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Most Companies Who Seek New Customers and Markets Are Unhappy with Results, Survey Finds

This article was published in "Business Wire." A version of this article was also published by "US Industry Today."

Concord, NH: Most companies today are striving to increase their volume and profits by adding new customers and by entering new markets. But they are not satisfied with their results, a survey of manufacturing and service companies has discovered.

The annual "Business Outlook Survey," published by The Beta Consulting Group, Inc. of Concord, NH reports that over 80% of companies it surveyed plan to grow by adding new customers and entering new markets. However, two-thirds say their marketing efforts are no better than adequate. Without significant improvements in this area, Beta analysts conclude, desired growth objectives for the surveyed companies can never be met.

"Attracting new customers and entering new markets is much more difficult in practice than in theory," notes Beta President Bradley E. Hosmer in announcing the findings. "Entering new markets often involves learning, adopting and implementing new business practices and policies. Companies often underestimate the difficulty of that process." Most companies also underestimate the quick reactions and skill levels of their competition, Hosmer added. "Our survey shows that most companies, as a result of such factors, fall short of their new business development goals."

Surveying the business experiences of 76 manufacturing and service companies in 1999 and 2000, the Beta study also found:

Companies that want and need new customers typically fail to implement effective strategies for achieving this goal. As a result, many companies fall short of their growth targets. "The fact that two-thirds of surveyed companies rated their marketing functions adequate (or worse) shows vast improvement is needed here," Hosmer explains.
Companies with profit problems often attack new customers/new markets out of desperation rather than as the logical consequence of a viable strategy. "They find themselves needing to grow in their current markets but stuck for some reason and unable to do so. They turn to new customers and new markets which seems like the only alternative. They just don't know what else to do." Hosmer adds. "But in taking this tack they are often quite ill-prepared, frequently underestimating the time, cost, and difficulty of expanding outside their current customer and market base."
Only 15% of the companies surveyed report pursuing new customers and new markets with effective, results-driven marketing. Most surveyed companies are indeed pursuing new customers and markets but with poor, ineffective marketing, "and are falling short of their objectives," Hosmer says. "They know that they want to find new customers and break into new markets in a fresh way, but they don't put enough of the required creative energies into research, planning, and implementation to effectively complete the job."
Successful companies instinctively recognize the importance of new customers and new markets. "Such companies value this strategy as a means for sustaining their good fortunes," Hosmer explains. "They're proficient at establishing both effective marketing and new business development processes aimed at achieving sustained growth."

Until recently, most companies found they could grow by optimizing and intensifying their traditional ways of doing business. Now that markets are changing fast in unexpected ways and becoming more competitive due to a myriad of factors, real profitable growth has become harder to achieve. Most companies feel they now need to branch out to find new customers and new markets rather than relying on established customer bases. However, the Beta survey shows that this process is harder and more time consuming than many companies initially assume, often producing results that fall far short of expectations.

"Any company that truly wants to attract new customers and enter brand new markets had better have a top notch marketing department/function within its walls or go looking for help from a competent outside expert," Hosmer explains. "Simply put, entering new markets is tough."

Basing his comments on both his survey and on over 30 years experience as a top marketing, manufacturing, and management consultant, Hosmer adds, " From what I've seen, when a new market venture falls flat, it often fails for unnecessary reasons. Mistakes are made and opportunities are missed. This is because too many companies jump into new products or markets without adequate market research. But only thorough research makes it possible to create practical strategies that will improve the odds of genuine success."

For further information on Beta's Business Outlook Survey, contact Mr. Hosmer at 603-226-3567 or email him at bhosmer@betacg.com. The Business Outlook Survey Report is also available for viewing on Beta's web site.

Beta Consulting Group, Inc.
71 Little Pond Road, Concord, NH 03301
v: 603.226.3567 f: 603.226.2623
e: w: www.BetaCG.com


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