distributor market research
TRANSCRIPT
Distributor survey purpose and methodology
Purpose– Discover and understand Distributor
opinions, attitudes, and purchasing of O‐ring products
– Understand Spec Seals’ brand awareness and perceptions
– Identify “distributor” information sources– Understand key competitor brand
awareness and perceptions– Discover important product and brand
attributes– Understand who’s involved in O‐ring
purchasing process and their role– Ultimately, survey insights to be used for
future brand strategy, positioning, and key messaging development
Methodology – Convenience sampling among Spec
Seals’ entire distributor database of 903 customers and prospects
– Final sample size: N = 863– Delta: = 40 (due to duplicates and
invalid records)– Survey completes: 52 or 6% (within the
projected 3% to 10% range)– Instrument was HTML web‐based
survey so anyone, on any device, with an internet connection could conveniently complete the survey
– Incentive was single entry sweepstakes• 1 new iPad with retina display• 5 iPod Shuffles• 5 $25 iTunes gift cards
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Executive summary Survey was fielded on September 24, 2013 Sample size N=863; survey completes were 52 or 6% Respondents: Key decision makers for the purchase
of O‐rings1. Owner/president (14%)2. Purchasing agent (10%)3. Customer service manager/specialist (10%)
Among the most important factors in selecting an O‐Ring supplier are 1. Consistently provides high‐quality O‐rings2. Quick response to problems3. Delivers on time4. Meets quality standards5. Quick turn‐around on orders6. Technical competency7. Sufficient inventory8. Meets short lead times
The most frequently sold O‐ring is Nitrile (Bauna‐N) at 82%, followed by Viton (FKM – Fluoroelastomer) at 34%
Top vertical markets are:1. Pumps and valves2. Hydraulic & pneumatic systems 3
Parker Seal has greatest share of mind with 38%, Spec Seals has 16% and Parco has 11%
The one thing respondents like about Spec Seals is “customer service”; Parker Seal, their website content
The one thing respondents like least about Parker Seal is long lead times; Spec Seals’ “limited offering” was the thing they liked least
Respondents said Parker Seal– Has insufficient inventory (67%)– Doesn’t provide quick turn‐around on orders (50%)
Spec Seals does have sufficient inventory and quick turn‐around on O‐ring orders (100%)
Respondents’ misunderstanding of Spec Seals includes
– 67% don’t know Spec Seals can deliver custom compounds or prototypes in weeks vs. months
– 33% said Spec Seals can not meet short lead times; 30% said they didn’t know (63% combined)
– 33% said they didn’t know if Spec Seals could provide custom O‐rings to spec
– 33% said they didn’t know if Spec Seals could design and manufacturer custom O‐rings; (33% said it was unimportant)
Q1. Please tell us your current job title
Most frequently mentioned job titles (combined 33%) are
– “Distributorship Owner/President”– Purchasing agent– Customer svc. mgr./specialist
“Other” job titles– Purchasing– Corporate Quoting– Account Manager– VP Sales & Marketing– CFO– Technical Manager– Quality Control/Traffic Manager– Territory Manager
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Respondent %
Q2. Please tell us your primary role in the selection and/or purchase of O‐rings for your company
Most respondents (74%) . . . 1. Purchase products based on
requirements2. Collaborate with customer to
determine need3. Make the decision
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Q3. Please tell us the top THREE markets for the O‐ring products your company sells
Top vertical markets1. Pumps & valves2. Hydraulic & pneumatic systems
Other leading vertical markets1. Aerospace2. Medical products3. Material handling equipment
0 2 4 6 8 10
Agriculture equipment
Off‐highway equip.
Water products/filtration
Automotive
Electronics
Food products
Irrigation
Material handling equip.
Medical products
Pool equip.
