Published On: Mon, Nov 10th, 2014

Joined up marketing

Independent consultant Anthony Pratt believes the industry needs to create the conditions in which small businesses can thrive

Anthony Pratt 2I remember asking the CEO of a large kitchen furniture manufacturer, “What is the difference between a premium brand cabinet and a budget one?” His answer was, “The Price”. Adding that the differences in specification aren’t great; it’s the brand that determines the selling price. The window industry isn’t much different. We have a small number of national companies, accounting for about 20% of the market and selling at a substantial premium. Realistically, their products aren’t much different from those of their smaller competitors; but their brand position supports their premium price. The problem for the remaining 80% of the market, where the interface with the final customer is through small businesses, is that the product has been commoditised. There are no consumer brands. Everything is down to the reputation of the local window company; and that’s hard.

The product development and logistics records of the systems companies are outstanding. The machinery suppliers and software houses have been equally creative; and standards of fabrication are generally high. Organisations such as FENSA and the availability of insurance backed guarantees have driven up standards, ensured compliance with statutory regulations and provided reassurance to customers. But the playing field has become level and, for the smaller players, developing a sustainable competitive advantage is very difficult. So how is it that, with such a great record of creativity and innovation, we have allowed the product to become commoditised and put the many small businesses, which supply it to the final customer, in such a difficult strategic position? The simple answer is that the industry has been sales driven rather than market led. Systems companies sell to fabricators; fabricators to installers; and installers to the final customer. It’s a 1980s approach to a 2014 market.

There’s no joined up marketing strategy that starts with the identification of the final customer, matches the product proposition to the target market and builds a strategy around it, involving each part of the distribution chain. Consumer targeting and profiling tools, such as Acorn, are rarely used and often not even known about. Because of this fragmented approach, media selection is equally fragmented and costs the collective distribution chain considerably more than would be achieved through an integrated strategy. In addition the messages conveyed are inevitably variable and inconsistent, which, from a consumer’s perspective, is confusing.

At a time when marketing to consumers is becoming overwhelmingly web driven, there are few examples of integrated website strategies, within systems companies’ or fabricators’ distribution chains. Instead, there is a plethora of basic websites that are often little more than on-line brochures and lack any serious interactive capability. As a consequence, too few businesses have active and effective database marketing processes. The systems companies do produce some marketing materials for their fabricators; but it’s generally fairly basic. Some of the marketing support packages around today are no more advanced than the support package I put together for Halo fabricators, when I was CEO of Bowater Halo thirty years ago. So they’ve not really come very far in that time.

The challenge that the industry now faces is to create the conditions, in which the small businesses, which form the main interface with the final customer, can thrive. If they thrive, then so will the rest of their supply chains. But many of these businesses can’t achieve this on their own. They need help and support in achieving high standards of operational excellence. They need help to embrace modern marketing practices. And they need branded products that will lift them out of the commodity trading arena. The only businesses that can drive this change are the systems companies and perhaps some of the larger fabricators; and I sense that one or two of them are beginning to recognise this. So I’m hopeful that we will start to see our industry moving forward into an exciting new era.