P-O-P Buying Begins With Selecting Right Vendor

Working with a P-O-P vendor takes many forms, depending on the project and the results desired from the relationship. And before marketers buy from any P-O-P company, they have to figure out which one they want to use.Certainly, the vendor pool in which to fish is fully stocked. Marketers report receiving as many as five calls per day from vendors wanting to set up appointments to introduce themselves. How do clients separate the wheat from the chaff?"We're very specific about what we want from a new vendor," states Penny Cleare, director of merchandising services, purchasing and production at Heublein Inc., Farmington, Conn. "We're more focused than ever on what our needs are and whether or not a supplier can meet them." Cleare is one of a number of marketers who work from a set of guidelines outlining what they want to see when a vendor makes a capabilities presentation. (For an overview of those points, see the accompanying checklist.)In general, marketers want to know one key thing: Can the vendor solve existing problems? "I want him to provide more value than I'm getting now," says Richard Lysinger, merchandising innovation manager at The Coca-Cola Co. in Atlanta. "Often, they have no understanding of my industry or concerns -- they simply present their whiz-bang technology and want me to tell them how I could use it."Adds Dennis Madigan, director of marketing and promotional materials at Milwaukee-based Miller Brewing Co., "A common mistake is that they haven't spent time learning our business. They shouldn't be asking me, 'What can I do for you?' They should know what they can do for us before they come in."Key attributes marketers want to find in a new vendor that often are difficult to discern from a capabilities presentation, include:Reliability "There's a different type of retailer out there now," says Laurie Houlihan, director of promotional purchasing, L'Oreal Inc., New York. "They want you to respond quickly, and that makes ship dates very important." Vendors sometimes ask for more work, figuring they delivered what was requested, she says. "But they delivered it late, and they don't see why that was a problem. They're proud of what they did, and the late delivery doesn't show up in their presentation book."Inventory Potential More clients stage delivery of displays over longer periods, and they want the vendors to coordinate that. "We're more focused on logistics and warehousing than ever," says Heublein's Cleare. That doesn't mean the vendor must manufacture the displays to work with them, she notes.Thomson-Leeds Company Inc., a New York-based design-only company, is one non-manufacturer that realizes this need to inventory is developing, notes Douglas B. Leeds, president. The company offers dedicated warehouse space where it also does light assembly, despite not manufacturing any components. "This is becoming critical to marketers, and it works for us because it builds a partnership. It creates an on-going relationship rather than a one-time, project-based one."Anticipation Of Problems Clients know things will go wrong -- it's the nature of the business. "Knowing the questions is more important than knowing the answers, because the answer may change," says John Lombardi, executive vice president of creative services, at Revlon in New York. "Anybody can manage projects when everything goes right," adds Coke's Lysinger. "How your supplier reacts when something goes wrong is the critical test."Chemistry Most decisions come down to three key ingredients, says Bob Peiffer, creative director at Sargento Foods, Plymouth, Wis. Those are talent, experience, and chemistry. "Chemistry is the biggest component, and it's hard to quantify," he admits. At Sargento, that incorporates customer service, creativity, flexibility, and the ability to "Get It." "Understanding our needs and approach is a learning experience, but it's vital to a longterm relationship." Adds Lysinger, "Chemistry is vital, and sometimes it's just not there, for whatever reason." Coke has even asked companies to switch salespeople because of a bad fit. "It's a key part of the relationship, and it has to work right for both sides."Computerization "Suppliers who aren't computer-integrated won't be able to be our suppliers," states Miller Brewing's Madigan. "It's that important today. It will eliminate a lot of small suppliers, unless they get on board quickly." The efficiencies of Electronic Data Interchange (EDI), which provides instantaneous electronic communication between computers, makes that switch imperative. "If you have the correct supply base, EDI will cut both the marketer's and supplier's paperwork and dramatically improve productivity on both ends."Adds Revlon's Lombardi, "To create a real partnership, you must be computer-based so projects can work system to system. We have to be able to communicate graphically and send paperwork by computer. It makes the process cheaper, better and faster. We haven't released a mechanical [drawing] to anyone in three years."Persistence Penetrating the corporate structure can be frustrating and time-consuming, marketers agree. "We know it takes a long time to develop a long-term relationship with Coke," Lysinger says. "I'm amazed at the number of vendors who call once or twice and give up. If they aren't prepared to work for one or two years developing a business relationship before getting business, they probably won't get in. There are five guys ahead of them who are willing to do the work."But it can pay off. Many diversified companies have a policy of working with other divisions' existing vendors before going outside. Grand Metropolitan, owner of Heublein, for instance, audits each subsidiary for successful practices and shares the best approaches with other divisions -- and Heublein has been rated tops for several years, Cleare notes. Miller Brewing has synergy agreements among its corporate cousins, including Philip Morris and Kraft.Results "I'm a big believer in going into the store and seeing what the retailer actually is using," says one marketer. "That's what is working. If only 50 percent of the retailers are using your displays, your costs are twice as high as you think." And often, 50-percent use would be a great return, he adds. Some vendors offer installation services and limited guarantees that displays will be used in a certain number of stores, while others audit their results and report back.Realistic Assessment "Too many vendors tell us they can handle whatever comes up, and we can tell they can't," says Revlon's Lombardi. "It's difficult to tell a vendor that he doesn't have the capability to handle our volume, but I can see it from the presentation." Coke's Lysinger agrees: "I want them to tell me they can't deliver the appropriate solution, back off this time and wait," he says. "I don't want them to try to force-fit a solution into their manufacturing process."Some of these attributes can be assessed during a plant tour, which marketers agree is essential before taking on a new vendor. (The points marketers look for are summarized in the accompanying checklist.)Of course, becoming involved in a project is a two-way street, vendors note. "Many marketers are protective of their information and strategies," notes Nick Romano, ceo, F. O. Phoenix Inc., Sussex, N.J. "They don't give out as much information as we'd like. Maybe they don't realize it, or maybe they don't think it's important." Often, he has to probe for specifics to ensure he receives enough information to bid and design the job correctly.Adds Leeds, "Since displays are only one segment of what the marketers are doing, they often don't know what they need themselves. We try to act as their alter ego and determine what best suits their needs as we understand them."Even without specific goals, it's critical that marketers understand what they want from a vendor before talking to one, notes Howard Topping, senior vice president at RTC Industries, Rolling Meadows, Ill. "We do capabilities presentations, but we first ask the marketer what he really wants to buy," he explains. "For the most part, they should be buying a complete organization, its processes and experiences. What's important is how that supplier is going to manage your business, not whether or not it can produce a specific display."The key challenge vendors face is to prevent marketers from thinking of P-O-P makers as "vendors," he stresses. "Marketers are always creating all-encompassing programs that include displays," he says. "Tackling a P-O-P project only as a display misses the key point. Our challenge is to help marketers understand what value really represents to them and what they should be receiving even in project-based work."

P-O-P Buying Begins With Selecting Right Vendor

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