Measuring the Temperature of the USA Opportunity
PhoenixTM manufacture temperature profiling systems for use in heat treatment, steel manufacturing, and ceramic firing processes. The company was established in 2010 by three co-Directors with a combined experienced in the industry of over 60 years. Based in Ely, Cambridgeshire and with one Director based in Germany, PhoenixTM initially focused on European Markets, building a strong base business before looking to export further afield.
Dave Plester, Director and Co-Founder of PhoenixTM, explained their strategy, “We have always known that the US market presents huge potential for us, but we wanted to build up a ‘head of steam’ before targeting this region”. Several factors combined to bring the US opportunity to the fore, “Our main competitor in the country had been taken over by a large, inflexible US company and we were hearing reports that customers wanted more choice”, explained Dave. In addition, PhoenixTM’s visit to the AISTech 2012 conference in Atlanta, a key iron and steel technology conference, clearly demonstrated the US market was picking up. It seemed the timing was right for PhoenixTM to launch into the USA.
Before entering the market, Dave was aware that they would need to make some key strategic decisions. Firstly, they wanted to ratify their plan to invest in the US. They also needed to determine the best route to market – possibly through the traditional manufacturer’s representative? Which sector in the market would present the best opportunities and how should PhoenixTM position their offering to each of these sectors – through a lower price point, through additional customisation, through faster delivery times?
Dave contacted UKTI to find out what support was available for such marketing research. PhoenixTM International Trade Advisor, Graham Bilton, recommended the Export Marketing Research Scheme (EMRS). The EMRS is a UKTI Scheme providing professional advice and funding to help businesses understand the dynamics of a potential overseas market before creating an appropriate strategy for launching in this market and there is a nationwide team of professional Research Advisers to support individual companies.
Dave met with Alice Mamier, Research Adviser for the East of England, who helped him structure his research plan, encouraging him to talk with a wide range of people using prepared interview guides. Dave travelled to the US in the summer of 2012 with a busy meeting itinerary and spent ten days undertaking fifteen different interviews with manufacturer’s reps, end-users, manufacturers in the steel, brick, power hand tools and copper tubing industries, and decision makers in the auto and aerospace markets. The meetings covered the Mid-West, Southern States and the New York area.
The research confirmed the market potential for which PhoenixTM had hoped. They were also able to pinpoint the sector and regions offering the most potential. The large US competitor clearly had strengths, but many customers were dissatisfied with their after-sales service and high prices; Dave realised PhoenixTM could succeed by promoting their superior service offer and offering a slightly lower price point and, in some cases, a faster service time too. An important finding was the majority of the customers were adamant they would only deal with a locally based company (even if not US owned).
Armed with the research findings, PhoenixTM decided to contract experienced industry reps to promote their services in the USA; within the first year, they had recruited five with another to be appointed soon. To support these reps, PhoenixTM have developed a structured programme of training, customer-questionnaires to support sales calls and a UK-based Sales Manager for the US. The research clearly identified American customers preferred to deal locally, so PhoenixTM established a US business with a local telephone number and receptionist service. The company also gained the confidence to invest in a number of key US trade exhibitions and events identified by the research as important for business generation in the country and also to advertise in a well-respected US trade publication.
The consequent sales have been rewarding. From a start point of virtually zero, PhoenixTM first year’s sales to the USA topped $100k with forecasted sales for this year of over $200k.
Dave was delighted that he’d contacted the EMRS, “The Export Marketing Research Scheme gets you to focus on the market and how you’re going to succeed out there. Alice really helped us to think about who we should speak with and what to ask, giving us the structure to ensure we were going in the right direction. We now have some good initial sales and a strong plan for how to attack the market!”
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Topics: Market Research