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 A
leading North American high
tech equipment manufacturer
faced destructive channel
conflict between broad line
catalog resellers and VARS
that focus on the design,
sale, installation and support
of their hardware.
The solution: A
discount structure and
rebate program leveled
the playing field among
the channels, creating
a significant increase
in margin for the manufacturer,
roughly 15% growth in
sales through both channels,
and a more satisfied VAR
channel willing to make
the investments necessary
to support the manufacturer's
product line. |
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 A
global supplier of computer
components sold directly
to OEMs, Authorized and Unauthorized
distributors on the same order
quantity discount schedule.
As a result, distributors
were unable to earn sufficient
margins and chose to support
competing lines. The client's
goal was to develop a strategy
and program that sorted customers
between direct and indirect,
differentiated value-add within
distribution, and reflected
the unique channel networks
in North America, Asia and
Europe.
The solution: A
tiered distribution model
by region provided higher
level benefits to value-added
distributors and account
registration opportunities
for distributors that specified
the manufacturer's brand. |
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 An
industrial power tool manufacturer
found itself in the destructive
mode of offering rampant "special
deals" at the end of each
quarter. As could be expected,
this adversely affected distributor
behavior as they waited for
the deals, loaded up with
inventory, and then either
unloaded the product at low
margins or cornered the market.
The manufacturer was unable
to forecast its production
requirements, lost sales due
to depleted stock, and deteriorated
its margins.
The solution:
A comprehensive new channel
program established consistency
in pricing for distributors,
recognized distributors
that made the greatest investment
in this manufacturer's product
line, and paid those distributors
that performed the functions
that end customers value
most. As a result, the client
increased margins by over
10%, and took market share
from its competitors.
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A leading candy manufacturer
utilized the "squeaky wheel" approach to allocate
marketing funds among retailers and distributors.
In addition, they used a one-size-fits-all
approach to funding product categories with
different strategic interests. As a result,
they provided the highest levels of funding
to their least efficient channel partners
and were eroding their brand by starving their
cash cow.
The solution: A new approach to
channel compensation based on cost-to-serve
the retailer. The most efficient partners
earned the highest levels of funding to
accelerate the company's profitable growth.
In addition, funds were allocated by product
category based on the way customers buy,
rather than by internally driven manufacturing
requirements. This aligned the company's
channel pricing program with its go-to-market
strategy.
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