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Marketing challenges facing the plastic industry in the '90s.

Companies that succeed in today's tight economy will be those whose people recognize and appreciate the value of marketing, and what it can accomplish.

In the preface to his book The Frontiers of Management, Peter Drucker writes, "The future is being shaped by totally anonymous people." Though this may seem to be, on the surface, a simplistic statement, he's hit the nail right on the head. A CEO here, a marketing manager there, people in the lab laying foundations for the next great revolutionary product: All of us are shaping the future in some way. This article points out some of the ways in which we can play a greater role in shaping the future of the plastics industry.

One of the biggest challenges facing the plastics industry is the increasing emphasis on moving from a product-driven perspective ("This is the product we've developed; now let's find someone who will buy it") to a market- and marketing-driven perspective ("This is what the market needs; let's develop it, while finding customers who will buy it"). Today, the plastics industry is more competitive than ever, buyers are more demanding, and needs are constantly changing. More important, buyers are calling for more versatile products offered at reduced costs.

Last October, an article in the Wall Street Journal pointed out that consumer products companies are introducing new products in record numbers, and spending heavily to promote them ("To Outpace Rivals, More Firms Step Up Spending on New Product Development," Oct. 28, 1992). Why? According to the executive vice president of Goodyear's North American tire operations, "you need new products to fight in a recession." He also notes that marketing experts see a poor economy as a chance for companies to get ahead of those that aren't promoting themselves. The same holds true for plastics: new products, new applications, more marketing.

This article explains what marketing is, why it's important, and why you should understand how it works. It doesn't matter if you're a design engineer, a compounder, a custom molder, or machine builder. And it doesn't matter what your position is--executive level, middle management, or in the lab. The companies that succeed in today's tight economy will be those whose people recognize and appreciate the value of marketing, and what it can accomplish.

A Broader View

For many, if not most, the term "marketing" invokes images of hard-bitten advertising executives hawking words and pictures. Or perhaps you see your own company's marketing managers on the phone, wheeling and dealing for the best advertising space. These images, however, are only part of marketing, which encompasses much more and is really about people. Marketing is knowing what you and your company have to offer, and how best to present it to your customers and prospects. Of course, it requires knowing how to find these customers and prospects.

You may ask, "Why should I think about marketing? I don't sell the product." But in a way, you do. Although marketing may not be in your job description, your role within the company goes much further, and marketing is a part of that. How well you fulfill that role affects the success of your company.

You know, for example, that if a plastic compound isn't mixed correctly, or tolerances are off in a molding operation, you won't achieve the desired goal for the application. You also know that if your design doesn't take into account likely processing obstacles, the part will fail.

And why should you switch from your "product-driven" perspective to a "market-driven" one? Because marketing is how you communicate with the people who keep you in business. By applying a "market-driven" perspective, you can broaden your viewpoint and discover new opportunities for your products and new business for your company.

The Power of Marketing

Santoprene, a product now offered by Advanced Elastomer Systems (AES), sat on a shelf for years before anyone took an interest in it. How, then, did it become so well known?

Once the material had been created, no one really knew where it could be used. It was a super material that had no applications because no one took a good look at the market to find out who would want it. Because no one had heard of it, people didn't buy it.

Then, along came a manager who understood the power of marketing. He wanted to move the product, so he called on marketing and marketing communications professionals and turned them loose. After extensive market research and a few heavy brainstorming sessions, they had turned up an enormous range of applications for the product.

The agency put together some targeted advertisements, produced and published twenty-six customer testimonial stories, and turned Santoprene into a household name. The product hadn't changed; it had been marketed.

In another case, a leading but relatively unknown colorants manufacturer asked us to market their company (more so than their products) for the purpose of attracting a buyer. We did, and Sandoz-Warner stepped in and bought them out.

Join the Team

More and more, people are being asked to look beyond their immediate responsibilities and see the whole picture. This is where you come in. No one knows your job better than you--certainly not the marketing managers, or the people who sell your product. Others don't know how to tap into your product's capabilities from a technical standpoint. Even if you don't know it, others rely on you to find new markets for them.

