Henderson Bas (hb) Case

Louisa Morgan, director of client services at Henderson Bas is faced with determining the future of the significant Halpernia engagement. This report will outline the challenges she faces, and will provide the recommended course of action to maximize the company's returns.

Henderson Bas (HB) is in a service industry where clients have a direct impact on the final product. Currently, HB caters to the interactive advertising segments, and has focused its business or large, multinational organizations. Combined with its interactive specialty, HB positions itself in the market with an extremely high level of customer service.

As part of this high level of customer service, clients are able to be very specific about what they desire from HB.Unfortunately, in the case of Halpernia, the first two original proposals HB created have been deemed unacceptable.

Louisa Morgan is currently engaged in negotiations with Halpernia representatives and the results of which will have significant impact on the future of HB as a whole. The main decision facing Louisa is either to continue providing free design services or risk customer dissatisfaction and losing company reputation. A key uncertainty in solving this problem is Halpernia's inability to articulate the company's project vision, questioning whether further efforts and improvements to the design by HB will result in project success.

Specifically, Louise can choose to provide a third proposal for free, continue with menu pricing or implement the value model.

The recommendation made based on theanalysis performed is to implement the "value model" which will allow HB to provide better customer service without worrying about making a profit. The total cost of the engagement will come at $123 thousand dollars, which ensures that HB is not overextending on risk for little return. This option also will ensure Halpernia gets exactly what it desires, and hence will have a positive view of HB.

If alternatives fail to materialize, HB must consider the contingency of dropping Halperina as a client. HB is simply too small to absorb significant costs with no chance of guaranteed profit and they would be better to focus their efforts elsewhere.

Problem statement

Louisa Morgan must choose a pricing strategy to proceed with in regards to Halpernia's advertising engagement. With the current creative proposals being rejected twice by the client, her dilemma includes finding a way to maintain the account while ensuring HB makes a profit on the engagement while reducing its risk.

Company Analysis

Background

Interactive advertising industry