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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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