MARKETING FOR GROWTH AND BRAND AWARENESS MARKETING IS
MARKETING FOR GROWTH AND BRAND AWARENESS: MARKETING IS FOOD, NOT MEDICINE Teresa Schell President/Owner Vive LLC PRESENTED BY:
Marketing for Growth and Brand Awareness: Marketing is food, not medicine Teresa Schell President/Owner, Vive LLC
Today in history…
Successful brands “Your brand is formed primarily, not by what your company says about itself, but what the company does. ” -Jeff Bezos, Founder of Amazon. com
Successful brands
How do companies market?
Survey participants Job Function Corporate Mngt 38% General Mngt/Operations 18% Miscellaneous Business Development/Planning Purchasing Account Mngt/Sales R&D Accounting 15% 11% 8% 8% 1% 1%
Annual company revenues $1 B or > $500 M - $999. 9 M $100 M - $499. 9 M $50 M - $99. 9 M $25 M - $49. 9 M $10 M - $24. 9 M $5 M - $9. 9 M < $5 M Don’t Know 0% 5% 10% 15% 20% 25%
Company uniqueness Quality & Service Co-extrusion barrier expertise in food packaging Quality, Price, Delivery Versatility, low to medium volumes High quality products & service Innovation Great customer service Personal care Global sourcing backed by expert after sales staff Quality & Technology Custom TPO’s Aesthetics & low maintenance, performance and warranties that are unmatched in the industry Custom engineered Whitest product on the market Product support Small company w/low overhead 40+ years injection molding experience Sell a vented stretch film that is unique to the market
Company uniqueness Co-extrusion barrier expertise in food packaging Versatility, low to medium volumes Aesthetics & low maintenance, performance and warranties that are unmatched in the industry Innovation Whitest product on the market Custom TPO’s Sell a vented stretch film that is unique to the market
Company uniqueness No differentiation = no branding = no long-term profitability
Company uniqueness Flexible payments terms Knowledge management systems that ensure accurate communication and rather flawless performance for short-run job shop. We take on jobs that no one else wants (or can). We print plastic molds We help from concept to production with extensive capabilities in CAD, prototyping, product qualification and several mfg. sites Independent & confidential. We are not tied to process, platform or material and IP developed is the clients.
Got brand position statement?
How would you rate your marketing? Informal/Adhoc Approach Dedicated - Strong Conservative - Moderate Need s Low Attentio n- ed t a dic ng o r - St De Conservative - Moderate Needs Attention - Low Very Minimal - Informal/Adhoc Approach
Sales & marketing alignment 1 - Not all aligned 2 - 3 - 4 - 5 - Very well aligned 0% 10% 20% 30% 40% 50%
Marketing Challenges Marketing to a growing number of people involved in the buying process Generating public relations 'buzz' Demonstrating marketing results/impact on the business Competing in lead generation across multiple media (paid searches, webinars to print ads) Generating perceived value in cutting edge product benefits Generating high volume of leads Generating high quality leads Developing or evolving the company's brand Working within budget or time constraints Allocating marketing budget across the mix 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Do you have a published marketing plan?
2014 Marketing Budget Don't Know $1 M - > $500, 000 - $999, 999 $250, 000 - $499, 999 $100, 000 - $249, 999 < $100, 000 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
How do you market?
How well do you measure success? We can measure most things successfully, but there are still big blind spots 42% We can measure a few isolated elements of marketing, but not many 24% We can't measure the impact of any of our marketiing 21% We have a comprehensive measurement procedure & can demonstrate ROI on the majority of our marketing 13%
What is being measured?
Which strategies are effective?
Which strategies are effective?
Which strategies are effective?
Company invested marketing Public relations Consult with advertising/marketing agency Membership in industry associations Videos Customer testimonials posted on website Digital advertising Direct mail promotions Print advertising Exhibit at business conferences or trade shows Attend business conferences or trade shows 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
How many logo renditions sinception?
How often are e. Newsletters used?
Which social media platforms are used?
Sales tools? Webinar/webcasts Video Power. Point presentations Oral communication only - no materials Sales material / collateral 0% 10% 20% 30% 40% 50% 60% 70% 80%
Rate your website Basic, user-friendly design 61% Needs a face lift 20% Marketing savvy with responsive design 19%
What’s your SEO strategy? Not familiar with SEO Organic with use of keywords 3 rd party SEO house Thomas. Net Pay-per-clicks 0% 10% 20% 30% 40% 50% 60%
Tradeshow attend vs. exhibit
Popular Tradeshows
Tradeshow ROI? Yes, from attending only 20% Yes, from exhibiting only 16% Yes, from both 29% No 15% Uncertain 20%
Internal communication
Build Marketing for Sustainability Marketing is a journey made of valuable communication content. Marketing is food. Not medicine.
