Manufacturer Marketing Co-op Feedback

On Monday we shared recent attitudinal research of electrical distributors’ thoughts regarding marketing funding and co-op funding in particular.

As you would expect, we also reached out to a number of manufacturers to gain their perspective.  The manufacturer feedback was qualitative in nature. Their thoughts were:

• Many cut back on their co-op programs in 2009, some even canceling their programs. Pretty much everyone still has some money to spend (MDF funds) for the “right” activities.
• To procure funding for activities, more manufacturers are expecting distributors to have a plan and have some type of a measurement process.
• Many manufacturers are no longer funding trips, and we know of a couple of companies that are not running trips this year that have historically had significant manufacturer funding support.
• Manufacturers find a greater ROI using MDF and targeting those funds on selected distributors and those distributors that plan (and this is more of a challenge for reps … having to explain why there is no funds for “everyone”).
• Golf tournaments are out.
• Manufacturers who continue co-op funding programs have tightened up what the funds can be used for.
• Manufacturers feel that the distributor attitude of “it’s my money, I earned it” was misguided as manufacturers were funding that “program”. This has been a bone of contention amongst some for awhile, however, remember, “he who has the gold rules” (and the manufacturers had the gold, but infrequently used their ability to say “no”).

We may be seeing a long-term shift in a business practice.  Whenever the economy improves (or the industry in general begins to grow), it is very doubtful that manufacturers will revert to the largesse of prior years. Expect to see marketing funds become more tightly controlled and allocatted to those distributors who have marketing / growth strategies. Manufacturers do, and will, have funding, but they’ll be more selective in their efforts.

Manufacturer salespeople have a couple of concerns:

• Many don’t have much experience in jointly developing marketing plans (although they can be good in developing sales plans and targeting accounts).
• They are concerned about “asking for funds”, and
• How do they address other distributors

Joint marketing funding can be a win-win for distributors and manufacturers. The keys are:

• The manufacturer having a sound marketing funding philosophy that is grounded in an analysis of prior experience correlated with ROI.
• A process to ensure that funds are allocatted in the best interests of the manufacturer.
• Distributors developing marketing plans, and
• Then involving the rep to refine the plan
• Execution
• Measurement and feedback

Joint funding enables manufacturers to localize their marketing efforts, thereby maximizing a return – when the monies are well spent. By planning and focusing, both parties can win.

What are you seeing regarding marketing co-op / marketing funds?