1) The company made a mistake as it focused very little on advertising and

sales promotion when it was financially okay. They thought that they can
keep on going well in chemical industry but their thinking was wrong.
With their skills and ability; they didnt invest in variety industry.
Pricing was done on a cost-plus basis, with total costs being calculated
and a fixed percentage added to an account for profits. The accounts
department thus fixed prices, and sales had no say in how they were
established. This led to much dissent among the salespeople, who
constantly argued that prices were not competitive and that if they were
cut, sales could be increased substantially. Salespeople are very
important

for

company.

Actually

salespeople

communicate

with

customers or buyers directly. For this reason, arguing among salespeople

is not good for their business.
Delivery times were slow compared with the average in the industry, and
there were few discounts for large-order quantities, with the salesperson
first having to clear such discounts with accounts before agreeing to such
an arrangement. Again, Watkinsons old philosophy If they want the
product badly enough, they will wait for it, and why offer discounts for
large quantities if they did not want that many they would not order
them.

I think Watkinsons philosophy is wrong. Of course buyers come who is

badly enough, but nowadays there are many competitors. If they want
products they would compare many companies who have better offer and
products.
The market became much more competitive with many new entrants,
particularly from EU Countries coming into the UK Market, which had
traditionally been supplied by UK manufacturers. Many of these new
entrants had introduced new and updated products to the market, with
such products drawing upon recent advances in electronics.
1

2) My Comment on the following as they exist now at Mephisto

Products:
Marketing
orientation
James Watkinsons business is concentrated in one place because he
married the daughter and he got the loan from his father-in-law.
He focused on product and product excellence backed by strong technical
sales support. Means he care the most about the quality of his product.
Watkinson

believed

that

if

the

product

was

well

designed

and

manufactured to the highest level of quality, there would be a market.

Marketing mix
He relies on hard sell tactic. He made his salesperson threaten the
clients by focusing on the negative outcomes if they dont use his
products. Also, there was very little advertising and sales promotion. So
people might not know about the company or products.
Place:
The products were sold through a UK sales force of some of 12 people. Each
represented a different area of the country and all were technically qualified
mechanical or electrical engineers.
Price:
Standard prices for one-off customers and differentiated discounts for account
holders/frequent purchasers. He does not aim to be the cheapest. Its aim to
provide value for money and a service those customers can rely upon.
Product:
He needs to be aware of lifestyle and changes when it decides which products
are offered for sale. Many products are standard building materials but adding
value to the product is important.
Promotion:

Little advertising and sales promotion was carried out, although from time to
time, when there was some spare cash, the company did purchase advertising
space in the Chemical Processors Quarterly.

The product
cycle

life-

During the previous five years, from being a relatively successful company,
market share for Mephisto products dropped substantially. The market became
much more competitive with many new entrants. Many of these market
entrants had introduced new and updated products, drawing upon recent
advances in electronics. These new products were seen by the market as being
technically innovative, but the view taken by Mephisto management was that
they were faddish and, once the novelty had worn off, customers would revert
to Mephistos superior products.
Jim Bullins was worried by developments over the past five years and felt there
was a need for many changes. Furthermore, he knew from talking to other
people in the industry that such companies considered sales to be an integral
part of marketing. At a recent meeting with his senior staff, he mentioned to
the sales manager the possibility of appointing a marketing director. Then he
decide to put someone in charge of marketing (appoint someone as marketing
manager).discounts with accounts before agreeing to such an arrangement.

3) If Jim Bullins goes ahead and appoints a marketing manager.

Mephisto brand's value will not be lost but it will be overshadowed when it is put
between these new entrants. So company need to focus on building the
marketing department and Jim Bullins should early appoint a marketing
manager.
An experienced manager marketing will know how to build a flexible marketing
team. Then active advertising will be emphasized. He knows how to attract the
attention of the media and buyers. In addition, to implement the marketing
concept successfully, active marketing must discover what type of product the
potential customers want, and then develop and produce it. However, much
more work is needed from the organization. In order to keep up with the
competition, it must continually adapt the product with the ever-changing wants
and needs of the customer.

My general advice to the company to make it more marketing

orientated?
Mephistos management strategy was not bad and it succeeded. However as
time goes on, there was a decline in sales and profits. The main reasons can
be:
Mephisto Products, Ltd had a little focus on Marketing. They carried out
little advertising and sales promotion. When there was some spare cash,
the company did purchase advertising space in the Chemical Processors
Quarterly. Marketing is an important department for development of
company. Focus on marketing will increase sales and profits. In the other
hand, Mephisto can enhance their reputation through advertising
campaigns.

Namely

advertising

on

television,

radio,

newspapers,

billboards, put products into movies, programs funded television and

radio channels are wider public monitoring, financial aid programs for
loyal customers, telephone sales, direct sales, catalogs sent to
customers, the public relations, etc.
Prices were thus fixed by the accounts department and sales had no say
in how they were established. This led to much dissent among the
salespeople, who constantly argued that prices were not competitive
and if they were cut, sales could be increased substantially. The
company does not emphasize low prices and they do not aim to be the
cheapest. This is not really bad, however, if Mephisto proposes justified
prices for the products, they not only can keep their loyal customers but
also

customers

from

another

competition

companies.

Because

customers always feel that they are benefit when the company makes
some discounts although it is much bit.
Times were slow compared with the average in the industry and there
were few discounts for large order quantities. This will make lose
confidence of customers in company, they feel uncomfortable with delay.

So Mephisto can cut some part of transport processes, the unnecessary

middlemen, even they can increase cost to impulse more rapid
transport. In addition, the company only had few discounts for large
order quantities; this is really that interests of loyal customers are
affected. If the company cannot make a big discount for large order
quantities, they can improve quality of service or practical promotion.

In addition, Mephistos products lacked the creativity and innovation while

many of these market entrants had introduced new and updated products,
drawing upon recent advances in electronics. The company wants to keep core
values within their products because they thought when the novelty had worn
off; customers would revert to Mephistos superior products. The core values
are kept, it means the company wants to remain tradition in their products. In
business, it is not really a bad thing. However, recently Science and
Technology are growing with a high level. The new technology of production is
constantly being developed. So when advanced technology was launched, the
older ones or more obsolete will be eliminated. Consequently, in a long-term
business, Mephisto need creativity and innovation in their products.
Finally, company is to delay appointment of

marketing manager. This person

would have marketing experience, and most probably come from the chemical
industry, because marketing is considered the heart of company. It will attract
the attention of the media and customers to the products of Mephisto.

Reference

David Jobber Geoff Lancaster (2009) Reference Selling and Sales

Management
Howard w. James (2011) Global marketing
Geoffrey Goodson (2004) marketing mix
Irene Stewart (2007) sales orientation