GROUP ASSIGNMENT:

CASE 1: Mephisto Products Ltd

Subject: Managing the Selling Interface
Lecturer: Mr. Tham Yuen Hoi
Members:
1- Tran Duy Khanh (leader)
2- Kim Junghwan
3- TSANG CHIU YI
4- Hestia Wong Kwan Yiu
5- Ng Wei Siang
Assessment Criteria 1: Criticise Mephisto Products approach to sales and marketing.
Mephistos management strategy was not bad and it succeeds. However as time goes on, profits
down by 15per cent. So Jim Bullins had been senior executive thought if the next year turned out
to be as bad, the company would be out of business.
There are some examples why the companys profits going down.
First, there was little advertising and sales promotion when the company has a little spare cash.
The company didnt active support on advertising and sales promotion. The company produces
95% of technically sophisticated electromechanical control devices to the chemical industry. The
company thought that they keep going well in chemical industry but their thinking was wrong.
With they have skills and ability; they didnt invest in variety industry.
Second, 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.
Third, 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.
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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.
Assessment Criteria 2: Comment on the following as they exist now at Mephisto Products:
2a. 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.
2b. Marketing mix
He rely 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 were very little advertising and sales
promotion. So petiole might not know about the company or products.
Place: The products were sold through a UK salesforce 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 that 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 were carried out, although from time to time,
when there was some spare cash, the company did purchase advertising space in the Chemical
Processors Quarterly.
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.
2c. The product life-cycle
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).
Assessment Criteria 3: What problems can you anticipate if Jim Bullins goes ahead and
appoints a marketing manager?
There are many different methods which organization implement in order to run a business
successfully. The method of running a business would not be practical today however. This is a
reason the majority of businesses have adopted the marketing concept, creating greater
competition.
The company produces a range of technically sophisticated electromechanical control devices for
industry. Mephistos major customer are in the chemical processing industry. There are a lot loyal
customers of Mephisto. However, to retain them and attract more customers are not easy recently.
Because the market becomes much more competitive with many new entrants; particularly from
EU countries, coming into UK market. 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 manager marketing.

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.
Assessment Criteria 4: What general advice can you give to the company to make it more
marketing orientated?
Mephistos management strategy was not bad and it succeeds. However as time goes on, there was
a decline in sales and profits. The main reasons can be:
Firstly, 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.
Secondly, 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 very bit.
Thirdly, delivery 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.
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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.