BUS 120 - Case 10 - AMF - DEVELOPING MARKETING CHANNELS for AMF Voit FLYING DISCS! PDF

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Summary

For over fifty years, AMF Voit, Inc. – the world’s largest manufacturer of inflated balls – has made recreational products that have been used by millions of people world over. It markets its products in USA and Canada (its major markets) as well as in 25 other countries in Central and South America...

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CONTENTS ACKNOWLEDGEMENT ................................................................................ 2 CERTIFICATE OF ORIGINALITY................................................................. 3 SUMMARY ...................................................................................................... 4 QUESTION & ANSWERS ............................................................................... 5 ORIGINAL RESEARCH .................................................................................. 9 RELATIONSHIP TO CONCEPTS ................................................................. 10 BIBLIOGRAPHY ........................................................................................... 11

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ACKNOWLEDGEMENT We would like to thank Dr. Shyam Vyas for giving us this wonderful opportunity to do such an interesting project on AMF Voit, Inc. The project helped us to learn and apply marketing concepts. We perceive this as an opportunity to gather important information about this company and learning to work together as a team.

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CERTIFICATE OF ORIGINALITY We declare that: -

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We have used our own words only

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We have not copied

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We have not plagiarized

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We have cited all sources from where quoted or adapted

SUMMARY AMF Voit Inc is the world’s largest manufacturer of inflated balls from last fifty years. It markets its products in USA and Canada as well as in other 25 countries. WJ voit founded the company in 1921 as a small business in suburban Los Angeles and in California in 1957. Product lines included inflated balls, exercise, track and field, court sports, and water equipments, institutional products and sport discs. The company has made good use of opportunities across the four grids of Ansoff’s grid. Its products are especially interesting for the new generations and the youth. The company plans to make a strong push in Asian markets and china and India that harbour huge populations that are young and increasing trendy. AMF Voit had entered the flying discs market after much research and investigation revealed much potential for growth. Disc throwing has emerged one of the fastest growing sports in the world. It was estimated that over 20 million people played with discs at the end of 1990 and 40 million by year 2000 and 80 million by 2010. AMF Voit patented 2 piece discs which represents the latest design is especially adaptable to free style manoeuvres. Disc sports have become very competitive, better organized, and more acceptable and popular throughout the world. The majority of disc sales occur during early spring and fall when the college student market is targeted. AMF Voit’s goal for its Sport Disc line is to establish a nationwide distribution through various channels. AMF is in the process of revamping its entire approach to distribution and seeks your advice and suggestions.

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QUESTION & ANSWERS Ques1. What marketing distribution channels should AMF Voit use to reach each of the 4 categories of disc users? Specify the type of intermediaries / channel hierarchies AMF may consider using. Ans1. AMF Voit should use different marketing distribution channels to reach each of the 4 categories of disc users are: 1. The pro and champion players: direct channel of distribution should be used in this segment because these players are looking for better products all the time, new games, technique and new trends. They are elite to the disc world. 2. Weekend players: dual distribution should be used here as over a million own an average of 15 to 50 discs each and play 3 to 5 times weekly. So the wholesalers and retailers can sell them directly as they are engaged in local and regional tournaments. 3. Average players: indirect channel of distribution should be used here as the players are of schools and colleges. These players are over 3 million and own an average of 4 to 10 discs each. This group is aware about the differences in performances. Wholesalers and retailers are the important part as they contact the schools and colleges. 4. General public: indirect channel of distribution should be used here as the number is over 14 million and each own 1 to 3 discs. C and F agents, distributors, retailers’ play an important role because of the market growth and market size are expected to increase over time. Ques 2. Should AMF Voit use intensive, selective or exclusive distribution or a combination of distribution approaches ? Ans 2. INTENSIVE DISTRIBUTION A marketing strategy under which a company sells through as various outlets as possible, so that the consumers can get the product everywhere they go: supermarkets, gas stations, etc. SELECTIVE DISTRIBUTION It is a type of distribution strategy that lies and operates between intensive and exclusive distribution. Selective Distribution involves selling product in some selected areas and using more than one, but lesser than all the intermediaries and distributors who carry the company's products on a basis of a company specific set of rules. EXCLUSIVE DISTRIBUTION Distribution is exclusive when only certain retailers are given the option of carrying a product in its store. Exclusive distribution is an agreement between a supplier and a retailer granting the retailer exclusive rights within a specific geographical area to carry the supplier's product. SELECTIVE DISTRIBUTION AMF Voit is the major competitor – in a challenger role – and is challenging Wham with a line of technically advanced discs that covers all major product applications. It is trying to differentiate its product through improved design and durability and approvals from various international approval bodies. To get more publicity and to make their product aware the industry should select the selective distribution where the consumer can get the product on the selected stores such as sports or gaming. As the product is not necessity like gas, or drug, thus it should be available in all the selected stores. 5|P age

