Mastering Marketing: A Guide for Manufacturing Entrepreneurs

Introduction

In the competitive world of manufacturing, success is no longer just about having the best product or the most efficient processes. It’s about understanding your market, knowing your customers, and creating a marketing strategy that ensures your efforts translate into sustainable growth. For manufacturing entrepreneurs, this requires a strategic approach rooted in thorough research and planning.

This guide, “Mastering Marketing: A Guide for Manufacturing Entrepreneurs,” is designed to help you navigate the critical steps of conducting a marketing feasibility study—an essential tool to validate your ideas and ensure they align with market demands.

Here’s what you’ll learn:

1. Identify Customer Segments: Understand who your ideal customers are and what they truly need.
2. Analyze Target Markets: Dive deep into market dynamics to uncover opportunities and challenges.
3. Prepare the Business Concept: Craft a clear and compelling value proposition tailored to your industry.
4. Prepare the Marketing and Sales Strategy: Develop actionable strategies that connect with your audience and drive results.
5. Budget for Sales and Marketing: Plan your resources effectively to maximize ROI and minimize risk.

Identify Customer Segment

A customer segment is a group of potential buyers of your project’s products sharing similar characteristics, interests, value perceptions, behaviours, and incentives. Its importance derives from allowing you better understand the customers and their needs and create a tailored marketing strategy to meet their needs.

Step-By-Step Process

• Identify your target market in terms of, for instance, geographical location, product and industry.
• Set segmentation factors like demography (e.g., customer’s age and gender), geography (e.g., where customers reside?), psychographics (e.g., segmenting customers on their attitudes, value perception, interest, and motivations), and behavioural (e.g., their buying habits, usage patterns, and brand loyalty).
• Segregate the target market into groups of customers sharing similar attributes to the segmentation factors. The customer data, useful for segregation, can be collected through customer surveys, social media, observation, online and offline line communication, interviews, published studies, etc.
• Create criteria to decide on the best-fit customer segment for your project, including profitability (e.g., selected segment enables generating the highest revenues and lower costs), market size (e.g., segment belongs to bigger market size), customer needs (e.g., segment fits your product offers), competition (e.g., the segment is underserved by competitors), potential growth (e.g., it has potential to grow), financial capability (e.g., it can buy), and easy access (e.g., easy to reach them).
• Decide on the customer segment best fit your project, describe it, list the justification of selection, and estimate the size.
• Prepare the customer profile, showing details of customer demography, attitude toward the project’s product, value perception, behaviours (e.g., steps or processes to buy products), motivation, challenges (or pains), stories, interests, wants, desires (of values), expectations, objectives, along with the way to reach them and convince them to acquire your project’s product. Such customer data will help you identify customer patterns and insights that are useful in identifying and satisfying customer needs. By the end, you prepare the customer persona listing key attributes toward segregation factors of your favourable customer.
• Prepare the value proposition of your concept, listing the value (or gain) creators (e.g., benefits making) and challenge (or pain) relievers (e.g., pains or hardships avoiders) around your project product.
• Ensure customer-value fit by matching customer profiles (e.g., customer value desires) with your project value propositions. Show real-life experience of how the customer segment accepts your product and its value propositions.
• Prepare a document highlighting the above outcomes, and share it with your team and experts.

Example

Customer segments for a pharmaceutical manufacturing company are end patients, characterized by being under chronic conditions (e.g., hypertension, diabetes, and asthma), adult age, generic medications for both genders whilst particular medicines for female patients only like osteoporosis and menopause), over the counter and hospital patient, concern about the medicine safety and quality, affordable prices, and residing in the GCC. 

Useful Tips

• Use multi-segmentation criteria (e.g., demography, geography, psychographic, and behavioural) instead of one criterion.
• Visualize a specific customer persona (or customer journey) to your product and identify their attitudes, behaviours, and attributes.
• Be specific and describe the customers’ needs and how to fulfil them.
• Dive deep to observe and understand your customers’ needs and how to satisfy them.
• Regular update of customer data.
• Test and refine segmentation.
• Prioritize customer needs.

