Reagan Technologies

Mike Reagan and his brother, Marc, were justifiably proud of their company. What they began as a paint distributor some forty years ago, fresh out of college, had grown into one of the largest specialty painting contractors in the U.S., and likely the world. What their company does is paint ships, which may not sound difficult, but when one considers that every surface on a ship, including some in some very tight places, has to be painted and repainted over time, it becomes easy to see that your average painter wouldn't be able to do the job. In fact, the company has the best safety record and is known for developing new, safer methods for ship painting. As a result, the company employed 1,200 people, 1,100 of whom were highly trained specialists in marine painting. Now, as Mike just turned seventy and Marc wasn't far behind, they were discussing the company's future.

"We need to find another business," Mike was telling Marc over coffee one morning. "Something that will flourish when times are not so good for shipbuilding. And we need to find it quickly so we can help get it going before we turn this company over to Mike Junior and Addie." Addie is Marc's daughter, and the only one of his children who had shown an interest in the family business. She worked with her dad in taking care of the back office functions (accounting, finance, IT, etc.) while Mike Junior worked with his dad to oversee the painting operations.

One truth about shipbuilding is that the industry is highly cyclicalgovernments don't build navies during peace, for example. Another truth about shipbuilding is that there is no sales force, because all jobs are put out for bid. Government jobs don't require a salesperson, just a good proposal, and Reagan Technologies had a solid proposal-writing team. But even with that strong team, the company's revenue would plummet when the U.S. Navy wasn't building new ships.

Marc replied, "I think I have an idea. I got a call last week from Shore Insulation and Fireproofing. They want to rent our scaffolds from us on the U.S.S. Bankston job when they do the insulation. And they're not the only ones. I've had several calls from companies in the area asking if we rent scaffolding. There's a lot of companies in construction, maintenance, and building repair that rent scaffolding."

Mike had a quizzical look on his face as he said, "But we don't know anything about that business."

"We know how to put up and take down scaffolding safely, and safety is a big issue. With our safety record, we should be able to win a lot of business," Marc responded. "Plus, this should be relatively steady income, in addition to the painting business. With our locations in the shipyards all across the Gulf and up and down the east coast, we should be able to serve just about anything east of the Mississippi River."

"Yeah, but how do we get the business? We'll need salespeople because right now, you and I are the only ones in this company with sales experience, and I don't have time for that!"

Discussion Questions

1. What would marketing do for the new division? What would its role be, and what would you consider success for marketing?
2. What type of sales position would they need, and what are several sales strategies they might could implement?