Ashworth, Inc.-A Case Study

CASE DESCRIPTION primary subject matter of this case concerns the components of marketing communications strategy in terms of generating leads and creating sales. case has a difficulty level of three, appropriate for junior level. case is designed to be taught in three class hours and is expected to require two hours of outside preparation by students. CASE SYNOPSIS This case is about a (fictitious) company and its marketing communications strategy. manager in charge, Jeff Gill, is faced with a challenge of justifying its budget to the senior management. He has to analyze and explain his expenses in trade advertising, literature, trade shows, direct mail, and PR in terms of the number of leads generated and sales completed. He decides to outsource some of his functions to MSC, a database marketing/leads management company, and together they are able to maintain the strategy intact, and most importantly, profitable. ASHWORTH, INC. I can't cut back any more, complained Jeff Gill, manager of marketing communications for a large industrial company. I don't understand how senior management can continue to cut my budget mid-year, and expect me to help the sales team make their numbers. Don't they know you have to spend money to make money? Ashworth, Inc. had not reached its net earnings for January and February of the year. As a result, senior management sought cuts on expense items, and also looked to cut back on various departments that were considered overhead. Marketing communications was always one of the first departments to feel the budget cuts. Senior management doesn't understand how important my department is, Gill continued. The sales team won't get any sales leads if we cut the advertising budget. And how are they going to be able to competitively bid on business without leave-behind literature? It just doesn't make any sense. Ashworth, Inc. was a large industrial valve company based in Munich, Germany. company had been in business for 50 years. Its North American corporate office in Chicago, Illinois had been successful in making its mark in the United States. In order to be closer to the customers, the company had four area offices and 30 regional offices in the U.S. It also had significant coverage of Canada. United States sales teams were in the regional offices. Each regional office had a regional sales manager that managed the sales teams in their offices. president of the company, Thomas Wenderburg, was a real go-getter from the Germany headquarters. He believed in allowing the regional sales managers to have authority and accountability. He pushed command down to these managers and allowed them to make daily decisions that would affect their business. Accountability was key--and as long as they made their numbers, Wendelburg was happy. Advertising and marketing communications, however, was centralized at the corporate office in order to protect the company brand, including the logo. marketing communications department at Ashworth had three people; small for the amount of sales in the company ($3,000,000,000 annually in the U.S.). Jeff Gill was the manager of the group; his staff consisted of one writer and a secretary. Whenever there were problems with sales revenue or poor earnings, it seemed as if marketing communications was the first department to get hit. This was the second consecutive year that the marketing communications budget had been frozen mid-year, despite good planning. annual marketing communications budget at Ashworth was $1.65M. It was spent as follows: Type of Expense Amount Spent Trade Advertising $500,000 Literature $300,000 Trade Shows $650,000 Direct Mail $50,000 Public Relations $150,000 TOTAL $1,650,000 Gill needed to think of a way to get out of this rut. …

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