Comment on your submitted problem.
1) Problem of price increase
a. What or how much can a distributor do about price increase from manufactured?
i. Is it really worthed to go against price increase policy?
1. My thought is, our function is to distribute and sell the product. What ever the policy the manufacture implement we should try to understand and seek to comply. For example, if we go against the policy, we may be able to do it one or two years then later there will be a huge increase. The question is do we really understand why they use this policy. My answer is I don’t think an average sales person understand or convinced about this policy.
To really understand this problem, you must ask yourself why do they increase price. And why does the Japanese competitor do not increase price. Simple people may think that it is to gain more profit. But, if you really look at the big picture. Most European brand (anything from watches, car, insert, cutting tools etc.) use price increase policy, why product from lesser develop countries use price strategies. Here lies the critical issue. The reason why European brand increase price is to push the customer to use newer product, which have a higher technology thus more profitability. Not higher profit through the same product but increase price. Off course less develop countries cannot come up with new product fast enough so they have no choice but to stick with the old price.
Specific to our issue is why does this customer stuck with E500 for the pass 3 years and does not change.
Answer has to be found.
Are they so loyal to E500
Do they know that there are other model that can do the same job more efficiently?
Have we offer them new product?
Is our distributor doing a good job of promoting our product, if they use the same item for the pass 3years. ?
Have the customer heard of our product success (other than E500)
How can we let them hear of our success (line, twitter , magazine, etc.) Did we do anything to advertise our success?
How important are we to the customer. Are they just use E500. What about other product. Obviously if we are major supplier, our value to them increased.
Does the distributor know our other products.
How important is this process.
Why haven’t they switch to other brand.
Have they try to switch to other brand, if so what is the result.
My suggestion lies within all the questions I asked back. Do you have all the answer? IF we did, I think then we can really do something about it. The above is obviously not easy, that’s why majority of sales people do not practice. But if you don’t practice, I don’t think you have the right to complain.
ii. What can we do to stop price increase?
As a distributor, we can
1) Negotiate for a lower increase
2) Absorb the increase our self
3) Complain and do nothing.
4) Follow the increase policy.
5) Find alternative product.
6) Stop supplying the brand.
What do you think we have done before? Short of no.6 I think we have done pretty much every things. But I think no.4 seem to be the only long lasting solution. Do you agreed.?
Comment on your submitted problem.
1) Problem of price increase
a. What or how much can a distributor do about price increase from manufactured?
i. Is it really worthed to go against price increase policy?
1. My thought is, our function is to distribute and sell the product. What ever the policy the manufacture implement we should try to understand and seek to comply. For example, if we go against the policy, we may be able to do it one or two years then later there will be a huge increase. The question is do we really understand why they use this policy. My answer is I don’t think an average sales person understand or convinced about this policy.
To really understand this problem, you must ask yourself why do they increase price. And why does the Japanese competitor do not increase price. Simple people may think that it is to gain more profit. But, if you really look at the big picture. Most European brand (anything from watches, car, insert, cutting tools etc.) use price increase policy, why product from lesser develop countries use price strategies. Here lies the critical issue. The reason why European brand increase price is to push the customer to use newer product, which have a higher technology thus more profitability. Not higher profit through the same product but increase price. Off course less develop countries cannot come up with new product fast enough so they have no choice but to stick with the old price.
Specific to our issue is why does this customer stuck with E500 for the pass 3 years and does not change.
Answer has to be found.
Are they so loyal to E500
Do they know that there are other model that can do the same job more efficiently?
Have we offer them new product?
Is our distributor doing a good job of promoting our product, if they use the same item for the pass 3years. ?
Have the customer heard of our product success (other than E500)
How can we let them hear of our success (line, twitter , magazine, etc.) Did we do anything to advertise our success?
How important are we to the customer. Are they just use E500. What about other product. Obviously if we are major supplier, our value to them increased.
Does the distributor know our other products.
How important is this process.
Why haven’t they switch to other brand.
Have they try to switch to other brand, if so what is the result.
My suggestion lies within all the questions I asked back. Do you have all the answer? IF we did, I think then we can really do something about it. The above is obviously not easy, that’s why majority of sales people do not practice. But if you don’t practice, I don’t think you have the right to complain.
ii. What can we do to stop price increase?
As a distributor, we can
1) Negotiate for a lower increase
2) Absorb the increase our self
3) Complain and do nothing.
4) Follow the increase policy.
5) Find alternative product.
6) Stop supplying the brand.
What do you think we have done before? Short of no.6 I think we have done pretty much every things. But I think no.4 seem to be the only long lasting solution. Do you agreed.?
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