Things To Avoid

• Don’t be generic in describing the customer segment.
• Avoid stereotypes in making assumptions of, for instance, customer behaviours and attitudes.

Analyse Target Market

Market analysis is a process of gathering, evaluating, and interpreting information about a particular market or industry. It includes studying various factors that affect the demand and supply of goods in the market, including target segments, competition, market mix, demand and supply structure, market size estimate, market growth, market attractiveness, influences, trends, key challenges, and opportunities. The purpose of any market analysis is to better understand the target market and customers, identify market gaps (or opportunities), evaluate the desirability of demand for the project product, and prepare the marketing and sales strategy.

Step-By-Step Process

• Identify your target market in terms of, for instance, geographical location, product and industry.
• Identify your customer segments as explained in the previous process.
• Collect data about the target market covering all factors affecting the demand and supply of products.
• Understand the needs, preferences, and purchasing behaviours of the target consumers to identify potential opportunities and challenges.
• Evaluate the competition structure in terms of the competition factors (e.g., price, quality, or service), competitors and their shares of the market, competitive positioning, and competition strategies.
• Evaluate the existing market mix, which includes product specification, value propositions, pricing, promotion, and distribution channels.
• Analyse the supply (e.g., local production and importers) and the demand, and conclude any gap and opportunity.
• Quantitatively estimate the market size (e.g., total consumption of customer segment as the value in a year) using top-bottom or bottom-up approaches. Top-bottom approach uses national statistics to reach the market size of an industry, while the bottom-up approach assumes individual consumption to estimate the market size.
• Evaluate the consumption records of the target market to figure out the potential market growth.
• Evaluate the market attractiveness using Porter’s Five Factors Model describing the new entrance threat, product substitution threat, buyer’s negotiation power, supplier negotiation power, and rival. The market is attractive if it is highly protected against new entrance and substitution, buyers have few choices of products, unfocused supply chains, and enable competition.
• Evaluate the internal and external environment of the business by using SWOT and PESTEL models. SWOT analysis involves evaluating a business on four key dimensions; strengths (e.g., value proposition or patent), weakness (e.g., new to the industry), opportunities (e.g., product and market development), and threats (e.g., easy to enter a market). PESTEL model evaluates the external influences on a business and stands for political (e.g., political stability), economic (e.g., growth or interest rate), social (e.g., lifestyle, migration to/from cities, values, habits, and norms), technology (e.g., technology access), environment (e.g., the impact of sustainability), and legislation (e.g., acts).
• Identify the market trends and patterns that could impact your business, such as economic factors, technological advancements, and cultural shifts.
• Identify the market challenges or gaps your business can address by offering unique or innovative solutions.
• Prepare a document highlighting the above outcomes, and share it with your team and experts.

Example

Market analysis for a pharmaceutical manufacturing facility in the GCC has revealed (90%) of the market, which reached $18 billion in 2023, is fed by imports, dominated by branded medicines, growing by (5%) annually, highly protected by heavy investment, easy replication of generic medicines, price competition is fierce, and industry is highly regulated. Market trends include customer focus, price reduction, digital technology, medical insurance, and governmental support to encourage local production. Market challenges reveal the lengthy process to register new medicines, higher dependency on imports to meet the local conception (i.e., imports reached 90% of the market size), expensive investment, lack of skill-full workforces, and fierce price competition. The key opportunity is import substitution, growing consumption of drugs, and government support for local production. 

