How Marketing Can Help Defense Contractors Survive and Thrive

Posted by douglasburdett

With defense spending on the decline, defense contractors who want to diversify beyond the military are turning to marketing to evolve.

defense contractor marketing survival photo credit: The Marmot via photopin cc

In a recent Forbes article, "Defense Industry Needs To Get Serious About Diversifying," the current state of the defense industry is described this way:

The defense industry’s winter of discontent has finally arrived.  After a decade of continuously rising revenues and returns, the industry now finds itself, like Richard III in Shakespeare’s play, surrounded by players indifferent to its fate.  Having taken all the easy steps to prepare for a continuation of the post-Iraq, post-Afghanistan downturn, industry leaders now need to consider something more basic: getting out of defense.

But diversification for defense contractors involves changing the way they operate, finding customers and making sales. And that includes marketing.

To many defense contractors, the word marketing brings to mind promotional activities like advertising, direct mail and trade shows.  But the promotional aspect of marketing is just one (albeit visible) pea in a much larger pod.

A popular paradigm for marketing is the "7 Ps of marketing," developed in 1981 by Booms and Bitner.

No relation to the 7 Ps of the British Army ("Proper Planning and Preparation Prevents Piss Poor Performance"), the 7 Ps of marketing stand for 1) Product, 2) Price, 3) Promotion, 4) Place, 5) People, 6) Processes, and 7) Physical Evidence.

Defense contractors who need to sell beyond the military would do well to develop diversification plans with these 7 Ps in mind:

  • Product is the thing you offer that fulfills the needs of your customer. How is your product different from the current market offerings? Why do your prospective customers need your product?
  • Price - if your product is more of a commodity, you could be sucked into a price war, which is difficult to win over the long term. If you offer more of an intangible or can demonstrate value, you can charge more. The perception of your product is also affected by your price (e.g. Godiva Chocolates).
  • Promotion - many think this is the ONLY aspect of marketing. Promotion greatly affects how you generate awareness, interest, desire and action. If you are of the mindset that a great product will market itself, you will fail.
  • Place is synonymous with distribution. Where are you offering and delivering your product? Is it on the Internet, in a geographic area? Through distributors, a sales force?
  • People - amazingly, many companies will consider all aspects of marketing a product or service without thinking about the human resources necessary for success. What is the human interaction that your customers will experience from first contact to post sale? How are you selecting and training them?
  • Processes are another way of saying "systems." This is usually a comfort zone for defense contractors. Without systems in place for successful marketing, the business will not scale.
  • Physical Evidence (or packaging) - Most impressions of your company will be formed within the first 30 seconds a prospective customer seeing you or some element of your company. Stand back and think about how every contact with your company appears and sounds.

every ... military contractor needs to be thinking more seriously about diversification, because the good times are over in defense — at least for now. -FORBES

What do you think? What are your thoughts about defense contractor diversification? Please leave your comments below.
FS secondary CTA

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