Brand Positioning for Contract Manufacturing

The contract manufacturing sector is booming. More OEMs are looking to achieve economies of scale in procurement and production while freeing up resources to focus on new products and markets.

Yet for decades, contract manufacturers have been positioned ‘beneath the radar’, operating as the silent engines of growth in the sector. Too often, this has left them stuck in an undifferentiated middle, part of a pack of closely matched suppliers struggling with commoditisation.

Competition in the market is intense. OEMs often have numerous manufacturing partners, they can play off each other to drive down costs and hedge their bets. The risk of becoming lost in the undifferentiated middle is a real threat.

Research into the Electronic Manufacturing Service (EMS) sector by VMR has shown that retaining clients is particularly hard when the players in the marketplace all seem the same.

When they can switch rapidly and easily between suppliers, OEMs need compelling reasons to stay loyal rather than beat their partners down on price to achieve their competitive advantage.

Without a clear brand identity and value proposition, CMs can easily end up undervalued and overlooked by their most important partners.

EMS suppliers are feeling the squeeze:

There’s so much in this market that CMs can’t control - from freak weather events destroying supply chains to currency fluctuation. But there’s one thing they can control - their brand positioning strategy.

Ultimately, where you are positioned in the market is key to being discovered by right-fit leads and forming the long-term partnerships that will see you thrive in the future.

• Effective brand marketing can establish that emotional connection with your prospects and customers, which generates more loyalty, more sales and more profit.
• Focusing on brand can help you tell a story that sets you apart from competitors and convinces the right people to work with you and continue buying from you.

Probably the most critical element of cutting through in this crowded market, then, is brand positioning – how CMs differentiate themselves in the eyes of customers and prospects to achieve sustainable growth.

Your market, your offering and your business strategy will determine the limits of where you can compete – but here are some general, and simplified examples of brand positions you could assume.

As a contract manufacturer, you may want customers to think of you as:

• The cheapest
• The highest quality
• The easiest to engage
• The most capable
• The most efficient
• The greenest

A perception of your manufacturing brand as the cheapest might help win more business, but it’s the fastest way to damaging price wars that only a few will survive.

Instead, work out the position where you have the greatest chance of building brand equity to maximise your growth potential.

The aim of a positioning exercise is to define where you want to be in the marketplace and ensure your ‘brand reality’ aligns with your ‘brand image’.

This position is the sweet spot where three things intersect:

• Your customers’ needs
• Your unique capabilities
• Your competitors’ weaknesses

In other words, the uniquely fertile ground where you can grow.

How to position your brand for growth is a 3 step process:

1. Define your Ideal Customer Profile and buyer personas
2. Analyse your competitors' offerings
3. Create your value proposition

A customer profile is about the type of companies you want to attract. They are essential if you are looking at Account-Based Marketing (ABM) but are relevant to all B2B businesses.

You want to create a description of a company with all the qualities that would make it the best fit for your solutions.

When you define a customer profile, you might look at the following characteristics:

Company size: How big is your ideal customer? How much revenue do they turn over, and how many people do they employ?

Geography: Are there regions that are especially important to you? Are there logistical reasons that mean there is a finite area you can serve?

Legality: Are there legal reasons that limit potential customers? Such as age, location, or government or regulatory restrictions?

Industry: Which industries do you want to work with or perhaps have the most experience in? Which industries do you want to avoid for any reason?

Product or service limitations: Do you have a service level agreement (SLA) with your customers to meet a specific response time? If someone needs a quicker response, can you guarantee you’ll be able to meet that demand?

This isn't a comprehensive list by any means, but it may prove a good starting point when defining your Ideal Customer Profile. A lead needs to have these qualities to be able to buy from you. You can use this profile when qualifying leads to ensure that sales time is not wasted on leads that are not likely to buy.

Ideal Customer Profiles are focused on the fit of the account and don't look at the nitty-gritty of the individual buyers within that business. Once you have identified business accounts that fit your customer profile, you want to start thinking about who your sales reps are talking to and who is responsible for actually making the purchase.

Businesses that fit your Ideal Customer Profile are comprised of these individuals who all hold different titles and have varied product/service knowledge, and levels of experience. These are the buyers you need to profile in your buyer personas.

Buyer personas are profiles of the people to whom you need to sell at the companies you are targeting.

You can use existing buyers’ profiles to base these on. But there are a couple of dangerous assumptions at work here. Firstly, these are the customers you have – not necessarily the ones you want – or the ones you might aspire to have. They may have got you here – to your current level of sales – but will they help you develop and grow your business?

Secondly, are they typical? You may have some outliers, and basing a buyer persona on them could be disastrous.

Developing a buyer persona requires a deeper level of thinking. Without the broader picture, you can't possibly know which aspects of your customers are genuinely unique to them and which elements are the ones they share with other potential clients.

