Palladium Garage doors Case Study
Palladium Door, Inc. wants to increase 2003 sales by 36% in 2004. There is concern whether the current distribution strategy used by Palladium would be adequate to achieve the goal. Although Palladium's growth has been steady over the past 10 years the market share was only at 2.6%. The firm's senior executives were firmly believed they justified this lofty sales goal because they had to attain a larger sales volume to preserve its buying position with suppliers. Palladium, during its growth, has exceeded the industry growth. There are three new plans on how to reach the goal. There are four different viewpoints on the marketing decision. Statements of Alternatives:
The first viewpoint is Increasing the number of dealers in the markets currently served by the company
The second is developing a formal exclusive franchise program, since 27 opportunities of such were able last year.
The third viewpoint called for a general reduction in the number of dealerships without granting any formal exclusive franchises.
The fourth and final viewpoint is to not change anything and focus on improving the current distribution policy and network.
Analysis of Alternatives:
Increasing the number of dealers in the markets currently served by the company
The executives believed it would be necessary to add another 100 dealers in order to meet the increase in sales of at least 2.4%, according to industry trends. However, Hawly believed that adding another 100 dealers over the next year would be challenging and furthermore would affect the sales force for the serviced nonexclusive deals already in place, which would inevitably have a need to increase that sales force. It seemed that this alternative would provide a potential gain in the long run, but would incur immediate increase in costs. The cost of adding a sales rep was $80,000 per year. Adding this sales rep would...