GINO SA:DISTRIBUTION CHANNEL MANAGEMENTCASE STUDY

Current Scenario

• Gino SA manufactures burner and sells via distributor’s channel.

• 95% of Gino’s burners are sold by three main distributors.

• Distributors began to bargain more for better prices and lower quotas.

• Feima, a leading boiler approached Gino for direct sales- A profitable deal for Gino

BUT……

Being the leading distributor of Gino and hence Feima, Jinghua OPPOSED the offer.

GINO HAS A DECISION TO MAKE

Should Zhou, Marketing manager of Gino ACCEPT Feima’s OEM business offer ?

OR..

Should Zhou, Marketing manager of Gino REJECT Feima’s OEM Business offer?

Is there a solution that satisfies BOTH: the distributors and also helps to achieve Gino’s

long term OEM goal?

Issues to be considered while coming to a Solution:

• Revenue & high profitability

• To determine a win-win situation

• Control distributors bargaining power

• Achieve long term goal of penetrating into industrial segment

LET US ANALYSE ALL THE POSSIBLE ALTERNATIVES….

1. DECLINE FEIMA’S OFFER

• Strengthen distributor-manufacturing relationship.

• Increase in distributor power.

• Heavy loss of opportunity in Industrial segment.

2. ACCEPT FEIMA AS JINGHUA’S CUSTOMER

• Increased unit sales.

• Relationship with distributors strengthened.

• Decreasing power of distributors.

• Loss of potential OEM

3.DEVELOP FEIMA AS OEM

• Increased unit sales through Feima.

• Decreased distributor power.

• Disappointed Jinghua(Distributor).

• May leave a negative impact on other distributors too.

So we can conclude that…

Accepting Feima as Jinghua’s customer leads to maximum profitability.

These slides were created by Ila Singh as part of an internship done under the guidance of Prof. Sameer Mathur

(www.IIMInternship.com)