BtoB

New markets, new tactics

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As b-to-b marketers launch new products, make acquisitions and seek to reposition themselves in a highly competitive landscape, they are using a variety of marketing tools and strategies to reach vertical industry segments.

Sometimes companies' vertical marketing strategies are developed as part of an overall corporate effort to enter new markets, while at other times new vertical segments are identified as a result of unexpected opportunities.

But regardless of the factors driving vertical segmentation, companies of all kinds are honing their marketing strategies to reach industry segments with relevant, compelling messages.

One of the key factors driving new vertical marketing strategies is acquisitions, which often bring new vertical segments into a company's overall marketing strategy.

Wireless and broadband communications company Motorola, for example, in January completed its acquisition of Symbol Technologies, a developer of mobile computers, bar code scanners and other mobile devices.

"The Symbol acquisition created a complementary portfolio of products, complementary channel and distribution strategy, and integrated communications and marketing strategies," said Eduardo Conrado, VP-global marketing and communications at Motorola Networks & Enterprise unit.

The division, which absorbed Symbol, had traditionally focused heavily on the government and utility sectors, providing integrated voice and data communications products and services.

Symbol brought a strong presence in the retail, manufacturing, warehousing and transportation segments through its mobile device offerings.

"Through the acquisition and by repositioning the portfolio, we were able to create a pretty unique value proposition for the vertical segments we target across applications, devices and networks," Conrado said.

Motorola's repositioning campaign, "Seamless Mobility," developed by BBDO New York, positions the enterprise mobility business as a leader in providing mobility services and devices across the enterprise, from the manufacturing floor to the field staff.

The company is using print advertising in general business publications such as BusinessWeek, Forbes and Fortune, as well as vertically targeted publications—such as CIO, Government Product News, Law Enforcement Technology and Mobile Radio Technology—to reach business, government and IT decision-makers.

For example, a print ad for the ML900 Rugged Notebook targets local municipalities by showing how police use the durable computer on the streets to access information that can help them solve crimes and communicate more efficiently.

Motorola also uses online advertising, webcasts, white papers, microsites, direct marketing and events to reach key vertical industry segments.

Business and technology consultancy BearingPoint recently introduced a new branding campaign, "Done. Differently," created by New York-based Renegade Marketing Group, that had a strong vertical industry focus in addition to a horizontal focus targeting business and IT executives.

The vertical campaign was aimed at the government sector, which makes up about 40% of BearingPoint's total business.

"Instead of vertical marketing, we call it `micro-targeting,' " said Connie Weaver, exec VP-CMO at BearingPoint.

"We think about it less as vertical marketing and more about targeting a particular group of people within a vertical, and honing messages to come at it with a complete 360-degree approach—everything from driving awareness through lead generation."

For the government campaign, BearingPoint ran print ads in publications such as Defense News, Federal Computer Week, Government Executive and Washington Technology, showing how it helps clients—including the U.S. Army, Navy and Air Force—solve critical issues such as information sharing, security, identity management and performance.

It also used online ads and radio spots to drive users to a redesigned Web site at www.bearingpoint.com/donedifferently, featuring client case studies, videos and service information.

Sometimes new vertical industry segments are discovered unexpectedly, and companies have to adjust their marketing strategies to serve these new segments.

For example, electrical wiring device manufacturer Pass & Seymour/Legrand identified a new vertical segment after it introduced a wall receptacle product called PlugTail.

"We kind of stumbled upon an application in the health care market," said Scott Bausch, marketing manager at the commercial product segment at Pass & Seymour.

"Health care facilities replace their receptacles periodically because they're worried about pin retention (keeping devices plugged in), with all of the critical equipment they're plugging in," Bausch said. "We had this great product, and we figured out that it fit into a great market for a replacement opportunity."

However, he added, "This was not a market we had strong competencies in."

Pass & Seymour worked with its marketing communications agency, Eric Mower & Associates, to develop a fully integrated marketing program to reach the health care segment.

It used print ads in health care publications, online marketing, direct mail and industry events to promote PlugTail to the new vertical market. It also gave away free samples to allow users to evaluate the product.

The vertical marketing efforts have paid off, as the health care segment now makes up roughly 40% of total PlugTail sales. Other verticals targeted include manufacturing, offices, retail, educational, entertainment and hospitality.

KI (formerly Krueger International), a furniture manufacturer, has also been successful in adding health care as a vertical segment.

The 66-year-old company traditionally targeted businesses, government, higher education, and science and technology institutions with desks, chairs and custom furniture.

About three years ago, KI decided to target the health care market in two areas—traditional office spaces, including billing and insurance areas, and "off the carpet" areas such as patient rooms and doctors' offices.

"To be a key player in this market, we really needed to have a competitive advantage," said Rod Ganiard, president of KI. "Our advantage is our ability to customize," he said, noting that about 20% of the company's sales come from customized products.

"There is a very finite, cohesive group of influencers and decision-makers in this market," he said.

To better understand the market and the target audience it was trying to reach, KI hired a VP-health care marketing who was a registered nurse as well as an MBA.

"It is really important to have someone with a lot of credibility," Ganiard said. "People buy from people who know what they are talking about."

KI also worked with ad agency Eric Mower & Associates on integrated marketing materials including print ads in health care publications, sales force materials, seminars, webinars, white papers and events.

One big effort was creating a 16,000-square-foot exhibit at NeoCon, a furniture and design trade show aimed at architects, designers, facility managers and office equipment buyers.

The showroom featured layouts of patient room furniture, office furniture, educational furniture and custom products aimed at vertical industry segments.

"Our goal is to be a top three or [top] five player in the health care market in the next three to five years," Ganiard said.

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