The paper “ 3M’ s Industrial Business Division - Changing the Customer Focus from Original Equipment Manufacturers to Maintenance, Repair and Over Haulers" is an engrossing example of a case study on marketing. IBD has been serving as a broad range of industrial markets in the sale of appliances, paper, and electronics. Some of its products include abrasives, adhesives and supply chain execution software solutions. To generate the top-line growth of the company, IBD decided to focus on MRO and this division brought about various product opportunities. These included improved technology platforms which increased growth potential for example through the introduction of composite conductors, liquid filtration and supply chain execution software.
The other opportunity included the use of direct sales by facing the customers and this stimulated sales into the company. The company was also able to pursue corporate initiatives such as by eroding the edge of Canadian manufacturers. Arikan (2008) describes that this strategy involves the incorporation of various elements such as growing the entire business, aiming at developing business opportunities, being involved in acquisitions and finally increases in investment especially in the emerging markets.
According to Baker and Hart (2008) customization of products and management of customer retention would be another way of achieving the growth of the business. In this, IBD gets an opportunity of driving scale and increased market share which is more at MRO. The reason for this is that MRO has a bigger market, especially in Canada. The other opportunity that IBD acquirers by using MRO are that large distributors are growing faster in the market as compared to the rate of MRO growth. There are also vacant spaces in various product lines showing that IBD will have a competitive position in the market by filling the vacant places.
A better opportunity for IBD that contributed to improving its revenue and profit margins was private labeling. IDB had two major customer groups which include original equipment manufacturers (OEMs) and maintenance, repair and over haulers (MROs). The two customer groups were different in their way of sale, for example, OEM concentrated on selling high-value items and mostly they were finished products while MRO was selling low-value products which were mostly consumables.
IBD had concentrated on distributing to the OEM segment and its growth had stated deteriorating since the segment had reached its maturity stage and therefore expansion would be difficult. MRO segment, on the other hand, was fragmented and there was a lack of brand loyalty though it was significantly growing. IBD came to the conclusion that the two major ways of attaining its target would be to find new customers for the present products and the other method would be to introduce new products to the market which will be aimed at targeting new customers in the market.
Other opportunities included improved technology platforms and have potential growth. One of the faced by changing customer focus from OEM to MRO was that IBD would get additional sales within the targeted time frame. This means that the time taken in delivering products from the manufacturer to the customer will be shortened. This is because IDB had been distributing to retailers and not concentrating on the customers.