2OptionAdvantagesDisadvantagesDirect SalesBetter access to customer information; Z Corporation’s sales people could tell them why people want to or why people do not want to buy the Z402 system.Having our own sales people mean that we can train them better and have them thinking about our product all the time.With that being said, Z Corporation’s sales people won’t be lying to the company about the company’ssales efforts since the sales people pretty much make a living from the company, unlike distributorswho always gives good news in order to keep the offering in their line.Internal sales force: everyone will understand the product and work hard every day to maximize salesRough patch in the beginning but as it progresses, having our own sales people will have a decent sales rate. The drawbacks from internal sales are driven by time, fixed expense, and limited coverageIt takes time to recruit good sales people (hard to find good sales people and it is time consuming). Internal sales force is capacity constrained; a distributor network can provide the company witha lot of sales people covering ground for the company with a relatively small start-up expense. Internal sales force will necessarily be smaller; cover a little ground, and not many phone calls can be given in a day.Building an internal sales force is costly (needs big commitment) which includes salary, expensesand bonuses. It is expected to cost over $200,000 annually (which is considered as a fixed cost since they are on a payroll). Distributors work solely on commission.To get a good internal sales team requires hard work and will make some hiring mistakesWith direct sales force, the corporation has to findpeople located in the markets where the product ismost valuable (such as the Detroit area and California in addition to the Northeast); Geography makes recruiting difficult as the corporation will have to find people outside of Boston and do not have a lot of contacts at this point in time. The difficulty in finding people outside the company’s area is due to the company’s desire to find great sales people (it will require a lot of time to do this).Realistically speaking from John Kawola’s point of view, the company would not get any sales from new sales people for six months if the company started the search immediately. Sales of the Z402 require multiple face to face meetings; pack up a van with the z402 system in the back and drive to the office of prospective customers.CAD distributorsResellers were very knowledgeable about their existing customers and could steer Z Corp’s machines to those customers who would likely be the first purchasers of the Z402 system.
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