Sales & Distribution Case
Transcript of Sales & Distribution Case
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Presented by:
Group-8Daljeet Singh
Gaurav Bimal
Rajan Dhingra
Vishal Singh Patyal
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L M THAPAR SCHOOL OF MANAGEMENT
THAPAR UNIVERSITY, PATIALA
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Pr si t- JoKli Vic Pr si t-
Bob Morr aux
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Area P pulati n 600,000
Unique Market Area f r Supermarket Industry (F d Pr cess r &
Manufacturers
80% retail gr cery sales thr ugh l cally wned chains r l cal
c peratives
Only ne nati nal chain having 4 utlets, Captures nly 10 % f t talretail v lumes
Theref re f d pr cess rs depend n Steel City f d Br kers sell
their pr ducts t supermarket buyers
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Firm Name Type Number ofStores
Approx. Marketshare (%)
Freed m
Gr cers
L cal Chain 3 13
Bear St res L cal Chain 18 22
S uthern
supermarkets
C perative 18 18
Biggs Superst res
C perative 16 16
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3rd Largest f d Br ker
Br kerage C mmissi ns $500,000 appr x. per year
25 n n c mpeting gr cery & h useh ld Supplier mfg.
Supplier C mmissi n rates varying fr m 1 t 5 %
Average C mmissi n Rates > 3%
18Milli n Sales f r its Suppliers
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Perf rms several services f r supplier as well as supermarket buyers
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SuppliersSupermarket
buyers
Inf rm p ssible market
changes
ACE rep. visitperiodically Take rders
New Pr ducts
Act asManufacturer
wn Salesf rce
ACE empl ys 10 field pers nnel wh visit individual st res f r:
C unting St ck
Replenishing shelf st ck
Delivering manufacturer P nt- f-Purchase displays
Make sure that ACE supplier are receiving supp rt in st res
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Remaining Supplier yearly CommissionRange > $1,000 to $35,000
largest supplier C nstitute $80,000
C mmissi n
M rreauxSugar
C mpany
70% Market share Generates $80,000
Br kerage fee
Tuna
Canne ishPr cess r
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e.g. withdrawn brokerage agreement with processor of food &pie fillings..Quality Issue
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Qualityf
Services
ffered
Supplierrepresentati n
by ACE
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Initially Getting$30,000 brokerageCommission
Now
Only $12,000 from New Supplier
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Net Profit $85,000
Moreover as owner 60% total share
Dividends paid from the firmEarning
But
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Earlier
Underw d Br kers Inc
Pr vincial Sugar
M rreauxSugar
C mpany
ACE
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*Brand has nly 1/3rd f
t tal market.
* Underw d Unwilling
t dev te m re eff rt
*Firm Refusal t give
m ney (Advertisement &
Pr m ti n)
*Increase its Penetrati n .>
25%
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Later Both firms SwapedBut
Pr vincial Sugarretail Market
20% Instituti nal
Market30%
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*L st sales p tential is a maj r c ncern.
*G d pp rtunity f r F d pr cess rs & Manufactures.
*Gr wth f Instituti nal Business.
*S me f the firms wanted t sign c ntracts with M rreaux which
w uld specify that M rreaux sugar be used in their utlets.
*M rreaux believes he c uld find time himself t call n a distribut r
in steel City & find the means t fulfill these c ntracts.
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Kline refuse to offerinstitutional sales division
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Morreaux may cancel
relationship with ACE
Look for broker havingboth retail & institutional
sales
Morreaux lost opportunity to
institutional field & satisfied
with retail Grocery trade
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Other large br kers already have supplier f r sugar . S
dealing with small br kerage firms risky
M rreaux t k this c urse and ther supplier f ll w .f urth
large br ker emerge in steel city
Devel ping new instituti n require additi nal staff members
M rreaux has t c ncern with ACE reacti n in any decisi n
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