Manufacturers' Representative Profession: A Model about the Impact of Agency Success and Marketing Methods on Willingness to Hire Recent College Graduates

By Weinrauch, J. Donald; Anitsal, M. Meral et al. | Academy of Marketing Studies Journal, July 2007 | Go to article overview

Manufacturers' Representative Profession: A Model about the Impact of Agency Success and Marketing Methods on Willingness to Hire Recent College Graduates


Weinrauch, J. Donald, Anitsal, M. Meral, Anitsal, Ismet, Academy of Marketing Studies Journal


ABSTRACT

Professional careers as manufacturer's representatives constitute a growing opportunity within sales for many businesses especially in global markets. These sales representatives act as independent agents possibly on behalf of several non-competing manufacturers. These representatives represent mostly in selling interrelated products and/or services within their assigned sales territories. Multifaceted sales organizations (agencies) generally employ multiple representatives. Recent college graduates may like to pursue an entry-level sales position with these sales agencies, yet the owners of these agencies may perceive the practice of hiring recent college graduates as an obstacle due to training time, costs and lost sales due to inexperience. The purpose of the paper is to investigate the impact of agency success, job expectations from manufacturers' representative and the degree of importance of marketing methods on the agency's willingness of hiring recent college graduates.

INTRODUCTION

Outsourcing has become a popular business strategy for trying to be more efficient in the marketplace as well as attempting to achieve better customer satisfaction with the realization of more business growth for those firms who are outsourcing. To better focus on a firm's core competencies, outsourcing may provide opportunities to save precious resources. Also, the mantra of cutting costs, downsizing, penetrating new markets, supply chain management efficiencies, consolidation of businesses, and globalization have been some major driving forces to more outsourcing..

Professional services, such as accounting, purchasing, human resources, law, and information technology, may appear to be a relatively new outsourcing phenomenon. In comparison, however, the professional services of manufacturers' representatives is a service that been outsourced for decades. These professionals have been providing sales support for manufacturers and middlemen for years. In fact, historians note that the development of the textile industry in the Northeast during the early 1800s was the beginnings of what was to become the modern day manufacturers' representatives in the United States (McQuiston, 2001).

With globalization, manufacturer representatives have become quite essential in many foreign markets (Stephens, Carlson, & Weinrauch, 1996).

Manufacturers' representatives, also known as contract sales agencies, are independent professionals who provide sales and marketing services to manufacturers, suppliers, and distributors (see for example, Anderson and Trinkle, 2005; Johnson, 1999; Kaufman, 1999; McQuiston, 2001; Weinrauch, Stephens, & Carlson, 1991; Weinrauch, Stephens, & Carlson, 1996; Weinrauch, Stephens, & Carlson, 1997; Weinrauch, Stephens, & Carlson, 2001; Weinrauch, Stephens, & Mann, 1998). Most of them are owned and operated by entrepreneurs who operate under a contractual agreement with their principals (manufacturers, suppliers, distributors, and other middlemen) for a defined territory. The representatives typically have multiple related but non-competing product lines in this exclusive sales territory. They are paid on straight commission based on sales.

It is difficult to gauge the exact number of the contract sales force in North America. According to one well-known contract sales industry researcher, the best available statistics is that approximately 50 percent of all companies operating in North America use a manufacturer's representative in some capacity. They may use them for selling a piece of a product line, a certain geographic area or a particular application. In the electrical and food service industries, 80 percent of the firms rely partially or entirely on contract sales personnel. Representatives may also sell services, such as a vertising (Anderson & Lodish, 2007).

Most manufacturers' representative organizations (frequently known as agencies) are small firms who may have 5 to 10 individuals covering a well-defined product portfolio and specific narrow geography.

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