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BY Alok Jayant Kamlesh Paromita

Case Facts
Well known manufacturer of orthopaedic equipments Sole manufacturing setup at Vizag

Presence across the country


Marketing based out of Vishakapatnam Negligible promotion activity distributes products

directly to retailers.

Problems at Maxwell Corporation


Current distribution system is ineffective Limited inventories with retailers

Major issue with dead stocks


Stock outs creating major customer dissatisfaction Unable to cater to emergency order Inventory crisis due to product variety

Desired Objectives
Revamp distribution system/network

Overhaul the marketing & sales paradigm


Increase brand equity Sustainable profit maximization

Which option should the company consider and why?

Possible Options
Setting up of hub and spoke type of distribution

network Setting up a central warehouse anywhere in Central India and feeding retail outlets from this location. Changing the distribution channel from the present numerous retail outlet systems to a more efficient system Outsourcing the entire distribution and logistics to a third party

Recommended Option
Hub and Spoke Model
Setting up of hub and spoke type of distribution

network wherein a stock point or mother warehouse is setup in each zone which caters to the needs of the retailers: ADVANTAGES: Efficient inventory management Timely delivery of products Effective sales control Proper understanding of the customer need

What should be the distribution channel for Maxwell and outline the advantages and disadvantages for having such a type of set up.
Distribution channel will remain the same i.e. Hub

and Spoke model having various advantages as follows Better alignment with Target Segments like Hospitals Bulk purchasers like Defence sector procurement, major healthcare / pharmacy chains Zonal control over sales

Much reduced inventory carrying cost By centralizing control, the company can afford a smaller staff which concentrates on management from a central location Faster response to emergency requirements / orders

What type of marketing and sales set up would you recommend for Maxwell Corporation and why

Marketing strategy
Stress on the 04th p of marketing mix: promotion

Through advertisements on Health magazines Billboards near hospitals, pharmacies & clinics On ambulances

Tie ups with major hospital & pharmacy chains


Endorsements through standalone doctors as well Tie up with health insurance companies

SALES STARTEGY

Mix use of both Pull & Push strategies Diversify & expand sales offices across the country Create a sales helpline (24X7 phone support) Use state of the art ERP applications