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The company employed five sales representatives. Two of these negotiated with senior
buyers at the major multiples for the supply of own label products; the other three were
responsible for ensuring that the 180 main wholesalers in the country stocked the branded
paint that the company produced. The salesforce had been recruited from a variety of
backgrounds, but had considerable skills in selling paint and paint products. The company
felt that the current team could be retrained, if necessary, to concentrate on the new areas
of development, the most important of which are described below.
At present, the company negotiated annually with the multiples on price, and had loose
agreements with the wholesalers which primarily consisted of attractive discounts on
quantity. The price position of the company over the past 5 years is given in Table 4F; with
Homecolour pricing related to the weighted market average in the various distribution
channels of 100.
Table 4F. Relative pricing of branded Homecolour by distribution channel, weighted
market average of 100 in each channel, by year, with year 4 the most recent.
Year
Channel
1
2
3
4
AG Stanley
98
99
100
102
B & Q
96
97
96
101
Woolworths
101
103
104
105
Texas Homecare
97
101
101
102
Homebase
100
102
103
103
Midlands
Independents 94
94
95
95
Wholesalers
97
96
98
97
South
Independents 95
93
93
94
Wholesalers
97
98
99
100
The advertising budget for the current year was £1.5 million and was to be spent entirely
on television during the months of September, October and November. The company had
received the following information about the consumer and the relationship between
coverage and exposure to help plan the campaign. Each £1000 spent would on average
achieve one rating point; the relationship between expenditure and achieved viewing
levels is provided in Table 4G.
Table 4G. Current relationship between percentage of the population OTS and ratings.
Ratings
OTS
1
2
3
4
5
6
50
30
20
15
-
-
-
100
45
35
25
20
15
5
150
65
50
35
30
25
15
200
85
75
60
50
40
20
250
92
78
72
55
50
35
Market research had suggested that the company needed to achieve 4 OTS to reach the
maximum potential sales threshold; the advertising decay rate over the past 3 years had
been in the range of 40 per cent per month. The most expensive period for advertising was
over Christmas; space was around 50 per cent more expensive than during the summer.
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