Section B

Case Study

Wilkinson Sword USA March 10, 1986

After a years gestation period, Wilkinson Sword USA has its first sales force. Its mission: Seize 10% of the wet-shave market.

On Nov. 5, 1984 Wilkinson Sword USA consisted of two people, Norman R. Proulx President and Ronald E. Mineo, Vice President Sales. Today the total head count of the re-organized company is rapidly approaching 100 and includes a 34 person sales force, the first direct sales force the company had had since its formation 35 years ago as the U.S. arm of London based Wilkinson Sword Ltd.

We need to be able to control our own sales force, says Mineo, explaining the change. If we (continued to use) brokers. Wilkinson could not get the kind of focus our product lines require to compete efficiently. All our competitors are our there with their own sales forces

During its checkered sales past, Wilkinson Sword had sold its razors and blades and recently, its self-sharpening knives and scissors, through manufacturers reps. or through the sales forces of other companies. In the late 1960s and early 1970s, for example, the Colgate Palmolive sales force took on the line. We parted with Colgate in the early 1970s says Proulx. We brought in our own senior sales types, but went to the manufacturers reps for drugstores and brokers for food stores and our share kept declining Proulx (pronounced prue) explains that even a company like Colgate was in effect a manufacturers rep for Wilkinson and would sell the thing thats easiest to sell.

Beginning in 1981, sales, marketing and distribution were taken over by the sister company, Scripto, a unit of Allengheny International, which had acquired Wilkinson Sword in 1960. But in late 1984, lighter and writing instrument marketer Scripto was purchased by Tokai, a Japanese lighter manufacturer. Wilkinson found itself with no sales force, no marketing management and no distribution.

Then it became apparent that Proulx, the then Vice President and General Manager of Scripto, was not going to stay on. Allegheny International offered him the opportunity to take over Wilkinson, which he agreed but only on the condition that the company have its own direct dedicated sales force. No longer, he says. Will our products be sixteenth in line in the manufacturers reps bag. He then offered Scripto Vice President of sales Mineo the same post at Wilkinson.

Wilkinson at that point was fighting for its very life. Its market share, which had peaked at a respectable 7.9% in 1974, had fallen to a mere 0.7% by the end of 1984, says marketing Vice President, William R. Gauch.

Lack of dedicated sales force was not the only problem. In 1974, the parent company had withdrawn advertising support and focused on Europe. Without ad support, the product slips in the market place. Mineo says, and there was no sales force to intervene.

Mineos view is supported by Ken Kerns, a buyer for mass merchandiser Fishers Big Wheel, based in New Castle, PA. Kerns says Fishers had carried the Wilkinson line about 10 years ago but dropped it. They stopped advertising and it stopped selling. He says.

Another problem, says Proulx, is that there were no products to keep the Wilkinson name before the consumer. But when Proulx and Mineo took over the company, their primary concern was to build a sales force that could command the attention of the trade and would give both existing and new products the attention needed to make them sell.

The new sales force, plus a strong new product, the Retractor disposable razor, plus the beginning of a two-year $23.5 million advertising campaign agency: (Eurton-Campbell, Atlanta), moved Wilkinson Sword USA to a 1.6% dollar share of the wet-shave market by the end of 1985, says Gauch. That market is variously estimated at $450 million - $500 million at factory level, which makes each share point worth $4.5 million - $5 million. Strong year-end activity brought the companys exit share to about 3.5% however. Total 1985 sales for razors, blades, and cutlery were expected to be about $12 million. Our goal, says Proulx, is 10% of the wet shave market by the end of 1987.

Those are brave words for a man whose goal was simple survival more than a year ago. On Nov. 5, 1984, Ran and I walked into a small temporary office. Proulx says. In the back of that office was an open warehouse, with a bit of a heater, where people worked at card tables. One day we had 11 people at a meeting Proulx says and we had only 10 chairs. People had to take turns standing

Adds Mineo. All we had was our briefcases. We couldnt even take any information with us until the transaction (the Tokai purchase of Scripto) was completed. The phone rang, and we didnt know what to do. He jokes. A secretary from Scripto volunteered to help us. She got us a typewriter, and got the phone lines switched.

Men at Work

Meanwhile, says Proulx, the Scripto sales force continued to sell Wilkinson products for two months, but for a fee. Obviously, the two men had to work quickly.

Step one in building the new sales force was account identification. Wilkinson sells primarily through food stores, drugstores, and mass merchandisers. We identified the leading secondary regions, Mineo says, and made them our target list. Twenty-five leading national accounts, which would be handled out of Atlanta headquarters, were identified.

The next tier was regional accounts. These accounts would be assigned to a salesperson at the field sales manager or area manager level, Mineo says. The third group was accounts that would be called on by the key accounts of sales or sales rep level.

Then Mineo partitioned the country into three divisions east, central and west. He segmented each division into an average of five areas and in each area, created one or two territories. All that was completed in November and December 1984. The next step was building a sales organization chart.

The 25 key accounts were to be assigned to two key account managers. The other 400 primary and secondary accounts would be spread among field sales, area, and territory people. The latter category includes key account people and sales reps. A field sales manager was needed for each of the three divisions. For each of the 15 or so areas, there would have to be area sales managers and in some cases, key account managers and sales reps. The initial goal was a total force of 24 people.

But organizing is the easy part, Mineo says. The hard part is finding the people. Proulx says there were times when he and Mineo were interviewing a candidate and Id look in Rons eyes and hed look in mine and we could see that we were thinking. Please we want to hire you, dont say the wrong thing.

