(Modified Problem Question) Started in 1965, ChemCo is a leading manufacturer of car batteries in the U.K. market. Since then, it has been under the charge of Mr. Jones, the founder-owner of the firm. In 1999, the company decided to go for a diversification by expanding the product line. The new product was batteries for fork-lift trucks. At the same time, Mr. Marek was appointed the Senior Vice President of marketing in the company. However, soon after its successful diversification into fork-lift batteries, the sales in this segment began dropping steadily. Mr. Marek wanted to introduce some radical changes in the advertising and branding of the new business but the proposal was turned down by the old-fashioned Mr. Jones. At this juncture in 2002, the firm is losing heavily in the fork-lift batteries business and its market share in car batteries is also on a decline. Mr. Jones has asked Mr. Marek to show a turnaround in the company within a year. What steps should Mr. Marek take to take the company out of its troubles?

Some of the facts on the case are:

ChemCo is a quality leader in the U.K. car batteries market.

Customer battery purchases in the automobile market are highly seasonal.

The fork-lift business was added to utilize idle capacity during periods of inactivity.

This is a low-growth industry (1% annual growth over the last two years)

Large customers are sophisticated and buy based on price and quality. Smaller customers buy solely on price.

There is a Spanish competitor in the market who offers low priced batteries of inferior quality.

Situation Analysis: Company 1. Established player in car batteries 2. Losing heavily in fork-lift truck batteries. 3. Old fashioned owner resistance to change

Situation Analysis: Competition

1. Low priced competitors 2. Foreign competitors gaining market share

Situation Analysis: Customers

High quality product, but low end customers care more about price than quality.

PROBLEM QUESTIONS:

1. Make a marketing research about the batteries industry 2. If there is a need to make an assumption to justify your analysis please do so