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:iirctf 5L] ir: tl:i: Fc.rtr:ne 5-01,). Siqcr: its si:,r.r'i in
i980. ?ehn hail scld i-il s+:niicor.rducicls tr: r.ire
:riii i l g; ;:r i:.n u iiici u.r'ers <;i' pet'son ii i la].i1iii):iier s
i'Cs). lirliir iia-, saki tirese 1:iccl-ei;i:; ti,r;:cr,:-11i: iis
:
,:t.'i-l i:;:tlrio-.ei:
s;les,eopie, wi:i,; are irigirl;1' cdir.-
:ai.rd iiirfi i.raineri dect-r'iral ellgir1eelrs.'iliiese
rrretitber's oi iire llelin saie:,i io;-ce pi-iiii: ';hcrl'i'ta.cebvili.
seivcs or;. tl:c clcse lelaiionsl:ii: the3
''';lth tireir cllsioirlels, the PC 1]1a.lie rs.
iit.".r evei'. aft l.r ;'e ari; of pirenomenal g:'o-ovth,
lhe PC i:rark-e.t. has i-:egln'r to 1e.,,el o{T. ?his has
led'Islin to degelo;t nerr lines of ntcie si-:ecializeC
proclnct"s. These proCucts slili use thi: s:irne techrrclo;f fou;rii in Tblin's ccmrui<,.r clrips" l:ui thi:-r,
at'e rlucli ir]ol'il \,,ei'sAtile, kr othei'r-,,ord*". 'Lhe3la:r l:er integ-i'a.ted inio a x,ide lange of-lrroilucis
:.;tJrcr tlro.tt PCs. The ne-.,,i Telin r:hips can be used
i:r cel1 phones, r'ideo galre inacieii:.es, to3rs, ar:ri ii
-,-ariei.3, of Inielnei. clata piocessing pr"criri.cis.
Tlee foiloiving exchauge is l:et-*€eIr Lri'Lr)
Telin sales execritives: Jirn Pierce ancl Pam
)Iudge.'Ihese execntives tiisagzee as to irorv tr;
'srganize the sales fcrce that r":i11 i:e seiling
iiiese nerv ilj-oducts. iim Pierce believes T'elin
shouici sell the nerv iihc ot'p,r,rlucts tlrlough irs
or{iir produci-speciaiized sa.}es for"ce (i.e., he
',',;drits Teiin tr-r tiire a serral-ate g1'o1tp of 20 salespeopte tirat ri,'oulel exciusively seil the r:ew- proeluit iirre io ihe manufac'curers of cei). phone:"
eic.). Par:r }"{ndge. or: l.he othcr hairri, beiieves
1]re neu' iine cctild be sold more e{Iectivelr, anrl
effi ciently tlrrorig.h n a-nuiacturers' reps.
Jim Pier'*u:: You rva-nt to ciittsot-r.rte tire sales
fi.rnction? You're crazyt,
Parui il,iudge: \'Yeli, I thinh rn'e shonld use marlufacturer's' reps to seli our nera producis-i
d,ldn't really thjnh cf that as "outsourcing'sale*".
Jiiqr Fier:ce: Brit thai'e exacily that 1,6111'1s
proposing. X'Ianr":.facturers' reps are noi, our'
iri:iili.i-!,:'i:ia.'.1'i:il.,-'i'Lt :l,iii,o:l-r':iiiil,rirl
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'ijili,;.
{-}ur' sri}e.lpr:iii1e a.e 1L;.i.i
ii; ihe cr-lsiiiiiici3.
(lustarr;crs fbl'n:';1-reil' ir.iilll'r,:.3sir.;n. of ?-r:ii;r
tirroi:gir the salcs;i.1,-ro1"ili,'. i r.;oul1 ,1,:aie t.c icr.i'c
lliat to soil1e lilil-iLlifa,ciiii'cll;' i:+'r; ir.h,r C-ires rii,i.
even'ivoi"ir i!r-r' r-is,
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r';ii,^r
rf i.i{i
t]:i;1li x,e sjtcrrifi f]o,i
Ji::; Fie.'E:e: i l,hir-r1r r",'r: shnulri hire 2{} sair:speople ic focris e>:clu..:ivel'l cn the ng1.,' pt'rlriuct
lines. Olil' c\',/r i ]ilo ill1 cN-spscia ti zsd sa les fbrr;e il
r.vha.t rve nee,J. T'hey cculd focus on rieveloping
lelatiorrsl:ips wi'L]: oilr'Ilsv; set of cliellts. Eriilrling and n:aintaii:ing thi;sc lelafiolisiriJ)s i"vas
the liey to oirr success rviih the PC rr:ahers.
Faim il.ferdge: Yes, buri it tool; a" loilg tiure to cle-/elDp th$se i'elaticnship-. rvitit iBI*{, Del}. aird
ali the oi,her PC ;latuirictruers. Oul i;ranC
name inea[s next to nothirg j:r these rre11: ll]arkets, arrl lv€ ]lee{l to n:ove fast. There ale r:1ailrifacturers' r'eps that have already establi.sherl
relationships rvith ihe ccrlpanies in tl:js ner,.'
raarhet. 1"lre irp"ve rrerl, liitie tiiae. Hir"ing ar:d
training a rvhole trelv sales fbrce rould talie a
C1 .,ri,,,,
I
couple of yearc.
Fieree; r'Ye'd i-iii'e sale-"people rvi'r,h i:acl,'"Ei.r*
glounds irr e]ecti'icr:1 engineering-tire-y shoui il
catch on pretty qr,iichiy . .
.
Falar F,9esdge: Did
ihink aitori"r. horv
lluch ii rvould cosi tc hire and then train ali
thr.rse engiireers? I r:rean, they'd probai:i5' eacir
expecr a corl}pensation package \i,'orEh .sgii s-,isr'
$100,000 apiecel ?raining thern r-;orrld cost tens
of thcusands of doilars mole. "Manufacturers'
reps are experienced salespeople that a::e a'irear11. traineC. and \ye'd pay them 100 percent
commissioir, sc they d only cosi us utotley if the--,.
lvere successiirl. It's rrrich less risir".,'.
./cr1 c?er
Jim pieree:
Yes, but how could they be successfuf at seiling our products when Telin is just
one of maybe 20 ccmpanies that they represent!
What percent of their time do you thilk they'll
de:rote tn our products?
Fam Mudge: I don't knorv, but actually these
otlrer products they sell contplemerut out praducts-they don't compete with them! So the
manufacturers' reps can provide total solutions
to our customers. Sure, our o'r,tn salespeople
r,vould focus 100 percent on Telin products, but
custorners might rather see a salesperson rvho
is selling them every*hing they need.
"Iim. Piercel f thought mnnufacf,urers' reps
rvere for small cornpanies that couldn"t afford
their owrt sales force. Our total sales revenue
last year v/as over $SO bitiionl
Faun Mudge: Jim, there are lots of big companies that use manufacturers' reps, including
Motorola, lBM, and.Texas Instruments, to name
afew.
rlirn Fierce: I guess I did,o't knorv that. But
still, it scares me to outsource our sales functian.
Pam lVludge:We have tc think about nelv lYays
of organizing our business. I'm convinced that
menufacturers'reps are the best way to pursue
this new market.
Questions:
1" Evaluate the strengths and weaknesses of
Telin's using
a) Its own, product-specialized sales force
for its new line of products.
b) Manufacturers'reps to sell its nerv line
of products.
9. \trhich side are you on? Explain your
swet'.
an-