Peterson Sales Limited Daphne McKinley was Sales Manager for Peterson Sales Limited. Peterson Sales was a distributor of Petersons label canned produce to a variety of independent grocers and small grocery chains in Eastern Canada. Daphne had been in her position for a number of years - nearly a decade. Until now, everything had been going fairly smoothly. But lately, she had been having some difficulty in her role as sales manager. Today she wanted to get to the bottom of the situation and make some hard choices about what to do next. Daphne managed a team of four sales people who covered the four Atlantic provinces. Suzanne was responsible for mainland Nova Scotia. Peter sold to Prince Edward Island and Cape Breton Island. Debbie sold to New Brunswick accounts and David was responsible for Newfoundland. Late last week Daphne's boss, Mike Peterson, had called her into his office. He wasted no time at all in showing her last month's sales figures. She was shocked to see that all of the reps with the exception of David were off of their sales for the month of October. October's sales were usually robust. But this year, they were up to 30% less than last year's numbers. Not everyone was equally affected. David was up 15%. But the others' sales were off considerably: Debbie -15%, Peter -18%, Suzanne -20%. Mr. Peterson was concerned that this blip on the radar was the sign of a permanent problem: either with the sales staff, or the market. But either way, he was determined to find out what was going on and he was relying on Daphne to find out from her sales reps what the problem was. Reluctantly, Daphne sent the following email message to her sales staff (see Exhibit A). Exhibit A: Email to Sales Reps Date: November 15, 2013 To: District Sales Agents From: Daphne McKinley, Sales Manager Re: Emergency Sales Meeting - November 20, 2013 Due to some changes in sales for the month of October which are outside of seasonal fluctuations, it is necessary to hold an emergency strategy meeting. The meeting will be held at 10:00 AM on November 20, 2013 at head office. Look forward to seeing you there. Daphne Daphne was surprised to find the following emails in her mailbox when she returned from lunch an hour later (see Exhibit B). Exhibit B: Email from Sales Reps Date: November 15, 2013 To: Daphne McKinley, Sales Manager From: Debbie McCaskill, New Brunswick Agent Re: Emergency Sales Meeting - November 20, 2013 Dear Daphne, I just wanted to take this opportunity to talk to you prior to the group meeting scheduled for next week. I am sure that the strategy meeting is designed to take stock of our sales figures and try to determine why sales are down. I don't know what everybody else is doing, but I know that I just came off one of the worst months ever in my territory. Before we all get together and share horror stories I just want to suggest something. Perhaps some of the reasons for the shortfall is that our firm isn't putting enough promotion in the field to support the reps. In my territory, I am facing increased competition from the huge grocery chains. They are taking sales from the smaller chains that we service. And, I can't offer these smaller firms much in the way of discounts, in-store promotions, or even end-of-aisle displays. I am sure that if we had some more promotion in the channel...if we could help these smaller grocers with merchandising, then our sales would go up. It has become more competitive, but we haven't responded effectively. Anyway, it's a thought. See you at the meeting, Debbie Date: November 15, 2013 To: Daphne McKinley, Sales Manager From: Peter Lahey, Islands Agent Re: Emergency Sales Meeting - November 20, 2013 Hi Daphne, I guess we're in for some kind of onslaught on the 20th huh? Well, I suppose we deserve it. I can only presume from the tone of your email that I am not the only one whose numbers are down. Well, I thought I would fill you in on some changes in my territory before the general meeting...I don't like to cry in public! Seriously though, I wanted you to be aware that I am encountering some public discontent...especially in PEI. It appears that some of the local stores are boycotting our canned tomatoes and fruit salad. Something to do with additives. They say that they want to stock brands produced locally (and they have some...just not many). I can't see why our additives would differ from some others. But, anyway, that's the story. I don't expect the boycott to last very long. And, actually, I think that the whole thing will blow over because the local product is actually more expensive. I think our product is great. No problems in Cape Breton... or at least not yet. But, anyway, here's hoping that word of this boycott doesn't travel...things could get worse. See you at the meeting...Peter Date: November 15, 2013 To: Daphne McKinley, Sales Manager From: Suzanne Perkins, Nova Scotia Agent Re: Emergency Sales Meeting - November 20, 2013 Dear Daphne, I guess I am not the only one with poor numbers for