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LAST YEAR ANSWERS

Part A
Answers 1
Value bases approach for moglixis in B2B through online mode –
1. Product centric view
 Estimate value in use of offering and sell benefits instead of product features
 Product excellence and value communication via campaigns
2. Customer Process centric
 Selling process improvement rather than product improvement
 Facilitate long tone business value with selling party by value creation process
3. Performance centric
 Market the realizes performance outcomes instead of potential value products
 Risk assessment and variable control in a e-commerce supply chain
4. Credit purchase
Partnership with various credit providers and rolled out empirical like “Buy now pay letter”, “Buy more ,
than one, grow more”.
This benefit pass way for business customs to create and strengthen relationship with new and existing
suppliers within parallel advantages.
5. Procurement redefined
This can be a vertical for business prospects with the facility to meet certain sources on basis of premium
or regular brand price and maintain preferred.
6. Negotiated pricing
This allow inside sales representative to acquire customer based on requirement, price and comfortable in
buying, this enables various business supplier to negotiate at quality rate and revert back at best possible price
from market.

Part B
Question 2 - Referring to the case Gino , should David Zhou proceed with selling directly to Fiema or not? Provide
rationale
As inferred from the case David Zhou should not proceed with selling directly to Fiemma.
However, they should indeed reject Fiemma’s proposal but can have certain considerations related to the industry
segment.
 Cannibalizing market share to distributors – From exhibit 1 we have observed that approximately 955 of the sales
and Burnor manufactures take place through distribution. In case of accepting the Fiems’s proposal it will lead to
reducing the share of the distdistributor’smination from the chain will also lead to disrupting relations with the
rest of the distributors 75% of the sales through distributors go to the OEM’s out of the whole of the OEM’s 85%
is represented by Fieamma, so acceptance of the proposal of Fiemma would lead to eradicating the rest of the
OEM’s.
 Eliminating credit risk for manufacturing – Post an order being placed, Gino would open a pro forma invoice
from the combination of the same after that distribution’s role would be to open a letter of credit through its bank
to Gino’s bank. This would lead to reducing the manufacturing credit risk. The reason being the payment was
made by the distributor’s bank as soon as the goods were shipped.
 Heavy reliance upon the distributors from sales and revenue generation – Gino relied completely upon the
distributors and also played a major role in providing after-sales service. Irrespective to the time span of the
burner’s usage, service was provided free of cost.
 Inventors handling and management – The distributors performed forecasting for three months orders for Gino.
The variation b/w the actual and the forecasted amount would be within 10%. They would ensure the volume of
backlog and on-time delivery to prevent the situation of stock out and overstocking,

Question 3 Briefly define any two types of Industrial Product lines with suitable example.
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There are 4 types of industrial product lines –

1. Proprietary product – A firm manufacture estimating that the demand for the particular product will be stipulated.
Hence, they produce and the firm who has the demand for the same are supplied to. They are like core products.
Example – Iron ore for making ball bearings, where the manufacturing simply extract and produce and
supplies to the desired market. There is harder any profit and hence there is no fixed price. It is similar to trading.
2. Custom built product – Here the firm identifies few segments and manufacture asper the segment. There are
products with little service.
Example – Iron ore in particularly such as bale bearings for motor vehicles in speciality. Normal profit is
cire depending on the segment and the competition they have fixed prices.
3. Custom designed product –
4. Industrial service –

GINO SA: DISTRIBUTION CHANNEL MANAGEMENT

More Case question in mail
Case in Brief
Manufacturer Gino SA sells burner units only through agreements with distributors. The three distributors therefore have
a lot of negotiating power with Gino. A major boiler manufacturer has asked Gino for OEM treatment because it currently
purchases through a distributor (a further discount by purchasing the burners direct from the manufacturer in return for a
commitment to purchase a percentage of their burners from Gino). The marketing manager must think about how his
choice would affect distributors, competitors, and corporate management while selecting whether to seek the company's
first direct OEM connection.
1. How serious is the control issue that Gino perceives it has with its distributors? Why does it have this
problem?
Gino believes that its control concerns with distributors are not as severe as they may be since the distributors
have confidence in Gino and its expertise.
They were facing the control issue because of: 
• The distributors were demanding better terms
• They were having control problems.
• Refusal to keep commercial burners in stock.
• Due to a shortage of inventory, at least 50 saleable units were lost.
• Unable to prevent violations.

