Outdoor are down from last year. Mr. Hudson

 

 

 

 

 

 

 

 

 

Outdoor Sporting
Products, Inc.

 

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12/18/2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents:                                                                                          Page
Number

 

Executive Summary:                                                                                       3                                                                                                                                                                                             

 

Product Management:                                                                                    4                                                                                             

 

Market Channels:                                                                                            5

 

Market Campaigns:                                                                                        7

 

Pricing:                                                                                                            8

 

Sales and Sale Force Management:                                                              9                                                         

 

Implementation of Technology:                                                                     10

 

Customer Service and Support:                                                                      11                                                                   

                       

Conclusion:                                                                                                      12                                                                               

 

                                                                                                                                                                       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Summary

Outdoor Sporting
Products Inc. has many different issues regarding the product management,
marketing channels, market campaigns, sales force, technology and their customer
service. Profits continue to be satisfactory but the profits and sales are down
from last year. Mr. Hudson McDonald is considered the president and chief operating
officer. He is continuing to see the need of change for the company. He is
concerned because the sales have not increased appreciably from year to year.
For the past 6 years the annual sales volume has ranged between $6.2 million
and $6.8 million. The sales have been increasing but the profits have been
decreasing. Mr. McDonald believes the salespeople compensation plan is the
basic weakens in the firm’s marketing operations.

            The
company has about 700 different items. They are grouped into three different
lines. The first is fishing supplies. Next is hunting supplies. Lastly is accessories.
 The hunting supplies consist of about
40% of the company’s annual sales. The fishing supplies consist of fishing
jackets, vest, caps, rods, different reels, lines, flies, lures, landing nets,
and creels. About 30% of the company is considered hunting supplies. The
hunting supplies consist of insulated and thermal underwear, safety garments,
shell holders, whistles, calls, and gun cases. The accessories are about 30% of
the company sales. That consists of compasses, cooking, kits, lanterns,
hunting, and knives. The sales of the hunting and fishing lines are usually
seasonal. Most of the fishing supplies were sold between January-April. Most of
the hunting supplies were sold between May-August. The companies’ lower sales
are usually during the month of December. Fifty percent of the companies’
volume is considered imported.

            Mr.
McDonald is in control of the sales force. He believes the sales are the weakness
for the company. He is curious on how he could increase sales and profits for the
company. The less with changing the whole organization the better. There are
many changes that can be conducted to improve the sales in the company. Some changes
that need to be made could be major and some may not be bad at all. The company
has great sales already. It would just be beneficial for them to explore new
markets. The company will need to shift resources around production and
marketing to make things happen. Customer service and technology will help
improve standing among the customers. This will help customers that are already
loyal to the company and help satisfy all the customer’s needs.

 

 

 

 

 

 

 

 

 

 

 

 

 

      I.        
Product
Management

            Mr.
McDonald has had some issues in regards to product management. “The most
important element of business market is deciding which product should be
introduced or keep, which items promote heavily, and which product to cut or
market less vigorously. There are four levels of product management: the product
itself, the technology platform, the product line, and the product category.”
(Dwyer and Tanner pg. 225) The product manager should be in charge of this
area. Mr. McDonald should be included in the issues and decisions that need to
be made. Product management should be focused on four different areas’: the target
market, intricacies of the product, what the business needs to order to
succeed, and how to measure the success. McDonald’s said “with few
expectations, Outdoors customers had little or no brand preference.” The product
manager and Mr. McDonald should be finding ways that can make the brands and
customers more loyal to the company. Customers don’t view the products by
setting themselves apart from the others to start buying from the company. This
strategy would be also considered marketing. The product needs to be quality so
the customers will be satisfied and they will go and re buy. The manufacturing of
the product should be improved as well. The percentages of where the products
are coming from should be fixed. Fifty percent of the company’s volume come
from imported products. The company could increase its self-manufactured products.
That would increase revenue or help gain more control over the process. If they
increase the self-manufactured product that could increase growth in the
manufactured factories. If the company starts to turn around this could mean
future growth.

            There
are different areas that could be fixed easily. The higher quality products can
be self-manufactured rather than imported. The could help increase the customer
loyalty and revenues. When they import 50% of the volume and only 35% self-made
can be different. The company should change it where 50% is self-made and 35%
is imported. This could help the company control the process of manufacturing. That
will increase the quality of the product. This could end up costing more but in
the long run the starting a secure preference for the customers it could be a
boost for the company. When the company starts getting different things figured
out then they could start growing the production process. If they are looking
at the future, then they may end up needing more space to manufacture the product.
They will most likely have to build and increase production. Buying space would
defiantly have to considered. It would be best for them to buy space in the
Midwest because than that will reach out to more hunters and fishers. That could
increase their sales.

