You pull, I’ll push…

Driving demand, not fulfilling it, is now the name of the game

Tags: United Arab Emirates
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By  Andrew Seymour Published  November 22, 2009

The sheer amount of tweaks that IT vendors have made to their Middle East channel strategies in recent months is evidence, if any were needed, that when market conditions undergo dramatic change there are very few organisations that can get away with standing still.

That's not to say this is always immediately recognised though, especially when you consider the denial mode that was prevalent among so many companies in the market during the first period of this year. 

Back then, many vendors appeared to be taking what I'd describe as the ‘bungee jump' approach to channel management (closing their eyes and hoping for the best), rather than accepting that some difficult decisions needed to be taken.

One issue that is now quickly coming to the fore is the ‘pull' tactics deployed by vendors in the Middle East. This subject never mattered too much in the past, but it is clearly going to have a major influence on the identity of the market's winners and losers going forward.

Middle East growth rates have been the envy of most other EMEA countries in the past few years, even if much of the double-digit expansion was down to the market's adolescence and the fact that the numbers were coming from a comparatively low base to start with. 

When vendors saw potential in a certain area all they had to do was come in and give things a bit of a kick-start, and before they knew it the numbers took care of themselves.

That comment is not meant to detract from the investments and efforts that many vendors have made in the region, but you'd be hard-pressed to identify many other territories where the natural appetite for technology and purchasing power was so high at that time. 

Take the performance of the volume space before the downturn hit, for instance. The vast majority of product categories enjoyed extremely strong market momentum that virtually guaranteed solid growth from quarter to quarter.

To stoke that fire, vendors simply had to ensure they were on the mark when it came to pricing and, most importantly, product availability. 

In a growth phase, the emphasis lies on facilitating the sales rather than actually driving them - but that is rapidly changing. "Today we are shifting from fulfilling demand to driving demand," was how one channel player described it this week.

What this means for some vendors is that a massive overhaul in the way they run their sales operations is needed - not just in terms of their channel model and the incentives they offer the channel to drive transactions, but also the way they address the market internally.

The slightest enhancement to a marketing campaign or promotional mix could make all the difference in a climate where customers now think twice about every dollar, dirham or riyal they spend.  

Nobody knows how long it will take for a proper recovery to occur, but as the channel transitions from a sustained growth period to more of a flat or contracting environment, it is inevitable that vendors must look at things differently. 

At this time of the year, distributors and resellers will be sitting down with their principals to devise their 2010 plans. One of things they should be asking is, what are you going to be doing to encourage customers to demand the product from the channel?

It might be greeted with a puzzled look at first, but the need to develop and execute compelling pull strategies is something that vendors - and their partners - can no longer afford to take lightly.

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