Promotions Case

Intro

Collegiate Promotions distributes products that are marketed to students and alumni of major universities. High-selling products include coffee mugs and T-shirts that bear collegiate logos. In order to distribute its products, Collegiate Promotions has adopted an independent sales representative model. The sales representatives work for themselves and are not actual employees of Collegiate. They have independent contractor status. (Stewart, 2009)

Evaluate whether or not the compensation system at Collegiate Promotions is effective.

In my opinion the compensation system at Collegiate Promotions is effective because the contractors can set their own price. By setting their own price they get to choose how much compensation they will receive from the products that they sell. This system also gives them room to negotiate with clients. For example, if a contractor was selling mugs for $15 but the client was only willing to pay $13 he could submit to that price and still generate a profit. Furthermore, this system probably gives the contractors motivation to sell more products because they have a sense of control over the business.

Discuss reasons a sales representative would try to sell at both the top and the bottom of the price range.

A sales representative would want to sell at both top and bottom ends of the price range because of the needs of their clients. If you have a client that more than likely will purchase a lot of products, like a College, he or she could sell at the bottom of the price range. This would be wise because they would be purchasing a huge order, and would feel as if they are getting a deal, and the representative would receive a greater profit. For a smaller client one should sell at the top of the price range because they would be purchasing fewer products. However, the representative could mention to the client if they purchased more products they could be more negotiable on the price. In my opinion this would influence the buyer to increase the order, thus increasing profit.

Predict whether the most sales are made at the top or bottom of the range of possible prices. Explain your prediction.

My prediction would be that most sales are made at the top of the price range. My opinion comes from the fact that most Alumni, college students, or fans will spare no expense to represent their favorite college or team. Sports have been merged into the culture of Americans, from entertainment to recreational activates. Some take it very serious, to the point of it being a family tradition to attend a specific university or college, or simply because they were a fan of the team growing up. Some even gamble currencies on the winning of a team,

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