Nathan Malek
Marketing Director
Donaldson
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View from the Top

Complex Filter Variations for Targeted Solutions

Mon, 09/01/2014 - 16:28

Filtration systems are needed by a vast range of industries, but automotive is such a dominant client that Donaldson Company, the leading global provider of filtration systems, has divided its operations into two main groups: the industrials segment, and the engine segment, which OEM and aftermarket clients. “It is not just about selling a filter, it is about understanding customers’ business needs. That is why we do not talk about the filter market but about the automotive market, the oil and gas market, and the mining market,” states Nathan Malek, Donaldson’s Marketing Director. To best cover all eventualities, the company is primarily focused on air filtration but also provides a strong line of equipment for hydronic applications and engine liquids.

The engine segment of its operations has seen Donaldson forge long-term relationships with OEMs, sometimes dating back 30 to 40 years. Being vertically integrated, Donaldson ensures each of its departments are in touch with OEMs, so that technology, design, and engineering are all incorporated in the specific applications automotive customers need. “We need to understand what is going to be used and what the constraints are,” says Franklin Cardenas, Vice President, Global Engine Aftermarket of Donaldson. For example, US automotive companies have a greater concern about engine cleanliness and have high specifications for fuel systems, requiring cleaner fuels that do not block the injectors. In response, Donaldson provides products and technologies that allow OEMs to offer better protection to the injectors, meaning that users will be able to operate vehicles without having to replace the injectors as frequently. Working closely with OEMs has enabled Donaldson to identify major market trends. One such trend that is driving product design is the deeper integration and connectivity of components. An example of this in Donaldson’s portfolio is its PowerCore G2 Filtration Technology, which brings together several advantages for OEMs. Lightweight with no metal parts, it incorporates Donaldson’s proprietary straight-through airflow technique, and uses the latest in filtration advances. This helps to reduce the weight of the vehicle and ensures fewer maintenance requirements. “As with many new technologies, this can at first be daunting for the customer as its features are different from those of traditional filters, but when the customer starts experiencing the benefits of our new filtration technology, they readily adopt it,” says Cardenas.

The PowerCore G2 is not the only technology where Donaldson has sought to adapt. “When our OEM partners are designing a vehicle that will present space constraints, an aspect such as the filters may not be foremost in their minds. We work collaboratively with them to see how we can continue to develop technologies that will allow our filters to fit better but still provide the airflow that engines require to operate properly,” states Cardenas. Such specifications provided by leading automotive customers are the key drivers of the technologies Donaldson invests in. “Donaldson has a lot of these cutting-edge technologies. We are the ones inventing them within our own corporate technology group,” specifies Malek. While this does lead to a higher price point for Donaldson products, the company reasons that the higher engineering and design elements create extra value. “However, the big difference between the aftermarket and OEM sector is that you only have a few minutes to convince the former why they should pay more for a Donaldson product. It is about crafting a story that resonates with our customers,” explains Malek. Given the time restraint, quality and confidence in a brand become the most important features a product can have. “We go to the market with a well-recognized brand and a very welldefined marketing structure which ensures that people understand what Donaldson stands for, no matter where we are,” explains Cardenas. Part of Donaldson’s initiative to reach out to the market is to have the right coverage in terms of distributors. “We have about 4,500 distributors around the world, and we keep expanding that network. We need to make sure that we have the right coverage in every region of the world. We have about 14,000 or 15,000 active part numbers and any given region will have 5000 SKUs in their price lists. We obviously have very different price offerings in the US, Mexico, Brazil, and Europe,” says Cardenas. This strategy seems to be working out so far, since in 2013, the aftermarket sector accounted for 37% of Donaldson’s total sales, as part of an Engine segment that brought in 61.7% of the company’s revenue.