It's also essential to go beyond the simple demographics to understand your prospects' challenges, fears, and aspirations. You need to identify their pain points – what do they struggle with? What elements of their weekly tasks are difficult, tedious or challenging? What other people in their world might be helping or frustrating their work?

Reverse-engineering buyer personas from existing customers doesn't trigger the same thought processes or the same rigorous research and evaluation – it can be useful, but only as an input into more in-depth buyer persona development.

Look around your sector. Identify who your competitors are. What do they do well? Where do their strengths lie? What do their customers value about them?

Here are a few questions to help you build a picture of your competitors' current positioning in the marketplace and where you fit in relation to them:

• Who are your direct and indirect competitors? Who might be a future threat?
• What do they claim about the products and services they offer? What data do they use to prove their claims? What features or benefits do they emphasise in their messaging?
• What marketing channels do they use? Which of their strategies appears most successful?
• What image of their offering, their employees, and their business do they project? What do their mission, vision and values statements promise?
• Can you work out the Ideal Customer Profile and the buyer personas they are targeting? Why do their customers choose them? You might know because you’ve lost deals to them.
• What do their customers say about them in business and product reviews? How does their market interact with them on social media?

Now, consider the unique strengths and weaknesses of these rival offerings. Where are the gaps in their armoury? Where are customers not being served well? Where are they ignoring the problems and complaints of the people they serve?

The clues to successful brand positioning will lie in understanding these weaknesses and the opportunities they present to you.

Once you have understood the audience you want to address and their current choices in the marketplace, you can figure out what it is about your company and your offering that can resonate with them in their search for a contract manufacturing company.

This is your value proposition.

What specific value do you bring to your customers when they engage your contract manufacturing company? What problems and pains does your company help your customers overcome? How does your company succeed in meeting their needs where others fail?

There are lots of tools that can help you identify your customers’ fundamental needs and map them against your products and services to define your unique ‘value proposition’.

The value proposition canvas (invented by Strategyzer) is a simple but powerful tool to help with this process. And it starts with creating a value map and a customer profile.

Understanding your customer is fundamental to any manufacturing branding strategy. And it all starts with their ‘jobs to be done’ (JTBD).

‘Jobs to be done’ are what your customers (i.e., buyer personas) want to achieve when they engage your business. Remember, this is about solutions, not product features. As the old adage goes people buy holes, not drills. Jobs to be done’ can be functional, social and emotional - recognising the full range of motivations that trigger a customer’s buyer's journey.

What might they look like for a contract manufacturing prospect?

As you fill out this section of the canvas you can begin to map the ways your specific product alleviates identified customer pains and delivers required customer gains.

For contract manufacturers, these might include the way:

• End-to-end services help customers solve for fragmented supply chains

• Your software offers customers transparency across the supply chain

• Outsourcing production helps customers focus on R&D and brand-building

• Value engineering services improve product quality while reducing costs

• DFX services help customers avoid delays in production and delivery

The completed map shows if you have a ‘good product fit’ against the needs of your ideal customers. If not, you may need to tweak and shape your offering to more perfectly answer customer needs.

When you understand your customers ‘jobs to be done’ you can see more clearly how you can position your services to speak to their specific pain points and end goals.

This is the position where you become more than just a commodity to be haggled over. It’s a place where you can represent something singular and powerful in the minds of your prospects and customers. It’s your competitive advantage.

Armed with your competitor analysis, your customer profile and your value map, you can clearly see the position in the market where you will be able to thrive. This is the place where you can avoid the dead end of price wars with equally matched rivals - or being forced into verticals where you can’t possibly compete.

Instead this is the clear ‘blue ocean’, the place where you can successfully grow your brand away from predation by competitors, confident in the value you alone can offer your customers:

Now you need to convert this insight into an expression of your brand position that can underpin all your sales and marketing efforts.

The ‘brand positioning statement’ is a paragraph that summarises the unique value you bring to your customers, your point of differentiation, and the reasons to believe your claim.

It’s a formula that sets out your target position in the marketplace that you can share with your team and use to validate all of your branding work.

According to Graham Robertson, there are four elements that make up a brand positioning statement: It's a description of who you serve, where you operate, where you will win and why customers should believe you.

Let’s explain this a little more.

Here’s an example of a brand positioning statement for Coca-Cola created by a lead copywriter at HubSpot.

Note that it breaks down into the simple formula outlined above, describing their target market first, their unique positioning, and the evidence to support their claims.

Need some inspiration for your own brand statement? How about this one for a fictitious medical device manufacturer who offers a complete end-to-end service to their customers:

Or how about a packaging brand that is bringing unique, sustainable packaging technology to a mainstream market:

The brand positioning statement helps everyone in your business appreciate how you are differentiated in the marketplace and the unique benefit you have for customers and, even, the wider world. It contextualises your offering and tells your people why they should believe in what you do.