professional distributor management mcsm services webinar - 2013-11-27
DESCRIPTION
Professional Distributor Management is a critical success factor for companies growing their sales internationally through a network of international trade partners like distributors, importers or agents (manufacturer's representatives) www.mcsmservices.comTRANSCRIPT
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“Professional
Distributor
Management”
November 27, 2013
Presenter:
Roland van Marlen
Moderator:
Yoav Amiri
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• In business since 1995
• Consultancy firm with 2 partners and +/- 20 Freelance market researchers
• Assisted more than 50 companies growing internationally
• Key specialization: “International Distribution Networks”
• Europe and the America’s
About MCSM Services
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Today’s Objective
How to manage international trade
partners
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International expansion models
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Distributor Management
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Traditional distributor management:
Catalogues, Telephone & Dinner
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Professional Distributor Management
Performance
Management Distributor
Motivation
The basis is
preparation
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Working with your partner Which panorama do you offer?
Hell Paradise
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Hell -vs- Paradise for international trade partners
- Long lead times - Ex-works (FOB) pricing - Currency risks - Undesired paralel imports - No guidance from vendor - No support from vendor
- Local/regional warehousing
- DDP pricing - Clear currency policies - Clear sales policies - Regular support
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Preparation
Marketing & Sales
Program
Written
Agreement
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The Program
Why a formal program? A formal Marketing & Sales program will:
Increase your credibility
Eliminate lengthy discussions
Make sales people more effective
Simplify management
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Elements of the program
Program
Pricing
SLIPP
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Proposition Analysis
“The Golf Method”
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Define the top elements of your
proposition one by one
Hole 1: Brand & Reputation
Hole 2: Product
Hole 3: Lead Time
Hole 4: Quick Ship Program
Hole 5: Return Policy
Hole 6: Credit terms
Hole 7: Customizations
Hole 8: Warranty
Hole 9: Training
Hole 10: Rebates
Hole 11: Awards
Hole 12: Marketing Support
Hole 13: Lead generation
Hole 14: Currency used
Hole 15: Local service
Hole 16: E-tail vs retail policy
Hole 17: Certifications
Hole 18: ???????????
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Program content: “On par means: You won’t win”
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Rate the top elements of your
proposition one by one
Hole 1: Brand & Reputation +5
Hole 2: Product 0
Hole 3: Lead Time -2
Hole 4: Quick Ship Program +3
Hole 5: Return Policy -2
Hole 6: Credit terms +2
Hole 7: Customizations -2
Hole 8: Warranty -4
Hole 9: Training 0
Hole 10: Rebates +2
Hole 11: Awards +3
Hole 12: Marketing Support -1
Hole 13: Lead generation -2
Hole 14: Currency used 0
Hole 15: Local service -2
Hole 16: E-tail vs retail policy +2
Hole 17: Certifications 0
Total: +2
Hole 18: ??????????? -3
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The last hole is.....Price
Hole 18
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Contents of a Distribution Agreement
• Type of agreement • Territory • Term and termination • Targets • Pricing • Currency market effects • Credit limits • Communication and
Reporting • Orders & cancellations • Confidentiality
• Marketing clauses • Non-Compete clauses • Direct sales • Cross territory sales • Warranties • Compliance with US export
laws • Choice of legal system • Language in correspondence • Company entitled to direct
contacts
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Principles of Distributor Management
1. Set objectives
2. Reporting structures
3. Measuring systems
4. Periodic evaluations
• Independent information sources
• Consultative approach
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• Keep it simple
• Keep it brief
• Include market
• Include goals
Marketing reporting
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Measuring systems
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Activity Based Costing
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ABC and measuring distributors
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Advantages & disadvantages of ABC
Cons Pro
• Only looks at the financials
• Cannot be used in start-up years
• Can be quite a burden to facilitate
• It becomes very clear what a distributor renders or costs
• Can be done without the distributor’s knowledge
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Measuring systems
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Balanced Scorecards
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Balanced Scorecard methodology (9 Steps to Success)
Robert S. Kaplan & David P. Norton
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BSC and measuring distributors
• BSC is designed with the distributor
• Identify what needs to be improved in order to generate (more) success
• Define KPI’s
• Make BSC part of the reporting structure
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BSC example
Critical Success Target Status
Factors
Business benefit
Annual Revenue $ 12,500,000.00 MAT $ 11,750,000
Market Share increase 3% 2.60%
Organization
Staff expansion 1 Product Manager
1 Customer Service Representative
1 A&D representative
Logistics
On time delivery 98.5% On time delivery 96.23%
Marketing
Brand recognition 25% Increase 19%
Sales
Shelf space in retail outlets 1500 mtr. 1750 mtr
New architect partners 300 new architect subscriptions 32
Customer
Complaints 20% reduction 6%
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Which KPI’s?
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Advantage & disadvantages of BSC
Cons Pro
• Distributors can be(come)
uncomfortable with the process
• BSC can be used right from the start
• BSC is a flexible method • BSC also looks at non-
financial criteria • BSC’s are easy to include in
a report
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• There is a correlation between ‘success’ and ‘having a reporting and measurement process in place’
• Top KPI mentioned was ‘revenue’
• From the Top 5 companies, however, only 1 company named ‘revenue’ the leading KPI
Some results from our own research
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Motivating Distributors
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Top Turn-off’s for distributors
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Motivating Distributors
Last but certainly not least:
Operational Excellence
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THANK YOU!
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Questions?