To always have availability of the product, reputation for quality and on the unique design of its discs – which are protected and proprietary items which create the competitive arena. EXCLUSIVE DISTRIBUTION They even have some categories when the products are available exclusively according to the area, people and geographic location, then the organisation should follow Exclusive Distribution. Disc users fit into four basic categories. • The pro and champion players • The weekend players • Average players • General public According to the categories the products can be available exclusively in stores depending on the public taste and preferences. Thus the AMF Voit should use the combination of distribution approaches which is selection and exclusive distribution. Ques 3. Why are marketing distribution channels so important for AMF Voit in selling sports discs ? Ans 3. A distribution channel (also called a marketing channel) is the path or route decided by the company to deliver its good or service to the customers. The route can be as short as a direct interaction between the company and the customer or can include several interconnected intermediaries like wholesalers, distributors, retailers, etc. Hence, a distribution channel can also be referred to as a set of interdependent intermediaries that help make a product available to the end customer. The marketing channels are important for AMF Voit because for such a large company like AM, because at this level the company cannot maintain the direct contact and relation with the customers so it needs a channel to carry out its operations easily without any complications. Distribution channels provide time, place, and ownership utility. They make the product available when, where, and in which quantities the customer wants. But other than these transactional functions, marketing channels are also responsible to carry out the following functions:

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Logistics and Physical Distribution: Marketing channels are responsible for assembly, storage, sorting, and transportation of goods from manufacturers to customers. Facilitation: Channels of distribution even provide pre-sale and post-purchase services like financing, maintenance, information dissemination and channel coordination. Creating Efficiencies: This is done in two ways: bulk breaking and creating assortments. Wholesalers and retailers purchase large quantities of goods from manufacturers but break the bulk by selling few at a time to many other channels or customers. They also offer different types of products at a single place which is a huge benefit to customers as they don’t have to visit different retailers for different products. Sharing Risks: Since most of the channels buy the products beforehand, they also share the risk with the manufacturers and do everything possible to sell it. Ques 4. Using the Indian market scenario - Name 2 companies that have some of the largest number of sales people and large distribution network to buttress the idea that more sales people in field, and more outlets at retail level help accomplish more sales ! Be very specific. Ans 4. ITC Limited ITC stands for India Tobacco Company. Apart from the fast moving consumer items the company operates in the hospitality, paper, packaging, agri-business, and IT sectors. In the FMCG segment, the company has a wide range of products. The list includes Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks and Safety Matches. Some of the most popular product brands are Ashirvaad atta, Bingo chips, Savlon, Manga deep agarbatti, Wills, Fiama, Vivel etc. Corporate Office: Kolkata, WB Turnover – 7.0 Billion Dollar | Turnover: 7.0 Billion Dollar Employees: 29000+ Company Website: http://www.itcportal.com/ ITC is an Indian cigarette company which is headquartered in Kolkata. Its five diversified businesses are Fast-Moving Consumer Goods (comprising Foods, Personal Care, Cigarettes and Cigars, Apparel, Education and Stationery Products, Incense Sticks and Safety Matches), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology. Although the cigarette business contributes more than 80% of the profits of the company, 80% of the capital is invested in the non-tobacco businesses. Established in 1910 as the 'Imperial Tobacco Company of India Limited', the company was renamed as the 'India Tobacco Company Limited' in 1970 and later to 'I.T.C. Limited' in 1974. The dots in the name were removed in September 2001 for the company to be renamed as 'ITC Limited' where 'ITC' would no longer be an acronym. The company completed 100 years in 2010 and as of 2012-13, had an annual turnover of US$8.31 billion and a market capitalization of US$50 billion. It employs over 30,000 people at more than 60 locations across India and is part of Forbes 2000 list