Other
Aerospace
Hydraulic & pneumatic systems
Pumps & valves
No. 1 Choice
No. 2 Choice
No. 3 Choice
Responses7
Q4. Please tell us the annual sales of your company 37% of respondents have
sales of $5MM to over $100MM
27% report sales of $1MM to $5MM
The largest percentage of respondents don’t know their company’s annual sales
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Q5. Within your company, who are the key decision makers for selecting/purchasing O‐rings Most frequently mentioned
job titles – Distributor owner/president– Purchasing agent– Customer service manager
“Other” titles, include– Inside Sales– Account Manager – CFO– Marketing
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Q6. Please tell us what information sources you use to identify/select O‐ring products and suppliers
Customer input (specifications) is the primary information source (83%)
Distributor’s market knowledge is second (54%)
Supplier recommendations (45%)
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Q7. Please tell us what publications and websites you use to identify/select O‐ring products and suppliers
Industrial Distribution (27%) Rubber Plastic News (17%) Hydraulics & Pneumatics (17%) Industrial Supply (15%) “Other/Internet sites”
– Google– Manufacturer websites
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Q8. Please tell us the annual purchase volume of O‐rings for your company 23% of respondents purchase
more than $300K annually Median is $149K per year $300K+ annual purchase email
list– [email protected]– [email protected]– [email protected]– [email protected]– bobby@pneu‐draulics.com– [email protected]– [email protected]– [email protected]– [email protected]– [email protected]– chris.coons@motion‐ind.com– [email protected]
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Q1. When you think of O‐ring companies and brands, what ONE company comes to mind first Parker Seal has 38% share of mind and
out distances all other brands Spec Seals has less than half the mind
share of Parker at 16% Parco is third at 11%
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Q2. Please tell us the ONE thing you like MOST about the company you selected (top three companies)
Spec Seals excels at customer service
Parker Seal excels at valuable website info followed by
– Technical expertise– High‐quality products– Broad product selection
Parco is not exceptional in any particular service or product offering
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Parco
Parker Seal
Spec Seals
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Spec Seals has a 3:1 “Customer Service” advantage over Parker
Respon
ses
Parker website content is considered valuable
Q3. Please tell us the ONE thing you like LEAST about the company you selected – top three companies
Spec Seals is perceived as having “limited offerings”
Parker is perceived as having– Long lead times– Slow delivery– And, being too large
Parco is perceived as being equally deficient with
– Lack of material developments– Long lead times– Selling to everyone, not just
distribution (no protection)
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Parco
Parker Seal
Spec Seals
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Q4. Please tell us about your experiences with and/or perceptions of the ONE company selected (top three companies)
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Parco Yes
Parco No
Parker Seal Yes
Parker Seal No
Spec Seals Yes
Spec Seals No
Spec Seals Don't Know
Spec Seals Not Imp't.
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OPPORTUNITY• Parker does NOT provide quick turn‐around on all orders (50%)
• Spec Seals DOES provide quick turn‐around on all orders (100%
OPPORTUNITY• Parker does NOT have
sufficient inventory (67%)• Spec Seals DOES have
sufficient inventory (100%)
OPPORTUNITY• Parker does NOT meet
short lead times• Spec Seals CAN meet
short lead times (17%)• Spec Seals can NOT meet
short lead times (33%)• Don’t know (30%)
Q4a. (Spec Seals’ respondents) Please tell us about your experiences with and/or perception of the ONE company selected
Spec Seals performs well in several key selection criteria
– Consistently provides high‐quality O‐rings– Delivers on time– Has excellent brand reputation– Has sufficient inventory– Is technically competent– Priced competitively– Quick turn‐around on all orders– Quick response to problems– Technically astute in all
compounds and applications
67% did not know Spec Seals could deliver prototypes in weeks vs. months
67% did not know, or felt it was unimportant, that Spec Seals can design and manufacturer custom O‐rings
50% did not know Spec Seals can develop custom compounds and almost 20% felt it’s unimportant
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Yes
No
Don't Know
Not Important
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Respon
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Q5. Is your company seeking to introduce new O‐ring products to your customers and prospects within the next 12 months
Respondents said they will– Present new O‐ring products (33%)– May present new O‐ring products (30%)
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No Don'tKnow
Maybe Yes
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Q6. If yes, what type of O‐ring products does your company expect to introduce to your customers and prospects within the next 12 months
There was no clear consensus/preference on the type of products to be introduced to customers and prospects
All offerings received the same number of responses
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Q7. What type of O‐rings does your company sell most Nitrile (Bauna‐N) was the most
frequently mentioned (82%) Viton (FKM – Fluoroelastomer)
was the second most frequently mentioned (34%)
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Q8. When thinking about the companies that serve the O‐ring marketplace, how familiar are you with
Respondents are equally familiar with Spec Seals and Parker Seal (74% and 73% respectively)
26% are “somewhat” or “not” familiar with Spec Seals
Least familiar with Hutchinson Seals (71%)
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spon
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Q9. When selecting O‐ring products, how important are these factors in the decision making process
Top 10 factors in the decision making process1. Consistently provides high‐quality O‐
rings2. Provides quick response when
problems arise3. Delivers O‐rings on time4. Meets all of our O‐ring quality
standards5. Provides quick turn‐around on all O‐
ring orders6. Is technically competent7. Is technically astute in all compounds
and applications8. Has sufficient inventory to meet
needs9. Products/services are priced
competitively10. Can meet short lead times on non‐
stock O‐rings
Not custom compounds Not design/mftr. custom O‐rings Not prototypes in weeks vs.
