will
not help the company in the long run, which could eventually be costly.

Major Disadvantages of Recommended Option

Risks Mitigation

Manager By dividing sales territories, the veteran sales reps and the division manager
and will be upset with Thomas. While Thomas was conversing with Jackson,
Employee division sales manager, about Nelson and how the territories should be split
confliction up. Thomas mentions how his idea in the sales meeting was brought up and
Jackson couldn’t recall. As conversation continues, Jackson states that if
they territories are divided equally, then the veteran sales representatives will
leave (Pg.10). He is worried most about is losing long-time sales
representatives that might be overlooked by newcomers and trainees.
Thomas then risks possibly losing some valuable reps depending on how
negatively they are affected by new territories. This could end up being a
lose-lose situation for Thomas.

Company Regardless of what decision happens, company morale will never be ideal
Morale because each rep has their own interests in mind and it is difficult to appease
will never them all. This is shown when David and Nelson are having a conversation
be great about the territories and Nelson abruptly says “I don’t want my territory
chopped up and handed to some kids” (pg. 8). This reiterates the lack of
respect the sales veterans have toward the newer reps and trainees.
 Action Plan:
David Thomas will need to meet with all the sales reps and trainees to tell them the decision he
has come up with. It is recommended that he show them a presentation of his plan and how he
wants to split up the territories. This will then show Clifford Nelson and Michael Taylor that they
will be the main sales reps.

Goals of Thomas’ action plan:

1. Strategically match new territories to the most productive and geographically close
salespeople within the 1-3 months, Michael Taylor and Clifford Nelson, while implementing the
trainees.
2. Travel around the territories of Taylor and Nelson to see the interaction with the clients and
how they are performing.
3. Maintain or achieve a high level of company morale to improve sales performance. Monitor
the employees to see if any problems arise and use legitimate power to explain to them the
decision
4.Double market share to 40% within the year

Short-term steps
1. Determine how territories will be split up after assigning Taylor and Nelson their
preferred territories: Use Exhibit 1 and 2 to determine the the correct amount of workload and
territories to distribute to each person. Using exhibit 2, determine the account assigned to each
person and how many are still active, then distribute the most important territories based on the
active accounts each person has made.
2. Identify sales reps selling strategy to determine which territories fit them the best and
how the sales calendar promotion will benefit them
a. By identifying the correct sales reps to their territories, we will be able to double the market
share within a year
b. Company morale will slightly improve with the ideal sales reps assigned.
3.Deploy the sales reps to their respective territories, where Michael Taylor and Clifford
Nelson split Brooks territories within 2 months.
New territories:
a. Jefferson: Nelson
b. Oswego: Nelson splits with Taylor
c. Lewis: Taylor and Murray with trainees to job shadow
I. Morale might be decrease at the beginning since Nelson will not be happy that
he has to share a territory with Taylor. Thomas will handle the situation using his legitimate
power to explain to everyone why he chose those accounts and how it will benefit the company
II. Since Trainees will be accompanying Taylor and Murray to their shared
territory, we will expect them to see the selling tactics of both a veteran sales representative and a
new sales representative while following company policies.
 4. Implement the criteria of being fair and providing equal opportunity for everyone, so the
older sales reps aren't dissatisfied.
a. By implementing this criteria, we will bring up the topic of why we chose to reassign the
territories and why we chose to assign Taylor and Murray to one of Brooks territories
b. Veterans shouldn’t feel like they are being attacked because Nelson is gaining more accounts. We
decided to have Murray and Taylor share one to see how they work together and determine
which of their selling strategies will be most beneficial
5. Within the next month, David Thomas should receive a progress report from everyone.
a. After receiving the progress report, he should determine whether he has to relocate certain sales
reps depending on how the accounts are being handles.
b. If relocation does happen, he should set up a meeting with everyone to communicate the decision
and concerns he has about the territories.
c. The main territory that is concerning is the Lewis territory, since we have a Veteran and New
sales rep working together. If everything goes as planned, the reassignment of territories will be
beneficial. Both Veteran and New sales reps will get along and improve company morale
6. Implement a new Sales training program.
a. Implementing a new program would most likely leave the sales trainees optimistic about the
situation.
b. They will feel more prepared to handle bigger accounts
c. The three trainees will accompany Taylor and Murray and the Lewis territory to get a perspective
on which selling strategy best works for them. They shadow them for 2-3 months and then will
be placed in the Onondaga territory that Michael Taylor would leave since he’s taking over some
of brooks territories

