Marketing Project Essay Example

Marketing Project Essay Example Marketing Project Essay Marketing Project Essay Executive Summary Wentworth Industrial Cleaning Supplies is an organization whose potential is currently clouded by their lack of competitive strategy. Through analysis of their current situation, several key issues were identified: * Market Research is ineffective and unimplemented * Product line ignores majority of market * Roles of key personnel are illogical and inefficient * Relations with distributors are hostile and unsustainable * Profits and growth is stagnant in an advancing industry * Communication mechanism is fragmented After evaluation of the alternative courses WICS has for consideration, recommendations to address and rectify each issue were chosen. Through assigning specific tasks to the marketing department and enabling a communication mechanism along the personnel chain, objectives and opportunities can be shared. By making strategic role changes to the territorial and area managers, redundancies can be eliminated and the goal of developing and maintaining a unified network can be achieved. Through the addition of a big-tickets sales team and the outsourcing of economy chemical for use in private labels, WICS can gain a larger market share and sustain increased profits for years to come. In combination, these actions provide the basis for the development of a large-scale, well-branded organization with responsiveness to growth and opportunities in the market. Issues with Current Operations Market Research WICS lacks the marketing insight to target clients appropriately. As a solely premium brand, market research is crucial to customer perception and increasing the 40% share of customers willing to pay premium prices for WICS products. Moreover, new lines or line extensions are difficult to launch when there is no market research. In an evidently growing industry, the inability to provide an appealing value proposition to 60% of the customers has caused WICS to halt sales growth and struggle to keep its current market share. Furthermore, the justified frustrations of the area managers cannot be resolved until WICS is able to give them appropriate job descriptions and requirements contingent on the nature and changing behaviour the industry derived from market research. Product Line â€Å"Only 8 percent of customers describe their experience as superior, yet 80 prevent of companies believe the experience they provide is indeed superior† Roger J. Best Current Segments Opportunity for Growth Distributors claim â€Å"WICS products are basically no better than anyone else. This is a dangerous mentality when they are currently responsible for actively promoting and marketing WICS products. Their products, priced in the premium category, are reliant on promotion to build a strong perceived value. Furthermore, only 40% of consumers are willing to pay premium prices, leaving 60% of end users uninterested in WICS. This presents a unique marketing challenge for WICS- the need to expand to reach a greater s hare of the market while upholding their image as a premium manufacturer. Role Distribution For managers, a lack of job autonomy creates a feeling of resentment towards superiors and inhibits productivity. (Quote OB Book). Furthermore, the current incentive program stresses disproportionate selling techniques by placing heavy emphasis on hunting at the expense of neglecting farming attained accounts. This focus on hunting new accounts has resulted in acquiring unprofitable accounts that do not allocate a sufficient amount of their total purchases to WICS products. It is expensive and frustrating for distributors to maintain these clients, and they ultimately add little value to the corporation. Finally, the allocation of area manager duties (exhibit 6) results in low productivity by emphasizing ineffective selling techniques and needlessly excessive time spent on demonstrations Communication Discrepancies Internal communication is crucial for any functioning business competing in any industry. The marketing vice president de-motivates his staff members by projecting low confidence in their abilities and using threatening tactics to scare employees into scrambling to do their work for the sake of maintaining their jobs (OB BOOK). Moreover, SSDs feel neglected in the sense that they lack direct communication to management level WICS employees and/or the ability to relay their concerns/recommendations via area managers. Distributor Relations The perceived subjection to â€Å"pressure tactics† and the lack of belief in WICS products amongst distributors is an ongoing promotional issue that must be immediately addressed. As well, the combination of WICS current high minimum buy-ins and lack of communication between SSDs and management level WICS staff has yielded an environment retardant to growth for WICS products. WICS’ refusal to grow geographically with its respective SSDs is limiting both to SSD relations and company growth. Requiring SSDs to beta test WICS products is detrimental to both WICS brand image and once again, SSD relations. Because the products currently require timely demonstrations, high sales costs for SSDs have