James Johnson, vice president of marketing for a major manufacturer of fiberglass home insulation aimed at the DIY market, was elated after reading an article in The Wall Street Journal about the recent steep rise in energy prices. “This will be great for us. Our sales could double next season,” he exclaimed to his general sales manager, Bill Allan, who had just walked into the office. “Tell your district sales managers to instruct their field salespeople to push home center retailers to double their inventory and floor space for home insulation,” continued Johnson. Bill Allan dutifully responded, “I’ll do it right away, but the last thing home centers are going to want is to stock up heavily on inventory when this energy price spiral might cause a recession.” Comment on this situation in terms of the different perspectives of the manufacturer and the retailers about this environmental development.
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