Nordyne Reports 47.5% Increase in Sales

October 30, 2000
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ST. LOUIS, MO — Nordyne’s independent residential distributors gathered here recently for Nordyne’s 2000 annual planning meeting to learn about new programs and products, as well as to be recognized for their sales accomplishments.

For the third consecutive year, Nordyne’s residential distributors have contributed to another large sales increase, reporting 47.5% this year, up from a 38% increase experienced in 1999.

“We recognize, though, that growth doesn’t happen just because we talk about it,” said Nordyne president and coo Dave LaGrand, addressing a standing-room only audience. He attributed the growth to a combination of a “strong distribution channel,” as well as brand strategy, program support, operational efficiencies, and quality products.

In 1998, Nordyne first introduced the Frigidaire, Tappan, and Philco brand names, along with an expanded product line. Sales increased 36%.

“We had 11 distributors more than double their business,” said LaGrand.

A year later, Kelvinator and Gibson were added to the strategic mix, resulting in another 38% increase in sales, he said.

Nordyne began this year with the implementation of a segmented brand strategy to target different levels of potential customers. As part of the strategy, the products had physical makeovers, as well as program differentiation. So far, the company has seen a 47.5% increase in sales. As a result of the growth, the company announced plans for an additional manufacturing facility.

Doug Land, director of marketing, attributes part of the growth to having evolved business processes.

“We want to meet customer demand and maximize efficiencies throughout the supply chain,” he said.



E-COMMERCE AND MORE

In addition to the manufacturing expansion announcement, Nordyne introduced its e-commerce website, e-NORA. LaGrand told distributors that “e-NORA is a flexible system that you’ll be able to use to increase your business and shortly help your contractors increase theirs.”

Land spoke about the direction of Nordyne’s business site, as well as its history.

“We have taken our existing business-to-business extranet to the Internet. Our customers have been able to do e-business with us for over 10 years on ‘NORA’ (Nordyne On-line Remote Access), so we feel we have a distinct advantage over those businesses new to electronic commerce.”

NORA is used for ordering product, filing warranty claims, and other account functions. However, Land said e-NORA expands those capabilities and is more accessible with a web interface.

After three years of planning, developing, and implementing, the completion of “Norflex,” a demand-based production operating system, was also announced to distributors. According to Land, Norflex is designed to take advantage of Nordyne’s flexible manufacturing environment.

“By focusing on demand initiated by orders, we inventory and produce the exact mix of products requested by our customers,” said Land.

The Norflex Production System runs daily, identifying immediate production requirements as demand filters into the Nordyne order management system. This compares to traditional production systems that run on a monthly cycle to determine production requirements.



BENEFITS PROGRAM

“E-NORA and Norflex support the rapid growth that our contractors and distributors are achieving, but our selling programs are also essential for future growth,” said Jim Burnes, residential sales director. “We are expanding our sales programs as a response to contractor needs, especially when dealing with our premium dealer base, who are accustomed to having a variety of programs to support their selling efforts.”

The latest program was the recently released “Contractors Benefits Advantage” program. The program is designed to provide “contractors and wholesalers of any size a way to take advantage of group discounts and affordable benefit packages,” said Burnes.

For members who join the program, it offers credit card services, extended warranties on parts and labor, targeted training programs, discounts on vehicle leases and purchases, Snap-On tool program, uniform program, reduced mobile phone charges, web-site design assistance and the services of a professional employment organization. Member contractors and wholesalers can also offer their employees benefits, including custom retirement programs, insurance plans, wellness discounts, and online banking.

“It is not easy to predict how successfully a new strategy will affect your business, but after seeing contractors and distributors grow their business the way they have in such a short time, it really is exciting for everyone involved,” said Burnes.

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