Ingersoll Rand (a) Decision Sheet

Ingersoll-Rand (A) Problem Statement To decide the distribution channel to use for the Centac 200, the new 200 hp outward-developing air compressor. Whether the distribution be handled by the direct gross revenue team or use the distributor/air centre channel. Also, the case highlights merits and demerits of each of the im fail in detail. Decision Clabough should opt for the direct gross revenue team channel. Rationale for Decision Experience Historically, the centrifugal air compressors consecrate been handled by the direct sales team only owing to their large hp size and technical expertise required. They have the required experience to sell centrifugals. * Competition Also, the nearest electric potential competition to Centac 200 is from the Z series rotary compressor from Atlas-Copcos which is being sold by distributors. So by opting to sell through the direct sales team, IR can avoid head-on competition and besides completely differentiate a rotary from a centrifugal in th e market. Expertise Considering that it is the get-go medium centrifugal, the direct sales team is better positioned to supply the technical expertise. They have well established service capabilities. If IR chooses the distributor channel, it will have to incur additional costs(and time) on intense distributor training. * Attractiveness May not be attractive to distributors owing to the very low spare part requirements in centrifugals. Apart from that, IR would not want the attention of distributors to be shifted from the smaller compressors, which form a big share of its total revenues. Recommendation In order to combat the risk of sales reps ignoring the Centac 200, IR may choose to offer higher sales commission to the direct sales team on Centac 200 sales. Also, the Full Partner Program can be extended to centrifugals too where the distributors earn commission on references made to the sale team, thereby also involving the distributors in the process.