Assignment on Project management - Essay Example

At the same time production and sales team should try to reduce production, marketing and sales cost. In order to reduce Cost, Company can try for new techniques for marketing as well as sales, but while doing so customer reaction to these changes should not be ignored. If any changes are done without analyzing market reaction it may result in crisis. “Gourmet Direct is a web-based New Zealand company delivering high quality gourmet products to the food industry and the public. The company experienced a crisis of customer confidence and loss of business when it attempted to rationalize its product lines by changing from a pick and mix ordering system to having only a set number of packs available for sale.

This change was designed to achieve cost savings through a reduced inventory and reduced distribution expenses, but had a further consequence of reducing product availability and ordering flexibility for customers. Customers immediately expressed their displeasure, and the company’s sales plunged dramatically in the year that the decision was implemented. With the bulk of the companys sales usually occurring over the Christmas period, December sales almost halved. The following first quarter sales dropped an alarming 76% compared to the same period in the previous year” In this case company changed its sales policies from a pick and mix ordering system to having only a set number of packs available for sale in order to reduce inventory and distribution expenses, But due to this changes customers found less options for selection and faced lack of availability of product.

This was the actual reason for customer dislikes and they stopped buying, which finally resulted in reduced sales on company side. Clearly this is mistake from company’s side. Company should not have implemented changes suddenly all over market at the same time.