Sunday, July 27, 2008

Burton at Costco!!!

The world is never black and white. Various shades of gray creep into all facets of our existence. Some aspects of these shades and hues keep life interesting, but on the retail landscape, gray markets cause untold headaches for both manufacturers and retailers. For brands, the size of the gray market is directly proportional to the demand for their products. There are currently nearly 80,000 Apple products on eBay, and the story behind that number is the brand’s strength. If you search for Burton on the online auctioneer you get 3,844 items. While this may pale in comparison to Apple, it seems a bit more noteworthy after searching for K2 Snowboards; which results in 61 items. Burton is a behemoth in our industry - the undisputed heavy weight, and defending that title is never easy. When you’re the 800-pound gorilla in the room, you’re in everyone’s sights, and they all want to take you down or make a buck. This is true of competitors, industry pundits, and consumers that believe large companies have sold out and lost their soul. It’s also true of the company’s dealers that want to improve their bottom line by riding on the strength of the brand.

Burton defines gray marketing as “when a Burton Authorized Dealer purchases goods from Burton with the sole intention to sell it via unauthorized distribution channels, including but not limited to mail-order catalogs, online retailers, wholesale retailers etc.” Gray marketing avenues are also, by definition, very gray. They take many shapes and sizes, and manufacturers in all industries have to keep on their toes to keep up with gray marketers wiley efforts. It’s like playing whack-a-mole on a five-acre board. In December of 2007, Burton implemented several new measures to prevent gray marketing throughout its distribution networks in North America, Europe and Japan to protect its brand integrity, and these policies were put to the test almost immediately when a slew of product showed up in Costcos around the West and on

Transworld Business recently spent some time chatting with Clark Gundlach, Executive Vice President and General Manager, Burton Snowboards, HERE IS THE REST OF THE ARTICLE...enjoy

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