Spectrum Brands, Inc. – the Sales Force Dilemma

Spectrum Brands, Inc. –The Sales Force Dilemma

Marketing Plan

Executive Summary

Spectrum Brands Inc. is at a cross roads after making several acquisitions very quickly over the last couple of years. As a company with over $2.8 billion in sales global, 9800 employees and over a hundred years of history the market place is proving as challenging as ever.

The Canadian arm of Spectrum is a modest yet profitable segment of the greater consumer products leader and has its own challenges in assimilating the new acquisitions and products. It has now been left to Bob Falconi, VP of Sales and Marketing for Canada to decide how the national sales force totaling 38 employees is going to organized and lead. This is a daunting challenge as the current sales process is a combination of three divisions all with different cultures and expectations.

Complicating the task for Bob is the corporate objective of seeing $900,000 in cost cuts realized while maintaining or improving retailer service. The product lines could not be more different and the current sales force all have their respective expertises.

The four solutions to the task above are the following;

1) Merge the sales forces and realize the expense reduction through attrition.

2) Maintain separate sales forces for each product line.

3) Align the sales forces geographically, and include judicious use of distributors for the smallest of accounts and Key Account Rep Teams for the largest of accounts.

4) Maintain the Status Quo which is a mash of separate sales forces and distributors.

Of the four alternatives above number three was chosen as our resolution to all the challenges that were uncovered in the case. Number three is an encompassing solution that boldly seeks the selling cost reduction that was mandated but also attempts to recognize that all Retailer accounts are not the same. Included in alternative number three are Key account teams that will serve a small number of the largest retailers and also distributors which are ideal for serving the smallest of retailer accounts.

Maintaining the status quo would not see any improvement in profitability or service. Maintaining separate sales forces would in time reduce profit as new acquisitions would join an even less efficient sales organization. Simply merging the existing sales forces could prove disastrous since it would achieve the cost cutting target but at the expense of a lower quality sales force and possibly lower quality of service.

Problem Statements

Globalization caused the brand industry to become extremely competitive.  This has resulted in frequent corporate acquisitions which have resulted in a small number of companies with extensive brand portfolios. These elite firms had developed many product lines that have provided them with the capability to compete in diversified markets and product categories while solidifying their relationships with retailers.