months
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Very Important
Somewhat Important
Not Important
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Respon
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Top 10 selection criteria
Top 10 selection criteria
Spec Seals’ performance against top 10 selection criteria
Respondents rank Spec Seals high in 8 of the top 10 selection criteria
Lowest ranking is “Can meet short lead times”
– 17% say “Yes”– 33% say “No”– 30% “Don’t know”– 17% “Not important”
50% don’t know the Company develops custom compounds
67% don’t know the Company can deliver prototypes in weeks vs. months
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120%
Yes
No
Don't Know
Not Important
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Selection Criteria – Least Important to Most Important
Respon
dent %
Q10. What lead times do you expect from suppliers for non‐stock O‐rings (weeks) 49%) of respondents expect lead
times of 4‐6 weeks for non‐stock O‐rings
Another 30% expect lead times of 1‐3 weeks
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˂1 Week
˃12 Weeks
10‐12Weeks
7‐9Weeks
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Q11. When thinking of the companies you are VERY FAMILIARwith, what’s the ONE thing that comes to mind (top 3 brands)
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Parco
Parker Seals
Spec Seals
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Q12. How familiar are you with the company, Spec Seals About 50% of respondents
reported being “very familiar” with Spec Seals
– This is concerning since this is the core target and mostly Spec Seals’ list
30% reported being “somewhat” familiar
15% said they were “not familiar”
47% are only “somewhat” or “not” familiar with Spec Seals
– This is concerning since this is the core target and Spec Seals’ list
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Q13. Please tell us about your experiences with and/or perceptions of Spec Seals
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Q14. If there were one thing you could change about Spec Seals, what would it be
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Recommendations
Prioritize and communicate Spec Seals’ performance in top 10 selection criteria
Emphasize performance compared to Parker
– Able to meet short lead times– Always have full inventory– Quick turn‐around on all orders– Customer service
Consider developing a marketing communication program to tell the story
– Consider distributor co‐branded direct marketing and collateral program using distributor lists
– Consider advertising
Target top vertical markets:– Pumps & valves– Hydraulic & pneumatic systems– Medical and Material handling
equipment
Target key audiences:– Owners/presidents– Purchasing agents– Customer service managers/specialists
Brand strategy & positioning
Raise visibility of the brand– Too many distributors either have incorrect POV
(33%) or simply don’t know (30%)
Continue using current positioning line– It’s valid and addresses two of the top supplier
selection criteria– Until a better message is developed, we see no
reason to change
Consider positioning Spec Seals as the alternative to Parker Seals. Messages:
1. Consistently high quality2. Delivers on time3. Quick turn on all orders4. Has sufficient inventory5. Can meet short lead times6. Technical competency
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Key messaging
The right Seal. Right now.– Slogan is valid . . . but, can Spec Seals
deliver on the promise• Only 20% say you can’t meet short lead times
Supplier selection is based on their ability to do the following:1. Consistently provides high‐quality products2. Responds quickly to problems3. Delivers products on time4. Meets quality standards5. Provides quick turn‐around on orders6. Technically competent7. Technically astute in compounds and
applications8. Has sufficient inventory9. Can meet short lead times
These are the messages to be communicated
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NEXT STEPS
Discuss survey implications Determine marketing communications budget
– Develop marketing communication plan– Execute, measure, refine