COLUMBUS, Ohio — The HARDI Education & Research Foundation has announced the kickoff of a major research project to study and define the distributor’s role in the demand creation process. Michael Marks, managing partner of Indian River Consulting Group, and his team have joined the HARDI Foundation to lead this research effort.
The research will directly address longstanding questions for distributors and manufacturers on making new markets and the demand creation role of the distributor. “If you want to make a market, what impact does that have on both cost and margin?” asks Marks. “It’s about the economics.” Marks and Indian River Consulting Group will conduct primary and secondary research, and develop an analytical framework for evaluating channel performance and effectiveness. “Market share gains are essential to manufacturers so what exactly does it take for distributors to satisfy those needs? That is the core question this research project will tackle,” said Emily Saving, HARDI’s director of Education and Research Foundation.
“We are going to do some deep diving with a project development team comprised of several distributors and manufacturers where people have agreed to share confidential and financial information. We are also going from the top down with some broad base surveys with the whole HARDI membership, both manufacturer and supplier side, and the distributors and reps as well. We are going to cross tie it together so we actually understand the entire cost in the entire system,” explained Marks.
For its part, the HARDI Foundation and its governing trustees are enthusiastically supporting the effort, including raising the funds to cover the cost of the research. “We’re ready to make an impact on the industry,” says Bill Shaw, CEO of Standard Supply and HARDI Foundation chairman. “We are very excited about the possibility of what we will find.”
That excited tone certainly resonates with all the participating distributors and manufacturers. Shaw indicated that the project is already about 75 percent funded, and fully expects to fund the rest of the research. Nordyne, a HARDI supplier member and manufacturer of indoor comfort systems, was one of the companies who signed on right away to participate in the research as a manufacturer project team member.
“Independent distribution has long been the lifeblood of our industry and participating in the HARDI distributor demand creation project was too good of an opportunity for Nordyne to pass up,” said Philip Windham, vice president of sales for Nordyne. “Working hand in hand with HARDI, HARDI members and Michael Marks will most certainly deliver substantial results that will benefit all facets of the HVAC channel. Spending time drilling down into the value of distribution and quantifying the significance of resources, relationships and results made the decision to participate one of the easier ones we will make this year.”
The project is kicking off with a hefty slate of distributor and manufacturer companies who have agreed to let the Indian River research team do a deep dive into their company’s data as a starting point for the research. Distributor participants include: Johnson Supply, Houston, Texas; Standard Supply & Distributing Co. Inc., Dallas, Texas; Meier Supply Co. Inc., Conklin, N.Y.; GW Berkheimer Co. Inc., Portage, Ind.; Gustave A. Larson Company, Peewaukee, Wis. and Mingledorff’s Inc., Norcross, Ga. manufacturer project team members include: Honeywell, Nordyne, Duro Dyne, Allied Air Enterprises, Heatcraft and M&M Manufacturing.
The results of the demand creation and quantification project will be presented at HARDI’s 2013 Annual Conference Dec. 7-10, in Phoenix, Ariz. through the keynote address by Marks. Attendees can expect to learn whether HVACR distributors effectively create demand for the products they stock and sell, and if so, to what degree and how it is achieved. The discussion will cover how demand creation works in the HVACR market and the proven frameworks for success. Finally, Marks will present the best practices in distribution that will fuel demand creation and encourage meaningful conversations between manufacturers and distributors on channel effectiveness.
To follow the research progress, visit the HARDI Foundation’s project page at http://www.hardinet.org/demand-quantification-project.