FAIRDEAL APPLIANCES

MANAGING THE DEALER

NETWORK FOR OPTIMAL
SALES

A J AY R A N A B H AT
162166219
MKM804 ZSS-INTERACTIVE
B2B SELLING
P R O F. L O R I A N N
M AT T H E W S - F E R R A R A
OVERVIEW OF THE MARKET AND
CURRENT SITUATION ANALYSIS

Q. What is Fairdeal Appliances' market overview and

analysis of the current scenario in the Indonesian air
conditioner market?
A: Fairdeal Appliances, a market leader in Indonesian air
conditioners until the early 2000s, has struggled to hold
onto its share of the urban market, particularly in Bali,
Indonesia. The market is becoming more brand-pull-
driven, therefore Fairdeal's strategy of selective
distribution might not be as successful as it once was.
International competitors including GOLDY Electronics,
Smart Line, and Technica pose a serious threat to the
company. A threat to Fairdeal's sales and market position
has emerged from Abdul Electronics, the largest retail
location for Fairdeal in Denpasar, Bali. Abdul
Electronics has begun carrying Technica items.
MARKET GROWTH
AND CATEGORIES
• Q. What are the main categories on the Indonesian air
conditioner market, and how has it been expanding?
• A: Between 2010 and 2016, the Indonesian air
conditioner market grew at a compound annual growth
rate (CAGR) of 20% as a result of urbanization, rising
incomes, and an expanding distribution network.
Reciprocating and rotary air conditioners are the two
primary types into which the market can be divided. The
market share of Rotary products is increasing and they
are well-liked in metropolitan marketplaces. In rural
locations, lower-priced reciprocating types are common.
COMPETITIVE LANDSCAPE
Q. How have their strategies affected
Fairdeal's position? Who are the main
rivals in the Indonesian air conditioner
market?
A: Global competitors including
GOLDY Electronics, Smart Line, and
Technica fiercely compete with
Fairdeal. The Indonesian television
market is also dominated by GOLDY
and Smart Line. Abdul Electronics has
began stocking Technica, a formidable
rival of Fairdeal, endangering the
company's sales and market position
in Denpasar.
KEY DEALERS AND TRADE
PRACTICES

• A: Who are the major vendors at the Denpasar market,

and what impact do they have on patron behavior?
What are the standard business procedures in the air
conditioning industry?
• A: Abdul Electronics, Vision Electronics, Northeast
Electronics, Rahman Sales, Spectrum Electronics, and
Indonesia United Appliances (Induapp) are a few of
the top vendors in the Denpasar market. At the point
of sale, dealers have a significant impact on consumer
choices, with some reaching conversion rates of 35–
40% for their favored brand. Based on sales volume
and performance, the manufacturers provide dealers
with a range of discounts and incentives.
THE CHALLENGE AND POSSIBLE SOLUTIONS

Q. What is the main marketing difficulty Fairdeal Appliances is currently facing,

and what viable solutions might be taken into account to address it and increase
sales, market share, and exposure?
A: Fairdeal's main marketing issue is holding onto its market share and sales in
the face of fierce competition, especially from Technica, which is carried by one
of the leading stores, Abdul Electronics.
• Strategic Partnership: To expand its market exposure and reach, Fairdeal
might create strategic alliances with other powerful dealers like Vision
Electronics or Spectrum Electronics.

• Selective Network Expansion: Adding dealers to the network who have

potential but distinct consumer groups may boost sales while lowering the
possibility of backlash.
• Competitive Incentives: By providing dealers who solely stock Fairdeal
items with competitive incentives, you may persuade them to choose Fairdeal
over rival brands.

• Product differentiation could increase Fairdeal's ability to compete in the

market by allowing it to offer clients new and distinctive items that better suit
their evolving requirements and preferences.
Q: HOW CAN FAIRDEAL APPLIANCES
IMPROVE ITS REVENUE, MARKET
SHARE, AND EXPOSURE IN THE
DENPASAR MARKET?
Improving revenue, Market Share, and Exposure

• Focus on Strong Dealerships: Develop connections with important dealers like Abdul and
offer them special offers and marketing assistance to increase sales and keep market share.