Long-term steps

1) Evaluation of each Sales rep in their territories using sales analysis and cost analysis after
one year has passed:
a. Determine whether the decision to give Nelson and Taylor the majority of Brooks’
territories was the best option.
b. Should use the progress reports to see how many of them have accounts assigned to
them still active.
c. Determine how much each sales rep is making in a year in comparison to last years
sales. We would determine whether they are increasing their sales and achieving a higher market
share, from 20% to 40%.
d. The next step would be to run a cost analysis to determine each sales reps strengths and
weaknesses. By doing so, Thomas gets an idea to see whether reassigning territories is needed
again
e. Determine whether how much the representatives are spending in their individual
territories
 f. Decide whether the relationship between sales and selling cost is maintained, each
sales reps knows what quota they have to achieve and do it within the territories spending budget
assigned to them
2) If needed, make the necessary adjustments to reassign territories and implement a bonus
plan for sales reps to achieve the necessary quota.
a. Implementing a bonus would change the compensation plan to commission plus performance
bonus
b. Some of our employees may be Extrinsically motivated, which could force them to work harder
to achieve that bonus
3) Evaluate how efficient the organization is by using the cost analysis method
a. Analyze the selling expenses for each individual territory
b. Make sure all selling costs, and sales are maintained at all times
4) Conduct a profitability analysis to see how effective the sales organization has been
a. Determine the ratios of input and output by examining how productive the sales force has been
i. Expenses- how much each person spends in order to make a sale or keep an account open
ii. Calls- how many calls each sales representative makes
iii. Sales- how many accounts they keep open
iv. Proposals- what type of selling strategy they have in order to keep the accounts active
5) Analyze and weigh current operating practices with practices employed by the organization
through the use of benchmarking to increase competition
a. Increase efficiency by using quicker, more reliable, and cheaper practices to meet customer’s
needs
6) Establish 360 degree feedback in order to determine how each sales rep is doing in their
territories
a. Ask feedback from:
I. Customers
II. Sales Manager
III. Other Sales Representatives
IV. The salesperson themselves
b. After evaluating the feedback, determine changes in company morale, if any.
7) Evaluate Salesperson’s Performance based on:
a. Behavior Criteria: should not only address activities related to short term sales generation but
should also include non selling activities needed to ensure long-term customer satisfaction and to
provide necessary information to the sales organization
b. Professional Development Criteria: assess improvements in certain characteristics of salespeople
that are related to successful performance in their sales job
c. Results Criteria:salespeople measured objectively based on results such as- sales, market share,
and accounts
d. Profitability Criteria: Salespeople have an impact on gross profit in two ways:
1) Through the specific products they sell and/or through the prices they negotiate for final sale
2) Salespeople affect net profits by the expense they incur in generating sales
8)Determine whether the newly implemented Sales Training Program worked:
 a. After having the initial sales trainees accompany Taylor and Murray, we would determine
whether it was a benefit to all trainees or just a few.
b. For the trainee/trainees that benefited from shadowing the sales reps, they would stay to their
assigned territory
c. For those that didn’t benefit from shadowing a sales rep, a new training class would be involved
where they would learn different selling strategies, how to communicate with different types of
clients, and how to close a sale for a year long process
d. After doing so, the trainees will do an evaluation of the program
i. If all goes well, then they will be assigned to a territory
ii. If it doesn’t go as planned then we will look at the performance evaluation methods;specifically
reliability, validity, comparability and usefulness