St Fabian Supply Co.
San Fabian Supply Co. Case Analysis Online and Offline Sales Models
Prof. Dr. Ove Jensen
Ralf Dreischärf
Chair of Sales Management and Business-to-Business Marketing Submission Date: March 4th, 2012
Louisa Schindler
Question 1 Reciprocal Actions
San Fabian for MacDowell Reputation → spill over on MacDowell’s product line National coverage, growth → fast penetration of local market No competing line in portfolio → no overlapping offer Reliability regarding payment → contributes to MacDowell’s liquidity Reduced uncertainty due to indefinite contract duration
MacDowell for San Fabian Supplementation of portfolio (roof top line) → fast acceleration of product offer, no need for costly and risky development on its own Exclusive basis → reduced manufacturer power, reduced competition in market → monopolistic for this certain line
Question 2 Change and Reasons for Change
- Downstream integration of distributor function by MacDowell (Participation in large commercial and governmental projects) - San Fabian: carry MacDowell as dealer - Install direct relationships to customers
Vertical compression (ct. Anderson, Day, Rangan 1997) IT, direct marketing, database marketing enables -> direct manufacturer – customer contact without intermediary Number of channel layers, thus number of margins, can be reduced: Master Distributors’ offer, like Inventory, credit functions Of info and logistics technology
Decreases in importance, through e.g. technology
→ →
Realization of higher revenues With regard to end customer: control, loyalty, observation
-
Streamline operations
-
Compensate inefficient under-utilization 45 % Increase number of dealers (strategy of CocaCola, P&G) Abandon price discrimination → 10 % margin for all dealer alike
Question 3 San Fabian’s Alternatives and Economic Impact
San Fabian’s position – factors providing negotiation power
-
Abandonment of MacDowell product line, o diversification of portfolio o
Prof. Dr. Ove Jensen
Ralf Dreischärf
Chair of Sales Management and Business-to-Business Marketing Submission Date: March 4th, 2012
Louisa Schindler
Question 1 Reciprocal Actions
San Fabian for MacDowell Reputation → spill over on MacDowell’s product line National coverage, growth → fast penetration of local market No competing line in portfolio → no overlapping offer Reliability regarding payment → contributes to MacDowell’s liquidity Reduced uncertainty due to indefinite contract duration
MacDowell for San Fabian Supplementation of portfolio (roof top line) → fast acceleration of product offer, no need for costly and risky development on its own Exclusive basis → reduced manufacturer power, reduced competition in market → monopolistic for this certain line
Question 2 Change and Reasons for Change
- Downstream integration of distributor function by MacDowell (Participation in large commercial and governmental projects) - San Fabian: carry MacDowell as dealer - Install direct relationships to customers
Vertical compression (ct. Anderson, Day, Rangan 1997) IT, direct marketing, database marketing enables -> direct manufacturer – customer contact without intermediary Number of channel layers, thus number of margins, can be reduced: Master Distributors’ offer, like Inventory, credit functions Of info and logistics technology
Decreases in importance, through e.g. technology
→ →
Realization of higher revenues With regard to end customer: control, loyalty, observation
-
Streamline operations
-
Compensate inefficient under-utilization 45 % Increase number of dealers (strategy of CocaCola, P&G) Abandon price discrimination → 10 % margin for all dealer alike
Question 3 San Fabian’s Alternatives and Economic Impact
San Fabian’s position – factors providing negotiation power
-
Abandonment of MacDowell product line, o diversification of portfolio o