Fondren a decision on how the new merged

 

 

 

Fondren
Publishing, Inc.

BN181224

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BUS 350 Introduction
to Sales Management

Professor: Sherry West

Westcliff University

27/01/2018

Abstract

The case “Fondren Publishing, Inc.” is about the merger between
Fondren Publishing, Inc., established in Paris, France and another journal
publisher, Bronson’s & Sons which is headquartered in Brussels, Belgium.
Fondren, is one of the successful publishers in the field of science and
technology and has expanded itself to the US, Asia-Pacific and Europe. They
have more than 2000 different titles in academic journals on science and
technologies and publish them in both print and electronic forms. They primarily
focus on trade customers. On the other hand, Bronson specializes in health and
science titles and primarily focuses on direct customers.

            Keywords: Fondren,
Bronson. Journals, Customer.

 

Introduction

            Fondren Publishing, Inc. is a world-wide publisher of
academic journals in the area of science and technology. They are based in
Paris, France. They have more than 2,000 titles in their collection of products
and are publishing them in both print and electric mediums. Fondren’s sales
force have employees who have been with the company for more than 17 years. The
structure of their sales force is geographical which has been divided into 14
regions: 6 in the US, 4 in Europe and 4 in Asia-Pacific. The biggest sales
revenue for Fondren is from it’s largest trade customer, which is New
York-based AcademCo. which currently holds Fondren’s 20% of the sales revenue.
Their regional sales team covering the northeastern United Sates is extra-large
to accommodate this customer.

            Bronson & Sons on the other hand is also a journal
publisher, who is headquartered in Belgium. They can help add 750 new titles to
Fondren’s already huge lineup of journals as they are specialized in Health and
Science titles, as a merger deal has been put forward between the two
companies. While Bronson has fewer trade customers, they focus on direct
customers and have a limited market with no defined territorial sales region
within Europe.

            Fondren’s executives must make a decision on how the new
merged company will be able to structure its sales force, to better compete in
the market with their extended journal lineups. The objective of the merged
company is to increase the market share and improve the company’s customer
service activities.

 

Sales Force Structure

            Fondren’s primary source of income are the trade
customers. They have huge trade customer relations that can help them earn
revenue. The retail customers are no their primary focus. Bronson on the other
hand doesn’t have huge resellers but they have retail customers such as
universities, libraries and individuals. They are focused on a more direct
approach of sales. According to Baldauf and Lee, the sales force is primarily
responsible for the maximum share of customer acquisition and retention.
Understanding the sales force issues in a global context would seem to be vital
for ongoing corporate success (Baldauf & Lee, 2011). Therefore, if the
new merger company needs to be successful they will need to rethink their sales
strategy as today’s business world is fundamentally different than that of even
a decade ago.

            The advantage that Fondren has is the large number of
trade partners, so using that, even after the merger it is advised to continue
its sales force geographically, while at the same time adding even more regions
in Europe as they do not have a good hold of the region. Along with the
geographical structure, the sales force should also be structured by the type
of customer that they are selling to since their journal lineups are extensive
and Bronson already has good relationship with healthcare, universities and
libraries; a sales force can be focused on this while another sales force can
be focused on Fondren’s trade partners. They can combine both of the company’s
resources and offer their products to each different key individuals as they
each one of them has varying needs. This can help the new company maintain
loyalty as well as increase the total market share through expanded
geographical and customer type sales force structure.

            Firstly, the new company will be able to maintain and
expand their territorial regions and keep their overall market reach and at the
same time influence direct customer sales to different types of customers and
easily target them. Being specific will also enable them to control their costs
and maintain a good record and analysis through TCA. Focusing on specific
region and customers will also enable the sales team to be effective and
efficient in their task. They will be more knowledgeable about the geographical
area they are in and the types of customer that they are dealing in.

            The downside of this sales structure is the potential
selling and administrative expenses by through the merger of the two companies’
they capital can be obtained. Also, Fondren already has veteran sales people in
its team meaning that they can train the new employees about the ins and outs
of the business and help them acquire the necessary knowledge and training
needed for better sales conversions.

Key Accounts Management

            Fondren’s key account is AcademCo. which holds 35% of the
market share and makes 20% of Fondren’s sales revenues. One of the major
reasons why many businesses flourish is because of the firms creation and
delivering of value to their customers (Sullivan, Peterson, & Krishan, 2011). Fondren should
treat its key account better than any other of its business partner since the
revenue generated from the key account outweighs any other sources of revenue. How
Fondren should go about doing this is by having the senior sales force that
Fondren already has to be the ones interacting with AcademCo. Since the sales
force is already well aware about the industry and how to deal with people,
they should be the ones interacting with the key partner. The veteran sales
force can be assigned to be the only ones dealing with AcademCo while also
managing and training the new sales associates.

            The major advantage of doing this is that the sales team
will be able to form closer relationship with the client company and also
better understand their processes and activities and come up with even better
ways to benefit both the new merger and the key account. The satisfaction of
the customers should be the major focus on Fondren’s side as similar key
accounts will be difficult to come by.

            The disadvantage of this is that the experienced sales
force will require more resources and handling of a single key account by a
dedicated team means time management and use of extra resource. Cost will be
the major factor in this but Fondren should be able to manage it through better
use of transactional cost analysis and is a step that needs to be taken since
AcademCo brings in so much revenue to Fondren. Even after the merger this will
hold true. The costs associated with bringing in new customers is much higher
than retaining an old customer (Jones, 2014).
Due to the already good relationship and a good revenue source, Fondren should
invest on adding value and maintaining the relationship with AcademCo through a
dedicated sales force.

 

Conclusion

            Fondren Publishing is a well-known company and with its
merger with Bronson will add a new layer of opportunities for both the
companies. With a sales force focused on geographical as well as customer
focused approach. By managing their key accounts with appropriate value
addition and independent sales force, the merger company will definitely be
able to grow its customer portfolio as well as increase their regional
dominance.

 

References

Baldauf, A., & Lee, N. (2011). Internationa
Selling and Sales Management: Sales Force Research. Journal of Personal
Selling & Sales Management, 31(3), 211-217. Retrieved from
https://doi.org/10.2753/PSS0885-3134310301
Jones, L. B. (2014). 70% if companies
say it’s cheaper to retain a customer than acquire one. Retrieved from
Our Social Times:

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Sullivan, U. Y., Peterson, R. M.,
& Krishan, V. (2011, Jan 13). Value Creation and Firm Sales Performance:
The Mediating Roles of Strategic Account Management and Relationship
Perception. Industrial Marketing Management, 41, 166-173. Retrieved
from https://doi.org/10.1016/j.indmarman.2011.11.019