Situation Analysis

Industry Analysis:

Average industry profit margins are 3% of the sales

Costs prohibit transportation of steel beyond 200 miles which adds to the already
existing competition among local suppliers
Large customers with consistent requirements are valued
Changing regulations e.g. Omnibus Trade Act (1980) and US internal revenue service
ruling constrain gifts as a business practice

Company Analysis:
Sales of Southwestern Ohio Steel are approx. $250 million in 1994
Top twenty-five customers contribute 2/3rd of companys sales
Promotion costs form only 0.01% of the companys sales

Southwestern Ohio steel and Matworks Relationship Analysis

Matworks used to be a large customer however in 1994 contributed only
0.27%($672000) of the companys sales in 1994
Matworks worked on a yearly negotiated contract basis

Problem Statement

In what way can Dan Wilson (VP Sales) respond to Matworks request for participation
in sponsorship of its annual sales meeting while maintaining its customer relations?

Factors impacting decision:

1. Company Policy of Southwestern regarding expenditure on promotional activities

2. Relationship with Matworks and its contribution to companys sales
3. Cost and benefits of sponsorship to company
 PILLSBURY COOKIE CHALLENGE

INTRODUCTION:

The case is on General Mills Cananda Corporation which is the second largest division in
international market for Genral Mills Inc. headquartered at Minneapolis, Minnesota.

Company: General Mills Inc. was the 6th largest manufacturer for food-products and was
headquartered at Mineneapolis, Minnesota. Various brands under General Mills Inc. were
Betty Crocker, Progresso, Pillsbury, Green Giant and Cheerios. U.S.Retail, International and
food service were the three distinct operating segments.

General Mills Cananda (GMCC) was the second largest divison of General Mills Inc. and was the
leader of Canadian food markets. The Canadian divison had four units namely Breakfast, baked ,
meals and snacks which was further divided into 12 categories.

General Mills Inc. Headquarter: Minneapolis, Minnesota

Dominion Motors & Controls Ltd. (DMC) had a strong hold of the oil well pumping market in the
north Canadian region owing to its product quality and USP of having sales personnel. It offered four
product lines with Fractional horsepower motors generating highest proportion of sales. Although
there is less emphasis on advertising, to aid sales, DMC focused promotions through comprehensive
product installation depiction in trade journals and catalogues with product offerings.

Customer: DMC sells majorly to OEMs and large industrial users in Canada. While these limited
number of customers comprise of 80% of sales, 20% were made to distributors for resale. The
equipment purchase is largely influenced by the Rig supervisors and when the company decides to
expand or overhaul oil well pumping. Smaller companies purchase decision is based on larger ones.
DMCs sales people keep up the long term relations with customers and keep them updated with
changes in product line.

Competitors: In the Canadian market, few regional players compete with DMC in the motors
product offerings. Universal and Spartan Motors are the major ones amongst them. Whereas,
foreign companies play in the controls product market with 10-20% lower pricing to compete against
DMC and other Canadian firms.

Collaborators: Only 20% of DMCs sales are through distributors, with the rest taken care by
the in-house sales personnel.
Context: Customers are limited to few OEMs, large and small industrial users in which rig
supervisors are knowledgeable and form the purchase decision makers. The bulk demand for
motors is derived mostly by around 25 oil companies that own 50 or more oil wells. These factors
shape the Business to Business marketing context. It is observed that the number of oil wells will
grow at a rate of 1000 wells each year for the next five years. Also the sales were seasonal (April -
September).

It was a pivotal time for DMC to choose the torque and horsepower specifications for its
motors when the power companies partnering with the oil fields came up with announcements
regarding power rates and factors. The rates are no longer flat and also need for appropriating over-
motoring practice. This instigated the largest oil company of Canada Hamilton to rethink its
product purchases. The tests carried out by its electrical engineer John Bridges pointed out the
optimum requirements in the motors (i) 3-5 horsepower motors (ii) higher torque than 70 pounds-
feet. These benchmarks seemed to have matched more with the existing product offerings of the
competitors Spartan and Universal. Hence DMC is placed at third position in the testing outcome.
Hamilton being an influential customer, its reports would have huge implications on future sales of
DMC.