Useful Tips

• Define the goals and objectives of your market analysis upfront to ensure that you collect and review the right data.
• Collect and testify market data using multi-sources of primary (e.g., customer interviews) and secondary (e.g., studies and published statistics).
• Filter out irrelevant data and focus on the most relevant data points that help you make informed decisions about your business.
• Analyse the data objectively and avoid personal biases or assumptions that could impact the accuracy of your analysis.
• Utilize tools and techniques such as SWOT analysis, PESTEL analysis, and Porter’s Five Forces model to structure your analysis and identify key insights.
• Use brainstorming sessions and focus groups to create ideas, evaluate data, and make decisions.
• Get input from other stakeholders, including employees, customers, suppliers, and industry experts, to gain a more comprehensive understanding of the market.
• Regularly monitor the market to stay up-to-date with trends, changes in consumer behaviour, and the competitive landscape to adjust your business strategy accordingly.

Things To Avoid

• Avoid stereotype assumptions in market judgement, data, and analysis.
• Collecting generic and false data on the market industry.
• Avoid being biased in your analysis by recognizing and accounting for your own biases and assumptions.
• Don’t rely solely on historical data to make conclusions about the market. Consider current trends and projections to make informed decisions about the future.
• Don’t ignore the needs and preferences of your customers.

Prepare The Business Concept

A business concept is a concise idea that defines the foundation of a potential business. It comprises important information about the project and identifies the problems/gaps/opportunities, crafted solutions, products, market mix, value propositions, competitive advantages, target segment, target market, size of the target market, market share, market growth, associated business/market risks, and justifications for the project. A solid business concept provides the direction and structure necessary to turn an idea into a viable and profitable business venture.

Step-By-Step Process

• Obtain information from the market analysis above on the market size, customer segments, competition, market mix, trends, challenges and opportunities.
• Identify a need or opportunity in the market that your business can fill. This can be done by conducting market research, studying industry trends, and analysing the competition.
• Apply a design thinking approach to observe customers, understand their needs, challenges, and stories to use the particular product, craft a solution and prototype, and test the problem-solution fit in the market.
• Develop a unique value proposition for your business concept or products that sets it apart from the competition. A value proposition could be a product or service that is faster, cheaper, or more innovative than what is currently available.
• Do a product-market fit by describing and prototyping the product, showing its value propositions, estimating its cost of production, offering a market mix, and testing all these pieces of information in the market. 
• Finetune the customer segment profile describing the demographic, geographic, psychographic, and behavioural of customers, along with their needs, desires, pains, and objectives to do the job.
• Describe the target market, its size, future growth rate, gaps, and trends.
• Define the market share target.
• Identify and analyse risks and strategies to mitigate them.
• List key justifications for this business concept. 
• Prepare a document highlighting the above outcomes, and share it with your team and experts.

Example

A pharmaceutical manufacturing facility produces medicines like cancer treatment, immunology, neurology, digestive, infectious, respiratory, diabetic, musculoskeletal, and other well beings drugs. These medicines come in various dosage forms, such as solid form (e.g., tablets and capsules), vials, UDV, injectables, nasal sprays, eye drops and gels, ear drops, and ampules.

The selling prices of the project products for the private markets are identified based on the proxy of (70%) of the originator’s CIF prices in the Saudi market, including the insurance and transportation expenses of (8%) of the factory ex-prices for the export markets. The project selling prices for the public tenders in the GCC markets are estimated at (30%) of the factory CIF prices for the private markets. Pharmaceutical distribution channels include manufacturers, distributors, wholesalers, and retailers.

In the pharmaceutical industry, promotion is a strong determinant in reaching target sales and usually comprises multi-promotional schemes, including free goods, price discounts, advertising, TV and radio commercials, digital promotion and more.

Pharmaceutical manufacturers typically target two types of customers, the first group is the end users or patients, and the second group is influencers and service providers, like technicians, hospitals, pharmacies, procurement administrators, and public tender authorities.

The total market size of the pharmaceutical industry of the GCC is estimated at ($18) billion in 2023, and the target market is ($2) billion in 2023. The project market share is (5%) of the target market.

In 2019, the pharma landscape of competition in the GCC involved about 52 local capacities and many distributors representing international pharmaceuticals like Pfizer, GSK, AstraZeneca, and Novartis.

