James Slater, Vice President Sales and Marketing of Northern Lights Limited (“NLL”) stared at his computer screen in heightened disbelief. What had grabbed his attention was an email outlining a unique request from a long-standing and important customer, Amtron Pvt Ltd (“APL”). The email strongly suggested that NLL participate in sponsoring a portion of the company’s annual sales meeting (see exhibit 1).
A recent MBA, James had been brought into the company with the specific mandates of strengthening relationships with existing customers as well as aggressively acquiring new business.
James was acutely aware of the fact that his bosses considered the concept of partnership with customers to be of paramount importance and prided themselves on the long-standing relationships the company had with many of their clients. APL was in fact the company’s first major client back in 1945 and has been a strong source of business and even referrals since then.
However spending large amounts on sponsorship or any other type of promotional activity was completely out of line with NLL’s marketing practices and beliefs.
Northern Lights Limited
NLL is in the steel service centre industry. More specifically the company buys “master coils” of steel from producers (master coils are generally 48/72 inches wide and weigh as much as 60,000 pounds) in bulk quantities.
These coils are then “processed” before being shipped to the company’s customers for use as a vital raw material. Processing mainly involves activities such as “cutting to length” (providing sheets of a certain size rather than coils), “precision shifting” (providing coils of a narrower width) and “tension leveling” (providing very flat sheets of specific sizes).
The company has worked hard to earn and enjoy a reputation for consistent and timely delivery of quality products exactly in line with the customer’s specifications. Other strengths include sophisticated market forecasting that