I recently attended to a cocktail event for manufacturers. Among other subjects, we discussed about the free trade agreement with Europe which is to come into effect within two years. Will your company take advantage of this new trading environment? Will European companies move here to nibble on our export shares in the United States?
Despite all the help to encourage businesses to take advantage of this new environment, few will succeed. Why? Because they have a habit and they will apply the same approach to a new and different context.
“Build it and they will come”
Manufacturers who rely on a product approach may be living their last decade. At the time these companies appeared, everything in their industry had to be done. Therefore, they designed products and services that would be used by one or more buyers by default. The “build it and they will come” motto sums up the movement pretty well, in the end.
Typically, these companies are doomed to compete on price, availability of materials or labor. Their product is almost a convenience; there is often little differentiation or added value. It is a safe bet to assume the company will face an unexplained decline in demand at some point. These companies don’t have much to hope for with the free trade agreement with Europe. Even worse, they might end up a target of acquisitions.
Those who will benefit from this are those who have a market approach.
The market approach
In contrast to the “product” approach, the market approach responds to unmet needs. The market approach involves reconsideration of the entire range of products and services in connection with the competition to differentiate. It explores in detail, the process of buyers and leads to micro segmentation. Identifying needs and buying behavior helps to create products and services that will have a better chance of success on local and export markets: an clear approach to the market, a shorter sales cycle and sales with good margins despite the vagaries of the economy.
The market approach is a scientific approach; methodical and “safer” than going with an offer that we hope “sticks”. Just continuously monitor the market and make any adjustments quickly if needed.
Take advantage of free trade
This is why manufacturers here have to immediately undertake strategic planning in order to position themselves for free trade with Europe or to rethink its current or future export markets.
Europeans are already putting their pawns in for the new agreement. Crossing the Atlantic and placing a point of presence in Quebec means they’ll eventually enter the US market. And the US market is our natural export market. Europeans have certainly sensed the opportunity to gain some of “our” shares.
Adopt the market approach. This will help speed up your export efforts in the US and Europe.