Sales and Distribution

Management

Group 4 – Assessment 1
Reg no: Name:
FX20020 Kharthigeyan P S
FX20026 M Praveen Kumar
FX20046 Vignesh P
FX20047 Vignesh V
1.Why did Abdul become a Technica dealer in January 2018? What would be the likely
impact of this decision on Abdul's margin and sales?

Customer’s comparisons:

• Over the years, customers preferred to compare the products before buying. Their primary check points of comparison
would be Fairddeal appliances vs Technicia Air conditioners.

• Since Abdul was not initially dealing with Tehnicia applicances, customers were dropping out and the churn rate was very
high.

• Abdul now decided to be a retail dealer of Technicia products also so as to prevent loss of customers to his outlet.

• Be it may, customer buying Fairdeal or Technicia, Abdul was witness loss of customers and that can be avoided by
placing both the products and leaving to the customer’s choice.

Impact of this decision on Abdul’s Business:

 
Dealer's motivation to sell is directly proportional to the margin.
 
Air conditioners business were more of consumer durables were dealers could convert 40 % of the customers to buy the
same brand that they deal with.

2
On looking the performance of Fairdeal vs Technica, consumer’s preference of A.C was higher for Technicia (60%) , next to
Fairdeal. This decision of dealership with Technicia will definitely increase overall :

• Sales volume of the company appliances

• Increase in footfalls into his store.
• Better capability of influencing the customers’s with their choice since they have both the products to compare.
• Negotiation power for Abdul over to his dealers.
• Currently, as of 2017, his AC sales was 6450 Unit with Technicia being 0. But Adding this will definitely increase the
conversion rate-be it may technicia or fairdeal AC.
• But, the share margin from Fairdal would definitely reduce post this decision.

3
2.Likely impact of Abdul’s decision on Fairdeal business:

Abdul’s decision was highly strategic where:

• If Fairdeal does not take any efforts, the overall sales will reduce from this counter both short term and long term.
• If Abdul completely stops the sales of fairdeal , it would clearly send a wrong message to the market thus reducing the
goodwill and brand image of the company.
• Since the Indonesian market if highly inter connected, any changes in the denpsar market would affect Bali.
• None other than Abdul had the sales potential and severing ties with Abdul and trading a deal with other dealers will do
no good.
• So, it is best to have the number of dealers limited with a higher profit margin for Fairdeal.

• Out of 15.15% share in Indonesian market, 3/4th comes from Abdul’s business
and there is no way of moving out of this dealer atleast for now.
• Fair deal will see a reduction (ateleast 20%) in the sales margin because of the
customer’s willingness to compare - snatching of the mind share.
• On a longer term, the sales would not increase but at least they can maintain the
number of sales number -status quo.

Counter intuitive:

There are chances for fairdeal’s business to boom automatically ( chances are very
slime) because of the comparative model with the other appliances provided proper
marketing and branding efforts in place.
4
3. What are the dealer network's options and the implications of those options for
Fairdeal?
• Indonesia United Appliances (Induapp)
• Vision Electronics
• Northeast Electronics
• Rahman Sales
• Spectrum Electronics
• Abdul Electronics

5
4. Which way forward would you recommend for Fairdeal? Why?
SWOT Analysis:

6
Fairdeal can increase its sales by the following strategies focusing evenly:

Market Development - Advertising and promotion of product and user education

Market Penetration - Geographical expansion and Online retailing
Product Development - Focus on R&D for new product development and Market testing
Product Penetration - Diversify the portfolio and acquire personally owned outlet to gain independence over dealers.

• Since Fairdeal is not performing well as much as it was in 2010, it is time to re-visit the product portfolios and revamp it.
• Also, dependence over the dealers cannot be cut down, but brought down by setting up their own retail outlet. ( Apple
followed this model) .
• Note: This is to be followed only when you have brand presence .Fairdeal can make this.
• Adopt Online retailing which would help in increasing the sales with the online dealers thereby reducing the dependence
over Abdul.
• Invest in R&D to stay ahead of the competition.
• Reach out to first time markets to attract new distributors and retail dealers.
• Improve the product quality addressing the existing issues of the customer so as to gain the customer confidence.
• Also, improve your interaction with customer support directly so as to increase the stickiness.
• Develop inimitable products to increase the consumer’s preference thereby increasing the dealer’s preference towards
your product.

7
Thank you