Kelsey Manufacturing

Com.
Case Analysis

Section C - Group 5
Shashank Shukla, 13P166

Shivam Atri,
13P167

Abhinay Abhilash, 13P183

Akshay Bhandari, 13P190

Mayank Taparia, 13P238

Case Facts

Kelsey is one of the largest manufacturers of repair material for tires and
tubes.

Over the years sales of its numerous product lines have been stagnant.

Management wants to reverse the trend by pushing the middlemen

The length of the channel was one of the reasons why the company was not
able to have proper contact with end customers

However, channel members no longer seem to be under Kelseys control.

Distribution Structure
Kelsey

Manufactu
rers
Represent
ative

WareHous
e
Distributor
s

Jobber

Service
Stations

End
Customer

Possible Issues with the Current

Channel Structure
The length of the channel was long for the company to direct the information about its
product to end customers
The company had less control at the initial channel level
Lengthy channel adds to promotion burden

Other Possible Issues

Lack of Technological
competitiveness

Kelsey doesn't
seem to change
with times at
least in
technological
competitiveness.

Addition of new
products without
consulting channel
members
Product line
augmentation
might not go
down well with
downstream
channel members

Increased items in
the product line for
channel members

Old channel
partners are no
longer loyal to
Kelsey

Issues Continued..
Some products
might not be
profitable ( less
margin)
The product line
has become very
large and channel
members are not
able to focus on
specific products

The product
might have been
higher priced
The sales have
been stagnant and
still the company
has been enjoying
a gross margin of
30-40% for years

Possible Alternative
Kelsey

Wareho
use
Distribu
tors

Jobber

Service
Stations

End
Custom
ers

The company can replace manufacturers representatives with its own salesforce
This will provide company more control at the initial level of the channel
The sales force can monitor sales and provide adequate knowledge about the
products to the other
channel members

 This will result in an increased loyalty of channel members. Also the

company should try to provide adequate advance notice of product line
change.

Company should seek channel

members opinion while expanding
the product line
Rationalize margins for channel
partners who are unhappy

The company has been enjoying a gross margin of (30-40%) over the
years. Company can rationalize margins so that channel members
become loyal and which will indirectly result in higher sales

Select Exclusive Distributors

Kelsey has many items in its product line. They can supply a complete
assortment to its channel members which are willing to become
exculsive

This will enable company in delivering product knowledge to end

customers via service stations

This will reduce the burden on channel members of carrying products

with low margins and they will be able to focus on specific products. Too
much products can sometimes confuse customers

Occasionally promote product line

directly to large Service Stations
The company should remove
unnecessary products from
product line

Recommendations

Thank You