The heart of the January/February 2005 issue of Business 2.0 provides a list of 25 companies and describes how they’ve managed to grow rapidly over the past few years. Some of the domestic and international companies are private, some public, and they vary in size, by industry, and in methods of innovation. They include Proctor & Gamble, Toyota , McDonald’s, Vonage, Air Canada , K2 , Apple and Steelcase. Below are a few examples of the stories covered in this issue of Business 2.0 and their relevance to economic development.
Never lose sight of your customers or their needs and desires
This was a bad but fortunately short-term mistake made by McDonald’s: instead of doing what it should have been doing all along, paying strong attention to its customers, McDonald’s for a number of years focused on opening up new stores. As it focused too much on starting new restaurants, the desires of its customers changed. As a result, McDonald’s failed to recognize the public’s shift to a healthier diet and its customers’ dissatisfaction with the quality of McDonald’s food. To avoid making the same mistake, economic development must concentrate on the needs of its target market. Communities must first identify the right industries to target and then cater to the needs of that industry. Communities must either have the infrastructure to support those needs or select a new industry or types of businesses to target.
Match the product with the right target markets
Recently, this strategy has made Toyota one of the most successful automobile companies, partly because it identified the markets it wasn’t reaching. For many years, Toyota relied heavily upon the Camry, its most successful car line, to generate most of its business. Toyota learned through an evaluation of the buying patterns of its customers that the median age of Camry buyers was 50 years old. That meant that Toyota was neglecting the generations that were both younger and older than that of Camry buyers. In response, Toyota developed the Lexus and Scion lines. The Lexus was obviously aimed at wealthier consumers, but also at consumers with a median age of 55. More recently, Toyota developed the Scion, which is aimed at the younger, hipper generation. Toyota also implemented very targeted and smart marketing strategies. When Toyota advertised the new Scion, it parked the new car in front of stores, cafes, bars and other public places frequently visited by young people. As a result of this marketing tactic and other strategies, Scion sales last year rivaled those of the Honda Element and Mini Cooper. The Toyota example is a terrific one for economic developers to follow. We have worked with countless communities around the world that were targeting the wrong industries. In addition, a large number of these communities were not even effectively marketing their location and amenities. Communities must first understand their community and the types of industries that they should be targeting. Once the industries have been identified, marketing programs must be tailored to each of those industries, since each of them must be approached differently.
Vonage is a great case in point for taking a great idea and running with it. For those not familiar with Vonage, Vonage is a voice-over-the-internet service provider. In simpler terms, it provides services that allow its customers to use their high-speed internet connection to make phone calls. Though the company was one of the pioneers offering this type of technology, it is bound to lose its market share once the big phone companies start offering the same service. But the company would not be where it is today had the President and CEO, Jeffrey Citron, not been a risk-taker with an innovative idea. This story is very relevant to economic development. Globalization has made attracting businesses a much more difficult task. We are seeing a large number of jobs going overseas, the majority of them traditional manufacturing jobs. To counter this trend, communities must find ways to be innovative and act on those innovative ideas. Innovations can be in the form of new programs to promote entrepreneurship or strategies for marketing your community.
Improve & repackage
Over the past five years, Proctor and Gamble has undergone double-digit growth. This is a tremendous accomplishment for a multi-billion-dollar, global company. Through a series of product improvements, new product developments, product repackaging and acquisitions, P&G has been able to sustain this phenomenal growth. P & G’s practice should be a part of all economic developers’ marketing programs, especially if their communities are diversifying. Refurbishing old and depreciated buildings, establishing new business/industrial parks, considering marketing your community on a regional basis, and reviewing your marketing materials, branding strategies, and communication channels are all examples of periodical improvements to enhance your marketing results for the future.
Twenty one other stories in this issue are worth reviewing. The following link (http://www.business2.com/b2/web/mag ) will take you to the Business 2.0 web site for this current issue. I recommend it: the stories are very intriguing and you will learn more insightful ways to market your community.