Welcome to ElectricalTrends.
ElectricalTrends is a communications vehicle, offered to the electrical distribution industry, by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates’ and Channel Marketing Group’s insights on industry trends, observations on industry activities and issues and ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.
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Thursday, July 30, 2009
- "efforts to use limited discounts to lure customers to full-priced items don't work"
- "aggressively marketed price reductions help keep sales momentum"
- "shoppers have been chasing bargains, visiting a variety of retailers and snatching up only low priced goods"
- "had to cut prices in some areas hasn't wanted to - becaise others are doing the same. Is someone morves, then we have to move."
- "price cutting and the move to low price is long-term as opposed to weekly specials"
- "use loyalty cards / programs to lure customers"
- "If the item is not on sale, it is far more likely to remain on the shelves"
Feedback we're hearing from distributors is that gross margins are down 1-2%, on average, across all product categories. With margins dropping, operating costs need to drop to retain operational profitability.
A couple of things were observing is that
- distributors need to do a better job of training their salespeople on their value-
- sales training is necessary
- price management needs to become a distributor core competency
- determining what your "price premium" could / should be relative to your competitors is something most haven't considered
Some things to consider ... have you thought about asking your customers how price competitive you are? Obviously you can't ask them outright, but there are ways. Also, are there ways that you can monitor marketplace pricing to therefore better know the marketplace?
How is pricing affecting you, your marketplace, your bottom line? How are you competing against your low price competitor.
Take our 1 question Price / Margin Erosion survey