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Article
Restructuring Fixed and Variable Pay in Sales Organizations: A Product Life Cycle Approach
Compensation & Benefits Review (2011)
  • Pankaj M Madhani, ICFAI Business School
Abstract

Organizations must review and update sales management practices and their compensation strategies according to the different stages of product life cycle (PLC). The PLC can be a valid framework for assessing organizational response in terms of marketing mix variables and sales force compensation strategy based on sales efforts. Fluctuations in sales growth, profit margins, asset turnover, and return on net assets are normal outcomes of the PLC and strongly influence compensation strategy. Restructuring fixed and variable pay in compensation plans according to the PLC will help organizations design an optimal compensation strategy. The primary objective of this article is to propose a framework for selecting an appropriate sales force compensation plan according to the various stages of the PLC.

Keywords
  • fixed pay,
  • variable pay,
  • product life cycle,
  • marketing mix,
  • sales compensation
Publication Date
2011
Citation Information
Pankaj M Madhani. "Restructuring Fixed and Variable Pay in Sales Organizations: A Product Life Cycle Approach" Compensation & Benefits Review Vol. 43 Iss. 4 (2011)
Available at: http://works.bepress.com/madhani/94/