October. I know I am reading between the lines here, but if Peterson wants to call a meeting...it can't be good news! I just wanted to apprise you of some changes in the Halifax market (my major market as you know). We are encountering some heavy duty price competition from the store's own private labels. I think we are being squeezed between the name brands (Libby's, DelMonte) and smaller labels like ours...not to mention the private label brands of the smaller chains. Independents can't afford to produce private labels, but the smaller chains do. And it seems that our price is not low enough to compete effectively with the private labels, and our quality isn't on par (or perceived as being on par) with the national brands. So, anyway, that is what seems to be lacking here. I will bring it up at the meeting. Do you know if Debbie, Peter and Dave are having the same trouble? Talk to you soon, Suzanne Daphne sat quietly staring at her computer screen. She realized that the problems may have very little to do with her sales staff and everything to do with their marketing strategy. She wondered if she should show these emails to Mr. Peterson before the reps came for the meeting. After all, she could recommend changes. She also wanted to assure him that the reps needed support to do their job and that no matter how talented a sales person was, no one could sell a product that was having problems. She was shocked that it was the first time she had heard about the boycott in PEI. Before meeting with Mike Peterson, Daphne decided to give David a call in Newfoundland. In moments, his cheerful "hello" greeted her from sunny Newfoundland. "Hi, Dave. Did you get myemail?" she asked "Sure", Dave replied. "Sound serious. How far are we down?" "Overall, about thirty", she replied, trying to sound nonchalant. "Oh-oh", David mused. "I suppose Peterson is out for scalps?" "No, of course not", she feigned a carefree attitude. The last thing she wanted to do is strike fear in the heart of her top sales agent. David was her most experienced rep. She often thought of him as an equal, rather than a subordinate. He was grounded, non-competitive and understanding. She often confided in him about some things that most managers don't tell subordinates. But more than that, she really valued his opinion. Next to her, he would make a great sales manager! "Yeah, right. That's why we're having an emergency meeting...no problem. He just wants to us to taste test canned corn...or is it artichoke hearts?" David joked quietly. "No, you're right, Dave. It is your folks' hearts he wants to can", she joked. "Now that sounds more realistic", David sighed. Daphne's tone turned more serious. "Well, David, we are bleeding and we need to know why. Any ideas at your end?" David sighed again...louder this time. "As you know, Daphne, my numbers are up. But I don't know for how long". "What do you mean?" she asked. She was worried. If David's sales should bottom out they would be really in trouble. Peterson's brand was big in Newfoundland. If his sales fell they wouldn't only be down in gross volume, they would be taking a loss. "There are changes out here, Daphne". "What kind of changes?" "More competition, the onslaught of private label brands, top flight merchandising from the big name brands. You name it, we've got it. But what we don't seem to have is a retaliatory game plan," David explained. "Where would you go with this, David?" she asked. "I mean, if you were to prevent a sales drop over the next few months?" "I really don't know," he responded quietly. "What is the situation in the Maritimes?" "Down all over," she responded. "Particularly in Nova Scotia. But it's by no means a Nova Scotia problem. We have a boycott in PEI-something to do with additives. Intense competition in New Brunswick, and what seems to be a lack of promotion in the field... or at least that seems to be the excuse." "Maybe it's a fair assessment," David responded. "Perhaps you're right," she agreed. "Well, thanks for the input, David. I will see you at the meeting?" "Yep, I'll be there", he assured her before hanging up. She sat at her desk. It was sure to be a difficult meeting. She thought she should make some kind of a briefing paper up for her boss, maybe summarizing the information that seemed to be plaguing her sales reps. She would like to be able to make some recommendations at the meeting. She didn't want it to become a long, tedious and depressing event. She sat down to make notes to bring to Mr. Peterson. ITS A MARKETING CASE. LET ME KNOW THE ANSWER The Case Structure: Your case analysis must consist of the following four sections: Problem (or Task) Statement (choose one) Situation Analysis Analysis of Alternatives Recommendation Use subheadings throughout your case study. The total length is likely to be between 5 and 10 typed, double spaced pages, not including Appendices. Use Appendices for graphics which do not fit easily into your text: graphs, tables, illustrations, other exhibits.