With deteriorating demand in certain high-volume, vertical market segments, an industrial equipment supplier was concerned about its growth prospects. Management believed that revenues were too concentrated in a few sectors, and that overexposure to declining segments was causing the company to underperform relative to its peers.
The company needed to diversify its business, reducing dependence on cyclical and/or volatile vertical markets. Doing this, however, required answers to critical questions, such as:
- What are the relative sizes and growth rates of alternative vertical market segments?
- Which segments might best leverage the Client’s current product offering and channels to market?
- In which segments are competitive dynamics most favorable for the company?
Before implementing any strategic re-alignment, the Client turned to RSR Marketing Solutions (“RSR”) for assistance in gaining a fact-based assessment of the market and competitive landscape of other key market segments.
Overview of RSR Engagement
Project Goals and Objectives
To aid the Client in re-prioritizing vertical market segments to pursue based on key criteria.
- Estimate the market size for each vertical market and segment the markets further to match the Client’s product portfolio.
- Estimate market shares and assess the competitive intensity in each of the segments of interest.
- Forecast growth rates and understand key growth drivers for each segment.
- Understand key purchase decision factors for each market segment relative to the Client’s product line.
- Assess customer loyalty and determine under what circumstances are customers receptive to evaluating another supplier.
- Evaluate how the Client’s value proposition matches with buying behavior in each vertical.
Key Study Findings
- Prioritized the vertical market segments of interest for the Client based on their relative size, growth prospects and competitive intensity.
- Identified a segment of the market that appeared to have room for another qualified supplier.
- Discovered an underserved market segment in which the Client’s share was lower than originally believed.
- Recommended that the Client divert business development resources to both the faster-growing segment and the underserved segment.
- Identified necessary product and sales channel modifications needed to gain share in the newly targeted market segments.
- Recommended a staged implementation plan to focus on the most attractive geographic segments of the newly targeted vertical markets.
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