Module 4 Case Study

Name(s): Keni H-Lovely

C. K. Worth Co., Ltd., was founded by Clayton Ken Worth, who also serves as president. C. K.
Worth’s primary activity is representing U.S. processed and fresh foods to retail and food
service distributors. The company is also engaged in representing processed and fresh food
producers in international trade. Principals in the company have many years of business
experience in sales and the food industry. The company has been in business for twenty-five
years, and President Worth is interested in diversifying the company’s products to ensure
its continued growth and success.
C. K. Worth has employed Kathy Green for the past twenty years. During that time, Green
has worked in various capacities with the company. She has seen the company grow from a
small operation to a large brokerage firm, which employs fifteen salespeople located
throughout the United States. However, Green always thought that the C. K. Worth Co.
should expand its services to represent other U.S. and international products. Given that
Green has a sport background and has tracked the growth of the sport industry over the
past decade, she approached Worth with the idea that the company should expand its
product line to include sporting goods. Green was confident that the Worth Co. could
improve its profit margins by representing another product line, in addition to food. After
listening to Green’s idea, Worth developed a sporting goods division within Worth Co. and
named Green as its vice president. Her job was develop a plan to expand the company’s
services to include sporting good products and to get the division up and running.
Green was excited about the opportunity and proceeded to develop a plan for C. K. She
developed a mission statement for the sporting goods division, which was to represent
manufacturers of sporting goods products in sport retail stores within the United States. Her
goal was to acquire at least ten product lines. With the approval of Worth, Green attended
the National Sporting Goods Association shows in New York, Chicago, Dallas, and Los
Angeles. In addition, she contacted sport manufacturers by telephone, letter, email, and
personal visits requesting to represent their products. Within six months, Green had
acquired more than twenty product lines to represent to sporting good retail stores.
Primary lines acquired were Converse, Salzenger, and some Wilson products. She was
pleased with the product lines, and reported her progress to Worth.
After their meeting, Worth decided that, instead of hiring salespeople specifically for the
sporting goods division, it would be more efficient to use the existing food sales force to
represent the sporting goods products. Green thought it would be better to hire a sales
force specifically for sporting goods products, however. Worth stated that he did not have
the resources to hire new sales personnel; instead, Green should train the existing food
sales forces to sell the sporting goods products. Given the situation, Green scheduled a sales
meeting to discuss the selling of sporting good products.
Fourteen of the fifteen sales personnel attended the meeting. Although some personnel
were happy to have another product line to sell, many voiced their opposition to selling
sporting good products—stating that they did not believe that the product lines of food and
sporting goods were compatible. After much discussion, however, the entire sales force
decided to give the sporting goods line a try. After all, as one salesperson stated, “selling is
selling.” Green distributed procedures for selling the sporting goods line and assigned sales
territories to be the same as the food territories.
As time went by it became apparent to Green that having food sales reps sell sporting goods
products was not working. She received phone calls from manufacturers complaining about
the lack of knowledgeable people selling their product. In addition, she received phone calls
from retail stores stating that the reps did not seem interested in the products and that
they were providing poor service. Green reported the situation to Worth.
Worth’s reaction was simple. He instructed Green to “either get the food sales force to do a
good job in selling sporting good products or get rid of the sporting goods line.” Green
decided to work with the sales force a while longer. She provided more training and sales
meeting. Sales personnel attendance at the meeting went down, as did the sales of sporting
goods products. Furthermore, manufacturers were beginning to pull their lines from the C.
K. Worth Company. Given all these facts, Green decided that she could no longer support
having the C. K Worth Company sell sporting goods products. Therefore, fifteen months
after the inception of the Sporting Goods Division of C. K. Worth Company, Worth
discontinued the division upon Green’s recommendation.
Discussion Questions (20 points):
1. How effective was the C. K. Worth Company’s planning regarding the sporting goods
product lines? Where did the company go wrong? (4 points)

The C. K. Worth Company's efforts to get ready for the launch of its line of athletic goods
were a dismal failure. The company chose to rely on its already established sales force
for food rather than recruiting a separate group of individuals to market and sell its
athletic items. As a result of the sales staff's lack of interest in and knowledge of the
items, customers received poor service, and the manufacturer received complaints.
After barely 15 months of operation, the company decided to withdraw from the sports
products industry, which was a clear indication that the business had been unsuccessful.
The company made a mistake both when it failed to create a clear plan for its sales force
and when it failed to deliver appropriate training for its sales workers to effectively
promote the new product range. Both of these errors contributed to the company's
failure.

