Group a9 - Soslp

8/13/2019 Group a9 - Soslp

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A N I R U D D H S I N G H R AT

D E E PA N W

M O H A M M

S A M E E R S I N G H P O K

SUBMITTED BY:GROUP A9

SOUTHWESTERN OHSTEEL COMPANY



Problem Statement

“Should Southwestern Ohio Steel Company sponsor the event atMatworks Annual sales meet in order to maintain the ongoing

relationship ”



Situation Overview

SOSLP has a history of developing strong relationships with mills and customers, and priditself on providing state-of-the-art services to add value to the channel.

The company generally doesn’t spend large amounts on any type of promotional activity andespecially not on individual customers. Though for the company, the concept of partnershipcustomers is very important.

The company recently received a letter from a large and long-time customer asking that, amajor supplier, Southwestern Ohio Steel contribute to the Matworks annual sales meeting bsponsoring an event that would cost anywhere from $5,000 to $80,000.

The customer was large and serious about Southwestern's participation, but as a supplier, tcompany had never done business in this way.



Option I – SponsorOption 1

– To Sponsor the Event

Cost to the Company: The annual expenditure of our company for advertising andpromotional activity is $25000 annually. Therefore if we decide to sponsor an event we wilto incur a minimum expense of $5000 (Golf tournament). As our company earns a pr$20160 from Matworks annually, sponsoring an event with minimum amount should be fea

Company’s Policy: The Company doesn’t spend large amount on any type of advepromotional activity. We are considered as industry leader. To increase our sales and proourselves against our competitors certain promotional activity will be needed. Therefore altthe company policy in the interest of the company will be beneficial. Thus sponsoring anwith minimum of $5000 is preferable.



Option I – SponsorBusiness Relationships: By sponsoring an event in Matworks annual sales meet we opportunity to improve our relationship bond with Matworks and it also shows the wavalue one of our oldest and long term customers. In a way we can also maintain a view thus relationship with customer matters the most rather taking advantage of the situation to mquick bucks.

Future Sponsorships: If we sponsor an event for Matworks there are good chances ofcompanies asking for sponsorship in future. Presently Matworks is actually facing probleby sponsoring the event we can show the company and other customers that we stand bycustomers when they are facing hard times.

Corporate Image: If we sponsor the event in Matworks we get to improve our burelationships with them and it shows that we support their morale in there bad times. Twon’t be any chance of bad publicity if we don’t sponsor the event, but there are chaour competitors might use the opportunity to break into our account. Hence the CorpImage will be maintained and our goodwill will increase.



Option II – Don’t Sponsor Option 2

– Not to Sponsor the Event

Cost to the Company: If we don’t sponsor any event in Matworks annual sales meet would be saving a minimum amount of $5000 which can be used by the company for purpose.

Company’s Policy: The Company’s policy will not be altered if we don’t sponsor. Weour earlier policy of low advertising expenses.

Business Relationships: Matworks being our important customer, there are good chances orelationship getting hampered with the company. We may lose a very important customfuture, which will not impact the business as it is only 0.27% of total business.



Option II – Don’t Sponsor Future Sponsorships: If we don’t sponsor the event now there are very less chances customers asking for sponsorship in future based on our decision but since our compemight agree to sponsor this event, an industry trend will set in and in future this mighcome back to SOSLP.

Corporate Image: Company may have a bad image for all the customers of similar sinature as Matworks. There is a possibility of losing Matworks as our customer. So indir

will be affecting our company’s image in the market.



RecommendationSOSLP should sponsor the event with minimum sponsorship of $5000 (golf tournament). The

amount can be paid from the company’s profits. If we sponsor this event, we see a bright future withMatworks and there are great chances of our sales getting increased.

If we practise our usual advertising policy like giving tickets for basketball game, we reach outlimited number of people, but by sponsoring this event we can reach out large number of peoplalso improve our corporate image. Also our company executives will get an opportunity to havedialogue with executives of Matworks.

Matworks can be asked for more business in exchange of the sponsorship indirectly as the offiMatworks can be impressed at the Golf Tournament where the major time is spent in talks ratherthan on the sports. Also sponsoring a aspirational sports like Golf will enhance image of SOSLP

This sponsorship should not be refused as this opportunity will be taken up by a competitor anindustry trend will set in, which will bring more such situations n future, so the company can benow itself.



Course of ActionSponsor the event by paying a minimum amount of $5000 for the Golf Tournament.

We need to change our advertising policy so that we can spend more on advertising to incour customers and improve the brand image.

We can invite the executives of four subsidiaries to attend the event, there by creawareness of their products as well.

We should look to improve our sales after the event as we will be having improved brand

in the market.A direct one-to-one relationship with the buying centre of the Matworks can be establ

and future business can be sealed by terms of new relationship.



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Group a9 - Soslp