Midlands State University s4

MIDLANDS STATE UNIVERSITY

FUCULTY OF COMMERCE

BUSINESS MANAGENT DEPARTMENT

NAME ANOLD MATURURE

REG NUMBER R11538E

PROGRAMME HMANvs

LEVEL 2.1

MODULE MM 202

LECTURER MRS NGWENYA

DUE DATE 30 JANUARY 2012

QUESTION: With the aid of examples discuss how the micro and macro environment factors have affected the sales force management from 2000 to date in Zimbabwe THE EFFECTS OF THE ENVIRONMENT ON SALES FORCE MANAGEMENT IN ZIMBABWE SINCE 2000.

INTRODUCTION

According to Kotler (2002) the business environment can be divided into two bread broad areas, i.e. the macro environment and the micro environment. Lancaster (2011) goes on to define the micro environment as ‘ those elements over which the marketing firm has control or which it can use in order to gain information that will better help it in its marketing operations. In other words, these are elements that can be manipulated, or used to glean information, in order to provide fuller satisfaction to the company’s customers.’ The microenvironment of an organization therefore comprises the elements like internal process design, its employees and shareholders, its customers and suppliers and even its competitors. 2marks

Lancaster (2011)further defines the macro environment as ’those global elements over which the organization has no control over but which affect the organization’s ability to serve its customers profitably.’ There are six major macro environment forces: cultural, demographic, economic, natural, political, and technological. The cultural environment includes institutions and other forces that affect the basic values, behaviors, and preferences of the society-all of which have an effect on consumer marketing decisions. The demographic environment includes the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistical information. The economic environment consists of all factors-such as salary levels, credit trends, and pricing patterns-that affect consumer spending habits and purchasing power. The natural environment involves all the natural resources, such as raw materials or energy sources, needed by or affected by marketers and marketing activities. The political environment includes all laws, government agencies, and lobbying groups that influence or restrict individuals or organizations in the society. The technological environment consists of those forces that affect the technology and which can create new products, new markets, and new marketing opportunities.2marks

ZIMBABWE’S MACRO ENVIROMENT AND EFFECTS ON SALES FORCE MANAGEMENT SINCE 2000 The macro environment can best be analyzed using the PEST analysis, which is an acronym for the five most critical elements of the macro environment that affect any organization. The acronym stands for Political, Economic, Socio-cultural, and technological issues facing a country. Each element will be analyzed in turn and its effect on sales force management will be discussed.

POLITICAL ISSUES:

There are two major Political undertakings which occurred around the year 2000 which greatly affected Zimbabwe’s economy. In fact the two decisions affected the rest of the other elements in PEST so greatly that the consideration of the other elements revolve around those two decisions. The first which was taken in 1998 but continued to 2002 was the participation by the Zimbabwean army in the Democratic Republic of Congo(DRC) civil war. For the average Zimbabwean there was really no reason for the government to spent millions of dollars in a war that did not involve any threats or benefits to the country. Of cause the political leadership had their strong reasons. However the cost of the put such a huge pressure on the country economically that it marked the beginning of a ten year shrinking of the economy. The second decision in 2000 was the land reform programme which in principle was to redress the imbalance of land ownership between the black majority and white minority. The effect was a sharp decline in agricultural output as the white commercial farmers were mostly replaced by either politician and high ranking government officials most of whom were not really passionate about farming or by peasant farmers who had neither the technical knowledge nor resource to undertake farming at commercial level. 2marks

From 2000 up to around 2005 most organizations remained optimistic that a solution to the country’s problems would be found quickly, especially through a change of government. Organizations however became reluctant to hire new people. Delta Beverages for example resorted to developing and upgrading work force including their sales force from what they already had.1 mark During the same era shortages of basic commodities began to surface. Organizations could therefore do without serious sales force management strategies. Anchor Yeast took a stance not to replace any sales force member who left. 1markMany organizations however took a position to keep their sales force well remunerated and to keep up with inflation they started to review compensation packages quarterly rather than annually or bi annually.1mark Victoria foods, Inscor, Anchor Yeast and Afrifoods are some organizations that began to review packages quarterly.

According to Wikipedia.com (2012) from 2006 up to end of January 2009 the Zimbabwean economy started an ever increasing recession. The ruling party ZANU(PF) remained in power and due to bad international publicity from the above two decisions as well as accusation from many sectors of election cheating, the economy of the country began to melt down very fast.

ECONOMIC AND SOCIAL ISSUES.

