Question

Topic: Strategy

Marketing For Our Distributors?

Posted by Anonymous on 6/10/2005 at 5:31 PM ET 125 Points
Ok, please share some feedback and advice:

We are the sole wholesalers of unique products to make an office/workplace more organized and efficient. We do not sell to the end user; we sell our products through Catalogs, Web-Retail and some Specialty Retail.

The biggest frustration I have is the lack of control over our destinty from title to title. We can successfully get a catalog to include our products in their mix, but if they do a poor job of representing/marketing the item, the item doesn't sell...and then we get dropped due to poor performance.

I am trying to talk my boss into a new strategy, in which we instead educate the market on our products, and then drive traffic to our distributors when we get response.

However, the initial number-crunching I have done is a little intimidating. Space Advertising is very expensive, and it's hard to generate enough business through direct mail advertising to Break Even.

But I look at Coca-Cola, for instance, and I say "Coca Cola does all the advertising, but they are not selling you a Coke from Atlanta. They sell to the bottlers who sell to the retailers. Likewise, the Retailer isn't paying for that 'Coke is It' TV ad, Atlanta is."

So, here is the point I am trying to make. Have any of you tackled this situation: you sell thru distributorship but you are unhappy with the month-to-month business they generate? Is paying to educate the market and then referring the incoming business the way to go?

THANKS!
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted by wnelson on 6/10/2005 at 6:29 PM Accepted
    Hi! Yes, this is a common problem with "channel partners" - getting their mindshare and getting them to invest in YOUR product. I worked in the semiconductor industry for 17 years and this was a constant battler. After a while (less than 17 years, I assure you), I came to the conclusion that Distribution for the most part DOES NOT PUSH product. They simply take orders. This is especially true the more the product is a commodity. We had a distribution management team (as does every semi company) whose sole purpose is to manage the inventory and pricing. They would also do feel-good deals that appeared to be PUSH strategy, but none of these resulted in any major sales increase. In the marketing group, we came to the realization that we had to create PULL from the customers ourselves. How we did this is we engaged manufacturer's reps to call on distribution customers to buy our product. Even them this was not very effective because, again, the reps didn't have complete mindshare for our product.

    So, our marketing was a three prong effort:

    1) Distribution Management - this involved price and inventory management. If our product wasn't on the shelf and priced right, it wouldn't sell. We would also keep in front of the regional distribution offices (where orders were taken) to make sure we had as much mindshare as we could get. We would also add incentive programs to sell our product - rewards given at the local level, but administered at distribution headquarters (not by us)
    2) Manufacturer's reps - they would call on distribution customers. We would put together goals for selling our product and commissions based on the emphasis we wanted. For instance, we wanted them to sell our new products so we paid twice the commission as with the older products.
    3) Pull strategy - This involved traditional marketing communications activities. We advertised in trade magazines, have press releases, and would have our engineers write articles. We would create the demand and the distribution would fulfill the demand.

    I don't know enough about your product to direct you any further, but th idea would be for you to find where your consumers find information on your product and to exploit PR, advertising, and writing informative articles to generate enthusiasm for your brand.

    A good clue of how to do this best is to study the Marketing Communications efforts and channel management activities of your competition!

    Hope this is helpful.

    Wayde
  • Posted by wnelson on 6/10/2005 at 6:31 PM Member
    Hi! Yes, this is a common problem with "channel partners" - getting their mindshare and getting them to invest in YOUR product. I worked in the semiconductor industry for 17 years and this was a constant battler. After a while (less than 17 years, I assure you), I came to the conclusion that Distribution for the most part DOES NOT PUSH product. They simply take orders. This is especially true the more the product is a commodity. We had a distribution management team (as does every semi company) whose sole purpose is to manage the inventory and pricing. They would also do feel-good deals that appeared to be PUSH strategy, but none of these resulted in any major sales increase. In the marketing group, we came to the realization that we had to create PULL from the customers ourselves. How we did this is we engaged manufacturer's reps to call on distribution customers to buy our product. Even them this was not very effective because, again, the reps didn't have complete mindshare for our product.

