January 2013

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Page 21 of 83

Marketing Putting the Cooperation Back into Co-op Brand Marketing Experts say 40 percent of co-op advertising dollars are left on the table. Will manufacturers and dealers ever be on the same page when it comes to building their brands? By Joanne Costin There are a lot of dollars on the table. Co-op advertising amounts to an estimated $50 billion annually for all U.S. retailers. Shouldn���t construction equipment dealers and manufacturers both be asking why their co-op programs aren���t utilized? Manufacturers need dealers to connect with buyers in local markets just as dealers need manufacturers to build brand awareness for the products they sell. So why the disconnect? There doesn���t appear to be one reason, but rather many. Where Did the Marketers Go? The economy has played its part in keeping dealers from spending money on advertising and marketing. During the downturn dealers lost marketing staff, and in many cases those positions haven���t been reinstated. As a result, dealer sales managers, administrative staff and owners are managing co-op advertising funds, along with a myriad of other responsibilities. ���After the crash of 2008, utilization really dropped,��� said Amy Lindon Maddox, manager of Corporate Communications for LBX Company (Link-Belt Excavators). ���The easiest thing to cut was marketing.��� Today, she says, there is only one dealer with a dedicated marketing person among her entire dealer network. While utilization of co-op funds is starting to come back for LBX (65 percent) it has not been without a concerted effort to make things easier for dealers. LBX encourages dealer promotion and offers graphic design services to help dealers stretch their budgets. However, Maddox admits it can be a struggle to get dealers to take advantage of programs. ���I think it comes back to not having a dedicated marketing person. It���s easy to forget it,��� said Maddox.���Dealerships lost their marketing people and their eyes are off of the prize. They are wearing too many hats.��� Stretching Budgets, Preserving Cash Flow As a single-line manufacturer LBX understands that its dealers rely on many other products. As a result, they are more flexible than many manufacturers. They allow and even encourage promotion in conjunction with noncompetitive products (reimbursed at a lesser percentage). To help dealers stretch their budgets, LBX has partnered with other noncompetitive products to create ads that include multiple brands such as Atlas Copco, Takeuchi, and Kawasaki. ���We have had very good success with that,��� said Maddox. ���It shows that the dealer has a full package of solutions.��� (continued on page 22) 20 | www.cedmag.com | Construction Equipment Distribution | January 2013 20_Mktg_Feature_KP.indd 20 12/21/12 10:46 AM

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