Global Spec 2009 Economic Outlook Survey

8/14/2019 Global Spec 2009 Economic Outlook Survey

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I N D U S T RY T R E N D S & R E S E A R C H R EF O R I N D U S T R I A L M A R K E

2009 Economic Outlook Survey:How Industrial Companies can Succeed in theCurrent Economy


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I N D U S T R Y T R E N D S A N D R E S E A R C H R E P O R T S F O R I N D U S T R I A L M A R K E T E R S

2 0 0 9 E C O N O M I C O U T L O O K S U R V E Y 2 0 0 9 G L O B A L S P E C , I N C .

Contents

Executive Summary .................... ....................... ....................... ...................... ....................... ........... 3

Profle o Respondents .................... ....................... ...................... ....................... ....................... ....... 4

How to Use These Survey Findings .................... ....................... ...................... ....................... ........... 4

2009 Economic and Business Climate ....................... ...................... ....................... ...................... .... 5

Impact by Industry ................... ....................... ....................... ...................... ....................... ....... 5

Departmental and Spending Impact ....................... ...................... ....................... ....................... ....... 7

Where Time and E ort is Focused ...................... ....................... ....................... ...................... .... 9

Finding New Customers in the Current Economy ...................... ...................... ....................... ......... 12

How Suppliers Must Respond: An Eight-Point Checklist ...................... ...................... ..................... 18

About GlobalSpec................................ ....................... ...................... ....................... ...................... .. 20

Charts & Graphs

Impact the economy will have on your business in 2009 ....................... ...................... ..................... 5

Impact o economy by industry .................... ....................... ...................... ....................... ................. 6

Changes in departmental budget rom 2008 to 2009 ..................... ....................... ...................... ...... 7

Number o projects working on in 2009 compared to 2008 ....................... ...................... ................. 8

Where time and e ort will be ocused in 2009 ....................... ...................... ....................... ........... 10

Where money will be spent in 2009 ..................... ....................... ...................... ....................... ....... 11

Time spent on the Internet or work-related purposes ....................... ....................... ...................... 12

How engineers and technical pro essionals use the Internet ..................... ...................... ............... 13

Number o work-related Web sites visited per week ...................... ....................... ...................... .... 14

How o ten specifc sources are used when searching or products, services and suppliers........... 15

Use o printed trade magazines over the past 12 months ...................... ...................... ................... 16

Number o e-newsletters received ....................... ....................... ...................... ....................... ....... 17

Frequency o reading e-newsletters ..................... ...................... ....................... ....................... ....... 17


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Executive SummaryGlobalSpec conducted an economic outlook survey of its North American regis-tered user base of engineering, technical, manufacturing and industrial profession-als in January 2009 to provide advice and analysis that will help manufacturers andsuppliers succeed in this challenging economy.

The survey results demonstrate that the economy has had a measurable impact onthe industrial sector, although some industry sectors are weathering the economicslowdown better than others. Automotive, semiconductor & electrical components,and computer, systems & peripherals are hardest hit by current economic condi-tions, while biotechnology/pharmaceuticals, utilities/energy, and aerospace/defense are the least impacted.

Suppliers and service providers that sell primarily into the hardest hit industriesneed to explore if their products or services are applicable to other, more vibrantindustries. If their products are not a good t for these industries, suppliers mustramp up marketing efforts in order to capture diminished demand in hard-hitindustries. Suppliers that sell to a broader spectrum of industries should focusmarketing efforts on speci c sectors that are less impacted by the economy, whichwill provide them an opportunity to grow their market share.

Fifty-six percent of respondents stated that their company sales will be downin 2009 compared to 2008 and 50% reported their departmental budget hasdecreased. However, the news is not all negative: 23% expect sales to increasein 2009. Top areas where engineers will be spending more time and effort includeentering new markets, researching future projects, projects to save energy, andnew product design & development. While purchasing may not take place imme-diately for longer term projects, suppliers must maintain a market presence where

customers can nd them now, during the research and speci cation stage, or theywill miss out on future sales opportunities when projects get funded.

Other work effort by engineers will lead to near-term spending. Fifty percent of respondents are spending more time on projects to save energy, 48% on projectsto reduce waste/scrap, and 47% on projects to decrease quality rejects. Supplierswhose products or services can help test current production processes; reducewaste, rejects and energy consumption; or otherwise save money will nd marketopportunity. Suppliers may need to re-invent their positioning and re-purposeapplication notes, case studies and white papers around these initiatives to letpotential customers know how their products can be used in these applications.

Its important to note that, despite the economy, engineers and technical profes-sionals are still specifying and purchasing products and services. Top product andservice areas where respondents will be spending the same or more money in2009 as in 2008 include electrical components, mechanical components, calibra-tion & testing services, and electronic components.

The industrial audience is also performing an increasing amount of work, researchand product search online. Forty-two percent of engineers and technical profes-sionals spend six or more hours per week on the Internet for work-related pur-poses and 62% visit six or more work-related Web sites each week. Online media


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represents four of the top ve resources used by engineers to search for suppliers,products, components and services. The conclusion to draw is that to succeed inthis economy, suppliers must right-size their marketing spend. Your customersand prospects are online, and you need a strong and broad online presencebe-yond your company Web sitein order to compete and win business.

