Gino Sa: Distribution Channel Management

Gino SA: Distribution Channel Management

In this case, there appears to be no win-win solution. If Zhou decided to accept Feima’s OEM business, Gino is very likely to lose one of its main distributors in China, then harm the sales. Further more, the other two distributors may give negative after that. The worst situation will be Gino losing all the distributors in China. if Zhou decided to decline Feima, Gino will lose the only opportunity in late several years to create an OEM business in China. The distributors will also bargain for more, even make Gino a hostage.

In order to solve this problem and to keep future scenarios under controll, Gino should adopt a new policy, which is, if any OEM, deal or end-user purchasing large figures of units, they become direct customers automatically. And the detail figure can be set due to Gino’s sales report of recent years. Gino will need to develop a direct sales team to handle those direct customers.

Without the help from current distributors, Gino will find itself hard to develop this sort of direct channel. Gino needs to look after all current accounts. If Gino can alienate with its distributors, then with the development of a direct channel and the grandfathering of current accounts, Gino will need to satisfy the requested of Feima by working with Jinghua to offer a new price model, which can maintain the largest account of Jinghua while offering Feima larger discounts.

To hold the distibutors, Gino will need to focus on 2 types of channel incentives, not only incentives to increase channel member local promotional efforts, which has been done by many large campanies including Gino itself, but also incentives to increase channel member purchase and inventories.