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Describes the sequence of events that led to a conflict with a distributor.

Describes the company's response to further problems with a distributor.

Many companies have found that high sales volume does not automatically mean high profits. Among the factors that do affect customer profitability are geography, order size, and extra attention to keep the account. Some customers simply cost more to serve. Others will pay any price to get a certain product. If companies want profits and not just sales, they should start by understanding the differences among their customers. Careful analysis of customers and products will steer sellers into more profitable markets. Sellers should: know the exact amount and origin of costs; understand their profitability dispersion and set prices according to the value customers place on each product; focus strategy according to their knowledge of customers and their own strengths; install information and other systems to support a chosen strategy; and analyze profit dispersion and rethink strategy continually.

Atlas Copco, a Swedish company, holds the highest market share for air compressors worldwide. However, its attempts to enter U.S. markets have been unsuccessful. The case describes a series of strategic distribution maneuvers implemented by the company which enable it to improve market share from about 1% to 10% in ten years. The objective is to gain an understanding of what is involved in building distribution strength.

Concerns negotiations between managers of Becton Dickinson's (BD) VACUTAINER division (which manufactures and sells blood collection products) and managers of a large hospital buying group. Recent changes in the health care industry are the background for the negotiations, which involve the buying group's attempt to negotiate both lower prices and different distribution terms with BD. The case provides background information about important industry changes and the previous history of purchasing and negotiations among BD, the buying group, and important distributors. As well as a pricing-negotiations case, it is a good vehicle for raising issues concerning what factors affect the balance of power in channel relations.

Lotus Development Corp., the number one microsoftware firm has traditionally sold to its customers through a distributor-retail dealer network. In early 1986, the company is considering the option of selling direct to large corporate customers. Students are expected to analyze the pros and cons of such a change in making their decisions.

Joan Macey, Rohm and Haas' market manager for Metalworking Fluid Biocides, found that sales of a new biocide, Kathon MWX, was utterly disappointing. This was all the more puzzling since sales of her other product--Kathon 886 MW, a liquid biocide used only in large-capacity tanks--was well on target and held a steady 30% market share. In May 1984, about five months after the new product was launched, Joan Macey was reviewing her entire marketing strategy with a view to bringing Kathon MWX sales closer to target. Of particular concern to her were the distribution and communication strategies used for the new product.

Spreadsheet supplement for case 587-055.

Population Services International (PSI) was a not-for-profit agency founded to disseminate family planning information and to market birth control products, primarily in less developed countries seeking to curb their population explosions. In 1976, PSI concluded an agreement with the government of Bangladesh to conduct a social marketing program, with the objective of using modern marketing techniques to sell subsidized contraceptives through commercial outlets. Seven years later, three PSI managers were meeting at PSI's Washington, D.C. headquarters to discuss 1984-86 marketing strategy for two products: Raja condoms and Maya birth control pills. Of particular concern was the fact that the marketing approach that had proven extremely successful for Raja was yielding poor sales results for Maya. The PSI managers needed to devise an action plan for improving Maya Sales.