Purchasing Hardgoods

In focus group research, end-users uniformly identify distributors as trusted partners.

By David Rich

As founder of Research & Planning Group in St. Louis, I have had the opportunity to leverage my opinion research studies to better understand a variety of businesses. But while I am a seasoned veteran of market research, I am new to the welding industry. In my past year’s work with Thermadyne Industries, I acted as moderator for a series of opinion research studies, or focus groups, around the country, involving welders of all ages. Through these focus groups, I have been able to track the purchase dynamics of end-users of hardgoods in the metal working and fabrication industries.

Thermadyne was looking for ways to increase the channels of communication with its end-users. Brand managers have continuous contact with their distributors, but were interested in the perceptions and opinions of the end-users so they could better understand their needs.

At the conclusion of the study, I discovered that in many ways this business is not too terribly different from other industries. It relies on innovative, reliable products, cost-effective manufacturing and well thought-out marketing. However, the dynamics of the hardgoods purchase in this industry are unique in that they are highly influenced by the role of the distributor.

My study included the users of plasma cutting systems, gas apparatus, welding equipment and arc accessories.

Study Findings
With decades of combined experience, the metal welding and cutting industry professionals interviewed in the study said they relied on a relatively short list of brands that are tried and true. Many of the end-users have a very real connection with particular brands, relating to brands they used at the start of their career paths in metal working. When considering the purchase of a plasma cutting system, for instance, potential buyers also look to other skilled craftsmen and fabricators to validate the efficacy of a product.

Beyond personal experience and associations with other end-users, the greatest influencer is the welding distributor. Distributors might be surprised to know how uniformly end-users identify their distributors as a trusted partner in their business.

Information – When we ask end-users about where they go to get more information on products when they are in the market and what influences their decisions, the answers were surprising. The participants listed their distributor or supplier, the Internet and product literature as their most prominent sources for new product information. When considering a purchase of hardgoods, most are influenced by the brand, referrals from others in the industry and—most surprisingly—the recommendation of their distributor.

The study showed that when shopping for a plasma unit, potential buyers are about equally likely to look to the Internet and to their local distributor for assistance – and several do both. But most believe that their distributors are a key resource, not only because they know what is available, but also because they often know better than the buyer what is needed.

When using the Internet to look at equipment before buying, most claim they are just getting an idea of what is new, leaving the final decision with the recommendation of the distributor; and few, if any, are using these sites to comparison shop. Similarly, others turn to their long-lasting relationship with their distributor for manufacturer’s literature and brochures, which are of great importance to some end-users.

Likewise, most end-users agree that a manufacturer’s reputation is very important in their selection of new equipment. And while machine specs, life and rate are important, most rely on their distributor to provide current information.

Selection – The endorsement of the distributor is of most significance in the purchase decision. A well-seasoned end-user probably has close ties built over years with their local distributor. The salesperson at the local welding supply is the person who helps them select the appropriate equipment after they’ve laid out their needs. So it is not unusual that potential buyers are likely to follow their distributor’s recommendation, even if they are not familiar with the brand. “My supplier knows me very well and knows what I need better than I do,” is a common response.

More often, end-users voiced that they depend heavily on their distributor in times of technical crisis. If they are down because of a problem with their torch, they are often temporarily out of business. So having a distributor who understands their needs and offers quick, reliable service and support is imperative.

“If we are down, we’re losing money. That’s why we have such a long-standing relationship with our welding supply company. They are very responsive,” said one participant. They know that if anything goes wrong, the distributor will make it right.

Manufacturers and End-Users
So if the best way to get end-users’ attention is through the dealer, then how can the manufacturer develop a good relationship with them? Evening and weekend clinics and trade shows hosted jointly by the distributor and manufacturer were exalted as the best option. But those held currently are often during workday hours, limiting attendance for end-users.

Educational events offer industry professionals a variety of opportunities, including networking, demonstrations and training for new equipment. By helping end-users become more knowledgeable and more effective users, we were told, a company can establish its position as the expert in the field.

Looking to the Future
According to the American Welding Society, many experienced welders are approaching their 60s, and the welding sector across the country is expected to take a major hit when they retire. By 2010, this will leave a potential shortage at construction and manufacturing work sites of more than 200,000 skilled welders. With twice as many retiring out as coming in, many welders are concerned about the lack of higher education systems focusing on trade and industrial careers. The industry is changing, and manufacturers should respond to these changes. Building the brand image by having a direct connection with end-users is vital for manufacturers to maintain sales revenue.

We learned that distributors play a powerful role in directing end-users in their ultimate purchase decision, and there is great potential to leverage this relationship. However, it is important for manufacturers to begin to know its end-users and to work with distributors to develop a stronger, ongoing relationship with them.