Perea cot) Soaps and Detergents Ltd (GSDL) is a major player in the industry and has been in the brands are brand leaders in specific Wisiness for over 30 years. Some of its soap and detergent geographies. GSDL has two detergent brands (one premium and one in popular category) an he six soap brands. Detergents are both in powders and tablet forms. Scanned with CamScannerIn recent months, one of the problems of GSDL which cropped tt ing wes becoming tlifficult to handle, GSDL had two powerful city and th both selling soaps and detergents in clearly de sslespeople had made careful analysis of the city territories andl almost equal sales revenues every month from their own territori agreements with the company clearly agreeing to the terms and c the rules of operation. istributy fined territory: ensured thy ies. Both dis ‘onditions Both A and B are located in the main wholesale mandi (market they were both appointed, the sales volumes were small andl the not matter. Now that the business has grown multi-fold, the loc. the main mandi within 100 yards of each other is making’s diffi, that they are instrumental in growing the business of GSDL and the two biggest channel partners in the region. Both A and Bh big soaps and detergent companies to work for them and have The main mandi market is in the beat plan of distributor A, The problem in distribution in the city started recently. Most wholesalers and Tetailers city (like any other city in India) visit the main mandi to buy all their requirements a.” unbranded goods like food grains, grocery products ete It i. naturally to be expected thay both A and B also have wholesale shops in the main mandi, a number of the city and once retailers and semi-wholesalers would visit them also. Distributor A started offering additional discounts (in his wholesale outlet) on Gem produss to retailers coming to him from the territory covered by B. When B visited his territory to all GSDL goods, he found that some of his retailers had already brought the goods from A. B stated retaliating by phoning some of the wholesalers and retailers in the main mem ant offering then better terms on GSDL products than A. At times while going out to their territories, salesmen of B would call on A’s customers in the main mandi and sell to them. Both A and B were violating all norms of distribution laid down by the company but still a complaining against each other to the ASM, Murli. Murli counseled both of them oe | together to desist from selling to each other’s customers. In addition, the distributors bes “ sf neglecting the coverage of the weaker markets in their own beat plans. In their — a teach a lesson to each other, they had reduced the credit percentage (percentage of owes st the benefit of credit from a distributor) in their beat plans but giving the credit ee f] market to lure each other's customers. Retailers and semi-wholesalers were Rents oxen this situation by playing the distributors against each other to get more bene! = ‘added on and localities in the city were not being covered by either distributor. oes already 0 beat plans of both A and B but were still not getting covered. ee sn the ai advantage of this situation and nibbling into the lion’s market share of G: Venger gt A and B also started complaining to the company that they were oo petition. From margins from GSDL products and were getting tempted to look i - ROI in exe numbers available with GSDL, it was seen that both distributors ha cof their OW? wee percent! Neither distributor was willing to admit that the problems wer ay ‘a eo) All efforts to reign in the two distributors A and B were to no avail. ae company °° | n both the distributors was also very high. There was a lot of debate in ) of the city Yay, location of ¢ ation of the ra, ence. The dist the company roc. ave resisted overt, stuck solidly beh ind Gspy Scanned with CamScannerdistributor in the city by carvin d f fA on 1 tories from those of A and B and sat 4 ti i litie : pera ee ppc ew extensions and localities and re-r < of ail three distributor spall RC , © aio ale to get better direct coverage of thin Gecbiectne distributor they would have taught afer a third dis ee apt nit) fon A and B. GSDL knew that the existing dist dene The company Was waiting for an opportunity to appaint this th paseo acy came when GSDL decided to introduce a ranec of s developed after a ‘he onportenity cam Sores roduce a range of shampoos developed after 2 march efforts. The shampoos had scored high in all test marketing efforts. GSDL decided to ecfrettiow distributor C to distribute shampoos in the whole of the city and not give shampoos RTE cher A or B. This was opposed by both A and B who argued that they will not accept ka stibutor in “their” city. On this issue both of them united They would want shampoos joto distribute, for after all, they were the ones to have built GSDL in the city (forgetting all the -Saketing efforts put in by GSDL over the years to build the brands and the business). shampoo was a new product category for GSDL and though C was eager to be a part of - -ige SDL network, C was not content with just shampoo. He wanted to distribute soaps and -Juergent brands also. GSDL desperately wanted C to become part of the network. C had already | ablshed himself as a good distributor for some lesser known products not competing with GSDL. If they gave him soaps and detergents also, he could not be given the entire territory of thecity and had to be given only a part of it. To give him one part of the city, some territories had tobe taken out from A and B. If C was given only a part of the city, what was to be done about the distribution of shampoos in the territories of A and B? Finally, succumbing to all the pressures, GSDL agreed to have three distributors A, B and C inthe city. A and B reluctantly gave up some territories and also agreed once again not to sell in each other's territory on the condition that they would get to distribute shampoos also in their own territories. C was given a territory built from new areas and those taken away from A and B. This decision was fraught with the following risks: * The new shampoo brands may not get the desired width and depth of distribution from any of the distributors. For the first two years shampoos would contribute only 10 percent to the total revenue. (GSDL agreed to give an additional mark-up of 1 percent ‘on shampoos for one year from the date of introduction) but required at least 25 percent of the effort on distribution. Selling in each other's territory may not still stop. Oral assurances from A and B have not Meant anything in the past. 4 Aand B may make sure by their aggressive selling efforts with other customers, not to let C succeed, How would GSDL tackle this problem when it arises? »* A, Bor C could start a distribution company in some other name and accept competitor Products. : sion Questions . ean? =. Wha i future for GSDL distribution in the city? Whee mea a ie resolve the channel conflicts and also ensure the successful marketing of shampoos? Could have the problem been resolved wi Be - ace ind also reduced the break-up of rd distributor. esist ai thout appointing distributor *C”? Scanned with CamScanner