Progressive Distributor - Ready to launch

Ready to launch

Successful product launches require a more coordinated effort between channel partners

by Rich Vurva

Whether it’s a manufacturer introducing a new product or a distributor expanding a line card, successful product launches require coordinated effort between channel partners. Most distributors represent so many lines, salespeople have little extra time to devote to product launches. And unless the product truly offers a competitive advantage to the end-user, customers won’t sit still for a demonstration.

Still, it is possible for manufacturers and distributors to work together to generate new product sales. In fact, if they don’t periodically introduce new tools and technologies to their customers, they run the risk of appearing stagnant.

Industry executives with experience in product launches say the keys to success include a thorough understanding of the needs of the marketplace, a well-defined launch plan and the ability to execute flawlessly.

Understand the marketplace
The only thing more difficult than launching a new product is launching a new company. The Abrasive Solutions Group is doing just that. The Cleveland-based company was formed in early 2005 by Even Cut Abrasive Company and former Garryson employees who started a new venture after an international metalworking corporation acquired Garryson.

The company calls itself a single-source supplier of high-quality specialty abrasives such as flap discs, flap wheels, spiral bands, cartridge rolls and cutoff wheels. Why start a new company in an already crowded marketplace? Executive vice president and general manager Jerry Hilf says doing business with ASG will enable distributors to consolidate their specialty abrasive supplier base.

“A lot of people say they’re a single-source supplier, but they’re sourcing 75 percent of their specialties. We make it ourselves,” he says.

Hilf says the advantages ASG offers distributors include eliminating the need to refer to multiple catalogs to locate specialty abrasive products, fewer invoices, and lower shipping costs.

Defining exactly how a new product — or in this case a new company — fills a need in a marketplace is probably the single most important factor in any new launch. Failing to clearly identify how the new product solves a problem, saves money or improves a process is a recipe for disaster.

“In our case, we can go to the market and say it’s a new brand but we’re not going to sell it to everybody. A limited amount of distribution will give us the penetration we need.

We’ve got more products to offer you so you can consolidate, and we’re going to allow you to maintain margins,” says Hilf.

Define the plan
Distributors are inundated with requests from manufacturers to help them with new product launches. Many manufacturers don’t get the attention they desire from distributors because they fail to develop a comprehensive plan, says Cathy Veri of Marketecture, a marketing services and consulting company serving industrial distribution and manufacturing companies.

New product launches should be multi-faceted and include product samples, literature, advertising and public relations, field sales and customer service support, Veri says. All launches don’t have to incorporate every approach, but they all should be focused on getting the new product into the hands of customers for trial.

“Package inserts are a low-cost way for distributors to promote products, and it’s minimal cost to the manufacturer,” says Veri.

Manufacturers should also train salespeople to spot appropriate applications for the new product, and be as accurate as possible in defining their niche. It might not be sufficient to say a product is aimed at a certain SIC code. They may need to suggest that salespeople target a precise geographic region or companies of a specific size.

She also suggests using reduced prices on initial orders to entice an end-user into placing a trial order.

“I’m a big proponent of giving people a price break to get them to try something new. Get them to try it and decide they need it, then you can charge them full price. Presumably there are competitive products, so you’ve got to create some reason for the customer to switch,” she says.

The goal of any launch materials is to help the distributor salesperson leverage his or her time.

“Often, a manufacturer will have an expectation that if they give a distributor a line, those distributor salespeople will immediately start selling. Unless you’re giving stuff away, it almost never happens,” says Steve Jones of Jaap-Orr Marketing in Cincinnati, a marketing and advertising firm that represents clients such as hand and power tool manufacturers Link Tools, RoboToolz and Flex North America.

“The manufacturer has to make it as foolproof as possible for salespeople to understand the features of the product, any information on competitors and what the installed base is looking for,” Jones says.

Some product launches offer free trips or other high-dollar prizes to distributors who reach sales goals. Another approach includes producing point-of-purchase material explaining how the new product can reduce plant downtime or increase productivity. Customized literature including both the manufacturer’s and the distributor’s name and logo increase the likelihood that distributors will support the program.

Execute flawlessly
When Danaher Tool Group launched its GearWrench line of ratcheting wrenches and specialty tools into the industrial channel this spring, the company followed a comprehensive plan. Launch materials included a PowerPoint presentation for salespeople to introduce the product, an Excel document where users can enter their own data to see the labor savings the tool can provide, advertising in end-user and distributor publications, brochures, catalogs and spec sheets.

“You have to arm people with anything they could possibly need to answer any objections that might arise,” says Lisa Morton, senior marketing manager for the Professional Tool Division of Danaher Tool Group.

The launch focused on how the GearWrench line, which commands 40 percent market share among professional tool users in the automotive aftermarket, can help industrial users improve productivity.

“First, we had to define how GearWrench would have an impact on the industrial market before we went to launch. As an industrial user, I want to know what GearWrench is going to do for me. The industrial user needs a tool strong enough to break, loosen and remove fasteners in one motion,” says Morton.
Danaher also had to change a general perception among industrial users that ratcheting wrenches aren’t reliable. Older ratcheting wrenches used three-piece construction, were bulky, weak and experienced a high failure rate. Danaher says its GearWrench combines one-piece forged construction and increased strength, allowing them to meet or exceed torque requirements for standard box-end wrenches.

“The hurdle we have to get over in the industrial channel is having the end-user learn to trust a tool they’ve had trouble with in the past. That takes time. The more time you can get in front of the customer the better off you are. It’s critical to get samples in end-users hands so we can prove it’s truly a tool that adds productivity to the industrial user,” she says.

With bigger line cards and more suppliers competing for their attention, distributors need to make wise use of their resources. Before they commit to helping a manufacturer launch a new product, distributors should first make sure the product fills a specific marketplace need, determine if a comprehensive launch plan has been established, and ensure that the manufacturer has the financing and people necessary to execute the plan effectively. When manufacturers and distributors jointly meet those criteria, all systems are ready for a successful launch.