CASE SITUATION

KEY DECISION MAKER : James Clabough (Vice President of Marketing & Sales).

CRITICAL DECISION :

Whether Centac-200 should be distributed through IR sales force or through the distributor network or air centers.

ISSUES

ISSUES DESCRIPTION1 Spare parts Delay in spare parts delivery.

Competition from pirate parts vendors. Loss of margins, market share & reputation

2 Commission Commissions to direct sales force of 1-3% on sales of all complete compressors,,70% of sales person compensation by commission income.

3 Rift between different distribution channels

Huge pressure from independent distributors for equal representation.

Company’s channels at times competed directly with each other.

Each perceived the other received favoured treatment.

4 Full Partner Program Indiscriminately passed commissions to each other, company end up paying more commissions on same level of sales.

5 Centac-200 competition Atlas-Copco gave a head to head competition in oil free machine segment with its top quality & 30% share of oil-free market.

PARAMETER FOR EVALUATION OF ALTERNATIVE DISTRIBUTION CHANNELS

DIRECT SALES FORCE

INDEPENDENT DISTRIBUTORS

COMPANY’S AIR CENTERS

MERCHANDISING TEAMS

PRODUCT TYPE

Recips 250 hp & overrotaries 450 hp & overall centrifugals

Recips 250 hp & underrotaries 450 hp & under

Recips 250 hp & underrotaries 450 hp & under

Recips 5 hp & under

SALES REVENUE GENERATED (%)

35% 30% 20% 15%

COST TO COMPANY

11% 21% 19% -

PRIOR EXPERIENCE WITH SALES OF CENTRIFUGALS

Highly competent technical selling.

No prior experience with centrifugals.

No experience No experience

DOWNSIDE OF SELECTING THIS CHANNEL

Risk of ignorance-lower end of the line

This would take away attention from the smaller compressorsThrived many on spare part and services so centrifugal was unattractive to them

This would take away attention from the smaller compressors

Not their area of selling

MARGINS SAVED

- 10-15% on compressors30-35% spare parts & services

10-15% on compressors30-35% spare parts & services

-

CONCLUSION

Centac-200 should be distributed through IR through the distributor network or air centres.

The company has taken responsibility for providing its independent distributors with a product line that will yield a good ROI.

The penetration in the market can be better done by distributors and the air centres as ATLAS has already captured 30% of oil free machine market.

The distribution would be consistent with the hp assignment. This would also increase distributors long term relation with the company.

RECOMMENDATIONS

Distributors need to be trained for dealing in with the centrifugals. With any encounter with the technical issue with the product the distributor can refer

to the company. Proper evaluation of the “Full partner program”.

B2B MARKETING

CASE ANALYSIS

INGERSOLL-RAND(A)

Submitted by:

Ankita Saraswat : 203

Nikita Banerji : 233

Rohit Saha : 249

Upasana Singh : 265

Urooj Ansari : 266

Hugo Benguesmia: 279