February 2012 - Modern Distribution Management

February 2012

MDM Special Report: The Distributor Marketing Imperative

The next major frontier for distributors is to develop more significant marketing capabilities. The companies who embrace this challenge will outperform the market and their peers, even during recessions.

The Distributor Marketing Imperative is based on a survey of and interviews with distributors across sectors. This research was conducted by MDM and Real Results Marketing in Boulder, CO. The two articles in this special report present the results of that research and explore ways distributors can refine their approach.

The first article analyzes distributors' approaches to sales channels, including outside sales, inbound sales, telesales and in-store programs.

The second article explores how distributors use different marketing vehicles, including email, the Web, catalogs and more.

Data/graphics included in this report:

  • Sales channel usage: Market Leaders vs. other distributors
  • Sales channel effectiveness: Market Leaders vs. other distributors
  • Sales channel importance: Market Leaders vs. other distributors
  • Direct response marketing vehicle use: Market Leaders vs. other distributors
  • Direct response marketing vehicle importance: Market Leaders vs. other distributors
  • In-store/in-person marketing vehicle usage: Market Leaders vs. other distributors
  • In-store/in-person marketing vehicle importance: Market Leaders vs. other distributors

Editor's Note: In this report, survey results are frequently presented showing Market Leader response vs. other distributors. MDM's Market Leader lists are available at mdm.com/marketleaders. The MDM Market Leaders are the largest by revenue distributors in eight different distribution sectors.

These articles were originally published in MDM Premium in May 2011.

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Special Report: Emerging Technologies in Wholesale Distribution

This MDM Special Report looks at five areas where distribution companies have started to take advantage of newer technologies to run their businesses better:

The first, cloud computing, provides a cost-effective, efficient way for distributors to implement technology in their businesses. The cloud has advanced to a point where it's a viable alternative to client-server ERP, according to some experts, and more distributors are using cloud-based services to gain competitive advantages.

Next, we look at tools that are helping distributors optimize their pricing practices. Pricing continues to be an area ripe for improvement, and advanced technologies now make data-based decisions on pricing much easier for distributors of all sizes.

Mobile technologies, the third area we examine in this report, is playing a growing role in how distributors do business and in the services they are able to offer their customers.

Business intelligence tools - delivered over a number of platforms, including mobile - are providing actionable data for distributors to be more strategic about their next moves in their markets.

And finally, e-commerce has evolved beyond what many think of as a B-to-C approach. More and more distributors are using online platforms with a B-to-B mindset to complement their sales and marketing efforts.

These articles were originally published in the second half of 2011.

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Trend Points to Less Offshoring by Manufacturers

For years, we’ve been talking about the trend of offshoring – companies sending operations to other countries to take advantage of lower labor costs. But there are signs that trend may be reversing. More manufacturers want to source product closer to home. This article looks at current conditions, challenges to offshoring and expectations for sourcing going forward.

For years, a core element of cutting costs for many major manufacturers was moving operations to countries with cheaper labor. The belief was that labor savings would more than offset the transportation costs associated with reimporting the finished products. As a result, manufacturers set up shop in places such as China and India and prepared to increase their profits.

But a problem developed: “China’s labor isn’t so cheap anymore,” says Barry Lawrence, director of the global supply chain laboratory at Texas A&M University. And transportation capacity has also become an issue.

As a result, a shift appears to be taking place in the market. While it is currently known by many terms – near-sourcing, insourcing, onshoring, etc. – it all means one thing: Manufacturers are looking for ways to bring production closer to the consumers of their products.

In its 2011 Global Manufacturing Outlook, global accounting and consulting firm KPMG reported that the U.S. was second as a destination for new sourcing in the next 12 to 24 months; only China registered higher.

Increased volatility in the global market has led ...

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