occurred. Recommendations Additional Duties for Territorial Managers The territory managers will be responsible for hunting new distributor clients that would work with WICS and assigning them to an area manager. The territory manager will allocate the new distributor to a manager in accordance with the ratio that we have in place: 1 Territory Manager: Area Managers – 4:1 Area Manager: SSD’s 2-4:1, based on size of SSD 1 Territory Managers: Area Manager – 4:1 4 2-4 Teea Manager – 4:1 Maintaining this ratio will allow territory managers to operate more effectively. Reallocation of Area Managers’ Duties Currently, the Area Managers’ roles and expectations are outdated and ineffective. Their duties need to be reallocated to give more autonomy to the Area Managers when hunting new clients. In this way, they can use their discretion when choosing which methods they prefer to use with their clients, based on their skills and what they feel is most effective. We propose they no longer push the demonstrations onto the SSDs, and instead offer sample Kits that the SSDs would give out to customers to sample the product before making their buying decision. Consequently, the Area Manager will cut this time in half and instead give information sessions for SSD staff about the DIY Sample Kits, negotiate lowering margins, and implement new products. Another 20% of the Area Managers’ time will be spent on the relationship with the SSD’s. Creating and Motivating Personnel Network WICS’ distributor network will be more interactive, fostering communication amongst all three key players- SSD’s, Territorial and Area managers. The Area managers will visit distributors on a weekly basis to receive feedback, address concerns, and discuss routine business logistics. In addition, distributors will receive a bi-monthly visit from their allocated territory manager, who will ensure that any feedback on the effectiveness of the area manager is heard and acted upon. Similarly, there will be weekly communication between territory managers and area managers. This will allow any corporate objectives to be reached, and to share ideas on tactics for reaching sales goal. The evaluation of the SSD’s roles will be done by area managers, with autonomy to create and execute incentive programs within a given budget. Although area managers will have the ability to identify the measurement tactics and rewards for managers, the general incentive drivers will be determined based on sales goals by the marketing department and manager. This will allow the company to emphasize sales of particular products, balance goals for growth with those of customer maintenance, and deliver a customizable incentive program to distributors that will ensure a strong partnership. For Area Managers, incentive programs will be designed and measured by Territorial managers. In a similar fashion to the distributor incentive structure, this method will allow WICS to balance their need for resonant, customized rewards with their efforts to align progress with corporate objectives. Drivers for measuring area manager success may include looking at feedback from SSD’s to evaluate communication and negotiation skills, looking at results in efforts to attract new customers, and evaluating their ability to foster an effective and profitable network through working with their subordinates and superiors on the WICS personnel chain. As area managers are a key link between WICS management and their front-line sales force, it will be essential to harness the competitive nature of the individuals working as area managers through recognition and reward. As a result, winners of incentives and titles will be well-publicized with the corporation, and the objectives by which measurement and designation of winners are achieved will be constantly re-evaluated to ensure that it is meaningful. Providing Raw Materials for Private Labels Only 40% of end users are willing to pay premium prices leaving the majority of customers within the janitorial cleaning supplies industry unaddressed by WICS. In order to maintain active growth, WICS needs to address the unserved 60% of the market. There are two typical ways to approach this problem ) create economy product lines 2) create a flanker brand The first solution not only poses the problem of diluting WICS premium brand image, but also presents the problem of cannibalization. The second approach, although separating WICS from the name of its economy brand, still faces strong opposition as SSDs will be hesitant to hold products that are directly competitive with their private labels. A more innovat ive and successful approach is to being providing SSDs with competitive incentives to sign over their private label outsourcing to WICS. In doing so, WICS will promise to match or provide SSDs a lower price for the raw core materials required to create their private labels. WICS will not pursue/take over any private label outsourcing activities if the prospects prove to be unprofitable, however it will strive to reap economies of scale in the production their raw chemicals, and to strengthen their vested interest in the market segments by sharing in the growth and profitability of the economy lines