Establishing a Clear Market Position

Establishing a Clear Market Position

In order to equip themselves for future challenges, wholesalers need to clearly define their respective market positions and communicate their strategic focus externally. The nature of that strategy is heavily dependent on the individual company and sector, but it is possible to distinguish between four basic approaches that differ in terms of pricing, service, offer complexity, and customer/product diversity.

PRICE LEADERSHIP

Digital platforms and new disruptive providers in areas such as technical wholesaling are already focusing their strategies on achieving price leadership. These companies leverage modern online technologies and define their position clearly and openly using the following three elements: pricing, breadth and depth of product range, and leanness/efficiency of processes and structures. The product range is based around standardized C-items, which are marketed to the consumer goods and industrial B2B sectors. The entire organization is geared toward optimum efficiency in purchasing, sales, and distribution. Price leaders generally do not offer customized services, consulting,
or niche products. In most cases, they are pure-play e-commerce companies. However, there are also opportunities for established wholesalers to compete in this market if they can make efficiency a core feature and clearly communicate their price leadership credentials. Naturally, this strategy requires the widest possible reach to achieve the economies of scale that enable lower procurement prices.

SERVICE-ORIENTED WHOLESALE

The service-oriented sector relies entirely on traditional wholesale strengths. It offers added value to
customers through a variety of services that can be individually tailored, combined with a broad, deep, and compelling range of products. Such is the quality of the service provided that the customer is willing to pay a premium. Naturally, that willingness has certain limits, which is why service-oriented wholesalers also require efficient processes and modern online technologies in order to compete with price leaders. Other methods of differentiation include additional offerings, such as service locations, showrooms, branch locations, high-end product presentation, product advice, information platforms, and training. These services should form part of a dedicated omni-channel
strategy in order to meet customer needs and expectations at every touchpoint.

MULTI-SPECIALISTS

With their breadth and depth of offerings plus exceptional expertise, multi-specialists are ideally positioned to create new, complementary, market-tailored products and services. As industry specialists, they are committed to achieving the highest standards of excellence in genuine wholesale services. Multi-specialists perform a wide range of tasks in the value chain and offer specially tailored, end-to-end solutions with everything from project planning through cross-brand configurations or installations to service. As is the case with other wholesalers, multi-specialists are dependent on efficient processes, modern omni-channel technologies, and modern distribution strategies. Using integrated supply-chain processes, they offer just-in-time delivery of products and services to the customer’s value chain.

NICHE SPECIALISTS

Niche specialists concentrate exclusively on narrowly defined segments, distinguishing themselves through the depth of their product range and the quality of their consulting and solution expertise in their respective market. This approach allows them to stand out from the competition. As in the other categories, niche specialists also require an efficient value chain as well as modern online and omni-channel technologies and distribution channels in order to bring their specific product and solution expertise to market. Key requirements are the ability to tailor solutions to individual customers and establish a clear position in the marketplace.

In each of the above categories, companies can differentiate themselves by remaining focused on their customers and continuing to customize their services. Equipped with a clear understanding of their own strengths and the needs of customers, they can specialize further in one of the following roles:

System supplier, of which there are two types: The first, an MRO provider (maintenance, repair, operation), caters to industrial and trade customers, assuming overall responsibility for the procurement and supply of items used in maintenance, repair, and operation and/or the procurement and supply of C-items (small parts of low monetary value). The second type, a service merchandiser, provides support to retailers through delivery of goods and management of sales, e.g., through appropriate marketing.

Module supplier: Responsible for individual processing steps in the value chain, providing either customer-specific or segment-specific services. This role involves a certain amount of creative leeway and thus greater scope for influence.

Distributor: This role is also essentially traditional, i.e., that of a broker between producers and consumers. For manufacturers, a distributor provides valuable expertise around opening up new markets. For industrial and trade customers, the distributor’s appeal lies in the extensive product range. Distributors who fail to secure their markets run the risk of being displaced by logistics providers and/or manufacturers.

Choosing the right strategy is never easy, but most wholesalers have already identified a specialty area for their business. Nevertheless, it is important to revisit this decision at regular intervals so that any necessary adjustments with regard to expertise or positioning can be carried out in a timely manner.

Find out what Intershop offers to solve a multitude of challenges in different industries: http://www.intershop.com/industry-solutions

Matthias Müller

Senior Product Marketing Manager

Go back

Add a comment

Please add 2 and 2.