Collegiate Promotions Discussion
Please read the case and answer the questions at the end. Please respond to
two of your peers. Do you agree or disagree?
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.
Becoming an independent sales representative is easy. An interested person
pays a $300 fee to obtain catalogs and other literature needed to advertise
and sell the line of products. The sales representative then begins to write
orders for products. A sales representative can sell to anyone through any
channel. This means that there are no protected territories, so several sales
representatives are often working in the same geographic location. Many
representatives also sell through Internet websites.
Collegiate Promotions does not set an absolute price for its products. Instead,
it uses a wholesale plus pricing strategy that allows sales representatives to
sell within a relatively broad range. The range is normally 30 to 50 percent
higher than wholesale. For instance, if the wholesale price of a coffee mug is
$10, then the representative can choose to sell the mug at a price anywhere
between $13 and $15. The sales representative receives a commission of
half the amount charged over the wholesale price. If the mug sells for $13,
the representative receives $1.50. If the mug sells for $15, the
representative receives $2.50. Because they are independent contractors,
the sales representatives receive no other compensation.
Questions:
1. Do you think the compensation system at Collegiate Promotions is
effective? I do not think the method of compensation at Collegiate
Promotions is effective. They pay $300 to be a sales rep and can market
products in a range that is unfair to both the vendor and the consumer as
they choose.
2. Why would a sales representative try to sell at the top of the price
This study source was downloaded by 100000812546443 from CourseHero.com on 11-22-2023 07:08:36 GMT -06:00
range? Why at the bottom of the price range? Do you predict that most
https://www.coursehero.com/file/81755706/CH12-Collegiate-Promotions-Discussiondocx/
Please read the case and answer the questions at the end. Please respond to
two of your peers. Do you agree or disagree?
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.
Becoming an independent sales representative is easy. An interested person
pays a $300 fee to obtain catalogs and other literature needed to advertise
and sell the line of products. The sales representative then begins to write
orders for products. A sales representative can sell to anyone through any
channel. This means that there are no protected territories, so several sales
representatives are often working in the same geographic location. Many
representatives also sell through Internet websites.
Collegiate Promotions does not set an absolute price for its products. Instead,
it uses a wholesale plus pricing strategy that allows sales representatives to
sell within a relatively broad range. The range is normally 30 to 50 percent
higher than wholesale. For instance, if the wholesale price of a coffee mug is
$10, then the representative can choose to sell the mug at a price anywhere
between $13 and $15. The sales representative receives a commission of
half the amount charged over the wholesale price. If the mug sells for $13,
the representative receives $1.50. If the mug sells for $15, the
representative receives $2.50. Because they are independent contractors,
the sales representatives receive no other compensation.
Questions:
1. Do you think the compensation system at Collegiate Promotions is
effective? I do not think the method of compensation at Collegiate
Promotions is effective. They pay $300 to be a sales rep and can market
products in a range that is unfair to both the vendor and the consumer as
they choose.
2. Why would a sales representative try to sell at the top of the price
This study source was downloaded by 100000812546443 from CourseHero.com on 11-22-2023 07:08:36 GMT -06:00
range? Why at the bottom of the price range? Do you predict that most
https://www.coursehero.com/file/81755706/CH12-Collegiate-Promotions-Discussiondocx/
