Market Recovery through Market Understanding

As I always say, I learn more from my customers by just listening. A few years ago, I met with a Senior Director of a global manufacturing company of construction equipment. I’ve always been impressed with their equipment, aggressiveness in the market place, and commitment to the needs of their customers. They are true students of a region before they enter into it. Yet, even they had a problem. They had increased warranty demand and increased part replacement requests. In-country distributors were looking at not renewing their contracts, causing them to lose and not gain market share.

After an internal study, they found what they thought was the problem. But what they found just couldn’t be. The problem they identified was their equipment was simply breaking down. These customers were turning to other manufacturers for the same equipment. After reviewing their quality assessment of materials, manufacturing procedures, advanced testing of the equipment they were even more perplexed. The review reinforced what they’ve always felt. They made the best equipment in their field globally. So what was the problem?

The next step, send a team to South America. The problem they had wasn’t limited to just one country but existed in six countries. They did not have these issues in North America or Europe. The question became; why was there a problem in just South America? Was it a climate thing, a terrain thing or something else? What were the common contributing factors?

Their team traveled from country to country. They interviewed distributors, reviewed training procedures for both the distributor’s personnel and the contractor’s personnel. They were also concerned there may be unforeseen physical demands that could compromise the equipment. They took it one step further. They interviewed the end user of their equipment to see what their views were.

Country-after-county, distributor-after-distributor, contracting firm-after-contracting firm, as well as the end-user they spoke with – – they heard the same story. Their equipment – though good at first was too difficult to maintain and operate safely. How could that be? As the manufacturing team continued to speak with more end-users, they realized the culprit was a completely different animal. This culprit-drainer was not originating at either the distributor or the contractor levels. The real problem was proliferating at the end-user level. The real answer wasn’t found within the distributor, or the management level of the contractor. The real reason was provided by the end user.

The problem would require a twofold solution. Operational manuals were written for a person with a 12th-grade education. Oftentimes, the end-user in developing countries does not have a 12th-grade education. In many instances, the end-user has not even achieved a 9th-grade reading level.

The Strategy: First, simplify the original English for easier-to-read translated materials. Second, understand the Spanish spoken in Chile is different from that spoken in Argentina or Columbia, etc. Thus the written versions of Spanish were different in Chile and Argentina or Columbia. Hence, the written instructions will need to adhere to the unique Spanish dialects for other countries in South America – especially – the end-user.

The Solution: Translate for the local market and not a blanket translation for an entire continent (don’t forget Brazil, its Portuguese of Brazil, not of Portugal). This may add to cost to document correctly, but a blanket translation “short-cut” will continue to erode the direct exporting channels of this manufacture.

By this manufacturer investing the time & resources to better understand their customers, they were truly grasping their requirements/needs. Was this a costly lesson? Yes. Would the bottom have fallen out if they had continued down their original path? Yes, and with great implications to other markets as well.

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