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C3.1-1
Teaching Objectives
1.
2.
3.
To recognize that sales is part of marketing and that the entire marketing effort
must be considered.
Teaching Suggestions
The Wentworth case can be used early in the course to illustrate the relationship between
sales and the rest of the marketing activities. Too often the sales function is viewed as not
being part of marketing. If used early, students should be able to discuss the problems and
make recommendations for most. Sales force problems may be recognized but
recommendations will not be as well developed. We assume that most students have taken a
basic marketing course which will facilitate their ability to discuss and recommend solutions for
the problems.
Students should be encouraged to look for the less obvious solutions to the problems in
WICS. Certain issues have been highlighted which are not intended to be the focus of this
case. The recommendations are marketing oriented, not just sales management oriented. An
integrated program is needed to help WICS reverse a stagnant and declining market share
situation.
C3.1-2
Discussion Questions
1.
C3.1-3
With a potential market share of 12.6% and an actual share of 9.5%, it appears that
SSDs are doing a reasonable job of marketing WICS's products through present channels. The
issue, then, concerns the necessity of determining the optimal strategy for increasing market
potential. Presumably, WICS will be able to retain or exceed its current share of 75% and
experience an increase in actual sales dollars as a result. Although we are currently interested
in providing salespersons and distributors with sufficient incentives for maximizing the
efficiency of the distribution system, it is not the focus of this study. Our major concern is to
find a means of facilitating growth, making it easier for sales representatives and distributors to
fulfill their roles and responsibilities in an efficient manner.
WICS, because of its strength in consumer markets from products sold by another
division, is assumed to have a market share much larger than 9.5%. It is unlikely that WICS
will be able to increase its market share by further "greasing" the channels of distribution.
WICS's situation can be compared to the problem of trying to pour more water through a
funnel. WICS's past strategies were just that, trying to get a given number of distributors to
handle more volume. As it stands, the case indicates that the SSDs resent WICS's efforts to
pressure them to sell more to existing end users and to call on new end users. SSDs see WICS
as being manipulative and unreasonable. In addition to the problem of negative distributor
attitudes, WICS faces similar problems with the sales force. The area managers are frustrated
by a sales role that they see as ineffective. Area managers view themselves as "lackeys" who
are denied the opportunity to use their own creative skills. Job descriptions do not reflect
reality and need revising.
C3.1-4
WICS's product line does not reflect end user needs. Existing products only cover part
of the market. Prices are too high, which serves to limit the market further.
WICS marketing program assumes that their products are in the growth stage of the
life cycle. Focus has been on market development using high distributor margins to encourage
SSDs to emphasize selling benefits, demonstrations, and cold calls on new end users. Exhibit 1
illustrates WICS's position.
2.
What alternatives are open to Griffith? What are the advantages and
disadvantages of the suggestions made by his staff?
One alternative is to do nothing. Obviously this has dire consequences, including
Griffith looking for a different job. It is unlikely that the problem will go away or be selfcorrecting.
Marketing mix problems exist that must be resolved if WICS's position is to improve.
TONER'S PROPOSAL
Toner's suggestions lead to more area managers and to more SSDs.
Advantages:
Disadvantages: SSDs who are doing a good job will resent the addition of more SSDs.
Ignores the fact that current job descriptions are inappropriate.
More AMs doing the wrong activities.
More AMs will mean more territory managers and maybe another
regional manager, adding to overhead costs.
C3.1-5
Summary:
HART'S PROPOSAL
Hart wants to use incentives to motivate the AMs and SSDs to sell more. She also favors
establishing quotas for the SSDs and dropping those who fail to meet quota. Hart favors
bonuses for securing new end user accounts, to be awarded to both AMs and SSDs.
Advantages:
C3.1-6
Incentives and quotas and bonuses may play a role in helping WICS
resolve some of its problems. They may be used in connection with
other recommendations.
MICHAELS'S PROPOSAL
Michaels is critical of how the AMs spend their time. He favors a job analysis of the AM's
position. He wants to determine what rewards AMs value, feeling that more contests are not
the answer.
Advantages:
C3.1-7
WEBBER'S PROPOSAL
Webber wants to expand the product line to include economy products. She also favors the
addition of more SSDs, primarily in the $500,000 to $1,000,000 range.
Advantages:
C3.1-8
SMITH'S PROPOSAL
Smith advocates reducing prices to increase sales volume. She also feels that margins are too
high and should be cut, due to her perceptions of where the product is in the life cycle.
Advantages:
C3.1-9
3.
Throughout this analysis, two basic strategies aimed at obtaining WICS's growth objectives
emerge.
A.
WICS needs to increase its market coverage by increasing the number of SSDs.
The addition of distributors with different "windows" will improve sales to new
end users.
More aggressive selling efforts are required, which means that the AMs will have to
spend less time with existing distributors. Job descriptions will need to be
revamped and sales training programs will have to change to reflect new activities.
Incentive programs will be needed to encourage AMs to secure new SSDs and new
end users.
B.
WICS needs to broaden its product coverage to include the economy class.
Presently, WICS is excluded from the low end of the market because of its limited
product line.
WICS has to lower prices on its premium products but avoid going too low and
competing against "schlock" products. Selling costs need to be lowered.
Eliminating market developments costs for new products is one example. SSD's
selling costs can be reduced by teaching their salespeople low cost sales
techniques. In other words, since the products are in the mature stage of the life
cycle, extensive sales efforts are not necessary. The products do not need
demonstration. Reallocating the AM's efforts reduces selling costs for mature
products.
C3.1-10
Epilogue
Prior to instituting the proposed program at a national level, WICS test marketed in Cincinnati.
Four major changes were introduced in the Cincinnati test market:
1. Progressive discounts were offered in relation to total order size.
2. New products were introduced, targeted at the economy-priced, mediumperformance category.
3. Distributors were added selectively to fill voids in the distributor network.
4. The daily routine of the AM was reoriented to increase productivity. (Directives
limited distributor calls to 20%.)
If present trends continue, real volume can be expected to increase by 53% during the
first year of the new program.
C3.1-11