BE Unit 15 Sales Case Study

Company Scope Inc., founded in 1993, was a high-technology products company.
The
company specialised in making electronic measuring devices for process control,
communication and instrumentation industries. It was largely an owner-managed company.
The President of the company, who himself was an inventor, had raised enough capital to
finance expanding operations. A major oil company had recently supplied capital in exchange
for a minority share in the company. The growth in business was enormous in the last four
years. The company’s R&D had made several innovative changes to give Scope an excellent
reputation in the industry. The business growth, however, came because of Scope’s new
technical advance. The company essentially responded to the customer demand. In 1998,
several other companies entered the field with similar products. One of them, 100 per cent
subsidiary of a major multinational oil company, was especially aggressive in marketing the
devices. It had invested in automatic production line and beat the prices of Scope in the
market place acquiring a considerable market share within two years. In 1993, it was
estimated that Scope and its major competitor each held 30 per cent market, while 10 smaller
companies had the rest of the market. Recently, it was rumoured that Japanese had come up
with a major technological breakthrough that would lower the prices of the electronic
measuring devices to half. Marketing Concept The Executive Vice President of the company
was alarmed by the recent trends in the marketplace. In spite of the number of competitors, he
was confident that the technological capabilities of Scope would enable it to maintain the
necessary edge to continue the growth at 30 and 40 per cent each year. He was also
convinced that his current Sales Department was incapable of “marketing” the products as
aggressively as the competitors. There was virtually no market analysis, product-planning
was uncoordinated and market intelligence was poor. He made several recommendations to
the President of the company.
1. The Director of sales be given early retirement or should be reassigned to a staff function.
2. The Sales Department should be replaced by full-fledged Marketing Department,
composed of four divisions: Sales, Technical Services, Marketing Planning, and Product
Management.
3. Marketing Planning should survey the market constantly, recommend innovation and
coordinate long-range planning.
4. Technical Services should assist Engineering Department in new product development and
render technical support to sales.
5. Product Managers should monitor their products and competitors introductions, look for
increased penetration of old products, foster market growth with new products.
6. Sales Department should concentrate on enlarging sales in present markets in coordination
with other divisions.
To implement the recommendations, Scope hired a new Director of Marketing. The new
Director interviewed all the personnel in the Sales Department and found that Sales Managers
more or less ran independent operation making their own pricing decision in many cases.
They constantly came up to the Vice President for reducing price levels complaining that
prices were high. The exceptional low-price approval became more of a norm. The
advertising budget was, one per cent of sales. Most of the budget was spent on advertising
aimed at enhancing corporate image in various trade magazines. The company offered
numerous products with almost no standardisations. Every order required special design and
production considerations. Sales Managers insisted on broad product line to keep customers
satisfied. The competitors, on the other hand, had rationalised their production line offered
only a few standard products.
QUESTIONS 1. What actions should the Director of Marketing take to implement the
marketing concept? How long would it take to implement these actions? 2. Evaluate each one
of the six recommendations made by the Executive Vice-President? 3. What are Scope’s most
pressing problems? Assign priorities for resolution.

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Company Scope Inc., founded in 1993, was a high-technology products company.

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