    So, our marketing was a three prong effort:

    1) Distribution Management - this involved price and inventory management. If our product wasn't on the shelf and priced right, it wouldn't sell. We would also keep in front of the regional distribution offices (where orders were taken) to make sure we had as much mindshare as we could get. We would also add incentive programs to sell our product - rewards given at the local level, but administered at distribution headquarters (not by us)
    2) Manufacturer's reps - they would call on distribution customers. We would put together goals for selling our product and commissions based on the emphasis we wanted. For instance, we wanted them to sell our new products so we paid twice the commission as with the older products.
    3) Pull strategy - This involved traditional marketing communications activities. We advertised in trade magazines, have press releases, and would have our engineers write articles. We would create the demand and the distribution would fulfill the demand.

    I don't know enough about your product to direct you any further, but th idea would be for you to find where your consumers find information on your product and to exploit PR, advertising, and writing informative articles to generate enthusiasm for your brand.

    A good clue of how to do this best is to study the Marketing Communications efforts and channel management activities of your competition!

    Hope this is helpful.

    Wayde
  • Posted by michael on 6/10/2005 at 7:39 PM Member
    Push or Pull..the age-old question.

    If you do the educating you always run the risk of having a distributor selling a competitive product. Not sure if your competition is direct or indirect.

    Also don't be afraid to pull a distributors contract. If you don't you can end up paying for "accidental" sales.

    Another option is to develop/adapt your own website so you "own" the sales process up until the time the customer chooses a distribtor. Then you can end up with your distributors fighting over position on your site.

    Hope this helps.

    Michael
  • Posted by businessmachine on 6/13/2005 at 3:10 AM Accepted
    hi, asiavoss. i've recently run into a very similar situation for one of my customers, a data security software developer selling internationally through a rather large and inefficient distribution network. what i've set for them, as to strategical approach to this, might work for you, too:
    - we've agreed on a limited set of messages for the consumer (stressing the need-solution and, respectively, the competitive advantage) and the same for the distributors/resellers (the "make money now!" kind)
    - we've illustrated those messages in striking and easy-to-remember copy and ads/web banners/other visuals ("grab your share!" for disties, "evolve!" for consumer)
    - we planned a mix of pull and push. pull is obvious and it did cost them some money, to get those ads and banners in all sorts of international media (got some deals though through good negotiation, plus some trade-offs, plus three 1/3 vertical right instead of a full page at times...) and it did pay off; for the push, we localized the copy for each country and we had the disties compete over who's contact info be promoted via the ad/banner.
    - we also worked out special promo campaigns for some disties/resellers, with joint funds and effort, but always with the unique communication concept and visuals and copy from the HQ.

    don't expect disti chain to care or pay for marketing your stuff; they're expecting you to do that - fine, do it jointly with them and impose that brand staus the same.

    hm... i wish at least some of this will help you sell the idea to your boss. i wish i had some feedback from you sometime if this worked out...

    good luck.

    clem.
    clement.dan@businessmachine.ro
  • Posted by adammjw on 6/13/2005 at 9:15 AM Accepted
    Hi,

    I have encountered similar problems and I think it is a commodity everywhere.Definitely the best possible way to get things done is by using PULL strategy as at the end of the day it's the consumer who decides what to buy and why.Therefore my suggestion would be to start putting all your efforts into convincing the public how unique and why your offering is.Could you think of any design tool or GUI you could succesfully integrate into your website.The idea would be to show the items as they work and engage end-users in the game.Your website would offer all guidance, instruction and happy customers' views along with a map featuring your distribution network.I would even contemplate putting retail prices in the system, but forwarding end-users to your distributors.What then would be necessary to rethink your search engine optimization to be ranked as high as possible with all relevant searches.You could make Premium Distributor category for the best ones with target sets for the rest to catch up with them.

    Regards

    Adam
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Strategy)