THM Caselet

Caselet 1: Java Coffee House

Michelle Wong is manager of the Java Coffee House at a busy location on Union Street in San Francisco. Michelle says that there are several challenges in operating a busy coffeehouse, such as training staff to handle unusual circumstances. For example, one guest consumed a cup of coffee and ate two-thirds of a piece of cake and then said he didn’t like the cake. Another problem is suppliers who quote good prices to get her business and then, two weeks later, raise the price of some of the items. Michelle says that young employees she has at the Java Coffee House are her greatest challenge of all. According to Michelle, there are four kinds of employees – lazy; good but not responsible; those who steal; and great ones who are no trouble. 1. What are some suggestions for training staff to handle unusual circumstances and how can they handle such customers? 2. How do you ensure that suppliers are delivering the product at the price quote? Caselet 2: International Travel Agency

The president of International Travel Agency was concerned about the performance of the sales force. It was felt that members of the sales force did not really utilize their sales opportunities, but instead though only about selling a ticket to a customer from point A to point B. The sales force did not seem to have an interest in maximizing sales and profits by aggressively selling the entire product mix. In total, the agency had a sales force of eight. Three members of the sales force were referred to as executive sales consultants. These people called on commercial accounts and were expected to spend more of their time outside the office. The remaining five persons were referred to as travel counselors and worked entirely within the agency. None of the travel counselors who worked within the agency were assigned a quota. The executive sales consultants, who worked outside the office, were assigned a sales quota. Failure to meet a quota would be discussed with the salesperson, but no other action was usually taken unless this failure continued for several months. If serious and persistent deficiencies existed, the salesperson could be subject to discharge. The agency provided nine to twelve familiarization (fam) trips for members of the sales force each year. This meant that each salesperson could experience at least one trip per year, as they were assigned on a rotating basis. These trips did not reduce time from the salesperson’s guaranteed number of days of annual vacation. The purpose of a fam trip was to acquaint travel agents with destination areas and the services of airlines, hotels, restaurants, and so on. The president felt that the agency could maximize profits by selling more travel services to clients and that the sales force was concerned only about selling tickets. An analysis of the product mix of International Travel revealed that approximately 85 percent was accounted for by airline tickets. The remaining 15 percent consisted of allied travel services, including hotels, rental cars, and entertainment. Of these, the majority consisted of hotel reservations. Less than one percent was accounted for by the sale of traveler’s checks. One of the members of management offered the analogy of a businessman entering a clothing store. If a customer purchases a suit, the salesclerk asks if the customer might need a new shirt or tie to go with the suit. Travel agents are no different. They write a ticket from Chicago to Hong Kong or London for a client and never bother to ask if the client needs hotel accommodations, rental cars, travelers checks, or other services that an agency handles. The president of International Travel had tried to encourage the sales force to sell other services but felt that they seemed uninterested in taking the time and effort required. The president believed that maximizing sales of the complete product mix would lead to maximum profits and that something must be done to encourage cross-selling. 1. What can be done to encourage the sales force to engage in more cross-selling?

2. Discuss what is needed in terms of sales incentives and sales controls to achieve the objectives of International Travel Agency.