Distribution Management

Submitted to: Submitted By:

Prof. Dhavale SwapnilChaudhary(07)
Ayush Khandelwal(15)
Aniket Powar (27)
Arunima Banerjee(42)
Sarang Bakshi (84)
AjinkyaThanekar(117)
 Executive summary
PCIL is one of the biggest manufacturers of high performance, heavy duty, and
protective coatings. The company has experienced across wide range of industries such as
nuclear, thermal, hydro power plants, refineries, sugar, pulp, paper industries etc. The
company includes complete product range such as epoxy coating, zinc, glass take etc.
Company is certified by various Indian and international laboratories. Market of protective
coating is concentrated in western India therefore company is situated in Gujarat. Total
market size for protective coating in Western India in 2011 was 10000KL. The growth rate of
PICL is 9% year per year. Before 2004 there was one manufacturer viz SPCL. In-between
2004-10 two more manufacturers entered into market viz GC and SIC.

PICL had 2 types of distribution channel which was direct channel and selling the
products through dealers. These dealers were of decorative paints and situated in various
cities like Pune, Nagpur, and Thane etc. In Gujarat they had only one dealer which was ATA.
All dealers used to sell their products either painting contractor or small to medium size
companies. PICL used to give 5% cash discount on list price and 3-7% discount for bulk
buying. Dealers mark up the list price by 8-10% while selling to painters and 4-5% while
selling to sub dealers. In Gujarat it was easy for sub dealers to deal with ATA. ATA also
provides warehouse in Gujarat & get 5% discount on total annual volume for warehousing
facility it rendered to PICL.

Before entering the new manufacturer PICL could achieve more than 50% market
share in Gujarat and SPCL capture 25% of market. Initially it was tough for new entrant to
penetrate market. Later on GC and SIC targeted sub dealers of ATA and offered them same
discount as given by PICL to their dealers. This strategy works and PICL have lost almost
70% of market share. Because of this regional marketing manager of West zone has decided
to take comprehensive view of situation and gives 2 options to company i.e. product quality
should be emphasized so that selling should be easy or higher margins should be offered to
sub dealers.
Q1. PCIL present channel management strategy.
They have adopted two channel strategy for their be product.

Industrial
PCIL
user

Sub
PCIL Distributor End users
distributor

PCIL Channel management

PCIL have dual channel strategy which was giving them tradition business nicely

Along with SPCL, and market share is mostly divided into this two giants.

Further when the new competitors come like GC and SIC they cut down the market of PCIL
by adopting Two stage channel strategy involving direct sub distributor so they can able to
give higher margins to the sub distributors.

Now PCIL is changing its strategy because of heavy loss in market share and they want to
focus on the quality as the known quality supplies in the market, Also they might think about
different distribution channel if they not able to recover there losses or might adopt different
channel strategy.
Q.2 Comparison of Strategies Adopted by PCIL and New Entrants

PCIL was using 2 level Distribution Channel for selling its products(PCILDealers
Sub DealersCustomers). New Entrants GC & SIC Identified that PCIL is getting more
business from its Sub dealers, they focused more on the sub dealers of PCIL. SO they
were using 1 level Distribution Channel(GC&SICDealersCustomers). Means PCILs
Sub Dealers Became Dealers of GC & SIC.
PCIL was giving Margin (almost equal) to each member in distribution channel. With
this strategy its Sub Dealers Were getting only 4-5% Margin. But Due to 1 Level
Distribution channel New Entrants started to give more margins to single member in
distribution channel.
PCIL was using High cost price for its product with quality. New entrants were using
low price strategy to for product for more market penetration.

Q4. What steps would you have taken to revive the company from crisis if you were the
marketing manager at PCIL.

There are 5 steps to rebuild the brand after the crisis

1. Plan ahead: Draft a preliminary strategy so that it will be easy to execute during
plan of action. Proper choice of stakeholder to whom the company should
communicate the action plan and provide needed information
2. Make every opportunity count: Thank and reward loyal consumers, Look for
opportunities to rebuild your brand's imagelocally, regionally, and nationally
 via, for example, special events, or social media contests that both educate and
engage your customer base.
3. Convince customers to return to your product: Give consumers a reason to
come back to you. For example replacing a faulty product for free or sending
incentives, such as coupons or samples. Create a call-to-action that offers
exclusive value and savings to maximize impact.
4. Personalize: Integral to rebuilding and rewarding is getting consumers to identify
with your brand again. Put a face and a name to your brand. Communicate with
customers on an individual level. Make your brand a person with whom
consumers can identify.
5. Harness the power of local media: Local publications are an integral part of
their communities; your message will benefit from the trust readers place in them.
Harness their power. Use a variety of media outlets and tactics to reach the most
consumers and prospects post-crisis and to maximize reach and frequency of your
message.