Manufacturer Support: A Give and Take Situation

Manufacturer Support: A Give and Take Situation

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Depending on whom you ask, manufacturer support of retailers is either up, down, or indifferent. Some retailers are very happy about the support they receive today, while others long for days gone by when they could pick up the phone and speak directly with a rep. “Sooner or later we will lose all contact with manufacturers,” laments Manny Park of Pro Image. “Support for retailers is way, way down, but I understand manufacturers have made changes because they need to survive. I can’t argue with that.” For Park, delivery and shipping costs are a huge issue. “Paper and chemicals are very heavy and they’re not something UPS or Fed Ex can handle. So it’s delivered by a special trucking company, which I’m sure was a step toward reducing costs. The local trucking company doesn’t prioritize deliveries and quite often items get delayed or lost in the channel. Only a few months ago, when I placed an order, I could request next day delivery at no extra charge. But those sweet days are gone.”

“Some companies have really gotten good while others have fallen by the wayside,” adds Bill Ferguson of Hokanson Camera. “I’m getting tremendous support from Olympus that is far and away better than anyone else. Their repair turnaround is amazing,” he states. “Although I don’t get too many Olympus products to repair, what I do send in I’m getting back in 7 to 10 days; I have to wait 3-6 weeks on other companies. Their customer support is also good. Just this morning I had a question and called the tech rep; he answered my question while I was with the customer in the store. It’s nice to have that quick access and not hear ‘I’ll get back to you.’”

Tony Miresse, President, Art’s Cameras Plus, says he relies heavily on support from key vendors to fund promotions throughout the year. “The biggest events are my June Tent Sale and my November Fall Expo. Both are huge events that center around a multi-rep demo. I spend a lot of money to promote these events,” states Miresse, “most of which I get from my vendor partners. I don’t just run an ad in Thursday’s newspaper and expect people to come in. I run an eight-page flyer in full color that shows it’s a true event. I use the support to really pound the market with advertising, whether it’s a flyer, an extensive radio campaign or getting my mug on TV programs.

“Partnership is the key—it has to be a win-win deal for us and the vendor. If we lose sight of that, we’re just another dealer with their hand out looking for charity. I get full participation from all my reps because I promise I’ll bring people in—then it’s up to them to sell the customer on their product. I also make sure we have plenty of the manufacturers’ merchandise available so the reps aren’t selling from empty shelves. When they see the reorders, they realize their money was well spent.”

Out of the Loop

“Our business is a traditional ‘mom and pop’ type minilab,” says Nancy Lavin of Lavin Photos Plus. Lavin feels many of the major manufacturers no longer want to do business with small companies like hers. “They prefer to do business with the larger retailers such as Wal-Mart, Walgreens, CVS, Pathmark, etc., stores that can offer their services for a lot less than I can afford to charge. Recently,” continues Lavin, “there was an article in Picture Business about how retailers could e-mail photos to Kodak to make mugs and posters, etc., that customers could pick up from Kodak-affiliated stores. We tried hard to get in touch with Kodak to see what it would take to become an affiliate. I had a hard time getting through to them and when I finally did I was told someone would get back to me. No one ever did. In my opinion,” concludes Lavin, “Kodak, HP, and others are going to drive the little guys out of the market.”

According to Parks, part of the problem is that some photo manufacturers no longer see themselves as photo companies. “They (imaging manufacturers) see themselves as electronics companies. They have a small booth at PMA but a huge one at CES. Dealing with retailers is not really within their main interest. I’m sure we’re still important to them, and obviously, they are important to us. But their strategies are moving toward more direct contact with consumers, not retailers. Nowadays, Amazon.com (and other mass channels) are selling more (photography-related product) than all photo retailers combined.”

True, many manufacturers are in direct contact with customers, but not all. “Now that the business has evolved and fragmented to the point it is, I do believe the need for closer collaboration between retail partners and manufacturers is paramount. It’s no longer a ‘nice to have,’ it’s a ‘must have.’ Our overall key message, our product development, go-to market, and distribution strategies are all centered around supporting our customers (retailers and professional labs),” states Bing Liem, Senior Vice President of Sales, Imaging Division, Fujifilm, U.S.A.

“We’re hedging our bets that the core consumer—a mom with kids in tow—is time-starved and will go back to the retailer to get things done. It’s all about convenience, and that’s where we’re putting our full support. We’re not going to directly compete with our customer; we’re going to drive (business) back to them. We believe it’s more about the retailer’s brand than our brand. In the end, if (a consumer) goes to Costco to shop, they’re not going because of Fuji, but for the Costco experience,” Liem added.

Valued Customers

Pentax also sends consumers to retailers. “Pentax Imaging Company has developed a number of initiatives that help retailers turn Pentax shoppers into Pentax buyers,” states John Carlson, Product Manager, Pentax. “Visitors researching Pentax products on www.h20camera.com, www.pentaxslr.com and www.pentaxoptioZ10.com may link directly to preferred dealers to make their on-line purchase. Pentax also provides popular SellPoint video product tours for dealers to post on their Web site product pages.” (To view a sample visit: http://www.pentaximaging.com/products/product_details/digital_camera–K1 00D_Super/reqID–9997004/subsection–digital_slr).

