Controlpro: go-to-market strategy

Abstract

Entering a saturated, competitive market late poses formidable challenges. These challenges are further amplified if the incumbents in the market have established brand equity and scale. The India market for Programmable Logic Controllers (PLC) is a case in point. The market is teeming with a number of players. The market represents a broad continuum with big-logo wide-portfolio manufacturers(such as Siemens, Allen Bradley and GE Fanuc) at one end and low cost local manufacturers (such as Messung and Delta) on the other. The products in this market include low-cost offerings (smart relays/micro PLCs) as well as high-end complex solutions (high-end PLCs, application and system solutions). There is incessant competition and price pressure in the high-volume low-cost product categories. Despite the low attractive industry structure, Control Pro wants to enter the India market with a low-cost micro PLC offering. Some markets carry a strategic value. Control Pro, a multinational industrial automation specialist in the field of drive and high-end motion control, is attempting to enter the India low-cost PLC market for its strategic potential. An absence of a low-cost PLC in its product portfolio shrinks the opportunity space for Control Pro to grow. A low cost control product is widely used in the industry as afoot-in-the-door to penetrate a customer account at the low end of the automation value chain and gradually increase the business through up selling. Competitors, armed with a low cost control product, are also increasingly able to eat into Control Pro s existing customer base. Thus, Control Pro finds it hard to ignore the low-end PLC market and is gearing up to develop a new product for the Indian market. The Go to Market strategy for Control Pro requires the ability to skill fully navigate the competitive threat from the incumbents and to establish Control Pro as a Control Specialist in the minds of the customers and channel partners. Given the backdrop of the industry dynamics, without the right segmentation and targeting plan Control Pro runs the risk of getting entangled in a draining price war with its mighty competitors. Because the industrial automation products (particularly the PLCs) have wide range of applications cutting across a number of other industries, identifying niche segments that can allow Control Pro to gain a foothold in the market is the recommended strategy. Moving from a niche to foothold is not easy. A phase-wise targeting strategy moving from volume base customers to customers who can ensure steady growth is the first step towards gaining a foothold. The next step involves targeting the high growth potential segments that look for differentiated offerings. In making this transition, Control Pro will have to invest brand building exercise to cement its position in the market.Having identified the segments of interests and the targeting strategy, the project team engaged in primary research to gather target customer group needs. For the research, we included both the end customers as well as the prospective channel partners. The research presented insights on customer needs, buying behavior, channel usage as well as competitor selling practices. The research was conducted using a multitude of market research interventions such as face-to-face or telephonic interviews, attending industry fairs such as Imtex (Bangalore 2011), online surveys and insights from Control Pro marketing team. Further to the primary research inputs, we undertook a comprehensive study of key competitors and their market offerings. This study was performed using secondary research entailing insights from analyst reports, media and other public sources. All these inputs were analyzed and incorporated in the Go to Market strategy. In the primary data analysis of the PLC customers, we found that the customers value a long-term relationship with the vendor and view the overall offering holistically. The industry relies on a network of channels predominantly system houses and direct sales force. For Control Pro s Go to Market strategy, we recommend following key elements§ Phase wise targeting and rollout: start with a niche and steadily gain a foothold§ Create a flex-offering, with product, services, program and systems: operationalize by strong investments in sales and distribution§ Multichannel strategy: develop well-trained value-added reseller network and direct sales force; leverage internet and tele channels for low-price sales, services and support§ Build and promote the brand through a mix of end user promotion, popularizing programming features of the product with Indian engineering institutes, establishing industry credentials through participating in setting standards and industry trade fairs. If Control Pro is able to efficiently operationalize these elements for its micro PLC launch, they stand a strong chance to achieve the market place success which is so illusive in the India PLC industry.