MEMO

To: Professor Soltero

From: Team 5, Pilgrim Drug Company Consultant

Subject: New Sales Territories-Recommendation

Date: October 13, 2018

______________________________________________________________________

On May 1, 1998, David Thomas transferred to Syracuse, New York and became the
division sales manager of Pilgrim Drug Company. Only six weeks into his new position, he
became aware that one of the most successful veteran sales people, Bill Brooks, planned to retire
the following month after initially requesting to extend his retirement. Brooks had been a major
asset to the company, but Thomas seemed to unintentionally neglect this fact as he immediately
thought to announce that he would work on reassigning individual accounts among the division’s
sales representatives. The possibility of reassigning territories does not seem to sit well with
many sales representatives and even Thomas’ direct boss, Robert Jackson, warned him that while
sales could potentially rise, there would be major opportunity costs involved: diminished
company morale and overall trust in and respect for the new manager. As a result, while a
change in sales force deployment could help increase company revenues, it is our suggestion that
David Thomas does not redeploy the salesforce in the various territories. It is more important to
keep veteran salespeople happy who have built the company up from virtually nothing and teach
them new selling techniques as well as provide active mentorship for newer sales representatives
and trainees. The selling process is currently broken/disturbed, so reassigning people will not
truly solve the greater company issue.

The two alternative options that we considered were redeploying the entire salesforce into
new territories or keeping people in their same locations (and reassigning Bill Brooks’ territory if
necessary). The criteria that we used to evaluate the potential of redeployment were as follows:
ability to manage territory size, business potential, propensity to create profit, effect on
relationships in current territory, years of experience, and willingness of salespeople to adapt to
regions. After evaluating the two options using a scale of one to five, with five being the most
favorable and one being the least favorable, it was decided that it would be wiser to keep
salespeople in their current territories and reassign Bill Brooks’ territory if needed. The potential
qualitative consequences of redeployment were the most important criteria in making the
decision to keep people in the same territories. We do not want to see a decrease in profitable
relationships. The option to not redeploy was more favorable in all criteria categories except for
ability to manage territory size.
 As mentioned in the company report, Thomas believed that his predecessor never truly
enforced sales policies prescribed by the New York office, so before considering redesigning
territory management, it is suggested that each sales representative be reminded of the three-step
sales plan for increased profitability and brought up to date on merchandising methods. Senior
sales representatives will also participate in a mentorship program with the younger
representatives and trainees as a way of increasing proper communication amongst territories,
sharing techniques that work, and teaching about proper relationship building. The veterans of
the company have formed strong bonds with their customers, which is another reason as to why
redeploying them would hurt the company. If customers are accustomed to completing
transactions with the same person for many years, a new face may make the customers fearful
and begin searching for alternative drug companies. Also, Pilgrim Drug Company has always
had a low turnover rate amongst their senior representatives, so by not redeploying them and
allowing them to mentor younger representatives, they will likely stay with the company and
perform even better because of being treated with the utmost respect that they have earned.

Bill Brooks will hopefully stay with the company now that his territory will not be
reassigned. It was rumored that he wanted to retire earlier than initially requested simply
because his pension is based on his earnings from the last five years of active employment. If he
can continue to thrive in his comfort zone, he will want to stay with the company. If for
whatever reason he still decides to leave, Clifford Nelson will take over most of his territories
and John Murray will help run one of them with Nelson. Additionally, trainees will be assigned
to assist with Matt Donnelly’s, Clifford Nelson’s, and Bill Brooks’ (if he stays) territories. The
trainees will help with these areas because Donnelly is overworked and because Nelson and
Brooks are extremely experienced and could teach them a lot prior to retirement and groom the
trainees to take over their own regions (potentially these profitable ones if deemed worthy based
upon qualitative results).

David Thomas must inform the sales representatives that he is going to keep people in
their current territories and only move them in the future if essential, which will keep
representatives on their toes. The transition should be presented and communicated twice: once
to senior sales representatives and once to the younger, greener, sales representatives and
trainees. By explaining territory assignment by seniority, there will be a less likely chance of
people arguing that the decision is unfair. Additionally, Thomas should include senior sales
representatives, like Clifford and Brooks, in the transition and get their feedback on which
trainees they want to work with and mentor to avoid an exodus, as both provide years of
invaluable experience to both the position and company. Three potential implementation issues
could result from Team 5’s recommendation: protests from senior sales representatives who
wished to take over Brooks’ territory if he still decides to retire, frustration from younger sales
representatives because of not being provided with new opportunities, and anger from Division
General Manager, Robert Jackson, because of Thomas seeming indecisive in the assignment of
territories. Overall, the idea to keep people in the same location will likely help the company as
long as Thomas actively works with the sales representatives and trainees on educating them of
the evolving world of sales and reminds them about the vitality of relationship building and
maintenance within their territories.
New Assignments without Brooks on the team:

Criteria Chart:

Keep Them in Current Territory

Ability to Manage
5 3
Territory Size

Business potential 3 4

Propensity to
3 4
create profit

Effect on
Relationships in 3 4
Current Territory
 Years of
2 3
Experience

WIllingness to
2 3
adapt

Total 21
18

Improved communication,
Synchronized efforts between
Results cohesive operations between
Marketing and Sales
departments