CASE 2.1 FERGUSON TRAINING ACROSS CULTURES In March of 2016, Andrew Ferguson, development associate at Ferguson Training AcrossCultures in Kingston Ontario, had just returned to his office following the weekly coordinators' meeting. The meeting had focussed on the coming launch of Ferguson's largest marketing effort in the company's 12 year history. It was Ferguson's responsibility to ensure that the campaign would be a success. Ferguson, had little experience in this area, yet he was responsible for selecting the most appropriate method to launch this campaign, and more importantly, to monitor its success. Ferguson's written promotional plan was due on the president's desk in four hours. FERGUSON TRAINING ACROSS CULTURES Company Background Founded in 2004, by Dr. Angus Ferguson, a retired university English professor, began as a home-based business that provided English-as-a-second-language (ESL) training, with Angus Ferguson as the president and sole employee. However, as Ferguson drew the attention of larger clients, the breadth of the services grew to meet the clients' demands. By 2014, Ferguson employed 10 full time employees and had established a data-base of approximately 65 consultants. These consultants were hired as needed, depending on the specificity of the clients' requests. By 2014, Ferguson was a leading provider of language, culture and diversity training in south eastern Ontario. The business offered two major services, language training and cultural diversity training. The language training component involved specific programs geared towards developing the employees' ees` English or French oral and written communication skills. The cultural diversity training services focussed on solving human resources problems through the education of the clients employees in teambuilding, mentoring, managing diversity, and understanding inherent cultural differences. Although language training still represented 60 per cent of the revenues, much of the firms focus had turned to the more lucrative and growing cultural diversity training, in fact, this part of the business had grown 70 per cent in fiscal year 2015. The average cost to the clients was $1,750 per day1 for either the language or cultural diversity training. Ferguson earned revenues of $ 1.6 million and realized a net income of $200,000 in fiscal year 2015. GROWTH The growth of the business had been due mainly to the hard work and exceptional networking skills of Angus Ferguson. The business's dramatic growth had severely strained the resources that Angus could dedicate to all activities of the business; consequently, Andrew Ferguson , Angus's grandson was hired in the summer of 2014 to lead the new "business development" 1 The industry averaged per cent gross margins on services. department. This new area of the business was designed to alleviate many of the marketing and selling activities that were performed solely by Angus Ferguson and to spark corporate growth that would allow the company to enter new geographic markets in the United States. Andrew Ferguson's first nine months on the job were spent improving his understanding of the business and fundamental marketing skills. It was anticipated that he would begin marketing activities towards the end of his first year, once he had a thorough understanding of what strategies would be effective in this industry. THE CROSS-CULTURAL CONSULTING INDUSTRY Like most professional services industries, cross-cultural consulting firms were most successful once they had developed a strong awareness for their services. Thus, reputations were of extreme importance and it was not uncommon for firms to advertise their client lists and to provide client testimonials to demonstrate the practicality of their services. Relationship management and earning referrals proved to be the key success factors in this industry. The clients of cross-cultural consulting firms could be divided into two groups: governments and private firms or organizations. Government Government departments, based primarily in Ottawa, required extensive text-intensive training programs in both English and French. Contracts were usually awarded through a bidding system. Although price was an important factor among the criteria listed, it was not paramount, the public client also considered the experience and reputation of the consulting firm when deciding on a successful bid. Ferguson's public clients included, Human Resources and Development Canada (HRDC), the Department of National Defence and the Department of Foreign Affairs and International Trade. Private Firms Ferguson's other group of clients consisted of private corporations interested in improved efficiency of their workforce and team dynamics. Several high-tech firms in the Southern Ontario region had begun to hire many non-Canadian engineers Management at these firms believed that training in cultural diversity would heighten the confidence of these newcomers to Canada and would provide them with a greater understanding of their work environment, Canadian culture and events. Additionally, it was hoped that these training sessions would improve the team dynamic between Canadian and non-Canadian employees. The decision to hire cross-cultural consultants was almost always that of the senior human resource professional in the office. When selecting a cross-cultural consultant, the professional would