Case 6- Duncan Ind

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School

Indiana University Of Pennsylvania *

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450

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Marketing

Date

May 12, 2024

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docx

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3

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Brian Lopez Morales Dr. Byramjee MKTG 450 2 April 2024 Case 5: Duncan Industries -   laying out their present distribution & sales network The industry was being dominated by two large U.S firms, AHV lifts and Berne Manufacturing who together held about 60% of the market. AHV held approximately 40% of the market and annual sales of about $60 million offered a complete line of hoists but focused primarily on the in-ground market and the two-post surface market. AHV was the only company with their own direct sales force, while all other companies used only wholesalers or a combination of wholesalers and the company salesforce. Berne Manufacturing had a market share of about 20% and competed in the same fields that AHV was in. Berne used a combination of wholesalers and their company salespeople. Both AHV and Berne competed primarily on price. DI had two competitors that manufactured scissor lifts. AHV lift marketed a scissor hoist that had a different lifting mechanism but did not include the safety knocking features of the Duncan Lift. The AHV lift was sold for 20% less than the DI lift. The second competitor was Mete Lift, who had a lift similar to DIs without the safety features. It was sold for about 5% less than the DI lift. The DI lift gained recognition and was called the “Mercedes” of hoists. It was seen as superior because of its design and the quality of its workmanship, safety features and easy installation. It also came with a 5-year warranty. There were 4 patents on the DI including the lifting mechanism on the scissor design and the safety locking mechanism. In 1991 DI sold 23 hoists, costing about $172,000. Sales were made to
independent service stations and garages specializing in wheel alignment in the Quebec and Ontario market. By 1999, the company had already sold 1,054 hoists and had sales of $9,708,000. 60% of the sales were to the U.S market and 40% to the Canadian market. Dis distribution system reflected the need to engage in extensive personal selling. 3 distributor types were used: a company sales force, Canadian distributors, and a U.S. automotive wholesaler. DI sold directly to GM, Ford, Chrysler, Petro-Canada, Firestonē, and Goodyear. - perusing the suggested growth strategies. To date (case date), Duncan Industries has not yet been rejected by any accounts. In total, the company salesforce generated about 25% of the unit sales each year. The Canadian distributors handled the Duncan lift and carried a line of noncompetitive automotive parts and lifts. They focused on the smaller chains and the independent service stations and garages. The U.S. wholesaler sold a complete product line to service stations as well as manufacturing some equipment. The DI lift was one of five types of lifts that they sold. Although they did have some sales and provided DI with a larger distribution, DIs lift was a minor product. It was believed that DI’s lift accounted for less than 20% of the total lift sales of the U.S. wholesaler. There was still a huge potential for the U.S. market since the market was 10 times the size of the Canadian market. DI also distributed a catalogue-type package with their products, the uses, the prices, and other important information. The lift sold for $10,990 and DI received on average $9,210 for each unit sold. The direct distribution channel gave 100% of the selling price to DI, with the Canadian distributors, DI received 80% of the selling price, and for the U.S. distributors, where DI received 78%. Pierre though that DI had 3 options for expansion into the European market: licensing, joint venture, or direct investment. They would have more luck with the licensing option since a French firm showed interest in manufacturing the Duncan lift. The joint venture
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