Don Whaley began his career in sales with Eastman Kodak in 1988, where he managed several territories on the West Coast. In 1998, he took on the role of Western Zone Operations Manager. In 1999, Whaley became Kodak Polychrome Graphics (KPG) Director of Sales Operations, US & Canada. He is currently KPG’s Director of Channel Management for the U.S. and Canada region. Whaley holds a Bachelor of Arts degree from the University of California at Santa Barbara and an MBA from California State University at San Diego.

Kodak Polychrome Graphics provides one of the broadest product and solutions portfolios available in the graphic arts industry today, including a wide range of conventional lithographic plates and computer to plate solutions, Kodak branded graphic arts films, digital, inkjet, analog and virtual proofing products, as well as workflow solutions and color management tools. With headquarters in Norwalk, Connecticut, USA, the company serves customers around the globe with regional offices in the United States, Europe, Japan, Asia Pacific and Latin America.

Question: Don, you’ve been with Kodak Polychrome Graphics (KPG) in Norwalk for about a year (plus 14 years of experience with KPG and Eastman Kodak Company prior to that), and what a year it has been. Describe the KPG dealer network when you first started as Director of Channel Management versus how it looks today.

Whaley: 2001 was definitely an exciting year. Our acquisition of Imation’s Color Technologies businesses was clearly a major event. One of the benefits of that acquisition was a very high overlap in terms of the existing dealer network for both Imation and KPG, which strengthened our share position and improved our alignment within our channel. Our master distributor relationship with Graphline has also been strengthened by our acquisition of the Color Technologies products. Finally, there was the formation of Enovation, which involved the acquisition of three significant KPG distributors.


Question: Which KPG products are sold within the dealer channel? Have there been any changes there recently?

Whaley: There have been no recent changes to the way we sell or distribute our consumable products. We have historically sold most of our consumable products through our dealer channel with some limited direct sales. Going forward, we plan to continue to utilize the channel as an effective method to reach as many end users as we can, and to look for ways to improve the value of our delivery systems.


Question: Tell us about your network of dealers. How many represent KPG in North America and how do you communicate with these partners?

Whaley: We have 55 authorized Digital and Value Advantage dealers with more than 200 branch locations in North America. We have an additional group of Growth Advantage Dealers serviced via our master dealer relationship with Graphline. In terms of communication, we issue monthly sales reports to the dealers to track sales performance, and we keep them informed about product changes, technical information and company news through regular mailings and marketing communications. We have also introduced an Internet-based portal for our Dealers – the "Intelligent Customer Assistance Network" or "ICAN" – to facilitate doing business between us.

Our most important form of communication with dealers, however, is personal interaction with members of the KPG sales organization. KPG sales representatives and managers maintain regular contact with our dealers. Additionally, as a key part of our commitment to strengthening our channel partnerships, we have named two Dealer Relations Managers to focus on strengthening the relationships and sales performance of our dealers through frequent communication and organizational alignment. Pat Duckworth will focus on our dealers in the eastern United States and Mike Huff will maintain responsibility for those in the west.


Question: Print professionals are obviously the end users of your products. In your position, how much interaction do you have with or how much data do you receive from the end customer?

Whaley: It is important that we understand what our end users (the consumers of our products) value in terms of KPG products and services as well as those offered by our channel. To that end, everyone at KPG is always looking for opportunities to have a dialogue with end users. In addition, we routinely conduct market surveys so that we know what end users think of the products and services offered not only by KPG but also by our authorized dealer companies as well. We use that data to understand market trends, product preferences and other factors to help ensure that KPG continues to be responsive to the needs of our end users and dealers.


Question: What role does Tech Services International (TSI) play as it relates to KPG’s channel efforts?

Whaley: TSI is a subsidiary of KPG that now allows us to provide a broader range of products and services to end users and dealers. We believe that the TSI acquisition will help us to strengthen our relationship with our end user customers and our key channel partners. By offering not just consumable products that they can purchase or resell, but also additional services that could range from traditional equipment service to consulting and training services, we believe that KPG can be even more competent at improving the productivity and effectiveness of our mutual customers.


Question: The acquisition of Imation’s color businesses - how does that change the way products and services are offered by KPG?

Whaley: It really doesn’t significantly change the way we sell and distribute our products. As mentioned earlier, our dealer channel was very similar and there was a lot of overlap, which helps us going forward. The acquisition gives us a broader, more powerful set of product offerings, which increases the value we bring to our dealer and end user relationships. This helps to maintain "mindshare" and improve alignment with our channel.


Question: Many say the dealer channel is very fragmented, and certainly there is much consolidation occurring. How important are dealers to KPG in 2002, and are you concerned with the overall health of the graphic arts channel?

Whaley: The majority of our products are sold through our authorized dealer networks. This clearly makes the dealer channel an important part of our go-to-market strategy. The health of the dealer channel is very important to KPG. In terms of long-term viability, it’s no secret that it’s a struggle [to survive] in the graphic arts distribution business. Dealers and manufacturers continue to experience top-line pressure on their consumable business brought on by the transition to digital technology. More than ever, dealers are looking for ways to augment their traditional products and services. Our focus is on maintaining stable relationships with our key dealers, understanding the drivers of their businesses and delivering value to the relationship via our products, services, people and programs.


Question: Are dealers becoming more specialized and selective about the products they carry as opposed to representing any and all products?

Whaley: I believe they are. However, the specialization is probably more driven by the manufacturer consolidation of the last six years than by a conscious effort on the part of the dealers. In talking with dealers, we find they want new opportunities to bring revenue into the business to offset the top-line pressure on the traditional consumables business and to strengthen their position with existing customers. They see the revenue potential in up-front equipment offerings as a problem-solving opportunity for the end user. In general, we expect that dealers will continue to adopt products to meet the needs of their customers, traditional or not.


Question: Agfa ended their relationship with Enovation, the newly formed distribution company owned by Fuji Photo Film of Japan. As you know, Agfa decided that it was not in their best interest to have Enovation represent their products since Fuji is one of Agfa’s major competitors. Many have speculated about what KPG’s decision will be. How do you view Enovation? Will KPG continue to use Enovation as a dealer of KPG products?

Whaley: Fuji’s entrance into the distribution business via the formation of Enovation is certainly a significant change to the graphic arts distribution model in the United States. Enovation is currently a distributor of both KPG and Anitec products. Beyond that, we don’t comment publicly on our relationships with specific distributors.


Question: Some think that major suppliers like KPG will develop their own dealer channels by acquisition or other means. Do you have plans to formalize any of your relations with dealers by an equity position or outright purchase?

Whaley: I’m sure a lot of people might wonder about that, given the events of the last year. While we don’t comment on our plans with specific partners in the industry, I can tell you that our focus remains on leveraging the value of our KPG and Anitec brands, through offering superior products and by maintaining a strong field sales and technical organization and channel of distribution.


Question: Finally, what is your outlook for the channel and how graphic arts professionals will receive their products in the next five years?

Whaley: As a manufacturer, our interest is in increasing the value that our products and channel of distribution deliver to the end user. Efforts to increase that value could take several forms, including the development of more strategic relationships with existing channel partners or the creation of alternative channels that could supplement traditional channels. The goal is to provide superior value not only through the product in the box, but also through the sales and delivery systems used to reach the end customer.