ABTEILUNG/Name

FNDI La giornata del Distributore 2015

L´organizzazione e la politica di vendita del produttore

Gian Paolo ArosioHead of Sales Management Region EuropeSenior Vice President

Monza, 16 Ottobre 2015

ABTEILUNG/Name

Think global, act local• Automation and Didactic• Factory and process automation• 300,000 customers•Turnover (Group): EUR 2.3 billion in 2014

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• 16,935 employees in 176 countries

• R&D budget: more than 7 % of sales• Learning company• 1.5 % of sales invested in staff

training

People: our no. 1 success factor

Distribution Strategy Europe\ Created: 6th/10/2015

Status: Draft Privacy Strictly confidentialDistribution Strategy Europe\ Created: 6th/10/2015

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Customer’ choice of multiple channel based on needs

Direct Festo Sales Channels

Distributors Channels

E-Business

Telephone Sales

Field Sales

Logistical orientation

Technical orientation

Online (catalogue) orientation

Value for me?

Customer

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Which are the sales channels of Festo?

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market / customer

KA

M /

indust

ry s

ale

s

Are

a s

ale

s

Dis

tance

sale

s

Onlin

e s

hop /

eC

om

merc

edistribution

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Effectiveness Efficiency

Effectivenessof

Direct Sales

Efficiencyof

Indirect Sales

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Balanced management of sales channels

SuccessfulChannel

Management

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Why do we use distribution as a sales channel?

•... having a balanced channel management•... reducing direct cost and risk•... getting a better cost-efficient coverage in the market•... having official partner for customer acquisition

increase profitabilit

y by ...

•... getting market access through distributors•... meeting demands of customer to use distributors•... using distributors to multiply resource on customer site•... having official partner for customer acquisition

increase market share by ...

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Full landscape of different types of distributors

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deliver advice support

Radius

Local Store

Logistic Distributo

r

Inter-/ National Distributor

Technical Distribut

or

Service Partner

Syst

em

In

tegra

tor

Representation

Non-o

ffici

al

stock

ist

solve

Components Solutions

Loca

lR

egio

nal/

Nati

onal

Inte

r-nati

on

al

Cata

log

ue

Dis

trib

uto

r

Added-Value

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LocalDistributo

r NationalDistributo

r

Local NationalInternational

Catalogue Distributor

International

Distributor

digitalphysical

AddedValue

Reach

logisticalstrength

technicalstrength

Main types of distributors

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What main selection criteria help in selecting distribution partners?

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Local Distributor: loyalty, technical expertise

National Distributor: market position, logistical expertise, technical expertise

International Distributor: internationality, market position, logistical expertise, tech. expertise Catalogue Distributor: market position, quality of online shop and logistics

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When does a distributor become an official partner for Festo?

Prerequisites to become an official distributor

Signed contract based on Festo standards (code of conduct, terms and conditions)

Min. 75% of orders through Festo OLS

Provide market transparency as defined per contract (point of Sales Report)

Regular training on Festo products for internal and external sales staff

Size of stock accordingly to agreed values in contract

Joined objectives fixed in an account plan with quarterly review

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What does an official distributor gets in return?

Benefits to be an official distributor

Participation on regular distributor sales conventions of Festo

Access to Festo's promotion material (according to marketing media overview)

Allowed to use Festo’s official partner logo

Access to distributor partner portal (download area)

Visibility on local Web-Site of Festo

Getting support by an dedicated Festo sales engineer distribution

Getting basic discount level in order to meet the market price by having a sufficient margin

Getting a numbered and signed certificate being an Official Partner of Festo

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Distributor Business Development - Signage

As a seal of proven quality the official distributor is allowed to use Festo’s official partner logo: This logo is an important part of effectivecommunication of the distributor into the marketwith which the official partnership is announced and visible. For Festo it is a big advantage that by using thislogo the Festo Brand is immediately visible andthe distributor benefits by association with our brand 12

Distribution Strategy Europe\ Created: 6th/10/2015

Status: Draft Privacy Strictly confidentialDistribution Strategy Europe\ Created: 6th/10/2015

Status: Draft Privacy Strictly confidential

acquisition

Trend in distribution_Consolidation

Logistical pathexpanding reach and

portfolio

Technical pathexpanding knowledge

and added value

Local Distributor with technical strength

national Distributor with logistical strength

expandreach

expandadded value

international Distributor

with logistical strength Systemintegratornational Distributor

with technical strength

Hybrid Customer Needs

Adapting to market trends – Current Sales Patterns

Transactional Selling

Distribution, Distance Sales, eCom

Consultative Selling

Added Value Selling (Complex Selling)

Traditional selling based on advising the customer during the buying process.

Key Aspects• Win customer trust by

fulfilling customer needs.

• Deep understanding of purchase motivations

• High product knowledge

Ex. Car selling, insurances, etc..

Sales methodology that requires a higher level of customer knowledge as well as his business processes and challenges in order to adapt your solutions to their targets long-term targets.

Key Aspects• Became an strategic

partner.• Real differentiation

Ex. AMI business, High End IT solutions, etc..

Key Targets

• Efficiency

Organizational costs vs. business turnover

• Capillarity

Be close to all your possible customers

• ConvenienceTo the customer

Consultative Selling

Transactional Selling

2015

18% of Total

Turnover

2020Target

25 - 30%

Adapting to market trends – Development of Sales Patterns

Added Value Selling (Complex

Selling)Trend:

Consultative selling

organizations are losing share due to a lack of efficiency vs. transactional and higher

specialization vs. Value Selling

2015

70%

202040-50%

2015

10% of Total

Turnover

2020Target

25 - 30%

Trend

Customers and business are getting more complex due to global competitive situation, so Added Value Selling is winning share to consultative due to better global understanding of customer business.

Trend

Web-based and indirect selling is very fast winning share to the classical “Consultative Selling”.

Ex. Internet supply us with all needed information before buying a car o getting an Insurance.

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