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The market has evolved over the years and customers today are looking for a complete solution package which necessitates customer-centric marketing

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Marketing Management Changing economics of marketing mantras

Aug 31, 2016

The article traces the evolution as well as the latest marketing trends and strategies in the machine tools sector, while discussing the importance of providing customised service packages to customers, who are increasingly looking for turnkey solutions in the global market

There was a time when very few companies catered to the machine tool sector in India. HMT and Cooper had a monopoly here and there was no marketing involved as it was more a seller’s market. Subsequently, there was an invasion from foreign brands, especially from Germany, Japan and USA. Most had Indian agents who acted as middlemen and there was proxy-marketing involved due to which customers had no trust in them. They also failed to provide after-sales service.

In the meantime, low-cost local manufacturers started making standard machines with their own sales and marketing network. After the liberalisation policy was passed in India in 1991, foreign brands started to establish their local offices in India. Globally, the European machine tool sector got consolidated and many of them migrated to the Far East.

Key issues in machine tools marketing

Today, across industries, there have been several key issues witnessed, in regards to the machine tools marketing sector in India. While the challenges are many, Avinash Khare, Head – Technology Centre, Indian Machine Tool Manufacturers’ Association, opines that Indian manufacturers are inclined in making standard machines more, rather than customising them for specific requirements, because customers look for turnkey solutions.

He further added, “Customers today are not only looking for efficient machines, but also want service packages. However, Indian manufacturers are not providing this solution – they are just selling basic machinery.”

Another issue is quality. Khare explains that the quality of paint, aggregates, etc is low due to which Indian machinery looks old and ages very fast. Furthermore, “There is a lack of process discipline which accumulates into poor reliability of products,” he says.

Thirdly, the approach of customers in India may often act as a hindrance. “They are not ready to bear the expense of excellence coming from Indian companies, while the partiality remains for foreign brands,” elaborates Khare. So, a solution for this is to educate customers and set bench-marking and proving exercises which will challenge customers’ perceptions.

Customer-centric marketing

The market has evolved over the years and customers today are looking for a complete solution package. They are demanding reduced costs, improved quality and meeting timelines. “Hence, the solution they need is not just a machine but a service package that will aid in meeting these demands. This needs a change in the thought process and engineers have to evolve their strategy so as to meet this demand,” says Dattatraya Navalgundkar, General Manager — Organisation Strategy, Kirloskar Pneumatic Co Ltd.

T K Ramesh, Chief Executive Officer, Micromatic Machine Tools Pvt Ltd, also suggests that the marketing strategy implemented by the sales engineer is of prime importance. He opines that the sales engineer must learn to be good at maintaining relationships with customers. “Selling does not work on logic. The cerebral and emotional quotient of customers must be taken into account,” he says. Additionally, the sales engineer must also know and study their business thoroughly.

Psychology of selling

Thus, it is crucial to understand a customer’s desires, fears and motivation. Without this understanding, we can only guess as to why they do or don’t do what they are supposed to do, which is buy from us. Hence, it is important to analyse the human mind so that the sales engineer can pitch to the customer keeping in mind the mindset and priorities of the customer. “We need to recognise a customer’s individuality – they are not all the same, so they should not be treated the same. There are positive customers who tend to see what’s there and negative customers who tend to see what’s missing. It is important to recognise this differentiation in customers before making a pitch to them,” elaborates Ramesh. Navalgundkar also emphasises on the importance of providing customised service to customers where their convenience is taken care of. “Providing a single point of contact for after-sales service and giving warranty of service are some of the ways in which a customised deal can be given,” he explains.

Theory in buying behaviour

Ramesh has categorised buying behaviour of customers into five different stages and it is called Maslow’s Motivation Theory in Buying Behaviour. The following are the five stages:

  • Psychological: This group includes companies who cater to first-time buyers who have budget constraints

  • Security: This group includes companies who are looking for repeat buyers and are looking to expand their business.

  • Belonging: This group segments those companies who are looking to make an entry into a band or group. For instance, a car manufacturer moves on from basic cars to luxury cars.

  • Esteem: This group of companies are looking to better themselves on a quality-cost-delivery basis.

  • Self actualisation: These companies are the leaders of the industry.

Thus, the sales engineer needs to identify which of these five categories his customer belongs to and then modify his sales strategy accordingly so that the pitch will be more customised.

Personality styles overview

Ramesh further elaborates on differing customer personalities and the approach that the sales engineer must adopt towards them through the following:

  • Driver and analytical customers: These types of customers try to control the process and give specifications. In order to deal with them, the sales engineer should ask them relevant questions such as why they need that specification. This gives the perception that the salesman is trying to aid them in their process of control. Another thumb rule to have is to not to tell or instruct these types of customers but to ask questions.

  • Amiable and expressive customers: These categories of customers are emotive and expressive. The salesman can tell and instruct them regarding their service because they will listen and get convinced.

The sales engineer’s ability to read these signals and personalities is crucial for successful and persistent success in sales.

Stay lean, stay fit

Specifically, in machine tools, repeat business comes when one learns how to manage the customer after the sales is over. “It becomes the sales engineer’s responsibility to make the customer successful after your product has been sold to them,” emphasises Ramesh. That is why after-sales service is important which includes tending to their calls, service request, etc.

Previously, volume growth was the focus with the mindset that more the turnover, more the business. “However, now, the business paradigm has shifted to staying lean and staying fit which means that there are more versatile products with less volume,” says Khare. Earlier, mass production of machines was needed but products today need to offer economy with flexibility and configurability of machines. This also means integration of technologies on all platforms and building multi-purpose machines. For instance, customers now demand an EDM which can also do milling, induction hardening, grinding, etc. Thus, strong research and development is required specifically in India as such versatile machines are not being manufactured here.

The Indian advantage

On the global platform, European and Japanese companies are showcasing premium technology, integrated technology product and multi-purpose products whereas Chinese companies are thriving mostly on low cost products. “However, Chinese manufactured products are not very trusted globally. India can use this to its advantage and pitch in by making bold marketing strides. Our trust factor globally is more than that of China and we also have a language advantage in terms of being well versed in English. We need to build offices and a strong presence globally and target the rest of the world (excluding Far East countries) where our products would be cheaper than the Western products and better in quality than the Chinese products,” suggests Khare.

Furthermore, Indian machine tool manufacturers must adhere to global standards and should not compromise on quality, standards and other important parameters. “With the latest advancements in Industry 4.0 which talks about human-machine interaction, Indian manufacturers need to get actively engaged in this revolution and provide remote monitoring of machines and proactive support to customers,” says Navalgundkar. Finally, the value perception created in customer’s mind goes a long way and providing exceptional after-sales service is key. “Creating schedules and recording data of all the processes involved to showcase value only happens after sales. This is the seed to grow the orchard,” concludes Ramesh.

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