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MathSoft's Sales Strategy Dilemma

MathSoft is a software company specializing in technical tools. Their core product Mathcad has been successful, but newer products like MathStation and add-ons (APs) require better marketing. The CEO faces pressure to address declining sales and rising costs. There is conflict between focusing on advertising vs field sales. The summary recommends maintaining a hybrid channel structure, allocating products differently based on maturity. For example, distribute Mathcad widely but rely more on specialized distributors and field sales for the newer MathStation. It also suggests focusing communication on the highest potential markets and changing programs over time as products and buyers evolve. Resources should be allocated more to new products initially and reallocated as products mature.

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1K views8 pages

MathSoft's Sales Strategy Dilemma

MathSoft is a software company specializing in technical tools. Their core product Mathcad has been successful, but newer products like MathStation and add-ons (APs) require better marketing. The CEO faces pressure to address declining sales and rising costs. There is conflict between focusing on advertising vs field sales. The summary recommends maintaining a hybrid channel structure, allocating products differently based on maturity. For example, distribute Mathcad widely but rely more on specialized distributors and field sales for the newer MathStation. It also suggests focusing communication on the highest potential markets and changing programs over time as products and buyers evolve. Resources should be allocated more to new products initially and reallocated as products mature.

Uploaded by

sankalpgargmdi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MathSoft, Inc Case Analysis

Context
MathSoft, a software company specializing in providing productivity tools for technical

professionals.
Mathcad companys core software product was launched in 1986 and has enjoyed good success in the market. It expanded product line by introducing MathStation in 1988. It is a high-end software

package to run on Sun Microsystems workstations.


Also introduced series of Mathcad add-on products Mathcad Application Packs (APs). President and CEO David Blohm is troubled by companys marketing and sales expenses. Sales channels distributors/retailers, field sales staff and telemarketing/direct mail.

In face of declining sales and increasing costs, CEO Blohm needs to address 3 critical
questions of venture capitalists.

The tussle
Tussle between Thomas Stone (VP- Sales) and Gordon Gossage (VP Marketing).

Stone wants to increase field staff by reducing advertising expense.


Gossage insists on advertising being the revenue drivers and points to inability of field sales in increasing revenue. Decision needs to be made on allocation of resources and channels.

What channel structure would provide best fit for growing product line?
Two objectives of the company increased penetration of Mathcad and boosting sales of MathStation.

Without a solid network, even a superior product can fail in the market.
Company should not be altering its channel options but instead better manage it and add new partners to cater to highly technical products. Maintain its hybrid channel structure but allocate products in channel based on their

position in PLC.
Mathcad is in growth phase but is a core product and has attained awareness . Channel allocation more to distributors. MathStation introductory product and highly technical in nature. Channel allocation

field sales
Channel structure allocation is also on basis of segmentation. Single distributor cannot provide market coverage and penetration.

Evaluating channel structures


Product Distributors/ retailers Mathcad MathStation AP 80% 20%** <20% Channel distribution Field sales 0% 80% 0% Telemarketing/ direct mail 20% 0% >80%

** Distributors for MathStation should be specialized distributors who can focus their energies on selling this technical product. Training and support should be provided to distributors for MathStation specifically.

Channels should be evaluated on a timely basis by top management and regionalterritory evaluation to ensure sustained performance.

What types of communication appropriate for its target markets?

programs

were

most

Communication programs need to be directed towards target market with highest potential.

Advertising:
Cutdown advertising for Mathcad. Maintain higher advertising budget for MathStation with focus on electronic and mechanical journals as they are the highest potential users and conversion rate is highest

in these journals.
Telemarketing: Continue focus of telemarketers on selling APs as MathStation is very technical for them.

Use for Mathcad promotion by outbound telemarketers.

How should MathSoft change its channels and communication programs over time? In particular, how should company allocate its limited marketing and sales resources?
Change communication programs and channels with product position in PLC.
Allocate higher resources to a new product. Pull back field sales and reduce communication program for products in growth or maturity phase.

Field sales should be more aggressive strategy during product launch and in case of highly specialized product with attractive commissions provided to sales staff.

Large distributors should be retained for core products with needs of increased penetration
and spread. Specialized distributors should be developed for highly technical products. Advertising expense should be reduced and focussed more on MathStation kind of products

as against Mathcad.
Change with buyers level of sophistication.
As buyers requirements and understanding of product technology and market changes, companys approach should change.

Thank You

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