We help you analyze your markets with a keen eye so you can make a quick response.
A manufacturer with a large number of small commercial customers began experiencing sales results that were inconsistent with management's understanding of the market potential in certain markets: fairly higher than expected among some types of buyers across widely-dispersed geographic territories, and much lower than "normal" among all buyers in specific territories. Was it product? sales approach? neglect by the local representative?
We were asked to explore customer needs and expectations, ranging from the usual "Price, Quality, Delivery" parameters to product performance, sales support and other issues and then to draw up a set of recommendations for improvement. After finely segmenting their market, we designed and tested a survey that covered all the identified issues and allowed plenty of opportunity for "wish list" observations. Throughout the course of the survey phase, we reported to management serious complaints and requests for immediate attention as soonn as we received them.
NOTE: What differentiates our surveys from those of many of our colleagues is the way we combine both numerical (ranking) and qualitative (the "why" behind the numbers) questions. It's more complex to conduct and to analyze the surveys this way, but the deeper insights and more meaningful information make this approach incaculably more valuable.
Among our discoveries was that many of the sales representatives were spending an inordinate amount of time with the "easy sell" customers, where there was both little competition and little need for all the "hand-holding", while allowing competitors to make inroads in other, very profitable markets. Pricing strategy and adjustment of sales incentives were two recommendations we made in this area. More than 50 recommendations were made, ranked by importance.
We also provided management with all qualitative and quantiative data in a relational database format for additional internal analysis and as a template for development of a comprehensive tracking system.
A large leasing company was concerned about the validity of its residual value calculations for a new type of capital equipment in the transportation industry. Misjudging the direction of the industry could seriously impair the company's ability to sell or re-lease this equipment once the lease contracts expired.
We were asked to calculate selected cost ratios and project future cost ratios based on estimates of factors such as equipment life (a function of design and utilization), domestic market acceptance, improvement in design or materials used, and stability of market share among the few producers. We also estimated projected demand for the used equipment in selected developing countries. The leases have not yet expired on this equipment; trends to-date indicate that our projections and recommendations were on target.
A specialty chemical manufacturer wanted us to make recommendations on how to increase the utilization of its products in two high-volume industries in America and in Europe. The business it was in was experiencing pricing pressure due to increased competition and product substitution worldwide. Remaining in this downward-spiraling environment would threaten its viability as a company.
We researched and discussed global trends in the company's industry, including channel relationships throughout the value chain (from raw material through service supplies, distributors, end users and recycling and/or disposal) and identified several profitable new applications in the two specified industries based on direct customer observations and requests.
A significant bulk commodity manufacturer had under-utilized capacity for an environmental process that could be used outside its own industry. In view of the commodity status of its core products and regulatory trends in the other industry on state and national levels that favored its environmental process, the company realized that it had to shift its business focus to this process in order to reverse the downward trend of its profitability.
We were asked to evaluate the emerging market for its environmental process, using several different scenarios with respect to the impact of future legislation. This market assessment covered current and new potential competitors (and substitute processes), geographic location and size of current and future customers, new technologies under development, pricing factors, and potential partners for specific marketing and distribution activities.
A financial services company wanted to increase the productivity of its salesforce beyond the improvements made by providing each of them with laptop computers and contact management software linked to the home office. The company agreed with our suggestion that we prepare individualized territory profiles for each of the salespeople. These customized reports included relevant demographic data and trends, identifying typical needs and purchasing patterns for different groups; business establishments (by segment) in their territory; appropriate membership organizations to join or speak before; dates of important trade shows and other events; and lists of media contacts. We presented much of this information in graphical format for quick, at-a-glance understanding of their territory's income potential.
Few marketing approaches can match that of trade shows for producing a large return on investment ... or for wasting large sums of time and money. We've been observing, learning and constantly adding to our checklists of "Do's and Don'ts" for almost 30 years, and we've been helping different types of organizations exhibit successfully at trade shows for about 25 years. One manufacturer has asked us to help them with 2-3 shows/year continually since 1974! Some other examples:
An overseas trade commission decided to host a week-long seminar series and exposition to re-position the country's image and reputation in a new direction. We worked closely with local and home country staff on planning and marketing the multiple events that would take place, with members of a university team to design and promote the seminar series, and with local and overseas companies that were exhibiting and speaking. Our on-site time attending to numerous details extended to 12-14 hour days throughout the week's run. Daily attendance exceeded expectations and both participants and guests reported favorable impressions on later follow-up inquiries.
A small manufacturer's booth at a very large industrial trade show had very few visitors during the first 2 of the show's 4days, even though competing manufacturers of similar size and comparable booth location were crowded much of the time. We stopped by and began talking with the owner. It was his second year of exhibiting at this particular trade show, and his experience last year was about the same. He had pretty much made up his mind that this show was not a good investment and would not be returning next year.
After some discussion, we learned that he had done no advance promotion, even to his existing customers. Although his product could be easily demonstrated, his booth consisted of photographs on the back wall and some literature on the front table...the same as last year. During most of the show he sat on a folding chair in a back corner, browsing through a newspaper or trade journal, and did not intend to walk the show to see what his competitors were doing. He did intend to mail brochures to the few leads he received, and then follow up by telephone.
