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Updating your marketing plan.

Few things are more stale than yesterday's assumptions-especially when it comes to applying the strategies outlined in a marketing plan.

Not long ago, two factors dominated the business scene: handling growth and modernizing to compete more effectively in world markets. Now, the focus has changed to recession, inflation, high energy costs and the reality of conducting a Middle East war.

Against this background, now is a good time to reevaluate and update your marketing plan. This is a time to objectively answer key questions in 10 important marketing areas. For some foundries this review may help uncover new solutions to existing problems. In other instances, the changing perspectives will help identify strengths and weaknesses and thus, point the way to marketing opportunities.

First, do you know the size, composition and location of your best potential markets? Do you keep track of changing trends and try to adapt to these changes? Identifying the casting markets you serve and those which constitute your best prospect markets is an essential step in reevaluating your marketing program.

It is unlikely that the nature and composition of your markets are the same as they were even five years ago. Customers' products become obsolete and so do the castings they use. Often, a foundry is not aware of the change until it hears of a competitor making castings for the new product line. Changes in purchasing people and locations also are being made with increasing frequency.

Second, are you underestimating the importance of emerging markets? Many casting applications are constantly being developed as a result of conversions from fabrications, forgings or other materials and processes. Not only would you try to stay abreast of new applications and new marketing, but at every opportunity you should endeavor to increase involvement of your engineering staff people in your customers' casting design and redesign activities.

Third, are you making a strong effort to reach companies that represent your prospect market? Market segmentation is the key here. All markets, regardless of their size, are made up of segments. Each of these segments is a complete market in itself, comprised of people and companies who can be reached and sold. Many smaller foundries have based their marketing strategy on marketing to individual segments, which the larger foundries overlook. Check your sales call reports closely; they will frequently indicate opportunities to pursue.

Published Data

Fourth, are you taking full advantage of published data on markets? Keeping up with shifts in your markets tips you off to which are declining and which are on a growth track. One useful measure is to compare your sales decline or increase with that of the particular market you are analyzing.

Fifth, do you have a good understanding of your customer's products and try to suggest ways in which your castings can be redesigned to improve his product or reduce cost? Many foundries have gained valuable feedback by getting involved with their customers' casting problems. With the right approach, it can be surprisingly easy to get to engineering people. But, first make sure that you are in a position to offer more than just lip service.

Engineering departments are not very tolerant of salespeople who only waste their time with vague offers to solve all their casting problems. When you get a chance to tell your story, send in the first team-people who can intelligently field tough questions.

Sixth, do you know the current profitability of individual accounts and patterns? Not all customers are worth keeping and some jobs may be a real drain on profits. There may be accounts which cost you more to service then they can possibly be worth in profits. You may think you have so few customers in this category that tracking them down will cost more than you will save. The fact is that you don't really know until you have the profitability numbers. Knowing which jobs are losers can also point the way to improving margins with much-needed price increases.

Seventh, are your pricing policies consistent with current marketing objectives? Price increases in our industry tend to follow demand curves: As demand rises, so do prices. You must make sure that increases at least match rises in labor, materials and other costs. In our industry, attempting to absorb these costs leads to financial disaster.

Some customers have attempted to institute "target pricing" programs, pressuring their foundries to either roll back or hold current prices. In an inflationary economy (6% last year) such expectations are unrealistic.

Sale Capacity

Eighth, if you have idle capacity, do you consider it a marketing asset or a liability? In most medium-sized foundries, the intangible assets are greater than the tangible ones, even though many managers may not agree. Idle facilities can often be a major asset if they can be used to generate subcontract or marginal contribution work, particularly if you are above the break-even point.

Ninth, are you handicapping yourself with poor sales literature and promotional material? For many prospects, the only impression they have of your foundry is that created by your company literature. Good marketing strategy dictates that the best times to use promotional literature are when business is good, and when it is bad.

Lastly, is your current marketing plan taking advantage of your foundry's strengths? Over a period of time, most companies gain strength in some areas and lose it in others. Your assets are probably different than they were just a few years ago. Take a look at your cash, foundry facilities, equipment, key people, technology, specialization areas and your reputation. Then ask yourself if your marketing plan is capitalizing on your current strengths.

In this period of rapid change, every foundry should review its marketing strategy to make sure it is in the best position to take advantage of every marketing opportunity.
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:Feb 1, 1991
Previous Article:Division has an ambitious agenda.
Next Article:Blind risers: why they don't always work; part 1 of 3.

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