The Valley Winery

Case Study

MOHD HAZRUL B. MAT TAJUDDIN

ABDUL MANAP B. ALI

ZP00003
ZP00156

[The Valley Winery is the largest producer of wine in the United States and has been founded in 1933
at Napa California. The company started with only &7,500 investment and now it has become the
leading producer of low-priced, consistent quality wines.]

Case 1.1: The Valley Winery

The Valley Winery is the largest producer of wine in the United States and has been founded in
1933 at Napa California. The company started with only &7,500 investment and now it has
become the leading producer of low-priced, consistent quality wines. In 2007, sales for valley
winery were believed to exceed 1.5 billion and the reason of this phenomenal growth of success
are because of the company produce wine of consistently high quality at relatively low prices
and also because of the Valley sales force using a push strategy that been considered by many to
be the most aggressive and innovative in the industry.
The main issue of this case is centered around Pat Walter, the new sales manager of the San
Francisco region chain division and he was lamenting the problem that he inherited from the
previous sales manager of the divisions. The main issue that Pat discovers in the Valley Winery
is that despite of having favorable sales result for the San Francisco region, turnover of its sales
representative were increasing in the past several years. Pat surprised that the average sales rep
had been with the San Francisco division of Valley Winery for only seven month and sales force
turnover neared 100 percent a year.
Walter knew that with less turnover, Valley Winery and San Francisco division profitability will
improve and he also believed that the sales will be improved. Recruiting and training cost
approached $30,000 per year per representatives and the cost doesnt include opportunity cost
with lost sales resulting from not having accounts called on. Pat Waller is confident that by
decreasing the turnover it would improve the sales and company profits.
In answering the question from the case study on what do you think is happening at valley
winery? We have concluded that Valley Winery facing major problem in its sales representative
turnover despite of their sales are increasing. With a higher turnover, Valley Winery needs to
spend more money in recruiting and training cost of its sales representative. In the case, we have
identified some of the factors that contributed to the high turnover of the Valley Winery sales
representative.
One of the reasons that might contribute to the higher turnover at Valley Winery, San Francisco
division is the high sales quota system that the company had for their sales representative. Marv
Flanigan a nine month veteran sales representative quoted that nobody, ever make quota and

he also stated that the quota for his Santo Rey cases is 90 cases and that is hard to achieve. With
a high quota to be achieved the sales representative can feel very stressed and we believe that
this is one of the main factor why turnover at Valley Winery, San Francisco division are high.
What the company can do is to re arrange back its quota system and make it achievable. By
doing this, it can motivated their sales representative and promote using a good selling strategy
rather than using aggressive selling in order to achieve the quota that the company need.
Another factor that might contributed to the high turnover of Valley Winery, San Francisco
division are the aggressive and unethical selling strategy that promoted by the management of
the company to their sales representative. The aggressiveness of Valley Winery sales
representative in selling their product had been known by the entire player in the industry.
Rumors are abundant about the aggressiveness displayed by the sales representative of Valley
Winery who has been accused of relocating competitive display and products to obtain the best
space for Valley wines. The Valley Winery sales representative also been accused of such tactics
as spraying hair spray on competitive displays and bottle so that they will gather dust and so
discourage sales.
These kind of unethical selling strategy that been encouraged by the management of Valley
Winery San Francisco division can promote a non-healthy working environment for their sales
representative. If a good and honest sales representative that work in Valley Winery are force to
do all of these unethical strategy in order to boost their selling, it will make the sales
representative feel very unpleasant and he might consider quitting the job because he feels very
guilty in doing such action like that.
In order for the management of Valley Winery to decrease the high turnover, they need to rethink
their selling strategy. The must promote a healthy and competitive way in selling their products
using advertisement and so on than using such unethical skill like spraying hair spray to the
competitor product. With an ethical working environment, the employee will feel better and
happy to work at the company.
Another factor that might contribute to the high turnover at Valley Winery is because of their
wine and dine recruitment and selection process. The recruiting process by Mike Wehner,
personnel manager for San Francisco division started by using a variety of methods to attract the

sales candidates. The methods that is used such as recruiting through college graduates,
newspaper advertisement, posting job notice and using six local employment agencies. The
company also offers $300 for any employees that are recommending friends or acquaintance to
the company.
The hiring process started when the selected applicants completes a simple application form and
is then interviewed by Wehner or his assistant for approximately 30 minutes. If the candidates
seem enthusiastic and motivated and ask for the sales job, the applicant is asked back for
additional interviews. Then the candidate were interviews by the distributorship top manager for
no more than 10 minutes, the next step involves an interview with major account manager and
after that the recruit is then asked to spend a day in the field with an experienced salesperson. If
all the hurdled are passed, the applicant is then offered the job.
The Valley Winery, San Francisco recruitment and selection process can be consider not so
effective in finding a good candidate that has a sense of loyal to the company. The process is
simple and the interview is not thorough in knowing the applicants characteristics and attitude to
job of a sales representatives. With a good recruitment and selection process, percentage of a
company to find a good and loyal employee can be increased. With an employee that had the best
characteristics and the right attitude for the job and the company, it is believed that the rate of
turnover can be decreased drastically.
For the conclusion, it is crucial for the top management to promote a healthy working
environment such as encouraging good selling strategy, encouraging honest and good conduct
while selling and redesign it recruitment and selection process in order to find employees with a
sense of loyal and good characteristic that are well prepared and ready to faces all challenges in
the industry of selling wine and liquor.