Caselet

Faridabad

Taurus Marketing,

Sharp Tools Inc US was happy for having chosen Taurs Marketing Pvt Ltd as
their distributor in Faridabad area, where the SME was growing at breathtaking speed. A machine tool a day was getting into this market, especially in
the die&mold segment, where Sharp Tools has been traditionally weak.
History said it loud Company was focused on segments like Auto, Defense,
Gen Engg, and Aero space. Due to lack of focus on Die&Mold, company
could not make products to match the needs of customers. However that
was the time that company decided to shift its focus on this segment and
indeed launched many products which could give some edge to break the
entry barriers already formed by competitors. Existing conventional
distributors were not having the knowledge and competence to make strong
entry into this segment. However due to Organizational pressures some
distributors here and there sold few items on discount and freebies. These
distributors also came back with excuses on how impossible to sell to this
segment. Sharp Tools then realized that it was important to appoint new
distributors for Die&Mold segment. Taurus Marketing was the result of such
search.
From the products perspective, Die & Mold segment needed both indexable
and Solid Carbide endmills. Sharp Tools could broadly meet customer
requirements of indexable endmills whereas they could not find a place to
position Solid Carbide endmills. Sharp Tools had the technology of these
products but suited for supreme quality high end applications found in
aerospace, whereas what die & mold customers wanted was very economical
endmills with reasonably good quality. At that moment Sharp Tools wanted to
take one step at a time, so just focused on indexable.
Arpit Agrawal, the MD of Taurus was a highly competent person. He knew his
customers well. He was very professional, had all e-systems in place with
highly motivated well paid engineers working for him. He has been supplying
various industrial products to Die&Mold and Auto segments. By taking
distributorship of Sharp Tools he was very successful in pushing the
indexable endmills but could not push solid carbide endmills due to price
barrier. With his command over this segment, Sharp Tools knew that with the
right pricing this segment could be conquered. But somehow, this could not
happen. Taurus was of the view that customers all needs to be satisfied to
win customers heart. He also argued that customer would expect the total

solution from a single distributor than buying indexable from one and SC
endmill from the other. So he decided that if Sharp Tools cannot meet the
needs of SC endmills, then he would procure the same from China which met
both price and quality requirements of customers. Initially it did not affect
Sharp Tools in any way. Taurus was growing at a phenomenal rate. But what
Taurus did fell in the grey area of dos and donts . Most of the industrial
selling in India is done by dedicated distributors of a brand who are not
allowed (which is an unwritten law) to represent any competitor brand.
Taurus was not representing any of the major competitor of Sharp Tools, like
Sandvik, Taegutec, Iscar, Walter, Mitsubhishi etc. Representing a Chinese
brand that too for filling a product gap, was knowingly ignored by Sharp Tools
in view of contribution of Taurus in the Die&Mold segment, though other
distributors in the NCR region started complaining about how Taurus is
spoiling the market with Chinese products and that he should be barred from
doing so.
Couple of years passed. Sharp Tools Inc realized that they need to fill the SC
endmill gap for succeeding in the Die&Mold market and that existing Sharp
Tools endmills can not fit into market requirements. The best way they
thought was to acquire a hard core SC endmill manufacturing co. So they
acquired HANITA, an Israel based company reputed for SC products. Hanitas
prices were very competitive compared to many branded products but
higher than the Chinese brand which Taurus was holding.
Post-acquisition of Hanita, tremendous pressure to sell Hanita products in
India came on Sharp Tools India and its distributors. As per parent company,
now the gap in Die&Mold is filled and the market has to be conquered.
In these two years, Taurus had laid a solid foundation of Chinese brand in the
NCR region, even beyond Faridabad. Sharp Tools started now putting
pressure on Taurus to leave the Chinese brand or give up Sharp Tools
distributorship.
Sharp Tools understood where it faltered. At the time of signing the
contract with Taurus, it failed to convey that it would not allow a
distributor to have a distributorship of a company that makes
carbide toolings.