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Case 5
Hyde-Phillip Chemical Company
Case Objectives
1) To provide students with an opportunity to evaluate a multiple-channel structure
Teaching Suggestions
Break up the class into three groups: Group 1 analyzes the pros and cons of using the company
Problem Situation
Hyde-Phillip needs to determine whether it should continue with the status quo of using the three
Case Discussion
A good way of starting this case is to present some of the advantages and disadvantages of the
Company Sales Force
Advantages
▪ Trained by company – thus more control exercised; may have more dedication.
Disadvantages
Merchant Wholesaler
Advantages
2
Disadvantages
Agent
Advantages
▪ Expertise in related product lines and contacts already developed.
Disadvantages
With regard to the question of whether the existing mix of channel structures should be
changed, several points are in order.
1. Part A of Exhibit 2 shows that of the nine territories that produced sales of over two million
dollars, only one was accounted for by an agent, while five of the nine were accounted for
by merchant wholesalers (industrial distributors). Thus, industrial distributors account for
over half of the high-volume (over two million dollars) territories.
These data show that the merchant wholesalers (industrial distributors) rank at the top in terms of
their association with the highest-volume territories, while the agents rank lowest. The company
sales force is in between.
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well.
While by no means definitive, from a strategic channel management standpoint, this pattern at
least suggests that the threefold mix of channel structures currently being used might need to be