The company had gone through an extended
no-growth period, and the Board of Directors of the
parent company became concerned. A new CEO was
hired and given the task of turning the situation around.
After spending a full year upgrading the company’s
internal operating capabilities and improving product
quality, the CEO worked with the Director of
Marketing and Sales to develop a new marketing
strategy. The first strategy involved an attempt to
increase sales to existing customers. But due to the
desire of customers to spread their purchases out over
several suppliers, this strategy produced no sales
growth. As a result, a second strategy was developed
that focused on gaining new customers. The staff of 20
sales representatives was told that this situation
represented the typical sales job and that they should
take advantage of their contacts in their sales
territories. They were expected to use this information
to build relationships and find new accounts. Other
than a slight increase in each sales representative’s
expense account budget, no other assistance was
provided in finding new accounts.