Pro le of RespondentsIn North America, 3,810 respondents completed the survey. Fifty- ve percent holdengineering titles. Other titles represented include a cross section of corporatemanagement, manufacturing, purchasing, quality control, research and develop-ment, and technical support positions. Respondents work across a variety of industries, from aerospace and automotive, to semiconductor and electroniccomponents, to utilities.

92% of respondents are involved in purchasing components and services.

59% in uence more than $50,000 in annual spending on components/equip -

ment/services with 32% in uencing more than $200,000 in spending.

How to Use These Survey FindingsUse the survey results and analysis presented in this white paper as a benchmarkto measure your companys current situation and activities. Does your marketingstrategy and product messaging line up with the behavior of your customers andtrends in the market? Are you making the right decisions to win available businessand gain market share? If not, now is the time to make the necessary adjustmentsto marketing programs, audience targeting and product positioning that will allowyou to capture the opportunities available in the current economy.

If you have any questions about this survey please contact us at 800.261.2052.


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2009 Economic and Business ClimateRespondents assessed how the current economic situation would impact theircompanys sales in 2009. The majority (56%) expect sales to be down in 2009,which is not surprising given the current state of the economy. However, the newscoming out of the industrial sector is not all negative: 21% anticipate sales to beabout the same as in 2008, and 23% expect an increase in sales in 2009.

Impact the economy will have on your business in 2009

The majority expect company sales to be lower in 2009 than in 2008.

Anticipating salesto be up in 2009

23%

Anticipating flatsales compared to

2008 21%

Anticipating sales tobe down from 2008

56%

2009 GlobalSpec, Inc.

Impact by IndustrySome industries will suffer more than others. Automotive industry woes have beenthe subject of headlines recently, and 56% of those working in the automotiveindustry expect their companys 2009 sales to be signi cantly down from 2008.Forty-four percent working in semi-conductor and electronic components industrystated their companys sales would be signi cantly down in 2009, as did 40% of those working in computers, systems & peripherals. All of these industries areheavily affected by the well-documented slowdown in consumer spending.

On the other hand, only 9% of professionals working in biotechnology/pharma-ceuticals stated that their 2009 sales would be signi cantly down, which mayindicate the demand for healthcare is not affected by the economy. Other indus-tries less hard hit are utilities/energy (11% anticipating sales signi cantly down),and aerospace/defense (12%). Demand for utilities does not change drasticallyduring a recession, and some parts of the energy sector may be bene ttingfrom investment in alternative energy sources. Aerospace/defense may be thebene ciary of long term contracts and the United States continued involvement inthe war on terror.


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Suppliers and service providers that sell primarily into the hardest hit industriesneed to explore if their products or services are applicable to other, more vibrantindustries. If they nd their products to be a good t, suppliers should re-purpose

content such as application notes and case studies and begin a marketing pushinto those other industries. If their products are not a good t for these more vibrantindustries, suppliers must increase their marketing efforts in order to capturediminished demand in the harder hit industries they currently serve.

Suppliers that sell into both the harder hit and better off industries can also bene tfrom a strategy adjustment, particularly if they are facing marketing budget con-straints. These suppliers should focus marketing efforts on speci c sectors wherethey currently do business and are less impacted by the economy. They will have agood opportunity to grow their market share.

Impact of economy by industry0 % 1 0 % 2 0 % 3 0 % 4 0 % 5 0 % 6 0 %

Automotive

Semiconductor & Electronic ComponentsComputer, Systems & Peripherals

Fabricated Metals

Industrial Machinery/Tools & Equipment

Chemicals, Plastics & Rubber

Consumer Products/Electronics

Manufacturing, Other

Communications- Datacom/Telecom/Wireless/Network

Instrumentation & Controls

Engineering/Tech Design Services

Paper, Printing & TextilesOil & Gas

Other

Transportation

Education

Government

HVAC, Fire Control, Safety

Medical Equipment/Instrumentation

Packaging Machinery

Aerospace & Defense

Utilities/Energy

Biotechnology/Pharmaceuticals


I look at the situation as an opportunity to gain acompetitive edge on our competition.

Engineer, Manufacturing

Automotive and semiconductor & electroniccomponents industries are hit hardest; biotechnology/

pharmaceuticals and utilities/energy are least

impacted by economic woes.


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Departmental and Spending ImpactEngineers and technical professionals answered questions about their departmen-tal budgets, changes in their day-to-day work processes, and where their workefforts will be focused in 2009. Fifty percent stated their 2009 departmental budgethas decreased compared to 2008. Part of the budget reduction can be attributedto changes in headcount, with 35% reporting their departments have decreasedheadcount. Fortunately, the news is not all negative. Fourteen percent reportedtheir departments have increased budget for 2009, and 20% have increasedheadcount in their departments.

