The aim of marketing is to make selling unnecessary(peter drucker,1973). In marketing mix place or distribution is the import part where the product and services get from producer to consumer where he can have access over it.(Michael j baker ,2003)
The type of method chosen to distribute depends up on many circumstances like some time it will be easy to sell to wholesalers from there will reach to retailers and some time they sell directly to the customers or retailers.( Michael j baker ,2003)
Praxair is a 26000 employee company which is being operated in more than 50 countries with single agenda to make the planet more productive. It was originally established by Carlvon Linde which was called as Linde Air Products company in 1907 and in 1992 as Praxair means practical application and air in Greek ( Praxair Inc., 2012:n.d).
It serves industries such as health, Aerospace technologies ,petroleum refining, special computer chip manufacturing , steel making and water treatment etc.
To become the best performing industrial gas company in the world. Its motto is to include total customer satisfaction, integrity, safety and environmental excellence ( Praxair Inc., 2012:n.d).
In 1999 the revenue was around 4.6 billion dollars
At present it is the largest industrial gas company in North and South America and world’s third largest revenue with $10.8 billion.(MDM market leaders).
To achieve such position it has developed many plans and strategies in marketing, distribution. Some the distribution plans are , Praxair has three methods to distribute the product to the customer and ensure that customer gets product they desire in the form and quantity they desire.
- on-site/Tonnage: This process is developed for customers requiring high quantity, which contains mainly atmospheric gases. In this process Praxair will build an on-site facility next to the customers plant. From the plant they directly provide the required gas through pipe lines as this process involves huge money they take long term contract 10-20 years, through which customer will have less purchase and price variations are also provided. (An analysis and valuation- Chris Tobin and Austin Badger,2010)
- Merchant :- In this process atmospheric gases are delivered in liquid form. Delivery is directly done from the Praxair plants in trucks to specified places or regions. Another process is direct distribution to the customers at designed on-site. In this method agreements are made from 3-5 years. (An analysis and valuation- Chris Tobin and Austin Badger,2010)
3.Packaged Gases:- This is the most followed method to consumers requiring very less quantity of gases which done in cylinders under high to low pressures. In this method it will be directly delivered on- site or also they can be picked up at the plant or at any retain stores depending up on the consumer. No contracts in this process as they will only be sold on orders. (An analysis and valuation- Chris Tobin and Austin Badger,2010)
This is how the complete distribution process going in Praxair.
Praxair is one of the elite group of companies and it is the company which is controlling the industrial gases market and some of its competitors are Air Product and Chemicals, Air Gas etc. But Praxair took first position because of its distribution process depending up on the customer needs. (An analysis and valuation- Chris Tobin and Austin Badger,2010)
Barriers to entry: Praxair has framed significant boundaries to passage through a system of plants and pipelines around the globe. These cost a huge number of dollars making it unpleasantly hard to raise the capital important to contend on that huge of a phase in this business sector. Additionally, the significant business players are contracting as mergers and acquisitions occur making it far-fetched for new contenders to emerge. (An analysis and valuation- Chris Tobin and Austin Badger,2010)
Position in emerging Market: We feel that of the top contenders Praxair is best situated inside developing markets for future deals development. A portion of the nations Praxair groups a favorable position in incorporate Mexico, India, China, and particularly in Brazil where they as of now control 65% of the piece of the pie. (An analysis and valuation- Chris Tobin and Austin Badger,2010)
Pensions: Being a 100-year-old organization, Praxair made numerous benefits subsidizes that now must be paid out as their senior workers move into retirement.
International Currency risk: Praxair has attempted to go into developing and worldwide markets. While we feel this is a keen move for the organization it comes with numerous dangers. With respect to developing markets the biggest issues are political and monetary insecurity, business limitations, taxes and disturbances.
Growth pattern and growth rate: Praxair has had a remarkable late history of development and into the future for quite a while.
- Praxair has huge skilled work force.
- It has large domestic markets.
- Praxair has experienced business units.
- It has best distribution process which makes them unite from others.
- The cost of labour is also very less.
- It is developing new products and new techniques.
- It is continuously acquiring other companies.
- Growth of Praxair is continuously increasing along with its profits.
Conclusion: Marketing efforts should be focused mainly on providing service that is required. This can be achieved only when we are in sync with the customers and understand their requirements . As Praxair Was in sync with the consumers and started developing new distribution process, so it ranks number one position in gases production company in the world at present.
- The marketing Book- Michael J Baker,2003.
- Management Tasks, responsibilities and practices- peter drucker,1973
- Praxair Inc-2012
- Top Distribution Companies: Survey by MDM Markets- http://www.mdm.com/marketleaders
- Praxair : An analysis and valuation- Chris Tobin and Austin Badger,2010
Name: Srikanth Gajavada
Student Id: 215374151.