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Metal stamperIndustrial marketing success storyA metal stamper, who specializes in deep drawn stampings, needed to analyze their base business to determine what markets could be served to diversify their business away from a high-volume, low-margin, industry. Koch Group consultants assisted the client with searches in multiple MANA territories to identify, qualify, screen, interview, and help contact with new manufacturers' agencies. SITUATIONLocation: Midwest The fourth family generation had just purchased the client company's assets and taken over all management functions. Sales were stagnant and their position in major markets was eroding. Distribution included a combination of eight manufacturers' sales agencies and direct sales personnel. The sales agents, with the exception of one agency, were primarily servicing accounts that had been provided by the house. No new accounts had been developed by the existing sales agencies in over six years. Seventy five percent (75%) of the existing business was low profit margin (4-6%) sales and concentrated in one large Midwestern manufacturer. The new management understood an increase in the customer base was required to stabilize the company's economic position.
ACTIONKoch Group consultants evaluated the market potential, by state, for the entire country and then ranked market potential by state. We compared existing company sales penetration to market potential and then existing agents' sales to potential in their respective territories. Our consultants identified and selected three territories with the most potential and least penetration for initial market development. We then identified, qualified, interviewed and recruited sales agents in 3 MANA territories - interviewing a minimum of 8 qualified agencies per territory. Finally, we trained management to work effectively with new agents and assisted management in terminating non-performing agents.
RESULTSThe company developed $1.5 million in new, higher margin (8-12%) sales, market niches within 12 months. Management had changed their way of thinking and their approach to the market, proactively pursuing new target companies, markets, and agencies to serve high potential areas. The company has revaluated its market strategy and has begun a multi-year planned shift from a single dominant low margin industry to multiple, lower volume, higher margin, industries, diversifying its business base and improving profitability. Next: Non-Ferrous Investment
Casting >> If you would like more information about our industrial marketing services for manufacturers and industrial service providers, please use our contact form or email us at info@kochgroup.com.
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