Competitiveness can be a positive thing. It inspires companies of all sizes to innovate and improve over time, and the constant push to do better can lead to some creative, outstanding results. However, because most markets are growing increasingly competitive, it’s getting harder to sort excellent goods and services from the rest, leaving a lot of voices drowned out by the noise. In the end, it all goes back to showing what you know, and adopting thought leadership as a key part of your strategy is key to distinguishing yourself from your competitors. Many think thought leadership is just a marketing ploy, but manufacturing companies stand to earn many long-term benefits by posting blogs and other pieces of content that draw back to your expertise. Even if you’re in a niche market, demonstrating awareness of what’s going on in your industry/sector goes a long way; in fact, 93 percent of respondents in a 2016 Bloom Group study said high-quality thought leadership content improves their opinion of the company producing it (while 94 percent also pointed out that poor or no content lowers their perception). But what can you do to ensure the content has good return-on-investment and gets you more
Do customers consider your products commodities? Nearly two-thirds of companies report that their products or services have fallen into commodity traps, as customers assume that there’s little or no difference between vendors. This puts tremendous pressure on pricing - with both customers and suppliers - a third of manufacturers find themselves stuck in price-centric, buy-and-sell relationships with customers (an even higher percentage of SMEs are stuck). Unfortunately, commodity-based, transactional relationships almost always lead to limited bargaining power and low margins. According to marketing expert Andrew Thomas of the University of Akron, current marketing and distribution notions have wrongly convinced thousands of U.S. innovators that the sale and distribution of their products and services is better left in the hands of outside forces. But there's good news: breaking out of the commodity trap can re-energize your organization — and your profits. In doing this, focus on three commodity-trap escape routes: Innovate: If competitors copy your products, make your own versions obsolete. Few products retain popularity forever (Twinkies excepted). Nothing drives new margins like new products. Differentiate: Add value to existing products — via enhanced service and support, embedded intelligence, extended warranties, etc. — that distinguishes your offerings from those of competitors.
Think about this scenario: You are a contract manufacturing company that has been in operation for 20+ years offering your customers the great quality and customer service, at a low price. You have a long list of customers that seem more than content with the services and capabilities that you provide. You were able to survive the Great Recession of 2008-2009 with minimal losses to your customer base; however, over the past 2-3 years, sales have been declining, and some of your trusted markets (like oil and gas) haven’t been as lucrative as before. You know you need to do something new to produce the results you want, but where do you start? Start with marketing and innovation. According to the late Peter Drucker, “The purpose of business is to create a customer, the business enterprise has two and only two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” Think about it from another perspective, no one in the market knows how good your product or service is until after the sale, so before they buy, they only know how good your marketing is.
Adopted in the late 1990s, the North American Industry Classification System (NAICS) consists of codes set up by the U.S. Census Bureau to separate manufacturers by sectors, subsectors, and industries. Most companies are familiar with this system at a high level, as it’s used by the government to collect, assess, and distribute data about manufacturing in 5-6 year cycles. However, if analyzed properly, NAICS codes can be far more important than simple identifiers used for federal purposes - in fact, they can play an active role in your company’s long-term strategy. If you’re looking to diversify your sales into new and growing markets, it’s important to analyze your competitors are already doing, and NAICS codes offer insight into some goods, services, and capabilities your competition is currently offering to their clients. The NAICS structure assigns two different sets of codes: a primary code based on the single manufacturing process that generates the largest sales for your company, and multiple secondary codes for your other (if applicable) major sales generating services. The majority of competing manufacturers – sometimes clients, even – are assigned the same codes, and targeted market research enables a company to compare and contrast what services they offer