An Irate Distributor: The Question of Profitability
(7 pages of text)
Case (Gen Exp)
In June 2012, an area sales manager at NutriPack India, a multinational company dealing with fast-moving consumer goods, had to find a way to match the success of his predecessor in increasing retail outlet coverage in central Maharashtra. He studied the territory data and identified the Jalgaon region as having the potential for high growth. However, the single distributor for Jalgaon was upset because he had already increased his operations the previous year and was unconvinced that this had been profitable. The area sales manager needed to convince this distributor of the benefits of his past investments, and also convince him to make further investments (e.g., hire more salespersons).
This case illustrates the challenges that young area sales managers face when they have to deal with experienced distributors in the Indian retail trade, especially in smaller towns where relationships can greatly affect business. Students will gain an understanding of the key performance indicators required to focus on developmental issues in a territory. They will appreciate financial considerations as a major tool in dealing with intermediaries, such as distributors, and will gain practical knowledge in how to convince a distributor of his past investments and profitability, and pave the way for further investment for retail expansion.
The case is designed for use at the postgraduate level in sales management, channel management and strategic marketing courses, as well as in executive management programs. It can be used at the beginning of a course to show the link between a distributor’s goals and a company’s requirements. Specifically, the case gives students an opportunity to:
- Understand the data handled by an area sales manager and appreciate its complexity for distributor management.
- Compare the distinct perspectives of a company and an intermediary (e.g., distributor) that are pursuing similar business goals.
- Perform a hands-on calculation of profitability for a distributor, and make use of numeric distribution and weighted distribution.
- Understand distribution management in the Indian fast-moving consumer goods context.
India, Large, 2012
$5.30 CAD / $5.00 USD Printed Copy
$4.50 CAD / $4.25 USD Permissions
$4.50 CAD / $4.25 USD Digital Download