1. Of theinformation provided in the case, what is most important in yourdesign of a sales incentive plan for the three sales staff? How doesthis information affect your plan design?
The design of asales incentive plan will be mostly influenced by the fact that manyfans buy less expensive tickets but switch to unoccupied premiumseats after the game begins (Milkovich, Newman, & Gerhart, 2014).In this respect, the plan will seek to motivate the sales staff tosell more premium tickets. Although such seats are more expensivethan others, officials are unable to intervene. The information aboutfans shifting seats during games influences the plan design inseveral ways. Firstly, the sales staff should be offered commissionsdependent on the number of premium tickets sold. Secondly, fansshould be incentivized using gift hampers and discounts. Notably,having a weak team leads to a lower average of seats purchased duringgames at the arena. Also, the seats are quite undesirable (Milkovichet al., 2014). The management would need to consider ways ofpreventing fans from moving to premium seats. Consequently, the salesincentive plan should be geared towards modifying the perceptions offans.
2. Your textbooktalks about unit rate plans. Which of these types of plans would youuse for sales of tickets? Which plan might be appropriate for salesof advertising? Why?
In the sale oftickets, I would use the ramped commission plan to reward thepersonal efforts of the sales personnel. On the other hand, thepooled commission plan would be appropriate for the sale ofadvertising due to the value of teamwork. The success of the salesteam has a direct impact on the actions of the advertising team(Milkovich et al., 2014). Low sales of tickets would invariablyaffect the sale of advertisements. In this regard, the team’sperformance is directly related to the selling of tickets. During theperiod when the team was performing well, the tickets were frequentlysold out. In fact, the sales team filled over 20,900 seats in the1990s (Milkovich et al., 2014). Therefore, improving the team`sperformance has a boosting effect on the sale of both tickets andadvertising.
3. What factorsinfluence the dollar amount you can pay for increases in ticketsales?
Several factorsaffect the dollar amount paid for increases in ticket sales. Forexample, the state of the economy plays a significant role in thatpeople spend less on entertainment during financial meltdowns.Moreover, the level of marketing also determines the number ofbillboards (Milkovich et al., 2014). Consequently, more advertiserslead to a reduced amount of dollars paid for increases in ticketsales.
Milkovich, G. T., Newman, J. M., & Gerhart, B. A. (2014).Compensation. New York, NY: McGraw-Hill/Irwin.