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Commoditized Products And The New Buyer

General linesWe all are aware of the results of the commoditization of General Line material handling products and ser­vices:

• Increased offshore manufacturing
• Declining commitment to local service-based dealers
• Availability of inexpensive look-alike products with similar claims.

A key factor, however, is the increasing ability of buyers, especially the 40-and-under workforce, to easily compare similar products on their own. This younger generation of end-users is poised to bring about serious changes to the way these products are manufactured, marketed, distributed and serviced.

Purchasing Methods
With an increasing number of younger employees gaining purchasing authority as they gain responsibilities, the influence this generation has over purchasing methods is increasing. Internet access and limitless communication abilities have made it possible for this generation of buyers to shop from a desktop computer at work, at home or over the phone.

No longer do many buyers feel the need to get knowledgeable input from dealers or service providers who are trained to ascertain the key issues impacting a purchasing decision. All the necessary information is believed to be available with easy access on the Web or other literature, so that an “informed” decision can be made in-house.

Fueling this new trend are new Internet-based parametric searches, such as www.globalspec.com or www.reedlink.com, which mine databases of competing products and services to find the “perfect” product based on a few product criteria.

Fighting Back
Leading MHEDA members, both manufacturers and dealers, are welcoming this trend and are fighting fire with fire. Here’s how they’re doing it…

Constant communication among end-users, manufac­turers and dealers is becom­ing more critical than ever. In a commoditized environment, where buyers are less inclined to stay committed to an ongoing relationship, buyers need to be constantly re­minded why they should be committed to a relationship. Dealers need to work closely with manufacturers to convey a uniform message to buyers.

Manufacturers and dealers must be able to understand how this new generation of buyers is making these purchasing decisions using new tools. Salespeople must be savvy with the new and established communication channels, as well as the new tools for making purchasing decisionsin-house. New offerings of services, products, programs, discounts, etc., need to be updated regularly.

Differentiation is key as new buyers are comparing products and services in-house, without the assistance of a knowledgeable dealer or service provider.

If buyers are going to compare products on their own, the information to properly assess products and services should be easily available. This means providing an informative, easy-to-navigate Web site that is up-to-date with the latest product and service announcements. Every communication channel with manufacturers, dealers and end-users should be analyzed to ensure a smooth and accurate flow of information.

When buyers compare two products or services, what factors should they be considering? Certain factors are obvious to everyone: capacity, warranty, service availability, price, dimensions, etc. Make sure buyers, who think they know everything already, are aware of the factors that differentiate your product or service from the commoditized version. Making compelling and differentiating factors easily accessible may be the difference between keeping a customer and losing a customer.

The commoditization of General Line products will continue, as well as an ongoing trend toward in-house purchasing decisions. Today’s 40 and younger workforce is changing the way business is conducted within our market. It is up to us to stay current with the changes and embrace this new generation of buyers.

Material Handling Equipment Distributors Association

Meet the Author
Nathan Andrews, 30, is a sales engineer at Morse Manufacturing Co., Inc. With his background in education as well as marketing, he looks forward to teaching customers the best way to solve their challenges.

 

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