Growth Strategies X - Declare a New Beginning
“Recognize that this is a time for a “new beginning” and declare the new beginning.”
By: Ralph Oliva - ISBM
What can we do to prepare for hatching a new beginning?
This I believe: Recognize that this is a time for a “new beginning” and declare the new beginning.
Many markets are readjusting themselves, bringing capacity in line with demand, recognizing old business designs are no longer working, setting the stage for new ideas to have faster uptake, and making innovators more successful than ever. ISBM Member firm Dresser is taking new approaches to innovation in gasoline retailing to market—driven precisely by how tough this challenge is and how tough it is to make money in this business right now. GE has a host of innovations in the pipeline, born of difficult markets, addressing fundamental crises we face in water, energy, and healthcare.
I believe now more than ever, it’s a time to segment your customers carefully. Our research shows this is critical in a down market. We suggest a simple three-pronged approach:
- There are “Value Buyers” – you can work with them to innovate, solve problems and create new value – and they’ll let you get a price to share the rewards.
- Price buyers – who want low price, but will let you cut the cost of serving them so you both can win.
- Then there are customers who want it all and won’t pay ? the (I’m sorry to say are) “Hogs.” In a down market these are especially hurtful. Know who they are. Migrate them to be either “Value” or “Price” buyers. If you can’t – you might introduce them to your least favorite competitor.
I believe that as our trading partners are all feeling stress – the problems they face come into greater focus, and their needs hurt a little more. This sets the stage for this to be a great time of discovery of opportunities to add new value. A time for Real Voice of the Customer work to pay off more than ever.
From my vantage across ISBM firms, things are not as bad as the pundits – and the press – say it is. I believe that it’s an important time to add energy and positivism to this environment. I believe that, if the innovation engines and marketing talent inside the group of industrial firms I’m familiar with, all decided that this economy would be turned around by August of this year – it would be. We need to decide that is what’s going to happen. And talk that way. The problems in today’s value chains are being amplified by an irresponsible and inherently negative press. I see a bunch of “latent demand,” waiting to surface if only buoyed up by a rising tide of confidence.
I believe that as innovators perhaps the most important thing we can do is:
“Declare the New Beginning!”
About Ralph
RALPH A. OLIVA
Executive Director, Institute for the Study of Business Markets
Professor of Marketing, Smeal College of Business
www.isbm.org
Ralph is the Executive Director of the Institute for the Study of Business Markets, and Professor of Marketing in the Smeal College of Business Administration at Penn State University. He is driving the growth of the ISBM as the leading academic center devoted to advancing knowledge and practice in Business-to-Business marketing worldwide. The ISBM is supported by 65 major firms, and a network of over 100 researchers, all focused on B-to-B.
Since 1997, Ralph has been working with B-to-B firms in building better, more profitable business marketing practice by creating direct connections from practitioners to leading-edge researchers, through the design and implementation of educational programs spanning the practice of B-to-B, and in building networked communities of learning. He has worked extensively with ISBM Member firms including DuPont, Deloitte, Xerox, Honeywell, Timken, Dow, Arkema, Rohm and Haas, IBM, GE, Alfa Laval, National Starch and Chemical, Parker Hannifin, Swagelok, PPG, and others in the Fortune 500.
Ralph is a regular columnist for Marketing Management magazine, and is active in Executive Education, as well as the Smeal College MBA program, where he received the “Excellence in Teaching Award” the MBA class for 2002 and 2007. He teaches B-to-B Marketing, Strategic Brand Management, and Integrated Market Communications. His research focus is on tracking the trends shaping business markets, Business-to-Business brands and ingredient brands.
Before joining Penn State, Ralph spent 23 years in B-to-B and consumer marketing, and established a “Virtual University” for marketing at Texas Instruments. He has served as V.P. of Market Communications and Design for TI worldwide, and leader of the TI.com web Team.
Ralph developed the “DLP” branding program for TI (TI’s first ingredient brand) and worked on landmark products (including TI’s “Speak and Spell”, and the TI-30 calculator).
His articles can be found at isbm.org, and ralpholiva.com.
Ralph holds a Ph.D. and M.S. in Solid State Physics from Rensselaer Polytechnic Institute, and a B.S. in Physics from Fordham University. He lives in State College, PA with his wife Kat, and their sons Matthew and Christopher.