Martin Artic Verklar
Resume
1. Why is Verklar’s market share dropping in the Austrian Market in the early 1980’s?
Verklar Austria
Answer 1:The main reasons behind the drop in Verklar¶s market share in Austria from 85% toapproximately 75% are as follows:
1) More aggressive strategies from competitors.As per the Case, competitors have started going after contractors and smaller and mid-tier dealers leaving Verklar- particularly focusing on major housing co-operatives and industrialconstruction companies- where repeat orders are likely to be high. They have managed tooffer customized discounts based on order size and willingness to pick up from warehouse,which are more flexible in nature than Verklar¶s existing discount scheme for its customers.In particular, Karlis has emerged as the 2 nd largest player in the market by focusing on low prices as a differentiator, and gives bulk quantity orders a 10% higher discount than thatoffered by Verklar- thus weaning away the price conscious segment of the market.
2) Commoditization of BrandAs Verklar has occupied most of the market share (85%) in roof windows in the Austrianmarket for a long period of time, most end users now associate the Verklar brand namegenerically for the entire roof window segment. Thus, Verklar loses out as sometimes, dealersmight supply roof windows from other companies, passing them off as ³Verklar windows´.In addition, Verklar ¶s primary focus on just business-to-business market and maintaining avery small sales staff has potentially led to lower brand recall among the end customer.
3) Issues with the current discount systemThe existing discount system is disproportionally skewed towards large dealers- as they arethe only segment which can set aside the adequate capital to purchase in bulk and handle
2. How would the quota system change the way channel flows are performed in Verklar Austria’s channel?
3. How would you close the existing channel
1. Why is Verklar’s market share dropping in the Austrian Market in the early 1980’s?
Verklar Austria
Answer 1:The main reasons behind the drop in Verklar¶s market share in Austria from 85% toapproximately 75% are as follows:
1) More aggressive strategies from competitors.As per the Case, competitors have started going after contractors and smaller and mid-tier dealers leaving Verklar- particularly focusing on major housing co-operatives and industrialconstruction companies- where repeat orders are likely to be high. They have managed tooffer customized discounts based on order size and willingness to pick up from warehouse,which are more flexible in nature than Verklar¶s existing discount scheme for its customers.In particular, Karlis has emerged as the 2 nd largest player in the market by focusing on low prices as a differentiator, and gives bulk quantity orders a 10% higher discount than thatoffered by Verklar- thus weaning away the price conscious segment of the market.
2) Commoditization of BrandAs Verklar has occupied most of the market share (85%) in roof windows in the Austrianmarket for a long period of time, most end users now associate the Verklar brand namegenerically for the entire roof window segment. Thus, Verklar loses out as sometimes, dealersmight supply roof windows from other companies, passing them off as ³Verklar windows´.In addition, Verklar ¶s primary focus on just business-to-business market and maintaining avery small sales staff has potentially led to lower brand recall among the end customer.
3) Issues with the current discount systemThe existing discount system is disproportionally skewed towards large dealers- as they arethe only segment which can set aside the adequate capital to purchase in bulk and handle
2. How would the quota system change the way channel flows are performed in Verklar Austria’s channel?
3. How would you close the existing channel