Brenda Cooper, the southeastern regional sales manager for the Hausser Food Products Company (HFP) expressed her concern to a researcher from a well-known eastern business school: I think during the past year I’ve begun to make some progress here, but the situation is a lot more difficult than I thought when I first arrived. Our current methods of selling products just are not adequate, and the people in the field don’t seem interested in coming up with new ideas or approaches to selling. BACKGROUND
Hausser Food Products Company was a leading producer and marketer of baby foods in the United States. The company manufactured and marketed a whole line of foods for the baby market including strained meats, vegetables, fruits, and combination dishes. The product line included foods that are completely strained, for infants, as well as foods that are partially strained or chopped, for children six months and older. HFP was traditionally the leader in this field. The company had no other major product lines. Its products were known for their high quality and the Hausser name was well known to most consumers. HFP owned its production and warehousing facilities. Its well-developed distribution network provided direct delivery of products to the warehouses and stores of most major food chains. The smallest segment of its market was composed of a limited number of institutions for children, which purchase HFP products in bulk. HFP had a long history in the baby food business. Traditionally the market leader, it had over the years maintained a market share of approximately 60 percent. During the 1960s the firm experienced rapid expansion and growth. The number of different types of baby food products increased tremendously to keep up with increasing demand for more foods and a greater variety of products. During the period from the middle 1960s through the mid 1970s, growth in sales approached 15 percent compounded yearly. During the past few years, HFP had faced a greatly changing market for infant foods. The sudden decrease in the birth rate brought about major changes in the infant food business, and projections of sales had to be altered drastically. In addition, the new concern about food additives, including flavorings, dyes, and preservatives, also had its impact on the baby food market. Many consumer advocates argued that it would be safer for parents to make their own This case was written for classroom use and is based on an actual organizational situation. Certain names and facts have been changed to protect confidentiality. (Written by Steve Palesy and David Nadler, 1976.) Reproduced with permission of the author. Minor editing by James G. Clawson, Darden School, University of Virginia, 1995. Page 2
baby foods than to purchase the commercially prepared products such as those manufactured by HFP. Finally, competition in the baby food market also increased. Private names competed on the basis of price against the nationally advertised brand names. These changing conditions had been viewed with great alarm by the top management of HFP. The drop in growth of sales (to 3 percent in the most recent year) was accompanied by an even greater drop in earnings as management found itself with unused plant and warehouse capacity. Management was currently concerned with looking for new ways of stimulating demand for HFP products as well as the longer-range problem of finding new complementary products to develop and market. THE MARKETING ORGANIZATION
In 1975 a researcher from a major business school became involved in studying the marketing organization of HFP as part of a larger-scale research project. His inquiries led him to look closely at the sales department and to investigate some of the problems that were being experienced there. The marketing function at HFP was directed by a vice-president for marketing who reported directly to the president of HFP (see a partial organizational chart in...