The case revolves around Custom Research Inc. (CRI), a marketing research agency that helps B2B as well as B2C companies conduct their market research projects. This summary aims to analyze the problem faced by the company, its probable alternative solutions and the solution that might best fit the organization’s long term and short term goals and interests.
The major problem that Customer Research Inc. (CRI) are facing at the moment is that while the company’s new bookings, closed sales and the overall operating profits were all increasing, however, profit as percentage of sales was declining. Exhibit 1 also shows that while New Bookings, closed sales and operating profits were increasing; they were still failing to meet the planned targets.
Company – Organizational structure may have been a big factor leading to the current problem or situation. This is because the current organizational structure lays the foundation of lack of specialization in fields of sales and research; afore mentioned two roles are integrated in the current organizational structure.
Customers – CRI’s customers are not only the B2C companies but also B2B companies that are interested to outsource their research processes involved in important marketing decisions such as new product development and its concept testing etc.
One key symptom of declining profits as percentage of sales is the unequal contribution of the company’s clients towards its profit margins. There are a number of clients on the company’s panel that, though profitable, are not contributing a lot to the company’s profit margin figures. This is because either the size of the companies (clients) or their projects is considerably small.
Context - The scope and trend of services provided to the clients by CRI, and for that matter many marketing research firms, evolved from being partly handled to the entire marketing research process (Research design, data...