The Research Of TK(China) Group For Transportation Reefer’s Channel Management

Thermo King (abbreviation TK) company is from U.S.A whomanufactured the1sttransportation reefer in the world, also manufactured the1sttransportation reefer and bus air conditioner in China. TK(China)company occupied the number1position of market share firmly since1993,but with local companies’―low price‖attacking, TK lost the title in2005. Todevelop more potential customers, TK(China) company changed its channelstrategy from sole dealer to intensive distribution in2006. New dealers bringmany new troubles as well as new orders, the hazardous sales actions of―lowprice‖and―cross-regional‖are found often in TK Chinese dealers. TheTK(China) company channel issues not only pull down the desire ofcustomers2ndpurchasing, but also damaged the TK(China) companyreputation building for many years.TK(China) company must find the root causes of channel issues andprovide the solutions for them.This thesis analyzed the Chinese transportation refrigeration market andmade conclusions that the market stepped into―Growth‖phase already. It isso natural for TK(China) company to lose market share when lots of newcompanies came out. Also, after surveying the requirements from old andpotential customers, TK got the real voice about reefer’s performance andpurchasing focuses. Then this thesis described the market of Chinese transportationrefrigeration and analyzed the main competitors’ channel strategy andmanagement of TK(China) company. Different companies have differentchannel strategies and managements, but whatever they are, the channels andthe functions are expressing the companies’ advantages and the companies’strategies. So the TK(China) company’s channel improvement plans shalladapt with company’s external and internal environment, shall be alignedwith company’s future strategies.The channel problems come from channel daily management. So thisthesis did deep analysis around the organization and functions of TK(China)company’s sales team who is responsible for dealer management. After―fishbone‖and―5why‖analysis, the root causes of channel problems were digout. TK(China) company stressed the market share but not the margin onsales team, also the bonus was linked to regional performance tightly. Underintensive distribution requirements, lots of new dealers enrolled in TK(China)company but lack of control. To achieve sales targets, some low quality newdealers took―low price‖and―cross-regional‖actions with TK Chineseregional sales tacit approval. TK(China) company sales negative attitudesaggravated the channel troubles. After studying the channel managementstrategies of TK(Japan) company and TK(Australia) company, and doingTK(China) company channel’s SWOT analysis, TK(China) company decidedto adopt Turnaround strategy in the future. New strategy asks for―oneefficient, teamwork and powerful channel to develop high ranking customersand maintain these customers by best service‖.TK(China) company channel improvement plans consist of two sections,one is new channel strategy development plans, the other is the solutions of channel daily management. Analyzed the Japanese―direct selling‖channeland the Austrian―exclusive‖channel, TK(China) company found that theselective channel is best choice. It matched company’s turnaround strategyrequirements and solved current channel problems, i.e.―low price‖competition. TK(China) company planned to optimize current dealer teamfrom16to9by strict dealer audit and customers distribution, and willcomplete the service network by encouraging the qualified dealers toestablish more service shops and by enrolling more contracted service dealers.The improvement actions of channel daily management will solve―lowprice‖first by adding margin in performance index and by modifying priceapproval processes; then, restrict―cross-regional‖by changing the salesorganization from regions to product lines as well as linking sales bonus towhole country’s sales performance; finally, recover―national servicenetwork‖by protecting dealers’ profit and encouraging dealers to developservice capabilities and abilities with good policies.It is inevitable that TK(China) company lost parts of market share in―low price‖battle. But that adopting selective channel strategy, and changingthe organization of sales and modifying bonus policy will solve these channelproblems. New channel strategy impel TK(China) company to develop theculture of efficient service and customized products as well as rebuild itsleadership in Chinese transportation reefer market.