Stepsmart Case Study

• D.LIGHT DESIGN

• Target: BOPs (4 million people live under BOP) – collective consumption $5 trillion
• Cost of energy for BOP household Ranges between 10-25% of their domestic expenses
• India was chosen for a global launch in 2009 as 45% of global revenues come from India, annual spending estimates to $163 billion
• Rapid growth in the use of renewable energy technologies
• Product Competitors: kerosene
• Distributors:

• Post Offices
• Common service centres (CSC)
• LPG Distributors
• General Retailers

• Margin for distributors: 10% and end-point-seller: 15%
• 3 models in the market: S2, S20 and S300
• Promotional Expenses: 3-4% to 6%

ISSUES & CHALLENGES

• Indians are comfortable with their habits and routines
• Convincing customers with nearly no extra income to purchase an unfamiliar technology
• Low Brand awareness
• The distributors do not promote the product as it is not their core product in spite of having a strong distribution network
• Low affordability as compared to kerosene
• Hard to explain the benefits to users due to lack of education

RECOMMENDATIONS

• Demonstrating high quality Standards.
• Partnering only with reputable, trustable distributers
• Building network of local sales agents
• “De-Risking” the product for customers
• Distributing free samples
• Emphasizing the disadvantages of kerosene lanterns

• GOODYEAR (PFA THE PPT)

• NATUREVIEW FARM(PFA THE PPT)

• ARROW ELECTRONICS

• BMW’S PROJECT SWITCH

• SIEBAL SYSTEM

• DESIGNS BY KATE

• Go Online
• Train your sales force
• As the brand & company grows moves to new geographical location

• FORCE INEGRATION AT FEDX

• STEPSMART FITNESS

Introduction

StepSmart Fitness was based on manufacturing equipment for exercise. Mark Wallace, C.E.O of StepSmart, was appointed six months ago. The Company was situated in the U.S. It acquired 18% share of the total estimated industry’s sales revenue which was $3.5 billion, in 2011. The total sales of StepSmart for 2011, were calculated to be $630 million. The number of employees in StepSmart Fitness was 540.  The company wanted to target different sets of customers, therefore, the sales force of the company was divided into 3 groups:

1) Retail products

The retail products contributed 63% in the StepSmart in the U.S sales. Retail product group dealt with the supplying of the home gym equipment to the different retailers such as Big-Box retailer, sporting equipment retail chains and online retailers. The company’s share in this particular segment was estimated to be 27%.

2) Private and Institutional

Its contribution in the sales of StepSmart was estimated to be 7%. This group was involved in supplying a range of exercise equipment to private clubs, universities and training facilities. The company’s market share was low and was estimated to be 10%, as the company recently entered this market.

3) Commercial Products

This group’s contribution in the sales was estimated to be 30%. It supplied the range of cardio and strength training equipment to fee based health clubs. The company’s market share in this segment was 17%.

Problem Statement

StepSmart Fitness was having issues with the performance of the sales force in the New England district and they were not able to achieve the targets. Ben Cooper, was promoted as the vice president of sales for Northeast district. The company demanded from Cooper that he was supposed to lead the New England district and increase the sales and revenue targets. Whereas, there was a challenge for Cooper, if the New England district was not able to achieve the target, then the 50% of the team would be terminated.

Case Analysis

Key Issues

StepSmart was operating in different parts of the U.S. The company worked in manufacturing the exercise equipment. It consisted of the sales teams which were responsible for supplying the exercise equipment to different parts of the U.S. The company was facing different issues in terms of achieving sales and revenues from districts. This could be due to many reasons but major reasons were that the sales teams of the company were not performing very well. In the New England district, especially the sales and revenue targeted by Step Smart were not being achieved by the sales team. This was due to the fact that though sales force was giving their efforts but due to some reasons they were not able to give their hundred percent. StepSmart fitness, appointed Ben Cooper as the vice president of sales for the Northeast region. His duty was to bring changes in the system of New England sales force in order to increase the productivity and revenue. The problem was that Cooper had to come up with different ideas or strategy by which he could turn around New England district and achieve the targets of the company.

The problem was the sales force and those problems could be identified if he practically examined the sales team. Therefore, he spent two days with each sales person and identified many problems that existed in the sales team. In case of Avery, he was an experienced employee of StepSmart and also had great knowledge, but the problem was that he was very much involved in the generation of new ideas, innovations and implementing them in his real experiences. Also, he was less interested in covering the less populated areas such as the northern regions. That was a problem as his job demanded, bringing innovation to the work and also covering all those areas to search for the opportunities. Whereas in the case of foster, Cooper came to know that his performance was going great, but his performance started to decline in a year. The reason was that he was disturbed from his marital issues and due to that he was not in a good condition emotionally. Once, female client complained about his bad behavior. The clients were the business and sales opportunity for the company and bad behavior with them could be very costly.