We made some simple suggestions to try the next 2 days: bring several models of his product to the show (he was local) and create a simple demonstration; remove the chair and reading material, run the demonstration on the front table, while actively looking out for qualified buyers as they walked past the booth; get people involved in the demonstration and ask a few questions to evaluate their needs and buying potential. Results: inquiries tripled, even though the last day was shorter and had fewer attendees.. The delighted owner asked us to help him assess the quality of the inquiries he received and to help him plan for the next year's event. The following year was a complete turnaround, establishing the company as an emerging player in its product line.
As we discuss in our Management section under Partnering, appointing a sales representative or sales agency is the first step most companies take in entering new markets, especially overseas markets. This is an important first step, because (1) you'll never get a second chance to make a good first impression on potential customers; and (2) you need sufficient information and control of your markets to take additional steps in the future for growing your business.
About 75 small custom design and fabrication firms from the same European country contacted us several years ago as a result of some marketing we did; they wanted to enter the U.S. market at an affordable cost. The managers did not know how big the overall market was or where the companies in their target industries were located, nor did they have a lot of money for extensive market research or for establishing their own branch offices. They understood that manufacturers representatives (agents) are often used by both domestic and overseas companies for access to customers in America.
We suggested that they share the costs of learning a little bit about their American markets and their competition before looking for and selecting one or more agents to represent them. Almost 20 companies accepted our offer to survey a major trade show on their behalf to identify the major buyers, competitors and sales agencies and map their geographic distribution. We also talked with all three groups at the show: buyers to get information on their requirements and which sales channels they purchase from and consider to be most appropriate; competitors to understand their capabilities and the kinds of sales channels they use; sales agencies to learn the types of product lines they represent and the kind of relationship they have with the manufacturers. We mapped the U.S. locations of their major prospective customers, listed their competitors and reputable sales agencies representing compatible products, and identified some marketing activities for their consideration.
Several of the companies requested that we develop a detailed sales representative management program for them, incorporating territory boundaries, tracking mechanisms to evaluate agency results against territory potential, and periodically communicating with the agencies and reporting to the overseas companies.
Competitive analysis often evokes images of telephone bugs, cloaked spies and intrigue. We want to make it clear that legitimate competitive analysis is none of this. We do not provide price lists, customer lists or product prints. There are so many ethical, moral and legal ways to creatively gather and analyze competitive information that it makes no business sennse to resort to questionable means (although we wouldn't do that anyway).
We like to remind clients that focusing too closely on your current competitors while neglecting your customers can lull you into a sense of false security or, worse, spending valuable time and material resources making improvements on factors that are fading in demand. That said, a few examples:
An overseas trade organization representing equipment manufacturers tracks market share of that equipment by country of origin in the top 10 countries of the world. Share in its home country was good, but lagged substantially behind other foreign competitors in the entire North American market. We were asked to investigate the reasons for their apparent competitive disadvantage in one major industry and make recommendations for improvement. We uncovered product design issues: customer specifications had changed over the years and the country's current offerings were over-engineered. There were also market-approach issues, but these were secondary: we recommended that first, either the products should be adapted to the new market requirements, or new markets should be found which valued the particular strengths of the country's manufacturers.
An American manufacturer of non-medical equipment for the health-care industry asked us to create an inventory of installed equipment, their own and competitors' in a random sample of hospitals throughout the U.S. This inventory included number, type, age and physical location of the units, and favorable/unfavorable observations of buyers by type of hospital. This information allowed the client to estimate demand for replacement equipment by different target markets and to customize the sales approach used for each of the market segments.
Diversification can take different paths: acquisition of existing businesses (G.E. is a prime example); research and development (e.g., biotech firms); commercial application of military and space technology (former defense contractors, transportation industry).
Many small and medium-size engineering firms spent the '70s and '80s winning and fulfilling government contracts for developing state-of-the-art missile guidance systems, advanced materials for nose cones, precision mechanisms and assemblies for ground vehicles, and on, and on, and on. We were getting calls even before the cold war was over from companies looking to find civilian uses for their splendid radar systems, ceramic and composite materials, and precision gear production methods, among others.
The challenge: identify commercial products, and services too, that could take advantage of the core competencies developed by these companies, compliments of taxpayer dollars . . . at a market price.
The process: start with the features of those technologies, then list as many benefits of those features that you can think of. Next, list requirements or problems across diverse industries (include both consumer and industrial) that either the specific features or their relevant benefits might address. By this time, you should have at least 3 or 4 product or service areas to begin investigating further. If you come up with more than a dozen, rank them by your estimate of their market potential and start with the top 3-5 to research simultaneously. The rationale for exploring several markets at once is that you could wind up focusing too much on your product (which is what government contracting is frequently all about) rather than on your potential customers.
We use a similar process for companies with excellent core competencies in specific production processes ... but with disappearing markets for their current products.
Technology Management Associates, Inc.
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