Our client was a tool manufacturer that had been very successful in one European market but had previously been reluctant to pursue the lucrative U.S. market. Recently, the client had developed a new plumbing technology that had the potential to reduce the time for a plumber to connect two pipes and with this innovation they decided that now was the time to finally attempt U.S. market entry.
Our objective was initially to size the U.S. market opportunity and understand customer economics and buying behavior. In Europe, strong labor unions, uniform building codes, and centralized training made the launch of the new technology relatively straightforward. However, in the U.S. the process was complicated by diverse building codes, non-standard or non-existent plumber training, strong incumbent manufacturers, and limited manufacturing capacity.
Our secondary objective was to develop a business entry plan. We first quantified the opportunity (which was sizable) and the risks it involved using built-up market based data on plumbers’ buying decisions – this involved detailed surveying, assessment of alternatives, construction of customer economics, and overall market sizing. From this data we made our recommendation.
Our approach was to first build economic models based on the key drivers of demand for our product of interest. We then translated our economic models into an operational strategy which included headcount requirements, organizational structure, key business metrics, development timelines, production requirements, and plant optimization.
In addition, we outlined a range of market entry options – from co-branding to resale/wholesale arrangements with existing equipment and supply companies. Following this, we developed core marketing materials/messages aimed at explaining the value proposition in terms of cost and time savings to an audience we by then knew very well – American plumbers. Lastly, we developed a prioritized set of geographies whose early performance would serve as a gauge for future success.
For our client, the primary value added was gaining a full understanding of a market they knew little about: U.S. plumbers and products. They utilized the feedback from our detailed market and customer research to redesign the feature set, develop the right value proposition, and created a viable product for the U.S. market.
The client clearly understood the core elements of their technology – but needed help mapping it to a new market and building an organization to support this rollout; together we were able to accomplish both.