Value of Marketing Groups to Manufacturers

As a longtime IMARK member, I could never understand why we brought in the EDN group. Seems like we watered down the group. Can’t network with them as they don’t understand larger company issues and I don’t see any improved rebates. it’s also a hassle having all these new suppliers calling on me expecting business because they are no in IMARK. So much for the value of member-owned since I didn’t get a vote

AD more than IMARK is a rebate driven company(I know both live on rebates). From my vantage point (a manufacturer), IMARK truly attempts to market their vendors to the membership. AD represents themselves first, and the distributors second. It is all about the rebates, GIBP, and bringing large groups to the annual meeting. They provide little value to us as ALL of our competitors are supported by AD. We are supporting them for defensive reasons and can honestly say our growth has had little to do with any of their support or programs.

Like so many things in our industry, those groups have outlived their usefulness . If a distributor can’t survive without them then perhaps a thinning of the herd is in order. The money and energy expended with these groups is better utilized with partners that can survive independently.

I disagree with the first poster about bringing EDN into IMARK. Although it may be cumbersome and at this time there is little interaction between the “legacy” and former EDN members, we have an opportunity to mentor them and help them grow their businesses, thus adding value for our manufacturers. Most of us started as a little guy and needed some help and guidance along the way!

As a small manufacturer of some advanced and somewhat unique technology, we are being compared to more established and older technology companies. Also, the focus seems to be more on what type of rebate we can offer members. What happend to joint marketing and building business together. As a long time member of the electrical / lighting industry, it bothers me to see more interest coming from the mechanical contractors and distributers than my electrical contacts. Wake up guys, you need to be more open to new ideas and companies as opposed to the same old things.

A couple of thoughts from a Distributor’s perspective. The discussions about rebates will always occur regardless if it is between a Marketing Group or the distributor. The ultimate value to the manufacturer should be volume and growth. The manufacturer should ask, does the Marketing Group influence the buying decisions of the distributor (distributor % of spend within the marketing group)? Reducing the price in lieu of rebates would only lower the market price and distributors would still expect a rebate. I think it is fair for the manufacturer to review selectivity and ultimately the reasons for participating in a buying group should be sales performance relative to the rest of the market.

How about the marketing groups focusing more on inventory snd total supply chain cost reduction opportunities between suppliers and distributors; meaning finding ways to reduce “total unit cost”.

Make “supply chain vesus supply chain” a competitive advantage, increasing the velocity of product throug the supply chain.

So many have spoken to the issue of “supply chain/partner collaboration” that it has reached the point where the term has nearly lost its meaning. Rebates are one of those disconnected functional silos based on optimizing “my situation”.

Both sides need to think differently. There are new and different ways to accomplish this; getting away from the need to place still larger order to get still larger rebates.

Other industries have undertaken this successfully.

Buying / Marketing Groups are the salvation of the independent electrical distributor. Before they existed, the national chains had all the leverage with vendors and used it in the marketplace.

Any manufacturer who thinks “thinning the herd” might be good is mistaken. When is having fewer options to get your product to market a good thing?

Manufacturers should reward distributors for volume and growth (especially for commodities) and focus their marketing efforts on engineers and specifying influences.

Distributors are too busy competing with each other and have no time to market products which may be purchased from their competitor.

Distributors fight for market share and manufacturers fight for shelf space. If the manufacturer is strong, distributors will stock them regardless.

There is safety in numbers for the groups and for the separate distributor companies.
I tend to go along with the post above that says that distributors should be rewarded directly…but then one begins to wonder if a reduction in price would undercut the local market place.

I think I will live long enough to see these groups go away. AD is so slow in paying accounts it make me think I really don’t need them.
Just a distributor on the west coast

Buying/marketing groups might gain value if they were to offer up some value with recommended ERP packages that perform and produce standardized information and the marketing group didn’t take a cut of the sale. They can get their cut on actual product sales.
I understand that I run my business differently than my competition, but at the end of the day, if purchases and reports grew, so would rebates and the win for the supplier would be increased sales.
ED in the SW.

We are fairly new to AD. Being invited into AD, only to have them slow pay has always been a problem for the very beginning.

I still think we have a better deal than the IMARK distributors.
But the poster above is correct that there is safety in numbers.