Case Synopsis, Uses, Discussion Questions, and Answers
78
CASE 31 Diamond in the Rough
Synopsis:
Use:
Chapter 15 Generate a discussion of the pros and cons of different methods of compensating
salespeople.
Discussion Questions
1. What are the advantages and disadvantages of the various alternatives Ruth Diamond is
considering?
100% salary Salary +
Commission
Annual
bonus
Motivate salespeople to make
sales
– ++ +
There are advantages and disadvantages to each of the compensation methods that Ruth
Diamond is considering. The present system, 100 percent salary, does not put pressure on the
salespeople to make sales and thus enables them to spend more time developing long-term
customer relations, performing nonselling activities such as setting up displays and making sure
the selling area is neat, and providing services to customers. However, Ruth Diamond is
Case Synopsis, Uses, Discussion Questions, and Answers
79
Commissions provide incentives for individual salespeople and thus might lead to conflicts
among the sales staff. All of the salespeople will want to work during the peak selling hours and
not work on the off hours. Conflicts might arise over who is responsible for a sale. For example,
a salesperson might spend a lot of time with a customer. The customer then wants to discuss the
purchase with his or her family and returns to buy the fur coat during a time when the original
2. Do you have any other suggestions for improving the store sales?
Ruth Diamond can consider altering other elements of the retail mix to increase sales such as
3. What would you recommend? Why?
The advantages and disadvantages of the plans above should be the basis for answering this
question. To some extent the decision should be based on Ruth Diamond’s objectives
80
CASE 32 A Stockout at Discmart
Synopsis: Discmart is a discount retailer similar to Target and Walmart. On a recent Sunday
morning, an irate customer in the store was complaining about how the store was out of
stock of an advertised special on the morning of the first day of the sale.
Use:
Chapter 15 Examines issues in store management, including stockouts.
Discussion Questions
1. Why did this service breakdown occur?
Generally speaking, the service breakdown occurred because Discmart was out of stock of an
2. How was this service gap related to the other gaps (standards, knowledge, delivery, and
communications) described in the gaps model in Chapter 17?
This service gap, like all service gaps, is a combination of all of the gaps that comprise the gaps
model, which are described below:
Knowledge gap:
customer expectations.
Standards gap:
and the customer service standards it sets.
Case Synopsis, Uses, Discussion Questions, and Answers
81