Executive

OVERVIEW Background Our company is called Zeta and we are in industry 4 which includes Eta, Psi, Theta, Upsilon, and our company Zeta. For the first quarter we were the number one in sales and in profit. For the other three quarters we were number one in sales and number two in profit. Our closest competitor is team Eta who three out of the four quarters was number one in profit. We have been very consistent ant throughout the first four quarters. Our profit has risen from 170,593 in quarter one to 1,138,989 in quarter four. Our company spent a considerable amount of time hiring our salespeople. We compared interviews and tried to pay attention to specific details we felt were important in the success of Zeta. For example we wanted to pay our employees above average and tried to keep them in their desired location if they had one. We looked for experienced people with college degrees, excellent references, and a great interview Industry Forecasts During the upcoming year we expect our industry to continue to grow. We have no reason not to expect continuing steady growth throughout the industry. We expect our company to increase units sold from quarter four to quarter five by 18%. We then expect for our units sold per quarter to raise 15% every quarter after that for the rest of the year. We found these numbers by determining the percent change in units sold between each quarter. We then used those percentages to find a sloping pattern to our units sold per quarter. We noticed that the slope was starting to level out; this leads us to believe that there will be an 18% increase in units going from quarter four to quarter five, and then a 15% increase for every quarter after that. When determining how many units we expect each region to sell for the upcoming year we used the most recent completed quarter. This would be the fourth quarter. We determined what percentage each region was responsible for by dividing the number of units sold in that region for that quarter, by the total number of units sold that quarter. We then assumed this number would stay the same for each region for the upcoming year. So using that information we multiplied each region’s percent of the total by how many units we expected to sell each quarter to determine our potential sales by region. Competitive Assumptions Eta is our team’s number one competitor because they have been number one in profits and number 2 in sales for three out of the four quarters. They also have had 100% cumulative for all four quarters like we have. Since Eta is our top competitor we feel they look at our performance like we look at theirs. We know that they want to stay competitive with us and beat us out in sales because they are number two to us. We predict in the next four quarters they will hire at least one person each quarter and put them in their top selling regions. We feel that they will continue to raise salary, sales contest, and their commission rate to make their sales people work harder because they are number two in sales. We also feel like they will raise their prices but only slightly because their product A price is already higher than average. Psi is another competitor of ours in industry 4. We predict that Psi will not hire salespeople until they can afford it. They constantly make changes regarding the price of their products but they are very small changes that do not help the company. We feel that they will continue to do what they have been doing as far as playing it safe with their decisions. We feel that they might have issues with money because they lowered their salary in quarter 4 and they are at lowest salary to date. Upsilon is another competitor of ours they did a great job in quarter 3 and we feel that they will continue to do even better next year. However they waited until quarter 4 to fill all their regions with salespeople which led to hurting their sales. They seem to be targeting product B more because its price is higher than market average. Their salary has stayed at 44,000 all four quarters and we predict will continue to stay around that figure. We do feel that they will continue to higher their commission rate like they have been, they are currently the highest as far as commission rates. We feel that they will continue to be safe as far as hiring and will have less salesperson because they just now filled all regions. Lastly there is Theta who is another competitor in industry 4. Each quarter their product prices are always lower than average. Based on this we predict they will gradually increase their prices, since they are so low, in the next few quarters. We predict they will continue to raise their salary and will hire more people to help their sales. COMPANY OBJECTIVES Sales Objectives Our sales revenue goal for the upcoming year is $11,412,000 in quarter five, $13,121,600 in quarter six, $15,090,450 in quarter seven, and $17,356,000 in quarter eight to total $56,980,050 for the year. We expect to achieve a 25 % market share for the next four quarters in the industry based on our average market share of the previous four quarters. Our company devised our sales objectives by looking at, and basing future numbers off of quarter four. We determined that our units sold are 93% product A, and 7 % product B in quarter four. We assumed these numbers would stay the same for the remaining four quarters. Based off that information we determined how many units of future quarters would be product A, and product B. We then multiplied those numbers by their corresponding prices, assuming the prices of each product would stay the same as in quarter four. Using those numbers we determined our total revenue for each of the next four quarters, and ultimately the year. Profit Objectives For the upcoming year we expect to make a total profit of $5,516,084. We determined this number by adding up our expected profits of quarters five through eight. We determined our profits each quarter by taking our gross margin on sales and subtracting our sales department expenses and other expenses from that quarter. That number is then our total profit for that quarter. We then added up our expected profits from the four quarters to find out expected profit for the year. Sales Strategy Our team is satisfied with our current market share and we want to continue to do as well as we have been doing. However, our team has been number two in profits for three out of four quarters and we want to be number one in both sales and profits. Our team plans to increase our profits through pricing, salespeople, and cost control. Our main focus will be on pricing. We will try to stay competitive but make money as well as hire more salespeople for our top selling regions. We also will try to keep our costs low as possible and try to produce the right amount