Page 188 - DMGT547_INTERNATIONAL_MARKETING

Unit 10: International Logistics and Distribution Channels

Notes

Case Study The Case of Centralised Sales

ess than halfway through his presentation, Ashish Mullick knew that the man in
the fourth row desperately wanted to speak to him. Not that there was anything in
Lthe demeanour of elegantly-balding manager in a well-cut grey suit that suggested
it, but long years on the circuit had helped Mullick develop a sixth sense about people.
That man seemed to him like a CEO waiting to unburden himself to the nearest management
consultant.

He was right. The subject of his ruminations was, in fact, a CEO. His name was Vinod
Saraf, and he was attending the Hyderabad Management Association’s daylong workshop
on strategic marketing with the specific aim of seeking the advice of Mullick, a professor
of marketing at the JL Kellogg School of Business, and a consultant to several Fortune
500 companies.
But Saraf didn’t get to meet Mullick till lunch; a waiting television crew soon whisked the
marketing guru away for the customary sound-bytes after his presentation ended. His
ulcers exacerbated by his organisational angst, Saraf was moodily pottering around the
salad bar, when he heard a voice behind him. “I saw you trying to speak to me before I had
to leave. I’m Ashish Mullick, but I guess you already know that…”
In a quite corner, away from the bustle of the pushy B-school types busy fattening their
Rolodexes, Saraf unburdened himself to Mullick.
“I head Pluto Engineering…”
“I’ve heard the name. You make machine-tools, don’t you?” interrupted Mullick.

“That’s right. We’ve been in the light engineering business for the last 53 years. We are a
widely held company, run by professional managers. Like most companies of our
generation, we have a functional organisational structure. A general manager heads each
of the four functions — manufacturing, marketing and sales, finance, and human resources
development. We have regional sales managers looking after the four zones, reporting to
Raj Chatterjee, my general Manager (sales & marketing), who is based in Mumbai. Over
the years, Raj and his team of 200 salespeople have built a nationwide network of
1,600 dealers. None of them is exclusive to Pluto, but that is characteristic of the machine-
tools market…”
“And this arrangement works for you?” questioned Mullick.
“It does,” answered Saraf. “In the 1990s, when the machine-tools industry was sputtering
along at 8 per cent per annum, we managed to grow by 11 per cent. Each of our 35 offerings
has a market share of 12–15 per cent in its category in a fragmented market, which is
dominated by the unorganised sector.”

Mullick knew a happy ending when he heard one. The CEO of any company that had
managed to outgrow the market in an industry whose fortunes were linked to the economy
should, he reckoned, be giving tips to consultants – not seeking their advice.
“I don’t see how I can help you, Mr Saraf,” he said. “You seem to be going great guns.”
“I know that, but we want to do better. Our industry is set to grow by 10 per cent per
annum over the next 5 years, but we should grow faster. Last month, we decided to
restructure our company into three independent profit centres — Power Tools, Industrial
Contd...

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