Footwear (India) Ltd.*
Reviewing Sales and Distribution Management for Performance Improvement
I. Time context
Your primary task is to stop the downward movement of the company’s market share in the footware market in India,” said Michael S Williams, chief executive officer, Footwear (India) Ltd. To Rakesh Tandon, newly appointed national sales manager.” Our market share was 60 percent in early 1990s and it has come down to 40 percent in the year 2005 – 2006. To give customers more choices and to improve its top line, the company started selling footwears of other brands like Nike, Lotto, Reebok, Lee Cooper. This strategy was implemented from the year 2003 – 04.
Footwear (India) Ltd. was a leader in footwear industry in India with five factories and two tanneries located in eastern, northern, and southern parts of India. The unorganised, small – scale footwear makers had a market share of 20 percent. The foreign brands like Nike, Reebok, and Adidas had captured a market share of 30 percent in a short span of time. The balance 50 percent market share was shared between the three players in the organized sector – Footwear India (40 percent), Liberty (6 percent), and Paragon (4 percent). The objective of the distribution channel was to make the company products available to consumers in every town across India. For achieving this objective, the company had adopted a strategy of vertical marketing system (VMS). The company had two types of VMS: corporate vertical marketing system with both production and distribution under the company’s ownership, and contractual vertical marketing system by appointing retailers as the company’s franchisees.
III. Statement of the Problem
Rakesh Tandon looked at the annual financial results of the company. He was not surprised that the company was making losses for the past two years. Rakesh wondered whether he should focus his analysis and suggestions on the improvements in top – line, bottom...
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