Many manufacturers equate marketing with their sales department or their advertising campaigns. But marketing is much more – it’s a critical part of any business. Manufacturers risk losing their position in the global marketplace if they fail to understand how marketing has evolved in the last 50 years.

A more complete definition of marketing is “the process of satisfying customer needs,” said Laura Voll, WMEP marketing specialist. “It’s building and managing relationships with customers that are mutually beneficial, so that it’s good for the vendor and the customer.”

Marketing is often broken down into four main functions, called the Four Ps. The first is Product, or the item or service being sold. The second is Place, or the distribution channel. The next is Price, which includes not just the price, but how it is set and how the goods or services are paid for. The last function is Promotion, which includes advertising and a broader strategy to communicate to the marketplace.

The purpose of marketing is “to build value for your organization,” said Voll, but how businesses have done this has varied over time. At the beginning of the industrial revolution, “manufacturers mass-produced products that had never been made before,” said Voll. “They just made things and took them to market.” In the 1950s and ‘60s, the emphasis was on selling existing products, which meant finding buyers who were interested in what was being offered. The focus shifted in the 1970s and ‘80s to the customer’s wants and needs. “People began to realize, maybe we should have asked our customers before we made this, to see if it’s something they would like,” said Voll.

Today, the current state or modern strategy of marketing is relationship marketing, where customers are seen as partners. Everything about the product, even the company itself, is designed to facilitate a partnership with the customer.

The benefit of relationship marketing is that “once you have that customer, they’re very loyal to you,” said Voll. “The loyalty goes both ways. It’s a strategic alliance for both. It offers more stability and predictability for both businesses.”

Past marketing practices are not as effective because “it’s become a very sophisticated marketplace with a lot of competitors,” said Voll. “Manufacturers are very good at creating product, but they don’t always think about how it fits in the market. The key to making your business successful is to truly differentiate yourself from competitors. Why are you the one the customer should call?”

Some basic steps to jump-start your marketing efforts include:

1. Conduct market research. This includes determining your company’s market niche and identifying competitors. “People don’t realize who their competitors are,” said Voll. “They may have indirect competitors.” The classic example of indirect competition comes from the cola wars. While Coke and Pepsi went head to head, bottled water moved in and stole market share. “It never occurred to them that water was a competitor,” said Voll. Entrepreneurs are especially at risk for not understanding that they have indirect competitors. Even if you offer a brand new product, someone had been filling that need prior to the new product’s introduction, and it was most likely an indirect competitor.
     
2. Focus on what your company is good at. Look at your organization’s internal capabilities, i.e., strategic competencies, in terms of three key questions:
          • What is the overt benefit of our products and services to the customer?
          • What is the dramatic difference between what we offer and others offer?
          • What is the real reason to believe we can deliver on this overt benefit?
     
   Manufacturers can leverage their strategic competencies to become more competitive using Eureka Winning Ways or Strategic Marketing or Innovation Blitz. Companies that have done this often develop new profit centers.
    
3. Develop a marketing plan. This is a detailed report of the organization’s place in the market. It should include specific objectives and goals. In addition, there should be market analysis and strategies that draw conclusions based on research data to create a roadmap that directs your company’s future growth. A helpful way to organize the analysis is to use the Four P’s mentioned above.

To differentiate you from competitors, your company can:

• Offer a combination of goods and services that no one else can offer. While it’s true that price is an important part of the equation, “customers most often are not looking for a lower price, but for the best value,” said Voll. By adding additional services and building the relationship, manufacturers can offer superior value while focusing on customer satisfaction.
   
• Take a look at your current products and services, identify key customers and product pairings, then work to develop relationships with those customers by specifically targeting them.
   
• Make it easier for customers to do business with you.  “One of the biggest trends is ease of interaction,” said Voll. “It’s about how easy it is to work with a particular vendor.” Many customers of Wisconsin manufacturers were lured by the low-price strategy of overseas companies, only to find them difficult to work with on delivery times and other issues. Ease of interaction affects everything from ordering and invoicing to customer and warranty service – all potential ways for a company to differentiate itself. One way to do this is by creating a web site through which customers can place orders directly.

If you want to grow today, you must move beyond traditional marketing and develop more modern strategies. Developing a customer- focused marketing strategy can help manufacturers strengthen and expand their position in the complex global economy. “If you can bundle business services, develop key customer relationships and find new ways to approach customers, it will give you that edge,” said Voll, ensuring beneficial customer relationships and improved top line growth.