Outdoor SportingProducts, Inc.
Natosha Trusty 12/18/2017 Table of Contents: PageNumber Executive Summary: 3 Product Management: 4 Market Channels: 5 Market Campaigns: 7 Pricing: 8 Sales and Sale Force Management: 9 Implementation of Technology: 10 Customer Service and Support: 11 Conclusion: 12 Executive SummaryOutdoor SportingProducts Inc. has many different issues regarding the product management,marketing channels, market campaigns, sales force, technology and their customerservice. Profits continue to be satisfactory but the profits and sales are downfrom last year. Mr. Hudson McDonald is considered the president and chief operatingofficer. He is continuing to see the need of change for the company.
He isconcerned because the sales have not increased appreciably from year to year.For the past 6 years the annual sales volume has ranged between $6.2 millionand $6.8 million. The sales have been increasing but the profits have beendecreasing. Mr.
McDonald believes the salespeople compensation plan is thebasic weakens in the firm’s marketing operations. Thecompany has about 700 different items. They are grouped into three differentlines. The first is fishing supplies. Next is hunting supplies. Lastly is accessories.
The hunting supplies consist of about40% of the company’s annual sales. The fishing supplies consist of fishingjackets, vest, caps, rods, different reels, lines, flies, lures, landing nets,and creels. About 30% of the company is considered hunting supplies. Thehunting supplies consist of insulated and thermal underwear, safety garments,shell holders, whistles, calls, and gun cases. The accessories are about 30% ofthe company sales. That consists of compasses, cooking, kits, lanterns,hunting, and knives.
The sales of the hunting and fishing lines are usuallyseasonal. Most of the fishing supplies were sold between January-April. Most ofthe hunting supplies were sold between May-August. The companies’ lower salesare usually during the month of December. Fifty percent of the companies’volume is considered imported. Mr.
McDonald is in control of the sales force. He believes the sales are the weaknessfor the company. He is curious on how he could increase sales and profits for thecompany. The less with changing the whole organization the better.
There aremany changes that can be conducted to improve the sales in the company. Some changesthat need to be made could be major and some may not be bad at all. The companyhas great sales already. It would just be beneficial for them to explore newmarkets. The company will need to shift resources around production andmarketing to make things happen. Customer service and technology will helpimprove standing among the customers.
This will help customers that are alreadyloyal to the company and help satisfy all the customer’s needs. I. ProductManagement Mr.McDonald has had some issues in regards to product management.
“The mostimportant element of business market is deciding which product should beintroduced or keep, which items promote heavily, and which product to cut ormarket less vigorously. There are four levels of product management: the productitself, the technology platform, the product line, and the product category.”(Dwyer and Tanner pg. 225) The product manager should be in charge of thisarea. Mr. McDonald should be included in the issues and decisions that need tobe made. Product management should be focused on four different areas’: the targetmarket, intricacies of the product, what the business needs to order tosucceed, and how to measure the success.
McDonald’s said “with fewexpectations, Outdoors customers had little or no brand preference.” The productmanager and Mr. McDonald should be finding ways that can make the brands andcustomers more loyal to the company. Customers don’t view the products bysetting themselves apart from the others to start buying from the company. Thisstrategy would be also considered marketing.
The product needs to be quality sothe customers will be satisfied and they will go and re buy. The manufacturing ofthe product should be improved as well. The percentages of where the productsare coming from should be fixed. Fifty percent of the company’s volume comefrom imported products. The company could increase its self-manufactured products.That would increase revenue or help gain more control over the process. If theyincrease the self-manufactured product that could increase growth in themanufactured factories.
If the company starts to turn around this could meanfuture growth. Thereare different areas that could be fixed easily. The higher quality products canbe self-manufactured rather than imported. The could help increase the customerloyalty and revenues. When they import 50% of the volume and only 35% self-madecan be different. The company should change it where 50% is self-made and 35%is imported. This could help the company control the process of manufacturing. Thatwill increase the quality of the product.
This could end up costing more but inthe long run the starting a secure preference for the customers it could be aboost for the company. When the company starts getting different things figuredout then they could start growing the production process. If they are lookingat the future, then they may end up needing more space to manufacture the product.
They will most likely have to build and increase production. Buying space woulddefiantly have to considered. It would be best for them to buy space in theMidwest because than that will reach out to more hunters and fishers. That couldincrease their sales. II. MarketingChannels Marketingchannels are the ways goods and services are made and available by theconsumer. There are few problems in the Outdoor Sporting marketing channels.
