Growing In The New Normal

Growing in the new normal

Suppliers recall the lessons of the past
as they forge forward.

Those of us who have parents or grandparents who grew up in the Great Depression can recognize the telltale habits of frugality or a penchant for saving more than they spend. It took just a few generations for the behaviors learned during a very dire period in our history to fade away. More recently, we can point to a period in which spending was rampant, most of us enjoying sales that were at record highs, and there were no forecasted rainy days to save for.

In this year’s forecast, despite the sales growth of 2011 and regardless of projections for growth based on the reasonable projections of one’s customers, most suppliers are hesitant to declare 2012 as a year to celebrate more growth. Most point to the influences of Europe or Asia and proceed to discuss how Main Street is no longer isolated from the global economies thousands of miles away. Many point to the government and discuss whether or not our elected officials can save us from the damages done over the past decade.

With continued high unemployment and stalled manufacturing and construction, the confidence that would allow us to boldly move ahead lies dormant. Yet there is hope for 2012. Those suppliers who count on the energy or health care markets as their base of customers will do well. Those suppliers who can provide the tools needed for increasingly automated workplaces will thrive and enjoy record sales. And the rest of us will welcome moderate (and in some cases more than moderate) sales growth, while remaining prepared for possible hard times. Like the generations before us, we cannot forget the lessons of the recent economic downturn. We, like our customers, are not going on a hiring or spending binge. Many in our industry (like our customers) are sitting on a pile of cash and will continue to spend frugally, based on a well-thought-out return on investment. And like our grandparents before us, we will not soon forget the lessons that helped us to survive the most recent economic downturn.

It Can Be All About Your Brand
Reputation, image, the words that come to mind when someone mentions your product…these can all make a difference when competing for a sale. Make no mistake: If customers are not on spending sprees, suppliers will use every weapon in their arsenals. Suppliers are working harder to communicate who they are in an effort to win the hearts of the distributor channel. 

Jimmy Wu, vice president of marketing, Revco Industries (Santa Fe Springs, CA), expects to at least maintain his 2011 sales numbers. The company will launch a new line of flame-resistant clothing, as well as several products with very-high performance feature characteristics during the 1st Quarter. Wu points to the continual stream of fly-by-night-companies that attempt to flood the market with inferior products as a continual challenge. He says, “When it comes to quality and the manufacturing of a brand that people can trust and rely on, it’s relatively easy to score a B; but to go from a B to an A, you have to work that much harder.”

Software companies typically talk about how their product will help distributors to save money. Jim Broughton, president, Dataweld (Bossier City, LA), says that his company is focusing on developing product that will help his distributor customers to generate more sales. Expecting 2012 numbers to equal 2011’s, Broughton will introduce his new product during the 2nd Quarter. He says, “We are combining new technologies with old-school concepts and creating a better solution.”

In an effort to maintain his 2011 volume of sales, Bob O’Brien, vice president, Gas and Air Systems (Hellertown, PA), says that the company’s success is based on its reputation. But he also adds, “We still need to keep our product in the forefront. We still need to stress the quality of our product and the service and spare parts to the aftermarket that we offer.” O’Brien believes that true growth is stalled as companies await the freeing up of funding for various projects.

Seeing a slow pick up in construction, Tina Kuo, executive vice president, Genstar Technologies Company (Chino, CA), anticipates a 5-8% uptick in sales, supported by a newly redesigned website to be launched during the 1st Quarter. New packaging is also being designed for each product line and will be introduced throughout the year. Kuo says, “Growing the brand is a challenge.” To strengthen the brand, the company is stressing more training and more communication with the distribution channel.

Jeff Winegar, president, CTR (Rock Hill, SC), says that his customers’ perception of his company as an engineering firm that does fabrication work is impacting the type of work his company is doing. In anticipation of a 10-15% sales growth, CTR will continue to emphasize both the remanufacturing of cryogenic tankers and their lower-cost automated cylinder filling equipment. In an effort to deliver more value, the company will add a 212,000 sq. ft. facility during the 1st Quarter.

