HARVARD CASES

Case 14
WESCO Distribution, Inc.

Synopsis

In June 1997, Jim Piraino, VP of marketing for WESCO Distribution, Inc., is preparing for a yearly review meeting with WESCO CEO Roy Haley. Haley wants the firm to reach annual growth goals of 6% to 8% in revenues and 12% to 16% in profitability over the next five years. The centerpiece of this growth strategy is the National Accounts program, which WESCO has developed to serve its major industrial customers in response to recent changes they have made to their business processes. However, as of June 1997, the NA program has not delivered the expected increases in sales and profitability.

Jim Piraino has to give Haley his recommendations for the future of the NA program, in particular, whether WESCO should continue to pursue NA business with the intensity it has in the past, or whether to assume a more reactive stance and offer the NA program only when it is requested by current customers. As well, he must account for how WESCO will achieve the desired increases in profitability and overall revenues when its current program already seems to be encountering difficulties in generating the desired numbers.

Use

Although the "customer" is at the heart of marketing strategy, "effective customer management" is still not a very well understood concept in industrial marketing practice. This case can be used to explore the difficulties encountered in developing and implementing new ways of customer management in mature industries such as component parts, industrial raw materials and consumables,[1] and other similar industries. These industries are characterized by an environment in which competitors are able to offer equivalent products at competitive prices and vendors/ distributors have to use service rather than product characteristics to create differentiation and add