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Case study marketing

‘Yet another poor year’ reflected the senior executive of Mephisto Products.’ P r o f i t s d o w n b y 1 5 p e r c e nt , s a l e s a nd t u r no v e r s t a t i c i n a m a r k e t w h i c h w a s recko ned to be growing at a rate of some 20 per cent per annum. It can’t go on.’ These were the thoughts of Jim Bullins, and he contended that the company would-be out of business if the next year turned out to be as bad. Jim Bullins had been senior executive at Mephisto for the past three years. Ineach of these years he had witnessed a decline in sales and profits. The company produced a range of technically sophisticated electromechanical control devices for industry. The major customers of Mephisto were in the chemical processing industry. The products were fitted to the customer’s processing plant in order to provide safety and cutout mechanism, should anything u ntoward happen in the manufacturing process. The products were sold through an UK sales force for some twelve people. Each represented a different area of the country and all were technicall y qualified mechanical or electrical engineers. Although some 95 per cent of Mephisto’s sales w e r e t o t h e c h e m i c a l i n d u s t r y , t h e r e w e r e m a n y m o r e a p p l i c a t i o n s f o r electromechanical control devices in a wide variety of industries.

The reason that sales wer e co ncentrat ed in ju st t he one i n d u s t r y w a s historical, in that the firm’s founder, James Watkinson, had some 30 years earlier m a r r ie d t h e d a u g ht e r o f t h e o w ne r o f a m a j o r d e t e r ge n t m a nu f a c t u r e r . A s a n e n g i n e e r , W a t k i n s o n h a d s e e n t h e p o t e n t i a l f o r s u c h d e v i c e s i n t h i s t y p e o f manufacture and, with the aid of a small loan from his father-in-law, had commenced manufacture of such devices initially for his father-in-law’s company and later for wider application in the chemical industry....
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