Selling Push or Market Pull at Godavari Soaps?
Godavari Soaps is a small unit near Aurangabad producing neem soap at a variable cost of ₹18 per 100g bar. Its owner, a production engineer, believes 'good quality sells itself'. The soap is priced at ₹30. Monthly sales have stagnated at about 4,000 bars against a capacity of 12,000. He has appointed six field salespeople on fixed salaries and told them to push stock to any retailer willing to stock, using a 20% trade margin. Many retailers accept the stock, but bars remain on shelves and repeat orders are low. A competitor's medicated soap sells at ₹45 with clear skin-benefit claims, influencer demonstrations and paid shelf displays. Godavari's manager proposes cutting the price to ₹24 and paying salespeople a push incentive. The owner refuses to spend on customer research or advertising, saying 'selling means convincing the retailer'. Cash reserves are ₹3 lakh, and a bank loan instalment of ₹1.2 lakh is due in four months.
1. Which marketing orientation is Godavari Soaps following? Support your answer with two symptoms from the case, and explain one consequence of continuing this orientation.
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It is closest to a selling orientation, with production-orientation roots. Two symptoms stand out. First, the owner treats capacity and product quality as the main problem-solver while 8,000 bars of monthly capacity remain unused; there is no customer research or segmentation. Second, the sales force is told to 'push stock to any retailer' and is paid for pushing, not for repeat sales or customer satisfaction. There is no communicated benefit that gives a buyer a reason to choose Godavari over the ₹45 competitor.
The consequence is not merely unsold stock. The firm is creating channel fatigue: retailers who accept stock but cannot sell it will demand higher margins, returns or refuse future stock. Because the competitor sells on a clear skin-benefit promise, Godavari's ₹30 soap is being compared on price without a reason to prefer it. If the orientation continues, the firm will cycle through price cuts and incentives, eroding the ₹12 contribution per bar and still not building demand. The judgement is that the problem is market-side, not production-side.
2. The manager proposes cutting the price to ₹24 and paying salespeople a push incentive. Evaluate this proposal against the alternative of a customer-focused approach. Which would you recommend with a ₹3 lakh budget, and why?
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At ₹30, contribution is ₹12 per bar (₹30 − ₹18 variable cost). At ₹24 it falls to ₹6. To keep the same total contribution from 4,000 bars, volume must double to 8,000 bars. There is no evidence that local demand is that price-elastic; the competitor's success at ₹45 suggests buyers will pay for perceived benefit. A push incentive may also reward opening orders rather than sell-through, worsening returns. With ₹3 lakh and a ₹1.2 lakh loan instalment due, a price war is the riskier option.
I would recommend a focused customer approach instead. Spend about ₹40,000 on outlet-level and buyer conversations to identify the benefit buyers want, for example skin soothing or a chemical-free positioning if it can be substantiated. Spend ₹60,000 on trial-generation such as small samples or local demonstrations, ₹30,000 on clearer label and packaging, and the rest on training the six salespeople to sell that benefit to retailers and consumers. Tie part of their incentive to repeat orders. Keep the price at ₹30 and monitor contribution, repeat rate and weighted distribution for 90 days.