MGT301 GDB 2 Solution Feb 2015

The Case:

A group of five women living in the rural area of Pakistan had started with a small set up of making embroidery suits three years ago, they had been making suits for a reseller who is living in the urban area; he bought suits from these women at lesser price and sold them in the urban market at a very high profit margin. It’s been more than three years now and these women are earning very less amount of their hard work; to get rid of this situation they started to analyze the way through which they could maximize their profit margin as in return of their extremely hard and devoted work. Finally they came to a conclusion that they should take the initiative of selling their distinguished work to the urban market themselves so that they could earn maximum profit and make more money as in return of their enthusiastic work.

Point of discussion:

Considering this scenario; which level(s) of distribution channel these women should opt so that their dependency on that reseller could be eliminated and they could competently sell their product in the urban regions(05 Marks)

Solution: Yes i agree that selling directly to customers for these ladies would be difficult. So No-1 (selling directly to customers) is out.

Retailers would also get some profit margin and would result in less profit margin for these ladies. So no-2 (retailers) would be less attractive.

No-3 (Itinerants fixed shop) appeals a lot to get maximum profit margin. They can introduce their own out let in the urban areas and place their products there to sell them directly to the end users. Like Junaid Jamshed garments etc.