Hercules Motorcycles Ltd

Hercules Motorcycles Ltd  CAST STUDY  solution

Rajan, the regional sales manager of Hercules Motorcycles Ltd. (HML), has just completed the monthly meeting in his office with his six dealers of Chennai. Rajan is quite upset as the meeting did not go well as planned. The problem started with the targets for the next month he gave to the dealers. None of them was willing to accept it saying that the targets were too stiff and not achievable. The dealers were also not convinced about the ability of the proposed promotional support for the month helping them achieve the targets. The problem is compounded as 25 per cent of the margins to the dealers are directly linked to achieving their monthly targets. MS-62 2 This is third month running that Rajan is facing the target issue with the dealers. Rajan strongly believes that (HML) and its sales management team understands the company needs, the competition and the prospects better and hence they can decide the targets for the dealers. The dealers have been missing the targets in the previous two months. In the first month only two dealers beat the targets and in the second month only one dealer could meet his target. In the current third month targets just given to them are even stiffer as Rajan is under pressure from his VP-marketing to make up some of the losses of the previous two months. He is planning to meet five of his Bangalore dealers the next week and is sure to face a similar situation.

Questions :

 (a) What should be the course of action taken by Rajan, to ensure that the targets are met ?

(b) Suggest a system of sales planning for the future to avoid such situations in future.