Don Rigby, Integrated MARCOM

The profitability gap between manufacturing companies that compete on the basis of innovative products or processes and firms that compete with a low-price advantage has more than doubled over the past three years. Innovation is the critical component allowing manufacturers to compete more rigorously, profit more substantially and sustain growth in the operations. This fact has been confirmed by 2 independent research studies conducted at the same time within manufacturing industries in the State of Georgia.

In a qualitative research study conducted by GrowthANSWERS and Plexus Marketing Group, interviews with manufacturing executives probed current marketing practices, productive marketing tactics and opinions on the most compelling Growth Gaps they must overcome. A white paper published last month: Beyond Survive, How to Thrive details key findings.

Simultaneously, Georgia Tech completed the 6th installment (every 3 years since 1994) of The Georgia Manufacturing Survey and also revealed results in Q4 of 2008. This quantitative study effectively identifies industry trends by measuring advancements in Sustainability, Strategies, Profitability, Outsourcing, R&D, Energy, Productivity and Training. This study makes the proof positive statement between profitability of manufacturers who complete on innovation versus those who complete on price.

So How do Manufacturers Define Innovation?
Both studies confirm marketing and sales are top concern of manufacturers, yet their strategies and definition of innovation do not include marketing. Most manufactures focus on Quality and Price as indicated in priority order:

1. High quality
2. Low price
3. Adapting product to customer needs (customization)
4. Quick delivery
5. Value-added services
6. Innovation, new technology (operations)
   Source: Georgia Manufacturing Survey 2008

Innovation is a 4-Legged Stool.
In production environments, perpetual improvement is common practice and innovation is a driving force behind these incremental gains.

1. Product Innovation--New products or significantly improved products
2. Process Innovation--new or improved practices, technologies or delivery
3. Organizational Innovation--changes in structure, management methods or information exchange systems
4. Marketing Innovation--changes to packaging, demand management, sales methods or distribution channels.

What happens to the stability of a stool when 1 leg is shorter than the others?
With one exception of working with customers to innovate new products, marketing comes up short. Purchasing new equipment and working with suppliers are primary innovative strategies among manufacturers.

The research indicates barriers to innovation are highest for marketing. The factors creating most of the resistance are Qualified Personnel, Funds or Costs, Established Firms' Dominance.

Marketing Innovation--the Stabilizing Factor
Here's what the research from Georgia Tech and GrowthANSWERS reveals:
Fact: innovation is closely linked to profitability.
Fact: marketing innovation is clearly the shortest leg of the stool.
Fact: manufacturers believe they can compete on quality, price and service.

The stability of any manufacturing enterprise and ability to compete for new and more profitable customers will be exponentially improved with an Innovation Mandate of marketing and sales strategies.

Marketing innovation drives profitable ROI when business strategy, tactical marketing and sales execution are aligned. This is the core value of GrowthANSWERS. Built to innovate with systems to execute, GrowthANSWERS is a membership organization of cross-functional, best-of-breed service providers united to transform emerging manufacturing companies into sustainable enterprises.

Live Learning Event--January 21st at the Georgian Club.
Hosted by GrowthANSWERS with keynote speaker John Zegers, Director, Center of Innovation for Manufacturing from Georgia Department of Economic Development, Marketing Innovation for Manufacturers is a positive step toward leveraging greater profits. This is not your typical presentation that ends with a sales pitch. This is roundtable session enables you to learn collaboratively with your contemporaries, other executives of emerging manufacturing companies. From the business development experts of GrowthANSWERS, you'll view your business more objectively and from a different perspective.

This is not a profit center, but a give-forward initiative of GrowthANSWERS. Participation is limited to 24. Cost is $65 and includes lunch. Deadline to register is Friday, January 16th. Here's the link for more information and to confirm your participation, Marketing Innovation for Manufacturers.

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