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
1 Spare parts
2 Commission
3 Rift between different
distribution channels
4 Full Partner Program
5 Centac-200 competition
DESCRIPTION
 Delay in spare parts delivery.
 Competition from pirate parts vendors.
 Loss of margins, market share & reputation
 Commissions to direct sales force of 1-3% on sales
of all complete compressors,,70% of sales person
compensation by commission income.
 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.
 Indiscriminately passed commissions to each other,
company end up paying more commissions on same
level of sales.
 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 INDEPENDENT COMPANY’S MERCHAN

SALES DISTRIBUTORS AIR DISING
FORCE CENTERS TEAMS
PRODUCT Recips 250 hp Recips 250 hp & Recips 250 hp Recips 5 hp &
TYPE & over under & under under
rotaries 450 hp rotaries 450 hp & rotaries 450 hp
& over under & under
all centrifugals

SALES 35% 30% 20% 15%

REVENUE
GENERATE
D (%)
COST TO 11% 21% 19% -
COMPANY
PRIOR Highly No prior experience No experience No experience
EXPERIENC competent with centrifugals.
E WITH technical
SALES OF selling.
CENTRIFUG
ALS
DOWNSIDE Risk of This would take away This would take Not their area
OF ignorance- attention from the away attention of selling
SELECTING lower end of smaller compressors from the smaller
THIS the line Thrived many on compressors
CHANNEL spare part and services
so centrifugal was
unattractive to them
MARGINS - 10-15% on 10-15% on -
SAVED compressors compressors
30-35% spare parts & 30-35% spare
services 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