Name: Gwellene Davidson West Pariat

Roll No: PGP12104

Section: B
Clique Pens: The Writing Implements Division of U.S. Home

Q. How should Ferguson manage the pull/push conflict between the marketing
department (Chen) and the sales department (McMillan)?

Ans The gross profit margin of Writing Implements had reduced from 42% in 2010 50
over 36% in 2012 due to the various discounts, allowances and other off invoice deals
.Currently, the main goal of Ferguson who is the President of Writing Implements is to
stop the decline in the Gross profit margin percentage and to grow the overall gross profit
by 4%. She was very certain that the decrease was due to the trade discounts given to
retailers.

Logan Chen who was the VP of marketing was of the view that trade discounts should be
reduced and instead focused more on marketing controlled, customer oriented Marketing
Development Funds, which would ensure that Customers received the full benefit of
Clique’s promotional benefits

Ross McMillan who was the VP of Sales was of the view that reducing the trade
discounts will not enable them to get retail shelf space and would lose sales to
competitors. He was certain that providing trade discounts and deals to retailers would
increase shelf space, sales, and increase overall profit margin.

Solution:

 The pens or pencils should be sold individually in order for customers to be able
to compare the prices
 Spending on advertisement would not make sense because customers who buy
pens and pencils from retails store are usually low involvement customers, which
means that these customers who do put in much thought in buying a pen or pencil
and moreover the differentiating factor when it comes to pens and pencils are very
less, therefore advertisement would not incentivize a person to choose one pen
over the other
 Spending more on consumer promotions such as coupons is also not a good idea
since they are already providing these at the moment and we saw that the coupon
redemption rate is only about 1.3% lower than most of the other consumer
products.
 I suggest that Ferguson spend more trade discounts and allowances to retailers in
order to gain more POS displays, cash register space , because consumers usually
indulge in impulse buying when it comes to purchasing pens and pencils.