Oreck Company Case Study

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About the Company and David Oreck

“David Oreck founded the Oreck Corporation in the United States in 1963. The company’s principal manufacturing facilities are in Cookeville, TN.” •“In 2001 Oreck had 200 Oreck-owned stores across the nation, and worked out a licensing deal for investors who can set up Oreck Prototypes for a $75,000 investment.” •“The vast majority of Oreck sales took place over the telephone or through the mail.” •David Oreck was born in Duluth, Minnesota. In New York City it was revealed that his true calling was working as a salesman. He sold everything from televisions, microwaves and Whirlpool appliances; he ascended to become general sales manager. In 1963 he left to form Oreck Corporation. Since Whirlpool wasn’t successful of its upright vacuum cleaners, Whirlpool granted him exclusive rights to market them and gave Oreck free power to redesign and revamp the machine.

Manufacturers in late 1960s commonly bribed sales people to sell their products, and competitors were known to sabotage display models. Oreck Corp took an unusual approach to selling and advertising his products at the time. “Mr. Oreck chose to bypass traditional retail outlets and sell direct to end users via direct mail that detailed the features and benefits of his products without misrepresentations or strategic omissions.” •90% of the revenue was through sales while the rest was through repair work. Oreck corporation marketed its products through traditional multi-line dealers, giving out licensees, syndication, and “did its own merchandising of the products by direct mail, space advertising, free-standing newspaper inserts, television and radio commercials.” •Marc Paulson who owns three stores and calls himself “super salesman” trains his staff methods of closing a sales deal. His sales tactics included letting the customer try out the product, running vacuum cleaner races and showing the durability of the vacuum by standing on it. He spends most of his...
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