Acquiring a marketing focus.

Until the last two decades, sales methods were considered more important than marketing techniques in our industry.

Except in times of serious recession, it was usually possible to get business if you could sell harder or cut the price. Market planning and attendant target marketing were virtually unknown. And the attitude of "We'll make it--you just sell it" was common among foundry managers.

As the industry became more competitive and attrition began to escalate while overall demand in some materials (like gray iron) declined, a new approach was clearly needed: identifying and aiming sales efforts toward "target" markets.

This involved such questions as "What kind of castings does the market need that we can make at a profit? If this involves revision of facilities or elevating technology levels, will these investments pay off? And if so, over what period of time?"

A Marketing Focus

Foundry managers have now come to realize that marketing means much more than selling. It means market research and analysis, planning, promotion, creative pricing policies, value-added programs and a multitude of other elements--including sales. Foundries with good marketing plans look well beyond their immediate customer base, realizing that future casting demand depends to a large extent on the needs of their customers' customers.

It's a fact that few foundries were started by salespeople. Most were founded by people with technical and mechanical skills. As the business grew, the manager became adept at selecting customers and building solid relationships.

In reality, he was the foundry, wearing the many hats required in the entrepreneurial setting of a small company. He knew his foundry's strengths and weaknesses, and had a good understanding of what it would and could not do. Frequently, he exercised a sound marketing approach, without fully realizing it.

With growth, though, the manager had less time to contact customers, listen to their problems and figure out ways to help them. From that point on, sales success depended on the ability to get the same kind of knowledgeable approach from salespeople, sales engineers or manufacturer's agents.

As a natural result, many managers became preoccupied with production, casting equipment and processes. Not being as close to the market as before, they weren't able to exercise the same level of informed judgment that had served them so well in the past. The result: the boss became progressively less marketing oriented.

Solutions

If this profile fits your foundry, what can you do about it? Plan to acquire a marketing focus.

First, step back and re-evaluate your objectives, resources and marketing potentials. Next, develop a marketing plan that established solid sales and profit objectives five years out, together with specific programs and actions to accomplish these goals.

Analyze where your customers and markets are going and what segments you can and should be serving, and at what levels of profitability. How well equipped are you to compete? What about new processes and new markets? Which markets should be your target markets?

Actually, salespeople can be vital to bringing marketing focus to a small company. But, to be effective, they must understand the broader picture of where the foundry's business is or should be going. Salespeople constantly face customers and are getting direct, personal reactions to your performance in the marketplace. Listen to them. Don't automatically assume that negative feedback is just making excuses for apparently substandard performance. Most salespeople are genuinely concerned with their customers' problems. And the better they understand their viewpoint, the better for the foundry.

Your salespeople constitute a key link with market reality: they can bring the customer's thinking and needs into focus with your foundry's marketing plan. To rely on production people--who think in terms of production problems--for coming up with sound market planning is wishful thinking.

Production cannot fulfill market needs if it is not in close contact with the market. Nor can marketing people function effectively unless they know production's problems and appreciate what the foundry can profitably produce for the market.

Target Marketing

The concept of target marketing is easy to grasp, and can be illustrated by a recent example of a foundry seeking to broaden its base of valve customers.

It first selected from a computerized market analysis 145 potential prospects, chosen on the basis of employment size, geographic location, six-digit SIC codes and prior knowledge. Of this group, buyers in 143 of these companies were then contacted by phone though a telemarketing program, as an initial point of qualification. Follow-up appointments were then scheduled.

Even though this program began only a couple months ago, request-to-quote results have been impressive. As time and manpower resources are available, this foundry will employ the same approach to develop greater penetration in other key markets.

Although foundries face unprecedented levels of competitiveness, shrinking demand, foreign sourcing, and buyer ignorance and indifference, these negative factors can create marketing opportunities. Someone has to make the $15 billion worth of castings produced in this country every year.

A clear marketing focus with good planning and effective programs like target marketing can help make sure you get your share of the pie.