Around the time you read this I’ll probably be uncorking a celebratory cold beverage to mark the beginning of my 24th year as an independent consultant on March 6th. I must say that it has been an enjoyable, rewarding and often challenging experience, but more importantly, the ride itself has been a very interesting and educational one. Over the years I’ve worked with clients ranging from (literally) a 1-man shop to multinational conglomerates and pretty much everything in between.
Yet despite the magnitude and diversity of experience I’ve gained over the years, I’m always surprised when something that should have been obvious for a long time surfaces as somewhat of a revelation. Just the other day in a conversation with a longtime client, it occurred to me why companies that are owned and/or managed by other than North American entities have such a hard time relating to the challenges here.
Okay, you’re probably thinking: Is it really all that difficult to understand that other countries and regions of the world have a different market environment than we do? Well, no, it’s easy to see that there are differences; it’s identifying and understanding the underlying roots of those differences that create a challenge for many companies, especially those trying to interpret and relate the substance of those differences to non-domestic managers. To put this notion into proper perspective, let me offer a well-documented example of what I mean…
Anyone who has tried to market distribution-centric equipment here in North America has probably learned that differences in the topology of the distribution network in Europe (i.e., many customers connected to a single distribution transformer) is in stark contrast with the layout here where only a few customers are linked to a given transformer in all but the most unusual cases. This fundamental difference in distribution network architecture has for decades been an impediment to replicating the success of European-style power line carrier (PLC) based load management systems in this country. So, short of completely redesigning our distribution networks, we simply cannot apply European distribution metrics to domestic applications.
However, when it comes to differences in effective global marketing strategies, the underlying reasons for the differences between one region and another – especially the level of understanding their true impact – may not be as apparent as when purely technical issues are involved. (For some reason, developing a global mindset around technical issues sometimes seems to be easier than achieving consensus on market-related issues.) Indeed, such is the case with what I’ll refer to here as market diversity. And, it was upon my further contemplation of this market diversity that I came to realize just how different the domestic utility market is from the rest of the world.
By market diversity, I mean that the North American utility marketplace has – and has always had – many more individual utility enterprises than any other part of the world. But, besides being a very large market with over 3,000 utility companies operating in the US, Canada and Mexico, it is also a very diverse market with large and small; public and private; monolithic and vertically integrated; and so forth. That’s where my revelation really began to crystallize. For the first time, it hit me why companies whose ownership and/or management are located elsewhere often have such a hard time understanding what it takes to be successful here.
Marketing to a few prospective companies at any given time, as is usually the case in countries where there are just a few utilities, or sometimes only one, is a very different challenge from marketing to hundreds or thousands of potential buyers. While this might at first seem to be stating the obvious, I’ve found that a lot of international suppliers do not adjust their marketing strategies to accommodate the uniqueness and vast differences in the market diversity here compared to what they are used to dealing with in other parts of the world. In fact, I know they don’t because several of my international clients are constantly having their marketing budgets squeezed by corporate management that can’t understand why they need bigger budgets for market research, advertising and promotion here than their rest-of-world counterparts. The answer is simple, although it may not be readily apparent, especially to someone making the assessment from afar: We have Madison Avenue; they don’t!
Whether you embrace or despise the endless stream of hyperbola that Madison Avenue cranks out daily in the name of advertising and promotion, the fact is, they do it for a good reason: it works. And the reason why it works is that marketing is a critical component of a diverse market like ours where differentiation is a fundamental ingredient in success. In my view, a higher dose of marketing, market research, promotion, etc. is necessary in virtually any market where a substantial diversity of buyers, sellers or both is present. But nowhere else is it as vital to success as it is in North America where sameness is all around us.
Like it or not, we need help differentiating the whitening toothpastes from the breath-freshening ones, and of course, the two dozen or so that do both in a variety of flavors and colors. For whatever reasons – whether due to lack of time, interest, aptitude (ineptitude?) or other reasons – most of us are accustomed to being told why we should favor one product or service over another. While we might not think we want that – or even accept that we are influenced by it – the Madison Avenue factor is ever-present, a constant influence in much of our daily routine.
Thus, a key ingredient in the formula for succeeding in this unique North American marketplace is recognizing and pro-actively addressing the market diversity it represents. If dealing with this market diversity is not integral to your marketing strategy, you might want to look in the mirror to see if your toothpaste is really the best one for the job. I can assure you that the Madison Avenue factor will be there – can you really afford to ignore it?
- Mike
Behind the Byline
Mike Marullo has been active in the automation, controls and instrumentation field for more than 35 years and is a widely published author of numerous technical articles, industry directories and market research reports. An independent consultant since 1984, he is President and Director of Research & Consulting for InfoNetrix LLC, a New Orleans-based market intelligence firm focused on Utility Automation and IT markets. Inquiries or comments about this column may be directed to Mike at MAM@InfoNetrix.com.
