Question

Wilson Puckett, president of Wabash Waste Management, had a stack of proposals on his desk from several truck companies. Two of the companies, Roper and Rollins, offered trucks on a lease basis, while three dealers wanted Wabash to buy their trucks. In the past Wabash always purchased their trucks. Which proposal would be best, he wondered as he picked up the proposals for the third or fourth time.

Wabash Waste Management is an industrial waste recycling company. It picks up grease and oil from several manufacturing facilities in the region, cleans the waste and oil, and then sells it to a company that packages the material for resale. Wabash also picks up frying grease from restaurants for recycling. The company is about to enter a new regional market, and needed four new trucks to pick up the used grease and oil.

The trucks were tank trucks with a pump that pumped the grease or oil from a holding tank at the restaurant or manufacturing plant. Darnell Gates, fleet manager, wanted Puckett to choose the Hauler 2000, a tank truck with a McLaren pump capable of pumping 50 gallons in about five minutes. It has a capacity of 5,000 gallons. The truck is rated at 10 miles per gallon of gasoline and has one of the better maintenance records of all the trucks. The Hauler 2000 is one of the trucks for sale, but could be leased through Wabash’s bank.

On the other hand, Betty Roberts, vice-president of finance, has been pushing the Roper offering, a Fleetwood truck that pumps fifty gallons in ten minutes. The Fleetwood holds 4,800 gallons of grease or oil, and the truck gets twelve miles to the gallon. The lease option on the Fleetwood is the most attractive of all the proposals according to Roberts. In addition, by leasing through Roper, the company does not use any of its line of credit from the bank, keeping that free for some other needed purchases. The company has operated close to the edge and needs to fill some excess capacity in order to make enough profit.

Gates told Puckett that the Fleetwood is too slow and would lead to at least three fewer pickups per day by each truck. Three drivers have also told Puckett that the Fleetwood is a deathtrap with a bad safety record. These drivers told Puckett that the current fleet will need at least two trucks replaced in the next year. The maintenance manager, however, thinks the company could get by with replacing only one truck and he also likes working on the Fleetwood better than the Hauler 2000.

1. How did problem recognition occur in this case?

2. Discuss risk (what each person is most concerned with) from the perspective of each member of the buying center. Discuss how the tank truck firms could reduce risk (address the concerns) for each member.   

3. Assume this buying center is an accurate portrayal of the average buying center for tank trucks? How would this information influence the emphasis of your sales presentations to each individual?

Answer 1

The solution for the above problem is given below and if you feel any problem then feel free to ask.

SOLUTION:-

1. In this case, problem recognition is done by taking into account all the factors that can affect the profit of the company in terms of man and money. First we have to check the efficiency of the truck which will provide more service in a given amount of capital, in terms of capacity, average(miles per gallon), maintenance. Along with capital the problem is also with the safety of the workers or drivers, the truck which will provide a good safety for drivers should also be taken into account.

2. The major risk which should be taken into account for every person will be the safety records and the maintenance of the trucks, if the truck have good safety record, then the main risk will get eliminated as this will ensure the drivers that they are safe and there is no life threats to them while driving and also if the maintenance is low then it will provide the company a good profit also as it reduces the expenses of the company over maintenance. To reduce the risks the tank truck firms can provide the truck with more security features which make the journey safer for the drivers so that they can drive without the threat of life and also the firms can provide the trucks with good quality machinery so that the trucks do not require frequent maintenance.

3. If this buying center is an accurate portrayal of the average buying center for tank trucks then it will definitely result in the increase of the sales to each individual as every individual wants to invest in the machinery for which they can get the value for their money. Also being accurate portrayal the presentation that are going to be given to the buyer will be more effective for sales and will force the buyer for buying the trucks as it will fulfill their most of the needs. So being accurate portrayal for the average buying center they can give more features and reliability which ultimately increase the sales of the buying center.