2001 in England London, Alec Stewart, VP for Western Europe, Richard Johnson, head of Marketing, and Antonio Sanpietro, the Italian director of sales and marketing were concluding 3 days of meeting on the company’s distribution and growth strategy for Italy.
Their business had to face two major difficulties, growth strategy in Italy and company’s distribution. The first challenge was entering the new market, new products to sales rationalization and branding program. However the most immediate problem was the need to address the conflict that had started to brew between regional master distributors and local dealers. Master distributors controlled over 80 percent of Aitwide’s business in Italy, while specialized dealers accounted for less than seven percent of Airwide’s revenue.
The main issue that Airwide experiencing is company’s internal sales operation. Due to the regional mater distributors and Local Dealers different contribution to the company’s success, Regional master Distributors constantly pressured Airwide to eliminate Local Dealers so that they could serve the local markets. Master distributors claimed that they had the expertise, technical capability, and the logistic infrastructure to maintain high level of customer satisfaction and market penetration in local market. Whereas, dealers especially appreciated by their customer because of their costumer focus on the service, assistance with initializations, and emphasis on sound ecological practices.
Airwide International’s organization structure divided into four division followed by same distribution model, but had ties with different channel partners. The company has major distribution problem, because Master Distributor’s main focus is high-margin split sales whereas Local Dealer’s main goal is increase the named brand awareness. As a result, they both had different strategies and different approaches to increase the sales. Meanwhile, Airwide