Case Study Essays

1252 Words Nov 21st, 2015 6 Pages
How would you characterize Crafton’s Position in the carpet and rug industry? Crafton Industries sells high priced to medium priced rugs and carpets predominantly to the domestic market segment. Crafton is small industry with company sales of $75 million in fiscal 2010, while the U.S. industry sales leader is Shaw Industries, with 2009 sales of 3025 million. Currently, Crafton supplies its products through seven flooring wholesalers; the seven wholesalers have 4000 retailers. For small players in industry like Crafton it is heavily depended upon its wholesalers to distribute its products, because it cannot setup retails store unlike its competitors.
How is the industry segmented?
The industry is segmented through large and small
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This strategy works well for larger manufacturers, which maintain local production in the market, but in case of Crafton, which has small factors need to be considered.

Following pros and cons of Crafton direct selling are:

Pros * Wide distribution, size, exposure, number of outlets, increased sales volume * Aggressive marketing and upsell opportunity. * Can offer personal consumer assistance * Create markets * Post-sales service, added personal service * Consumer will know Crafton directly and will be trusted * More hands-on for customers * Increased profit margins and decrease reliance of wholesalers

Cons * Long channel—lots of work to build network and complexity of building network will be observed by Crafton. * It will be an expensive option as compared to distributor selling * Store reputation will vary on customer service and product quality * Poor customer service offered by Crafton will leads to bad impression. * High employee turnover will be possible because of need to require additional employees

What functions do wholesalers provide a manufacturer like Crafton? A) How are these functions provided when a wholesaler is eliminated? B) Who will perform these functions if there are changes introduced in the channel of distribution?
Wholesalers acquire goods from a manufacturer like Crafton and they hold them in a distribution center and then sell them to retailers. A

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