25 Oct 09 Case Study – METL Marketing, Supply, Demand
Case Study – METL Marketing, Supply, Demand – List Brokers
I think that a good relationship between Mr. Orban and the government is already well established, as indicated in question #2. In order to move forward with the sale, I think it is important for Mr. Orban to establish his business more across the state of Texas. While METL has a few larger contracts, Mr. Orban’s lack of sales and marketing efforts has lead to a situation where nobody has awareness. Putting a marketing team in place would be beneficial in spreading the word about Orban’s company. Branding and other forms of advertising could bring METL to top of mind status in many potentials vendor’s eyes, and this would increase his shot of closing the sale. More marketing communication tends to equal a larger market share – and a large share of voice tends to portray more validity for a firm within a specific industry. If METL can become better known and respected within the market, it can increase sales without Orban having to waste time – he will have more opportunity to worry about business administration and growth strategy.
Once the marketing effort has been put in place and executed, forming a traditional sales team in an important next step. Mr. Orban seems to be worried a lot about the lack of work employees sometimes receive, and work cannot be made more readily available if regular sales are not occurring. After an initial branding campaign, a sales steam can work with the METL name and move forward more efficiently. Marketing + Sales = Increased Sales. Mr. Orban needs to recognize this pattern, a pattern established by various companies ever since the start of free enterprise in America. If he can stop treating the company like a one man show, or a “mom and pop” shop, Mr. Orban will have much more success with this sale. Again, the current validity and status lies with Mr. Orban, and not his company. Taking the next step, to me, means aggressive marketing, advertising, and of course, direct sales efforts.
Typically, as price decreases, demand rises. As supply increases, prices also drop. Large quantities of unused goods and services don’t do anyone any good if they remain unused. Thus, a larger supply usually creates a market that yields the service at a lower rate. This is important to understand for direct competition purposes. For example, if there is one pizza shop in town, it might make sense to charge $3/slice for pizza, since many people like it, and will be willing to pay the premium. There is a demand for pizza, and only one place can accommodate it with an adequate supply. As the supply of pizza vendors increases though, to say three shops in one market, the original store’s market share now drops. Now, they are selling less pizza since competitors have entered the market and are offering the same service. How can they increase their revenue again? Lowering prices will likely drive more of the original patrons back to their shop, as they are now getting more “bang for their buck” with lower pricing. The other pizza shops will see this trend, and follow suit. Now, the market is flooded with pizza, and the prices are lower than they’ve ever been.
Mr. Orban’s business seems to be fairly unique, and it does not appear as though there are too many competitors within the market. When jobs need completion, demand is created. Since there is demand, and the supply is relatively low (only METL, a handful of other companies who can accommodate the buyers), prices will likely remain fairly high. High pricing in this industry, or within the government sector in general, may not be too off the mark. Price plays an important role in contract duration periods, but typically, services such as the ones provided by Mr. Orban require quality. Thus, Mr. Orban’s company will likely have a better chance of selling on value rather than price alone. The company is still fairly small, and a larger firm could easily price them out of the market. But, Mr. Orban has standards and values, and his business is built on quality control and value. In this particular market, I don’t feel that price plays too large of a role in managing the demand for services. While price will always be important and a true metric for measuring ROI, value and quality will likely reign supreme for METL in my estimation.
Fore more on Supply and Demand
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