Case 2 Bell Jeans Berhad
Bell Jeans Berhad was founded in the mid-sixties. The firm survived several lean years and economic recessions largely as the result of the market durability of its dominant product—blue denim jeans. Bell Jeans had been a market leader with
"wash-and-wear," bell-bottom and flare jeans, and modern casual pants. By 2009 it was one of Malaysia’s largest clothing manufacturers. It offered a wide variety of dress and fashion jeans for both men and boys and a complete line of pants for women.
It enjoyed a reputation for reasonably priced, quality pants. The company sold 40 million pairs of pants last year.
Production
In each of the last 30 years, Bell Jeans sold virtually all its production and often had to begin to…show more content… At year-end, Bell Jeans' top management determined a bonus base by evaluating the firm's overall performance and profits for the year. The bonus base had been as high as RM10,000. The performance rating for each member of Bell Jeans' management was multiplied by this bonus base to determine a given manager's bonus. For example, a manager with a 3-point rating would receive a RM30,000 bonus. Bell Jeans' management group included many finance and marketing specialists. These personnel, who were located at corporate headquarters, were consistently awarded higher ratings by their supervisors than were plant managers. This difference consistently approached a full point.
The five marketing departments listed in Exhibit 1 under the vice president of marketing are treated as revenue centres. Marketing forecasts are used to set sales unit and sales dollar targets.
The performance of marketing department managers is measured on the basis of meeting these targets. To meet changing consumer demand, frequent changes in product mix were necessary. The sales force sells all types of jeans within an assigned territory. Their compensation consists of salary plus 8 percent sales commissions. Commissions represent roughly half the average salesperson's compensation. The customers are retail stores and clothing distributors. For marketing department performance assessment, the sales of each line of pants are assigned to the respective marketing
departments
