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Sales Management: Cloverfield Case Study

Essay by   •  July 16, 2011  •  2,227 Words (9 Pages)  •  6,222 Views

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Introduction

Cloverleaf plc is an established UK-based supplier of bottling plant used in production lines to transport and fill bottles. One of the main strengths the organisation has is their technology. The technological benefit they have allows them to fill the bottles 10% quicker than their competitors with equal accuracy. Therefore this will save customers a lot of time and cost. Cloverleaf also discovered that their product was more reliable than any of their competitors. In addition, customers would benefit from further cost saving as the product was more reliable. Time wastage would be minimised for the buyer. This is a major competitive advantage for Cloverleaf over their competitors. Having a superior product than competitors should increase sales, if marketed and processed correctly.

Analysis

Cloverleaf failed expectations in the European market. With a potential 1000 customers only three units had been sold in two years, sales were low. So why was this?

Cloverleaf invested in sending five employees to Europe to drive sales. These included ones sales manager who was in charge of three sales people and a technical specialist. One sales person was placed in France the other in Germany and the third around the Benelux countries. The technical specialist was available to clear up any specific technical questions with potential customers.

One particular deal that was unsuccessful was with Commercial S.A.

Commercial S.A. is a Marseille based bottling company, who produce a number of key soft drink brands. They also have a reputation for technical excellence and innovation. Commercial S.A. required a new bottling line as a result of their expansion. This seemed like an ideal potential customer for Cloverleaf, as they provide a leading technical product that could be desired by Commercial S.A.

Commercial S.A. controllers purchases through a DMU. A decision making unit which compromises of a few selected senior employees that are involved in the buying decision Jobber (2004). Increasingly DMU’s are much more common due to the fact that some products and services are extremely expensive and by having a group of people involved in the purchase, a greater perspective is given therefore a more accurate decision is made Jobber (2003). The consequence of this is that we are beginning to see the Pareto effect. This is where a large proportion of profit or turnover comes from a handful of customers Wilson (1999). Taking this into account, Cloverleaf’s sales process must target and have a good relationship with the DMU from Commercial S.A., to receive benefits such as sales person knowing who to influence in DMU in order to secure a sale. Mullins (2005) describes that employees in the DMU take particular roles in the buying process, six different roles were created. In terms of Commercial S.A., this consisted of a production manager who tends to be focused towards cost saving and smooth production flow. He may take upon a decider role in the DMU. The production engineer M Artois tends to look upon technical specifications of product. He may well take up the influencer position in the DMU, as he is in charge of drawing up specifications of the requirement. The purchasing officer was M Bernard. Bernard was interested in the financial aspects of the purchase, especially as the potential order was over Ð'Ј1/2 million. Bernard has the Buyer role in the DMU, this is a powerful position in the DMU as he can negotiate prices, and ultimately decide if the order is value for money. The last person in Commercial S.A.’s DMU is the Technical Director. Dr Leblanc is responsible for technical issues and to certify that the technology is state of the art to maintain the organisations technologic excellence and innovation. John Goodman is sales executive for Cloverleaf in France and is responsible for negotiating and producing sales in this region. The potential sale between Commercial S.A and Cloverleaf began when Technical Director Dr Leblanc contacted John to enquire about their products. After a series of events it became apparent that there were flaws, in the process of the sale that led to the deal going to a competitor Hofstead Gm.

On March 8th John Goodman met with M Artois, the Production Engineer for Commercial S.A., the meeting didn’t go to well. One of the main problems with this is that John showed the technical manuals to M Artois. M Artois wasn’t impressed by this. This might be because M Artois doesn’t necessarily want to view these materials as that’s not his role in the DMU.

The next meeting was with Dr Leblanc the technical director. Dr Leblanc wanted to know if Cloverleaf’s product is more technologically advanced than competitors. John reassured him that it was. The problem with this is that, John is a sales person, not particularly technically minded. Cloverleaf invested in sending over a technical specialist to assist in knowledge to help a sale, John didn’t take advantage of this, and particularly as Dr Leblanc’s possible buying criteria was based on a rational decision. The impact of this means that, the need has not been satisfied, and then it may have contributed to the sale falling through. The organisation of the salesforce was poor in the instance.

Another meeting took place on March 13th between John and M Bernard the purchasing officer. As a purchasing officer Bernard was interested in the price however John described the technical details to Bernard, who wasn’t particularly interested in this, as his role in the DMU wasn’t on the technical side. Bernard wanted to know the price of the product, John didn’t know. This meeting was a waste of time and a missed opportunity to influence a powerful member of the DMU. This again demonstrated a lack of sales planning and poor relationship with Commercial S.A. It took a week for John to get the price figure to Bernard. Cloverleaf came up with Ð'Ј1.1m. Competitor prices where less than Ð'Ј1m. The 10% extra Cloverleaf quoted was because the product had superior performance than competitors. However was this 10% increase in performance worth 10% increase in price? Cloverleaf positioned them self as high quality high price, however in a competitive market like this, where they where bidding against three other competitors for Commercial S.A., price might be more important than buying criteria such quality. However compromising on price can undermine its own value proposition. After negotiation the final price was dropped to Ð'Ј1m. Cloverleaf’s selling style seems to be a mix between a hard sell and a take it our leave it approach.

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