Risk analysis for the pharma project identified risks like low sales, low quality of medicine, loss, and lack of liquidity and default, along with developing a strategy to mitigate risks.

Project justification may include a proven project feasibility, import substitution, showing compelling market needs, and government support for local production.

Useful Tips

• Identify a specific problem or need that needs quick fixing.
• Conduct market research to understand the market, customers, competition and trends.
• Innovate a solution and product that can produce unique value propositions wanted by customers.
• Concisely define the project concept after you test it in the market.
• Test the product-market fit in the market.
• Collect and validate information related to the project concept.
• Put the customer needs at the centre of the project concept.
• Analyse the competition and gather accurate and useful insights.
• Involve advisors and experts in crafting the business concept.
• Be open to feedback and adjust your business concept accordingly to meet the evolving needs of your target audience.
• Make your business concept unique, innovative, and desirable for customers.

Things To Avoid

• Avoid developing a business concept without conducting thorough market research.
• Avoid developing business concepts that are too complicated to understand.
• Avoid developing a business concept that is not unique or does not offer a clear value proposition compared to competitors.
• Inaccurate data and personal judgement.
• Approving a business concept without testing.
• Attached to the business idea regardless of its feasibility.

Prepare The Marketing And Sales Strategy 

The marketing and sales strategy shows a roadmap for a business to develop products, price, promote, distribute, compete and sell in target markets. It involves making critical decisions about the allocation of resources, including financial, human, and technological resources, to achieve sustainable competitive advantage and long-term success. It encompasses information on the business concept (as explained in the previous process), mission and vision, strategic direction (e.g., differentiation, low cost, intensive technology, and targeting niche market), market positioning (e.g., the position of the project in terms of price, quality, market share, and brand relevant to competitors), strategic objectives, strategies or initiatives (e.g., approaches to reach objectives), action plan (e.g., including day-to-day actions and targets to achieve), key performance indicators (KPIs), and metrics for at least three years (incl. target sales, market mix, annual growth, market share, served customers, promotion and distribution budget, etc.). A business strategy is important for a business to reach objectives over a specific time and within given resources. It is a useful tool for the business because it provides clear direction to meet objectives, helps anticipate and respond to changes in the business environment, and prioritizes and focuses on the most important activities.

Step-By-Step Process

• Clarify the marketing analysis information obtained from the previous processes on, for instance, customer segmentation, market analysis, and business concept.
• Conduct an internal analysis (e.g., SWOT) to identify strengths and opportunities for the project.
• Conduct an external analysis (e.g., PESTEL) to identify threats and opportunities where the business operates.
• List strengths, weaknesses, opportunities, and threats that form the bases for the project business strategy.
• Identify the unique selling propositions (USPs) of the business that differentiates it from competitors and develops strategies to sustain these competitive advantages.
• Develop your business concept as in the previous section.
• Craft your business mission, vision, and goals. A business mission shows what, how, when, where and why a business exists, and the vision statement visualises the long-term dream business battles to reach.
• Explore and choose the best strategic direction for the project, which can be differentiation, low cost, intensive technology, or targeting a niche market.
• Evaluate competition and plan a market positioning of the project. It shows, for instance, the position of the project in terms of price, quality, market share, and brand relevance to competitors. Market positioning involves how a business competes and what image or reputation a business perceived in the eyes of customers.
• Set your SMART strategic objectives that a business determines to achieve by the end of the strategic term.
• Show initiatives or ways on how you can achieve these strategic objectives.
• Transform these objectives and initiatives into shorter-term actions and targets. By doing this, you list the actions and targets for a period, like one year.
• Set your key performance indicators against the strategic objectives to measure and evaluate the performances and success of the strategy.
• Identify your business metrics during the strategic terms, including target sales, market mix, annual growth, market share, served customers, and marketing and sales budget.
• Prepare a strategic document highlighting the above outcomes, and share it with your team and experts.