“Our most ambitious effort is the development of two community building Web sites www.pentaxphotogallery.com and www.pentaxian.com. Pentax opened the doors of the gallery to offer Pentax photographers from around the world a place to display their work, while the Pentaxian site creates an environment for Pentax enthusiasts and new consumers to participate in and learn more about the brand, the products and the photographers. Our relationship with dealers is strong and getting stronger,” concludes Carlson, “because of these initiatives and the growth of our on-line presence.”

According to Richard Ford, SPG Manager, Digital Capture & Devices, Americas Region, Eastman Kodak Company, the company feels it has maintained a strong relationship with retailers. “Kodak is moving thoughtfully and decisively to complete a successful transformation in the digital marketplace. To do so, one of the company’s goals is positioning itself with the right people/properties for success, which includes retailers.

“Kodak values retail relationships and works hard to help build successful in-store programs. Not only do we listen closely to our retail partners’ needs,” assures Ford, “but we bring a portfolio of products to the table that is rooted in a deep understanding of what the consumer wants and needs. We also bring a wealth of marketing expertise that has been tested for success with the target consumer.”

Kodak claims their success is evident in the many retail partnerships they have developed over recent years. These partnerships are designed to meet consumer needs at every level. For example, Kodak Gallery has partnered with several retailers including Target, Rite Aid, Eckerd and CVS to offer both order and pickup services in-store. Moreover, Kodak Picture Kiosks are located at more than 40,000 retail locations across the United States. As Kodak continues its transformation,” concludes Ford, “we are providing all of our retail partners and their consumers with innovative, easy-to-use, intuitive solutions for every lifestyle.”

Support Retailers Would Like to See

“So many people in the industry, specialty dealers in particular, cry about lack of support. But manufacturers, like retailers, are faced with tight budgets,” states Miresse. “I understand what they’re doing and how they’re trying to make their numbers. They need the big box stores and that’s not going to change.” However, Miresse believes the specialty dealer would benefit from improved partnerships with manufacturers to help improve their businesses and continue growth.

“If they could provide support such as tech reps for seminars and demos that produce, that would really help. An area I’d like to get into more is photo excursions (workshops)—a weekend getaway that people pay good money to attend. We did a few where Nikon and Canon were involved. If the dealer is on the ball and can set the workshop up and if Nikon or another key manufacturer could loan equipment, come along and be the expert in the field to support these efforts, it would go a long way. I think it would attract a lot of people who are frustrated with the response from their point-and-shoots. They’d discover that an SLR isn’t as complicated or as expensive as they thought,” concludes Miresse.

Park, as well as other retailers, would like to see manufacturers launch a national campaign, perhaps featuring a popular celebrity. “I suggest large corporations like Kodak drive a more active campaign among manufacturers, retailers, and service channels that will work together to promote a photography campaign,” states Park. “Naturally, it will be beneficial to everybody, including customers.” Park points to the dairy industry’s “Got Milk” campaign as a successful example.

It seems like a simple solution, so why isn’t anyone willing to step up to the plate? “It’s very hard to do any type of national advertising of any scope,” explains Fuji’s Liem. “There are certain organizations such as PMA that are trying to pull that together but it’s difficult. It’s an expensive proposition and it’s hard to measure exactly what you gain for that investment. I think a lot of people are weary about doing that and would rather invest in other vehicles that directly affect their business than potentially the overall business.”

Educating Consumers

Whose responsibility is it to educate consumers? Manufacturers and retailers agree that it’s everyone’s job. “I know it’s the easy pat answer,” says Tony Miresse, “but we run seminars and classes because we can’t just open our doors and expect customers to come in like they did twenty years ago. If we’re going to fight it out with the big box stores, we have to provide something they’re not providing. Education is one of the key aspects. The majority of the people that come to our classes purchase our cameras because they get a coupon to save money on a class.

“However, we’re seeing more and more people visiting our Web site and signing up for classes that purchased their cameras elsewhere. And that’s fine with me, because what they didn’t purchase (at mass market) was all the profitable accessories. As they learn more, they take more pictures and buy more stuff,” he added.

Bill Ferguson believes it’s the responsibility of the manufacturers to educate the retailers on how to educate the consumer. “The retailer has the face-to-face interaction with the consumer; the manufacturer really doesn’t. If we can answer consumer questions, they will be happy with that brand’s product. But if we’re not sure, not only does the retailer look as if he doesn’t know what he’s talking about, but the customer may think the equipment is more complicated than he wants to get into. Some companies are doing a great job, but it’s also the responsibility of the retailer to know what he’s selling. And that’s where some of the big stores just can’t compete,” notes Ferguson. “Very rarely do they have an employee that knows what they’re selling.”

According to Fred Towns, Senior Vice President Sales and Marketing Operations, New Age, a distributor that often bridges the gap between manufacturers and retailers, education is vital. Towns believes that the biggest challenge facing manufacturers these days is the rate at which technology is changing. Hence, getting their message to the retail floor is crucial. “Manufacturers are really trying to help us get as much information as possible so we can find a vehicle, display, or training seminar to help retailers tell consumers about the exciting new technologies they’re bringing to market. Education is the big issue. When you look at everything from computer products to digital stills to plasma TVs, each one has new and exciting stories to be talked about that really need to be translated on the floor. Question is,” concludes Towns, “how do you get that story properly told on the retail floor to make it a good experience for the consumer?” yy

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