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Spotting marketing opportunities.

In order for a marketing opportunity to exist, it must be a natural fit for your foundry; it must involve the types of castings and markets that are in the path of your company's growth. And it should also reflect a market vacuum, a low-pressure area where the prospect will welcome a new casting supplier. Together, these two factors will be the key to spotting market opportunities.

As a first step in uncovering marketing opportunities, you must initially define both your foundry's present and prospective markets. Present markets are comprised of your customers (who have the potential for increased business) along with other companies that have identical or similar casting requirements. In this case, you have demonstrated your ability to be price competitive and produce castings to known quality and other requirements of a particular industry.

Let's say you produce pump housings. There is a great deal of commonality between some of these and compressor housings, some valves, gear cases, etc. What you're looking for here is similarity in size and weight, configuration, coring, metallurgy and other characteristics. Add these to your first group. Finally, include those industries with which you have little familarity but with which you think there could possibly be a fit between your capability and their casting requirements.

Present markets have many advantages when it comes to developing opportunities. These are the areas in which you are experienced, and your sales people and agents have established personal contacts. So, getting more business from present customers will usually be easier than generating work from new accounts who probably do not know much about your foundry and its capabilities, and where personal relationships and confidence have yet to be established.

Finding Opportunities

In looking around for market opportunities, there are certain indicators that the door is ajar, even if not all the way open. Unless at least some of these signs are present, you will probably be locking horns with a well-established competitor, in which case your chances of success are pretty slim.

Poor delivery is one of the best signals of a marketing opportunity. Purchasing people are both frustrated and angered by their inability to get castings when they need them. Switching to another foundry is a way to fulfill this requirement and get even at the same time. Poor delivery, even in recessionary periods, continues to plague our industry.

Overpriced castings are another invitation to make marketing inroads. Some foundries with across-the-board price increases lose touch with economic reality and become noncompetitive. This creates latent resentment on the part of purchasing people and again opens the door for competition. Even a cursory cost analysis should enable you to determine whether certain work is priced reasonably or not and, thus, if a marketing opportunity exists.

Poor quality is another pervasive problem that can represent a marketing opportunity. With the growing emphasis on SPC and good quality assurance programs, many casting users are recognizing that their present sources may be either unable or unwilling to meet their higher quality requirements. If quality is one of your strong suits, then uncovering these situations spells marketing opportunity in capital letters.

New technology can also be a door opener. Better or lower-cost molding and coremaking facilities can often point the way to marketing opportunities if they provide an edge in casting quality, delivery, capacity or price.

Offering design services can be a potent tool for building business. At every opportunity, you should endeavor to increase involvement of your engineering people in customer casting design and redesign. A large potential exists for converting fabrications and forgings to castings. Of course, it will have to be emphasized that you do not prepare the final drawings, nor can you take responsibility for the function or safety of the finished part. Offering these services can indeed increase product liability exposure. However, since the assistance is basically consulting on design, production and tooling, liability problems should be minimal.

Providing machined castings is another way to create marketing opportunities. Tie-in machining services can generate a considerable volume of new casting work and can help build small accounts into large ones. For the buyer, this eliminates double handling, casting inspection, cast scrap and casting inventory. It also makes purchasing easier because the buyer deals with one supplier, rather than two. Another strong advantage of machining programs is that they serve to cement solid customer relationships because the foundry becomes much more than just another casting supplier--it becomes a component supplier. Also, these programs can help protect against downturns in the economy.

Rapid growth periods in the economy create opportunities, too. Don't make the mistake of shutting down your marketing program when business gets good. This is usually when other foundries are having delivery and quality problems, an excellent time to invade their territory.

The collapsing foundry is an all too familiar phenomenon in our industry. Knowing your competitors and recognizing their imminent demise represents one more marketing opportunity. Sales volume of the faltering foundry quickly becomes a prime target for all of its competitors. But the one with thorough planning and a good sense of timing could readily capture the lion's share of available business.

Recognizing marketing opportunities is not as easy as it sounds. However, with good perception, sound planning and adequate follow-through it can lead to significantly increased sales.

T. Jerry Warden Foundry Marketing Services Estero, Florida
COPYRIGHT 1991 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Marketing
Author:Warden, T.Jerry
Publication:Modern Casting
Date:Aug 1, 1991
Words:891
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