After it became clear that a solution was not to be found soon a lot of the country’s best sales force left the country to look for better opportunities abroad, the most favored countries being the United Kingdom, the United States of America and South Africa. Organizations like Delta Beverages, where part of the sales force are people with skills like class one and two drivers who double as route salesmen, were the most affected 1mark. During the period between 2006 and 2009 the Zimbabwean economy turned from being one of the best in Africa to being one of the worst1mark. The country’s production in sectors had beed dropping since 2000, but during this period the decline was acute. There was wide spread shortages of basic commodities. Inflation rate rose to three, then six then nine figure levels 1mark. The general public lost faith in the local currency. There was wide spread evidence of fiscal and monetary indiscipline in the government. In reaction to hyperinflation the government imposed unrealistic price ceilings which led to further shortage of basic commodities and triggered a thriving black market for the commodities1mark. The banking system in the country broke down and there emerged a thriving foreign currency exchange black market.1mark Due to the hyper inflation and shortages of basic commodities, formal employment was shunned as it was no longer rewarding and millions of Zimbabwean quit their formal jobs to join the informal international commodity trade or foreign currency exchange activities which were more rewarding.

On the socio cultural perspective families which form the basic unit of Zimbabwean social structure broke down as spouses separated to look for survival means. This led to wide spread infidelity and prostitution. To add to this in May 2005 government undertook an operation to destroy illegal structures in the urban areas. The operation was coded Murambatsvina, and according to United Nations reports, the operation left an estimated 700 000 Zimbabweans homeless and without any livelihood1mark.

Sales personnel were not spared from these macro socio-economic difficulties. Since companies had scaled down or stopped production due to price controls, the Sales force had nothing to sell. If they had they were competing with a thriving black market. If any organization made any efforts to motivate their sales personnel it was by paying them in basic commodities called food hampers, which they either took home to their families or to the black market for foreign currency 1 mark. Most organizations in the bakery, milling and other food processing industry closed down. Downing’s/Superbike closed down never to recover. Lobels bakery were forced to produce bread or face prosecution on sabotage charges and up to today they are in financial problems. For two years from 2007 to 2008 Anchor Yeast operated at below 6% capacity1mark. National foods and Olivine closed their Bulawayo operations. There was just nothing that could be done to motivate or retain the sales force that the organizations had recruited and trained at a cost. The best of the sales people therefore left the country or joined the informal sector paralyzing the sales function of many organizations.

TECHNOLOGICAL ISSUES

During the period between 2000 and 2009, Zimbabwe’s economy was in a continuous recession. As a result the country suffered a severe infrastructural decay when neighboring countries were advancing in technology. Zimbabwean industries could not maintain their out dated technology let alone invest in modern technology1mark. Only after the introduction of the multicurrency system after the formation of the government of national unity did some organizations start recapitalizing. However these are so few that on a national level, Zimbabwe is still far backwards in terms of technological upgrade. E.g

The current trend the world over is sales force automation but maybe the only sectors which have done something in that line are the mobile telecommunication and the banking industry. Products like ecocash and mobile banking are examples1mark. However the rest of the sales force in Zimbabwe have to fight for the same customers with competing imports from countries that have upgraded both their manufacturing and sales technology. It might be easier to place an order for a commodity in South Africa via internet or email than buying the same from Harare when you are in Gweru. Bakeries can place orders of yeast to Anchor South Africa than to Anchor Yeast Zimbabwe who do not even have a website. Catalogues of used cars from Japan are more accessible and more informative via the internet than catalogues of Mazda Motor Industries or Nissan Clover Motors both in Harare. The current technological set backs are costly to Zimbabwean companies and make it difficult to motivate the Sales Force in Zimbabwe. In spite of the use of multi currency, the remuneration for Zimbabwean Sales personnel in far below international standards e.g.

ZIMBABWEAN INDUSTRIES’ MICRO ENVIROMENTS AND EFFECTS ON SALES FORCE MANAGEMENT SINCE 2000

The micro environment is heavily affected by the prevailing macro environment in sphere of operation of the business. From 2000, the Zimbabwean micro environment was there a reflection of the above mentioned issues. Some of the micro environment factors heavily affected by the above macro environmental issues are as follows:

