Tremendous changes are taking place
in the business world. By studying past trends, it is possible to get a better idea of where we are going in the future.
I recently studied the hardware industry and discovered the following trends:
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1. |
The standard order size for a product moved from a gross to a shelf pack. |
|
2. |
Prepaid freight decreased from $2,000 to $500. |
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3. |
Salesmen's commissions fell from 10 to 4 percent. |
|
4. |
Inventory turns in the distribution channel moved from low single digits
to double digits. |
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5. |
Support programs such as co-op advertising and rebates - unheard of a few
decades ago - are now standard fare. |
|
6. |
Outstanding receivables - once less than a month - now extend to several
months. |
These changes lead us to conclude
that the power in the hardware channel of distribution has shifted from the manufacturer to the consumer. Marketing programs developed with this
understanding will be much more successful than plans that are stuck in the past.
By analyzing the price of the product to the consumer and the cost of the product at various
stages in the channel of distribution, it is obvious there are opportunities to lower the product cost without cheapening the product. Using this
information for competitive advantage can be rewarding.
If you would like to learn more about how Industry Trend Analysis might help your business,
click on the Contact Us button.
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