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Hanover Bates

In: Business and Management

Submitted By ahsanarshad
Words 3189
Pages 13
Benjamin vonWurmb

Hanover-Bates Chemical Corporation

Background

The Hanover-Bates Chemical Corporation is a leading distributor of processing chemicals for the chemical plating industry. The company currently employs 40 sales reps in seven sales districts, and its products are fashioned in four plants which are located in Los Angeles, Houston, Chicago, and Newark. Hanover-Bates prepares its products for customer use by mixing chemicals from a broad range of suppliers. Salaries of Hanover-Bates sales representatives range from $33,000 to $45,000, with fringe benefit costs amounting to an additional 15% of their salary. A commission of 0.5 percent is paid, based on dollar sales, on all sales up to established sales quotas. Commission on sales in excess of quota is one percent. District sales manager’s salaries range from $47,250 to $52,000. (515) They are not paid a commission in excess to salary. Hanover-Bates and the majority of the firms in its industry produce the same line of basic processing chemicals. Minimal quality difference exists between Hanover’s products and those offered by its competitors, however, some of these chemicals, such as CHX (a protective post-plating chromate dip), provide a much higher gross margin than others. (See Exhibit 4)
Introduction
James Sprague is the newly appointed Northeast district (also know as District 3) sales manager for Hanover-Bates Chemical Corporation. He is now in charge of helping that district improve its currently dismal product performance numbers. Sprague’s predecessor was not a good sales manager. He had an attitude of reluctant compliance to company wishes and was subsequently persuaded to take an early retirement. When Sprague was named the new manager he was told that although the Northeast sales district ranked third in dollar sales it was the worst district in terms of

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