For example, by adding more of ingredient X, you might make a material more heat resistant. And by substituting one resin for another, you might create a part with totally new and better quality. An example is the trend in which PVCs with additives are becoming tomorrow's engineering resins. It illustrates the kind of awareness and insightful thinking that can open up new doors by expanding your company's product line and penetrating new markets. No one but you will think of it, try it, or do it.

You are in the ideal position to help "market" your company, so join the team, and don't be intimidated. Marketing can be easy. In fact, you already market yourself and your ideas every day--presenting a new design, suggesting a cost-saving measure, or solving a problem. Marketing your company requires use of the same techniques, but out of the laboratory and on a larger scale.

Marketing Techniques

You should know about a few specific marketing techniques. One is advertising, the technique that you are probably most familiar with. Ads highlight a certain feature or benefit of a product or service, they are printed in selected magazines so as to reach a certain target audience. Although advertising is expensive (as much as $20,000 for a single appearance of an ad, after at least that amount has been spent to produce it), it serves to build identity for the product and the company as a whole. It says what you want to say, when and to whom you want to say it.

Another technique is direct mail--targeting a specific pool of potential customers and sending them promotional materials or information to get their attention. Getting their attention is one thing, but the key to direct mail is offering your prospects an incentive to respond. This technique works extremely well when you can identify a prospective customer.

Public relations. This is an excellent way to gain product exposure and reach a larger, more diverse audience than may be practical with advertising (and, it's relatively free). Trade magazines are usually hungry for information about new products, technical breakthroughs, or technical applications.

Did you know that many of the articles in trade magazines are written and submitted by people from companies like yours? Normally, designers and engineers like you furnish the information to skilled writers/marketers who relay the information in a form that is likely to appeal to readers. Again, success depends on your level of involvement and awareness of the right opportunities. The right exposure in a magazine can be ten times more successful than even the greatest one-on-one sales pitch. It also gets your message to dozens, hundreds, or even thousands of prospects.

The same goes for speaker presentations, technical conferences, and seminars. You may attend a conference to hear what the experts have to say, but remember that you're an expert, too. Chances are that you have something on your mind that would merit such a presentation. Share your ideas with the rest of the industry.

If you give an audience the chance to get to know you and your products, you'll be surprised by the impact you might make. The next time they're looking for expert advice on your special products, services, or technology, who will be first on their minds?

Finally, literature is also a key part of the marketing mix. However, many companies encounter problems in this area because their brochures are too technical. They need, instead, a sales piece to interest the prospect. Once the prospect is interested, a salesperson could present the technical information and close the sale.

These are just a few of the tactics and methods used to undertake marketing, which encompasses much more and can take almost any form. In fact, many marketers profess that the most powerful marketing is accomplished by word of mouth.

Interestingly, we've undertaken activities to initiate trends and promote word-of-mouth marketing. An example involves how a client, Battenfeld, earned a reputation at the forefront of injection molding machine manufacturing. Until a few years ago, no one really knew about Battenfeld machines. The company, however, wanted to be recognized as a leader in the industry. To accomplish this level of recognition required an aggressive, "go get 'em" marketing program.

The company took the initiative by approaching magazine editors with ideas, developing articles for publication, creating new ads, and telling the world about the vast potential of injection molding, gas injection, coinjection, and reaction injection molding (RIM). Such bravado literally took the industry by storm, and people began calling with questions, problems, and orders. Editors who needed input and technical data for stories tapped the company's knowledge and experience. Today, the company is an acknowledged leader.

How did they do it? Quite simply, through marketing. But how did the company--or any of the others in which we've seen dramatic growth--know whom to sell to, and where to sell?

Market Research

Market research, the core of any marketing effort, provided the answers.

Market research is all about getting the facts. It is the process of finding out all you can about your product or service, including how it is used and how it can be used. It means finding out who needs it, who is currently using it, and who might be able to use it--all identified by name, title, and job function. It also includes finding out what magazines your prospects read, what your customers need and care about, what you can offer them, and why they would want to turn to your products instead of others.

A recent example is our work for a Fortune 500 company, which wanted to identify packagers (companies that put products in corrugated cartons) throughout the U.S. who might be persuaded to use hot melt adhesives rather than tape or staples to close their cartons. Our staff canvassed wholesale clubs, toy stores, and outlets, looking at hundreds of boxes and obtaining the names and addresses of every company that didn't use hot melts.

