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Homework answers / question archive / Founded in 1970 in Alençon (Orne), the company MPO Fenêtres (Menuiserie Plastique de) was one of the first French companies in the PVC/carpentry sector to offer a customized service
Founded in 1970 in Alençon (Orne), the company MPO Fenêtres (Menuiserie Plastique de) was one of the first French companies in the PVC/carpentry sector to offer a customized service. However, at that time, in France, very little was known about PVC, carpentry and double glazing technology: these markets were still in their infancy. It took about ten years, and two oil crises (in 1974 and especially in 1979) for the PVC window market to really take off. The commercial policy of EDF (the French public energy provider) at that time favoured the development of this product, encouraging investors to push for “all electric” installations, which would, according to the manufacturer provider, require better insulation of public buildings to reduce heat loss. With regard to marketing and distribution, the business is customer-oriented: therefore, MPO Fenêtres has chosen to keep control of the entire supply chain, right through from the order to delivery to (and sometimes installation for) the customer. For both new and replacement windows, MPO Fenêtres markets, designs, manufactures and installs its own products, thus ensuring complete control of the order and keeping to a minimum the number of contacts for the customer. The company distributes its products through two distribution channels: a central department in charge of “key accounts” and “communities”, and a network of eight agencies deployed in northeastern France, all owned by the company. These agencies are the cornerstone of the distribution network. Each agency employs fifteen salespersons, as the control of about 15% of its market area, and operates in a sales territory of approximately 45,000 customers. The company’s salespeople actively seek potential clients, especially at trade fairs and exhibitions. These events are of paramount importance: they afford opportunities to expand the client base and win new contracts. Up to 25% of the annual turnover of an agency can be attributed to contacts made during these events. Today, the continuing strong growth of the market has encouraged MPO Fenêtres’s CEO to rethink the organisational model of its agencies. In order to improve performance and increase the commercial strength of the company, an audit of its business performance was conducted. Internal research within the company enabled the identification of tasks conducted by employees, and the time allocated to each task, over the course a year. The results are as follows. Each year, a salesperson has two weeks of training and five weeks of paid holidays (in accordance with employment law). Two weeks of their annual working time is devoted to attending trade fairs. In addition, the average salesperson is absent one week per year for personal reasons. In terms of the organization of their fiveday working week, the Director observed that one day is devoted to purely administrative tasks (making appointments and reporting activities). For the remaining four days of the week, based on a working day of 11 hours, one hour is devoted to the management of administrative problems and urgent tasks, and one hour is taken as a lunch break. In terms of customer contacts, information obtained from sales staff showed that the average sale is concluded at the end of the third meeting, and that such meetings last on average about an hour. Convinced that high thermal performance PVC windows are the future of the company, the company’s directorate decided to develop sales of these as its primary strategic activity. It therefore needed to develop a marketing strategy for these products on the retail market. Some factors are key to the strategic approach needed: individuals are not necessarily aware of the technical features of the products. In addition, although they offer real benefits, triple-glazed products are more expensive. This may hinder sales of triple-glazed products, because many alternatives, which are cheaper and perform equally well, are still marketed, both in the company’s own catalogue and in those of its competitors. Although the triple-glazed products are better in terms of insulation and sophistication, their price may be an important deterrent. Required:
1. Suggest incentives to stimulate the staff to encourage their continued training and to support sales of the company product that will lead to competitive advantage (3 marks)
2. Identify the key factors for success from the passage (3 marks)
3. What is the business implications of the passage (2 marks)
1) I will suggest an incentive plan which will be decided as per product demand in the marketplace and experience level of employees.
A common and minimun number of size of units may be decided. For example: A team leader must have to sales at least 30 triple glazed machine products. If , he has a team of 5 people having less sales experience. Successful completion of this target must be offered 10 to 20 % incentives to each individual on regular salary.
2) Regular sales and marketing, training to staffs and welfare schemes ( holidays , paid leave and incentives ) are main factors for organizational success.
3) Every business operations of an organization must be designed for customers. Employees welfare schemes help it to achieve. Technological advancements support customer service in greater speed, qulity and less costly. Sales and marketing activities are one of the key ingredients for organizational success.
