Channel structures

For a new electrical equipment, called “molded case circuit breaker” (MCCB), required for large manufacturing plants like steel plants, two leading engineering companies—viz L&T and CGL—adopted two different distribution channel structures. L&T promoted the new product through its technical sales team and asked the business customers to place orders on their industrial distributors, who would carry the inventory of MCCBs for supplying to business customers. Crompton Greaves Ltd. (CGL) promoted the new product by organizing technical seminars, followed by visits by their sales engineers along with manufacturer’s representatives (or agents), but inventory carrying, the shipments and billing of MCCBs were made by the company. The role of manufacturer’s representative was to build relationship and follow-up for the orders and payments. Evaluate the two channel structures by using appropriate criteria and suggest which channel structure, in your opinion, would be more appropriate and why.


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