“We have products that are perfect for this industry, but we’ve been relatively insular up until now. We need to create more of an awareness of our product amongst the distribution channel,” says Michael Saraf, director of sales and marketing for Flexovit USA (Angola, NY). To accomplish that objective, Flexovit will make better use of POP displays that can provide more information to the distributors’ walk-in customer and will launch a new, trilingual website during the 1st Quarter. Expecting a 10-15% sales increase, Saraf has been charged with creating a stronger brand awareness for his highly skilled sales team.

Increased Market Share
If sales are to increase beyond the conservative growth that is forecasted, sales must come at the expense of our competitors. We must take a larger slice of the pie.

Predicting sales numbers to be, at worst, flat and, at best, low single digits, John Kaylor, president, Abicor Binzel USA (Frederick, MD), expects that closer relationships with distributor partners and new products will help to grow share in 2012. Distributor partners will benefit from new sales programs that serve to create win-win-win situations for Abicor Binzel, the distributor and the end-user. A new MIG gun to be introduced during the 1st Quarter and a cost-effective peripheral robotic product to be introduced during the 2nd Quarter will help to spur sales activity. Kaylor also points to U.S. manufacturers who are bringing some of their offshore operations back to the U.S. as a positive that will benefit all industrial suppliers.

Anticipating a 5-7% sales growth, supported by increased market share, Rex Larkin, vice president of sales and marketing, Reelcraft Industries (Columbia City, IN), will also focus on maintaining margins in the face of volatile raw material pricing changes. Larkin adds, “We do not have the luxury of being complacent. We need to continue to focus on our promise to deliver a quality product and the service that our customers rely on.”

Also hoping for more market share, Tom Cregan, president, Evergreen Midwest (Mentor, OH), expects a 5-7% growth rate in 2012. He says, “Hopefully, we can use a stable, flat economy to springboard an effort to reach new customers.” New product offerings in the 2nd Quarter will also help to stimulate growth. A newly redesigned website together with a new e-newsletter will provide a more focused approach to selling more products to their existing customer base, while creating a connection with new customers at the same time.”

In an effort to capture more market share, which will contribute to an overall sales increase of 5%, Jeff Cunningham, vice president and general manager, Catalina Cylinders (Hampton, VA), promises to be as competitive as possible. Catalina will remain ISO-certified and continue to emphasize continuous improvement programs and lean manufacturing to drive costs out of product. Cunningham says, “Pricing continues to be competitive, as all manufacturers become leaner in order to produce the same product at a lower cost.”stud welding. The company is using social media in an effort to arm the end-user with knowledge surrounding new applications and new application techniques

An increase of 6-9% will be driven by market share growth, says Jim Rosenthal, director of North American distribution sales, Lucas-Milhaupt (Milwaukee, WI). He says new products launched in the second half of the year will help to generate new customers. But when it comes to growing share, he says, “It still comes down to blocking and tackling. We still need to go out and call on our distributors face to face. They are our lifeblood.”

Mark Johnson, vice president of sales and marketing, Osborn International (Cleveland, OH), intends to grow market share by 1-3% in various product categories in 2012. For the first time, the company is establishing good, better and best designations for basic wire brush and power brush products. These new product designations, to be launched during the 1st Quarter, will contribute to the company’s projected 10% increase in sales. To underscore the company’s commitment to training, late in the 1st Quarter, Johnson will open new lab facilities in Richmond, Indiana, to be utilized for distributor training. Johnson adds, “Success boils down to people, product and programs.”

A Better Economic Climate
Many believe that the current economic climate is not as bad as the picture painted by the media. They point to customers who are doing well. And they base expectations of increased sales on what they are seeing with their own eyes, as opposed to what they are reading in their daily newspaper.

Pointing to new construction projects that include bridges and roads, Bill Houston, general manager, Pro-Weld Spiegelberg MFG (Strongsville, OH), says that the construction industry is far from dead. In anticipation of a 3-5% sales increase, he says the greatest challenge he faces is one of educating the end-user as to the cost-saving benefits associated with

Seeing is believing for many in our industry. David Kiilunen, vice president, Cor-Met (Brighton, MI), points to suppliers and customers who are busier than they have been in years, and he projects a sales increase of 10%. He says, “Machine shops, even those located in Detroit, are busy. The economy is stronger than news reports lead us to believe.”

Page 1 of 5 1 2 3 4 5 Next >

Pages: 1 2 3 4 5