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lisabon 2012 [21]
3 years ago
7

IN A DEPARTMENT STORE, SALESPEOPLE ARE REWARDED BASED ON THEIR SALES VOLUME. THE PROBLEM IS THAT THEY ARE GIVING SUBSTANTIAL DIS

COUNTS AND PRESSURING CUSTOMERS TO MAKE UNNECESSARY PURCHASES What are the reasons for the negative consequences of these bonus schemes? Modify these schemes to solve the problems.
Business
1 answer:
8090 [49]3 years ago
5 0

Answer:

This bonus scheme has two main problems:

  1. consumer satisfaction will decrease because they are pressured to make unnecessary purchases and once they realize it they will not be happy with the store nor with their purchasing experience. This will damage the relationship between the store and its customers.
  2. since salespeople are offering substantial discounts in order to boost sales volume, then the profits of the company will decrease.

In this situation both lose, the company and its customers.

In order to solve this issue, the store should award bonuses based on total revenue and gross profit margin, not volume. This way, the salespeople will try to sell their products at the normal price, which means that they will have to convince their customers through other strategies and not just low price. The sales technique will have to shift from low cost to differentiated product that can satisfy their customers' needs.

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The answer is stated below:

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By completing form 8888 from tax application

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