P&G Steel Products Company, Inc.

Marketing Plan

> RESULTS

  • 25% net sales growth
  • 80% increase in bottom line profitability
  • Expanded business base that reduces seasonality and cyclicity
  • Penetrated two new end user segments
  • Established global presence

> COMPANY

P&G Steel Products, founded in 1948, has been a contract manufacturer of metal stamping and fabricated components for a variety of industrial applications, including automotive, which comprised about 55% of their sales volume. Manufacturing operations are conducted within a 70,000 square foot facility located in Cheektowaga NY, on a three-shift basis. Employment consists of approximately 70 people including production workers. Due to quality requirements of the industries served by the company, P&G Steel Products had also successfully achieved both ISO and QS-9000 registration.

> SITUATION

The company's primary selling activities were concentrated in the eastern United States. The sales function was generally assigned to a network of independent manufacturers' representatives, who had varying degrees of success.

In 2001, annual sales were tracking toward a decline in excess of 10% from the previous year. Much of this erosion was due to the relocation of customers' plants outside of the North East and foreign competition, particularly from Asia, where low cost imports were penetrating the domestic industrial base. In addition, the economic decline within several key market segments, including automotive and appliances, further contributed to this business decline. The situation was further exacerbated by the fact that the company had put minimal emphasis on new business development, either new customer or market segment opportunities, for a number of years.

> SOLUTION

In conjunction with P&G Steel Products' senior management team, a formal marketing plan was written by Insyte Consulting for the purpose of addressing the above business situation. The intent was to identify specific market opportunities that provide a more complete, overall solution to our customer's needs. The first step was to develop a comprehensive situation analysis that covered all market and competitive factors, as well as the company's position within these markets. This exercise enabled the company to develop a specific market focus, where their anticipated future success would be realized. From this point the company developed a strategic direction that was supported by the appropriate tactics, action plans and required budgets.

However, most importantly, the company effectively implemented the strategic direction and consistently measured performance against the goals stated in the plan. This persistence has enabled the organization to both meet its objectives, as well as to react to new business opportunities.

The basis of the plan was to diversify the business base from low-end, commodity type stampings to manufacturing solutions that were less affected by imports. This included shifting the product mix to larger stampings, as well as introducing secondary services like welded assemblies and CNC machining that provided further differentiation.

Within two years P&G Steel Products has achieved a significant turnaround. The company has been successful in maintaining business with accounts that have moved offshore. This has enabled them to gain an initial foothold in both the Pacific Rim and Latin America. Domestically, by emphasizing new market development, P&G Steel Products has been able to obtain several major customers in both the recreational vehicle and HVAC segments. Even within their traditional automotive segment, they have been able to significantly increase penetration of an existing customer to include multiple divisions and locations of that account. This added business has enabled the company to invest in new capital equipment that has allowed them to more effectively serve this customer as well as pursue additional customers with similar product needs.

The net results of the successful plan implementation are: a net sales growth of over 25%, despite business erosion among some customers and markets; an 80% increase in bottom line profitability; and an expanded business base that reduced both the seasonality and cyclicity of the business.


" This process enabled P&G Steel Products to set a solid strategic direction that has driven our recent growth. By setting specific measurable goals, we have been able to consistently track our progress and take the appropriate actions that provide the greatest positive impact on our business." - Andy Ponkow, Director of Business Development, P&G Steel Products, Inc.