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Parle Agro Parle Agro is an Indian company. Basically, the company operates in the food and beverages industry. The company has several popular brands in the beverages and confectionery segment. Some of the most popular products are Frooti, Appy Fizz, Hippo, Parle G, Bailley etc. The company has made the position in the consumer interest through the biscuit and canned fruit juice items majorly. Corporate Office: Mumbai, Maharashtra Turnover: 1 Billion dollar (Approx.) Employees: 2500+ Company Website: http://parleagro.com/ Parle Agro commenced operations in 1984. It started with beverages, and later diversified into bottled water (1993), plastic packaging (1996) and confectionery (2007). Frooti, the first product rolled out of Parle Agro in 1985, became the largest selling mango drink in India. The original Parle group was amicably segregated into three non-competing businesses. But a dispute over the use of "Parle" brand arose, when Parle Agro diversified into the confectionery business, thus becoming a competitor to Parle Products. In February 2008, Parle Products sued Parle Agro for using the brand Parle for competing confectionery products. Later, Parle Agro launched its confectionery products under a new design which did not include the Parle brand name. In 2009, the Bombay High Court ruled that Parle Agro can sell its confectionery brands under the brand name "Parle" or "Parle Confi" on condition that it clearly specifies that its products belong to a separate company, which has no relationship with Parle Products.

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ORIGINAL RESEARCH Voit began in Los Angeles in 1922 as a tire retreading products factory. In the late 1920s Voit developed and patented the first full-molded, all-rubber inflatable ball and the first needle-type air retention valves. They also developed highly accurate pocket and wrist watches during this period. In 1931, Voit developed and patented the first all-rubber athletic balls, including the process of vulcanization which allowed a material to be fixed onto a separate rubber bladder. In the same year, it changed names from the W. J. Voit Corporation to Voit Rubber Corporation. Later in the 1930s, Voit developed the process of icosahedron winding, which allowed balls to be machine wound with nylon threads over the bladder, providing both strength and consistency in shape and permitting mass production by a machine processed. Those Voit patents and products made possible greatly increased athletic and recreation activity in the school systems, and led to universal use of a new type of product that now dominates sales in its field.

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RELATIONSHIP TO CONCEPTS MARKETING DISTRIBUTION CHANNELS The distribution function of marketing is comparable to the place component of the marketing. A distribution channel in marketing refers to the path through which goods and services travel to get from the place of production or manufacture to the final users. It has at its centre transportation and logistical considerations.

Business-to-business (B2B) distribution occurs between a producer and industrial users of raw materials needed for the manufacture of finished products Business-to-customer (B2C) distribution occurs between the producer and the final user.

INTENSIVE/SELECTIVE/EXCLUSIVE INTENSIVE DISTRIBUTION- A marketing strategy under which a company sells through as various outlets as possible, so that the consumers can get the product everywhere they go: supermarkets, gas stations, etc.

SELECTIVE DISTRIBUTION It is a type of distribution strategy that lies and operates between intensive and exclusive distribution. Selective Distribution involves selling product in some selected areas and using more than one, but lesser than all the intermediaries and distributors who carry the company's products on a basis of a company specific set of rules.

EXCLUSIVE DISTRIBUTION Distribution is exclusive when only certain retailers are given the option of carrying a product in its store. Exclusive distribution is an agreement between a supplier and a retailer granting the retailer exclusive rights within a specific geographical area to carry the supplier's product.

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BIBLIOGRAPHY • •

https://www.feedough.com/distribution-channels-definition-types-functions/ www.marketingmo.com/strategic-planning/how-to-develop-your-distribution-channels/

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https://nextwhatbusiness.com/top-fmcg-companies/

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https://www.quora.com/Which-is-the-best-network-marketing-company-in-India

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http://voit.com/en/aboutus

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