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Leading Exterior Building Materials Manufacturer - Part 2Marketing New Technologies Before home centers became commonplace in the American economy, Frank Lynn & Associates began working with the client to assess the new centers' viability and determine what role the emerging channel could play for them. We knew our client would have to participate in the channel to stay competitive. However, we had to determine how to reduce the possibility of channel conflict between the home centers and our client's proprietary dealer stores. If our client was to offer the same range of products in home centers as they offered in their retail stores, they risked upsetting their dealers and eroding their profit margins. We recommended that they distribute a new complimentary window line designed for the do-it-yourselfers through home centers. This would establish a presence in the channel while reducing the risk of channel conflict. The product extension proved advantageous for our client and the complementary window line continues to be sold in home centers today. Reducing Marketing Costs As our client's business grew, so did their variety of customers. Uncertain of what their new customers' needs were, and how to service these needs, our client asked us to conduct a customer audit and economic return analysis. We worked closely with several of the client's distribution channel partners and interview hundreds of customers in order to determine first, what type of customers they were serving, and second, what customer care attributes these buyers required form their window supplier. With this information, we quickly determined that our client was serving six unique customer groups. We went on to benchmark best practices in servicing these customer groups, and using activity-based costing, developed economic profitability models for each of the customer groups. Today, our client has combined their customer segments into three manageable groups. They continue to use our models, and with our help, are restructuring their business units to better serve these unique customer segments. |
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