1) Edward Smeets is the new sales manager for Grunwald Instrumentation. He has just come aboard to head up a sales force of seventy sales professionals, all of whom possess at least a B.S. in a scientific field. Many have Master’s Degrees.
Smeet’s sales reps sell highly complex instrumentation systems that are used to analyze a variety of different materials in a variety of laboratory environments. The instruments, sixteen in total, are used to analyze gases, liquids, and blood. Each product is very technical and customers expect their Grunwald sales rep to be very knowledgeable about the technical applications of their product to their analysis requirements of their laboratories.
Each sales professional covers an assigned territory which usually comprises about one-half of a state. In some cases, the sales rep may cover two states, but 80% of the sales reps are within a two-hour drive of their home. The sales team has been divided into twelve teams around the country, with each team having its own sales manager and five to nine sales reps, all of whom call on a variety of customers. Sales teams operate out of the same office, located in a major metropolitan area (e.g., Boston, Dallas, San Francisco, Atlanta, etc).
Sales rep turnover has been 15% annually the past few years and Smeets sees it as imperative that he do something about this. Annual sales have been averaging a 3-5% increase each year over the past five years… but the corporate president wants more, complaining that your competition has been averaging 6-8% sales growth increases in revenue each year.
Analyze the sales force structure. What is the current sales force structure that is being used and what might be the limitation of the sales force structure that is currently employed? What changes, if any, would you suggest that Smeets consider to the sales force structure to effect increased sales?
2) Your product, the iPhone, has had a good Introduction phase and is now in the Growth stage of the Product Life Cycle (PLC).
You know that one product-related strategy that you can employ is to offer newer iPhone models or offer more features on current iPhone models.
As you prepare to do battle with other companies who area also in the market, what might be some other PRODUCT-related strategies that you might utilize to enhance your product offering that complements your introduction of newer models/features?
(NOTE: This question asks you to focus ONLY on the “product.” Responses that focus on what you would do relative to the product’s pricing, promotion, and channels of distribution are not what you are asked to provide. )
3) You have just become the marketing manager for a new line of DVD players. Your Fixed Costs (FC) for running your plant are $1,300,000 a month. This includes salaries, insurance, rent, amortized capitalization of equipment, etc.
Your Variable Costs (VC) per unit will, of course, vary. You have looked at your hourly salaries, your utilities usage, your raw materials used to make your DVD player, shipping, promotional programs, and other variable costs. These Variable Costs (VC) average $1,634,000 per month.
Your plant is able to produce 76,000 DVD players each month (30 days per month).
Your price to your wholesaler distributor is $71.25. The retailer’s price (e.g., Best Buy) from the wholesale distributor is $94.70. Your suggested list price for consumers for the DVD Player at the retail store, e.g., Best Buy, is $129.99.
What is your Unit FC per DVD player?
Your Unit VC per DVD Player?
How many DVD Players do you need to sell each month to “break even”?
4) Your colleague has been tasked to do market research for your company. Management is complaining that sales have not been where the company would like them to be (the sales are about 8% behind the projected goal). Senior management wants your colleague to find out why. At a team meeting, your colleague shares that he has defined the problem, a critical “first step” towards doing market research. Specifically, he announces the Definition of the Problem as “Sales are down.”
Comment on the Definition of the Problem, as shared by your colleague. Do you agree or disagree with his Definition of the Problem? How would you restate the Definition of the Problem.
5) Your manager tells you that his Vice President is receiving many complaints about your company’s field service organization. The VP wants to get to the bottom of this and wants answers NOW!
Your manager delegates the responsibility of creating a market research vehicle to gain the necessary information. What market research approach would likely best provide the insight necessary that would help the VP of Field Service understand what is causing the problem, as seen by the customer, so that a remedy might be applied?