Talk about just-in-time delivery. An ambitious program from AlliedSignal Inc. promised customers 48-hour delivery of any quantity of its most popular resins used in a variety of manufacturing applications. It was an industry first, and it still will be. But within days of breaking an estimated $15 million campaign - including print ads and direct-mail brochures to key customers - the giant Morris-town, N.J., company pulled the program.
What happened next is a key lesson for marketers striving to remain one step ahead of the competition.
Although having to yank the program caused embarrassment to AlliedSignal, industry executives believe the company will emerge stronger for making sure the production and delivery program can match advertised expectations.
``The 48-hour program in and of itself may not be that big a deal,'' said Paul Raman, a chemical industry analyst with Paine-Webber of New York. ``But it's [really] about [long-term] customer relationships.''
In recent years, AlliedSignal Plastics aggressively has sought to expand its market share, particularly in the automotive industry, where plastics, particularly nylon 6 and nylon 6/6, are found in virtually every automotive part.
In January, the company reorganized its automotive group, based in Southfield, Mich., consolidating its design staff there.
According to Wertheim Schroder & Co., a Wall Street investment adviser, AlliedSignal had an 18.7 percent share compared with market leader DuPont Co., which accounted for 47.3 percent of U.S. nylon engineering materials in 1994, the latest available figures.
Throughout 1995, AlliedSignal executives talked up their plans to compete aggressively in new markets with new products. The 48-hour delivery program was viewed widely as one facet of that sales push. It was considered especially valuable for automakers, which rely increasingly on just-in-time material and parts deliveries to keep assembly lines humming.
The promotional brochure touting the 48-hour turnaround acknowledged manufacturers' desires to ``do more with less in less time than ever before.''
But a new production team, which went into place just as the ad campaign from USA Chicago, based in Chicago, was breaking in plastics industry trade publications, decided it wasn't ready to meet the delivery guarantee. Capacity concerns were cited as the main reason.
``Everything was green-lighted; marketing and production had signed off on it, but new people came in, took a hard look at the program and decided that [the company] really wasn't ready,'' a company spokesman said.
Because the ads and the brochures already were in customers' hands, top AlliedSignal executives, including Michael Apperson, former vice president and general manager of the Engi-neering Thermoplastics Group, were sent to explain to customers personally why the program was being delayed.
``There was a feeling that [the company] didn't want to leave its customers hanging and upset,'' the spokesman said.
While not commenting specifically on the Allied case, Peter Hirsch, executive vice president at New York-based public relations agency Porter Novelli, said he would recommend an approach similar to Allied's tack.
``What you're trying to establish is long-term credibility with your clients and potential clients....When you can't deliver on promises made, it is the right decision to contact your target audience and make it clear what's happened...looking at the ramifications of how this will affect your customers. It is preferable to take a one-on-one approach to handle these matters,'' Hirsch said.
``The worst possible thing a company can do is to then make more promises. It's best to step back, evaluate the situation, underpromise and overdeliver. You don't want to make the same mistake twice,'' he said.
In August, Apperson left to pursue other career interests. Kevin Byrne, director-sales and marketing for the Americas, was named interim general manager until a replacement is found.
Although AlliedSignal stopped the national rollout of the 48-hour delivery program, the company still is working with several key but unidentified customers, a company spokesman said.
It still intends to launch the 48-hour delivery program by the second quarter of 1997, perhaps with a substantial splash at NPE '97, which will be held in June at Chicago's McCormick Place.
AlliedSignal's Byrne said in a statement that the company will be able to roll out the program after the first of the year.
``We've just recently felt confident that we could deliver the product to [our] customers 99 percent of the time within that 48-hour deadline,'' Byrne said.