LOW POWER UNIT SALES THREATEN VIABILITY:
Dynex has built hydraulic power units (HPU’s) at its Massachusetts facility since 1966. Unfortunately, depressed sales hurt profitability in 2011 and threatened the facility’s future. A competitive analysis and input from customers and its distributors identified two factors affecting the facility’s success.
First, there was little awareness in the marketplace about the design and manufacturing strengths of the facility and its products. Many competitors offered cheap, off-the-shelf HPU’s that were difficult to compete against. What unique selling proposition could be identified and promoted? What customer needs could be met to improve product value?
Second, there was very weak awareness even within Dynex’s own distributor network. Many distributors built their own power units for sale to regional customers. Also, units for delivery beyond the east coast were not always competitive because of higher shipping costs.
Dynex has always delivered high quality. The solution now was to reposition its power units as custom-designed and built for special requirements. The facility had much experience designing and building HPU’s to meet difficult operating parameters, including high pressures and difficult fluids. Workers regularly fabricated units with special materials and custom finishes to meet customer’s requirements.
A new focused campaign would facilitate market segmentation by customer need and would allow targeting to specific industries. Because higher prices were more acceptable for units with value-added performance, price became less of a sales objection.
INCREASED SALES AND PROFITABILITY
Hundreds of qualified leads were followed-up in an aggressive effort by the sales department. Regional sales managers worked with distributors to promote the revitalized brand.
The result of the campaign was an improvement in sales and profitability. Some distributors began to view Dynex as a source for special units they could not produce. With higher base-prices, additional shipping costs were less of a roadblock, and several sales were made to overseas customers.