Example

Here is the SWOT and PESTEL analysis for a pharmaceutical manufacturing project:

SWOT Analysis

Strengths: Local capacity.The first of its kind in Bahrain and the GCCCapital and technology-intensive.Strongly supported by the Bahrain government and medical authorities.Tackle a diversified and needed list of drugs.Local and GCC local production advantages.Aligned with the government strategy about encouraging local production capacities.

Weaknesses: Highly dependent on imported raw materials, other supplies and technology.Limited local market.New industry in Bahrain.Lack of local technical workforces.Require huge investments/funds and reveal a higher period of payback.

Opportunities: Imports substitution.Steadily growing market of 5%. Stronger chances to penetrate the GCC markets.High chance to obtain direct purchase orders or off-take agreements from the public medical purchasing authorities.Dominating the supply to the local market.Can play a local stabilizer of the pharma supply in Bahrain.Support the local content and pharma ecosystem in Bahrain.Securing funds from the sovereignty funds in Bahrain and Abu Dhabi.The limited number of local pharma producers in the GCC.

Threats: The time-consuming procedure to register new drugs.The high competition resulted from branded and generic supplies.Direct competition from local/GCC existing and potential producers.  Fail to secure needed support from the local government.Fail to commence operation on time.Fail to secure significant funds. Stronger control of prices by health regulators in Bahrain and GCC.Huge overheads resulted from expensive fixed assets.Unable to meet the sales and marketing strategy. The outcomes and assumptions of the feasibility study are inaccurate.

PESTEL Analysis

Political: The stable political system in Bahrain and GCC brings stability to the business environment.	Economy: Hydrocarbon: higher prices and demand contributed to the strong recovery of GCC economies.Interest rate:  Inflation: 2.1% in 2021.GDP and growth: projected to be US$ 2 trillion in 2022, and $ 6 trillion in 2050, growing at about 3% in 2023/2024.Employment: strongly controlled by the government, and unemployment ranges between 5-10%. Exchange rate: the exchange of the local currencies are stable against US $ and other major currencies. Free economy: GCC market is a free economy with no restriction in the flow of resources from and to the GCC.Corporate taxes: recently, GCC has applied a corporate tax system of 10-20% on foreign investments, in addition to VAT reaching 20%.	Social: Urban migration: almost all the GCC people live in urban cities. Living lifestyle: hardly influenced by the Western living lifestyle.Values and norms: GCC is an Islamic and conservative society ruled by strong social norms and values.
Technology: Technology base: business and service sectors have been heavily investing in technology, incl. e.g., products, services, machinery, AI, data analytics, and SMART solutions.Technology ecosystem: GCC technology literacy levels are high; advanced IT and production technologies are widely used in the GCC, supported by a strong welfare economy, universities, technology parks, the manufacturing sector, etc. Trends: moving toward high-tech technologies and SMART societies.	Environment: Awareness: social awareness of protecting the environment is improving due to the spreading of the internet and social media, increasing awareness, and the influence of international mobilization toward environmental protection.  Protection: GCC has been imposing stringent laws to protect the environment. Environment issues: GCC has made notable progress on issues like environmental awareness, legislation, clean energy, encouraging renewable energy, waste recycling, promoting local supplies, using green materials and technologies in production, replacing plastic bags with recycled or paper ones, etc.	Legislation: Latest legislation progress: GCC counties have issued stringent acts to regulate the pharma industry, protecting the public interest and safeguarding patients. Recently, GCC has established the GCC Central Drug Registration system to unify drug registration procedures, improve patient safety and access, and unify prices. Pharma regulations: pharma industry is tightly controlled by the drug regulatory authorities in the GCC, which approve medical factories, doctors and supporting staff, medicines for production and trading, and set selling prices.

Useful Tips

• Conduct market research to understand customers and competition and to identify opportunities.
• Be innovative in articulating the business strategy by bringing new and unique ideas about the strategy components discussed above.
• Seek advice from experts and involve the team and other stakeholders to develop a strategy.
• Set realistic and measurable goals that are aligned with the mission and vision of the company. Break down larger goals into smaller, achievable milestones to help track progress.

