Let Marketing work for you

    Planning for profit and growth

    by
    RG Liberty




A good many electrical contractors are under the misapprehension that marketing is a field best left to the giant corporations which have, over the years, built a mystique around the concept and the process of marketing. This is a fallacy which literally cries out for correction.

Granted there may exist a mystique surrounding marketing, and it may have been nurtured by huge multi-nationals in an attempt to protect their market shares, but it is a man-made mystique. There is nothing mysterious about marketing! Marketing is simply a process by which a company plans the best possible method of getting its product or service to its customer, and with any luck, finding new customers in the bargain.

No mystery

Electrical contractors often claim they have no marketing plan, or strategy. The fact is, however, each and every one of them in business today uses marketing on a regular basis. Joe Contractor may not have a formal plan or budget written down on paper or carved in stone, but every decision he makes is motivated by his understanding of market trends-that is, the needs and wants of his customers.

Joe gets up for work in the morning and while dressing, it hits him that nobody in his area is providing HVAC services. The germ of a marketing plan. . . While he's driving in to his office he's rolling a few ideas around in his head. When he gets in to work he calls in his partner, Fred and says, "Look, Fred, I know this could be risky, but I've just had a great idea. There's no one here in town doing heating, ventilation and air conditioning work. It's all being done from outside. What if..."

No mysterious marketing specs and forecasts here. Joe simply had an idea. He told Fred and the next thing they know, they're in the HVAC business as well as their established contracting line. Of course Joe took a calculated risk here. He based the future success of his new venture on the reputation he'd built up over the years with his customers and it paid off. After all, why should customers import services that suddenly become readily available in their own area-and possibly cheaper in price?

Joe and Fred Contractor expanded their business, made a profit and have a rosy outlook for the future. Why? Because they saw a gap and filled it. That's marketing.

Sophisticated or simple?

Joe Contractor can continue to run his business on a simple basis, just keeping his eyes open for any opportunities that fall into his lap and acting on them. Or he can take the hint from his first successful departure and take an active and aggressive attitude toward searching out new markets to be serviced. It will, of course, depend on the size of his organization, the number of people he has at hand and the time and money he can afford to put into active market research- looking for the gaps.

Let's say he starts small and simple. Joe has a person on staff who has been dealing with the firm's customers for a few years and Joe thinks it's not a big leap from what the person has been doing to what he could be doing in terms of market analysis (another frightening phrase to many). So, Joe takes the person aside and says, "Look, you're in the best position to get the feel of what might be needed out there, right? So why not do a little poking around while you're talking with our clients and see what you can find out." What Joe is asking that person is to try to anticipate the customer's future needs so Joe can analyze the situation.

Joe can then weigh the pros and cons of moving into new areas of specialization, based on the information received from his person in the field. Can his company handle the physical work required in this specialized area? If not, will the cost be low enough to ensure he can make money through this specialization if he decides to go ahead with the necessary up-dating of his facilities? Will the venture be a flash-in-the-pan or a steady-growth market with continued return on investment? And (a very important factor in Joe's equation) will this move attract new customers looking for exactly what Joe might be offering?

Suddenly, Joe Contractor finds that his intended expansion into new areas of specialization will, indeed, work, as well as turn a tidy profit. Does he then rest on his laurels? No, sir. Joe is an entrepreneur who knows a good thing can be made better. And, as we can see, he has already established a simple, but effective marketing plan. Now Joe wants to build his business in a more sophisticated way.

Realizing what a great help his man in the field has already been to his expansion, Joe theorizes that a permanent salesperson is his logical next step toward growth. But, since Joe is still in the infancy stages of his company's expansion, his salesperson will also function as his marketing specialist. So, Joe arranges for his sales/marketing specialist to attend a number of seminars and perhaps a course or two on marketing strategy in order to more easily identify new markets (again, find the gaps).

Market identification

It is during this stage of Joe's growth that he becomes aware of marketing mix. He notices that the new construction market is no longer the dominant factor it was during the 1970s, rather that technical specialties are now prominent, with energy management, design-build work, electronic controls, life-cycle maintenance and renovation following close behind.

Joe's sales/marketing specialist tells him that some of the technical specialties include: air conditioning, computerized control systems, electric heating, electric signs, energy management, exterior lighting, fire alarm systems, heat pumps, integrated ceilings, interior lighting, master antenna/CATV, motors and controls, security/TV, sound communications, standby emergency power and telephone interconnect. Of course, there are more, but by now Joe's mind is reeling with the possibilities!

Now, Joe has already committed himself to his expansion and his decision to pursue his marketing goals, but how can he follow through with any real success? Unless his sales/marketing person can handle the vast number of potential markets available, he will have to organize a separate division for marketing and one for sales, (with the expertise to run them) and they will have to not only complement each other, but support one another as well.

It is obvious to Joe that an infinite variety of specializing combinations can be generated from the options he now has. To make his problem even more complex, each combination needs its own special set of capabilities, financial investments and marketing methods. The way Joe puts these options together into profitable business activities is his marketing mix. And as new options are added to traditional ones, the total number of profitable opportunities will increase, but the decision-making process for Joe will become more complex.

Obviously, this is when Joe Contractor needs all the help he can get.

The marketing concept holds that the key task of Joe's organization is to; determine the needs and wants of the markets he's looking into, adapt the organization to supply the desired satisfaction profitably, and effectively and efficiently communicate Joe's capabilities to his prospects.

Marketing program

Since Joe is becoming somewhat of a marketing whiz, he knows there are other concepts involved with marketing. Some of these include; constant improvement of production and delivery efficiency, to attract and hold new customers; the best quality for the price concept; and the concept that customer purchases are dependent upon efforts to stimulate their interest and encourage their decision to buy.

Now that Joe has the physical capabilities in his shop to service a marketing mix, he decides to hire an advertising or public relations consultant to help him promote his services. His marketing/sales person now handles personal sales only, the better to service established customers and attract new ones.

But, Joe Contractor is not finished yet! He and his organization must constantly innovate. Remember, Joe has competitors out there admiring the advances he has made through marketing-filling the gaps. This is where positioning comes into Joe's marketing strategy.

Positioning

Positioning is another stage in Joe's marketing strategy to distinguish him from his competitors. Positioning goes beyond simple image making and visual identification-handled by Joe's advertising consultant-it aims to help prospects know the real differences between Joe and the others in similar fields, so they can match their needs to the one of most value to them.

Finally Joe Contractor has a sophisticated sales and marketing organization. Right? Well, let's see. He has achieved sophistication in advertising, sales promotion, customer relations, innovation and positioning.

That sounds pretty good. But, it may not be enough to keep Joe riding his wave of profitable growth-unless all these factors are professionally planned and controlled.

But, our Joe is a shrewd businessman by anyone's standards, and he knows the ultimate essence of modern marketing depends on analysis of the market and actions of competitors, identification and evaluation of alternative strategies, development of organizational plans to meet carefully stated objectives and goals, and control of the various activities necessary to carry out his marketing plan.

Professionally planned and controlled

And since Joe's people are the ones who helped him every step along the way, he pays careful attention to the personal objectives, incentives and rewards of those same people.

In Joe's new awareness, his customer is seen as the ultimate controlling influence, with his company's marketing function integrating activities of production, finance, purchasing and sales promotion-all through the motivation of his team of people.

Joe Contractor, who not too long ago had an idea while dressing for work, has attacked the concept he once thought mysterious and forbidding - and he's won the prizes. Joe is now a successfully diversified contractor servicing numerous customers in specialty fields he never dreamed he could master. He's filling the gaps-and so can you! No goal is too scary if you take it on one step at a time, with a little help along the way.