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Frigidaire: doing the Gibson 2-step; tailors the line and extends promotional money.

DUBLIN, Ohio--A year after declarations of rededication to its Gibson distributor brand, Frigidaire Co. says it significantly increased the label's programs, exposure and volume.

Customers tend to agree, though there still are some complaints about the quality of support. What no longer seems in question is whether Frigidaire remains committed to Gibson.

"There is no discussion, nor has there been, for us to get out of this business," declared Scot Brown, director of Gibson sales and distribution. "Why would you walk away from X million dollars of business?"

Gibson is among a half-dozen brands Frigidaire Co. keeps in general distribution. It's also the only remaining label from the five giant major-appliance manufacturers reserved for two-step sale.

The prevailing industry logic is suppliers must computerize and reduce field staffs to compete. The counter-argument is big chains and buying groups can work that way, but the last, fragmented 20 percent of the $19 billion retail business requires human skills.

As rivals and even Frigidaire Co. canceled contracts with distributors, skepticism persisted about Frigidaire's support for Gibson. But the company put Brown in charge of the program at the outset of 1994 and provided greater resources. Dubious customers became converts, though some remain wary.

Distributors were given quotas to increase their portfolios, often in fresh channels, such as remodelers, co-op associations, institutions and rental outlets. Sources a year ago put Gibson's volume around $200 million. Brown declined to give specifics, but said sales in the past year showed "significant growth."

"Most of the Gibson guys [distributors] are up because their business is more aggressive" than in the past, observed John Jackson, president of the Independent Distributor Association.

In return for the tougher sales quotas, the manufacturer provided its distributors with an expanded training program and a redefined product line to reduce overlaps with other Frigidaire Co. brands. Enhanced promotional activity included increased rebates; more models supported with deals for distributors, and greater attention to specific competitive situations.

"I feel that a push brand has to have an element of pull, too," said Brown, "so we've given this an element of pull with this rebate program."

Bob Holsten, owner of E.A. Holsten Co., a distributor in Richmond, Va., said his Gibson volume increased slightly. "They've been promoting well for us," he related. "They continue to come to us with differences to help us stay competitive in the market.

"The quality is very good on the products. Gibson has stepped up its sales training for our people," he said. "That gets pushed out into the stores."

Holsten's chief complaint, like many of his compatriots, was that some SKUs were cut back. Jackson echoed the gripe, calling it "the number-one problem with Gibson."

The references were to the corporate program last year to simplify lines for all the brands and add flexibility to merchandising. Every label lost some SKUs, Gibson no more than its share, said Brown.

Frigidaire also introduced generic cartons inside which a brand label could be slapped on the product in the warehouse when a customer placed an order. In fact, White-Westinghouse disappeared as a line with dedicated product: only generic models requested as W-W remain.

"The generic product hurts us," proclaimed one distributor executive who requested anonymity. "All we are selling is a name and a long warranty. They extended the warranty for other brands, so we lost that exclusive."

He went so far as to challenge top management's commitment to the brand. "They pay lip service," he charged.

Brown acknowledged the company was criticized for the cutbacks not only by Gibson accounts, but also those of Frigidaire's other brands. The distributors, however, were particularly fearful the reductions were a first step to ending Gibson.

Instead, Brown noted, he worked with company officials to get meaningful Gibson models. For example, Bill Zani, merchandise manager for cold products, offered a Gibson refrigerator with one full and three split shelves. With that model to sell, Gibson was able to forgo some other step-up SKUs.

The two-step brand also benefited from the generic program, said Brown. Yes: generic models available as Gibsons are offered with the other names to other customers. But the core Gibson line is exclusive, and so are many of its benefits.

All this raised a familiar complaint: Gibson's biggest competitor is Frigidaire Co. with its other brands.

Fred Turner, vice president of sales operations, said months ago that all the other labels have been positioned to step up to the premium Frigidaire brand, and no store should have more than two lines, with one exception. That was some Tappan to flesh out cooking appliances.

"To be honest, we are in competition a little with one another," conceded Brown. "I have not found that many cases where we're running into direct competition." Brad Chaffee and Jay Penney, respectively general managers of the Eastern and Western regions, have set out minimize the number of models in conflict, he added.

The Gibson director said one objective was to integrate his line more with Frigidaire's direct-distribution brands. For example, the ordering department was accustomed to large customers filing daily. Distributors with nothing for days and a flood of orders at month-end tested the department's patience until Brown convinced them the two-step beast is a different animal and must be handled as such.

Some smaller distributors get jealous when a Frigidaire direct brand comes out with a program for buying groups, continued Brown. He insisted Gibson offers several distinct advantages.

Examples of Gibson's differences are additional shelf space in a top-mount; lower pricing on the step-up GRT19 refrigerator and MWX433 washer to increase volume, and introductions of more two-speed washers. Crushed-ice dispensers and room-air sweep are limited to Gibson and Frigidaire brand models.

The 1995 Linebacker Series of special deals and the seven-month rebate program for distributors have been enlarged this year. Phil Wilson, manager of Gibson sales promotions, said the 1996 Great Buys plans offers promotional allowance on mid-line products. About 39 models are available with rebates.

Promotions support only the core line and not generic models, added Brown.

A Cornerstone program offers incentives to distributors who enroll large accounts in their areas. The Marketing Brilliance demographic computer program has been enhanced with information by Zip Code to provide market share by category. Brown said there's some merchandising money so a distributor can fight a competitor's deal.

Zone managers also have funds, and if there's some left over at the end of the month, that could be poured into a special event.

That can backfire in unexpected ways.

One angry distributor said Gibson ran a one-day special. His firm had ordered a day or two earlier and wasn't entitled to the reductions.

"You can't order everything on the menu," said Wilson of the programming array. "It's there if you want it."

"I think we're giving them far more programming and merchandising dollar retention than they ever had," said Brown. "Not just programming, but meaningful stuff.

"I found them to be a wonderful group of successful business people. They understand the market. The distributor fills a wonderful niche there."
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Title Annotation:Frigidaire Co. expands capacity of Gibson distributor
Author:Beatty, Gerry
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Jun 10, 1996
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