Caselet 2: Freud Testing Services Freud Testing Services (FTS) conducts psychological profile testing for companies who are looking to hire new salespeople. FTS claims that these tests are accurate 9...

Caselet 2: Freud Testing Services

Freud Testing Services (FTS) conducts psychological profile testing for companies who are looking to hire new salespeople. FTS claims that these tests are accurate 9 out of 10 times, meaning that if FTS says to hire someone, the chances are 90 percent that the person will become a successful sales rep. The company sells its product through independent distributors, which retail the tests for $95 per person being tested. There are currently 22 distributors selling FTS testing products, along with other testing products and sales training and consulting services. The sales of FTS products generated by each distributor range from $10,000 (generated by a small distributor in Arizona) to almost $100,000 (generated by a distributor in New York City). The average annual FTS sales per distributor are about $22,000. The total sales for FTS are about $4 million per year. George Shannon, the owner of FTS, would like to grow the business by another million dollars in two years. The question is, how? George has considered adapting the tests so they could be used to screen retail salespeople. Right now, they are used only to screen business-to-business salespeople. The tests could also be translated into different languages and sold in other countries. Or perhaps George could simply look for additional distributors. He has called you and asked how he should go about determining the potential of each of these markets.

Questions

1. In a perfect world, how would you answer George?

2. Assuming George had no cash to spend, how would your answer change?