Name: Roll No:

Varun Chandna MBA20357

Deepesh Topno MBA20334

Submitted by
Group 1: Aman Ranga MBA20339

Priyansh Madkya MBA20347

M Surya Ramesh MBAA20012

 Ingersoll Rand
● Market leader in US stationary Air Compressor industry
● Market share:30% of $660 M market
● Product Categories:
● Type – Reciprocating (recips), Rotary Screw (rotaries), and Centrifugal
● Size – ¾ to 6000 horsepower
● Multiple channel distribution:
○ Direct Sales force
○ Independent distributors
○ AIr centers
○ Manufacturers Representatives
● Minimal Territory overlap
● Inter-channel conflict/competition
 Stationary Air Compressor Market
Market Leaders in Each Category
Small (below 25 hp) Medium (25-300 Large (Above 300
hp) hp)
Recip Campbell-Hausfeld Ingersoll-Rand Ingersoll-Rand
Ingersoll-Rand Joy Joy
Rotary Sullair Ingersoll-Rand Ingersoll-Rand
Kaesar Sullair Sullair
Centrifugal - - Ingersoll-Rand
Joy

• IR is leading in all the segments except small compressors (DIY products)

• IR share is about 30% whereas the share of Joy, Sullair, and Atlas-Copco is 10-12% each
Distribution Channels

OEMs and User-Customers

Generic pros and cons for channel allocation
Direct Sales - Zero
Level
Pros Cons

Respond to product performance More fulfillment costs

and customer feedback

Direct customer contact - build Hard to reach all potential

relationships customers

Avoid sharing profits with 3rd party Increases internal workload

distributors

More control Logistic issues

Generic pros and cons for channel allocation –
contd.
Manufacturer - Intermediary -
Consumer (One Level Channel)

Pros Cons

More penetration - wider Less control for the

customer reach manufacturer

Faster fulfillment of orders Profits to be shared

Flexibility and scalability Less technical knowledge for

sales support

Effective logistics support

Channels of distribution – Comparision for
Centac-200
Direct Sales Force
● Minimal sales cost
● Better service capability
● No training required
● Addition to shrinking
product line
● Partial attention to
Centrac-200
● Loss of rotary sales
● More time to deliver
and service
Independent
Distributors
● Increase in revenue &
profits of distributors
● Established network
● Attention to Centrac-
200
● Easy accessibility &
serviceability
● Low Profit margins
● Intensive technical
training required
● Lack of attention to
other compressors
● Less control over
distribution
Air centres
● Increased revenue and
profits
● Higher profit margins
as compared to others
● Attention to Centrac-
200
● Only 19 air centres
● Less penetration in the
market
● Intensive technical
training required
 How would distributors benefit from Centac-200?

● Increase in revenue and profits of distributors

● A well established network is going to be a reward for loyal distributors
● Easy accessibility,serviceability and can increase their portfolio
● Company policy favouring distributors which gives preference to distributors when machines are
short of supply
● Distributors also receive specialized training
 How would the salesforce benefit from Centac-200?

● Well established service capabilities

● A good addition to shrinking line of direct sales products
● No training required
● Minimal sales cost
 Marketing mix perspective:
● Management must develop and operate its
marketing channels in such a way as to
support and enhance the other strategic
variables of the marketing mix.

● Product strategy: IR commands market leader

position on the back of high quality products
and technological innovation, while catering
to the post purchase servicing needs of
diverse set of customers it caters to.
● Price strategy: IR was involved in
competitive pricing in small compressors,
while enjoyed margin benefits in its medium
and larger counterparts.
● Promotion: One of the reasons for its position
as market leader in US was its sales
promotion assistance to its dealers and air
center, or rather a failure of atlas-copco.
Distribution Strategy (alternatives):
● IR should have a omni/multi channel distribution network like it
already have in place, minus the clutter and conflict to serve the
diverse set of customers.
● These customer segments are essentially different in their behavior as
mentioned in the case, so IR can launch same products under different
brand names specifying different technical parameters/ level of service
for both the types, so that no channel cannibalizes the other, and serve
a specific segment of customers.
● It can also change compensation/margins for sales force and
distributors and Acs.
● Another option is cut the direct sales channel altogether, where IR will
handle all the major customers directly, with the sales force no longer
working on a commission basis.
How should IR distribute Centac 200?

● As the Ac’s and Independent distributors have no geographical overlap, and little
difference when it comes to overall cost to the company.
Centac-200 should be distributed through the distributor network and air centres.

● The company has taken responsibility for providing its distributors with a product
line that will yield a good ROI, this product push might ease out the tension between
the two channels

● The penetration in the market can be better done by distributors and the air centres
when compared to sales force as ATLAS-Copco has already captured 30% of oil free
machine market

● The distribution would be consistent with the hp assignment