For Office Use:

Grade

Marketing Channel Management

Case Analysis
on
AN IRATE DISTRIBUTOR: THE QUESTION OF
PROFITABILITY
Submitted by:

Group No.: 6
Manish Kumar

(131326)

Prateek Sabharwal

(131339)

Saumya Ranjan Biswal (131346)

MBA FT (2013-2015)

Institute of Management, Nirma University

Date of Submission: 17th March 2015

Executive Summary
The case deals with a distribution issue between the profitability of a distributor and the
demand for increasing investment by the company. The problem identified is increasing the
market share equivalent to the Competitors in Jalgaon Market. There exist three alternatives
which are as - Mr. Kumar should leave the situation as it is, Mr. Kumar should disallow the
distributorship of Sachin Agency, Mr. Kumar should convince Mr. Sachin Mandore for
further investments, and continue with the agency. The decision is to go with the third
alternative as it is mutually beneficial to both the parties.

Problem statementIncreasing the market share equivalent to the Competitors in Jalgaon Market.

Evaluation of Alternatives1. Mr. Kumar should leave the situation as it is

Pros This would not hamper the relationship between Nutripack and Sachin
Agency. As this relation has been going on for long, it would allow the relationship to
stay intact.
Cons Nutripack could not tap the potential market share, also this would lead to
decline in the market share in the future.
2. Mr. Kumar should disallow the distributorship of Sachin Agency
Pros Disallowing the current distributor would give Mr. Kumar to look out for new
distributors who are willing to work extra and invest more.
Cons Searching for new distributor would take time. Moreover, the relationship
with Sachin Agency has been long so breaking it might not be a suitable idea. Sachin
Agency has been the biggest distributor in the Central Maharashtra.
3. Mr. Kumar should convince Mr. Sachin Mandore for further investments, and
continue with the agency
Pros This alternative would allow Mr. Kumar to maintain relationship with the
current distributor as well as increase the investment of the same.

Cons In future, Mr. Sachin Mandore can have similar issues with Nutripack.

DecisionThe third alternative that is Mr. Kumar should convince Mr. Sachin Mandore for further
investments, and continue with the agency is the most proffered alternative.
Reasons
If we consider Mr. Kumars Perspective

Low Margins High Volumes

o Have a wide reach so as to cover as many villages as possible

2nd most populous district in Central Maharashtra

o 16% volume share but 8% contribution

Interior markets need to be serviced well in terms ofo Extending the credit
o Uniform discounts and schemes
o Regular market visits

Considering Mr. Sachin Mandores Perspective

Largest distributor in Central Maharashtra

Veteran in the FMCG distribution business

Content to meet companys targets

Maintains good relationship with major retailers

Would like certain issues to be addressed before making further investmentso Pending secondary claims

o Low distributor margin

Convincing Mr. Mandore can be done by the below table
Monthly Expenses
No Unit
Particulars s
Price
Total
Motor
Vehicle
2 18000 36000
Salesman
Salary
3
4000 12000
Salesman
Bonus
3
1000
3000
Driver
2
3000
6000
Delivery boy
2
3000
6000
Godown
Keeper
1
3000
3000
Helper
1
3000
3000
Operator
1
7000
7000
Computer
1
500
500
Printer
2
1000
1000
Internet
1
450
450
Telephone
1
500
500
Admin Exp
1
500
500
Godown
300
rental
0
7 21000
TOTAL
99950
1199
Annual Expense
400

Monthly Income
Particulars
Gross
Turnover
Margin
Net Margin
Security
Deposit
Return
Net return
Total Return

Net

54000000

CP

4.50%
24300
00
1000000
8%

51570
000
14128
7.7
33909
04
42160
24

80000
25100
00

retur

64154
24
39.12

Hence, the return he gets by staying with nutripack is 39.12% as compared to 10.5% from
peoples bank.

Increased reputation.

To reduce the problems between Sachin Agency and Retailers, following steps could be
followed
o Uniform schemes and cash discounts across all outlets of similar value.
o Increase personal visits to retailers.