Auckland Engineering plc Harold Horne, sales manager for Auckland Engineering plc – a well-established engineering compa

[answerhappygod]

Auckland Engineering plc
Harold Horne, sales manager for Auckland Engineering plc – a
well-established engineering company
in Bishop Auckland, County Durham, received the following memo from
D.C. Duncan, his recently
appointed marketing director.
Memo
To: H. Horne, Sales Manager
From: D.C. Duncan, Marketing Director
Date: 16 January 2018
Subject: Preparation of annual marketing plan
You will recall that at our series of preliminary meetings to
discuss future marketing plans for the
company, I suggested that I was unhappy with the seemingly
haphazard approach to planning.
Accordingly, you will recall it was agreed between departmental
heads that each would undertake to
prepare a formal input to next month’s planning meeting.
At this stage I am not seeking detailed plans for each product
market; rather, I am concerned that
you give thought to how your department can contribute to the
planning process. Being new to the
company and its product/markets, I am not fully up to date on what
has been happening to the
market for our products, although as we all know our market share,
at 35 per cent, is down on last
year. I would particularly like to know what information your
department can contribute to the
analysis of the situation.
To help in your analysis I have summarised below what came out of
our first planning meetings:
1 Business definition: It was agreed that the business needs
re-defining in customer terms. An
appropriate definition for our company would be ‘Solutions to
engine component design and
manufacturing problems’.
2 SWOT analysis: Our main strengths are:
excellent customer awareness and an image of reliability and
quality;
sales force is technically well qualified;
manufacturing flexibility second to none – we respond quickly and
effectively to individual
customer needs.
Our main weaknesses are:
prices approximately 10 per cent above industry average;
spending higher proportion of turnover on advertising than most
main competitors;
sales force not skilled in generating new leads.
Our major opportunities are:
some major competitors having difficulty keeping customers because
of quality and delivery
problems;
recent legislation means research and development programme on
new TDIX component,
emphasising lower exhaust emission levels, should prove
advantageous;
recent and forecast trends in the exchange rate should help export
marketing efforts;
buyers in the industry seem prone to switching suppliers.
Our major threats are:
our largest customer threatening to switch owing to our
higher-than-average prices;
apart from TDIX programme, we have not been keeping pace with rapid
technological change
in the industry;
some major export markets are threatened by possibility of import
restrictions.
3 Objectives:
Financial:
to increase return on capital employed by 5 per cent;
net profit in the forthcoming year to be £4 million.
Marketing:
sales revenue to be increased to £35 million in the forthcoming
year.
4 Marketing strategy:
Target markets:
major manufacturers of diesel engines worldwide.
Positioning:
highest engineering quality and after-sales service in supply of
specialist low-volume diesel
engine components.
I would welcome your comments on my analysis, together with any
views on the appropriateness
of the objectives I have set.
For the next meeting, I suggest that, as sales manager, you give
some thought to where the relative
emphasis should be placed in our promotional effort. As I have
mentioned, we seem to be spending
an excessive amount on advertising compared with our competitors.
Perhaps you could give me your
thoughts on this, as I understand you were in favour of raising our
advertising budget from 1 per cent
to 2 per cent of turnover last year. As you are aware, from a
limited budget, we must decide where
to place the relative emphasis in our communications mix. Perhaps
you can indicate what you feel
are the major considerations in this decision.
Questions
1 Give a brief outline of ways that Sales Manager Harold Horne can
contribute to the marketing
planning process at Auckland Engineering. (20 MARKS)
2 Looking at Duncan’s analysis of the previous meeting, what
issues/problems do you see that are
of relevance to the activities of the sales force? (5 MARKS)
3 How would you respond to Duncan’s comments on the promotional mix
and, in particular, to his
comments about the level of advertising expenditure? (10 MARKS
)
4 What is the logic in conducting a SWOT analysis in this context?
(5 MARKS)