Things To Avoid

• Avoid developing a business strategy without conducting thorough market research.
• Avoid developing a business strategy that is too complicated to understand.
• Avoid developing a business strategy that is not unique and bring new values to the business.
• Avoid inaccurate data, guessing works, and assumptions without evidence.
• Avoid setting objectives that are not SMART.

Budget Sales And Marketing

Sales and marketing budgeting refer to the process of estimating costs and allocating funds for various sales and marketing activities that a company plans to undertake in a given period (e.g., one year). This budgeting process involves analysing historical sales data, market trends, and competition to create a comprehensive sales and marketing plan. This process includes information on the projection of annual sales (quantity and value), and marketing costs, including promotion, distribution, salesforces, and other associated costs. These details are essential to identify sales and marketing costs for the financial study. Sales are the significant operating cash inflows, whilst marketing costs are cash outflows, and thus, these estimates influence the project profitability. Besides, the sales and marketing cost budgeting ensures that the company allocates the right amount of resources to its sales and marketing activities while also ensuring that it stays within its financial constraints.

Step-By-Step Process

• Clarify the outcomes of the previous processes, including customer segmentation, market analysis, business concept, and business strategy.
• Identify the company’s sales and marketing objectives, such as increasing brand awareness, expanding the customer base, and improving customer retention. These objectives will help determine the types of activities needed to achieve them and the resources required.
• Analyse the market to identify trends, competition, and customer behaviour, as this will help create an effective sales and marketing strategy and estimate the costs involved.
• Prepare the sales plan of the project for (5-10) years.
• Estimate the salesforce costs of the project for (5-10) years.
• Estimate the promotion costs (e.g., advertising, PR, event management, discounts, and free goods) of the project for (5-10) years.
• Estimate the distribution costs of the project for (5-10) years.
• Estimate the other costs like communication, transportation, fuels, hospitality, and IT costs of the project for (5-10) years.
• Prepare a table showing the yearly revenues and the marketing costs for (5-10) years.
• Prepare a budget document highlighting the above outcomes, and share it with your team and experts.

Example

Here are the budgeting costs of the marketing and sales for a pharmaceutical manufacturing company:

Sub-accounts	Year 1 ($/Yr.)	Year 2 ($/Yr.)	Year 3 ($/Yr.)
Sales & distribution staff costs	148,320	218,010	225,150
Communication costs	5,998	90,538	233,336
Travelling costs	9,881	149,157	384,408
Office supply costs	2,470	37,289	96,102
Staff development costs	494	7,458	19,220
Marketing- Internet and IT costs	9,689	146,248	376,912
Promotion costs	130,226	1,965,765	5,066,187
Event management costs	34,584	522,048	1,345,427
Distribution costs	88,931	1,342,410	3,459,670
Vehicle fuels and maintenance	7,411	111,867	288,306
Printing costs	14,822	223,735	576,612
Advertising costs	49,406	745,783	1,922,039
PR costs	24,703	372,892	961,019
Hospitality costs	4,941	74,578	192,204
Sales & marketing  transportation	9,881	149,157	384,408
Goods transportation	83,990	1,267,831	3,267,466
Other sales & market costs	18,772	222,743	563,954
Total	644,519	7,647,508	19,362,419

Useful Tips

• Conduct market research to understand customers and competition and to estimate sales.
• Seek advice from experts and involve the team and other stakeholders to develop a sale plan and budget.
• Set realistic estimation of annual sales and costs.

Things To Avoid

• Avoid inaccurate estimations.
• Avoid personal judgement and consult key stakeholders.

The author: Munther Al Dawood

This article is derived from my book- Your Guide for Preparing an Industrial Feasibility Study

Get your copy here: https://growenterprise.co.uk/book-your-guide-for-preparing-an-industrial-feasibility-study/

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