THE INTERNAL PROCESSES

During the period 2000 to 2006 most organizations still maintained proper business processes in their operations. Unethical conduct was occurring but in isolated cases. Business were still upholding corporate governance standards. However during this period foreign currency was already in short supply. There was a thriving black market for foreign currency but it was frequently used by the informal traders and the general public who wanted to avoid the inconvenience associated with sourcing the currency from banks. Due tomto this anomaly in the financial system of the country, the official bank rate was much lower than the black market rate. This triggered unethical practices in many financial institutions and to the wide spread liquidation of financial institutions and assert management companies. The best example is the CFX bank and the ENG assert management company 1mark. This was the beginning of serious corruption fund externalization and lack of accountability in many organizations. From the period 2007 to 2009 almost all organizations were dealing in foreign currency on the black market. It became more profitable for organizations to play speculative games with foreign currency on the black market that to engage in production of goods and services for sale. Sales force management like any other people management was heavily neglected. Widespread shortages of everything led to demand for goods far surpassing supply. Therefore the immediate need for proper sales force planning and management was overlooked 1 mark e.g.

EMPLOYEES

During this period Zimbabwe lost more than three quarters of its qualified and experienced work force to neighboring countries (Crush 2001). Zimbabweans could not provide for their family needs by working in Zimbabwe. Teachers, nurses, engineers and of cause Sales people left the country in droves to look for employment mostly in South Africa. Being a an office cleaner in South Africa was much better than being a Sales manager in Zimbabwe at the time. A cleaner could earn money sufficient enough to support his family, i.e. buy food clothing and provide shelter. The approach to Sales force management was laisez faire. No one bothered about performance anymore. Both management and the sales force were caught in the same web of poverty and people spent most of their time looking for their next meal. This only changed for the better with the formation of the Government of National Unity and dollarization in 2009 1mark. The current state is still a recovery state. However positive gains are being realized especially in the retail industry. Sales force planning and management is now taking the normal forms of remuneration by commission comparison of performance to staffing levels.

SHAREHOLDERS

From around 2000 to 2006, share holder value was retained in most companies. However from 2007 to 2009 most of the shareholder’s equity was eroded as companies made perennial losses. Due the state of the economy, and weird transaction facilitated by financial institution, hard currency was value at more than one thousand times the value of soft currency. $50 could there fore buy goods worth $50 000 if converted and used in the form of cheques or bank transfers. The shareholders bore the cost of this disparity. Parastatals, hospitals and colleges suffered the most in this regard. A student could convert $7 to soft currency and pay the whole year’s tuition fees. This led to the share holders holding on to their financial asserts instead of reinvesting.1mark e.g This in turn led to massive decay of infrastructure especially sales and marketing infrastructure as the two function became irrelevant non value adding to most organizations. The skeletal sales force that remained in many organizations had to work with obsolete equipment.

CUSTOMERS AND COMPETITORS

During the period 2000 to 2009, customers gradually lost faith in their suppliers. The Zimbabwe dollar discouraged even the most risk taking exporters to try the Zimbabwean market. There were serious food shortages, there was a ready market for the product, but exporters shunned the local currency which could expire in a day’s time by inflation or at the call of the Reserve Bank governor. The result was that customers remained unsatisfied and lost faith in local businesses. Completion???/ in industry remained local, i.e. local companies competing. However in the strict sense there was no competition in Zimbabwe. All industries were producing far below demand and the result was shortage. The Sales force at that time became uncompetitive and complacent. Customers were no longer respected. This is the supplier –customer relationship that was ushered into the new dollarized economy in 2009. With dollarization it how ever became worthwhile for foreign companies to push their products into Zimbabwe. They were swift and rode on the sour relationship between Zimbabwean consumers and their producer industries. Zimbabwe was suddenly flooded by South African, Zambian and Mozambiquean products which were cheaper since Zimbabwean businesses were used to profiteering on then little they produced1mark e.g of companies. This is the current situation in Zimbabwe. Consumers prefer cheaper imports and have negative perceptions of a Zimbabwean business man. Management of local sales force requires more imagination and creativity than ever before. The sales force has to compete with cheaper superior products with poorer technological and information resources.

Thus was Zimbabwe from 2000 to 2009????. A very exciting period and experience was passed through. The whole Zimbabwean work force including those in Sales went through a difficult time. Some came out worse, others better still others perished in the period under review. REFERENCES

1. Kotler, P. (2002). Marketing Management 13th ed. Prentice Hall , New Jersey

2. Lancaster, G. (2011). Essentials of Marketing Management. McGraw-Hill Higher Education. London

3. Crush, J. (2009). The brain drain from Zimbabwe in Migration policy vol 29

4. Baran, R. et al(2009). Customer relations management. Pearson Publishing, Australia.

5. Available online www.quickmba.com visited 19 January 2012

6. Available online www.wikipedia.com visited 19 January 2012 2mark