About Northern Light Limited Case Study

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Northern Lights Limited
James Slater, Vice President Sales and Marketing of Northern Lights Limited (“NLL”) stared at his computer screen in heightened disbelief. What had grabbed his attention was an email outlining a unique request from a long-standing and important customer, Amtron Pvt Ltd (“APL”). The email strongly suggested that NLL participate in sponsoring a portion of the company’s annual sales meeting (see exhibit 1). A recent MBA, James had been brought into the company with the specific mandates of strengthening relationships with existing customers as well as aggressively acquiring new business. James was acutely aware of the fact that his bosses considered the concept of partnership with customers to be of paramount importance and prided themselves on the long-standing relationships the company had with many of their clients. APL was in fact the company’s first major client back in 1945 and has been a strong source of business and even referrals since then. However spending large amounts on sponsorship or any other type of promotional activity was completely out of line with NLL’s marketing practices and beliefs. Northern Lights Limited

NLL is in the steel service centre industry. More specifically the company buys “master coils” of steel from producers (master coils are generally 48/72 inches wide and weigh as much as 60,000 pounds) in bulk quantities. These coils are then “processed” before being shipped to the company’s customers for use as a vital raw material. Processing mainly involves activities such as “cutting to length” (providing sheets of a certain size rather than coils), “precision shifting” (providing coils of a narrower width) and “tension leveling” (providing very flat sheets of specific sizes). The company has worked hard to earn and enjoy a reputation for consistent and timely delivery of quality products exactly in line with the customer’s specifications. Other strengths include sophisticated market forecasting that enables the company to purchase at the best possible prices, inventory control and efficient transportation. Northern Steel’s general marketing strategy has been to limit their advertising or promotion to direct mail campaigns (spending approximately one-one hundredth of a percent on sales). Instead the focus of marketing has been on maintaining good communications and relationships with customers. Overall the company is known for its honesty and integrity as well as supporting an atmosphere of loyalty and open cooperative practices. During times of short supply of steel and consequent rising prices, Northern Steel has often been known to “hold the line” on prices for their customers, thus smoothing the ups and downs of the market outlining the tendency of management to take a long-term view of business and relationships rather than taking advantage of situations to “make a quick buck”. The company’s annual sales stands at close to $1 billion distributed across 500 customers from a range of industries. However the top 25 customers account for approximately 67 percent of NLL’s revenues. Although NLL has enjoyed over 5 decades of continual growth and profitability, recent years have seen the company experiencing a gradual decline in market share. What has made this relatively new trend rather surprising is the fact that the company is still widely considered to be one of the industry leaders in technology and service. Lastly in addition to conducting its primary activities and functions, NLL also operates two subsidiaries: * NLL Leveling which provides state of the art tension leveling services for those customers who require superior flatness and

* J.R. Lights who market secondary steel. Secondary steel is steel that did not meet its production standards or had some sort of flaw. Expertise in metallurgy, the ability to correct some of the problems, and superior knowledge of the markets and customers allows them to sell secondary steel profitably. The Industry

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