ATLAS COPCO (A):

Gaining and Building

Distribution Channels

Four Market Entry Phases

Phase 1

Phase 2

Phase 3

Phase 4

Trial
1950-72

Entry
1976-79

Consolidation
1980-82

Growth
1983-85

Product

Develops US
product lines
Focus on wide
target markets:
pulp, chemical,
pharmaceutical

Focus on single
top quality line

Increase width
of product range
Incorporation of
new products

Price

High price due

to high exchange
rate

Offers higher
margins (15%)

Promotion

Participation in
fairs & exhibitions

Place

Distributors are
required territory
exclusivity

Does not require

exclusivity to dist.
Buy Worthington
dist. System

Rationalizes dist.
Territories
Attemps to
award exclusivity
Intensive
training to dist.

Performs A-B-C
distribution audit
A-B forced to
sell full line
C provides full
service support

Results

Total failure:
Market Share less
than 1%

Very successful:
attracts 50 distrib.
+ 50 from Worth.

Distribution
rationalized to 85
Market share 7%

Franchise
modifications: ?
Market share 10%

LIFE CYCLE OF A 200 HP

COMPRESSOR

ROLE OF DISTRIBUTION
CHANNELS

Distribution Channels :
available to the customers

Make

the

product

After Sales Support

Sources of Market Intelligence / Market Research
Research..
Branding tools
tools: Create Brand Awareness /
Improve Product/Brand
Product/Brand Positioning
Positioning..
Diminish / Reduce Time to Market.
Market.

TYPE OF DISTRIBUTION CHANNELS

Channel structure defined by:
product nature and

Company

customer nature

Indirect
Channels
Wholesalers

Direct
Channels

Retailers
Distributors

Big Clients
Or Complex
products

Client

Client

Retailers
Distributors

Client

Retailers
Distributors

Client

Client

Client

HISTORY OF R.C.SWANEY
Phase 1

Phase 2

Swaney appointed
distributor in 1964
By 1975 was asked
to focus on
manufacturing and
pulp and paper
industry applications

In late 1975,
Swaney requested
to be relieved of the
responsibility for
small compressor.
Swaney wished to
continue with the Z
series, oil-free
compressors.
Atlas Copco
agreed.
Air Power was
appointed as a
selective distributor
to carry these
products.

Phase 3
In 1980, of four
New England
distributors, two
were dropped.
C.R.Swaney and
Air Power were
retained.

Phase 4
In december 1983,
Air Power was given
the franchise for all
Atlas-Copco lines,
including the Z Serie.
C.R.Swaney
franchise was
terminated in
December 1984.

THANK YOU
VERY MUCH