Ingersoll-Rand: Managing Multiple Channels

Group 10

1. Vageesh Gupta- 20M152

2. Sayandip Datta- 20M138
3. Krishna Maheshwari- 20M124
4. Chandrakant Vadluru- 20M110

Problem statement: Through what channels should I-R sell its new product (200 hp centrifugal) and
how to manage multiple distribution channel.

Issues faced:

1. Distributors are not controlled by the company

2. Distributors are inexperienced with centrifugal while giving after sales service to their
customers
3. Company channels sometimes overlap for some products
4. Disputes between distributors and air centers regarding the company policies

Analysis:

From Table C we can conclude that our product falls under medium range and the number of end
users are 25,000. So, to cater such a huge customer base we need to adopt intensive channeling
strategy. Independent distributors have a maximum reach of customers, but they lack experience in
dealing with centrifugal products. 50% profit of distributors come from I-R lines. Distributors and air
centers have a gross margin of 10-15% on compressors and 30-35% on spare parts.

There were 19 air centers setup for better penetration in the areas where distributors cannot reach.
They were under the control of company. Even though the distributors sales dropped by 25% on the
other hand air centers sales reported a slight increase in revenues.

Final solution:

Based on the above analysis we can conclude that we must reach out maximum customers so that’s
why we will stick to distributors channel to achieve market penetration. On the other hand, air
centers is focusing on the areas where distributors cannot reach out. So, to reach out to maximum
customers we will use multiple channel distributions with the help of independent distributors and
air centers.