Rob Allison, senior accountant manager at for Boise Automation, has lost an order of $1.2 million from Northern Paper. There are various things which he could have done differently while approaching Northern Paper for this order to design, supply and install an automated control system for its wood-chip handling system. PROBLEM ANALYSIS:
The initial price offered by Boise was $1.35 million. According to Jason Li from Northern, this price was approximately 30% more than the price offered by the lowest priced contender. Assuming that this contention is true, the lowest price offered by competition was $0.945 million. Considering that the initial price offered by Boise was at a 20% premium, the cost price of the automation system can be calculated as $1.08 million. This means that it was not possible for Boise to lower its price to match the lowest price offered by the competition, without suffering losses. 2.
Decision Making Unit
Rob was not able to identify correctly who the key decision maker was, in the selling process. Identifying the roles played by different people in a DMU is critical to the selling process. Rob incorrectly identified Mr. Jennings as a decider and tried to cultivate a close customer relationship with him and most of his subsequent decisions were based on the feedback received by him from Mr. Jennings. He failed to understand that Mr. Jennings was an outsider and the final decision was to be taken by the Rocky Falls team. RECOMMENDATION
Identifying the Participants in the Buying Process
In a competitive B2B market, Boise must propose a compelling business value proposition to Northern Paper Inc. so that it can command a high price premium. Boise needs to target the finance department of Northern to show the advantages of the better technology it offers and its benefits in financial terms. The finance department was a critical influencer in this case as it gave the final approval of the budget. On a higher budget,...
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