Answered: 1) How did the relationship between…

MARKETING 2018

19th Edition

ISBN:9780357033753

Author:Pride

Publisher:Pride

Chapter4: Social Responsibility And Ethics In Marketing

Section4.2: Blue Bell Creameries Moo’ves Ahead After Listeria Crisis

Problem 1C

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Case: Brewing Peace Philippines: Customer Relationship Management

Case Synopsis: Brewing Peace was an integrated coffee manufacturing and selling company in the Philippines. It targeted sales revenue of P2 billion by end of 2022. Despite a base of 80 customers, 70% of its business depended on 9 key accounts, including its largest buyer CCEL, which accounted for 20% of Brewing Peace’s revenue. The co-founder Jose realized that a 55.6% rise in operating costs had resulted in only a 29.8% profitability growth. This seemed to be compounded by CCEL’s new order of P30 million, which had a profit margin of less than 20%, a 90day payment period, and a short delivery time. This forced Jose to review his relationship with his biggest client. Jose’s dilemma was he could not accept this order on CCEL’s terms without jeopardizing his company’s payment terms with its vendors and affecting the supply of its orders worth P25 million to its other customers. He wanted to retain business with CCEL yet nurture and augment his relationship with other clients. In such a case, Jose wanted to have clarity about whether to accept the order on CCEL’s terms or renegotiate the price, payment terms, and delivery schedule to benefit his own company.

Discussion Questions:

1) How did the relationship between Brewing Peace and CCEL evolve? Why did Brewing Peace continue its relationship with CCEL? Hint: Think of Price received and Cost to Serve (2X2) matrix.

2) What should Brewing Peace do about its recent order from CCEL? Assess the 3 options (maintain status quo, renegotiate or stop supplying products) it has.

3) What other strategies the company can explore to reach the goal of P2 billion sales revenue?

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