WELCOME
Weekly selected highlights in flow control, treatment and combustion from the
many McIlvaine publications.
· A Good Sales Lead or a Reliable
Purchase Forecast
· Market Forecasting by Type of
Purchaser
3700 Large Purchasers of Bags and Cartridges
3700 companies will purchase 50 percent of the bags and cartridges used for dust
collection and gas turbine inlet filtration. They will spend $1.75 billion for
these products in 2019. Large cement and power companies’ individual
expenditures will exceed $1 million. The average large purchaser in the
miscellaneous industry category will spend just $150,000. The average among the
3700 will be $470,000.
Since the purchases of these 3700 companies are predictable a direct sales
program can be set up to address them. Each will spend enough to warrant a
special effort.
Purchases by the 200 largest customers are included in the
N021 World Fabric Filter and Element Market
Purchases by the other 3500 are available as part of a business program
explained at
www.mcilvainecompany.com
A Good Sales Lead or a Reliable Purchase Forecast
Which would you rather have? A good sales lead for a hot project with the name
of the purchasing agent and the project manager or a reliable forecast as to how
much of the products you sell will be purchased by the customer over the next
two years.
You would want to choose the hot sales lead if you sell a general performance
product such as a 2” water intake valve. If your product is a 36” diameter
lined valve you would want to choose the reliable forecast. Here are the
reasons.
· The selling task for high performance
products starts months or years before purchase. The chances of last minute
persuasion are not high. If you have a reliable long term forecast you can
devote the requisite sales effort.
· The project manager and purchasing contact
are valuable but with a high performance product the decision may have been
already made by engineering. Companies such as BASF, IP, ConAgra, or
Arcelor Mittal have thousands of LinkedIn contacts. So finding the right
people is not a problem. Part of a long term campaign is to establish rapport
with the decision makers. A last minute introduction is a poor alternative.
· The reliable purchase forecast allows you
to wage an organized sales campaign. Responding to sales leads is a
chaotic modus operandi.
Find out about the McIlvaine program to provide reliable purchase forecasts at
www.mcilvainecompany.com
Market Forecasting by Type of Purchaser
Forecasts for pumps, valves, scrubbers, filters and other combust flow and treat
(CFT) equipment are typically divided into new equipment and repair/service.
However, with further divisions by use it is possible to forecast purchases by
individual customers.
When a system supplier provides a new system at an existing plant, the plant
owner is likely to provide a preferred bidders list. If a unit is going to
be replaced or for normal service and repair the plant will be the purchaser.
Only a few percent of purchases will be for greenfield plants not owned by
companies already operating CFT products. Expansion at existing plants is more
common. Replacement of equipment is likely to be a bigger potential than
purchase of equipment for a new system. If the industry growth rate is 5 percent
and the CFT product life is 20 years, the replacement market will be the same
size as the new system market.
Segmentation in this manner shows that the end user is making most of the CFT
decisions. Since there is consolidation and centralization of purchasing in
industries buying CFT products most of the purchases will be made by less than
35,000 companies.
The energy and utilities sectors have the most large purchasers. Other
industries have fewer large purchasers but in the case of the food or metal
working industry there are many very small purchasers. However their total
share is small.
The ability to forecast most of the purchases provides a foundation for a whole
new marketing approach. Details are found at
www.mcilvainecompany.com