Kelsey Manufacturing Company

1. Kelsey Manufacturing Com.
Case Analysis
SDM, NMP Term IV
Group 5
Abhijeet Tomar - 03
Argha Ray - 15
Khushal Malik - 28
Vipin Kathuria– 59

2. Context
• Kelsey is a major manufacturer of tyre and tube repair material.
• Over the years sales of its numerous product lines have been stagnant.
• Management wants to reverse the trend with ambitious targets.
• Product promotion down the channel is one of the strategies under
consideration.
• However, channel members no longer seem to be under Kelsey’s control.

3. The Genesis of the Problem:
• Kelsey still to evolve from a family owned business to a full fledged
corporate.
• Management doesn't seem to have any clues about what plagues the
channel. “Spread the Word” is a common refrain. But How?
• Kelsey doesn't seem to change with times at least in technological
competitiveness.
• Product line augmentation is a sore point with downstream channel
members.
• Lengthy channel adds to promotion burden.
• Old channel partners are no longer loyal to Kelsey.

4. The Ongoing Decline:
• Contrary to management’s
belief sales are not stagnant but
continuously declining.
• Product gradually moving from
maturity stage to decline stage
in the Product Lifecycle.
• Kelsey not doing enough to
keep channel members
motivated.
• Possible changes in channel
design is not under
consideration.

5. Questions to Ponder:
• Has Kelsey augmented its product line after consultation with channel
partners?
• Are all the long list of products profitable? Which of these products have
marginal sales in the market and can be ejected?
• Is product pricing adequate? For long Kelsey seems to enjoy the same
gross margin and profits?
• Does Kelsey’s product line provide adequate assortment for channel
members?
• Why are competitors not offering complete line like Kelsey?
• Should Kelsey invest more on technology to match competitors' new
products like Chem Bend.

6. The Alternate Channel:
• Remove manufacturer’s
representatives with
own salesforce.
• The may be bit costly
initially. Manufacturer’s
Representatives act
almost as External
Salesforce for the
company. They can be
replaced with own
salesforce so as to have
more control at the
initial level of the
channel.
• Product is Low
Involvement, hence
advertising will not be of
much help.
Kelsey
Manufacturers
Representatives
Warehouse
Distributors
Jobber
ServiceStation
Customer
Kelsey
Warehouse
Distributors
Jobber
ServiceStation
Customer

7. Channel Partner Selection:
• Tyre and Tube repair materials are only one piece of the assortment puzzle
for a automotive parts wholesaler.
• Kelsey has a gamut of offerings in this segment. It will not be hard for
them to supply a complete assortment to its channel partners for this
product category.
• Select only those Warehouse Distributors and Jobbers who are willing to
exclusively distribute for Kelsey in this product category and not hold
competitor’s products.
• These Warehouse Distributors and Jobbers will however be allowed to
hold any other complementary product line from other manufacturers but
not competitors Tyre and Tube repair material.
• Kelsey’s own salesforce must monitor distributor sales personnel as well
as provide technical help down the channel up to Service Stations on need
basis.

8. Decision:
• Prune unnecessary product lines.
• Take inputs from channel partners on product assortment.
• Distributors who deal exclusively with Kelsey’s product line and
independently with other product lines will take it upon themselves to
push Kelsey’s product line.
• Try to promote Kelsey’s product line to Tyre Manufacturers who are willing
to recommend Kelsey’s product line.
• Occasionally promote product line directly to large Service Stations.
• Rationalize margins for channel partners who are unhappy.
• Invest on technology to stay ahead in the race.