Channel Distribution at Maxwell

7/28/2019 Channel Distribution at Maxwell

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BY

AlokJayant

Kamlesh

Paromita


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Case Facts

Well known manufacturer of orthopaedic equipments

Sole manufacturing setup at Vizag

Presence across the country

Marketing based out of Vishakapatnam

Negligible promotion activity distributes productsdirectly to retailers.


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Problems at Maxwell Corporation

Current distribution system is ineffective

Limited inventories with retailers Major issue with dead stocks

Stock outs creating major customer dissatisfaction

Unable to cater to emergency order

Inventory crisis due to product variety


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Desired Objectives

Revamp distribution system/network

Overhaul the marketing & sales paradigm

Increase brand equity

Sustainable profit maximization


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Which option should the companyconsider and why?


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Possible Options Setting up of hub and spoke type of distribution

network

Setting up a central warehouse anywhere in CentralIndia and feeding retail outlets from this location.

Changing the distribution channel from the presentnumerous retail outlet systems to a more efficient

system Outsourcing the entire distribution and logistics to a

third party


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Recommended OptionHub and Spoke Model

Setting up of hub and spoke type of distributionnetwork wherein a stock point or mother warehouse issetup in each zone which caters to the needs of theretailers:

ADVANTAGES:

Efficient inventory management Timely delivery of products

Effective sales control

Proper understanding of the customer need


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What should be the distribution channel for Maxwell and

outline the advantages and disadvantages for having such

a type of set up.

Distribution channel will remain the same i.e. Huband Spoke model having various advantages as follows

Better alignment with Target Segments like Hospitals

Bulk purchasers like Defence sector procurement,

major healthcare / pharmacy chains Zonal control over sales


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Much reduced inventory carrying cost

By centralizing control, the company can afford a smallerstaff which concentrates on management from a centrallocation

Faster response to emergency requirements / orders


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What type of marketing and sales set up would you

recommend for Maxwell Corporation and why

Marketing strategy

Stress on the 04th

p of marketing mix: promotion Through advertisements on

Health magazines

Billboards near hospitals, pharmacies & clinics

On ambulances


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Tie ups with major hospital & pharmacy chains

Endorsements through standalone doctors as well

Tie up with health insurance companies


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SALES STARTEGY

Mix use of both Pull & Push strategies

Diversify & expand sales offices across the country

Create a sales helpline (24X7 phone support)

Use state of the art ERP applications


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Documents

Channel Distribution at Maxwell