Identifying the problem:
* Palladium Door, Inc wants to increase its sales goal to $12.5 million for 2004 which represent a 36% increases in sales over projected 2003 year-end sales.
* During the planning process, a number of fellow executives had voiced concern over whether distribution approach used by Palladium Door was appropriate for the expended sales goal. Richard Hawley is the director of sales and marketing felt that their concerns had merit and should be given careful consideration. Though he had considerable latitude in devising the distribution strategy, the final choice would have o be consistent with achieving the 2004 sales goal. His approach and action plan had to be prepared in a relatively short time to permit implementation in January 2004.
* The company projected year-end company sales were $9.2 million in 2003 with a net income $460,000.
* The company distributes its garage doors through 300 independent dealers that typically offer three different garage door manufacturer brands and 50 exclusive dealers that stock and sell only Palladium doors (exclusive dealer’s service competing brands of garage doors in their market area.)
* A distribution facility operates at the company manufacturing plant. The company employs 10 technical sales representatives. 8 representatives call on independent (non exclusive) dealers twice a month on average. Two representatives call on the 50 exclusive dealers.
Pros and cons for different viewpoint had been voiced by Hawly’s fellow executives:
* 1st viewpoint
It is to increase the number of dealers in the markets currently served by the company to achieve the sales goal, that to increase sales by 2.4 percent so it would be necessary to add at least another 100 nonexclusive dealers.
* Adding another 100 dealers in present markets over the next years would be not easy and would require increasing in sales force that serviced the non exclusive dealers. *...
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