Sales & Distribution Case

8/9/2019 Sales & Distribution Case

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Presented by:

Group-8Daljeet Singh

Gaurav Bimal

Rajan Dhingra

Vishal Singh Patyal

*

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


5/15

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

*


6/15

Perf rms several services f r supplier as well as supermarket buyers

*

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e.g. withdrawn brokerage agreement with processor of food &pie fillings..Quality Issue

*

Qualityf

Services

ffered

Supplierrepresentati n

by ACE


9/15

Initially Getting$30,000 brokerageCommission

Now

Only $12,000 from New Supplier

*

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%

*

Later Both firms SwapedBut

Pr vincial Sugarretail Market

20% Instituti nal

Market30%


12/15

*

*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.


13/15

Kline refuse to offerinstitutional sales division

*

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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Sales & Distribution Case

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