Bay City Steam Fittings,inc

CASE STUDY MARKETING

BAY CITY STEAM FITTINGS,INC

I. DISTINCTIVE COMPETENCE

Bay City Steam Fittings, Inc. started as a steam equipment engineering company. Jerry Ball founded Bay City in the spring of 1970. Jerry had developed a new type of thermostatic steam trap that had broad application in variety of industrial steam systems. The Bay City products were known immediately for quality workmanship, and a low need for maintenance upkeep. Bay City never really developed a good marketing plan as the word of their products was spread word of mouth and the sales representatives were “old school”, not pro active or very forward thinking. They were ripe for picking and Jackson Shipping in “Hot-lanta” was lurking on Bay City Steam Fittings horizon.

II. CORPORATE STRATEGY

In the early years, the company’s expertise was entrenched in manufacturing processes and product quality. While embracing these qualities as its roots, the company attempted to develop a distribution and marketing plan. Continuous years of success put an increasing emphasis on the importance on manufacturing processes and product quality, thus Bay City evolved incrementally in respect to distribution and marketing. Bay City did not have a distribution mold to use as a reference. As a result, the incremental changes overlooked some of the previous doctrine already in place, leaving holes in their working distribution strategy.

III. STATEMENT OF THE PROBLEM

Bay City Steam Fittings exact problem was their lack of a forward looking marketing plan. Bay City did not adhere to their marketing strategy, because they did not really know who their competition was. In their Sales, Distribution, and Pricing Policy, they defined a Class A dealer as major industrial distributors that sell to smaller distributors. These smaller distributors that Class A services Bay City defines as Class B dealers. Bay City sells to the Class distributors in their markets as well as to key end user accounts. Jackson Supply Company, as a distributor, already had a network of Class distributors and end users. Bay City’s first mistake was made when they did not identify distributors such as Jackson Supply. In fact, Bay City’s current marketing strategy does not include this new type of distributor that sells to Class A dealers. In reality, Jackson Supply was the Bay City of the South and became a Bay City competitor, not a potential customer.

Another failure of Bay City was they did not cover promotion in their marketing strategy. Bay City’s promotional and advertising campaign became stagnant. Because their sales enjoyed continued growth, they relied on personal negotiation with individual dealers through a sales force. However, they never tried other modes of advertising and marketing to increase their customer base. Promotion is one of the essential components of a sound marketing strategy. By inadvertently overlooking the need to revamp their promotional marketing techniques, they were not able to draw new customers to Bay City and keep their current customers.

Lastly, Bay City Steam allowed Jackson Supply to become a powerful customer. Jackson Supply generated 15 percent of Bay City’s total sales, so Bay City could not adequately respond to Jackson Supply’s first attacks in their market. They thought they could not afford to loose the money their deal with Jackson Supply brought in. They believed Jackson’s logic “to stop business with Jackson Supply would hurt Bay City more than it would hurt Jackson Supply”. Therefore, Bay City was left powerless to Jackson Supply. Without the necessary promotional strategy, Bay City was not adequately prepared to contend with competitors that utilized a sound promotional and advertising strategy.

IV. ALTERNATIVE SOLUTIONS

This weekend Jerry Ball and Bay City Steam should do some war gaming, and three distinct choices should emerge.

1. Retreat and give in to the situation. Keep the account with Jackson Supply and eventually be swallowed up by them.

2. Surrender and give into the inevitable; close down the company thereby retaining and saving gained profits and protecting Jerry’s fathers inheritance, that initially funded Bay City’s start-up.

3. Resist and go on the counter attack and fight. During World War II General George Patton instructed his junior officers the best defense was to go on the offense. Bay City Steam should cease doing business with Jackson Supply under the current terms of the contract