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CHAPTER ONE 

INTRODUCTION

1.1 Background Of The Study

To compete in today’s global markets, organizations strive to deliver their products (physical) and services (intangible) in both an efficient and effective manner. In service supply chain, human labour forms a significant component of the value delivery process and physical handling of a product leads to standardized and centralized procedures and controls in manufacturing supply chains, (Sengupta et al 2008:1). The focus of efficiencies in service supply chains is on management of capacity, flexibility of resources, information flows, service performance and cash flow management. Critical factors are demand management, customer relationship management and supplier relationship management in manufacturing supply chains and service supply chains. Sales force in any company – big or small, manufacturing or service, are charged with generating product sales from assigned customer accounts in independent territories. However, the evolving selling environment today is much more complex, demanding significant changes in performance metrics, goals, control and compensation.

South-East zone is an epitome of developing and concentrated businesses that engage sales force east of the Niger. The role of sales and marketing is becoming increasingly important to manufacturing and service firms (big and SMEs) in the South-East. Unfortunately, most of these companies do not apply the theories of sales management to their sales operations. They usually rely on past experience or judgment. Sales management is considered to be recognized management process activities involving the need to plan, set objectives, develop policies, procedures, strategies and tactics, to organize and co-ordinate, direct operations, motivate, communicate, develop staff, supervise and control and evaluate results, (Bolt 1987:28).

In sales management, Alexander Hamilton Institute reported in Kalu (2005:29) that motivation and supervision are two of the most important topics. Four success factors for sales success include: Product and Application, Selling Skills, Time and Territory Management, and Motivation. Among these elements, only motivation is important in all kinds of selling. Ubanagu (2006:190) stated that motivation is the effective managerial application of tangible and intangible incentives to improve the performance of the workforce. The obvious and distinctive feature of sales force activity is that it involves personal contact with the customers, that is, the need to persuade through personal visits, and the need to undertake other activities not directly associated with personation. Thus, all classes of sales force or salespeople, namely Route sales people, Sales clerk, Detail sales persons, Account representatives, Sales engineers and Creative sales persons require adequate and proper motivation.

The three popular methods of compensating sales people identified by Ubanagu (2006:190) are straight salary, straight commission and combined plans. He further explained thus:-

1. Straight salary: This system is mostly adopted when the management wants to motivate sales people to achieve objectives other than short run volume. Straight salary method of compensation is adopted in the following situations:-

a. When the individual sales person’s impact on sales volume is very difficult to measure in a reasonable time;

b. Where the sales people are engaged in missionary selling as in the MTN Nigeria; and

c. When the selling process is complex and involves a team or multi-level selling effort as in that of Guinness Nigeria Plc.

1. Straight commission: A commission is payment for achieving a given level of performance and are based on a certain percentage (%) of the sales essence units volume. However, MTN and Guinness companies base their commission on the profitability of sales to motivate the sales force in order to extend effort on the most profitable product or customers.

2. Combination Plan: It put the basic salary with commissions/bonus or both. If salary is combined with commission, the commission is tied to sales volume as in the case of straight commission plan. A bonus is a payment made at the discretion of management for achieving or surpassing some level of performance. The attainment of quota is often the minimum requirement for a sales person to earn a bonus as it is the case in Guinness Nigeria Plc.

The purpose of motivating subordinates/sales force is to get them to achieve objectives (results) that help the organizations, how to motivate employees remains a perennial challenge faced by managers. This study will therefore examine the effects of motivation on sales force performance in manufacturing and service companies with a view to making a comparative analysis, bringing out the areas of differences and similarities, and projecting more effective and modern ways of motivating the sales force for optimum productivity. So, Guinness Nigeria Plc and Mobile Telecommunications Network (MTN) in South-East, Nigeria were used for this purpose.

1.2 Statement Of The Problem

Customers are more demanding today than ever before. The target market require better goods, services and quick and reliable support than they had in the past. The sales force in the field who should have some wealth of knowledge and experience about the products, market, competitors, industry trends, do not seem to be active and effective as exemplified by failure to keep business promises, giving incorrect information to customers, and poor customer relationship management.

Specifically, greater percentage of the sales force in manufacturing and service companies have been major culprits in these practices including lateness to work and not keeping appointment at all. Others could be very unfriendly and even become hostile while attending to customers. Some sales force lose focus and consequently supply wrong brand of products to customers. These result in long waiting time for customers to receive the needed goods and services, and the consequent low performance as some customers lose patience and consequently take their leave and even go the alternatives. The poor attitudes of the sales force such as lateness to work, delayed sales calls, lack of information for customers problems, could contribute to the low growth of sales force performance in manufacturing and service companies.

The foregoing situations of the sales force in manufacturing and service companies in relation to economic performance raise issues on whether these companies can achieve and sustain high rates of output and growth, able to generate and sustain large numbers of employees, and whether they can compete effectively in the global market. The failure of sales force could have industrial, managerial and marketing implications which this study is set to explore, and which constitutes its research problem. Particularly in the context of how the sales force are motivated towards improving productivity using the incentives of salaries, sales calls allowances, sales bonuses, access to sales vans, product availability and continuous training and updating of the sales force.

1.3 Objectives Of The Study

Consequent upon the background of the study and the statement of the problem, the researcher will endeavour to:-

i) determine the direction from very high to very low levels of motivation of sales force in Guinness Nigeria Plc and MTN.

ii) Identify the differences in the motivational tools used on the sales force by manufacturing and service companies.

iii) ascertain whether staff preferred leave period and participation in decision making have significant effect on sales force performance in the two companies. iv) determine the most effective motivational incentives – insurance scheme, commissions, and regular pay used by either of the companies under study.

1.4 Research Questions

Based on the background of the study, statement of the problem and the objectives of the study, the following research questions were raised to guide the study:-

1. What is the level of sales force motivation in the two manufacturing and service companies (Guinness Nigeria Plc and MTN) under study?

2. What are the different motivational tools used on the sales force by the manufacturing and service companies?

3. What are the motivational effects of staff preferred leave period and participation in decision making on sales force performance of the two companies under study?

4. What are the most effective sales force motivational incentives used by either of the companies under study.

1.5 Hypotheses Of The study

Following the statement of the problem, the objectives of the study and the research questions raised therefrom, the following hypotheses were formulated to guide the survey:-

1. There is no significant difference in the level of sales force motivation in Guinness Nigeria Plc and MTN.
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2. There is no significant difference in the sales force motivational tools used by the manufacturing and service companies.

3. Preferred schedule leave period and participation in decision making do not have significant effect on sales force performance in Guinness Nigeria PLc and MTN.

4. There are no most effective motivational incentives used by manufacturing and service companies in Nigeria.