After a quick call to each company for the name of the appropriate person, we had an accurate, targeted market segment and list of potential customers.

To extract such information, your marketing department uses surveys, questionnaires, and magazine circulation figures, in addition to reader analysis, association membership lists, existing customer records, and one-on-one discussions. Focus groups, which gather together a number of experts or potential customers for unbiased input, can help pinpoint product and promotion needs and strategies.

By taking a broader view, you can do your own market research. Consider all the possibilities. If you're designing a product (a disposable plastic cup, for instance), walk through its life cycle and try to anticipate every potential stress or obstacle the product might encounter.

The product may be designed and sold as a hot-beverage cup, but will the end-use environment present other stresses? Will a toothbrush handle withstand straight baking soda, which some people use instead of toothpaste?

Maybe you can't foresee every potential hazard. But if you can spot a few, and modify your product or take a new approach, you are using a market-driven viewpoint and taking an active role in the future of your company.

New Opportunities in a Changing World

Our world today is seeing many changes that leave no one untouched. Awareness of these changes and how they affect you is another key to success and profitability. We're no longer living in the free-wheeling '80s, and the plastics industry has never needed marketing so desperately. Budgets everywhere are tight as job functions are being streamlined and redefined; globalization is making the world both a smaller and larger place.

Downsizing means that people have more responsibilities, and are expected to do more work. Your customers, in turn, expect you to provide more service, improved products, faster delivery, and higher quality. To satisfy a market that wants more for less, when you have less yourself, is not easy.

The '90s have also brought corporate restructuring and new business philosophies. According to Dr. Michael Beer of Harvard University's Graduate School of Business Administration, companies today "need an adaptive organization that senses changes in both internal and external environments," and entrusts power and decision making to workers (Pro Report No. 202, Penton Publishing Research, 1990). Without such an organization, he says, no other strategy will succeed in the long run. These ideas lead to team decision-making and long-term partnerships between suppliers and customers.

Every job function is becoming involved in the buying process as people's roles become more inclusive and new people enter the picture. According to a recent study by Penton Publishing, the average annual rate of change among managers, engineers, and purchasing agents in all industries is 23.4% ("When Change Becomes the Norm," Industry Week, Michael A. Verespej, March 16, 1992). That means that every year, nearly one quarter of all people who need to know about your product and company are replaced by new potential customers who may not know your company and its offerings. You need to find them and sell them all over again. Ongoing marketing communications is the key; maintaining a constant presence in the public eye will ensure that the people who need to know about you do know about you.

Last is globalization. As mentioned above, the world is both a smaller and a larger place. Advanced electronics, faster transport, and instant worldwide communications, among other things, have brought distant places closer to all of us. At the same time, social upheaval and the tremendous surge toward free-market economies have broken trade barriers and opened up new opportunities for expansion into the world marketplace.

The U.S. economy, therefore, is tied more closely to the economies of the rest of the world; language, culture, and lifestyles are the new obstacles. A product will need to be flexible, universal, and usable in many different countries.

An example of a classic blunder was Chevrolet's attempt, years ago, to sell its Nova in Mexico. In Spanish, the phrase "no va" literally means "no go"; in other words, "it doesn't run." Market research might have significantly improved the company's chances for success with what might have been a great product.

And why haven't U.S. appliances, such as washers and dryers, ever sold well in Japan? Because they're too large, and don't fit. What's more, U.S. cars being shipped to Japan for sale had, until recently, steering wheels on the wrong side. Again, market research could have enabled companies to anticipate these problems.

What does all of this mean to you? It means that you need to be aware--aware of what happens after the product leaves your hands, aware of possibilities, and aware of what's happening in the world that can affect you. You need to be innovative, flexible, and, most important, involved.

The plastics industry is facing a new world. Some people may find that threatening, but from a marketing standpoint, I see it as a tremendous opportunity. The difference between the winners and losers will be their reaction to this new world, and the role they find for themselves. You can either embrace it as a chance to grow and stand out from the rest of the crowd, or reject it as an insurmountable obstacle. The choice is yours.
COPYRIGHT 1993 Society of Plastics Engineers, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Marketing
Author:Pottle, Martin K.
Publication:Plastics Engineering
Date:Sep 1, 1993
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