Hewlett-Packard Company’s Marketing Issues

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Table of Contents

Introduction
Main body
Conclusion

Introduction

The main problem that can be identified from the case study on H-P is the bureaucratic operational structure of the company, which crippled the efficiency of the sales force of the company. Therefore, the main problem identifiable with the company is in its organizational structure and especially with that of the sales team. This led to inconsistent corporate communication to customers, many sales people interacting with corporate customers confused them as to whom they should contact. As the salespeople were divided on geographic locations, it became difficult for them to handle multinational customers. Inconsistent corporate communication with customers in terms of price quotes from Europe and the US created problems for the customers and confused them. Bureaucratic structure made operations and decision making cumbersome which led to delay in internal process like recruitment. Further, it also forced high amount of administrative work on salespeople resulting in less attention being paid on customers. Thus, customer relations were affected. One reason for this was tall corporate sales structure, which had 11 layers of management between CEO and a customer.

Main body

Given this problem, Mr. Hurd had a few options to choose from in order to make the company’s sales tem more effective. First option was to make the corporate sales team flatter. Second, was to have a one-point contact for all corporate customers in the sales force. Third, was to increase customer orientation of the salespeople. Fourth, was to change the compensation structure of the salespeople. Fifth was to bring sales team under the business units.

The above-mentioned strategies were devised by Mr. Hurd to address the problem at H-P. Making the corporate sales team flatter was a necessary step. A tall structure with 11 layers of management made the corporate operations slow and bureaucratic in nature. There were too many sales people and support staff at H-P – 17000 people in sales team, 10000 direct contact with customers rest support team or management. This led to higher turnaround and response time, which led to losing of profitable corporate accounts. However, this also led to massive layoff, which may lead to labor and union problems. Corporate customers were unsure as to whom they should contact at H-P in order to place their order. Thus, Hurd made a one-point contact for corporate customers, which made accessibility with the H-P sales team easier. This would also reduce the problem faced in multinational customers. In order to increase customer orientation, it was insisted that salespeople master one of the products in the product portfolio of H-P in order to deliver better to the customers. They were given less number of accounts to handle so that the salespeople had more time to spend with customers. Change in the compensation structure of the sales people led to incentive based salary structure that would act as a motivating factor in order to push them to sell more. Further bringing the sales force under the business units made the salespeople aware of the business unit operations and the budget was in the hand of the business units and not towards the sales teams separately. Thus, internal and external coordination developed.

Conclusion

Thus, the main recommendations derived from the case study are to restructure the corporate sales team and bureaucratic operations was crippling the efficiency of the sales force. Customer orientation of the sales team was necessary, as it would increase customer loyalty. Further salespeople must have complete knowledge of the product they sell, and thus have specialized salespeople for all products. Further change management is a must in the company. As H-P was undergoing several changes at one go, it might be difficult for the employees to understand them. Thus, it was necessary to have a systematic change management program for easy acceptance of the changes.

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Hewlett-Packard Company’s Marketing Issues

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