Manufacturers gear up for Web business

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Manufacturers, which have generally been slower to embrace Web initiatives than companies in other industries, are beginning to pursue e-business, according to a new report by SVM E-Business Solutions.

The "E-Business Trends Report" was based on a survey of more than 80 executives at U.S. manufacturing companies. It was co-sponsored by the New Jersey Chamber of Commerce, although it was national in scope.

"Manufacturing organizations typically have lagged significantly behind in e-business," said David Smith, director of business development at Parsippany, N.J.-based SVM, which provides Web services to businesses."They have put up a Web site and that is about it. Now, they want to take their Web site from a static brochure to one that will provide a more interactive experience for their customers."

Seventy-seven percent of respondents to the survey said e-business is "extremely important" or "very important" to the needs of their company. E-business is defined in the report as Web sites, e-mail, online marketing, intranets and extranets.

Also, 61% of respondents strongly agreed with the statement, "E-business is essential to the long-term success of my company." Twenty-nine percent agreed with the statement and 10% disagreed or were neutral.

"E-business is essential," said Sherry Munyan, marketing manager at Chemglass, a laboratory glassware manufacturer that participated in the survey. "I don't think you can run a successful business today without it."

Chemglass uses the Internet primarily to provide company information and to generate qualified sales leads, she said.

The survey asked respondents to state their primary e-business objectives, and they were allowed to choose more than one response.

The top objectives selected were: providing information about the company (88%), generating sales leads (70%), improving brand awareness (66%) and enhancing customer service (55%).

Tara Castorina, marketing manager at Marotta Controls, a maker of fluid control products, said her company's Web site has primarily been an informational resource for customers and prospects interested in learning about the company and its products.

Marotta does not offer e-commerce on its site because it sells its products directly through its sales force. The company is planning a Web site redesign this year and will be adding a searchable database feature and expanded capabilities for its sales force, Castorina said.

Most manufacturers plan to boost their Web budgets, according to the survey. Seventy-four percent of respondents said their budget for Web initiatives and e-business would increase over the next two years, 24% said budgets would stay the same and only 1% said their Web budget would decrease.

Munyan said Chemglass' e-business budget makes up about 70% of the company's overall marketing budget, and it is expected to increase by about 10% over the next two years. Castorina said Marotta's e-business budget is also expected to increase over the next two years, although she did not give specific figures.

While manufacturers are recognizing the importance of e-business and are beginning to invest more in Web initiatives, they are slower to embrace measurement.

The survey found that 45% of companies do not measure the success of their e-business initiatives. Of those that do, 38% measure the number of qualified sales leads generated, 27% measure subjective goals, 18% measure online sales, and 16% measure customer service improvements. 

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