Value of Marketing Groups to Manufacturers

Over the past few months, and most recently at the NAED Leadership Summit, we’ve heard from a number of manufacturers lamenting about participation in marketing groups. While some work the groups well and focus on the group’s members with targeted marketing strategies, some of the issues we’ve heard include:

• “All, or substantially all, of our competitors are part of the group. So what is the benefit for me? I recognize that I need to belong just to keep pace.”
• “They keep negotiating for more and more money. Every conversation is about rebate. Few, if any, are about growing my business.”
• “They call themselves ‘marketing groups’, but where’s the marketing?”
• “As an engineered products company (not a commodity) with selective distribution, we’re questioning the value of the groups.”
• “The old rationale of belonging to streamline rebate negotiations and processing is no longer valid. We’re having lots of distributors asking for additional rebate and technology has made the process easier. Our finance people are questioning the value proposition.”
• “With such a high percentage of distributors in one of the groups, I wonder how they can outperform our other groups / chains.”
• "We wonder how much, if any, business we'd lose business if we left the group but redistributed the rebate to those who support us."

Given the comments we’ve heard, we’d like your thoughts.

• What are the benefits of groups to manufacturers, if any, anymore?
• Are groups avenues for manufacturers (who've been in the group 5+ years) to grow their business or are they alternative profit streams for distributors (and why are manufacturers responsible for distributor profitability?)
• Would distributors prefer a reduction in price in lieu of rebates?

Let us know and also take our survey on “Value of Marketing Groups to Manufacturers” (its anonymous and we’ll report back results on ElectricalTrends.)