To Sell In Combo Or Not Essay

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To Sell In Combo Or Not? Essay, Research Paper To Sell in Combo or Not? It was hot–hotter than usual for the first week in September, and Ed Jefferson was not eager to go out in the heat and sit in his car while the air conditioning cooled it off. He put his feet up, stared out over the tree tops from his cool office and tried to think of all of the alternatives he had for solving his problem. Ed had been general sales manager of KRQZ-FM and KRQO-AM for twelve years and he had never faced a more difficult, perplexing decision: should he sell the two stations in combo or should he keep the two separate sales staffs structured the way they were now? It was budget time, and Ed had to make a decision within the next few days so he could finalize next year’s budget. It was his

budget, as the new general manager, Tyler Saunders, had told him. Ed liked working for Tyler, who was an ex-program director, and like the freedom and autonomy Tyler had given him for the six months Tyler had been general manager. Ed Jefferson picked up the KRQZ/KRQO Weekly Sales Report, Monthly Forecast Report and Miller-Kaplan Report (these reports appear after page five, at the end of this case). He began examining the reports carefully, for what seemed to him to be the thirtieth time, trying to find the right questions to ask and some hints of what some solutions might be. KRQZ-FM’s revenue was running five percent ahead of last year’s and was thirteen percent over budget, year-to-date. This situation was quite gratifying to everyone (including corporate) because the

station had experienced some ratings declines in the past year. For the last seven years KRQZ-FM, known by everyone as The Z, had featured the same programming–a bright, personality-oriented Adult Contemporary (AC) format with a highly recognizable, very funny morning team. At one time the station had been a strong number-two to the perennial market leader, KNNN-AM, an old-line news/talk station with a huge but older-skewing audience. However, The Z’s audience had fallen off in the last year as several other AC stations began to compete for its 25-54 core audience. One station, known as The Cloud, had virtually tied The Z in the last three books in the all-important 25-54 demo. For the last four Arbitron rating books, The Z had ranked fourth 25-54, and in two books it was

behind The Cloud. The Z had a 4.4 12+ share in the latest Arbitron, in contrast to an 8.1 12+ share for KNNN-AM. However, The Z’s sales staff had very little turnover, was the highest paid in town and its salespeople were extremely well liked among the agencies and clients in the top-ten market in which they were located. So in spite of the rating declines, the salespeople had consistently made the station the number-two biller in town, according to the Miller-Kaplan reports. The staff reported to the KRQZ-FM local sales manager, Olivia Mitovsky, who had been in the job for five years and had the full support, respect and admiration of everyone in the department. The six-person sales staff and Olivia were considered to be miracle workers–the local staff’s share of revenue

continually outperformed the station’s 12+ rating share by over two-to-one. This outstanding sales performance also made Ed Jefferson, the general sales manager, a hero, too. His boss, Tyler Saunders, and everyone at corporate headquarters knew he and Olivia were doing an excellent job–that’s one of the reasons everyone trusted him to come up with a solution to the problem: KRQO-AM’s billing problem. KRQO’s format was unique in the market–an oldies, Music-Of- Your-Life-type format that featured Frank Sinatra, Patti Page, big bands and songs from the late ’40s and early ’50s. KRQO’s audience was primarily 44+ and 55+. But because it had no competition in the format, it pulled good 12+ numbers. In the latest Arbitron it had a 5.8 12+ share, but ranked tenth 25-54.