Case Analysis Palladium Door, Inc. Palladium Door, Inc. wants to increase 2003 sales by 36% in 2004. There is concern whether the current distribution strategy used by Palladium would be adequate to achieve the goal.

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Case Analysis – Palladium Door, Inc.

Wednesday, April 4, 2012

MKTG 6822- Anselmi

Written By:

Brent Fountain

Mark Spinney

Joseph Davis

Table of Contents

Problem Statement

Palladium Door, Inc. wants to increase 2003 sales by 36% in 2004.  There is concern whether the current distribution strategy used by Palladium would be adequate to achieve the goal.  The company will examine four distribution alternatives including, increasing the number of dealers, reducing the number of dealers, increasing the number of exclusive dealers, and maintaining the current distribution approach.  After examining these four alternatives, it must be decided which distribution strategy will maximize sales and if any will increase sales by at least 36%.

External Analysis

Market analysis

Palladium Doors is a leading manufacturer and distributor of garage doors and parts.  The market consists of a number of national, regional and local brands.  Palladium Doors currently operates at a regional level with two distribution centers targeting the Rocky Mountain States and northern Texas.  

The market of door manufacturing is two billion across the United States with a 90% focus on steel doors manufacturing with projected growth is at 2.4% annually.  The sales target for Palladiums next year is 12.5 million which represents 36% increase from the previous year.  With these aggressive targets, Palladium must increase focus on multiple high risk but targeted marketing projects.

Palladium is in the manufacturing and distribution business not retail.  Palladium is in the middle of the supply chain for doors.  It relies heavily on its network of independent dealers to funnel its products into the market to the end user which utilize the product.  The supply chain starts with material manufacturing of equipment, and then flows into product manufacturing, distribution, retail sale then installation and maintenance.  

Palladium has a number of approach alternatives it could take into reaching its aggressive sales growth goals.  Regionally, Palladium could expand its footprint into surrounding markets maintaining its market share percentage and focusing on expansion into new markets.  This approach would require adding additional independent dealers in these new markets.  

Alternatively, Palladium could approach either vertical expansion moving up the supply chain to material manufacturing or down into retail and even retail sales and service of its doors.  Horizontal expansion also offers another means to increase sales objectives by expanding its offerings into markets such as residential doors and customized and specialty doors.  

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Customer analysis

Although palladiums end users are receiving the doors and associated parts, palladium relies on independent dealers for installation and service to the end users.  Of its independent dealers, some of the dealers have exclusivity, only offering palladium door products to its customers while other dealers offer palladium door products in addition to other competitor’s products allowing customers to easily compare product lines.  The customers, dealers, look for a reliable product which meets the end-users motivators including price, reliability, and innovativeness increasing their own sales goals.  Since the dealers rely on repeat business including repair, the products Palladium sells ...

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