Introduction
The case concerns the need to strike a balance between two proposals the company in 2008. The first proposal was by Michael Harvey, who championed for an increase in consumer expenditure by $225, 000. In the increase of consumer spending, the corporate advertising as well the trade allowances would stay at the same levels of the previous year. The other proposal was by John Bott, which stood for an increase in administration allowances by $135, 000. In other words, the company was to employ new sales representatives, who would work on the services for new customer accounts that had been realized in 2008. John Bott’s proposal expected the consumer spending, the trade allowances, and the corporate advertising to remain the same level with that of the previous year (Kerin and Peterson 309).
Problem Statement
The problem of the case was to find common ground between the two proposals. The question that would be asked was on how the company could allot money for the marketing promotion and the administration. All the proposals were geared towards the achievement of company's goals of an efficient community program and good customer service. However, the budget allocation was the issue.
Alternatives
The first alternative the Haverwood can take is to utilize the two proposals concurrently. Nonetheless, the issue to consider is not to exceed the sales policy limit. To avoid that, the company can alter the corporate advertising allowances and the trade advertising allowances for the previous year. The additional $225, 000 for consumer spending can be drawn from the pool of corporate advertising while the $135, 000 for an increase in sales staff can be drawn from the trade advertising pool. The reason for the choices is based on the budget allocations. The stake of corporate advertising is by far higher than that of trade advertising (Daft).
The other alternative is to maintain John Bott’s proposal and reduce Michael Harvey’s proposal to about $100, 000. The cutting of the Michael Harvey's budget proposal will imply that the company will not violate the policy limit and will reduce a headache for the enterprise.
Evaluation of alternatives
The market for wood furniture is cyclical and is pegged on some factors which include the consumer confidence, the statistics of new housing units and consumer’s disposable income. Increasing consumer spending does not mean consumer confidence will increase, which implies that it is not the best alternative. However, a slight increase of about $100, 000 is quite manageable.
John Bott's proposal is quite good and directly affects the company retailers. The reason the proposal needs to be retained for the two offered alternatives is because the support of retailers comes directly from the sales personnel. About half of the company's sales are handled by the sales staff. Additional sales staff would provide the needed support for the retail outlets (Daft).
Recommendations
After the evaluation of the possible alternatives, it is better for Haverwood to consider both options. Haverwood should increase the sales personnel as this is critical to the support of the new 50 accounts realized by the company at the beginning of the year. Moreover, if the funds remain, the sales representatives can be trained to better their skills in service delivery.
Besides, the company should consider increasing consumer spending at a smaller rate that that proposed by Harvey. Consumer spending is also good considering that there might be high chances of new housing units and a boost in consumer confidence from the availability of enough sales personnel with better services.
Works Cited
Daft, Richard. Management. New York: Macmillan Publishing Company, 2008. Print.
Kerin, Roger A, and Robert A Peterson. Strategic Marketing Problems. Boston: Allyn and Bacon, 1978. Print.