Marketing Questions Teresa Schell tschell@vive 4 mfg. com
INCREASING PROFIT MARGINS & SALES: GOING ON OFFENSE Tom Langan Owner WTL Trading PRESENTED BY:
40 Increasing Profit Margins & Sales: Going on Offense Tom Langan, WTL Trading Profit Margin Management Consulting
High Cost of Hope-for-the-Best Oil Producers and Related Industries $/bbl 120 Crude Oil Futures 110 100 90 80 70 60 50 -07 Jan -08 Jul -08 Jan -09 Jul -09 Jan -10 Jul -10 Jan -11 Jul -11 Jan -12 Jul -12 Jan -13 Jul -13 Jan -14 Jul -14 Jan -15 Jul -15 Jan -16 Jul -16 40 Jul • Crude oil drillers cut back as lower crude oil prices lead to layoffs • Sand producers cut back – less fracking, less sand • US Steel lays off 800, blames low oil prices; steel town employees at risk • Ethanol producers (farmers) squeezed by low gasoline prices
42 What Margin? Several measures … • Nominal Gross Margin (NGM) = Product Price – Resin Price • Gross Margin = Product Price – % Resin x Resin Price • Net Margin = Product Price – % Resin x Resin Price – Fixed Costs where % Resin is typically 45%. … but actions to secure and increase are the same.
43 Summary Resolved : Going on offense for profit margins will lead to higher margins and sales. Going on offense means: 1. Establish Target Margins for existing and new sales 2. Get in Position to execute forward resin transactions 3. Execute when target margins may be achieved Same strategy as oil refiners and some chemical producers. Results : lower risk, secure and higher margins & sales, competitive advantage over hope-for-the-best competition
44 Managing Margins: Reactive or Proactive I. Reactive = Hope for the Best II. Proactive = Take Control • Floating resin costs vs. fixed price products • Profit margins reflect volatile resin prices • High resin costs cost cuts elsewhere • • Risk of high resin costs reduced Target profit margins achieved Cost cuts not required Competitive advantage
Taking Control: Like Refiners & Producers Oil Refiner NGM ($/bbl) = Refined Product Price – Crude Oil Price Execution is easy, futures market provides means (including options) for refined products and crude oil transactions. Chemical Producer NGM ($/lb, $/gal) = Petrochemical Price – Feedstock Price Execution is easy to challenging, futures market helpful. Customers (processors) necessary forward petrochemical sales. Resin Processor NGM ($/lb) = Product Price – Resin price Execution is challenging, futures market developing, different price indexes, requires good customers forward product sales. 45
Polypropylene Processor for Automaker Hope-for-the-Best • Customer requires fixed price product without price escalators • Processor buys resin at monthly index, so profit margin depends on resin price Nominal Gross Margin ($/lb) 1. 10 0. 85 1. 05 0. 80 1. 00 0. 75 0. 95 0. 70 0. 90 0. 65 0. 85 0. 60 0. 80 t-1 1 Jan -12 Ap r-1 2 Jul -12 Oc t-1 2 Jan -13 Ap r-1 3 Jul -13 Oc t-1 3 Jan -14 Ap r-1 4 Jul -14 Oc t-1 4 1. 15 0. 90 1 1. 20 0. 95 Oc Ap Jan -11 r-1 1 Jul -11 Oc t-1 1 Jan -12 Ap r-1 2 Jul -12 Oc t-1 2 Jan -13 Ap r-1 3 Jul -13 Oc t-1 3 Jan -14 Ap r-1 4 Jul -14 Oc t-1 4 1. 50 1. 00 r-1 1. 60 1. 25 Jul 1. 70 1. 05 -11 1. 80 1. 30 Ap 1. 90 1. 10 Jan 2. 00 -11 Product Price vs Polypropylene Price ($/lb) 46
Polypropylene Processor for Automaker Taking Control Processor buys forward resin to support fixed price product when target margin may be achieved Product Price vs Polypropylene Price ($/lb) 1. 60 r-1 1 Jul -11 Oc t-1 1 Jan -12 Ap r-1 2 Jul -12 Oc t-1 2 Jan -13 Ap r-1 3 Jul -13 Oc t-1 3 Jan -14 Ap r-1 4 Jul -14 Oc t-1 4 Ap Jan -11 1. 50 1. 25 1. 00 1. 20 0. 95 1. 15 0. 90 1. 10 0. 85 1. 05 0. 80 1. 00 0. 75 0. 95 0. 70 0. 90 0. 65 0. 85 0. 60 0. 80 r-1 1 Jul -11 Oc t-1 1 Jan -12 Ap r-1 2 Jul -12 Oc t-1 2 Jan -13 Ap r-1 3 Jul -13 Oc t-1 3 Jan -14 Ap r-1 4 Jul -14 Oc t-1 4 1. 70 1. 05 -11 1. 80 1. 30 Ap 1. 90 1. 10 Jan 2. 00 Nominal Gross Margin ($/lb) 47
To Take Control, First Get in Position A. Specify Objectives 1) Target profit margins for products 2) Customer needs/wants for product prices 3) Resin prices required to achieve targets B. Put It in Writing 1) Identify and prioritize means and strategies to achieve objectives 2) Assign responsibilities to execute forward transactions 3) Summarize in a concise Policy; obtain C-level buy-in 48
