March 30, 2010
Taking the High Road: Using Brand Amp to Counter Commoditization
“Or it could be the high-road scenario, in which OEMs treat suppliers as extensions of the firm –
seeking to establish ongoing close relations, working to assist suppliers in upgrading capacity while reducing costs, and sharing in suppliers’ productivity gains.”
– The Advanced Manufacturing Project
In recent years, the trend toward outsourcing has dramatically changed the relationship between original equipment manufacturers (OEMs) and their suppliers. According to industry sources, “a generation ago, of the total value of goods sold by OEMS, the share that originated with suppliers averaged 40 percent. Today, the average share is 80 percent!” The result has been an increasing concern among OEMs to hold down supplier costs while demanding quality, service and delivery. Many suppliers have responded by reducing costs (particularly labor) in a downward spiral of price promotion, reduced productivity and unreliable performance. These issues have been particularly salient in highly competitive, technical and error-sensitive arenas such as medical device manufacturing. In dozens of recent conversations with purchasing agents for medical device manufacturers, we heard report after report of the stress these agents faced as they sought to obtain high-quality parts in a timely fashion at a good price.
Enter Media Logic client, MicroGroup. Originally a machine shop, MicroGroup offered “off-the-shelf, finished-to-order, microthin metal tubing products for various industrial segments.” As it saw its products becoming more and more commoditized, it turned its focus to the bourgeoning medical device manufacturing market.
According to Jay Caraviello, President and CEO of the Medway, Massachusetts-based company, “We saw an opportunity to meet the needs of medical device manufacturers by offering consistently high-quality products that meet the demanding specifications and delivery requirements of this industry. But we also wanted to go beyond that to become a true manufacturing partner, to function as an extension of the OEM.”
MicroGroup began what could be called a “cultural evolution,” turning the “get it done” attitude that had become part of its DNA into a corporate commitment to the OEMs, their customers, the medical professionals who use the equipment and, ultimately, to the patients who are being treated by the devices. Of course, Caraviello and his team implemented new processes and procedures to ensure consistent quality and delivery, but perhaps more importantly, the organization hired project management teams to function as liaisons between the OEMs, the engineering crew and the production floor – spending as much time on the OEM site to ensure manufacturability as they do with their own production department.
In effect, MicroGroup had established the foundation for a new brand in a new market – a brand that offered the value that OEMs were seeking. But how could MicroGroup describe this value in a way that would resonate with its markets – quickly and effectively? How could it use this value to move itself away from continual price promotion and competitive bidding?
Caraviello hired Media Logic for Brand AmpSM, our fast-track strategic process that helps organizations create “conversation-worthy” brand identities, develop strong positioning and marketing strategies, identify brand community opportunities and prepare for active participation in the conversation. The Brand Amp process helped MicroGroup:
• Uncover its brand opportunity
• Define its brand positioning
• Design corporate, product or initiative identities
• Begin to establish brand communities
• Develop key brand collateral and online properties
• Create seed social media content
Keying off MicroGroup’s awareness of “what’s on the line” for their OEMs and the patients ultimately treated by their products, we created a new look, tone and feel for the company that reinforced the spirit of the brand. The brand launch was supported both internally and externally through a new and highly optimized website, an e-commerce site, a video, print ads, online presence and direct marketing campaign. The introduction of the new MicroGroup brand has effectively raised the company’s profile and search visibility and set the stage for additional content development (case studies, white papers, blogs) that will deepen relationships with clients and prospects.
Says Caraviello, “We’re committed to working with our OEMs to improve productivity, quality, delivery times and costs. Ultimately, we’ll all win. Media Logic’s Brand Amp process allowed us to begin, build and maintain the conversations we need to get found, be credible and create preference.”