Page 25 - Parquet International January 2014

If a man does not know to which port
he sails, no wind
is favourable
Seneca
It’s now 2013 and 5
years have passed since
the beginning of this
slump, yet most companies still deal with the market in a passive manner, waiting (as before) for work to come knocking at the door. I’m sorry to say that this is no longer the case. Put simply: you’re going to find it hard to balance the books unless you’re will- ing to step outside and start building seri- ous, professional and reliable relations with the market.
Hence this concept of confusion, as manu- facturers have been forced to adopt highly sophisticated market forecasting tools in or- der to survive and so now realise that they have to produce high quality goods, capable of guaranteeing long life and sustainability, goods that can satisfy the latest design trends, etc. All in order to create significant value, easily absorbed by the market. The quantities may well be lower, but the mar- gins are definitely higher. What would you prefer: 100 customers at €1 or 10 at €10? Having developed these products, manu- facturers have no choice but to entrust them to the only distribution chain possible. Like them, distributors are now emerging from decades of “easy living”, years when there had been no need to distinguish oneself in order to survive.
Many resellers have used different tools to study the market and now find themselves with products, brands and values requiring a lot of effort to be sold properly and gen- erate a good margin. The result has been that most are not in a position to invest the effort required: partly because they are not accus- tomed to doing so, partly because they have no clear strategic plan when it comes to dis- tribution and partly because they are still very much focussed on short-term devel- opments.
Hence the crisis in the distribution chain! Quite understandable if there were no dis- tinctive, high quality products or important and innovative solutions that meet the ob- vious needs of the market; however these do exist and quite evidently so. The resulting dispersion of a brand’s value is now seen as an unsustainable waste by manufacturers. Since I am involved in marketing, the most frequently asked question I have to answer is “Why?” So I would like distributors to ask themselves these two questions: “Why should a brand give me his product to sell?” and at the same time, “Why should I give this brand the chance to be sold in my ex-
cellent, innovative sales outlet?”
I believe that the market
can no longer afford to make any compro- mises! To succeed in business all cogs in the engine must turn at the same speed: if a manufacturer is going at 100, then the re- seller must also go at 100. Only then will the final result be coherent and allow the end customer to truly understand the value of the product and be happy to pay for it.
If, on the other hand, the reseller and man- ufacturer go at different speeds, the result will be not only stress and dissatisfaction on both sides, but also a waste of money and that is totally unacceptable in the light of today’s difficult and highly competitive market.
There is no shortage of products or resellers. What we need to do now is see sense and get rid of the confusion: enough of brands offering their products to as many resellers as possible in an attempt to get sales and enough of resellers stocking as many dif- ferent products as possible, from high-end products to low-end ones, willy-nilly. Choic- es have to be made: either you sell quality or you sell quantity. You can’t do both!
It’s not a matter of good or bad, it’s a ques- tion of making a clear business
decision. One that avoids
waste and allows an or-
ganisation to play its full hand. How can you pos- sibly use the same mar- keting tools (web, sales outlet, staff, advertising, etc.) for both customers only willing to spend €10 and those happy to spend €80? How can you remain credible?
There are different customers,
speaking different languages and
with different needs and habits. More importantly, there are customers requiring personalised treatment and these are the ones who, surprise, surprise, are willing to pay more for the privilege.
Therefore, make your choice and do so quickly as the opportunities are getting scarcer all the time. Stop complaining about what’s not right: everyone can see why things are going wrong. The time has come to decide what to do in order to change and to introduce concrete operational changes. Remember, any action loses its meaning without a clear-cut goal! s
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