Allen-Bradley Co. (A-B), Milwaukee, Wis., and Affiliated Distributors, Inc. (A-D), Wayne, Pa., have decided to work together to capture more national-account and integrated-supply contracts.
Under terms of a program called Rockwell & Affiliated Distributors Industrial Alliance Solution (RADIAS), A-B will be able to coordinate its distributors-including A-D members and nonmembers in some cases-using A-D's systems, without violating A-B limited-distribution territory assignments. A-D, on the other hand, will be able to offer A-B products as part of its package of products and services to customers nationwide.
Both companies declined to discuss the agreement, citing policies against commenting on programs under development, but according to a letter mailed to A-D member distributors by A-D President Bill Weisberg, and obtained by EW's sister publication Electrical Marketing newsletter, A-B will not become an A-D vendor, and will not take part in the buying/marketing group's programs and financial incentives.
The letter brought out the following key points:
* Under the RADIAS program, all A-D members-whether or not they're A-B distributors-will be presented to customers whether the presentation is done by A-D or A-B. Any A-D member already doing business with a customer will be automatically written into the contract.
* The customer can select any A-D member or any A-B-authorized branch of a non-A-D-member distributor to supply a plant under the contract. Non-A-D-member distributors must pay a fee to participate in the proposal, plus an annual fee to participate in the program once a contract is awarded.
* A-D members that are not A-B distributors but that are included on a contract will be free to compete with A-B distributors and products.
* RADIAS is not intended as an offensive selling tool; it's introduced when a customer needs a single-source contract that includes A-B products.
Weisberg emphasized in the letter that the relationship between A-B and A-D will be strictly a marketing alliance, and will focus solely on national accounts and integrated supply.
The two organizations have been growing closer over the past few years, as an increasing number of A-B distributors have joined the ranks of A-D members, including several on the A-D board of directors. An estimated 85% of A-B's largest distributors are A-D members; and A-B distributors make up 30% of A-D's Electrical Supply Division membership and 75% of its electrical sales on national contracts, according to A-D. In light of this alignment, industry observers have long been predicting some sort of cooperation between the two as a way for A-B to capture more national accounts and integrated supply business while preserving its limited distribution policies and fending off pressure from customers and national chains to authorize sales for MRO contracts on a national basis.
The program is expected to be introduced and implemented early in 1998.