of the distributors. Hunting and Farming Tactics for Market Share Development WICS will be most successful in its business development efforts if it targets customers using the most successful tactics. For new, high-end customers willing to pay premium prices, tactics such as spotters, use of personal network, research and cold-calling can be used. This will allow WICS to identify potential large-contract clients and either reach out to them via connections or cold-call and pitch their value proposition. Examples of events in which WICS can capitalize on the need for industrial cleaning products include: * Sporting Events- 1992-1996 is the most concentrated time in history for the Olympic games- with two games in 1992, and two more in 1994 and 1996, WICS has the opportunity to capture huge contracts and expand into other sporting event clients * Airlines- in 1992 alone, 86 new airlines were launched. WICS should aim to approach start-up companies in travel and high-growth tech segments for potential contracts * Malls- with Mall of America opening in 1992, WICS should capitalize on the opportunity to develop a sales pitch aligned specifically with the needs of retail malls. Through the sale of chemicals to distributors private labels, Wentworth now holds a vested interest in 100% of the industry. As a result, they have the opportunity to pair with SSDs to farm current customers and pitch a full-package contract in which the SSD private line and WICS products cover all the needs of the client. Special Sales Force Big Ticket Clients With the aforementioned large-scale contract opportunities, WICS needs to devote highly effective salespeople specifically to the attainment of big-ticket sales. The strategy behind acquiring such â€Å"big-ticket† clients involves partnership with market leaders from the other three segments in the institutional maintenance chemical market (EXHIBIT 1). Through partnership, it becomes possible to offer such big clients with massive cleaning requirements in every segment with relatively cheap product bundles. Product bundles are able to be priced as low as necessary to entice clients to pursue them exclusively because of economies of scale. Market research would determine viable market leaders that suit WICS brand image to be pursued by WICS Special Sales Force. The Special Sales Force would initially comprise of two management- level staff members (SEE NEW ORG. CHART) who strictly work towards pursuing the logistics of â€Å"big-ticket† clients. This number can expand as WICS grows contracts and profitability in new sales segments. Further advantages of creating product bundles with the other three respective segments in the institutional maintenance chemical market is utilizing partners as spotters. Spotter perks involves exchanging market research, customer information, and referring prospective customers. Furthermore, some big tickets clients may present unprecedented marketing opportunities for WICS. For example, if the product bundles are successful in attaining most of the purchasing of one or both of the Olympic games, WICS could always offer further discounts in exchange for soft advertising such product placement. Implementation of Strategic Recommendations: * Within the next 6 months: The measures taken during the next six months are going to lay the groundwork for WICS to become more efficient, reduce costs, forge better relations with SSDs and staff, and increase market share. Firstly, area and territory managers need to be retrained into their new roles with in the company. This training needs to be carefully implemented, and WICS needs to ensure that the staff are happy with the changes and behind the revamped corporate strategy. Once staff understand their new roles, the infrastructure and products must be ready. The chemical products need to be available for sale as soon as possible for the area managers to start sales. Area managers need to get to work on private label sales as quickly as they can in order to begin penetrating the market. As well, the do-it-yourself kits need to be made and sent out to distributors so that customers can begin testing WICS products without the distributors and area managers having to worry about the timely demonstrations. With the new roles in place, the feedback mechanism will immediately begin so that the distributors begin to feel the shift in customer focus that WICS will be adopting. With the increased support from all WICS staff, and the lower cost of sale, this will motivate the distributors to push WICS products more, without the pressure from area managers, and will grow market share and sales for WICS. * Long term goals: As adoption rates of WICS raw chemicals increase, the company should work towards an objective of serving products in 100% of the industrial cleaning market’s segments. This will be achieved by a combination of increased sales in the WICS line, representing 75% of the market, and the addition of private label products which serve the remaining 25%. This goal should be attained within the next three years, and the mechanism for its realization is the ability of area managers to negotiate and finalize outsourcing contracts with their distributors.