Jan 13, 2009
Barb Pellow and I were invited along with about twenty other market analysts to attend the Konica Minolta Business Solutions Vision 2009 dealer event in Orlando, Florida. Of the more than 400 U.S. dealers, Konica Minolta estimates that about 60% to 70% were represented at Vision 2009. All in all, InfoTrends believes that close to 1,000 people attended the event, including Konica Minolta dealers, employees, and partners. Held at the Walt Disney World Swan and Dolphin Resort, Konica Minolta’s Vision 2009 included presentations by Konica Minolta executives, a keynote by Fortune magazine senior editor Geoffrey Colvin, various workshops, and an extensive exhibition area.
You can see more on the product and service announcements in the News area of the InfoTrends web site, but what I’d like to write about today is how Konica Minolta addressed the concerns of the audience of dealers. The parallels with the national dealer event that Ricoh USA held in October are interesting to consider in light of the close proximity of the two meetings:
- The hosts were both U.S. sales and marketing arms of two large Japanese equipment manufacturers
- Both had recently made distribution channel acquisitions (Ricoh was in the process of purchasing IKON and Konica Minolta had purchased Danka Office Imaging in June of 2008)
- Both continue to integrate the components of previous acquisitions
- Both were working hard to convince the dealer community that they had their best interests at heart
- Channel conflict was a top priority on the minds of the attending dealers
- On top of that, both meetings were in Orlando and both were called “Vision.”
It was interesting to see how Konica Minolta addressed this set of challenges. Leading off the presentations the morning of the first day was Rick Taylor, Senior Executive Vice President and COO. In a witty and persuasive presentation Taylor set the tone for the event, making the following points:
- Konica Minolta Business Solutions revenue was up 8% and color unit sales were up 11% over the first nine months of 2008 (compared to 2007) despite a difficult economy.
- He acknowledged that ongoing work that needed to be done to fully consolidate Konica and Minolta, which first announced merger plans in August of 2003.
- He identified channel conflict as the most important business issue to be solved and discussed several moves that he made to address this issue, including having a single marketing organization serving the direct and dealer channels; assuring that the direct and dealer channels have the same pricing structure; and organizing the regions to align along the direct sales organization and dealers.
- He noted that strong multiple channels of distribution are essential, including a controlled direct channel and a successful dealer channel. (Konica Minolta Business Solutions’ President and CEO Jun Haraguchi later said that he felt strongly that a healthy split between direct and dealer revenue would be 50/50.)
- Taylor assured the audience that Konica Minolta would respect dealers’ existing customer base and would not sell into their Konica Minolta accounts. He also said they would not recruit a dealer’s employees. He went on to say that direct channels that did not respect these two rules would be disciplined, including possible termination. Taylor said that the reality of the situation was that he had the authority to fire or put Konica Minolta employees on probation for disregarding these rules and he would not hesitate to do so, and in fact had done so in a few cases. (Taylor mentioned later in a question and answer session with the analysts that he considered that the newly acquired Danka organization would abide by the same rules and would be considered a direct channel.)
- Taylor described several programs intended to please the dealers, including two extensions to the warranty program (one moving the warranty on certain parts up 80% of yield from the previous 20% and another expanding the warranty from three months to three years on boards, write units, and disk drives of Konica Minolta’s mid-range color products).
Taylor, who joined Konica Minolta from Toshiba and who has only been there about a year, was followed by other speakers, including Alan Nielsen, Executive Vice President for Dealer Sales; Kevin Kern, Vice President of Marketing, and of course Jun Haraguchi. There was more news about financing, alliance programs, managed print services, and new products, but the message to the dealers was consistent across each presentation. This helped to support Konica Minolta’s theme of “One Company, One Vision, One Voice.”
It was quite symbolic that Konica Minolta began the session with three top American executives. It speaks to the level of empowerment that they have in addressing business issues like channel conflict, supply chain and inventory management, and major account structure. Konica Minolta talks about moving from a “sell to” to a “sell through” strategy with its dealers, and if the speeches are any indication of what’s happening in the field, then there is good reason to hope that Konica Minolta has tackled a difficult issue head on and is positioning itself for success.
One other take-away from the event is our perception that despite the recession, the overall mood of the dealers in attendance was upbeat and that for many business was still good.
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