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Ominico Case Study

Ominico Case Study

Introduction

Omnicom Group Inc. is a US-based company with headquarters in New York. The company is in the stock index S & P 500 listed, and on the New York Stock Exchange. Omnicom was created in 1986 from the merger of DDB Needham and BBDO. Omnicom worldwide belong to a large number of media companies and in particular advertising service. Omnicom is the world's largest holding company of advertising services. In 1993, the company acquired Omnicom TBWA Worldwide. The biggest main competitors include global WPP, IPG and Publicis. It is present in all areas of communication: advertising, direct marketing, public relations, lobbying, marketing services, interactive communications and media buying.

Discussion

Statement of the Problem

The problem which will be analyzed in this paper is that Omnico's customer retention is much lower than the industry. Omnico is less likely to maintain long-term relationships with its clients. In comparison to its competitors in the same industry, Omnico is well below the average in client retention. There also seems to be a discrepancy among the employees at Omnico as to which personal selling process is the most effective to increase customer loyalty.

Summary of the Facts

Omnico is a company that has been around for decades. Over the years, the company has cultivated some fiercely loyal customers. These customers built close relationships with Omnico's salespeople. Buddy Towers of Omnico has been a top-producing salesperson for 35 years. Mr. Tower's key to success has been the trust and loyalty he built with customers, built mostly while enjoying a round of golf. His personal selling process has worked for him and Omnico over the years. However, there has been opposition to Mr. Tower's tactics from newer employees of the company. These employees feel that Mr. Tower's previously successful sales strategies are now outdated. Their belief is that customers remain loyal to Omnico when the product and service improve their bottom line.

Analysis

There are two options that Omnico needs to consider in their situation. One alternative is to focus on improving their bottom line. Omnico would focus on attracting new customers and maintain old ones by offering the best prices for products in their industry. Omnico would improve quality and product performance in the areas of greatest reward. The strength of having a superior product could be beneficial in this competitive market. Weaknesses could include the increased cost to the company to implement different manufacturing styles. However, this could be a great opportunity for Omnico to take the lead in their industry. But, if another competitor is able to offer a comparable product for less cost, it would entirely threaten the profitability of Omnico. Since Omnico has previously focused more on its relationship selling tactics to increase revenue, this alternative could be a potential risk. This strategy does not build a lasting relationship with the customer. The customers might also conclude that they are equally satisfied with a less superior product sold at a better price. Today's customers have more information available to them through improvements ...