• Expand Distribution Network: To improve market exposure and expose Fairdeal items to
a larger client base, think about collaborating with other dealers like Spectrum or Vision.

• Product Differentiation: Invest in research and development to create cutting-edge air

conditioner models that set Fairdeal apart from rivals and draw in more clients.

• Effective Marketing Campaigns: Implement powerful marketing campaigns that

showcase Fairdeal's advantages, dependability, and energy-saving capabilities in order to
boost brand recognition and draw in additional clients.
• Competitive Pricing and Attractive Incentives: Encourage dealers to prioritize Fairdeal
items by providing them with competitive pricing and enticing incentives. This will result
in a positive feedback loop of higher sales.

• customer service: Deliver first-rate after-sale support and services to foster client
adherence and positive word-of-mouth, increasing market exposure.

By putting these strategies into practice, Fairdeal Appliances can work to increase sales, take
market share, and increase brand recognition in the Denpasar market.
ST RE N G T H S A N D
W E A K N ES S ES Company Strengths Weaknesses

Q1: Summarize the
strengths and weaknesses of
each of the Appliance
companies (Fairdeal,
Technica, GOLDY, Smart
Line, Harlem).
Dominant brand in the past with a stable
Fairdeal
workforce
Competitive range of technologically advanced
Technica products, positive and high-tech image, strong
local presence in Bali
Fastest-growing brand, strong brand pull,
GOLDY
extensive distribution presence
Diminished brand power, not perceived as trendy
or high-tech, selective distribution strategy
High employee turnover, aggressive distribution
network expansion, high reliance on discounts
and credit terms
Overemphasis on discounts and high sales
volumes, potential reliance on price competition,
limited customer loyalty

Initial lack of focus on air conditioners, possible

Large Korean appliance retailer, presence in
Smart Line competition with dealers for sales in other product
multiple consumer goods categories
categories