©2006 Jaguar Media, Inc. & Michael A. Marullo. All rights reserved.
Yet despite the magnitude and diversity of experience I’ve gained over the years, I’m always surprised when something that should have been obvious for a long time surfaces as somewhat of a revelation. Just the other day in a conversation with a longtime client, it occurred to me why companies that are owned and/or managed by other than North American entities have such a hard time relating to the challenges here.
Okay, you’re probably thinking: Is it really all that difficult to understand that other countries and regions of the world have a different market environment than we do? Well, no, it’s easy to see that there are differences; it’s identifying and understanding the underlying roots of those differences that create a challenge for many companies, especially those trying to interpret and relate the substance of those differences to non-domestic managers. To put this notion into proper perspective, let me offer a well-documented example of what I mean…
Anyone who has tried to market distribution-centric equipment here in North America has probably learned that differences in the topology of the distribution network in Europe (i.e., many customers connected to a single distribution transformer) is in stark contrast with the layout here where only a few customers are linked to a given transformer in all but the most unusual cases. This fundamental difference in distribution network architecture has for decades been an impediment to replicating the success of European-style power line carrier (PLC) based load management systems in this country. So, short of completely redesigning our distribution networks, we simply cannot apply European distribution metrics to domestic applications.
However, when it comes to differences in effective global marketing strategies, the underlying reasons for the differences between one region and another – especially the level of understanding their true impact – may not be as apparent as when purely technical issues are involved. (For some reason, developing a global mindset around technical issues sometimes seems to be easier than achieving consensus on market-related issues.) Indeed, such is the case with what I’ll refer to here as market diversity. And, it was upon my further contemplation of this market diversity that I came to realize just how different the domestic utility market is from the rest of the world.
By market diversity, I mean that the North American utility marketplace has – and has always had – many more individual utility enterprises than any other part of the world. But, besides being a very large market with over 3,000 utility companies operating in the US, Canada and Mexico, it is also a very diverse market with large and small; public and private; monolithic and vertically integrated; and so forth. That’s where my revelation really began to crystallize. For the first time, it hit me why companies whose ownership and/or management are located elsewhere often have such a hard time understanding what it takes to be successful here.
Marketing to a few prospective companies at any given time, as is usually the case in countries where there are just a few utilities, or sometimes only one, is a very different challenge from marketing to hundreds or thousands of potential buyers. While this might at first seem to be stating the obvious, I’ve found that a lot of international suppliers do not adjust their marketing strategies to accommodate the uniqueness and vast differences in the market diversity here compared to what they are used to dealing with in other parts of the world. In fact, I know they don’t because several of my international clients are constantly having their marketing budgets squeezed by corporate management that can’t understand why they need bigger budgets for market research, advertising and promotion here than their rest-of-world counterparts. The answer is simple, although it may not be readily apparent, especially to someone making the assessment from afar: We have Madison Avenue; they don’t!
Whether you embrace or despise the endless stream of hyperbola that Madison Avenue cranks out daily in the name of advertising and promotion, the fact is, they do it for a good reason: it works. And the reason why it works is that marketing is a critical component of a diverse market like ours where differentiation is a fundamental ingredient in success. In my view, a higher dose of marketing, market research, promotion, etc. is necessary in virtually any market where a substantial diversity of buyers, sellers or both is present. But nowhere else is it as vital to success as it is in North America where sameness is all around us.
Like it or not, we need help differentiating the whitening toothpastes from the breath-freshening ones, and of course, the two dozen or so that do both in a variety of flavors and colors. For whatever reasons – whether due to lack of time, interest, aptitude (ineptitude?) or other reasons – most of us are accustomed to being told why we should favor one product or service over another. While we might not think we want that – or even accept that we are influenced by it – the Madison Avenue factor is ever-present, a constant influence in much of our daily routine.
Thus, a key ingredient in the formula for succeeding in this unique North American marketplace is recognizing and pro-actively addressing the market diversity it represents. If dealing with this market diversity is not integral to your marketing strategy, you might want to look in the mirror to see if your toothpaste is really the best one for the job. I can assure you that the Madison Avenue factor will be there – can you really afford to ignore it?
- Mike
Behind the Byline
Mike Marullo has been active in the automation, controls and instrumentation field for more than 35 years and is a widely published author of numerous technical articles, industry directories and market research reports. An independent consultant since 1984, he is President and Director of Research & Consulting for InfoNetrix LLC, a New Orleans-based market intelligence firm focused on Utility Automation and IT markets. Inquiries or comments about this column may be directed to Mike at MAM@InfoNetrix.com.
©2006 Jaguar Media, Inc. & Michael A. Marullo. All rights reserved.
