Tfl Industrial Distributor

Statement of the Problem

        The major issue at hand is for TFI, an industrial distributor company. They must determine the best alternative to sell the two additional products they have acquired the rights to sell. These products include a blender made by One-Shot Corp. and a french fry vending machine produced by R-O International. They must determine an alternative that will be valuable in obtaining their overall goal, which is to increase overall sales of their entire product mix.

Background Information

        TFI is a well-established industrial distributor company with their headquarters located in Brampton, Ontario. They currently distribute products from Henny Penny, which include food service applications such as fryers and rotisseries. They also distribute products from Taylor, which is more focused on ice cream and beverage equipment. TFI holds exclusive rights to sell these products in Ontario and all four of the Atlantic provinces. Two other distributors hold the rights in the western provinces and Quebec.         Alex, the president of the company, has recently secured the Canadian rights for two new products which include a blender called “Revolver” from One-Shot Corporation and an automatic French fry vending machine from R-O International. Alex is in the works of determining the best alternative for sales of these new products. These rights include distribution in all of Canada which means Alex will have to determine the best strategy to procure the most sales possible.

        Alex is also currently distracted by the fear of future possible competition due to the recent collaboration of Henny Penny and J. Frishman Associates to sell one of their products. This is currently only happening in the U.S. But Alex has concern for the future as their will be other distributors in Canada already selling this product. This will create competition that up until this point, TFI has not had to deal with due to the fact they hold exclusive rights on their current product mix within their specified territories.

Major Conclusions

Point form notes:

• TFI is a well-established privately owned industrial distributor head quartered in Brampton
• Two major product lines: Henny Penny and Taylor (produce equipment for restaurant, store and institutional food service operation use)
• Taylor: ice cream and beverage equipment
• Henny Penny: food service applications (fryers, rotisseries)
• They compliment eachother very well
• TFI held exclusive rights to sell both in Ontario and the four Atlantic provinces
• Alex secures Canadian rights for One-Shot Corp.’s “Revolver” and R-O International’s automatic fry machine (Alex considering how to develop national market for these products)
• Alex also distracted by  recent change one of his current key suppliers was making in the U.S. market (wondering if this will have implications for his Canadian operations)
• TFI achieved Distributor of the Year for Henny Penny and Taylor
• Alex concernd about future growth due to limitations to current sales territory
• Sales projected for 2006 are down 4% from 2005 which isn’t horrible but its not the growth that Alex desires
• Alex is president of TFI (formerly vice president of sales and marketing)
• He developed many of the important relationships TFI has with suppliers and customers
• Instrumental in establishment and growth of sales force
• D.S.L. distributes Henny Penny and Taylor products throughout Western Canada and Northern Canada (as well as Alaska, Washington, and Oregon)

TFI Sales Force

• Employs TWO types of salespeople who sell to DISTINCT markets:
• FOUR serve national accounts (7-Eleven, Wendy’s, Burger King, McDonald’s Harvey’s, KFC. Mac’s convenience, Esso,etc.)
• One of the Four sells to supermarket chains such as Loblaws, Sobeys, and Wal-mart
• These contribute about 43% of total company sales revenue
• TEN salespeople service the “INDEPENDENT” market
• 31 % of company’s total sales revenue from this market
• Small, locally owned, operations
• Salespeople granted permission to sell TFI product in specific exclusive territory
• Parts and service revenue generates 26% of total revenue

New Opportunities for TFI

• Alex is enthusiastic about two new products added to product mix (Blender and French fry machine)
• More concerned about success of fry vending machine as it is very new and consumers may question the quality of the fries

MAIN GOAL FOR ALEX and TFI as a company

• Any decision made would enable TFI to generate sufficient sales to satisfy company’s two new suppliers and ensure company’s ability to maintain sales for current products is not compromised