Recently BatesManor Furniture merged with Lea Meadows and was faced with the decision with the economic sense of merging the sales efforts of the two companies. Lea Meadows employs sales agents to represent their upholstered products and BatesManor has its own sales force; Does the company give the new acquired line to existed sales force or continue to use the sales agents? Each company leader desires to leave the sales responsibility to their respective sales efforts. Lea Meadows currently employs 15 sales agents to represent its privately owned and manufactured company.
Their Net Sales were $5 million in a 15. 5 billion dollar market expected to expand next year. Sales agents employed by Lea Meadows however are not solely representing their brand, but tend to discuss lines from several of their available products with their customers. They are paid 5% of net sales and are guessed to spend 10-15% of their time on Lea Meadows products. BatesManor currently has Net Sales of $75 million in the 12. 4 billion dollar wooden furniture market. The 10 sales representatives call on 1000 retail accounts and earn a salary of $70,000 annually plus .
5% commission. The advantage to the BatesManor sales representatives is their knowledge and respect in the industry they function in. Sales representatives were making around 10 calls per week, averaging 3 hours per call. In order to grow within the industry, Bates would like to see the call frequency be increased to 7 calls per account per year to match industry norms. Alternatives BatesManor’s Vice President John Bott suggests that the Lea Meadows product line simply be given to the sales force at BatesManor.
The Essay on Lea Meadows Merger Company Agents
Alternative 1: Keep things as they are... at least for now. A big concern in this case is: at what point after the merger are the sales reps versus the sales agents discussions taking place? While management could make changes based on financial aspects of both companies (which will at some point have to be done), if these changes are occurring immediately after the death of one owner and a ...
Their sales force has the established relationships within the industry that can be advantageous and only 15% of sales call time is required to handle the Lea Meadows line. Martin Moorman, Lea Meadow’s national sales manager suggests the line should stay in the hands of the sales agents currently employed by Lea Meadows. His argument is based on the fact that the sales agents already have established contacts with the retail outlets based off of this specific product line. These sales agents also frequently contact clients that are not covered by BatesManor and in order to cover these clients BatesManor would have to hire
more sales representatives. Significantly, the sheer number of combinations associated with the Lea Meadows brand would require an extensive knowledge of the product line and intensive training. Recommendation We recommend to continue with the current sales force of BatesManor. With numbers evaluated the more economic option is to educate the current sales force rather than rely on a different sales distribution acquisition entirely. Lea Meadows employees would need to be incorporated, and Moorman would need to be either reassigned or fired which would strain personal relationships but is a better option economically.