2. At this stage of its development in China, should Gino be trying to take more control of its distributors, or
should the relationship be a more co-operative one? 
In order to better serve its customers and provide more precise inventory management techniques that will benefit
its distributors, Gino must concentrate on strengthening its ties with its distributors.
They were facing the control issue because of: 
• One of their key strategic objectives is to improve distribution channels and cultivate new distributors.
• Needed to boost sales across all segments.
• Domestic (14%), Commercial (8%), Industrial (<3%)
• Insufficient effective distributors
• Uphold the brand's reputation
• Controlling costs

3. Should David Zhou proceed with selling direct to Feima or not? What should be the criteria for the
decision? What else should Gino be doing in the short term?
Gino should not directly sell to Feima at the cost of losing its partnership with Jinghua. This can turn out costly
and damaging for Gino to act on the repercussions of losing Jinghua as its partner.
Criteria for the decision:
 Jinghua could collaborate with Gino's competitions.
 Loss of existing network.
 Risk of stock out.
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 Gino could face huge cost investment to set up a warehouse in China.

 Additional resource.
Gino should take the following steps in the short term:
 Reduce the monopoly that big distributors enjoy.
 Conduct cost benefit analysis.
 Build more close relations among the three distributors.

4. What should Gino's long term channel strategy be?

Formulate key account policy for future clients
• Direct customers are eligible for discounts on large-scale purchases of units.
• Use the Distributor OEM model for any existing OEM accounts.
Set ‘margin’ targets for distributors
• Increasing industrial sector
• The industrial segment's gross margin was 35% (commercial was 25% and domestic was less than 20%).
Decrease cost of stocking industrial burners
• Stop using stationary models.
• Encourage distributors with volume discounts across many product lines and rewards for keeping
industrial burners in stock.
Set up its own warehouse
• Only allow it for important end users and OEM accounts.
• Reserve stockpiles for the distributor
Eventually develop & expand own sales force for industrial burners
Build stronger relationship with distributors
• Provide rewards
• reciprocal respect
• better terms for credit

FARM ELECTRONICS
5c analysis
Company
 Founded by Dinesh Ratan Upadhyaya, as a Sole Proprietorship
 positioned themselves as a sub-vendor (Vendor to Vendor)
 Core products were Transformers, Railway signalling relay coils etc
Collaboration
 Suppliers of materials- local and pan India
 Vendors who would have customized orders- CGISPL
Competitors
 Local vendors catering to local manufacturers
 Chinese manufacturers
Customers Farmers (Initially)
 Vendors to railway networks
 MNCs
 Small local manufacturers
 PSUs
Context
 Invested in advanced machines, including computer numerical control transformers, welding machines, assembly
lines, and more.
 Quality for workplace safety measures and environmental responsibilities were taken care of.
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Decision Problem – Farm Electronics has to choose between three options which are either to expand the product
portfolio for the existing customers or to target new customers for the growth of the company or to expand globally.
Alternatives – Retaining existing customers, targeting new customers, Expanding into international markets
Evaluation of Alternatives
Pros Cons
Retaining existing  87 % of the revenue came only from 2 key The opportunity of venturing into new
customers accounts avenues will be lost
 Retention rate is high
 No significant cost is incurred
Targeting new  The expansion in product portfolio by means of  Customer acquisition costs are high
customer Types A,B, C,D, and PSUs  It is a time-consuming process (varies
 The firm has established its reputation, it can be on type of customer)
used in acquiring new customers  Fierce competition with the local
 Custom products can be manufactured vendors
Expanding into  Very few suppliers of electronic equipment in  Substantial investments required
international the African markets  Regulations that require tie-ups with
markets  Opportunity to expand in the untapped markets local players.
 Competition with the Chinese players.

