"We will do it for 10% less than what we are paying right now!" Erica Carson, Purchasing Manager at Westbank, a large western financial institution had agreed to meet with Art Evans, a sales representative from D. Kiloran, Inc. a printer supplier from which Westbank currently was not buying anything. Art Evans' impromptu and unsolicited price quote concerned the printing and mailing of checks from Westbank.

Westbank, well known for its active promotional efforts to attract customers' deposits, provided standard personalized consumer checks free of charge. Despite its increasing popularity of Internet banking, the printing of free checks and mailing customers cost Westbank $ 8million in the past year.

Erica Carson was the purchasing manager in charge of all printing for Westbank and reported directly to the vice president of supply. It had been Erica's decision to split the printing and mailing of checks equally between two suppliers. During the last five years, both suppliers had provided quick and quality service, a vital concern of the bank. Almost all checks were mailed directly to the customer's home or business address by the suppliers. Because of the importance of checking to print, Erica had requested a special cost analysis study a year ago, with the cooperation of both suppliers. The conclusion of the study had been that both suppliers were receiving an adequate profit margin and were sufficiently cost-conscious and the price structure was fair. Each supplier was on a two-year contract. One supplier's contract was renewed 7 months ago and the other expires in another 4 months.

Erica believes that Killoran was underbidding to gain part of the check-printing business. This in turn would give Killoran access to Westbank's customers' names. Erica suspects that Killoran might pursue these customers more actively than the current two suppliers to sell special "scenic checks" that customers paid by themselves.

1. After reading this case, reflect on what action, if any, would you take regarding Killoran's bid, if you were in the position of Erica Carson?