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A Rama industry was established to manufacturer fashion shoes. Since they were new in the market, they decided to sell their product through wholesalers. They appointed one wholesaler in each district and promised them verbally that they will remain the exclusive wholesalers in the area. After three years during one of the review meetings the sales manager informed that if company sells directly to retailers, they will be able to offer competitive prices, which will increase sales volume and eventually profits. He was directly supporting elimination of wholesalers.a. Should the company follow sales manager’s suggestion and start direct business with retailers?b. What values would the company ignore if they by – pass wholesalers to earn extra profit? |
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Answer» a. No, I don’t think that company should follow sales manager’s suggestion and start direct business with retailers, because it is the wholesalers who have put in all the effort to establish sales network and prepared a market for new product. The company has though verbally promised wholesalers the exclusivity to sell, so it may not send good signals about the company in the market. The wholesalers may sell the competitors’ product more aggressively, which may affect the company’s sales adversely. b. Values ignored are: 1. Mutual trust 2. Integrity 3. Importance to relationships |
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