To Sell In Combo Or Not?
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To Sell In Combo Or Not?
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, wa...
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