As sales-driven organizations, most distributors neglect the marketing function. Although a good marketing program takes time, effort and close cooperation between distributors and suppliers, the benefit of increased profitability makes it worthwhile.

by Reed Stith

The term “marketing” is used in so many different ways, it’s almost as confusing as e-commerce. But in fact, a good marketing partnership between a distributor and manufacturer can lead to significant improvement in profits, both by increasing sales and by reducing wasted expenses. Good marketing leads to increased productivity of the manufacturer’s and the distributor’s inside and outside sales forces.

Perhaps the best way to define marketing is by determining what it is not. Marketing is not advertising. Marketing is not sales. It is not coming up with creative promotions to unload excess inventory. Marketing may include all the above, but it ultimately comes down to determining the needs of the customer, and developing solutions that satisfy those needs.

Generally, successful marketing programs aim at helping customers lower costs, improve productivity and increase value to their customers. Accomplishing this goal may include advertising, sales and promotions, but also includes choices about product development, pricing, ordering, delivery and customer service, among others.

Another common misconception about marketing is that it’s an expense, not an investment. Often, the marketing communications budget is one of the first items sacrificed when sales drop. Yet, it is precisely during such a downturn when marketing is needed most. If your customers are buying less, you must dedicate resources to determine what you can do to meet their needs. Just like with personal savings or charitable giving, companies must make an ongoing commitment to marketing, perhaps tied to a percentage of sales. There is never “money left over” for these important items.

One reason that marketing is so quickly cut is the perception that its value can’t be measured. Management considers an investment in advertising or customer research to be a necessary evil that can’t be avoided. In fact, it is possible to design marketing projects to generate a clear, desired outcome that management can evaluate compared to the project cost. It’s all a matter of proper up-front planning.

Marketing is a team effort
Manufacturers and distributors each have an important role to
play in developing effective marketing programs. Unfortunately, most marketing programs are developed by manufacturers and then rolled out to distributors,
who are expected to wave the banner in front of customers. When they don’t get the results they’d hoped for, manufacturers typically blame distributors for lackluster support.

The best marketing efforts (and the rarest) involve close cooperation between channel partners.

Manufacturers should do the initial market research. They should define the end-user market for their products, the size of the market, what problem the product solves, what the customer considers before purchasing, and how and where the customer buys. In particular, manufacturers should provide distributors with a summary of competitive intelligence, so they can be prepared for common questions and objections.

Manufacturers should also provide basic support literature, plus lead-generating initiatives such as advertising and trade shows. Even more important, manufacturers should train distributors on how best to use the support materials to get the best results.

Manufacturers should also review their marketing materials with distributors before it is too late to change them. After all, as distributors, you are closer to the end-user and know how customers may respond to various approaches. The truly progressive manufacturer will ask for your help to get feedback from targeted customers during the testing stage (but that rarely happens).

Manufacturer programs should be easy to implement, and as turnkey as possible.

They should be flexible, so they can be tailored to fit your resources and your individual goals. The programs should also complement your internal structure and compensation incentives. There’s nothing worse than a spiff program that takes your sales force away from the priorities you have given them.

Step-by-step guidelines
Effective marketing takes time and effort and close cooperation between channel partners. So, clearly, distributors and manufacturers must be selective in choosing the channel partners to work with to develop marketing programs. Each side needs assurance that its partner is willing to do what it takes to complete the journey together.

Before you decide which manufacturer to partner with, there are easily definable steps you can follow to assure measurable results and minimal wasted time and money. A smart marketer will take the time to do the homework, and pilot testing, before committing valuable time, money and manpower to a program. The trick is to take time to get it right the first time. By adhering to the following steps, you and your manufacturer partner will end up with a road map to increased sales and profits.

Click here to view the road map checklist

Reed Stith is principal of IDC3, a distribution consulting firm. He can be reached at (330) 656-2023 or at rstith@idc3.com.

This article originally appeared in the March/April 2001 issue of Progressive Distributor. Copyright 2001.

back to top                                       back to marketing archives