Sponsored By

Blueprint for the 21st Century: Sales and marketing challenges

March 1, 2000

6 Min Read
Blueprint for the 21st Century:  Sales and marketing challenges

Marketing your molding business is a challenge by itself. Throw in increasing competition, more and more mergers and acquisitions, and pressure from foreign molders, and it gets even tougher. Jim Mahon, regional manager for business development for SPM/A Dynacast Co. in Anaheim, CA, echoes the feelings of most marketing and sales people for molders and moldmakers. "I don’t think 10 years ago you could have conceived of the challenges we face today," he says.

Marketing is still a huge hurdle for most companies as people try to get their arms around what marketing entails and how to do it. And that in itself is a challenge. What market niches do you best serve? What do you do best? For whom? How do you promote your company to the OEM world? And, how do you differentiate your company from the literally thousands of competitors that do basically the same thing you do (make molds and mold parts)?

Jeff Somple, vp of sales and engineering for the Northern Div. of Mack Group Inc. in Arlington, VT, says today’s competitive landscape is one where consolidation has created megamolders with full-service, contract manufacturing capabilities at the top end. That means the bar has been raised for everyone else.

Also, Somple says that it’s becoming harder for molders to differentiate themselves as the playing field has become more level. "The challenge is to find out how you are different, package it, and then get it into the hands of the right customers," he says.

That usually means finding your niche. However, Somple notes that niches are quickly disappearing. "As soon as someone discovers a profitable niche, somebody else will jump into it," he adds. Other molders say that a niche isn’t enough; today’s OEMs want their suppliers to handle everything from product development to packaging and distribution.

Rod Roth of R&D Plastics LLC in Hillsboro, OR has already struggled with those problems. "What happens when you get your niche and your niche goes away?" he asks, noting that molders need to be as focused externally on what’s happening to markets as they are internally with what’s happening on the production floor.

Martin Kellogg, president of UFE Inc. in Stillwater, MN, says that keeping in touch with fast-changing markets and companies within those markets is a challenge. Consolidations, mergers, and acquisitions have changed the face of many OEMs in recent years. As the players change, it impacts the molders that serve them.

Global Issues
Being able to play in a global market has become a huge issue for molders and moldmakers. To play or not to play globally is the big question. What edge does being a global player give a molder when seeking to obtain new business from large OEMs?

This issue is a source of frustration for many who struggle with whether or not they should put plants in foreign countries to accommodate their OEM customers, establish a joint venture partnership with a company already there, or give up on trying to be a global player.

"Becoming a global supplier is really the next big wave," comments Mike Farrell, executive vp of Precise Technology Inc. in North Versailles, PA.

"If you can’t service your customers globally, you’re going to have problems remaining a supplier."

Joe Joyner is sales and marketing manager for Morton Industrial Group’s Morton Custom Plastics, SE Div., which includes plants in Harrisburg and St. Matthews, SC. "In the markets we serve, the business used to be a local business," says Joyner. "Customers were within 100 miles of our business. Today, e-commerce and other factors are pulling the world closer together. We’ll have to listen to the needs of the customer as it looks for solutions and someone who can solve its problems anywhere in the world."

Joyner points out a fact of life true with most molders. "We’re a contract manufacturer of thermoplastics specializing in injection molding, painting, and decorating," he says. "We do not market any products so we’re dependent on our customer’s success.

"If a customer is looking at decreasing the number of its suppliers, it may demand we go where it puts plants. We have to have the ability to grow with it."

UFE’s Kellogg notes that the challenge for many molders is size and scope. Its customers are large, sometimes billion-dollar global entities, while the majority of molders still tend to be small to midsized, lo-cal or regional companies.

That raises the question of just how molders can best serve these global OEMs and which molders will be successful.

Sales Challenges
A major factor affecting many companies’ ability to break into new markets with new customers is the merger and acquisition activity of the last decade. "Mergers and acquisitions have created fewer competitors, but they’re much bigger and much better," comments Mack’s Somple.

TALK TO US

Now tell us how you cope. What have you done to meet your challenges? Please answer one or all of these questions and fax them to Jeff Sloan at (303) 321-3552, or send e-mail to [email protected]. Identities will be kept confidential upon request.

What strategy do you employ to differentiate your company from your competition when promoting your company to new customers or markets?How do you maintain a competitive edge in pricing when going after new business while providing higher levels of service?A customer just asked you to put a plant in Mexico. How do you evaluate this new sales opportunity and respond to global forces pushing you beyond U.S. borders?Please include your name, company name, and phone number with your reply.

The ability to capture new business is particularly difficult for companies without a marketing plan or a focused idea of who their customers should be. How a company markets and sells its services and capabilities depends in large part on the size of the company. And the customer base that a company serves determines to a large extent, a company’s size. It can be a Catch-22.

"When we first opened up [April 1, 1996] we’d take anything that walked through the door; it didn’t matter what it was," says R&D’s Roth. "The sales challenge we have this year is to grow but also to be discriminating in choosing those customers that are right for us—making that mental switch in focus."

With most things being equal in the molding and moldmaking business, the challenge of capturing the sale lies in price and delivery. "The bar is constantly being raised to meet increasing pricing and delivery pressures," says SPM’s Mahon. "Time to market is everything, and price is close behind. How you continue to reduce costs and time to market is critical. It’s not a static thing. What was competitive two years ago isn’t competitive today."

In years past, once you were in tight with an OEM you could be assured that future work would always be coming through the pipeline. Today, say moldmakers and molders, you have to fight for every job you win.

Mack’s Somple notes that the focus for sales is constantly on getting the next program. Shorter program life means less predictability in forecasting. "We have no idea what our revenue stream is going to look like in the next year," says Somple.

So much challenge and uncertainty can be daunting. But it doesn’t have to be that way. Coming up later this year in the August issue of IMM we’ll explore the strategies molders use today to meet these challenges successfully.

Sign up for the PlasticsToday NewsFeed newsletter.

You May Also Like