JSW SHOPPE — A UNIQUE DISTRIBUTION MODEL FOR BRANDED
STEEL
Brief of Case
JSW is a manufacturing plant producing steel pipes, bends and sockets and was one of many low-cost steel producers in the world and favored bulk buyers. In April 2007, at Jindal Steel Works Ltd.’s marketing headquarters in Mumbai, the sales and marketing team headed by Jayant Acharya (director marketing), Sharad Mahendra (vice-president) had a debate on how to boost the presence of Jindal Steel Works steel in the market. After much debate, the most promising idea was the development of an organized retail format.
Steel was perceived as a business-to-business product. The company’s objective was to create a distinctive impression in the minds of end-users to
The company strategically targeted the new generation of dealers initially, as it believed that these young dealers would be more receptive and flexible to the idea. As the dealers were not aware of the company’s rationale for choosing a select set of dealers there was no proper evaluation criterion one major issue from the dealers’ perspective was the success of the very idea of attracting the end consumer into their Shoppes
It was found that many dealers had parallel outlets through which they sold other manufacturers’ products. Also the dealers were not interested in investing in information technology (IT) infrastructure.
Another grey area was the recruitment by the dealers of Shoppe executives who did not meet the company’s standards. Using the trained executives for routine activities resulted in reduced morale of the executives. Dealers did not send the Shoppe executives for training since they had to pay the bill whereas the company on the other hand wanted to get involved in the recruitment and training of the executives the objective was to bring about a sense of professionalism and uniformity. The most critical issue was that there was no system in place to measure the performance of the dealers, and therefore no basis upon which to determine their incentives. This lack of