MARKETING 400 LEVEL CASE STUDY

Haverwood (B) Case Hints

This case builds directly on the sales analytics material from Chapter 6. While we haven’t covered the rest of the Chapter 6 material, you should know enough about the sales function and its role in an organization’s communication program to analyze this case.

· For additional background on this case, read the Haverwood (A) case (you’ll be doing it anyway). Key issues to keep in mind as you read Haverwood (A) are the nature of the home furnishings industry, and the importance of “push” communications and role of the sales force in Haverwood’s promotional program.

· The issue in Haverwood (B) may seem pretty clear (Haverwood’s sales force vs. Lea-Meadows agents), but be sure to dig a little deeper to assess what Haverwood is really facing with the addition of the Lea-Meadows line.

· Remember that Haverwood’s sales force and Lea-Meadows agents are selling to the furniture store buyers. They do not sell to, nor have any interaction with, the consumer buying furniture in the store.

· As in most professional selling situations, there is a strong relationship between the salesperson and buyer. The actual “selling” (getting the order) is only a small part of the job; a large part of the salesperson’s time is spent in servicing the account. It is also important to note that in larger accounts, different retail buyers may be purchasing wood and upholstered furniture.

· There are a number of qualitative issues in the case with regards to account relationships and servicing, not to mention personal relationships and behavioral aspects of sales management, that may impact your analysis. As you look at alternatives and your recommendation, also think about where the principal buyer-seller relationship resides: between the furniture company (as represented by its sales reps) and the store buyers, or between the sales agent and buyer (and not with the furniture company). This can have sales implications depending on what is done with the Lea-Meadows agents (who may also represent Haverwood’s competitors).

· Quantitative analysis can include both sales force type and sales force budget allocation calculations. You may also want to do some sensitivity analysis (“what if” scenarios) for different variables in your calculations (number of calls, call length?) to help determine the best avenue for Haverwood (including the implications of Charlton Bates’ recommendation to John Bott). You can make some reasonable assumptions about how many hours a week Haverwood’s reps work and how much vacation time they have a year. You may also have to perform some interim calculations to be able to use the formulas; again make whatever reasonable assumptions you need to.

· You may also wish to consider the difference in sales volumes and gross margins between Haverwood and Lea-Meadows, and the impact of that on what you recommend for Haverwood.

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