GINO SA : Distribution Channel Management

B2B Marketing
PROBLEM STATEMENT

Zhou has to decide whether Gino needs Feimas OEM business based in the following
aspects:
Response from distributors
Competition
Ginos management
Feimas response
Solutions to face
GINO BURNER CO.

Founded in 1931, manufacturer of burners, headquartered in Paris, France

Three competitive edges:
In-house production capability
Well-established channel network
International exposure

Largest burner manufacturers and exporters in the world

 GINO - FUNTIONING
Segmentation:
Domestic boilers
Commercial boilers
Industrial boilers
Distributor Functions:
Credit
Stock
Sales & Service
Pricing:
Transfer price
Base price
Public price
Contract price
SWOT ANALYSIS

Strengths Weaknesses Opportunities Threats

Market leader Poor market China Lose of

Financially penetration emerging distributors
stable No direct market Presence of
International sales force Industrial large local
presence Total segment distributors
In-house dependence expected to with political
production on grow by 20% connections
distributors annually
 CURRENT SCENARIO
Market is segmented into 3 parts: Domestic, commercial and industrial
Significant penetration in domestic range market and also impressive in
commercial range but poor in industrial markets
Feima boilers have approached for getting OEM status
Feima is a customer of Jinghua hence opposing the deal aggressively
Companys global distributor meeting with the director of commercial
department of Gino burner
GOALS

Resolve conflict with distribution channel

Decide whether to give OEM status to Feima
Increase annual combined sales
Increase annual sales of industrial burners
Develop OEM accounts
Improve spare and supply
Build brand image
DECISION 1 DECLINE FEIMAS OFFER

Advantages:
Maintain good relationship with distributor
Retain competitive advantage
Disadvantages:
Forgone revenue from potential sales
Opportunity cost in lucrative industrial segment
Increase in dependence distributor power
DECISION 2 ACCEPT FEIMAS OFFER

Advantages:
In-line with management strategy
Penetrate into industrial market
Resolve warehouse issues
Increase in overall sales and profitability
Disadvantages:
Channel conflict difficult to convince distributors
DECISION 3 OFFER DISCOUNT TO FEIMA THROUGH
JINGHUA

Advantages:
Satisfy both parties
Can work further on manufacturer-distributor relations
Disadvantages:
Not aligned to Ginos strategy
Other OEMs distributors fight for margins
Distributor power increases further
Overall margin of industry will be impacted
FINAL DECISION

Decision 2 is recommended
Completely aligned with long term business strategy and achieves target of 200 industrial
burners
Jinghua can compensate 10% discount by its additional sales
Warehouse will have industrial burner inventory
KEY TAKEAWAYS

Decision making involves considering multiple factors, multiple parties and multiple
aspects
In B2B, impact of decision making is huge
Intensive analysis of every side is required before a choice is made in B2B
Good and wise decision making should result in increase sales & profitability along with
alignment of key management principles
THANK YOU