Mephisto Products Ltd ‘Yet another poor year’, reflected the senior executive of Mephisto Products. ‘Profits down by 15 per cent, sales and turnover static in a market that was believed to be growing at a rate of 20 per cent per annum. It cannot go on.’ These were the thoughts of Tony Bullins, and he contended that the company would be out of business if the next year turned out to be as bad. Tony Bullins had been senior executive at Mephisto for the past three years. In each of these years he had witnessed a decline in sales and profits. The company produced a range of technically sophisticated electromechanical control devices for industry. Mephisto’s major customers were in the chemical processing industry. The products were fitted to the customer’s processing plant in order to provide safety and cut-out mechanisms, should anything untoward happen in the manufacturing process. The products were sold through a UK sales force of some 12 people. Each representative covered a different area of the country and all were technically qualified mechanical or electrical engineers. Although some 95 per cent of Mephisto’s sales were to the chemical industry, there were many more applications for electromechanical control devices in a wide variety of industries. The reason that sales were concentrated in just the one industry was historical, in that the firm’s founder, James Watkinson, had had been friends with the owner of a major detergent manufacturer. As an engineer, Watkinson had seen the potential for such devices in this type of manufacture and, with the aid of a small loan, had started the manufacture of such devices, initially for his friend’s company and later for wider application in the chemical industry. Watkinson had long since resigned from active participation in Mephisto Products, although he still held a financial interest. However, the philosophy that Watkinson had brought to the company was one which still pervaded business thinking at Mephisto. The essence of this philosophy was centered on product and production excellence, backed by strong technical sales support and targeted marketing messages. Hendrik Simmons, the sales director, believed that if the product was right (i.e. well designed and manufactured to the highest level of quality), there would be a market. Needless to say, such a product then needed marketing (because customers were not necessarily aware that they had a need for such safety mechanisms) and marketing also helped to identify possible new customers within the industry. The sales team was expected to visit at least one new customer per week to recruit them to adopting Mephisto’s products. Most of his salespeople used, what may be described as, high-pressure salesmanship, pointing out the consequences of not having such mechanisms in a manufacturing plant and how the adoption of their products would be important for CSR and meeting health and safety needs. The salespeople therefore tended to emphasize the negative aspects (dangers of not having such devices) rather than the positive aspects (of how effective they were, the benefits of time saving in the case of plant breakdown, etc.) for both new customers and existing customers.

However, Tony had been having conversations with the Head of Marketing, Martin Chen. Martin believed that the market had changed and that there were a lot of opportunities to sell Mephisto products to new industries, and this opinion was backed by some market research. However, Tony would have to encourage Hendrik Simmons and his sales team to adopt a new sales philosophy and new selling methods if they were to break into new markets. If the sales team would consider changing their sales operation, then Martin would support him with an increase in advertising and a series of sales promotions to raise awareness of their offer more widely. To be attractive to new customers there needed to be a number of changes. Salespeople would need to emphasize the saving in time and improvement in working conditions by the adoption of the safety devises on production lines. Sales promotions should be available to attract customers and discounts should be offered for large order quantities, or extended service contracts. The salesperson should be given the authority to provide such discounts (within limits) without reference to accounts. More importantly, the sales team needed to adopt more conversational selling techniques, so that they can establish what was important to the customer before starting their sales pitch. Adopting customer relationship management should also be considered for the long-established customers. The major focus for the sales team would be to find new customers in different industries in order to increase sales quickly. Here Martin could provide leads and market information to help the sales team identify new potential customers. Tony Bullins was convinced that the time had come to make these changes and that sales should adopt a new sales philosophy for new and existing customers and should be re-focused on finding new customers outside the chemical industry.

Discussion questions

1. Evaluate Mephisto Products’ current approach to sales. Why has it been relatively successful to date?

2. Comment on why the proposed changes to sales processes are necessary. Also, which changes would you recommend in terms of their:

(a) selling activities?

(b) sales value proposition?

3. What problems can you anticipate if Tony Bullins goes ahead and changes the sales team and selling philosophy?

4. What general advice can you give to the company to make it more customer orientated?

Answer rating: 100% (QA)

Required solution 1 Criticise Mephisto Products approach to sales and marketing The company Mephisto were initially leader in electromechanical controldevices in the industry The company has long had ... View the full answer