Sales and Customer Service Costs
DardenBusinessPublishing:209044
UVA-C-2292
Rev. June 17, 2009
This document is authorized for use only by madelene manu at Douglas College.
Please do not copy or redistribute. Contact permissions@dardenbusinesspublishing.com for questions or additional permissions.
JOHNSON BEVERAGE, INC.
As president and primary owner of Johnson Beverage, Inc. (JBI), Jack Johnson was beginning to realize that retaining long-term customers was becoming a challenge. During a delivery run yesterday, driver Joe Stevens had noticed a competitor’s sales manager talking with the general manager of Saver Superstore, one of JBI’s largest customers. Then, that morning,
Johnson’s sales manager, Marsha Ketchum, had mentioned that, during her visit with the same general manager on Wednesday, he was starting to make some noises about wanting to negotiate a lower price. This could cause a dilemma because this customer had been one of the company’s largest and most loyal customers for years.
Johnson leaned back in his chair. These things always seemed to come up on Friday— just in time to monopolize his thoughts over what otherwise would have been a restful weekend.
Deciding to address the situation head on, he scheduled a meeting with Stevens, Ketchum, and several others for later that afternoon.
Company Background
JBI distributed beverages to retail customers. The company had been in business for two decades and had become a preferred distributor among several retail outlets in the local area. JBI primarily distributed bottled sports drinks made by small specialty beverage companies, and its business had grown steadily with the popularity of sports drinks over the past 10 to 20 years.
Last year, JBI’s revenues totaled $12 million. The company serviced about 20 customers whose beverage purchases totaled anywhere from about $100,000 to over $1 million annually.
The undiscounted list price on the sports drinks that JBI distributed was $15.20 per case of 24
UVA-C-2292
Rev. June 17, 2009
This document is authorized for use only by madelene manu at Douglas College.
Please do not copy or redistribute. Contact permissions@dardenbusinesspublishing.com for questions or additional permissions.
JOHNSON BEVERAGE, INC.
As president and primary owner of Johnson Beverage, Inc. (JBI), Jack Johnson was beginning to realize that retaining long-term customers was becoming a challenge. During a delivery run yesterday, driver Joe Stevens had noticed a competitor’s sales manager talking with the general manager of Saver Superstore, one of JBI’s largest customers. Then, that morning,
Johnson’s sales manager, Marsha Ketchum, had mentioned that, during her visit with the same general manager on Wednesday, he was starting to make some noises about wanting to negotiate a lower price. This could cause a dilemma because this customer had been one of the company’s largest and most loyal customers for years.
Johnson leaned back in his chair. These things always seemed to come up on Friday— just in time to monopolize his thoughts over what otherwise would have been a restful weekend.
Deciding to address the situation head on, he scheduled a meeting with Stevens, Ketchum, and several others for later that afternoon.
Company Background
JBI distributed beverages to retail customers. The company had been in business for two decades and had become a preferred distributor among several retail outlets in the local area. JBI primarily distributed bottled sports drinks made by small specialty beverage companies, and its business had grown steadily with the popularity of sports drinks over the past 10 to 20 years.
Last year, JBI’s revenues totaled $12 million. The company serviced about 20 customers whose beverage purchases totaled anywhere from about $100,000 to over $1 million annually.
The undiscounted list price on the sports drinks that JBI distributed was $15.20 per case of 24