LDFL India Limited: Adapting a Multi-Channel Distribution System for Omnichannel Consumers
(9 pages of text)
Case (Gen Exp)
The director of sales for the detergents arm of LDFL India Limited (LDFL) had to develop a 2019 sales strategy with the objective of reducing the inter-channel conflict that had resulted in the general trade (GT) channel’s destocking of LDFL products and a loss of market share in 2018. The cash and carry format was the biggest challenge for the GT business, as it provided a cheaper, on-demand supply source alternative to the GT retailers that dominated the total detergent sales in the industry. The sales strategy options were to demarcate specific channels for sales of specific stock-keeping units; focus on stricter price control across channels, which could ensure a level playing field for GT; customize market offerings for targeted customer segments; or make changes pertaining to organizational structure and performance metrics. Every option had benefits, pitfalls, and implementation challenges.
This case is ideal for graduate-level or executive-level courses in sales and distribution management or channel management. It specifically highlights situations of channel conflict. It can also form part of a discussion related to how emerging distribution channels, such as modern retail, C&C, and e-commerce, are disrupting the existing market equilibrium. After working through the case and assignment questions, students will be able to
- discuss the challenges of ensuring the smooth distribution of consumer products to omnichannel consumers, and the emergence of new organized retail formats;
- understand and explain the advantages and disadvantages of the different channel formats that arise in distribution systems as consumers evolve;
- analyze the impact of the different channels and the major challenges faced by sales managers in the fast-moving consumer goods industry; and
- create an evaluation mechanism for formatting the different solutions proposed in the case.
India, Large, 2018
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