THE #1 AV NEWS PUBLICATION. PERIOD.

The Challenge of Brand Protection

brand-0216Manufacturers and distributors aren’t just responsible for growing their brands’ business and market share — they’re also responsible for maintaining their brands’ image and position in the marketplace, as well as supporting the best interests of their dealers.

Products deserve to be sold for what they’re worth, and dealers who support the brand deserve to make a profit for doing so. That’s where vendor reps come in, and they have to be responsible for making sure that the vendor’s products are being sold to resellers whose goals are aligned. It’s not easy, though, and too often, efforts at brand protection amount to little more than closing the barn door after the horse has gotten out.

At the AV integrator I used to work for, one of our HD display vendors wooed us to install its brand new 65-inch HD LCD flat panel in our showroom as a centerpiece technology. Back then, manufacturer’s suggested retail for the 65-inch model was $22,999.

Our vendor rep was very keen to have his brand’s flagship TV on display in a high-end AV Pro shop, where it could be beautifully displayed to the kind of high-roller customers who like that sort of thing.

Still, it was a lot of money to spend on a demo product that’s going to sit in the showroom for a year or more, so my boss negotiated fiercely for a substantial floor-model discount off of dealer cost. Once it was delivered and installed into the middle of a connected living-room setting it did indeed look fantastic, and several of our clients ooh-ed and ahh-ed over it.

Not two weeks elapsed after we installed our demo model than the same 65-inch LCD appeared on the floor at our local Costco.

Costco’s posted price? $17,999.

My boss was apoplectic. Even with his office door closed, I could hear him yelling at our rep all the way on the side of the building.

The rep apologized and apologized with lots of empty platitudes but the damage was done. “We traced them to the retailer in Iowa who sold them to Costco and we cut him off,” he said, as if that made it any better.

Really? Didn’t the local territory rep wonder why a ma and pa retailer out in Iowa needed 190 twenty-thousand-dollar TVs? Or was he too busy cashing the commission check in his head to care where they were going?

Now that I work on the distributor side, I’m very conscious of the experiences like that one I had working for a dealer, and the best interests of my dealer network are at the forefront of my mind when I’m the one making the decisions about who I’m going to sell to.

Believe it or not, vendor reps don’t always open up new accounts to anyone with a pulse and a credit card. Not long ago I received an inquiry from a company that was interested in our cellphone signal boosters. We spoke about it, I got more information about their company and I was honest with them that they weren’t a good fit for our business.

That’s not the only instance of me declining to open up a new dealer, either. I remain convinced that being particular about choosing new dealers as business partners saves headaches down the road. And to date, none of my dealers have ever screamed at me over the phone about competitive issues like our poor TV rep years ago.

Top