Recommendation
Analysing the complexities and costs involved in other strategies, acquiring new customers Strategy is the best option for
Farm Electronics to go with
 With the reputation, the company can penetrate the market to acquire new customers type A, B,C, and D instead
of putting up a customized facility setting up a generic enhanced facility is more beneficial as it will cost less also
the same facility can be used for not just Type A customers but also for B, C and D also
 Also, to target customer types C and D, marketing expense is required for the first three years but in this segment,
Farm electronics can win in volumes if not in the value of the transaction
 Reducing the cycle time order-prototype-delivery, supplier dependency, and time overhead across all segments
 Invest in equipment, plants, and manufacturing to serve the demands of multiple customer segments
Action Plan to handle negatives
 Target the Domestic customers
 New Product to cater to Type A customers
 Improve the buying process by offering lucrative proposals
 Providing discounts to target international clients
 Being a direct suppler to PSU’s
 Ramping up the marketing efforts in the e-commerce segment and trade engagement with these E-commerce
partners for increasing the revenue generated from this segment.

SERON CHEMICAL
1. Why is Soren chemical struggling to sell coracle?
The lead reason for Soren Chemical struggling to sell Coracle is the disappointing market result (only made less
10% of budgeted sales). There are few reasons for the disappointing result thought. Firstly, Soren Chemical had
focused on b2b market instead of b2c, thus they are fairly new and inexperienced. Secondly, the competition in
consumer market for that product is strong. There are 3 known brands and every each of them takes 15-20% of
market share. Also, the marketing communication strategy is less efficient (in my opinion), where the
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communication strategy concentrated only on professionals and specialty retailersby giving press and website.
However, the intention Soren Chemical made was opening consumer market, but they didn't touch with
customers directly.

2. What would you recommend Soren do to increase sales of Coracle? ; Meaning, should the company adopt a
push or a pull marketing strategy? Why?
I would suggest Soren to go with a pull strategy. According to the case, although the marketer thinks that it is an
opportunity for them to entre the consumer market, there are already few brands on the market and they are
known and take large part of the market share. That means there are more options for distributors and limited
shelf space. Thus, introducing a new brand become more critical to win over and expanding the market. I would
recommend a pull strategy.

3. What is the addressable market size for coracle?

Market size
Number of swimming pools 2,25 Million 
Average retail Price = 44,30$
Retailer gross margin = 15%
Retailer gross profit = 6,6$
Distributor price = 37,7$
Distributor gross margin = 30%
Distributor gross profit = 11,3$
Soren Chemical price = 26,4$

Total Market = 59,4 Million 

First Year Goal = 1,5 Million 
First Year Market Share Goal = 2,5 %

Average Price including competitors

2,25 Million · 26,4$
The addressable market is 59,4M$. The first-year goal for Coracle is 1,5M$, which represents a 2,5% of market share.
This is reasonable considering that competitors have between 10%-20% market share.

4. What price should Soren chemical set for Coracle?

5. List three marketing communications tactics that will be part of type of campaign you selected above.
 1Creating brand image: By using display ad with Adwords or other SEM methods.
 Mailing: having an individual pool means the person owns the property. It makes sense to implement
mailing to reach to our customer.
 Mass media: bring the importance of cleaning their pool correctly and efficiently is important. The key of
doing so might be missing and there’s a need for the pool own to acknowledge that

Why is Soren Chemical struggling to sell Coracle? How would you describe the selling process for Kaylan MW vs.
Coracle?-
 
Retailers might not be interested in selling Coracle as they loss profits due to the benefits that Coracle produces to the end
consumer (20%-30% reduction on other chemical costs).Previous profits for retailers:
Previous profit for retailers:
Cost Margin Profit
Clarifies 4430 15% 664
Other chemicals 30000 20% 600
Total 34430 6664

With coracle
Cost Margin Profit
Clarifies 3906 15% 586
Other chemicals 22500 20% 4500
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Total 36406 5086

For each client retailers lose revenues of about 16$ a year if they sell Coracle, due to reduced consumption of other
products. The channel is discouraged to sell our product. The different situation for the product Kaylan MW. In this case,
formulators use the clarifier in larger creational water parks and buy directly to the chemical manufacturer thus savings on
products increase their (formulators) profits