TABL2731 Marketing and Distribution Law
Use MIRAT technique to answer the questions
Do not provide the facts of cases you refer to unless they are
relevant to your argument.
Part A
Greenbus, Brownbus and Whitebus compete in the market for the manufacture and
supply of buses in Australia. Between them they have an 80% share of the market. Some
of them have overseas holding companies that manufacture and ship the buses to them in
Australia for sale and some of them manufacture the buses in Australia from parts either
made in Australia or sourced from overseas.
They supply all sizes of bus including double- deck, single- deck and smaller buses used
by schools, aged care facilities and tour bus hire companies. Their major customers are,
of course, the State transport authorities in each State.
They also compete in the bus repair business, which is more lucrative than the sales
market, and have market shares of 15%, 25% and 30% respectively in that market.
Newbus is a minor competitor, trying to increase its market share in both the sales and
repair markets. However, it is finding it difficult to do business. No matter how it tries to
discount the buses it manufactures, which are of a very high quality, it loses tenders, as
the other competitors have dropped their prices significantly. Newbus is finding that it
can only successfully tender to schools, aged care facilities and tour bus operators.
When Newbus wins maintenance contracts, it is very difficult to source the parts needed
to repair any buses that are not its own. The main reason for this is that its competitors
charge Newbus 5 times the “normal” price for their parts and take an unreasonably long
time to supply them. Newbus is losing revenue and its good reputation as a result.
Tom Newhouse, the CEO of Newbus, received a call from one its customers, Barry, who
wants to cancel a contract to buy three buses because he received an email from
Brownhouse’s manager, Jim, stating that Newbus buses have major safety issues.
You are the compliance officer at Newbus and Tom has asked you to look into what
rights Newbus may have under the Competition and Consumer Act and report to the
Board. Refer to legislation and case law to support your advice.
Part B
You are a group product manager working for K Co Pty Limited (K Co). The product
development team at K Co has just developed a new version of the electric kettle. Instead
of using an element, the K Co kettle uses a heat exchanger. This means that its power
consumption is very low, but that the kettle takes 30 minutes to boil two litres of cold
water. In order to overcome this disadvantage, the K Co kettle can be switched on
remotely using an iOS or Android app. This app can be configured to allow manual
remote switch-on or remote switch-on based on distance from home.
K Co intends to use three distribution channels. The first is direct sales from the website.
The second is in bricks and mortar stores and online. The third is by leasing the kettles to
hotels, motels and long-stay health facilities. You expect export sales to be about 30% of
total sales and the product is being manufactured in Guangzhou.
The retail pricing of the product is likely to be about $A100. You do not want this price
to be discounted excessively and the trade association, the Australian Boiling Products
Association, takes the view that feature rich kettles should cost above $100.
The marketing people at K Co are ecstatic that they have the cheapest (to run) kettle in
the world and the sales team already think that the running costs are so cheap that they’re
almost free.
You have to write a short report to the Triple R Committee of K Co. The Triple R is “risk
and risk remediation”. You have attended all of the lectures in TABL2731 and have read
all of the required material. The take home project is to write the report, providing all of
the reasons for the views that you express.