so we are not paying inventory holding costs. We feel that by fixing our prices we can hopefully increase our profits. SALES TATICS Market Coverage For the next four quarters we plan to hire and train more people so we can have larger market coverage. Our top selling regions are regions: 1, 2, 3 and 10. We already have two salespeople working in these regions and plan to fill other regions and maybe add more than two people to our top selling regions. We target these regions because we are projected to do well in them. If our company does not meet our profit objectives we feel that it would be partly due to our salespeople. Thus whatever we do whether it is raising our salary or sales contest we will do it to make our salespeople happy so they will perform well. We feel that by raising these it will give them incentive and motivation. Pricing For our teams product A we have kept our price the same until quarter 4. We raised it by $100 making it 3,600. Our team did not change it because we did not want to take a major risk in the first four quarters because we were already doing so well. We are currently below the industry average however we plan to raise it this year but not higher than our competitors. For our teams product B we plan to keep our price the average market price because that’s what are competitors are doing. We also want more emphasis on product A because that is our better product. We are defiantly going to take more chances with our pricing in the next four quarters because we have been playing it safe. We want to take chances so we can become number one in profits. Sales Force Recruiting/Training For the next four quarters we plan to continue to hire salespeople to sell more of our products. We plan to hire at least one person each quarter but no more than three people a decision. Our specific hiring criteria consist of good references, a college degree, prior training and overall good appeal. We wanted our salespeople to have good references to make sure they worked well previously. Our team felt that our people should have college degrees because it shows they are disciplined and have some experience. Prior training was defiantly a bonus we looked for because it meant they had experience in the field. We also looked at personality traits to make sure they we the kind of people we wanted selling our teams products. An example of traits we would look for would be outstanding marks in motivation, confidence, and grammar and vocabulary. Our plan for hiring is to have at least two people in our regions and place people we hire in our top selling regions. We will retrain our salespeople if their performance is considerably lower than average. We hope that by retraining them it will better their performance. Sales Force Evaluation We have an excellent sales force. That being said we have expectations for them to achieve each of the next four quarters. For instance we expect Jack Parsons to sell 268 total units in quarter seven, and Dianne Butterfield to sell 166 total units in quarter five. We determined a sales objective for each of our 14 salespeople for the remaining four quarters. We found these numbers by taking what percentage each salesperson sold in each region in quarter four. We assumed that they would continue to sell that percent of units for every quarter after that. We then took that percentage and multiplied it by the how many units we expect to sell each quarter in each region according to table one. This then gives us our quota for each salesperson for each quarter. This method was used because we assume it appeared to be the most accurate with the most logic behind it. We will assess each salesperson’s performance by how close they come each quarter to their quota. Nothing will be done to salespeople who sell 90% of their quota. Salespeople who sell in between 80 and 90% will be closely monitored. If their performance does not improve to 90% or better then they will be let go. Any salespeople who sell less than 80% any given quarter will be let go immediately. When making these decisions we will also take into account how each region as a whole is doing. Something else we will take into consideration is their desire to be relocated. Other than that we will firmly stick to our strategic “percentage of quota” plan. Compensation/Contest Our company has paid our employees 55,000 a year in salary each quarter. We have been the highest salary in all quarters so far. Our compensation rate went from 2.3% in quarter one to 2.5% in quarter four. We are the highest as far as salary but Eta is not far behind us at 50,000. In order to stay on top we must increase our salary and compensation, not only to beat our competition but to also keep our salespeople happy. We will continue to raise our sales contest to keep an incentive for our employees. We derived the amount of compensation by the concept of realizing we wanted to pay our employees more than our competitors. TABLE 1 |Table 1 | | | | | | | | | | | | | |Region |Qtr 5 |Qtr 6 |Qtr 7 |Qtr 8 |Totals | |1 |459 |528 |608 |699 |2294 | |2 |370 |425 |489 |564 |1848 | |3 |379 |436 |501 |576 |1892 | |4 |250 |287 |330 |380 |1247 | |5 |247 |284 |326 |375 |1232 | |6 |166 |191 |220 |253 |830 | |7 |299 |344 |395 |455 |1493 | |8 |240 |277 |318 |366 |1201 | |9 |281 |323 |371 |426 |1401 | |10 |392 |450 |519 |595 |1956 | |  |  |  |  |  |  | |Totals |3083 |3545 |4077 |4689 |15394 | |Quarterly Change |  |15% |15% |15% |  | | | | | | | | TABLE 2 |Table 2 | | | | | | | | | | | |Budget Category |Qtr 5 |Qtr 6 |Qtr 7 |Qtr 8 | |Total Net Sales |$11,412,000 |$13,121,600 |$15,090,450 |$17,356,000 | | Units |3080 |3545 |4077 |4689 | |Gross Margin on Sales |2,259,576 |2,256,915 |2,595,557 |2,985,232 | | Percent |19.8 |17.2 |17.2 |17.2 | |Total Sales Department Expenses |855,900 |984,120 |1,131,784 |1,301,700 | | Percent |7.5 |7.5 |7.5 |7.5 | |Other Expenses Total |61,625 |70,857 |81,488 |93,722 | | Percent |0.54 |0.54 |0.54 |0.54 | |Total Division Profit |1,342,051 |1,201,938 |1,382,285 |1,589,810 | | Percent |11.8 |9.2 |9.2 |9.2 | | | | | | | TABLE 3 |Table 3 | | | | | | | | | | | | | |Employee Name |Qtr 5 |Qtr 6 |Qtr 7 |Qtr 8 |Totals | |Jack Parsons |202 |232 |268 |308 |1010 | |Brad Smythe |257 |296 |340 |391 |1284 | |Jane Inmann |200 |229 |264 |305 |998 | |Robert Judge |170 |196 |225 |259 |850 | |Harold Cooling |193 |222 |256 |294 |965 | |Carlos Parra |186 |214 |245 |282 |927 | |Debra Young |250 |287 |330 |380 |1247 | |Peter Blair |247 |284 |326 |375 |1232 | |Dianne Butterfield |166 |191 |220 |253 |830 | |Marie Fernandez |299 |344 |395 |455 |1493 | |James Tunny |240 |277 |318 |366 |1201 | |Roger Walker |281 |323 |371 |426 |1401 | |Tomas Gomez |218 |252 |291 |333 |1094 | |Susan Hurst |174 |198 |228 |262 |862 | |  |  |  |  |  |  | |Totals |3083 |3545 |4077 |4689 |15394 |