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FUTURE TRENDS. Industry Consolidation Will Accelerate Manufacturers, Distributors & Wholesalers Big Will Get MUCH Bigger or Get Out Small Must Focus on Niche Segments Biggest Future Threat Likely NOT in the Industry Today Technology Will Dramatically Increase

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future trends

FUTURE TRENDS

Industry Consolidation Will Accelerate

Manufacturers, Distributors & Wholesalers

Big Will Get MUCH Bigger or Get Out

Small Must Focus on Niche Segments

Biggest Future Threat Likely NOT in

the Industry Today

Technology Will Dramatically Increase

Both Speed & Efficiency but Require

Significant Investment

role reversals

ROLE REVERSALS

Manufacturers Becoming Wholesalers

Wholesalers Becoming Distributors

Wholesalers Becoming Brokers

role reversals3

ROLE REVERSALS

BENETIT

Increased Understanding of Each Other’s Key Business Issues

CHALLENGE

Greater Transparency of Program/Profit Dynamics

boutique vs cafeteria

“BOUTIQUE” vs “CAFETERIA”

Define Future Role / Function of Jan-San Wholesaler

Selective Line “Boutique” or Comprehensive “Cafeteria”

Consistent Strategy or Line-by-Line Approach

Examples From Other Industries With Deep Wholesaler Penetration

ie. Grocery, Drug, Office Products

boutique
“BOUTIQUE”
  • Exclusive Lines in Many Key

Jan-San Areas

  • Space Constraints Are Real
  • Product / Application Redundancies
  • Line Access / Selective Distribution Determines Point of Purchase
boutique6
“BOUTIQUE”

EXAMPLES

  • Rubbermaid or Continental
  • GoJo or Sani-Fresh
  • Etorre or Unger
  • Time Mist or Technical Concepts
cafeteria
“CAFETERIA”

EXAMPLES

  • Dawn, Joy, Palmolive & Sunlight
  • Tide, Ajax & All
  • Dial, Safegaurd, Softsoap & Lever 2000
  • Lysol & Clorox Spray
  • Fantastic, Formula 409 & Simple Green
  • Easy Off & Mr. Muscle
clarify roles manufacturer rep wholesaler
CLARIFY ROLES Manufacturer, Rep, Wholesaler

REQUIREMENT: Reduce / Eliminate Duplication Throughout the Channel

  • Warehouses
  • Customer Service Functions
  • Sales / Tele-Sales
  • Distributor Marketing
  • Promotional Programs
clarify roles manufacturer rep wholesaler9
CLARIFY ROLES Manufacturer, Rep, Wholesaler

REQUIREMENT: Identify Most Efficient/ Effective Way to “Create” New Business

  • Lowest Cost - Identify “True” Costs
  • Highest Impact / Leverage
  • Accountability For Sales Performance
re distribution data
RE-DISTRIBUTION DATA
  • Basic Requirement For Expanded Wholesaler Role
        • Security of data – potential loss of control
        • Prudent measures that can be taken
  • Extension of Factory Field Warehouses/ Order Processing Systems
        • Accurate confirmation of orders shipped
        • Today’s speed will always be unacceptable
        • Technology investments required for process automation
future threats
FUTURE THREATS
  • Biggest Bundle Wins
        • Yesterday’s “giant” is tomorrow’s midget
        • Logistics will rule – TURNS!
        • Access to lines will NOT be a barrier
  • Technology Investments
        • Requirements continue to grow
        • “Virtual” extension of the factory
        • “Transparent” information/costs
future threats12
FUTURE THREATS
  • Low Barrier to Entry – Warehouses
        • Services Required vs current model
        • Consolidation & Delivery
        • Costs vs Value Added – Marketing, Sales, etc
        • Need to have vs Nice to have (ie. catalogs)
  • Capital Requirements
        • Inventory investment
        • Technology
        • Margin Requirements
future threats13
FUTURE THREATS
  • National Coverage
        • Seamless Operation
        • Ownership vs group membership
sources of revenue
SOURCES OF REVENUE

ASSUMPTION: Margin “Squeeze” Will Continue To Grow

  • Sales Costs / Broker Commissions
  • End-User Bids
  • End-User Drop Shipments (3PL)
  • Distributor Data – beyond the “basics”
  • “Dual House” Model
minimum adverstised price map policy
MINIMUM ADVERSTISED PRICE (MAP) POLICY
  • Component of Advertising Program NOT Price Control
  • Pricing Decisions Controlled by the Wholesaler NOT the Manufacturer
  • Does NOT Impede Price Negotiations With Key Distributors
  • Does NOT Guarantee Wholesaler’s

Net Margin

minimum adverstised price map policy16
MINIMUM ADVERSTISED PRICE (MAP) POLICY
  • Prevents “Death by Fax Machine”
  • Preserves the Price Equity of Key Products in Trade Advertising
  • Compliance is “Policed” by Wholesalers
  • Used Frequently Outside of Jan/San Industry