Then Execute Physical Resin a) Fixed price purchases from suppliers b) Purchases of price spreads of resins to more actively traded proxies (ethylene, propylene, NGLs). Price spreads are producers’ profit margins. c) Convert discrete price (spot or monthly index) purchases to PCW average price What’s in it for suppliers? Opportunities to increase their profit margins and secure sales. Financial Resin a) Futures (resins and proxies) b) Same as b above, but spreads are financial c) Swaps (index-settled, fixed for floating deals with counter-parties)
50 Resin and Olefin Futures • Resin and olefin futures settle against PCW daily prices. • PCW prices are correlated with more commonly used monthly price indexes (IHS/CMAI, CDI). • So resin futures are fair forward prices.
Forward Curves 85 0. 65 75 Ho. PP LLDPE 0. 55 65 0. 45 55 HDPE PGP Ethylene 5 WTI c-1 De 5 t-1 Oc 5 g-1 Au Jun r-1 Ap Fe c-1 De -15 35 5 0. 25 b-1 5 45 4 0. 35 4 Take-control processors purchase forward resins (or correlated proxy or options) when target margins may be achieved on existing and new sales. $/bbl 0. 75 t-1 Hope-for-the-best processors gamble that resin prices are the same or lower when future becomes present. Resin, Olefin, and Crude Oil Prices $/lb Oc • For most processors, forward resin price curves are inverse of future profit margins. PCW 1 -21 -15
What Customers? • High volume, credit-worthy, and reliable -- the customers everyone wants (automakers, big box retailers, MDMs). • Interested in fixed price forward products at or below their budget or other target levels. • May be interested in options: • Downside price protection accompanying fixed price purchases • Upside price protection instead of fixed price purchases
Margin Management Strategies Strategy Resin Product Result Hope for the Best Floating Fixed Margin will equal market and competitors; downside risk Take Control Buy fixed price Sell fixed price 1) Floating Use call options Use put options 2) Sell fixed Buy call option price 3) Sell call option 1) Floating Buy fixed price & put option 2) Sell fixed price Sale of forward margin at target; eliminates downside risk 1) Eliminates upside resin price risk but enables downside price participation 2) Sale of margin at or above target 3) Sale of margin at or above target or at market 1) Eliminates resin price risk and provides downside resin price protection 2) Eliminates margin risk and provides downside resin price protection Rules: 1) Scale into positions 2) Sell up to 75% forward
Options Give You (and Customers) Options Market Expectation Higher Choices w/o Options Buy fixed price very somewhat Choices w/ Options · Buy fixed price · Buy call spread · Sell put spread Neutral Do nothing · Sell options · Sell option spreads · Do nothing Lower Sell fixed price · Sell call spread · Sell call · Buy put spread · Buy put · Sell fixed price somewhat very A whole other topic, but a gold mine of opportunities for processors and suppliers.
Mission Statements FTN To lead our valued customer base in the development and manufacture of highly engineered plastic products and materials, adding value to each product solution offered. Strive to exceed customer expectations for Quality, Delivery, and Service. LKS To be a world class supplier of molded products and component systems. Our customers must feel that we provide exemplary service, quality, and dependability. PTI Earn the appreciation and respect of our customers , associates, and communities. Sound good, but what about price? What if they mentioned price guarantee, security, options, …? What if you did?
Takeaways Take control of forward resin costs to reduce risk and increase margins and sales. • Get in Position, then Execute when target margins may be achieved. • Increase sales by helping customers with their targets. Take the Money when the money is good!
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