One of the most difficult areas to staff was New York. Mineo says. It took four months to find the two people needed. New York and New England are where the Wilkinson Sword business is heavily rooted. Mineo says. We had several millions of dollars tied up in that market and didnt want to risk it. He explains that the New York market in particular is very price-sensitive, very demanding.

What really kept the pressure on was that while people were being recruited, the business in that market had to be maintained. I made sales calls. Says Mineo,

and Norm did. Shelly (eastern field sales manager Sheldon R. Babel) would run out and make calls whenever he could.

We were primarily looking for people with five years of experience-and-up in the finer health and beauty aids companies. Mineo says. The new hires do in fact, included people with experience at P&G, Colgate, Richardson-Vicks, Gillette and Werner-Lambert. Given where we were in the marketplace. Mineo says, We couldnt hire new recruits. We absolutely had to have people with basic selling experience behind them.

Hiring a totally new direct sales force of that caliber is a costly proposition. Mineo estimates that the first years recruiting, training, salaries, bonuses and related costs totaled about half-a-million dollars. We pay as much as $15,000 to an agency to recruit one person, he says.

Brokers risky

When setting salaries, we polled some companies and came up with a package at least as good as the competition, and may be 10 per cent better, Mineo says. There is also a field sales bonus program that allows people to earn a maximum of 60% of their salaries. The broker route costs significantly less, Mineo says, because the cost of sales is of commissions only. And your risk factor is under control. He points out, however, that the risk factor in terms of business that brokers generate is greater and that is the risk that Wilkinson could no longer afford.

Proulx and Mineo alerted search firms to their needs in December 1984, and began interviewing the first two weeks of January 1985. By Feb. 4, the first seven sales people were on board. By April 2, eight more people had been hired. By May 1, 18 people of the 24 had been hired, and by mid-September of last year, the final 6 were in place.

But in the meantime, management got budget approval from the parent company to hire 10 more key account managers and sales reps. The additional 10 people will meet more of our secondary and tertiary accounts, Mineo says. Measuring the accomplishments of the original 24 people against the objectives showed that the dollar volume and the numbers of people appeared to be gelling, he says. So when, he and Proulx identified the accounts we can reach with additional people, and the revenue wed realize they go the ok.

The new sales force does include 5 people who had been with Scripto when it handled the Wilkinson line. Mineo stresses, however, that there had been an agreement that Wilkinson could not actively recruit people from Scripto for a specific period, and that agreement was honored. A number of Scripto people became free agents, and contacted us, he says. We did not could not recruit people while they were still employed by Scripto.

Adhering to those contract requirements was particularly illustrating when Mineo was trying to fill the position of Vice-President Trade Relations. The person in that position represents Wilkinson at trade shows and social events, and his function has a lot to do with personality and style, Mineo says. The person Mineo wanted, but couldnt get, was Tony Taggart, who was at Scripto. So Mineo conducted a casual search for other people, all the while hoping that Taggart would eventually become available, which he did.

Wilkinson still has seven manufacturers reps in areas where management couldnt justify a direct sales person Hawaii, Alaska, Arizona and Oregon among them. Established rep organizations had also been kept on to continue handling catalogue, department stores and military sales.

At the national sales meeting in January, management announced that it is now beginning to put in place retail merchandisers who will support sales people by reducing out-of-stocks, building incremental facings and displays, and monitoring pricing. The use of retail merchandisers was successfully tested beginning of last September, and the goal is to have 29 people in place by end of August.

Retailers had become apathetic toward Wilkinson Sword Proulx says. Also, they felt they werent treated well. The constantly changing sales force was another problem, says Proulx, When we announced our own sales force, they said. Yeah, thats this week.

Kick the doors down

Meanwhile, Fishers Big Wheel, which dropped the Wilkinson line 10 years ago, has been carrying it again since last August. National accounts manager James A. Musarrra calls on buyer Kerns regularly, and is knowledgeable and aggressive, Kerns says. All salesmen push for something they believe in. I can tell he believes in his products.

Competitors, meanwhile, are unwilling to say much more than that Wilkinson is not a factor in the market. Bic marketing manager Keith Koski does say that the company is just making a return but will not comment on its prospects.

Ohio-Atlantic area manager Mark Cavalier has no doubts about his prospects, however. Cavalier joined Wilkinson in February 1985, coming over from sunglasses marketer Foster Grant. Looking to the future, he says, We have may be a 24- to 30- month long-range plan to become the number 2 razor blade company in the country. Weve opened the doors. In 1986, we need to kick the doors down.

1) Please evaluate the selling (and marketing) strategy and policies of Wilkinson Sword USA adopted in 1985. This would probably involve among other things evaluation of:

a) Basic decision to operate through company owned sales force,

b) Policy of organizing sales force around National accounts, regional accounts, key accounts etc., dividing the country in three geographical divisions, several areas, and territories etc.

c) Determination of sales goal of 10% market share of Wet Shave market by end of 1987

d) Policies of hiring of experienced personnel (five years)

e) Sales personnel compensation policy as good as that of competitors or 10% better than competitors

f) A sale bonus program which allows an individual to earn maximum of 60% of his salaries as bonus

g) Continuing the practice of selling through manufacturers representatives in selected areas

h) Future plan of adding 29 retail merchandisers.2) On an overall basis, please state and explain two major strengths and two major weaknesses of the companys selling strategy and policies.

3) Using Wilkinson Sword USAs experience as an example, please identify two / three Indian organizations which made substantial changes in their selling strategies and policies. Describe the circumstances which stimulated these organizations to make these changes their selling strategies and policies; what were the specific changes that were made? How were they implemented? And what was the outcome of introducing such changes?

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