 

 

 

 

 

 

 

 

 

 

 

 

     II.        
Marketing
Channels

            Marketing
channels are the ways goods and services are made and available by the
consumer. There are few problems in the Outdoor Sporting marketing channels. The
first major issue they have very little presence in large metro areas. There
was poor customer coverage which is why the company has very little presence in
large metro areas. Just because there is poor customer coverage that doesn’t
mean the market is not good. Some customers are being overlooked by the
company. The market share is 2% to 3%. This area defiantly needs to see some
improvement. They do have some customers that are not able to purchase product from
Outdoors. The discount stores are also remaining untouched. Mr. McDonald stated
there has been an increase in discount stores. Outdoors as yet developed a
presence in these kind of stores. They claim it from the pricing policy and the
amount of pressure a customer can put on the sales person. It is a poor business
not to follow the trend of the different markets. These problems defiantly need
to be addressed. If the Outdoors started making discounts they would have to
learn how to put their products in market discount stores. The last issue in
the market channel would be how their distribution is set up. Mr. McDonald said
every product is shipped out of one warehouse in Albany, New York. This could
put a limit on distributing their product. Every sale or product that is sold
will have to be routed through one place. If the company continues to grow this
could become a major problem. Outdoors will have to make sure they stay ahead
from the growth at a manufacturing standpoint.

            It
could be very beneficial for the company to start a presence in the large metro
areas. They could achieve this by making their sales person start a presence in
the area. They could hit the large retail chains in the area. This will help brand
awareness and also open them up the market. They could also start forming
discount stores. If the market is moving in this area, then it could be beneficial
for them to open a store. The sales person will need extra time in these
outfits to increase their market. If they decrease sales in stores of small to
medium size it could free up time. If they reduce to 4,000 stores and then put
them in 500 major retail locations could be beneficial for the company. They then
could add 500 – 1,000 discount stores. The distribution could be fixed by building
another warehouse. Another warehouse could improve in different areas. It could
help customer satisfaction because it will decrease the shipping time. It will
also put less stress on existing shipping and manufacturing employees. It could
defiantly good pay off in the future. It is really good for a company to think
about the future. It may not beneficial to increase right away until business picks
up a little.

 

 

 

 

 

 

 

 

 

 

 

 

   III.        
Market
Campaigns

            Outdoor
Sporting Product are not utilizing the marking it the full way that they should
be. They are making a huge mistake in the marketing field. They didn’t use
magazines, newspaper, or radio advertising to reach the consumers. It might
save money but it also puts strain on the sales force. They are not attracting
customers by having a salesperson be the major role in the marketing. Magazine,
newspaper, and radio advertisement may not reach the marketing they need but it
is a cheaper way to market the company. The newspaper ads and magazine ad could
be a major role in the hunting and fishing products. People that hunt and fish
are more than likely to purchase a product from their favorite magazine or
newspaper ad. The catalog that the Outdoor Sporting Product puts out every year
needs to be evaluated so they can make any changes that are needed. Customer
usually don’t make their purchases wit the catalogues. With the internet being
around catalogues have really decreased interest. They need to evaluate what the
catalogue is actually doing for the company and how much it is costing to make
them yearly. Marketing is used to try to convince people to keep using their
products. That is why improving their marketing is a must. They could start advertising
in fish and game magazines that could help improve the marketing of their
product. If they are target fish and game magazines that would be a very good
strategy. It will not hurt the company to try different things. It is
relatively cheap to advertise in a magazine. Newspaper ads and radio ads can
also be used. People will gain brand recognition from the different ads. Even
if someone would just mention the name that could really help the reputation of
the company. Marketing is very important to look at in a company. The catalogue
will only be successful in re-buys. They could only make the catalogues
available for the people that are interested in them or people that will use
them. It can be a waste if they send out 20,000 catalogues and only 1,000
people use them. Utilizing the internet could be very beneficial to the company
as well. This would help eliminate the wasted catalogues people are not using.
Product catalogues are just an outdate marketing strategy.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   IV.        
Pricing

            The
pricing of the product is another negative result on the company. Deciding the
price of a product can be very difficult. There are many things you have to
considered when it comes to deciding the price. You have to take account the
price it will take to make the product and also you have to think about the
profit. Somethings are not in the company’s control as well. Outdoor Sporting
Product gets their products from self-manufacturing, importing, and domestic companies.
They have to mark up their product to make any profit of them. They have to
also pay for the product and the employees. The markups are too high for the company.
It should go off the trends of the market. Mr. McDonald state their markets was
50% to 100% on Outdoors cost for the item. The average markup with all product
averages out to about 70%. The markup has worked for the company but it needs
to be adjusted. Mr. McDonald said customers are leaning more towards a discount
store. If they try to maintain a 70% markup that could make it really difficult
for a discount store. The markup could result from different issue like
shipping, manufacturing, and distribution issues. It can’ t be put at 70%
strictly because of profits.

