Case Studies Distribution Management

by Milind M. Shahane
2009-10
1

Case Study Superb Appliances Ltd. Situation Analysis Changing market conditions Declining sales and market shares Increased competition from MNCs Change in distribution channels Uncompetitive products Technology issues Response to market growth
Sales Management

Case Study Superb Appliances Ltd. Products Air-conditioners Water coolers Refrigerators Deep freezers Washing machines Ovens White goods portfolio
Sales Management

Case Study Superb Appliances Ltd. Current Distribution System Franchisee distributors Small distributors appliance stores Direct sales for institutional customers Higher margins Limited exposure to department stores Coverage of around 1500 outlets

Sales Management

Case Study Superb Appliances Ltd. Current Distribution System Characteristics

Family owned businesses Small size Low volume, high margin More emphasis on service support

Positives
Exclusive Full focus on companys products Full service
Sales Management

Case Study Superb Appliances Ltd.

Current Distribution System Positives
Sales persons for push High degree of specialisation Demonstrations

Negatives

Sales Management

Non-prominent areas Limited capacity to invest No investments in promotion Family owned

6

Case Study Superb Appliances Ltd. Market Changes Consumer profile changing Fast growth of economy higher PDI Increase in DINKs Change in buyer shopping habits More retail oriented Growth in household segment Attracted by promotions
Sales Management

Case Study Superb Appliances Ltd. New distribution system Super markets / chain stores / malls Prominent areas High volume Hard sell Large organisations Professionally managed Low on service
Sales Management

Case Study Superb Appliances Ltd. Positives High volume, high capacity Consumer pull Promotion schemes Mass selling techniques Attractive showrooms Multiple product lines

Sales Management

Case Study Superb Appliances Ltd. Negatives High cost Low margin No proper salesforce No service support No specialisation

Sales Management

10

Case Study Pure Tea and Beverages Situation Analysis M&A (takeover) of DDL by PTBL Need to align the distribution systems Rationalise distribution system for DDL Increase volumes and market shares Payback / ROI on the purchase of DDL Large and very fast growing market for mineral water How to exploit the market?
Sales Management

11

Case Study Pure Tea and Beverages Market Structure Various segments retail and institutional Highly fragmented distribution structure Competitors using bottler route Franchisee bottlers are used in distribution High physical distribution costs transportation, storage, packaging
Sales Management

12

Case Study Pure Tea and Beverages Decision Factors Approach for sales and distribution
Different sales force Use of alternative channel structures for different segments

Use of Bottlers as a channel alternate Use of non-store retailing as alternate Modification of current distribution structures
Sales Management

13

Case Study Pure Tea and Beverages Decision Factors Merging channels of PTBL and DDL Appointing new distributors Increasing reach Re-aligning physical distribution in line with new channel structures / alternatives

Sales Management

14

Case Study Pure Tea and Beverages Advantages Traditional channel Well set Relationships with retailers Relationships with customers Established terms and conditions

Sales Management

15

Case Study Pure Tea and Beverages Disadvantages Traditional channel Family managed Lack of professionalism Aversion to modern techniques Use of technology Reach to new areas / segments Lack of flexibility

Sales Management

16