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Allen

AD maintains the right to set its own prices
AD differentiates from competitors through its offered services (mas bulok yun AD):
*cooperative advertising
*store displays
*inventory control
*credit arrangements
Sales often depended more on the personal relationships developed between the customer and company salespeople
AD’s sales force concentrated on maintaining current accounts and on expanding sales by securing outlets carrying competing product lines where brand differentials could be emphasized
Commission of 1% for net sales to salespeople + 1% commission on net sales to new accounts
Sales during the first four months of 1967 declined 2% as compared to the previous year
Intensified sales campaign needed for new outlets to improve sales
Prize system to reward sales personnel for successful efforts
Purpose not to minimize credit losses but to maximize profits
*THE SELECTION AND HANDLING OF MARGINAL ACCOUNTS MADE THE DIFFERENCE BET*WEEN PROFIT AND LOSS.
An increase in sales volume for AD usually meant increased sales for the company
1000 new requests for credit annually
Considerations in evaluating a marginal account:
a. Cost of handling the account
b. Current and potential profitability of the account
c. Inherent risks
d. acid test ratios, net working capital, inventory turnover, and other B/S and I/S ratios
e. Principal’s character
f. company’s financial status
Considerations in applying a new credit policy:
a. risk of losing all or part of the AR balance through bankruptcy
b. Cost of having to carry the amount due beyond the net period
*Credit department spent at least twice as much time maintaining credit files and collecting overdue amounts on marginal accounts as on good accounts
*20% of the branch’s accounts, representing nearly 10% of sales, were marginal firms
*Collections from these companies tended to be on the...