Palladium Doors, Inc Essay Example

the next years would be not easy and would require increasing in sales force that serviced the non exclusive dealers.

The disadvantages are:

• This plan had more merit in the long run of three to four years and they need this plan to be applied on this current year as increasing in its sales goal.
• Their idea had merit as a long term distribution policy.
• The direct cost of adding a sales representative was $80,000 per year.

The 2nd viewpoint focuses on creating a formal exclusive franchise program. Over the past year, 27 nonexclusive dealers have expressed interest in this opportunity. Each of these dealers represents a different market, all of which are considered to have great potential and are potential candidates for the new advertising and promotion program.

• Pros: The company would drop present dealers in their markets and not add new dealers.
• The program could be implemented during the traditionally slow quarter of the upcoming year. (quick implementation)
• The franchise program in these 27 markets could be served by the advertising and promotion program.
• The other 50 markets served by exclusive dealers wouldn’t be affected, since the advertising and promotion program was already budgeted for these dealers.

The remaining 73 markets would also be unaffected except for increased advertising in 23 high potential markets.

Cons:

• Dropping nonexclusive and focusing more on exclusive dealers, as they produced 70% of company sales.
• Losing a part of market.
• 3rd viewpoint It’s about reducing the number of dealerships without granting any formal exclusive franchises.

The advantages are:

• 70% of company sales are produced by exclusive dealers without any franchises program.
• Committing to any franchises program could limit the company flexibility in the future.
• Improvement in sales force effort and possibly increase sales might result if more time is given to fewer dealers.
• 50 exclusive dealers would benefit from the additional marketing spending.

Negative aspects:

• I don’t see any cons as exclusive that are highly profitable to company is still the same
• But losing benefit from franchise program.
• 4th viewpoint Voiced by several executives was not to change either the distribution strategy or the dealers. Rather, they believe that the company should do a better job with the current distribution policy and network.

The benefits are outlined below:

• By additional investment in advertising and promotions, the company may focus on awareness campaigns about their brand, products and their competitive advantages over competitors.

• Not having a large number of nonexclusive dealers, not expanding like

what franchises program will do.

The second viewpoint is the recommended option as it will result in high publicity for the company's products through advertising and promotions. It will not affect the existing exclusive dealers, who are crucial to the company as they contribute 70% of the company's sales goal. Additionally, it will enable the company to sell effectively in new markets and expand its customer base. Choosing a franchise provides the advantage of offering an established product or service with existing brand-name recognition.

Being a franchisee offers the benefit of acquiring an already established customer base, a process that would typically take years to accomplish. The company's approach includes ending contracts with current dealers in each market and avoiding the recruitment of new ones. Furthermore, executives highlighted that the current agreements with independent dealers permit either party to terminate the contract by giving a 90-day notice period, without needing to provide a specific reason.

Thus, the franchise program could potentially be implemented in the slow first quarter of the upcoming year. If approved, company executives believed that the advertising and promotion program could serve the franchise program in these 27 markets. The other 50 markets, which are served by exclusive dealers, would not be impacted as the budget for advertising and promotions is already allocated for these dealers. The remaining 73 markets would also remain unaffected, except for the fact that there would be increased advertising in 23 high potential markets.