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ConstructionIndustrial marketing success storyKoch Group is a 40+ year old industrial marketing consulting firm providing a broad gamut of industrial marketing assistance activities to small and mid-sized manufacturers. Assistance activities include market research, strategic and tactical planning, plan implementation, target marketing, new market identification and qualification, existing market penetration, direct selling assistance, and trade show management. We also specialize in manufacturers' agent identification, screening and contracting. Koch Group consultants performed a sales analysis, targeted accounts, qualified targets, provided direct selling assistance, and many other industrial marketing activities resulting in an over 80% increase in sales for this Midwest company manufacturing equipment that is used by the concrete construction industry. SITUATIONLocation: Midwest A returning veteran founded the client company after the Korean War. New owners purchased the company from the original owner. In 1995, annual sales were $3,800,000 that generated a net loss of $300,000. Company products were sold nationwide through a combination of distributors and limited contractor-direct sales. Distributor sales accounted for approximately 90% of sales. The only significant marketing activity consisted of participating each year in the industry's major week-long trade show. The company's product line enjoyed an excellent reputation for quality, but service had deteriorated during the previous 5-6 years under the previous owner.
ACTIONKoch Group began the project by defining the market size, and company penetration, by state. We then surveyed 100 geographically dispersed end-users to develop a current view of market conditions and buying patterns. Project activities determined all major competitors were underserving their primary market segment. Our consultants evaluated existing sales versus the market potential in all states. Those states with the most potential, but the least penetration, were targeted for market development activities by identifying distributors of same and similar products. We scheduled and participated in monthly trips to evaluate and support existing dealers, to identify, and evaluate potential new dealers, and convert competitors' dealers in the target states. We assisted company management hire a new sales manager and then trained the new sales manager in the methods used to evaluate existing and potential dealers. We worked with company management to set up a "quick ship" manufacturing cell to capture time sensitive orders. We participated in and/or directed select on-going marketing activities, including account strategy, product strategy, and sales calls. We identified a market need for a heavy-duty version of the company's primary products, qualified selected accounts, and arranged for a 3rd party with specialized equipment to produce the product. Koch Group Senior Partners provide ongoing marketing oversight as board of directors' advisors.
RESULTSSales increased by $3,500,000 during the late 1990s, and $1,500,000 in profits were generated by the end of 2000. The company has shifted its marketing and sales activities from reactive to proactive by establishing and actively supporting nationwide distribution. The company is now recognized as the fastest order shipper in the business as a result of setting up the quick ship manufacturing cell. Most orders are now being shipped in one day versus the five-day industry standard. The company has successfully entered the heavy-duty product market segment and generates more profit per sale than any other product they sell. The company's annual sales growth rate has been averaging an 8-10% increase in a mature market. Profits continue to increase sharply due to both increased sales and production improvements. Next:
Construction Equipment & Tools >> If you would like more information about our industrial marketing services for manufacturers, please use our contact form or email us at info@kochgroup.com.
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