Thefirst major issue they have very little presence in large metro areas. Therewas poor customer coverage which is why the company has very little presence inlarge metro areas. Just because there is poor customer coverage that doesn’tmean the market is not good.
Some customers are being overlooked by thecompany. The market share is 2% to 3%. This area defiantly needs to see someimprovement. They do have some customers that are not able to purchase product fromOutdoors. The discount stores are also remaining untouched.
Mr. McDonald statedthere has been an increase in discount stores. Outdoors as yet developed apresence in these kind of stores. They claim it from the pricing policy and theamount of pressure a customer can put on the sales person. It is a poor businessnot to follow the trend of the different markets. These problems defiantly needto be addressed. If the Outdoors started making discounts they would have tolearn how to put their products in market discount stores. The last issue inthe market channel would be how their distribution is set up.
Mr. McDonald saidevery product is shipped out of one warehouse in Albany, New York. This couldput a limit on distributing their product. Every sale or product that is soldwill have to be routed through one place. If the company continues to grow thiscould become a major problem.
Outdoors will have to make sure they stay aheadfrom the growth at a manufacturing standpoint. Itcould be very beneficial for the company to start a presence in the large metroareas. They could achieve this by making their sales person start a presence inthe area. They could hit the large retail chains in the area. This will help brandawareness and also open them up the market. They could also start formingdiscount stores. If the market is moving in this area, then it could be beneficialfor them to open a store.
The sales person will need extra time in theseoutfits to increase their market. If they decrease sales in stores of small tomedium size it could free up time. If they reduce to 4,000 stores and then putthem in 500 major retail locations could be beneficial for the company. They thencould add 500 – 1,000 discount stores.
The distribution could be fixed by buildinganother warehouse. Another warehouse could improve in different areas. It couldhelp customer satisfaction because it will decrease the shipping time.
It willalso put less stress on existing shipping and manufacturing employees. It coulddefiantly good pay off in the future. It is really good for a company to thinkabout the future. It may not beneficial to increase right away until business picksup a little. III. MarketCampaigns OutdoorSporting Product are not utilizing the marking it the full way that they shouldbe. They are making a huge mistake in the marketing field. They didn’t usemagazines, newspaper, or radio advertising to reach the consumers.
It mightsave money but it also puts strain on the sales force. They are not attractingcustomers by having a salesperson be the major role in the marketing. Magazine,newspaper, and radio advertisement may not reach the marketing they need but itis a cheaper way to market the company.
The newspaper ads and magazine ad couldbe a major role in the hunting and fishing products. People that hunt and fishare more than likely to purchase a product from their favorite magazine ornewspaper ad. The catalog that the Outdoor Sporting Product puts out every yearneeds to be evaluated so they can make any changes that are needed.
Customerusually don’t make their purchases wit the catalogues. With the internet beingaround catalogues have really decreased interest. They need to evaluate what thecatalogue is actually doing for the company and how much it is costing to makethem yearly. Marketing is used to try to convince people to keep using theirproducts. That is why improving their marketing is a must.
They could start advertisingin fish and game magazines that could help improve the marketing of theirproduct. If they are target fish and game magazines that would be a very goodstrategy. It will not hurt the company to try different things. It isrelatively cheap to advertise in a magazine. Newspaper ads and radio ads canalso be used.
People will gain brand recognition from the different ads. Evenif someone would just mention the name that could really help the reputation ofthe company. Marketing is very important to look at in a company. The cataloguewill only be successful in re-buys.
They could only make the cataloguesavailable for the people that are interested in them or people that will usethem. It can be a waste if they send out 20,000 catalogues and only 1,000people use them. Utilizing the internet could be very beneficial to the companyas well. This would help eliminate the wasted catalogues people are not using.Product catalogues are just an outdate marketing strategy.
IV. Pricing Thepricing of the product is another negative result on the company. Deciding theprice of a product can be very difficult.
There are many things you have toconsidered when it comes to deciding the price. You have to take account theprice it will take to make the product and also you have to think about theprofit. Somethings are not in the company’s control as well. Outdoor SportingProduct gets their products from self-manufacturing, importing, and domestic companies.They have to mark up their product to make any profit of them.
They have toalso pay for the product and the employees. The markups are too high for the company.It should go off the trends of the market.
Mr. McDonald state their markets was50% to 100% on Outdoors cost for the item. The average markup with all productaverages out to about 70%. The markup has worked for the company but it needsto be adjusted. Mr. McDonald said customers are leaning more towards a discountstore. If they try to maintain a 70% markup that could make it really difficultfor a discount store.
