Pro-Audio Sales Agent Program

Based on the information Pro-Audio should not abandon the new program; however, some changes need to be made to make this a successful program for everyone involved. Several things may be the root cause for the lack of growth in sales under the new plan starting with the lack of marketing. For instance, customers were previously able to negotiate a price that they felt was a bargain by trading in old equipment or taking position of the property by a certain date but under the new pricing policy the cost of the equipment is fixed. The new pricing policy does not provide customers with an incentive for purchasing their product nor does the policy provide the retail agents with an incentive to sell more items. Pro-Audio needs to develop an incentive program for customers and retail agents for the purchase and sale of the audio equipment, which may boost sales. The incentive for customers would be the trade-in of old equipment, taking possession of the equipment on a set date, or an incentive for paying in cash versus credit. An incentive for the retail agents would be offering them a commission for driving up sales and bringing in new customers. Pro-Audio would keep the fixed price based on a list of pre-approved tradeoffs that allows the retail agent and customer to decide on how to proceed with the purchase (Nagle & Hogan, 2006).

With the trade off information, Pro-Audio should build on their pricing strategy because it is an ongoing process. The pricing strategy must be managed strategically, which involves three steps: diagnosis, policy development, and implementation. Pro-Audio must realize that prices change over time and management must keep up. Steve or his management team has to determine if retailers are getting around the fixed pricing clause or if it is only a rumor. Yes, Pro-Audio should enforce the fixed clause provision; however, they need to adjust the fixed price with the different tradeoffs such as paying in cash. A company policy should...