Friday, April 4, 2008

Do you want a horse? How about two horses?

On my phone LCD the name of a product GM appeared. Must be important if he is calling me directly.

“Hey Al, what can I do for you?” I asked helpfully.

“I need a program to get rid of some inventory.”

“What kind of program?”

“The kind that gets rid of inventory.”

“Why do we have so much inventory?”

“Because we couldn’t sell it.”

“So, you think a marketing program will get rid of it?”


This was a very real conversation that I had with someone that I respect tremendously, but he always wanted to push his product through the channel at all costs. The problem that he had was that he had a product with no demand (hence the excess inventory). A marketing program (or Ginzu knife special) was not going to solve his problem. What he needed was a better product that fit the needs of his customers.

If somebody offered to sell me a horse, I would say no. Why? Because I don’t want a horse. If he then said that he would give me two horses for the price of one, I would still say no. I simply do not want a horse, no matter what deal you offer. It is an issue with demand, not price. Besides, if it was a price issue, why not just lower the price?

Sometimes we expect our channels to make up for our own problems. Shifting a demand related problem to the channel only stuffs the channel and pushes the issue further down the chain. It will not only not solve your problem, but quite possibly create longer lasting and bigger problems with your relationship.

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