Distributors and Direct To End User Remain Preferred Distribution Channels for UPS Products Worldwide

2/20/2003 - In the recently released multi-volume study entitled "The 2002 Power Protection Market Intelligence Program" Venture Development Corporation (VDC) concluded that the use of distributors and selling direct to the end user are the sales channels most commonly employed in the worldwide UPS industry. Despite there being numerous methods and combinations for the allocation of these products, these two combined avenues account for over 60% of all shipments in this $4.50 billion market. This is due partially to the processes involved and the changes inherent in them as the kVA level of the products in question increases. Among the major differences:

Successful channel strategies in the less than 5.0 kVA market segments are largely a function of territorial coverage. Many suppliers have implemented scaleable sales structures that enable them to deliver to high-volume customers. Like the addition of new product features and enhancements, many vendors have similarly adopted this method on a broad scale. One of the key elements of such a strategy is the responsibility of channel partners, as well as internal sales and other personnel to educate and adequately service the end user. The forecasted purchases of higher powered home systems (due to reductions in cost) mean more and more end users buying direct, making user-friendly hands-on learning and personal attention paramount to the success of the channel strategy. Beyond this, efforts should be made to cast as wide a distribution net as possible and to ensure that channel partners can maintain appropriate margin levels by dispersing efforts to blanket all applications.

The 3.0 to 8.0 kVA segment is a transitional one, in that these UPSs can encompass qualities typical of both low and higher range products. Consequently, they are sold through a wide range of channels, including traditional distributors, value-added resellers/systems integrators, private label resellers, OEM and/or direct to the end user. However, inevitably, as the kVA rating and the mission-critical value of the protected load rises, it becomes increasingly necessary for the supplier to take a more direct approach in building a close relationship with customers.

About the Study
The report, "The 2002 Power Protection Market Intelligence Program: Volumes I-VI (North America (under and over 5 kVA), Europe (under and over 5 kVA), Asia-Pacific, and Latin America)", is a multi-client study designed to provide subscribers with relevant and up-to-date market intelligence to support strategic marketing and product planning decisions. This report includes:

Venture Development Corporation, a technology market research and strategy firm, was founded in 1971 by graduates of Harvard Business School and MIT. Over the years, VDC has developed and fine-tuned a unique and highly successful methodology for forecasting and analyzing dynamic technology markets. VDC has extensive experience in providing analysis in electronic components markets. This includes both multi-client and customized consulting engagements in a broad spectrum of related topics including switching power supplies, surge suppressors, fuel cells, static transfer switches, and others.

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