COMPANY OVERVIEW
Martella Paper Products, Inc. is a paper products producer and distributor to many offices and office supply stores. The company was established in 1979 by Michael Martella. Michael Martella saw the need for a paper company and believed that he could fill that need. Martella Paper Products Inc. has been in business for over 15 years. The company has expanded tremendously in that time. When the company was first established, Mr. Martella could not even afford to employ a secretary. Today Martella Paper Products has divisions on both the East and West Coasts and employs over fifty individuals. It is still owned and operated by Mr. Michael Martella, a sharp business man with the sense and know how to remain competitive throughout the past fifteen years.
ABOUT THE INTERVIEWEE
Mr. Jonathan Martella is the younger brother of Michael Martella. Jonathan graduated from CW Post in 1983 and has played a significant role in Martella Paper products ever since. Jonathan's official title at Martella Paper is Vice-President. Along with his older brother Michael, the two control all aspects of the company. Jonathan's responsibilities at the company include, but are not limited to, overseeing sales, purchases, and marketing. Jonathan has always played a large part in the day to day activities of Martella Paper, and he hopes to continue to do so throughout the rest of his career.
I chose to interview Mr. Martella because I one day hope to own and operate my own successful business. Upon interviewing Mr. Martella I discovered that it is extremely difficult to operate ones own business. There are many different factors and problems that need to be dealt with on a daily basis.
THE INTERVIEW
The primary factor essential for the success of Martella Paper Products Inc. is the volume of sales. The second most important factor is the inventory level which is what determines the cash flow. The third factor is controlling overhead. Of the three, sales is the most crucial. Without sales the other factors are irrelevant.
Marketing is also an important factor in the day to day operations of the company. In order to be competitive with regard to the competition, Martella must advertise their lower prices and seek out business. The target market consists of restaurants and offices. Martella sells products that both these types of companies use on a daily basis.
The production process begins in the design and merchandising departments. Personnel in these departments research different markets, decide which products to produce and what quality of paper or cardboard should be used. The samples are then shown to a select group of customers whose feedback on the sample designs is collected. Once the selections of the samples are made, the purchasing department begins to price the selections. Purchasing is responsible for getting bids from paper manufacturers and determining how much to spend. Different customers will want different grades of product and Martella must cater to each customer. The paper is then bought in mass quantity for a large production. By buying in bulk, Martella gets a substantially lower price than they would otherwise. The paper is then sent to the factory where it is manufactured into end user product.
The main factor in deciding the quantity produced is the projection made by the company salespeople. Martella has its own salespeople and market researchers who offer projections on sales of new items. While forecasting, the salespeople take into account the reaction of the small, random select consumers that have seen the sample item. However, this method can sometimes be misleading. The selected consumer is shown the item three months before the item is seen by the public. Following a positive reaction from the selected consumer, the product is produced.
The inventory control process is done manually. As a result of manually counting the inventory, many mistakes are likely to occur. These mistakes can have serious adverse affects on the inventory quantity. Mistakes in the counting process can cause the inventory to seem in excess, when in actuality the inventory is in shortage. The need for more inventory is ignored and as a result there is not a sufficient amount of merchandise which can be sold to retailers. The reverse also occurs where the inventory is mistakenly counted as being in shortage, but