Kelsey Manufacturing Com.

Case Analysis

Section C - Group 5

Shashank Shukla, 13P166 Shivam Atri, 13P167

Abhinay Abhilash, 13P183 Akshay Bhandari, 13P190

Mayank Taparia, 13P238

Case Facts• Kelsey is one of the largest manufacturers of repair material for tires and tubes.

• Over the years sales of its numerous product lines have been stagnant.

• Management wants to reverse the trend by pushing the middlemen

• The length of the channel was one of the reasons why the company was not able to have proper contact with end customers

• However, channel members no longer seem to be under Kelsey’s control.

Distribution Structure

Kelsey Manufacturers Representative

WareHouse Distributors Jobber Service

Stations End Customer

The length of the channel was long for the company to direct the information about its product to end customersThe company had less control at the initial channel levelLengthy channel adds to promotion burden

Possible Issues with the Current Channel Structure

Other Possible Issues

Lack of Technological competitiveness

Kelsey doesn't seem to change with times at least in technological

competitiveness.

Addition of new products without consulting channel

members

Product line augmentation might

not go down well with downstream channel

members

Increased items in the product line for channel

members

Old channel partners are no longer loyal to

Kelsey

Some products might not be profitable

( less margin)

The product line has become very large and channel members are not able to focus on

specific products

The product might have been higher

priced

The sales have been stagnant and still the company has been

enjoying a gross margin of 30-40% for years

Issues Continued..

Possible Alternative

Kelsey Warehouse Distributors Jobber Service

StationsEnd

Customers

The company can replace manufacturer’s representatives with its own salesforce

This will provide company more control at the initial level of the channel

The sales force can monitor sales and provide adequate knowledge about the products to the other channel members

Recommendations

•This will reduce the burden on channel members of carrying products with low margins and they will be able to focus on specific products. Too much products can sometimes confuse customers

The company should remove unnecessary products from product line

•This will enable company in delivering product knowledge to end customers via service stations

Occasionally promote product line directly to large Service Stations

•The company has been enjoying a gross margin of (30-40%) over the years. Company can rationalize margins so that channel members become loyal and which will indirectly result in higher sales

Rationalize margins for channel partners who are unhappy

•Kelsey has many items in its product line. They can supply a complete assortment to its channel members which are willing to become exculsive

Select Exclusive Distributors

•This will result in an increased loyalty of channel members. Also the company should try to provide adequate advance notice of product line change.

Company should seek channel members opinion while expanding the product line

Thank You