When Kemet Electronics Corp. prepared to launch AO-CAP, a new aluminum polymer surface-mount capacitor, the supplier called TTI Inc. to offer the passives distribution specialist an exclusive one-year franchise agreement in return for its help.
The joint venture, which will cost the companies a combined $400,000, encompasses everything from planning the product launch, putting promotional material into the hands of engineers, and monitoring initial samples through the prototype stage and into production.
"TTI has demonstrated they can take a new product and bring it to the market effectively," said Jim Bruorton, vice president of worldwide distribution at Kemet in Greenville, S.C. "Typically, they concentrate on a handful of suppliers with a focused effort in passives."
That focus has paid off. Recognizing the need to reach beyond its top-tier OEM and EMS customers, Kemet went to TTI in 1999 when the supplier rolled out its multi-anode tantalum T510 series. While Bruorton declined to disclose the financial revenue gains from the first joint product launch, he did say the amount of business generated by TTI was significant enough to attempt a repeat performance.
The deal is exclusive through September 2002 to help TTI defray some of the costs associated with the launch.
"While revenue from the product represents a relatively small percentage of the overall dollar volume TTI does with Kemet, we put a disproportionate amount of time toward working with engineers getting the product designed-in," said Mike Morton, senior vice president of global product marketing at TTI in Fort Worth, Texas.
Kemet pushed more than 40% of its $1.4 billion in revenue through distribution during its past fiscal year. TTI is the supplier's single largest distributor, accounting for more than 10% of overall revenue.