Conventional wisdom states that when times are bad and sales are down, management should cut all expenses except sales and marketing. And when things get really bad, management must cut everything but sales because selling is the fastest way to increase revenues.
This business-to-business case study illustrates how, if executed properly, strategic marketing can sometimes be a quicker, more efficient and more effective way to grow sales.
A manufacturing firm’s brand enjoyed high name recognition, and the longstanding business had survived and often thrived through multiple business cycles during its storied history. A competent management team had been assembled and was balancing operational needs with cash-flow requirements.
However, sales of the manufacturer’s primary division were declining and the market for its products was in a severe depression. The lack of volume meant the company was not covering its overhead. Escalating energy and raw material costs were eroding profit margins 토토사이트추천.
Product and Distribution Channels
Market perceptions of its products were mixed. The company had a strong reputation as a manufacturer of “green” building products, but it was not well regarded for solving end-user problems. The firm was not in a position to compete on price.
Although the company’s products were esteemed by specifiers and designers for being sustainable and other specific performance attributes, many end-users were put off by the high cost of the products, and sometimes found these products to be difficult to work with and of questionable quality.
Low sales volume and slow inventory turns decreased the company’s value to channel members and kept new distributors from taking on the line. To cut costs, existing distributors reduced their inventories of the company’s products, and dropped slower-moving niche items manufactured by the firm entirely.
In response, management hired a full-service marketing firm and undertook a full-blown marketing and advertising campaign. The marketing message trumpeted the environmental friendliness of the firm’s products but failed to communicate their other performance values.