Manufacturer Priorities – New Products & Training

Last month we shared some of the input we received for our 2008 ElectroIndustry Survey:

• 2008 Sales Projections
• Distributor Priorities
• Distributor Branding Strategies

It is evident where the manufacturer focus is:

• three of their top eight priorities are training related
• three focus on revenue generation (new products, expand distribution, specifications)
• another is a focus on cost reduction (which means either less services and support materials and/or more work delegated to distributors and reps)

Additionally, you can see a focus on improving profitability through productivity, cost reduction and better pricing strategies.

The low energy efficiency score can be attributed to the breadth of survey respondents – not everyone is focused on this market, albeit many have opportunities in it, even if their product is an “add-on” sale.

The low data scores (data synchronization and POS information) are probably related to 1) sales and marketing contacts responded and don’t either understand the issues, the opportunities or are tired of hearing about the challenges from their IT departments, 2) these endeavors require investment, which may not be a priority at this time, 3) the companies don’t have the infrastructure in place to address or benefit from these areas or 4) are someone else’s responsibilities.

Of interest is the desire to focus so much on training. A concern that has been expressed by a number of distributors and reps is “If I do all this training, when am I going to sell?” and manufacturers also question the ROI that they receive on their training. Prioritizing which training to partake in, in what format, and whom should be trained and by whom, are all major industry challenges. With much of this “training” being funneled through distributors, someone within the distributor must now be the gatekeeper, monitoring the flow so that sales can continue to generate revenue.

A number of manufacturers have told us that they see 2008 growth in high single/low double digits. They expect this to be driven by new products, penetrating specific niches and working closer with selected distributors (providing them training and other support). The key to achieving these objectives is effective partnering in the field to ensure execution.