Manufacturers too can experience both potential challenges and benefits from having a third party in place, noted Michael Smith, vice president, sales, for Lutron. “Rep agencies signif- icantly increase our sales presence around the country, help build local relationships in virtually every geog- raphy, and lend tremendous value in terms of product and business knowl- edge to a wide range of projects,” Smith said. “Are there also challenges in having a third party representing your com- pany? Potentially. An increase in mergers and acquisitions and con- solidation within the lighting and electrical industries could cause line cards to become a blurred, and there is the chance of manufac- turer conflict for the agencies.” But Smith added that overall, the chal- lenges are minimal compared with the ben- efits independent reps can bring to both manufacturers and distributors.
Collaborative Partnerships There is another type of third party that can enter the distribution dy- namic: buying and marketing groups. Although they are less directly in- volved in transactions, they are an important factor when it comes to the distributor/manufacturer dynamic. The good news is that people on either side of the equation feel that these groups provide far more benefit than any challenges they may intro- duce. In fact, they can provide help in some of the areas previously identified as sticking points in the distributor- manufacturer relationship, such as help with strategic planning. “[Marketing groups] are remark- ably important to us,” said Vanden Hoek. “We rely very heavily on [them] and they provide tremendous value to
us. One of the most important things is marketing programs. They also con- solidate and standardize business transactions, reporting, and tracking that helps us engage with distributors better as well as help to consolidate communications—we can reach hun- dreds of distributors through the mar- keting organizations and know we’re reaching the right people.” Barsema agreed that these groups largely benefit the distributors. “Mar- keting groups rep- resent the pool of resources in one place, a community of common interest, intent, and inspira- tion. It’s a place where special rela- tionships are built. In a way, manufac- turers and distribu- tors are instantly bonded by being members of one company,” she said. “There are special programs arranged for us, ways to bring the relationships closer together.” Barsema noted, for example, that buying and marketing groups can pro- vide data to help distributors project their purchase intentions for next year and decide which suppliers will be the best fit for the distributors’ forward- looking goals. “I think distributors receive white- glove treatment from suppliers within a buying group due to the vigilance of the buying and marketing group leaders. It certainly raises your aware- ness and expectations from a sup- plier that isn’t part of it,” she said. “But that doesn’t mean a distributor won’t get great service and can’t have a strong partnership with suppliers outside of it.” ;
Katarsky is a freelance business writer
based in Philadelphia. She can be reached
www.tEDmag.com Jun. 17 • the ELECTRICAL DIS TRIBUTOR 29
We engage with reps from a desire to enhance our value to distributors. That’s the basis for why we use these business partners. If there is no value added, there is no beneficial rea- son to establish that relationship.
—JIM VANDEN HOEK,
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