Marketing: the missing ingredient in manufacturing companies
By Paul Hogendoorn
What’s the magic ingredient often missing in a manufacturer’s pursuit of success? Most manufacturers will not like my answer, but I think the missing link is marketing.
Marketing is not just glossy brochures and a high-tech website. It is knowing what your main differentiating value is, and then conveying that message to your marketplace. A simple test to assess the health or effectiveness of your company’s marketing efforts is to ask yourself the following two questions:
• What do we believe are our company’s key value differentiating features; and
• How would our target customers (existing and desired customers) answer that question?
If the answers to both questions are close, then your company has an effective marketing strategy. If they are not similar, then marketing is likely the biggest impediment to your company’s growth, and perhaps even survival.
A company’s long-term success depends on two things more than anything else: its vision and its values. Marketing is key to making sure that the company’s purported vision and values line up with the marketplace’s perception of its vision and values. In this case, perception is reality.
If a company says that "customer satisfaction is our number one concern," but the consensus in the marketplace is that they are just bottom line focused, their marketing is fatally flawed. What is wrong in this case? It is not that they don’t have the right message, it’s that they don’t live the right message.
The most common mistake that I see made by manufacturers is that they do very little to create or promote the awareness of their company’s actual vision and values in their target marketplace, and it’s their vision and values that separate them from their competition. Every purchasing decision by every customer or consumer comes down to one of, or a combination of, three things: brand, relationship and price. Brand takes into account reputation, which includes factors like quality and features. Relationship takes into account the personal contact, distribution, after-sale service and support – anything that involves personal connection with the customer. Although price is also related to marketing, the first two are completely associated with marketing. If a company has a good brand, and if it has good relationships, it doesn’t have to win business on price. However, if a company does not have a good brand and its relationships are weak, it has no choice but to win on price, and only one company can win on price – the lowest bidder.
My company has a scoreboard division that was successful selling to pro venues across North America, but wasn’t successful in the main marketplace – elementary and secondary schools in the U.S. Although our products were good enough for the pro venues, we had no "brand" in the main market and didn’t have any relationships with the target customers. The missing ingredient to success was marketing: we believed we were "the choice of the pros," but the marketplace didn’t know that, and that’s the only opinion that mattered. By persistently conveying this message to the marketplace through tradeshows, in our brochures and on our website, we were able to convince distributors – the people who own the relationships – that our company and our product was sufficiently different, and that difference would be enough to separate us from our competitors.
Conventional logic suggests that expansion into a contracting market, with a more expensive product that competes against a half dozen established competitors, is not a recipe for success. But it was for us, thanks to marketing. We had a vision and values that were advantageously different from the rest, and accurately conveyed that message to the marketplace.
Does your company have a vision and values that separate you from your competition, and is that what your customers and target customers think? If not, you need to zero in and define that message, and get that message out to your marketplace effectively. If this is your company, it doesn’t need more Lean, or cost reduction, or quality improvement, or even more new product development or innovation. It needs better marketing, pure and simple. It’s often a tough pill to swallow for many engineering and technically minded people who have started, or now run, most of our industrial companies; but it’s true. Sorry to break the bad news.
Paul Hogendoorn is president of OES, Inc. of London, Ont., and past chair of the London Region Manufacturing Council. He can be reached at email@example.com.