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Eicher Motors: Channel

Design
Submitted By:
Suyash Nigotia 13P116
Ashir Madaan 13P131
Kaushik Nihalani 13P148
Mayank Rathore 13P150
Nikhil Jain 13P152

Indian Automobile Industry
Commercial Vehicle Industry
Heavy (HCVs)
Payload = 10
tonnes
Tata
Motors
Market
Share =
75%
Ashok
Leyland
Market
Share =
25%
Light(LCVs)
Payload = 1.5 - 3.5 tonnes
DCM
Toyota
Allwyn
Nissan
Swaraj
Mazda
Eicher
Mitsubishi
Bajaj
Tempo
Mahindra
and
Mahindra
Introduction
About Eicher Mitsubishi
4
th
of the new players to enter the LCV market with a payload of 3.5 tonnes
Shortage of funds led to delay in setting up the manufacturing plant; hence the late
entry
Lost the first mover advantage to DCM Toyota
Delay helped Eicher to introduce an updated version of Mitsubishi LCV having better
specifications than vehicles launched by competitors

Difficult to rope in good dealership parties willing to make large financial
investments as the sales of DCM Toyota, Allwyn Nissan and Swaraj Mazda
were much below the expected volumes

Challenge for the industry: To estimate the size for the new LCV market

Challenge for Eicher Mitsubishi: Selection and implementation of a suitable
distribution channel

Parameters for Distribution Design
Distribution
Tasks
Deciding upon suitable geographies
which could be targeted
Deciding promotions in the target
market
After sales service/ repair provided by
dealer
Dealer locations and years of service
Determine competitive products sold by
the dealers
Deciding upon incentives for the
dealers
Inventory capacities of dealers and
access to warehouses in nearby locations
Developing possible
alternative channel
structures
Decide upon
the number of
levels in the
channel
Decide upon
whether to go
for intensive /
selective
distribution
levels in
different target
markets
Proposed Channel Structure
Eicher
Dealer
Sales
Agent
Retail
Agents*
Industrial
Users
Industrial
Distributor
Industrial
Users
Agents*
Industrial
distributor
Industrial
Users
* Independent selling arm which sells directly or indirectly to
Industrial users
Attracting Suitable Channel
Members
Provide loans to build initial infrastructure

Provide sales force training

Providing advertising and support for the
vehicle

Provide better margins to the dealers than
competitors
Major evaluation parameters for
channel member selection
Reputation among customers
Sales force strength
Market segment being covered
Financial capacity
Size of operations
Margin of operations of dealer

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