Pyramid Door Formal Case Final Draft Essay

As a privately owned regional manufacturer of residential and commercial steel garage doors, gain Doors has managed to conjure up a distribution network in the Western and Southwestern United States of 350 distributors broken up into three hundred non- sole(a) dealers and 50 exclusive dealers. This schema has allowed Pyramid Door to capture a commercialize share of 2.6% with entirety sales in 2005 of $9.2 meg. While executives agree that a growth in sales of 36% to $12.5 million is necessary to achieve critical mass to preserve its buying position with suppliers, opinions are split on the correct method to achieve this goal. An increase in the marketing budget of 20% over 2005s budget has already been approved, but four alternative scenarios about how to handle the distributor base put up been brought up by various executives.While some executives favored dramatically increasing the overall add together of dealers, others suggested the opposite, cutting the overall number of non-exclusive, poorer performing dealers. Still other executives suggested a more targeted approach, leaning on more exclusive dealers at the expense of fewer non-exclusive dealers, while a final group suggested maintaining the precondition quo of dealers and letting the new marketing strategy carry them to the required number of sales. To determine the best strategy moving forward, we have put together a proposal outlining the pros and cons of each strategy, backed up with soft and quantitative data to back up our conclusions.Alternative 1 Increase number of independent dealers in markets currently served by the company by 100 ProsIncreases effective market coverage allowing customers to find Pyramid Doors at more dealers. Diversifies the distribution network so that the company is less dependent on exclusive dealers. Sets Pyramid Door up for future distribution expansion.Will significantly increase sales.Allow for market specific advertising to benefit more locationsConsAdding 100 distributors will be very difficult in one year, given it has taken 10 years to add the most recent 50 distributors. Has the potency to cause channel conflict with current distributors by increasing the number of dealers they have to directly grapple with within their markets. Distinct possibility of product cannibalization by saturating the market. Even with the increase in Net Sales, this picture would require an increase in Sales Representatives, decreasing our profit margin. Increased transportation costs to diffuse to more low-volume locations.