Can Demand Be Created in the Electrical Industry?

Lately we’ve been talking to a number of manufacturers about what they are seeing in the market and what their initially planning thoughts are for 2010.

While most feel that the market has stabilized (and in some cases seeing a little growth over the prior month), they are concerned about the market, both short-term and longer-term.

No one sees much, if any, industry growth for 2010. The numbers we are hearing are +/-2%, depending upon the product category. Their concerns are :

• the project market is not good (we know, an understatement)
• credit availabiliy is questionable
• a weak dollar will increase fuel costs, thereby slowing a recovery
• the financial viability of many of their customers
• everyone (manufacturers, distributors, reps and customers) have reduced staffs as well as sales and marketing budgets

And that there isn’t much to drive the market, hence distributors will focus on “beating each other up” for the available share to “serve” the existing market.

They know that they can service the existing business, but they don’t see many trying to create demand.

Creating demand can only occur at the end-user level. It requires doing some research, understanding the voice of the customer, marketing applications to solve problems, a different type of sales mentality and a marketing strategy that expands beyond promotions and events.

Given the economic environment, there is an opportunity for distributors to stand out as demand creators; an opportunity for manufacturers to more closely partner with selected distributors in a given market; and reps may need to make a choice of either providing more support to selected distributors or identify ways to create more opportunities.

The question becomes, since it is everyone’s role to create demand, but few have done it, what do “you” need to do differently to create demand and control your own future? Doing tomorrow what you did today (and yesterday) will only deliver similar results (and position you as a transactional player). Deciding to be a demand driver takes having a vision and understanding your market (and there will only be a few in any given market).

Where do you stand? What are the opportunity areas in your geographic area? How do manufacturers, distributors and reps need to change? (and can they!)