303: How Manufacturers Can Protect Their Market Share - with Sam Gupta Social Capital

Meet Sam
 
Sam has been an ERP thought leader in the digital transformation space for nearly two decades with a primary focus on financial systems and ERP. He has been part of large transformation initiatives for Fortune 500 corporations but now spends time consulting with SMEs as a principal consultant at ElevatIQ. Sam regularly speaks at industry conferences and contributes his experiences through many popular blogs and publications. He also hosts a podcast called WBSRocks. 
 
Why are manufacturers not exploring these marketing opportunities right now?
 
When we look at the manufacturing landscape, especially if we talk about the SMB manufacturers, their business model, traditionally, if we look at the manufacturing supply chain, we had the manufacturer, we had the distributor, and we had the retailers. So just going back 20 or 30 years, manufacturers never had to worry about building their brand, because they had distributors who could actually sell for them. But now things are changing in the world, right? The skillset that they needed to develop, to be able to market, to be able to educate their distributors, they never had that. They were selling through distributors, they always had sort of the sales mindset, they had salespeople who were really good at talking about their products, but they never had to worry about marketing and that is the primary barrier, in my opinion, for manufacturers in understanding why they should worry about the marketing aspect and why they should pay attention to marketing to be able to create the opportunities they already have.
 
With that being one of the key barriers, what do you anticipate how this next phase of growth can happen and what can these SMB manufacturers do to get to the next stage?
 
I don't know whether you want to call this as next phase of growth, or the next phase of disruption. So there are some disruptions happening in the startup space, right. We have a lot of startups that are really good at marketing because they were never good at let's say the traditional manufacturing just because they had to compete with some of these established channels and their relationships. They had to figure out how to do the marketing because otherwise, they cannot compete with the traditional manufacturers. So disruption is happening in the startup space. Now, their products are going to be slightly more superior and the reason for that is because they are better at manufacturing as well. Just because they are utilizing the newer technologies, they are slightly more innovative. Looking at the traditional manufacture, they are going to face tremendous competition from these startups just because their products are going to be easier. They are going to build let's say the b2c channels which are going to be direct to consumers as opposed to going through the distribution channel. So manufacturers are going to face tons and tons of competition from these startups, plus, the lines are really blurring between your distribution and manufacturers just because some of the manufacturers are directly marketing to the consumers and the distributors, what they are trying to do is they are trying to develop their own in house capabilities to be able to develop these products. Now, they have competition from their own distributors, who were supposed to be their sales and marketing channel. So it's going to be a very interesting play overall and I think manufacturers need to think a lot more about what they can do to make sure their market share is protected.
 
How do you see the buyers and the decision-makers play into this?
 
Well, let's look at the buyer types depending upon the kind of products. If we are talking about some of the spaces such as food and beverage manufacturing, in that case, the buyers are going to be slightly smaller overall, in terms of their buying power because of the way...