The markup could result from different issue likeshipping, manufacturing, and distribution issues. It can’ t be put at 70%strictly because of profits. Itis important for them to find business in the discount stores. Having a 70%markup will not work for a discount store.
They will need to decrease themarkup so they can develop the relationship with the customers. They should beable to find a way to become profitable around about 50% markup. This will helplower the price on the product. The development of another warehouse would helplower shipping costs. That would help the company lower their markup costs becausethey will not have to pay for the extra shipping costs. If they fix these issuesthis could really help the company.
V. Salesand Sales Force Management Salesforce is one of the biggest problems in the Outdoors company. There are manydifferent issues in this area. Some are including training salespeople,evaluating sales performance, determine sales potential and territories, andthe relationship between the sales function and overall marketing strategy. Thesalesman that have guaranteed salary have a higher average earning to salesratio. The incentive plan has different weaknesses. One of the plans require thesalesman to be in the territory the previous year to be eligible for the bonus.That would make it to where the first year people won’t get an incentive.
Itdoes make it to where they would get a big bonus the next year. The compensationdefiantly needs to be addressed. Compensation could be changed by having alower salary. They could give the salespeople a chance to sell products andhelp with the money in the area of commission. Salesperson usually carries arounda catalogue about the selling formula.
If the customer could get knowledgeabout the product than that could help increase the pride of the jobs andsales. The sales group may need additional training. Mr. McDonald could justuse his best salesperson to do the sales training. If the salespeople get more trainingthat could leave to more sales for the company. Mr. McDonald can lead the salesteam but may need to make a few changes. His sales formula would be a goodformula to use.
He may need to increase his amount of time and effort of hisMonday sales calls. There should be better way of checking in with thesalesperson that is dealing with the daily sale reports. They could benefitfrom another sales director that deal with day to day operations. VI. Implementationof Technology Technologyis one thing that the company is not utilizing. The case doesn’t mention muchabout internet sales. They also don’t mention how technology is utilized themake the organization successful. Technology is not a very big area of focuswith this company.
If they use internet sales it could affect sale of the salesforce. It could upgrade customer service in dealing with customer needs andwants. The company only seems to deal with sales between salespeople andcatalogue. The customer satisfaction may increase if they use the information toimprove their needs. Technology could also help improve the shipping process. Thesalespeople that just focus on calling and handling reports could start payingattention to the manufacturing and shipping products. Even if they eliminate aday off of processing sales.
If they look into the future that would show theyneed to more technology. Itwould be use to advance the technology in the company. Especially with today’sgeneration everybody is using technology. They could develop an onlinecatalogue or find ways they could process the sales online. Online sales havemajor sale in today’s time.
Today’s generation buy most of their stuff online. Outdooris missing out on the opportunity by just focusing on the salespeople. Theycould even have a salesperson pay attention to the site. This could help speedup the process and allow the salesperson to travel to other places. Technologycould really help the buying process for the customers. VII. CustomerService and Support Havinggood customer service skills is very important when trying to make sales. This couldbe the tougher job because you have to deal with different people.
It could bethe difference of making a sale to looking for another job. The lack of trainingin this area could cause a concern. There are sales that could be missed andsome companies may not know because they don’t how you are dealing with thecustomers. The case doesn’t mention if they have a customer service departmentbut somewhere they have customer support. When the company starts to grow it isimportant to make sure they maintain happy and loyal customers among theirgrowth. Training the sales staff will increase customer service and support. Salesdepend on the customer service and support the customers get.
If a salesperson iscommission based it will depend on how good they are with people. The bestsales person should be the one to train the other because they are doingsomething right with the customers. There defiantly needs to be a customerservice department so that customer have someone to call and make theircomplaints too. Saving the customers can help save and maintain loyalcustomers. Employees that are dealing with the customers should relay the ideasto the other departments. The customer service is about satisfying thecustomers wants and needs. VIII.
Conclusion: OutdoorsSporting Products Inc. have done a great job setting up the company to makeprofit. The case is focused on the compensation of the sales forces there aresome areas that need to be improved. Mr. McDonalds needs to realize that thecompany needs to keep up the market changing. That will take the company to theirnext stage. If Outdoor makes the changes, they need they will defiantly see muchmore growth in the company.
Outdoor Sporting Products has a great company andthey are ready to take the steps need to become a major sporting company. Mr.McDonald just needs to develop the company that will help them reach theirpotential. Resources:BBusinessMarketing, 4th edition; by F. Robert Dwyer and John F. Tanner. McGrawHill.
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Retrieved December 18, 2017,from http://smallbusiness.chron.com/todays-technology-used-business-communicate-27351.html