Changing elements in marketing-general business environment

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Reference no: EM132252538

Changing elements in the marketing and general business environment can quickly affect even the most successful business. Francesco's Bike World is facing multiple problems that have combined to put the chain in a serious sales and financial decline. What is surprising is that it has taken four years of unsatisfactory results for Francesco to decide something is wrong!

Beyond the compensation plan itself, however, what other information might be useful for Francesco to consider? Does the nature of their product offerings make them more vulnerable to the economic downturn? How important a factor could rapid overexpansion be, and could this cause problems between the stores? Are other competitors experiencing problems due to supplier price increases and general economic struggles, and if so, what are they doing about it? Are there larger, underlying marketing issues beyond simply sales compensation and motivation? If Francesco and Luca are correct, what changes to the compensation plan might be made to offset this situation? Consider these possibilities as you answer the 3 questions in the text box below.

1. Did Francesco and Luca do a good job of assessing the situation with respect to the compensation plan? What other information would you like to have that is not given?

2. What were the advantages and disadvantages of Francesco’s straight salary compensation plan? What were the advantages and disadvantages of his straight commission plan?

3. Given the preceding facts, recommend to Francesco a combination compensation plan that would best suit his situation. What other compensation devices might you use in addition to bonus, salary, and commission? Explain your recommendation.

Reference no: EM132252538

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