Digital Test & Equipment (DTE) is a distributor of test equipment used in mining and oil applications. When Mark Polonsky, of Albany Manufacturing, got the call from Amy Sheppard at DTE, he was excited. For over a year he worked to get DTE to carry Albany’s geothermal test equipment, but there was no progress— until today, when Amy asked if the Albany Geo-Core Xcel would handle conditions in the North Sea oil fields. “I don’t know,” Mark replied. “I’ve personally not had any customers drilling in that area, but I will ask our senior engineer and find out. What’s the situation?” “We’ve got a really good shot at landing some business from British Petroleum, but we’ve got some holes in our product line,” she replied. “I’m really thinking of making this an all-Albany pitch, which would be about a $400,000 contract. Or I may give them two solutions, one all Albany and one a mix of other products.” She went on into detail about the conditions in which the Geo-Core would have to work so Mark would know what questions to ask. After the call, Mark called the senior engineer and asked if the product would work. Assured that it would, he went to work on a great proposal. Not only would a $400,000 sale represent a month’s quota, he knew that DTE was good for five times that in its other accounts. This opportunity was huge! Amy called Mark immediately when she got his e-mail with the proposal attached. “This looks great, Mark! I think the all-Albany approach is best, so that’s what we’ll go with. I’ll submit this to BP tomorrow.” Two months later the first Geo-Cores were installed and operational. But within a week it was obvious that they weren’t up to the demanding weather conditions of the North Sea. The machines were breaking down on average about every four hours. Allison called Mark, quite upset with the results, particularly because BP now wanted to cancel the entire agreement.
1. Assume you are Mark. What should you do?
2. Does the stage of the buyer–seller relationship matter? Which buyer is most important, British Petroleum or DTE?
3. Your first call after hanging up with Allison is with the senior engineer who gave you the wrong information. He claims there is a simple fix, but a DTE engineer will have to make the trip there to do it, and that will be about a $5,000 trip. First, what would you say to your manager who has to sign off on that expense? Second, how do you handle Allison?