New-Product Survival Strategies
When Milwaukee-based Koss Corp., a $40-million stereo-headphone maker, decided to enter the promising new market of computer headphones and speakers, sales vice-president John Koss Jr. realized that nurturing an unpredictable new product line required more disciplined sales management.
- Recruiting sales staff. Koss's longtime reps excelled at selling to stereo shops, but few had experience with computer stores. Rather than retraining them, Koss hired six computer-rep firms to sell PC headphones and speakers in several key markets. "There was this whole other world of reps I didn't know about," he says. "You love the ones who have buyers' home phone numbers."
- Forecasting sales. "When you're in a hot market, you have to look at the big picture," says Koss. He kept close tabs on the size of the multimedia market, both home and corporate. He also focused on the smaller "micro" trends that affect key accounts. Sales and inventory data from retail and OEM (original equipment manufacturer) accounts enabled him to analyze the sales of mass-merchants versus superstores. The data also enabled him to isolate inventory turnover by item, month, and retail outlet. Koss prepared three sales forecasts: "regular," "stretch," and "bomb."
- Managing inventory. Koss worked closely with manufacturing, adjusting forecasts on a monthly basis. He learned to stick to the plan, to the point of even turning down some "big deals" because there wasn't the inventory.
Koss' disciplined sales management paid off: Within three years, sales of computer accessories grew to 25% of total revenues.
Copyright 1998 G+J USA Publishing