The 2020 Mid-Year Economic Update_long

Assessing Growth Potential: Go Beyond Broad Market Descriptions

Bill McCleave: Dig deep to assess new and existing markets.
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Assessing your future market potential was the topic of a presentation by Bill McCleave at last week’s Power Transmission Distributors Association and Fluid Power Distributors Association meetings in San Diego, CA. As he explained in the PTDA Annual Report: "For the distribution business serving the present economy, things are challenging but not necessarily impossible. There will be vibrant markets in the future with real customers with real needs. If distributors can discover those needs and provide solid solutions, they have a bright future."
 
In his presentation, he outlined what distributors need to assess before moving into new markets or trying to grab more market share from current markets, including: what the owners want from the business; the future viability of served and potential markets; the health and forecasts of customers; how they compare with competitors’ serving these markets; the future viability of key suppliers; and available resources to serve new and current markets.
 
I’ll hone in on one point he made during the presentation when discussing market assessment. Market segmentation must go beyond a general description to really get at what a distributor can and should go after. For example, we’ve heard (and reported in the pages of MDM) that "Alternative Energy Markets" can be a great opportunity for distributors that have the resources to serve them. But what are "Alternative Energy Markets"?

There’s more to it. Break it down into Solar, Wind, Biofuels and so on. But then to really determine potential customers for your products and services, it’s necessary to break down those sub-segments even further. For example, Wind can be broken into areas such as Blade Production, Speed Control, Electrical Control and Maintenance. All different areas with very different needs.

 
Read more about alternative energy markets:

 

 

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