Case Study: From Red to Black, Generate Double-Digit Sales Increases Through Strategic Marketing

The conventional wisdom is that when things are tough and sales are declining management should reduce all costs, excluding marketing and sales. If things turn bad, the management should reduce all other expenses, except sales, since it is the most effective method to increase revenue.

This case study on business-to-business highlights how, if implemented correctly, strategic marketing can sometimes be a faster efficient, more efficient, and efficient way to increase sales.

The Situation

The brand of a manufacturing company was well-known and the long-standing company was able to survive and even thrive through multiple economic cycles throughout its lengthy story. A highly competent management team was in place and was balancing the demands of operational requirements and cash flow needs.

However, sales for the main division of the manufacturer declined and it was experiencing a serious slump. In the absence of volumes, the company wasn’t able to cover its costs. The rising cost of energy and raw materials had a negative impact on profit margins.

Distribution and Product Channels

Market perceptions about its products were not always positive. The company had a solid reputation for being a producer of “green” building materials however, it was not regarded as a leader to solve the issues of the end-user. The company did not have the resources to compete with pricing.

While the company’s products were highly regarded by specifiers as well as designers due to their sustainability as well as other characteristics of performance, However, many customers were put off by the cost of the product, and at times found these products difficult to use and of poor quality.

The low sales volume and slow inventory turnovers reduced the value of the company to its channel partners and prevented new distributors from joining the business. To reduce costs existing distributors trimmed their inventory of company products while removing slower-moving products made by the company entirely.

The company’s management then hired an all-service marketing company and began a comprehensive advertisement and marketing campaign. The message promoted the eco-friendly nature of the company’s products, however, it was unable to convey the company’s other characteristics of the performance.

Selecting Strategic Priorities

Instead of launching the typical marketing program the business needed to determine:

It is a high-volume application…

* In which case it might have the potential to be priced competitively…

It has an entirely different story to tell…

* In a market that is growing, that allows growth without the need to compete for markets share…

* Reestablish its importance to distributors.

Internal Assessment

The primary product of the company is a fiberboard that is utilized for a variety of uses by construction professionals. Reduced sound transmission within structures was the best way for the company to create volumes. Multi-family projects that require the reduction of sound could require several truckloads of products. The company had already advertised this product but wasn’t focusing on it.

The product’s noise reduction performance as well and was affordable for flooring applications. It was put in place very different from the other products that dominate the market. The competing products were directly sold to specialist contractors without the need for traditional distributors or contractors.

The housing market was in decline without any hope of recovery. The inability to pay to make down payments, the overly demanding mortgage requirements, and the fear of falling value of homes caused a sluggish market.

However, people still needed homes to live in. The construction of apartments, though decreasing, was still feasible, and an increase in demand was expected in the near future. Changes in demographics were predicted to increase demands for housing in the student sector as well as assisted living. Changes in consumer preferences were driving the demand for urban life. The Federal government’s investment in affordable housing, typically with the help of apartment buildings was rising to stimulate economic growth.

Implementing the Strategy

A number of applications had been discovered that met the company’s strategic goals. Marketing needed to put all its energy into implementing the plan as efficiently and cheaply as possible in the face of larger, more capitalized competitors who dominated the market. Each issue that was perceived by customers which could hinder sales had to be addressed.

How do I

The marketing team used various strategies to help implement the new strategy:

Bring It In. To save money The company ended its relationship with the full-service marketing agency outside and implemented marketing within the company, with the assistance of independent experts.

The messaging was aligned. The marketing team created an engaging tagline that was in line with the new strategy. The tagline was straightforward and specific, but it was also applicable to different product lines.

Created Aligned Materials. The team communicated their solution and addressed the known issues using new tools for marketing that are available in an array of formats, such as packaging, videos, website sales aids installations and product sheets as well as trade show booths, and much more.

Access to All Channels. The team utilized all affordable channels to spread information, including the company’s site, YouTube as well as industry-related websites of third parties.

Quality Improvements. Marketing team members communicated quality improvements that would increase sales acceptance to operations. In the Operations Department innovated and made improvements. Third-party testing labs were hired to address concerns regarding the performance of end-users and increase confidence.

Bottom Line

The change in the marketing strategy helped significantly in turning declines in revenue into year-over-year sales growth of 20% or more. Finding and targeting an increasing market aided the growth in sales. Market share growth was an aim but was not necessary for major growth in revenue recurring.

Organizations that adhere to conventional wisdom possibility of leaving their core issues not being identified and failing to transform sales. Strategic marketing avoids this risk. Strategic marketing gives the sales force a more effective product to promote and a larger market to sell it to which results in increased sales in a short time.

The business could not sell its way from declining revenue without first altering its go-to-market strategies. It was required to identify an opportunity to market that satisfied its goals for strategic growth and offered an opportunity to focus on the achievement. Marketing messages that are persuasive can help with marketing in a manner that selling through individuals or groups could not.

If it is done in a creative manner, and with an eye on the cost Strategic marketing can be the most efficient way to drive sales growth.