Ingersoll-Rand Essay

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Ingersoll-Rand: Managing Multiple Channels, 1985 Ⅰ.Issue background About Ingersoll-Rand IR is the leading firm in the US stationary air compressor industry with a 30% share, marketed a broad range of compressors through a multiplicity of channels. It management had been confronted periodically since 1960 with decision about which air compressor types and size should be marketed through which channels. Thus, in late 1985, with the development of a new centrifugal (Centac-200), a decision had to be made on whether this model would be marketed through the IR direct sales force or through the distributor network. Types of Compressor Labeled By Power Labeled By Technology Small below 25 hp Reciprocating (recip) Medium 25~300 hp Rotary Screw (rotary) Large above 300 hp Centrifugal Sales Index by Channel of Distribution   Direct sale force Air center Independent distributor retailor and catalog houses Recips below 5hp       ● Recips from 5hp to 250hp   ● ●   Recips above 250hp ●       rotaries below 450hp         rotaries above 450hp ●       Centrifugals ●       Profit Distribution   compressor Spare parts and service Direct sales force 20% -- Air center 10-15% 30-35% Independent distributor 10-15% 30-35% Retailor and Catalog houses -- -- About Centac-200 Centac-200, centrifugal compressors, the distributors had no experience with centrifugals, and not sure they can provide the technical support needed to service these units in the field. Loss of margin on spare parts, IR had a plan(1986) that was to authorize a selected list of 19 distributors to carry spare parts for the large compressors These distributors were also given larger recips and

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