QUESTION 5

Grainger Canada: A Leading-Edge Industrial Distributor - Marketing Channels

Grainger Canada is one of the largest B2B distributors in North America. With over 100 branch locations throughout Canada, over 500,000 customers, 900 customer service associates, and a robust line of 750,000 products (tools, pumps, motors, safety and material handling products, and lighting, ventilation, and cleaning items), Grainger is the leading industrial distributor of products that allow organizations of all types to keep their facilities and equipment running smoothly.

Grainger's objective is to grow by capturing market share in the highly fragmented North American facilities maintenance market. With sales of $5 billion, Grainger is a Fortune 500 company and a frequent member on Fortune's list of Most Admired Companies.

Its large sales force and product line allow Grainger to meet customer needs in a highly responsive manner. For procuring maintenance and operating supplies, the company offers multiple channels:

Branch NetworkCustomers can go directly to their local Grainger location to pick up their order or have it shipped directly to them, often within hours.

The Grainger Catalog and digital catalogAn icon in the industry and on the shelf of virtually every procurement manager in North America

Grainger.caCustomers can access detailed descriptions and order from a massive collection online. The products can be shipped directly to the customer's business or to the local branch for pickup by the customer. Grainger's annual e-commerce sales exceed $1 billion.

Grainger represents one of the strongest brands in industrial distribution because customers believe that the firm can get them what they need, when they need it.

Questions:

10a. Grainger performs the selling function for thousands of its suppliers (that is, B2B firms). Under what conditions might a supplier choose to bypass Grainger and sell direct to a customer? Be specific in your answer considering what Grainger offers. (5 points)

10b. Grainger is increasing the amount of emphasis it is devoting to large customers, but those customers are quite demanding, posing a threat to profit margins. What selling strategies might Grainger take to attract and retain large customers while enhancing profitability? Remember to refer to the mini-case. (5 points)