Cause: Sales Management Case Study Cloverleaf plc Cloverleaf plc was a UK-based supplier of bottling machinery used in production lines to transport and ll bottles. Two years ago it opened an overseas sales ofce targeting Germany. France. and the Benelux countries. It estimated that there were over 1.000 organizations in those countries with bottling facilities and that a key sales push in northern Europe was therefore warranted. Sales so far had been disappointing with only three units having been sold. Expectations had been much higher than this. given the advantages of their product over that produced by their competitors. Technological breakthroughs at Cloverleaf meant that their bottling lines had a 10 percent speed advantage over the nearest competition with equal lling accuracy. A key problem with competitor products was unreliability. Downtime due to a line breakdown was extremely costly to bottlers. Tests by Cloverleaf engineers at their research and development establishment in the United Kingdom had shown their system to be the most reliable on the market. Ctoverleaf's marketing strategy was based on high quality. high price competitive positioning. They believed that the superior performance of their product justied a 10 percent price premium over their key competitors. who were all priced at around 1 million for a standard production line. Salespeople were told to stress the higher speed and enhanced reliability when talking to customers. The sales organization in northern Europe consisted of a sales manager with three salespeople assigned to Germany. France. and the Benelux countries respectiVely. 1When a sales call required specialist technical assistance. a salesperson would contact the sales ofce to arrange for the technical specialist to visit the prospect. usually together with the salesperson. Typically. four groups of people inside buying organizations were involved in the purchase of bottling equipment. namely the production manager. production engineer. purchasing ofcer. and. where large sums of money were involved (over 5 00.000}. the technical director. Production managers were mainly interested in smooth production ows and cost savings. Production engineers were charged with drawing up specications for new equipment and in large firms. they were usually asked to draw up stateotltherart specications. The purchasing ofcers. who were often quite powerful. were interested in the nancial aspects of any purchase. and technical directors. while interested in technical issues. also appreciated the prestige associated with having statenoftheart technology. John Goodman was the sales executive covering France. While in the sales ofce in Paris. he received a call from Dr. Leblanc. the technical director of Commercial SA. a large Marseille-based bottling company that bottled under license a number of key soft drink brands. They had a reputation for technical excellence and innovation. Goodman made an appointment to see Dr- Leblanc on 'i' March. He was looking forward to making his first visit to this company. The following extracts are taken from the record of his sales calls. March 7 Called on Dr. Leblanc who told me that Commercial SA had decided to purchase a new bottling line as a result of expansion. and asked for details of what we could provide. I described our system and gave him our sales literature. He told me that three of our competitors had already discussed their systems with him. As I Was leaving. he suggested that I might like to talk to M- Anois. their production engineer. to check specications. On March 8 [Visited M. Artois who showed me the specifications that he had drawn up. I was delighted to see that our specications easily exceeded them but was concerned that his specications seemed to match those of one ofour competitors. Hofstead Gm. almost exactly. I shoWed M. Artois some of our technical manuals. He did not scent impressed. March ll Visited Dr. Leblanc who appeared very pleased to see me. He asked me to give him three reasons why they should buy from us. I told him that our system was more technologically advanced than the competition. was more reliable. and had a faster bottling speed. He asked me if I Was sure it Was the most technologically advanced. I said that there was no doubt about it. He suggested I contact M. Bernard. the purchasing manager. I made an appointment to see him in two days' time. March 13 Called on M. Bernard. I discussed the technical features of the system with him. He asked me about the price. I told him I would get back to him on that March 15 Visited Dr Leblanc who said a decision was being made within a month. I repeated our operational advantages and he asked me about price. I told him I would give him a quote as soon as possible. March 20 Saw M. Bentard- I told him our price was $51.1 million. He replied that a key competitor had quoted less than 1 million. I replied that the greater reliability and bottling speed meant that our ltigher price was more than justied. He remained unimpressed. March 21 Had a meeting with Mike Bull. my sales manager. to discuss tactics. I told him that there were problems. He suggested that all purchasing managers liked to believe they were saving their company money. He told me to reduce my price by 50,000 to satisfy M. Bernard's ego. March 25 Told M. Bernard of our new quotation. He said he still did not understand why we could not match the competition on price. I repeated our technical advantages over the competition and told him that our 10 per cent faster speed and higher reliability had been proven by our research and development engineers. March 30 Visited Dr Leblanc who said a meeting had been arranged for 13 April to make the nal decision but that our price ofl.05 million was too high for the likes of M. Bernard. April 4 Hastily arranged a meeting with Mike Bull to discuss the situation. Told hint about Dr Leblanc's concern that M. Bernard thought our price was too high. He said that 1 million was as low as we could go. April 5 Took our nal offer to M. Bernard. He said he would let me know as soon as a decision was made. He stressed that the decision was not his alone: several other people Were inVol't'ed. April 16 ReceiVed a letter from M. Bernard stating that the order had been placed with Hofstead Gm. He thanked me for the work I had put into the bid made by Cloverleaf plc Discussion question Analyse the reasons for the failure to secure the order and discuss the lessons to he learnt for key account management