Palladium Door Essay

854 Words4 Pages
Palladium Door, Inc. | | | | | Problems & Issues Situation Analysis In the 150 markets served by Palladium Door, Inc., there are approximately 3,002 independent garage door dealers, with estimated yearly sales of $348.5 million in 2003. Comparing this to Palladium’s estimated 2003 sales of $9.2 million, it’s clear that Palladium Door has a very small share of their market, only 2.64 percent. In fact, their share of market in independent garage dealers only is quite smaller than 2.64 percent. Since 70 percent of sales come from their 50 exclusive dealers, Palladium Door only sells approximately $2.76 million a year in their 300 independent retailers. Their market share in these independent retailers is only .79%. Their average sales in the exclusive dealers of Palladium Doors are over 14 times that of their independent retailers. See Appendix 1. In order to make their 36 percent sales increase from 2003 to 2004, Palladium will need to earn an extra $3.3 million in sales, making their sales goal $12.5 million for 2004. Palladium will need to add new dealers, redesign their current marketing channel, or drop some of their less profitable dealers to help attain this goal. Currently, Palladium has an average of three independent retailers and one exclusive retailer per market they serve. See Appendix 2. Analysis of Major Alternatives The company’s first decision is to determine whether adding more independent retailers will be able to make up the extra 36 percent of sales forecasted. The advantages and disadvantages of adding more independent retailers can be defined as follows: * Advantages * The company can achieve a more intensive distribution by adding more retailers, which would help increase market coverage and sales. * By being offered in additional locations, brand awareness would increase, thus increasing

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