industry
Consumer Products
U.S. Market Entry Strategy for a European Tool Manufacturer
Client Problem
- The client had developed a new plumbing technology that had the potential to reduce the time for a plumber to connect two pipes
- The company was very successful in one European market but was reluctant to pursue the lucrative American market without a sound business plan
Initial Project Focus
- Our initial focus was sizing the U.S. market opportunity and understanding customer economics and buying behavior
- In Europe, strong labor unions, uniform building codes, and centralized training made the launch of the new technology relatively straightforward
- In the U.S., however, the process was complicated by diverse building codes, non-standard or non-existent plumber training, strong incumbent manufacturers, and limited manufacturing capacity
- Our first step, then, was to quantify the opportunity (which was sizable) and the risks by building up market based data on plumbers' buying decisions - this involved detailed surveying, assessment of alternatives, construction of customer economics, and overall market sizing
Key Leverage Areas
- While the European team was encouraged by the market opportunity, they remained concerned about the organization's ability to effectively build from scratch in a new geography
- As a result, they turned to us to translate our economic models into an operational strategy which included headcount requirements, organizational structure, key business metrics, development timelines, production requirements, and plant optimization
- In addition, we outlined a range of market entry options - from co-branding to resale/wholesale arrangements with existing equipment and supply companies
- Following this, we developed core marketing materials/messages aimed at explaining the value proposition in terms of cost and time savings to an audience we by then knew very well - American plumbers
- Lastly, we developed a prioritized set of geographies whose early performance would serve as gauge for future success
Key Learning's
- For our client, the primary value added was gaining a full understanding of a market they knew little about - U.S. plumbers and products
- They utilized the feedback from out detailed market and customer research to redesign the feature set, develop the right value proposition, and created a viable product for the U.S. market
- The client clearly understood the core elements of their technology - but needed help mapping it to a new market and building an organization to support this rollout; together we were able to accomplish both
