Question

Theresa Campana owns The Olentangy Group (named after a local river)—a manufacturer’s rep agency. The Olentangy Group sells similar products for noncompeting producers in the technology industry. She is deciding whether to add a new product line—serving another producer. She is very concerned because, although she wants more lines, she feels that something is wrong with her latest candidate.

Theresa graduated from a large Midwestern university in 2006 with a B.S. in business. She worked selling cell phones for a year. Then Theresa decided to go into business for herself and formed The Olentangy Group. Looking for opportunities, Theresa placed several ads in her local newspaper in Columbus, Ohio, announcing that she was interested in becoming a sales representative in the area. She was quite pleased to receive a number of responses. Eventually, she became the sales representative in the Columbus area for three local computer software producers: Accto Company, which produces accounting-related software; Saleco, Inc., a producer of sales management software; and Invo, Inc., a producer of inventory control software. All of these companies were relatively small and were represented in other areas by other sales representatives like Theresa. The companies often sent her leads when customers from her area expressed interest at a trade show or through the company’s website.

Theresa’s main job was to call on possible customers. Once she made a sale, she would fax the signed license agreement to the respective producer, who would then UPS the programs directly to the customer or, more often, provide a key code for a website download. The producer would bill the customer, and Theresa would receive a commission varying from 5 to 10 percent of the dollar value of the sale. Theresa was expected to pay her own expenses. And the producers would handle any user questions, either by using 800 numbers for out-of-town calls or by e-mail queries to a technical support group.

Theresa called on anyone in the Columbus area who might use the products she sold. At first, her job was relatively easy, and sales came quickly because she had little competition. Many national companies offer similar products, but at that time they were not well represented in the Columbus area. Most small businesses needed someone to demonstrate what the software could do.

In 2008, Theresa sold $250,000 worth of Accto software, earning a 10 percent commission; $100,000 worth of Saleco software, also earning a 10 percent commission; and $200,000 worth of Invo software, earning a 7 percent commission. She was encouraged with her progress and looked forward to expanding sales in the future. She was especially optimistic because she had achieved these sales volumes without overtaxing herself. In fact, she felt she was operating at about 60 percent of her capacity and could easily take on new lines. So she began looking for other products she could sell in the Columbus area.

A local software company has recently approached Theresa about selling its newly developed software, which is basically a network security product. It is designed to secretly track all of the keystrokes and mouse clicks of each employee as he or she uses the computer—so that an employer can identify inappropriate uses of its computers or confidential data. Theresa isn’t too enthusiastic about this offer because the commission is only 2 percent on potential annual sales of about $150,000—and she also doesn’t like the idea of selling a product that might undermine the privacy of employees who are not doing anything wrong.

Now Theresa is faced with another decision. The owner of the MetalCoat Company, also in Columbus, has made what looks like an attractive offer. She called on MetalCoat to see if the firm might be interested in buying her accounting software. The owner didn’t want the software, but he was very impressed with Theresa. After two long discussions, he asked if she would like to help MetalCoat solve its current problem. MetalCoat is having trouble with marketing, and the owner would like Theresa to take over the whole marketing effort.

MetalCoat produces solvents used to make coatings for metal products. It sells mainly to industrial customers in the Page 637mid-Ohio area and faces many competitors selling essentially the same products and charging the same low prices.

MetalCoat is a small manufacturer. Last year’s sales were $500,000. It could handle at least four times this sales volume with ease and is willing to expand to increase sales—its main objective in the short run. MetalCoat’s owner is offering Theresa a 12 percent commission on all sales if she will take charge of its pricing, advertising, and sales efforts. Theresa is flattered by the offer, but she is a little worried because it is a different type of product and she would have to learn a lot about it. The job also might require a great deal more traveling than she is doing now. For one thing, she would have to call on new potential customers in mid-Ohio, and she might have to travel up to 200 miles around Columbus to expand the solvent business. Further, she realizes that she is being asked to do more than just sell. But she did have marketing courses in college and thinks the new opportunity might be challenging.

Evaluate Theresa Campana’s current strategy and how the proposed solvent line fits in with what she is doing now. What should she do? Why?

Answer 1

After analyzing the case, it is clear that Theresa Campana is going to enter in to a red ocean strategy where she is going to face the real market competition apart from what she was doing before.And here, as every human nature, Theresa too have fall for the commission package and has took a brave strategy to try out her luck in a new line of business which is actually a very good decision according to me.And considering the past work experiences of Threresa,it is almost clear that she can pass through all the obstacles coming in her way as she has tactfully handled all the 3 businesses previously.

The proposed solvent line can surely fit in with what she is doing right now because after all, everything is business and marketing. Even though the line of business is different from what she has done before, but still considering the fact that he has completed her marketing course along with the fact that she was a B.S student in Business, it is proven that after spending some time in this field can make her a champion.

According to me, i think she should proceed with this idea as she already has got some selling experience during her former days when she used to sell cellphones. Another reason in telling that she should go is that nobody is perfect until one experiences and faces the situation.In the case of Theresa who is never a fresher in this field can reap productivity for sure if she tries.

Hence the answer.