White House Industries: A Customer Selection Conundrum

In December 2020, White House Industries (White House), a manufacturer of aerosol aluminum cans for deodorants and other consumer products, including sanitizers and pain relief sprays, received customer order forecasts of 30 per cent more than its maximum production capacity. Unless White House invested in a third production line, which represented a significant capital investment and required almost a year’s lead time, it would be unable to fulfil several customer orders with its existing manufacturing lines. Some customers had long-term relationships with White House, some were newly acquired, and some had a global-level tie-up with White House’s parent company. In addition, the demand from some customers was already large, while others had immense future potential. White House’s board and management team had different views regarding which customers the company should retain and which it should decline. This customer selection issue was a pressing and challenging problem that needed to be solved immediately. How should White House resolve its customer selection conundrum?

This case is intended for use in graduate- or postgraduate-level management programs as well as in training programs for corporate executives on Marketing management and B2B marketing. After working through the case and assignment questions, students will understand<ul><li>why customer selection is essential and how to arrive at the most appropriate criteria for customer selection;</li><li>the application of profitability metrics, such as the customer lifetime value (CLV), for customer selection in a business-to-business (B2B) context;</li><li>the link between company strategy and marketing decisions; and</li><li>the concept of non-monotonic pricing and dynamic capacity allocation in the B2B context.</li></ul>

• B2B customer selection
• dynamic capacity allocation
• non-monotonic pricing
• customer lifetime value
• business strategy
• marketing strategy