Michael McClellan, Plexus Marketing Group

The challenging economy aside, a white paper published in December, 2008 by GrowthANSWERS and Plexus Marketing Group, Inc. (of Atlanta, GA) suggests that a significant number of Georgia's small to mid-sized manufacturers are using a combination of online and offline (traditional) marketing tactics to successfully support (and even grow) their niche market positions.

Many of the manufacturers participating in this qualitative market research survey serve limited numbers of customers in highly specialized or customized "niche" markets, and have found effective techniques for protecting and growing their niche market positions. That may be one of the key reasons why manufacturers of this size have been able to persist in their markets despite the trend toward overseas outsourcing of manufacturing in the past few years.

One question that a manufacturer, or anyone selling a product or service, has to ask themselves is which of the many marketing tactics are best for their particular situation. Both online and offline tactics should be considered effective and a combination is usually the best way to go. The whitepaper provides a number of examples of how niche oriented manufacturers optimize this combination, including one example involving a printed circuit board manufacturer whose company is growing at a rapid pace (despite the economy):

"Our company is growing … at a very rapid pace … which is phenomenal considering the market today. But, we are in a niche market. People come to us because they are innovating new products. The way we have to present ourselves now is different than it was a few years ago. First of all, the Internet is the most important way … absolutely the most successful way … we have to reach the people who would use our services. (We have) a good website with the proper links where people can go on the Internet to search for a certain item we produce."

And, while this manufacturer was a strong believer in online marketing tactics, its marketing manager cited "tradeshows" as the next best tactic for its business because:

"You meet people … and have your product with you. They can come over and look, so you get the people that are interested - the right people. You get their names and business cards and you can call them back when you get home to develop that contact."

In addition to which online and offline marketing tactics are being used by these small to mid-sized manufacturers, the study also examined which "Growth Gap" areas are the most compelling for these types of companies. "Growth Gaps" are 5 functions or "levers" that affect a company's ability to increase revenue and grow. According to the study, the two most compelling "Growth Gaps" for the the manufacturers surveyed are the "Prospect Gap" (i.e. attracting new customers) and the "Margin Gap" (i.e. get paid more for your products).

With the manufacturers' suppliers increasing the prices of inputs - accompanied by an economy that makes it difficult for manufacturers to in turn pass along price increases to their customers and still maintain market share - it is no wonder that the "Margin Gap" is a pain point for many of the respondents.

Incidentally, it turns out that one of the key strategies recommended in the whitepaper for addressing this "Margin Gap" situation is for a manufacturer to strengthen its niche market position and increase the value it creates for customers within that highly specialized market. For example, by focusing on the "Expansion Gap" (i.e. finding additional ways to serve customer needs within the niche market) and focusing on both the brand position and differentiation of the manufacturing company within its niche market (which addresses both the "Prospect Gap" and "Customer Gap"), a manufacturer can shift the emphasis of its prospects and customers from "price" to "value" - thus alleviating the "Margin Gap" pain.

By diagnosing your own firms "Growth Gaps" and addressing them with some smart marketing techniques like some of those used by our survey participants, you can build your firm's niche market position and achieve growth in a difficult economy.

For more information, access a full copy of the whitepaper, or participate in a personalized Growth Gap assessment for your firm.

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