Many medium-sized, owner-operated companies stand out for the high levels of commitment their employees demonstrate, at all levels of the business. They understand and "live" the true meaning of service. Within the company, people take responsibility for co-workers, and day-to-day interactions are friendly. Frequently, however, one key factor is overlooked: the need to invest time in business strategies, long-term planning, market observation and early innovation. Yet these factors are central to securing competitiveness and success. To specifically address these areas, the Bremen-based Steinbeis Transfer Center for Integrated Design (i/i/d) provides businesses with highly individualized advice, as well as support with issues pertinent to markets and strategic topics. In doing so, it draws on many years of expertise to help companies with their innovation and development processes.
The typical working day of the committed owner of a medium-sized enterprise is filled with a variety of tasks, all running in parallel to one another – telephone calls, client meetings that the boss absolutely has to be involved in, walks through production, maybe a series of short meetings with employees (each with a friendly handshake of course). Should a problem crop up, workers do not hesitate to ask directly for advice. They know their manager likes to try to find a solution himself. Everything revolves around the boss, who is totally involved and, in essence, is doing everything right. But these day-to-day issues really eat into his schedule, leaving no time to rest, let alone time to deal with overarching issues like planning, strategies and frontline implementation – tasks often pivotal to the role of a business owner.
A simple analysis of the numbers at a typical small enterprise highlights a key issue, usually in line with the Pareto principle: around 20% of products or clients account for roughly 80% of sales, the other 80% of clients only account for 20% of sales. Time investment in these small clients is correspondingly high, for little (if any) profit. Without a doubt, the problem is partly to do with the nature of daily business, which dictates everything.
Unprofitable products and clients are given attention for too long, and too much time is invested. This means opportunities are missed to adjust the company portfolio or engage in marketing. The competition is not observed closely enough. And if customer behavior changes, this may not be noticed until it is too late.
There are five key factors that dictate successful marketing: the company’s portfolio of services, the target group it sells to, the sales channels, the point of sale, and last but not least, communication. These factors are linked and have a mutual influence on one another. They are the threads of a cobweb that make up integrated marketing. A firm should aim to develop efficient market strategies, customer-oriented concepts, products and services that minimize dependence on larger customers, as well as the time invested in small customers and day-to-day business. It should also strive to tap into its full potential to develop solutions and innovate, and with this, make profit. It is here that companies can draw on the full support of the Steinbeis Transfer Center for Integrated Design (i/i/d).
One such company was Quadro, the Vechta-based producer of advertising materials. Its primary philosophy for years had been to keep the customer satisfied – whoever the customer, large or small. As a result, it was difficult to express what the company stood for, as over time it had developed a sprawling and confusing product and service portfolio. Worse still, some support services were not making money. Day-to-day business dictated everything, and no one had a clear overview of what was going on. Key actions and decisions were constantly being put on the back burner – activities such as acquiring major customers, or finding ways to manage small or large accounts on a differentiated basis. It had also needed to make distinctions between unprofitable clients or services and then organize its realigned portfolio according to a clear, systematic structure. Building on a business strategy developed with the i/i/d, Quadro settled on a relaunch of its brand and marketing communications. By the end of the process, people finally had time and capacity again to focus on key tasks and develop new products and offerings likely to generate real profit.
One reliable starting point for the decision-making process outlined above is a close examination of business prerequisites and an assessment of market requirements. Continually re-examining key factors makes it possible to spot (early) any adjustments that may need making and take the appropriate corrective measures, with the ultimate aim of creating enough space to develop new concepts and innovations. Central to a company’s ability to launch new offerings and reach out to the right target group is how well it knows the target group’s preferences and tendencies, its values, life goals, lifestyle or attitude. This must be understood, as different customers need to be approached differently.
This two-pronged strategy – separating the wheat from the chaff and launching new offerings early – results in less time wasting and higher profits.
Apart from integrated marketing services, the i/i/d portfolio includes communication planning, brand development, industrial design and interface design. These services culminate in products, processes and campaigns that arouse interest in clients and users, engender client satisfaction and thus provide a foundation for long-term success.
Prof. Dipl.-Des. (FH) Detlef Rahe (MFA)
Steinbeis Transfer Center i/i/d Institute for Integrated Design (Bremen)
su0417@stw.de