Take Home Exam - Marketing Strategy
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ABCSLIDINGGLASSDOOR.docxABC SLIDING GLASS DOOR
ABC Glass is a small company which specializes in the manufacture of sliding glass doors. These doors are predominantly installed as a replacement item in existing residential item in existing residential housing although ABC does participate in new residential construction.
Selected Industry Data
Value of US door market (at manufacturer Prices) = $90B
Value of US sliding door market (5% of the above) = $4.5B
Value of the sliding door market in ABC’s served market = $348.5M
Total # of dealers in ABC’s served market = 3002
Market research indicates that less than 10% of prospective glass door buyers (i.e. homeowners) could name any brand of sliding glass doors. The vast majority of glass door buyers had their new doors installed by the dealer. Most buyers obtained at least 2 bids before installing sliding glass doors. The dealer choice dominated brand selection.
The Company
The most recent Income Statement for ABC Glass doors is given below:
Net Sales $9,200,000
CGS $6,900,000
Gross profit $2,300,000
SGA (fixed) expenses $1,840,000
Net Profit $ 460,000
DISTRIBUTION:
MSA’s in the ABC served market = 150
# of exclusive markets (dealers) = 50 (50)
Sales in Exclusive Markets = 70% of total = $6.44M
# of non-exclusive markets (dealers) = 100 (300)
Sales in non-Exclusive Markets = 30% of total = $2.76M
The typical breakdown of sliding glass door in-store market shares in non-exclusive dealers is:
60% for the leading brand;
30% for the second brand;
10% for the third brand.
As noted above, ABC distributes its doors to 150 locations (MSA’s) in the western United States. It has 2 distinct patterns that have evolved to represent a distribution strategy.
Pattern#1: “reciprocal exclusivity”. This means that ABC sells through a single dealer in a MSA, and this dealer in turn sells only ABC brand sliding glass doors. ABC has 50 such markets.
Pattern#2: “mutual non-exclusivity”. In this circumstance ABC has 3 independent dealers in each market. Each dealer carries 3 brands of sliding doors. ABC has 100 of such markets.
Note: the above are somewhat simplified but are sufficient for our purpose.
SALES OBJECTIVE
ABC SLIDING GLASS DOOR
ABC Glass is a small company
which
specializes
in the manufacture of
sliding glass doors.
These doors are predominantly installed as a
replacement item in existing residential item in existing residential housing
although ABC does participate
in new residential construction.
Selected Industry Da
ta
Value of US
door market
(
at manuf
acturer
P
rices)
=
$90B
Value of US sliding door market (5% of the a
bove)
=
$4.5B
V
alue of the sliding door market in ABC
’
s
served
market
=
$348.5M
T
otal
# o
f dealers in
ABC
’
s
served market = 3002
Market research indicates tha
t less than 10% of prospective glass door
buyers (i.e. homeowners) could name any brand of sliding glass doors. The
vast majority of glass door buyers had their new doors installed by the
dealer.
M
ost
buyers obtained at least 2 bids before installing slid
ing glass
doors. The dealer choice dominated brand selection.
The Company
The most recent Income Statement
for ABC Glass doors is given below:
N
et
Sales
$9,200,000
CGS
$6,9
00,000
Gross profit
$2,300,000
SGA (fixed)
expenses
$1,
840,000
Net Profit
$
460,000
DISTRIB
UTION:
MSA
’
s in
the ABC served ma
rket
=
150
ABC SLIDING GLASS DOOR
ABC Glass is a small company which specializes in the manufacture of
sliding glass doors. These doors are predominantly installed as a
replacement item in existing residential item in existing residential housing
although ABC does participate in new residential construction.
Selected Industry Data
Value of US door market (at manufacturer Prices) = $90B
Value of US sliding door market (5% of the above) = $4.5B
Value of the sliding door market in ABC’s served market = $348.5M
Total # of dealers in ABC’s served market = 3002
Market research indicates that less than 10% of prospective glass door
buyers (i.e. homeowners) could name any brand of sliding glass doors. The
vast majority of glass door buyers had their new doors installed by the
dealer. Most buyers obtained at least 2 bids before installing sliding glass
doors. The dealer choice dominated brand selection.
The Company
The most recent Income Statement for ABC Glass doors is given below:
Net Sales $9,200,000
CGS $6,900,000
Gross profit $2,300,000
SGA (fixed) expenses $1,840,000
Net Profit $ 460,000
DISTRIBUTION:
MSA’s in the ABC served market = 150
