These days, producers across the country are strategizing how to profitably differentiate themselves from their competitors. When everyone is selling seemingly similar products and services, how can one producer distinguish itself from the rest?
Instead of increasing their marketing budgets, several producers have turned to a plan that actually increases cash flow. Their strategies focus on expanding their offerings of value-added products.
Concrete producers have always distributed products to their contractor-customers. Rebar, mesh, and even work gloves can be found in every plant's storeroom.
But this concept requires the producer to go a step further: making a commitment to integrating value-added products into their core businesses. And just as important, making sure customers know about the producer's effort to be a one-stop source for every project.
Two Midwest producers have embraced this value-added construction products strategy as a key part of their business plans. Cemstone has seen a dramatic pull-along increase on their ready-mix sales after strategically expanding its contractor stores in the Minneapolis/St.Paul area. While in the Toledo, Ohio, area, the Kuhlman Corp.'s new corporate office is literally built on its strong commitment to construction product suppliers.
Balloons, product demonstrations and free refreshments drew a large crowd last summer when Cemstone officials held their grand opening of the new North Metro Concrete plant, and its 19th Contractor Supply Store in East Bethel, Minn. The dual opening is a common experience now that Contractor Supply Stores have become such a big part of Cemstone's business. “Anytime we construct a new plant, a store will be part of it,” explains Patrick Kinsel, general manager.
The producer has been in the business of selling construction-related products since it acquired an existing contractor supplier eight years ago. Kinsel, who manages the Cemstone Contractor Supply (CCS) division and its sales team, says contractor supply sales have more than tripled since the acquisition.
But, Kinsel says, that success is more than just constructing an additional building. He credits Jim Galloway, CCS's general manager of operations, for providing a customer-friendly environment. Galloway is responsible for consistent store design, training employees who sell the products, and working with vendors to select appropriate inventory.
In Cemstone's diverse market, proper store design is important, as one location may specialize in concrete masonry, while another may be heavily agricultural. By meeting with vendors each month, and keeping a close eye on inventory patterns, the CCS team can customize the products in each store to best meet specific needs of local contractors.
Along with a local focus, CCS's product selection can help boost sales of its ready mix business. Insulating concrete forms (ICFs) are a perfect example of a product that supports both divisions. ICFs are a natural fit for Cemstone because they directly support its core ready-mix business.