2. What planning steps could have been considered and/or undertaken to improve the
effectiveness of the sporting goods product lines? (4 points)
To improve the effectiveness of the sporting goods product lines, the following planning
steps could have been considered and/or undertaken:
 Hiring a dedicated sales force: By hiring a sales force specifically trained and
knowledgeable in the sporting goods product line, the company could have ensured
that the products were being sold effectively and efficiently.
 Providing adequate training: The existing food sales force could have received
additional training on the sporting goods product line, including product knowledge,
sales techniques, and customer service skills, to better serve customers and
manufacturers.
 Establishing clear goals and objectives: The company could have set clear goals and
objectives for the sporting goods division, such as target sales and profit margins, to
measure the success of the new product line and make necessary adjustments.
 Conducting market research: The company could have conducted market research
to better understand the sporting goods market, identify opportunities and potential
challenges, and tailor the sales strategy accordingly.
By implementing these steps, the C. K. Worth Company could have improved the
effectiveness of the sporting goods product line and ensured its continued growth and
success.

3. In what areas were the goals of the food division and the sporting goods division
compatible, and in what areas were the goals not compatible? Explain. (4 points)
 The goals of the food division and the sporting goods division were not fully compatible
in several areas. Compatible: Both divisions aimed to represent U.S. and international
producers to retail and food service distributors. Both divisions had the goal of growing
and diversifying the company to ensure its success. Not compatible: The main product
lines of the two divisions were different and required different knowledge and skills for
successful sales. The food division's primary product was food, while the sporting goods
division's primary product was sporting goods. This difference in product knowledge led
to the food sales force being unable to sell the sporting goods effectively, resulting in
poor sales and manufacturer complaints. Additionally, the sales approach and target
markets were different. The food division was targeting retail and food service
distributors, while the sporting goods division was targeting sport retail stores within
the U.S. These differences in target markets and sales approach likely contributed to the
lack of compatibility between the two divisions.

4. What factors should have been considered in the decision to create a new division to
sell sporting goods? (4 points)
In the decision to create a new division to sell sporting goods, several factors should
have been considered:
 Market demand and competition: Before creating a new division, it is important
to research the market demand for sporting goods products and the competition
within the industry. This will give an idea of the potential for success and the
level of effort required to establish a successful division.
 Sales and marketing expertise: Selling sporting goods products requires a
different set of skills and expertise compared to selling food products. This
should have been considered to determine if the existing sales force has the
capability to sell sporting goods products effectively or if new personnel with
relevant expertise needs to be hired.
 Company resources: It is important to consider the company's resources,
including financial and human resources, before creating a new division. The
company should have the necessary resources to support the new division and
ensure its success.
 Product compatibility: The company should have considered if the sporting
goods product lines are compatible with the food product lines. Different
products may require different sales and marketing strategies, which can impact
the overall effectiveness of the new division.
5. If you were an advisor to Worth and Green, what advice would you have provided to
them about planning, budgeting, goals, forecasting, and knowledge management? (4
points)
If I were an advisor to Worth and Green, I would have provided the following advice
regarding planning, budgeting, goals, forecasting, and knowledge management:
Planning: I would have advised them to conduct a thorough market research before starting
the Sporting Goods Division to better understand the demand, competition, and potential
growth in the industry.
Budgeting: I would have recommended them to create a realistic budget for the Sporting
Goods Division, taking into account the costs of product acquisition, sales and marketing,
training, and operations.
Goals: I would have suggested them to set specific, measurable, and achievable goals for
the Sporting Goods Division and align these goals with the overall mission of the company.
Forecasting: I would have encouraged them to create a sales forecast for the Sporting
Goods Division and regularly track their performance to make necessary adjustments.
Knowledge management: I would have advised them to invest in training and development
for the sales force to have the necessary knowledge and skills to sell the sporting goods
products effectively. This would have helped to improve the overall performance and
reputation of the division.