Matisse Company

Timothy Matisse the owner of Matisse Company has to decide whatever to accept Mr. DeBeer’s offer about become an exclusive distributor of residential windows and accessories in his area. Matisse Company has been a lumber distributor since 1985, in the last few years, a number of Timothy’s lumberyard customers have gone out of business-and others have lost sales. Six month ago, things even got worse, more and more customers seem to be willing to buy from the lowest-cost source. Evaluate Timothy Matisse’s current strategy and how the present offer fits in Timothy Matisse has been a sales rep for lumber mills for about 20 years; he works with five large lumber mills on the West coast. Timothy isn’t the only person selling for these mills – but he is the only one in his area, he knows all the lumberyard buyers in his area very well, he is using a channel system (pg308) to sell lumber to buyers. A aggressive young salesman set up in the same business, this has hurt Timothy‘s business. Recently, Timothy was approached by Mr. DeBeer, owner of Good Timber Manufacture Company, a large manufacturer of windows, doors, and accessories who offered exclusive distribution. Mr. DeBeer has offered Timothy 5% commission on all window sales and 20% commission on the sale of all accessories.

Alternatives
1. Take DeBeer’s offer and sell both window and lumber products. The sale commission on residential windows would be about 5%, by getting just 20% ~ 30% of his lumberyard’s residential window business; Timothy could earn half of his current income. However, to do this Timothy would have to help the lumberyards get a lot more business by invading the commercial market with residential windows and the bigger markup accessories needed for this market. 2. Take DeBeer’s offer and drop lumber sales.

If Timothy drops the lumber business and he can focus on windows and accessories sale, plus the retrofit market is growing, he had good opportunity to be successful. However, because Timothy does not have a lot of knowledge in selling window products, he may fault in this industrial and same time lose the security of his primary financial income from lumber business. 3. Don’t accept DeBeer’s offer and stay as it is

If Timothy chose stay as it is, he doesn’t have to worry about learn how to sell the windows or can he be successful in selling windows or not. However, he also cannot guarantee how long can he stay in lumber business. Recommendation

I would recommend that Timothy to take the Mr. DeBeer’s offer to become exclusive distributor of residential windows and accessories in his area and same time keep his lumber business. Because this way he can take the opportunity which Mr. DeBeer offered to him and get known of the business, use the resource to increase his market network, also this would increase his income, relief him from down trend of lumber business. At the last, this would also provide an opportunity for Timothy to approach not only his existing customers with more variety of product lines, but also his clients that had already switched to large chain stores for the lumber as a great convenience.