Distributors Preparing For Differentiated Product Lines

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TWICE:

Are you seeing attempts by suppliers to differentiate their lines and push commodity products to mass channels and more high-end products to specialists?

Stephen Bodnarchuk, M. Rothman & Co:

Manufacturers have continually tried to market and segment product by channel; this year is no different. With life cycles of electronics products becoming even shorter and products becoming more advanced and feature rich, it is even more important for the manufacturers as well as the distributor community to get the right products in to the right channels.

The challenge that remains is viable channels and disciplines. There simply aren’t as many directed sales floors left.

We are definitely seeing an increase in product offerings along all lines and categories with the intent of segmenting by channel in 2012, and channel management has certainly become an even greater focus this year.

Brent McCarty, Ingram Micro Consumer Electronics:

Yes. Where consumers purchase products is changing at a rapid pace. Manufacturers are trying to ensure they leverage the strengths of the multiple channels and are modifying their approach — and in some cases products — to address the change and the differentiators of the various sales channels.

Fred Towns, New Age Electronics/Jack of All Games:

We have seen a little bit of this, but the trend we are experiencing most is manufacturers offering extended assortments and step-up models to give the customer a more robust experience. Consumers have been educated on the new enhanced features offered, such as web-enabled TV, and are asking their retailers for them.

Michael Flink, ADI Americas:

While some suppliers are trying to differentiate their product lines, there is a lot more to be done. Major suppliers have strategies to differentiate between mass-market and specialty products. Our dealers prefer the specialty channel as it provides them with opportunities to deliver more value with higher specs and better performing products.

Jerry Satoren, DSI Systems:

Yes, I am seeing a little more of that this year. But I think many suppliers’ new and improved MAP policies take care of that without having to exclude highend products from certain channels by policy, at least in the brick-and-mortar space.

However, I am seeing significant attempts by suppliers to differentiate their lines between brick and ecommerce channels. In my opinion, these moves are the key to providing the profit margins required for suppliers and retailers to get these higher-end technology products built, sold and into consumers’ homes.

Ron Eby, D&H Distributing:

A perfect example happens in the headphone category: Manufacturers are pushing to increase their unit growth via more accessible product lines, but they have also developed high-end and fashion models to drive a higher [average selling price].

Retailers are being forced to differentiate themselves in order to compete with e-commerce venues. The Internet is growing faster than ever as mobile shopping apps improve. More people have tablets available to them, which allow consumers to do instant price look-ups. The online shopping experience has become more comfortable and secure. Additionally, as e-tailers’ delivery methods improve there is less of a gap in instant gratification for online purchases.

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