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Globalization + the Internet = Big Opportunity

October 24, 2017 / By Bruce McDuffee

Most of us in manufacturing view globalization as the bane of the industry. Globalization means having to compete with other countries where the cost of goods and cost of production are much less expensive than in the United States. Some would perceive globalization as forcing U.S. manufacturers to cut labor costs, cut profit margins, raise prices, or go out of business.

Then there is the Internet, which seems to further erode profit margins by commoditizing nearly every product on the face of the Earth. It may seem like U.S. manufacturers have no choice but to either join in and offshore production or buckle down and slowly go out of business.

Looking at it another way, the Internet and globalization have created an excellent opportunity for manufacturers that embrace the new way to go to market. Although huge corporations with a global footprint may seem to have an instant advantage because of their global infrastructure, the real potential is for small and medium-sized companies that can now compete for the very same customers served by the big guys.

Yes, that is correct, if your firm is a small or medium-sized manufacturing company, you can now compete around the globe and gain market share with the new way.

This is the silver lining for savvy manufacturers. Because of the Internet and globalization, you can engage and develop virtual relationships with the people in your target audiences like no other time in the history of commerce. For those manufacturing companies that remain stuck in the 1970s go-to-market paradigm, which includes maintaining expensive field salespeople, trade show attendance, and product pitching (and there are a lot of you out there), without incorporating the new way, you will be forced to compete at the profit-margin level. Ultimately, you will have to reduce profit and cut expenses. Reducing profit and cutting expenses is the beginning of the death spiral for any manufacturing company.

The choice is up to every business. You can watch profit decrease as you cut commissions to your sales team and reduce marketing spend (probably not in that order), or you can go all in with the new way and take market share from your laggardly competitors. Now is the time to act; the window of opportunity will eventually close because everyone will be up to speed with the new go-to-market strategy. I am assuming you are a smart manufacturer because you chose to read this book.

Congratulations! You are about to start taking market share from the laggards.

The Amazon Effect is a significant influence on the way we purchase a product. Amazon has raised the barand changed expectations for how we expect to do business. Regardless of the purchase, we now hope to have easy access and clear insight into the purchasing process, even if we are purchasing a multi million-dollar piece of machinery for our factory. We expect to be able to log on to a convenient and intuitive website to monitor the delivery date of the product once we plunk down the money. We do not want to have to call, press a series of numbers, and leave a voice mail to learn the status of our order. We expect to have instant, easy access to the shipping route and timeline. We hope to be able to have access to payment options, reordering information, current stock, and above all, instant price comparison. This is the Amazon Effect and, like it or not, this effect is driving our expectations, even in the B2B manufacturing realm. The winners in your particular market space will be easy to do business with as benchmarked against the Amazon Effect.

Your opportunity, Mr. Smart Marketer, lies in the fact that your competition is playing the globalization game by competing on the features of the product, the company size, and the charisma of the CEO. This is a losing proposition because, as I stated in Chapter 2, nobody cares about your product, your company, or your CEO. They care about WIIFM. You can exploit WIIFM with the Internet, the great equalizer. No matter what you are manufacturing, ultimately a person is making the decision about what to purchase. It has been proven over and over that people make purchasing decisions based on emotion first, and they support the emotional decision with logic. The new way increases engagement well before a person starts to engage with your sales team. The new way exploits the Internet around the globe by creating virtual relationships before the other guys get the call.

Yes, pricing is important, but in all market research conducted over the past forty years, when buyers are asked to rank the top ten items that influence their purchase, the price is never, I repeat never the number one influence. If the price is not the number one influence, then you may wonder what is at the top of the list. Usually, it’s people’s trust or belief that their purchase will be safe. Once again, people purchase based on emotion and justify the decision with logic.

Globalization and the Internet enable the new way by sharing expertise to help the people in your target audience better relieve their pain, thus beginning a meaningful buyer-seller relationship. The Internet enables the savvy manufacturing marketer to start a conversation with a prospective customer anyplace on planet Earth. Remember, you do not start a conversation with a potential customer by talking about your product; you begin by talking about their pain and freely sharing your expertise to relieve that pain. This critical step is 


conducted virtually, and you may or may not know your firm is creating these relationships, which will depend on how modern your marketing strategy, tactics, team, and tools have evolved to be.

While your competitors are beginning their engagement by talking about product features and ending up talking lowest price, you are winning the business by creating top-of-mind awareness (TOMA), credibility, and reciprocity among your global audience. Globalization and the Internet afford you the opportunity to reach more people, engage with a broader audience, and develop relationships twenty-four hours a day, seven days a week, 365 days a year, including while you sleep. The Internet and modern marketing tools are the keys to exploiting this opportunity.

Takeaway Actions:

  1. Assess the current state of the company. Examine the culture within your firm as it applies to globalization and the Internet. Are people in your firm afraid, confused, excited, baffled, enthused? Have there been any concrete steps taken by the sales or marketing function to exploit the ability to connect virtually around the globe?

  2. Assess how close your firm is to meet the expectations created by the Amazon Effect. Is it easy to do business with your firm? Make a list of deficiencies and areas that can be improved.

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