either use a bibbing process or would hire a familiar local firm such as Ferguson. These customers often put results and professionalism above price when choosing the firm. Ferguson's major private-clients were high-tech firms such as Nortel Networks, Siemans, Cisco Systems, Linamar, Blackberry and JDS Uniphase. COMPETITION Competition in Southern Ontario consisted of three major categories of competitors: professional service firms, home-based cross-cultural consulting businesses, and colleges and global language training companies. Professional Service Firms Professional service firms, including PricewaterhouseCoopers and Delotte & Touche, were large multinational competitors. These firms offered a full array of services from accounting to management consulting and operated on a global level. Their cross-cultural consulting services is primarily focused on high-level executive training and exhibited less flexibility in other offerings than many of the smaller, more specialized firms. They would often use their strong business relationships with executives to win consulting contracts and were renowned for charging premium prices for their services. Home-Based Cross-Cultural Consultant Businesses This category of competitors included much smaller, home-based cross-cultural consulting businesses, often referred to as "basement operations." These firms usually employed few consultants and used lower prices as one strategy to sell their services. Because of their size, these firms had fewer resources and support than were available to medium and large sized firms. Consequently, they were unable to offer the full range of services many clients demanded. Colleges and Global Language-Training Services This category included local community colleges such as Algonquin College, Conestoga College, and La Cite College, and the global language-training companies such as Berlitz and Living Languages. These companies originally began offering language services, and having recognized the demand for cross-cultural training courses, had developed appropriate programs. Their programs were general in content and often could not be customized to meet specialized client needs, hence, these programs were often more appropriate for low-to- middle-level management. The general approach used by this group allowed them to offer these training services at prices that were in line with the "basement operations" offerings. THE BUSINESS DEVELOPMENT DEPARTMENT New to Ferguson, the role of the business development department was to structure and coordinate the firm's marketing and selling activities. It was anticipated that this new role would allow Ferguson to develop its brand as a leading cross-cultural consulting firm. It was intended to reduce Angus Ferguson's role as the face of Ferguson and allow the business to grow in a new direction. Currently, clients viewed Ferguson as Angus Ferguson, and not a company that had over 65 other consultants at its disposal. ANDREW FERGUSON, DEVELOPMENT ASSOCIATE Andrew Ferguson graduated from the University of Toronto, with a degree in economics and history, and obtained a master's, degree in broadcast journalism from Syracuse University in Syracuse, New York, USA. Andrew grew up in his grandfather's business and while in university he spent his summers working at Ferguson in various positions within the company. As a result, he developed a comprehensive understanding of Ferguson and the cross-cultural consulting industry when he graduated from Syracuse. As development associate, Andrew was responsible for attracting new clients and retaining existing ones. Major activities included cold-calling potential clients, responding to inquiries, developing proposals for new business and implementing creative marketing campaigns. In addition, Andrew spent much of his time supporting the development of training programs and the development of curriculum that would be taught by the consultants. ADVERTISING AND PROMOTION BEFORE 2016 Until 2016 Ferguson had spent very little money on traditional advertising or promotion. Rather, Angus Ferguson relied on his networking skills to find new business and attract new clients to Ferguson's services. Angus spoke at numerous engagements, emphasizing the importance in cross-cultural relations in the workplace. These speaking engagements were generally followed by numerous enquiries about the services provided by Angus Ferguson and his firm. Furthermore, Ferguson had garnered significant attention when the firm was nominated for, and won numerous local and national business awards. The majority of the expenses incurred for advertising and promotion before 2016 were for publicity calendars and a web site2 . The calendars were mailed to current clientele, annually, with a short note thanking them for their business. The calendars and web site provided, information about the services that Ferguson provided, as well as articles highlighting the successes that they had achieved in the past. These measures had been deemed as sufficient for advertising and promotion because, it was Angus Ferguson belief that the "personal touch" was necessary and instrumental in selling Ferguson's services. The down-side of this strategy was that no formal advertising or promotional strategy had been developed to attract new business to Ferguson before Andrew Ferguson was hired as development associate in 2016.