            It
is important for them to find business in the discount stores. Having a 70%
markup will not work for a discount store. They will need to decrease the
markup so they can develop the relationship with the customers. They should be
able to find a way to become profitable around about 50% markup. This will help
lower the price on the product. The development of another warehouse would help
lower shipping costs. That would help the company lower their markup costs because
they will not have to pay for the extra shipping costs. If they fix these issues
this could really help the company.

 

    V.        
Sales
and Sales Force Management

            Sales
force is one of the biggest problems in the Outdoors company. There are many
different issues in this area. Some are including training salespeople,
evaluating sales performance, determine sales potential and territories, and
the relationship between the sales function and overall marketing strategy. The
salesman that have guaranteed salary have a higher average earning to sales
ratio. The incentive plan has different weaknesses. One of the plans require the
salesman to be in the territory the previous year to be eligible for the bonus.
That would make it to where the first year people won’t get an incentive. It
does make it to where they would get a big bonus the next year. The compensation
defiantly needs to be addressed. Compensation could be changed by having a
lower salary. They could give the salespeople a chance to sell products and
help with the money in the area of commission. Salesperson usually carries around
a catalogue about the selling formula. If the customer could get knowledge
about the product than that could help increase the pride of the jobs and
sales. The sales group may need additional training. Mr. McDonald could just
use his best salesperson to do the sales training. If the salespeople get more training
that could leave to more sales for the company. Mr. McDonald can lead the sales
team but may need to make a few changes. His sales formula would be a good
formula to use. He may need to increase his amount of time and effort of his
Monday sales calls. There should be better way of checking in with the
salesperson that is dealing with the daily sale reports. They could benefit
from another sales director that deal with day to day operations.

 

 

   VI.        
Implementation
of Technology

            Technology
is one thing that the company is not utilizing. The case doesn’t mention much
about internet sales. They also don’t mention how technology is utilized the
make the organization successful. Technology is not a very big area of focus
with this company. If they use internet sales it could affect sale of the sales
force. It could upgrade customer service in dealing with customer needs and
wants. The company only seems to deal with sales between salespeople and
catalogue. The customer satisfaction may increase if they use the information to
improve their needs. Technology could also help improve the shipping process. The
salespeople that just focus on calling and handling reports could start paying
attention to the manufacturing and shipping products. Even if they eliminate a
day off of processing sales. If they look into the future that would show they
need to more technology.

            It
would be use to advance the technology in the company. Especially with today’s
generation everybody is using technology. They could develop an online
catalogue or find ways they could process the sales online. Online sales have
major sale in today’s time. Today’s generation buy most of their stuff online. Outdoor
is missing out on the opportunity by just focusing on the salespeople. They
could even have a salesperson pay attention to the site. This could help speed
up the process and allow the salesperson to travel to other places. Technology
could really help the buying process for the customers.

 

 

 

 

 VII.        
Customer
Service and Support

            Having
good customer service skills is very important when trying to make sales. This could
be the tougher job because you have to deal with different people. It could be
the difference of making a sale to looking for another job. The lack of training
in this area could cause a concern. There are sales that could be missed and
some companies may not know because they don’t how you are dealing with the
customers. The case doesn’t mention if they have a customer service department
but somewhere they have customer support. When the company starts to grow it is
important to make sure they maintain happy and loyal customers among their
growth. Training the sales staff will increase customer service and support. Sales
depend on the customer service and support the customers get. If a salesperson is
commission based it will depend on how good they are with people. The best
sales person should be the one to train the other because they are doing
something right with the customers. There defiantly needs to be a customer
service department so that customer have someone to call and make their
complaints too. Saving the customers can help save and maintain loyal
customers. Employees that are dealing with the customers should relay the ideas
to the other departments. The customer service is about satisfying the
customers wants and needs.

 

 

 

 

 

 

VIII.        
Conclusion:

            Outdoors
Sporting Products Inc. have done a great job setting up the company to make
profit. The case is focused on the compensation of the sales forces there are
some areas that need to be improved. Mr. McDonalds needs to realize that the
company needs to keep up the market changing. That will take the company to their
next stage. If Outdoor makes the changes, they need they will defiantly see much
more growth in the company. Outdoor Sporting Products has a great company and
they are ready to take the steps need to become a major sporting company. Mr.
McDonald just needs to develop the company that will help them reach their
potential.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resources:

BBusiness
Marketing, 4th edition; by F. Robert Dwyer and John F. Tanner. McGraw
Hill.

 

Blunt L. (n.d.). Types of Marketing Channels. Retrieved December
18, 2017, from

http://smallbusiness.chron.com/types-marketing-channels-21627.html

 

Gold, R. (n.d) How Today’s
Technology Is Used in Business to Communicate. Retrieved December 18, 2017,
from http://smallbusiness.chron.com/todays-technology-used-business-communicate-27351.html

 

 

 

 

 

 

 

 

 

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