Question $2$: Customer Relationship Management

$($Marks: $45)$

The Fitter Snacker manufactures sells two types of product: BAR$-$A and BAR$-$B$.$ The BAR$-$A touts "advanced energy," and BAR$-$B boasts "body$-$building proteins." Each product contains a mix of various ingredients:

BAR$-$A contains beans and rice, and BAR$-$B contains milk and flour.

Fitter's sales force is organized into two groups: the Wholesale Division and the Direct Sales Division. The Wholesale Division sells to intermediaries that distribute the bars to small shops, vending machine operators, and health food stores. The Direct Sales Division sells directly to large grocery stores, sporting goods stores, and other large chain stores. The two divisions operate separately from one another, in effect breaking the Marketing and Sales functional area into two pieces. Each division has an organizational structure that interacts with Fitter's other functional areas, such as Accounting and Finance and Supply Chain Management.

The two sales divisions differ primarily in terms of order volume and pricing terms. The Direct Sales Division offers customers volume discounts to encourage larger sales orders, which are more efficient to process. The Wholesale Division charges customers a lower fixed price because the orders are usually large. Each order$-$regardless of size$-$generates costs related to the paperwork, shipping, and handling of the order. Thus, an order of $500$ cases of snack bars incurs the same handling costs as an order of $10$ cases. However, the large order might generate $\backslash (\backslash$$ $5,000\backslash )$ in profit, while the small order might generate only $\backslash (\backslash$$ $100\backslash ).$ Both divisions send their customers invoices requesting the total balance within $30$ days and offering a $2$ percent discount if the customer pays within $10$ days $(\backslash (2-10/\backslash )$ net $30).$ In addition to selling snack bars under the Fitter Snacker brand name, the company also packages the bars in store$-$brand wrappers for some chain stores.

Q$\mathrm{.}2\mathrm{.}1$ The manufacturing process at Fitter suffers from a number of problems; discuss these problems as related to the product manufactured by Fitter Snacker.