SALES & DISTRIBUTION MANAGEMENT PROF. J. N.

GODINHO
CUMBERLAND METAL INDUSTRIES
GROUP 4
13P001 AANSHU CHADHA
13P021 GUNJAN RAI MADAN
13P022 DARSHAN GANDHI
13P027 KUSHAGRA GROVER
13P029 NISHANT MADAN
13P054 VASUNDHARA TIKOO
CONTEXT
Cumberland metal industries is one of the
largest manufacturers of curled metal
products.
It faced a declining market share in Slip
Seal (exhaust gas recirculation valves), its
main source of revenue.
It had 80% of the market share. Not
optimistic of maintaining the market share, the
company planned to diversify away from a total
reliance on the product & industry.
Curled Metal Cushion Pads pads that
prevented shock of the hammer from damaging
while pile driving
Background
Competitor
Analysis
ABOUT CUMBERLAND
COMPETITOR ANALYSIS
33% faster
Lasted for the entire job
Performance increase of
20%
Downtime eliminated
Asbestos pads were
hazardous
CMI pads never went above
250 F, so change overs
COLERICK TEST

80 Asbestos = 1 CMI
FIAZO TEST

120 Asbestos = 1 CMI
ADVANTAGES of CMI
Background
Competitor
Analysis
ASBESTOS vs CMI
PROBLEM STATEMENT
Determine a method for pricing the new pads
Decide which channels to market the pads based on the
pricing strategy
Background
Competitor
Analysis
Issues Pricing
QUESTIONS POSED TO THE COMPANY
PRICING
100 Asbestos
= 1 CMI
Taking mean of
Colerick and Faizo
Tests
1 Asbestos =
3 $
Price of one 11.5
inch Asbestos pad =
3 USD
1 CMI Pad =
300 $
Therefore Price of 1
CMI pad = 3x 100
USD
Background
Competitor
Analysis
Issues Pricing
Channels
PRICING STRATEGY
STAKEHOLDER ANALYSIS
STAKEHOLDER TYPE IMPORTANCE ATTITUDE
Pile Hammer Manufactures Neutral
Architectural/Consulting Engineers Positive
Pile Hammer Distributing/Renting
Companies
Negative
Large Engineering/Construction
Contractors
Positive
Soil Consultants Positive
Independent Pile-Driving
Contractors
Positive
Background
Competitor
Analysis
Issues Stakeholders
Channels
MAPPING OF STAKEHOLDES WITH IMPORTANCE & ATTITUDE
CMI
Large pile driving
contractors (75%) Own/
manufacture equipment
Small independent pile
driving contractors
rented equipment (25%)
larger firms ,companies with
deeper pockets
tend to buy in bulk
less risk averse
more willing to agree on long-
term contracts
sophisticated
Pile hammer
manufacturers
Pile hammer renting/
distributing companies
Provide first pads to
contractors
Conflict of interest
Will keep what could be
sold most easily
Dont want efficiency
Small Customer
But major Influencer
Focused on making money
Not very sophisticated
But knowledgeable
Entities participating in purchases / Customers
Influencer Reseller
Consumer
Architectural/
Consulting engineers
1
2
1
2
3
CHANNEL SELECTION
Background
Competitor
Analysis
Issues
Channels
2. MARKET DEMOGRAPHICS
Concentrated markets
3. BUYING BEHAVIOUR (LARGE PILE
DRIVING CONTRACTORS)

larger firms ,companies with
deeper pockets
tend to buy in bulk
less risk averse
more willing to agree on long-
term contracts
1. NATURE OF PRODUCT
Innovation, technically complex
CMI cushion pads 100 times expensive, life 10 times more than asbestos,
performance increase of 20%
little attention paid to cushion pads
no promotion
Mostly unbranded, cut by anonymous job shops
Risk that the industry will not try the CMI
pads due to the lack of clear distribution
channels and existing attitudes towards
pads
FACTORS AFFECTING CHANNEL SELECTION
Pricing
Background
Competitor
Analysis
Issues
UNDERSTANDING CHANNEL SUITABILITY - ALTERNATIVES
Channels Nature of
Product
Market
demographics
Transaction Amount Buyer behavior
Direct Sales Technically
Complex, New,
Expensive
High concentration
of buyers
Large dollar amount of
individual purchase
transactions
Buyers needs for
technical info /
customization/
persuasion
Independent
distributors
Simple, well
known products
Widely dispersed &
fragmented
markets
Low transaction
amounts
Bundled purchasing
behavior, small buyers
Captive
distribution
Simple, well
known products

May come at some cost in enlisting the full support of other
intermediaries + More control
Manufacturers
reps
Technically
Complex, New,
Expensive
Concentrated
markets
Large individual
transactions
Buyers needs for
technical info /
customization/
persuasion
CHANNEL SELECTION
Channels
Pricing
Background
Competitor
Analysis
Issues Pricing
RECOMMENDATIONS
Short Term
Currently we need manufacturer reps
with the knowledge of construction
industry to promote the product directly
and also try to educate
influencers/distributors about the
product benefits

Channels Pros Cons
Direct Sales Direct control
Help to educate the
distributors and other
channel intermediaries
Fixed cost required
No contacts in the market
Lack of industry
knowledge
Manufacturers reps Deep roots in the
construction market
Better understanding of
the industry
Less control


Long Term
Concentrate to have more independent
distributors to increase the reach and
availability of the product

CHANNEL SELECTION
Channels