KINETIC ENGINEERING COMPANY

Sales & Distribution Management

Group – 7
Sonal Kumari (69)
Parul Israni (41)
Rupa Singh (92)
Jasmeet Kaur (22)
Priya Kumari (123)
Rohan Vashista (106)
Nishu Gupta (137)
 ABOUT THE CASE
 KEC (Kinetic Engineering Company) was established in
India by Mr. Krishna ( a technocrat) about 25 years
back.

 A US based company EPC (Engineering Project

Consultants) was searching for a good project company
in India.

 EPC finally gave the project to LT (Latest Technologies)

 Star was the dealer of KEC.

 Star get the requirements of LT for project.

 Contract between the Star and the KEC.

 Successful completion of project by KEC with LT.

 KEC looking for new orders on spares.

 After 7 months LT again had requirement of the
spares.

 Star again gets the order for KEC with certain

conditions.

 KEC CEO Mr. Krishna was not agreeing on the

conditions made by Star (Dealer).

 Conflict arises between Star and KEC.

 ABOUT THE ISSUE/ PROBLEM
Primary Issue:
 Conflict between the dealer (Star) & KEC.

 KEC agrees on paying 8% commission to STAR instead of

paying 5% commission.

 But KEC was not agreed to pay the value benefit from price
negotiation to STAR.

 Instead of paying the full excess amount, KEC proposed 50%

of excess realization in price of $10,000.
Secondary Issue:
 The dealer STAR refuse to accept the clause.

 Mr. Krishna (CEO) felt that spares which were

getting sold at this higher price were not because
of STAR dealer, but because customer feels that
they (KEC) are worth.

 STAR stated that if the request was not agreed by

KEC then he will go to other vendor who can easily
develop future spares orders in their (STAR) name.
 ALTERNATIVES

 KEC should have adjusted the compensation before hand

with STAR.

 KEC should have not given too much pricing control to it’s
dealer STAR.

 KEC should have realistic assessment of risk and

opportunities associated with their decision.

 KEC should implement lead attribution system to eliminate

confusion & conflict.
 RECCOMENDATIONS OF THE FOLLOWING
PROBLEMS AS A CONSULTANT
1. Identify at least 4 reasons for the present situation?

 No written agreement

 KEC should have control over the dealer by tracking sales

price and taking feedback.

 Less communication with the dealer about your motives.

 Full dependency on the dealer

Is Kinetic Engineering using Exclusive, Selective or Intensive distribution? Give
reasons for the same?

KEC is using selective distribution system.

Reasons are:
 It deals mainly in B2B.

 Optimum market coverage

 Good control

 Direct targeting

 Less Cost

 KEC was small company

Identify four parameters of measuring performance of
M/s Star Engineers? Give reasons for the same?
Parameters of measuring performance of M/s Star
 Percentage of hitting sales quota

 Average deal size

 Conversion rate

 Sales funnel leakage

 Provide four recommendations to solve the problems
highlighted in Q No 1. Recommend five methods to
evaluate the performance of dealers?
Some of the recommendations are:-
 KEC should have written contract with the dealer for
the agreement.
 KEC should not give the full price control to it’s dealer.
 KEC should first think about the consequences and
clarify everything with STAR before agreeing on the
contract.
 KEC should not depend only on STAR, as we can see
that after the conflict KEC will not be able to have such
a good dealer.
Methods to evaluate performance of the dealers are as
follows:
 Establish performance indicators

 Devise and evaluation method

 Selection of viewpoints among outcome & behavior

based while evaluating salespersons.

 Identify the problem areas.

 Evaluation based on sales quota.

THANK YOU