Known for innovative products, wide range of Yet to firmly establish its brand image in
Harlem appliances, revolutionary split air conditioners, Indonesia, direct sales through distributors instead
long product guarantee of dealers
Company Strengths Weaknesses Opportunities Threats Q 1 : P E R F O R M A S W OT
A N A L Y S I S F OR E A CH OF
Air conditioner business is a Focus on air
Appliances
Wide range of
smaller portion of turnover conditioner
Intense competition from THE DEALERS IN THE
products. other dealers.
and profit. sales. N E T W OR K :
• SWOT Analysis summary:
Premium appliance
Northeast Higher prices than Targeting high- Competition from other
retailer with loyal
Electronics competitors. end customers. premium retailers.
clientele. • Although there is a great variety of
appliances available, Denpasar has fierce
competition.
Prime location with Aggressive
Vision Intense competition from •
good visibility and Limited financial clout. selling and Northeast Electronics targets high-end
Electronics larger retailers.
foot traffic. promotions. clients, but it needs to find ways to boost
sales.
Excellent customer Expanding • To compete with bigger businesses, Vision
Rahman Conflict with Abdul or
care and lower Potential rivalry with Abdul. product
Sales other retailers. Electronics must take advantage of its
prices. portfolio.
position and aggressive marketing style.
Long-term support • Rahman Sales efforts should be directed on
Potential to be Risk of losing Fairdeal's
Abdul from Fairdeal and Recently started stocking keeping and growing the clientele.
the largest support or facing
Electronics good customer Technica products.
dealer. competition. •
loyalty. Fairdeal has consistently supported Abdul
Electronics, however it is left to them to
Excellent - Expanding handle any potential issues with Technica.
Competition with larger
Spectrum showrooms and Difficulty converting customer base
dealers and potential • Spectrum Electronics needs to control
Electronics presence in footfalls to sales. through
retaliation. competition and work on turning traffic
multiple markets. marketing.
into sales.
Largest retailer in
Continuously Competition from other • Although Induapp is the biggest retailer, it
Denpasar with a
Induapp Not dealing with Fairdeal. growing large retailers and pressure competes with other major companies and
sound management
market. from cartels. unofficial cartels.
team.
Q1: DEVELOP A MATRIX TO EVALUATE EACH OF
FAIRDEAL’S OPTIONS AGAINST THE FOLLOWING
FACTORS.
It has positive effect on
Alternatives relationships with current
dealers? How?
May negatively affect
Alternative 1: Stop dealing
relationship with Abdul and other be perceived negatively by customers Denpasar; negative impact on
with Abdul
dealers.
Abdul may remain loyal, but
Alternative 2: Dealing with
Spectrum might not be as strong
Abdul and add Spectrum
as Abdul.
Abdul's loyalty might remain, but Vision's inclusion might attract
Alternative 3: Dealing with
Vision's performance is
Abdul and add Vision
uncertain.
Abdul's loyalty might remain,
Alternative 4: Deal with
and Fairdeal gains from both
Abdul, Spectrum & Vision
Spectrum and Vision.
Current relationships with Abdul
Alternative 5: Doing
and other dealers remain
nothing
unchanged.
Will it enhance Fairdeal brand image
to customers ? How?
It may show a strong stance but might Potential loss of sales in
and competitors.
Spectrum's inclusion could bring
more variety to customers, enhancing
Fairdeal's brand image.
customers looking for more options,
benefiting Fairdeal's image.
Fairdeal's brand image could be
significantly enhanced by offering
more choices.
No enhancement; Fairdeal maintains
its current image.
Does it have the least
It will likely benefit Fairdeal
negative impact to Fairdeal’s
more than competitors? How?
current business? Why?
Competitors might gain Abdul's
business and market share.
revenue.
Minimal impact, but
Potential advantage as Fairdeal
Spectrum's addition might
can leverage both Abdul and
create competition with other
Spectrum's customer bases.
dealers.
Minimal impact, but Vision's Potential advantage if Vision
performance needs performs well and attracts new
monitoring. customers.
Minimal impact, but Potential significant advantage
managing three dealers might as Fairdeal can tap into all three
require additional efforts. dealers' customer bases.
Fairdeal may face challenges Competitors might gain Abdul's
in Denpasar market share. business and market share.
SUMMARY OF THE MATRIX
Stop doing business with Abdul: This decision can harm your relationships with Abdul and other dealers and result in a
decline in sales in Denpasar. Although it could appear to be taking a stand, customers and rivals might disagree. It's
possible for rivals to steal Abdul's customers and market share.

Deal with Abdul and add Spectrum: By keeping Abdul and adding Spectrum, Fairdeal may be able to keep Abdul's support
while giving customers more options and improving the perception of its brand. The strength of Spectrum might not be as
strong as Abdul's, and there might be more competition from other vendors.

Deal with Abdul and include Vision: This option keeps Abdul's support and might draw clients looking for more options by
including Vision, improving the reputation of Fairdeal as a brand. Vision's performance must be monitored because it is
unreliable.

Deal with Abdul, Spectrum, and Vision: By merging all three dealers, Fairdeal has access to each consumer base and
strengthens its brand image by offering a greater range. Despite the fact that this approach has many benefits, maintaining
three dealers could involve extra work.

Do nothing: This option keeps the present dealer connections in place without improving the reputation of Fairdeal. In
Denpasar, maintaining market share might be difficult, and rivals might profit from Abdul's enterprise.

Overall, Alternative 4, which deals with Abdul, Spectrum, and Vision, appears to benefit Fairdeal the best. It enables them
to reach out to multiple consumer bases, offers a wider selection of goods to improve the brand's reputation, and keeps
Abdul as a loyal customer. However, successful implementation requires careful management of the three dealers.