It Seemed Like a Good Idea at the Time

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Established in 1960, Great Outdoors, was a third generation family owned and controlled business that had, by 2000, established itself as a manufacturer of high quality caravans, particularly the more rugged off road styles that were becoming increasingly popular among the older set. Unlike other caravan manufacturers, Great Outdoors sold its caravans from attractive show rooms in prime locations in all major cities. For clients, purchasing a caravan was akin to purchasing a prestige motor vehicle and they were treated accordingly. Management always went the extra yard to ensure client satisfaction and, within reason, the original purchaser had a lifetime warranty on the caravan. The sales staff was mostly aged 40+, was highly trained, and all had spent time in the factory learning the nuts and bolts of caravan building. Some of the caravan builders, following extensive training and mentoring, were now amongst the company’s best sales staff. Staff were also well managed – the company had an effective performance management system and its genuine ‘open-door’ policy meant two-way communication operated at all levels. Regardless of their position, staff were given an additional three week’s leave each year provided it was a caravanning holiday during which time they were expected to promote Great Outdoors caravans first hand and to listen to what other caravanners had to say about its caravans and those of other manufacturers. Given such generous conditions, staff turnover was low and generous cash bonuses contributed to a highly motivated and stable work force. In many ways, Great Outdoors was an employer of choice before the term had been coined. However, despite its success, and like so many family businesses, Great Outdoors was beginning to fragment. After much deliberation, and in an amicable arrangement, the family decided to put Great Outdoors up for sale. This was a fortuitous decision because at the same time, Australia’s biggest hardware chain, Templeton Hardware, was looking to become the leading retailer of ‘all things outdoors’. The CEO of Templeton Hardware, Jacquie Tudori, saw Great Outdoors as the ideal vehicle for its first foray into the world of water, wilderness and wildlife and Great Outdoors was duly acquired and became part of the Templeton empire. For most of the first year, Great Outdoors continued business as usual and to anyone outside the company, nothing had changed. Templeton’s, however, operated under a strict corporate business model and success was frequently measured by profit/square metre of floor space. Despite the profitability of Great Outdoors, Templeton’s business strategists felt more profit could be generated by selling the various sites of Great Outdoors, reducing the number of displays and relocating what remained to what it called ‘show-spaces’ either within or adjacent to its hardware stores. In keeping with its ‘all things outdoors’ plan, Great Outdoors caravans were marketed as Templeton Caravans. Now that Templeton Hardware controlled the business, the previously generous employment conditions were revoked and sales targets took precedence over customer satisfaction and staff satisfaction. Not surprisingly, within a short time, almost all of Great Outdoors’ original employees had left and were replaced with Templeton staff who worked on a rotational basis in other sections of the business. Jacquie was confident that the caravan business would be a star performer because of the reputation of Great Outdoors and the propensity of the baby boomers, or grey nomads, to chase the sun in their retirement. This group thus became the primary target and was expected to be so for at least the next twenty years. However, after an initial honeymoon period, sales were well short of expectations. Jacquie was not the sort of person to let the grass grow under her feet and she soon instructed her marketing people to find out what was happening.
© Teh Eng Choo (Elaine) 2012

When the results came in, Jacquie was taken aback. It appeared that the baby boomers did not like the generic, big business feel that Templeton Caravans now had. Previously, when travelling around Australia, a common talking point in the caravan parks was the quality of Great Outdoors caravans – they had a ‘reputation’ and an identifiable personality but as Templeton Caravans, the caravans were now perceived as a home brand product. In simple terms, status conscious baby boomers with money to spend did not want a home brand caravan being towed by a top of the range four wheel drive. Further, baby boomers who had $70,000 to $100,000+ to spend on a caravan wanted to be treated as VIPs in decent surroundings rather than in something that was an adjunct to a hardware store. They particularly did not like jostling for parking amongst hardware shoppers and scruffily dressed tradespeople. Being served by staff wearing Templeton’s distinctive green, gold and white Tshirts and caps further served to diminish the experience. The survey also reported that baby boomers made comments such as ‘poor quality service’, ‘no-one knows what they are talking about’, ‘how can you expect a 25-year old to know what we want’, ‘you can never find the same person twice’, ‘poor after sales service’ and ‘everyone seems in a hurry’. Question While poor sales often result from ineffective marketing strategies, they are frequently symptomatic of deeper organisational problems, many of which can be traced to a lack of alignment between human resources practices and the organisation’s business strategy (see Saks & Haccoun, Ch.1). With reference to Chapters 1 and 2 in Saks and Haccoun (and other sources), what strategies can be emplaced to revitalise Templeton Caravans in order to achieve Templeton Hardware’s aim of being the leading retailer of ‘all things outdoors’?

© Teh Eng Choo (Elaine) 2012