Increased budget14%

Remained the same36% Decreased budget

50%


Departmental budgets have decreased for half the respondents, while remaining the same or

increasing for the other half.

Changes in departmental budget from 2008 to 2009

The economic climate and departmental budgets have affected peoples day-to-day work activities. Thirty percent are working on fewer projects, which mayindicate that less capital is available for projects, but another 33% indicate they willbe working on more projects.

Even though sales may be down, engineers and technical professionals are notnecessarily working less: they are still busy because they may have to take onmore projects due to decreased headcount, fewer internal resources, or a man-date to cut back on the use of outside resources. These busy engineers are likelyworking under constant time pressures; when they do devote time to sourcingproducts and services, its important for suppliers to have a presence in the marketso they can be found.


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More projects33%

Fewer projects30%

Same number of projects

37%


Number of projects working on in 2009 compared to 2008

Engineers working on more projects are likely under time pressure and being asked to do more with less or cut back on outsourcing.


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Where Time and Effort is FocusedMany companies are spending more time and effort on entering new markets (59%spending more time and effort), researching future projects (53%), new productdesign and development (50%), and new technology research (46%). Planningfor new products, markets and technologies involves searching for and specifyingcomponents and services. While purchasing may not take place immediately forthese longer term projects, suppliers must maintain a market presence wherecustomers can nd them now, during the research and speci cation stage, or theywill miss out on future sales opportunities when projects get launched.

Other work effort by engineers will lead to near-term spending. Fifty percent of respondents are spending more time on projects to save energy, and 48% onprojects to reduce waste/scrap. Another 47% are spending more time on decreas-ing quality rejects. Typically, these types of projects require parts purchases toalter manufacturing processes or assembly line functions.

Suppliers whose products or services can help test current production processes;reduce waste, rejects and energy consumption; or otherwise save money will ndmarket opportunity. For example, suppliers who offer higher quality and perhapshigher priced products can showcase that their products last longer and needreplacing less frequently, helping customers save money. Suppliers will needto re-invent their positioning and re-purpose application notes and white papersaround these initiatives to let potential customers know how their products can beused in these applications.

Outsourcing led the list of where less time and effort was being spent in 2009:outsourcing design (44% spending less time/effort), outsourcing testing (37%),outsourcing manufacturing (35%), and outsourcing assembly (36%) all have been

reduced. Suppliers or service providers that offer value-added or complimentarydesign services can nd market opportunity with companies that have cut back onoutsourcing design or dont have enough time or internal resources to get whatthey need done.

Suppliers will also discover market opportunity by knowing where engineersplan to spend budget in 2009. Even in the downturn, the majority of respondentsare spending the same or more on products and services. Seventy percent of respondents plan to spend the same amount or more on electrical componentsin 2009 than in 2008. Other top spending areas include mechanical components(69% spending the same or more), calibration & testing services (69%), electroniccomponents (69%), and materials, chemicals and adhesives (67%). This dataindicates that demand still exists in the marketplace.

I will be working on new

and improved products for 2009 and adding value/features/bene ts without

adding cost.

R & D,Manufacturing

There will be more cost control and focus onlean manufacturing and

green improvements to

reduce overall operatingcosts.

Facilities Engineer,Biotechnology/Pharmaceuticals


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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Entering new markets

Researching future projectsNew product design & development

Projects to save energy

Waste/scrap reduction

Decreasing quality rejects

Expanding service o erings

New technology research

More production capacity from existing lines

New product launches

Retro tting lines for new capabilities

Sourcing new suppliers

Green manufacturing initiatives

Projects to reduce packaging/shipping costs

Training

Product line consolidation

Projects for shorter run capabilities

Environmental safety & compliance projects

Consolidating suppliers

Equipment maintenance

Maintenance & repair projects

Capital projects

Requalifying current suppliers

Outsourcing manufacturing

Outsourcing assembly

Outsourcing design

Outsourcing testing

More time/effort (%) Same time/effort (%) Less time/effort (%)


Where time and effort will be focused in 2009

Companies are spending time and effort in 2009 on forward-looking projects such as entering new markets and researching future projects, as well as projects to help cut costs and waste. Less time and effort will be spent outsourcing.


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Where money will be spent in 2009

In almost every category of components, products and services, companies are spending the same or more in2009 as they did in 2008.

Electrical components

Mechanical components

Calibration & testing services

Electronic components

Materials, chemicals & adhesives

Industrial maintenance

Test & measurement equipment

Sensors, transducers & detectors

Fabrication services

Data acquisition

Flow control & uid transfer

Material handling & packaging equipment

Fluid power componentsMotion & control

Process equipment

Laboratory equipment & scienti c instruments

Manufacturing equipment

Contract manufacturing

Engineering design services

Networking & communication equipment

Electronic manufacturing services

Industrial & engineering software

Industrial computers & embedded systems

SemiconductorsIndustrial automation services

Optics & optical components

Imaging & video equipment

Building & construction

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Spending the same or more (%) Spending less (%)



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How engineers and technical professionals use the Internet

More than 80% use the Internet to obtain product speci cations and to nd components, equipment, services and suppliers.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Obtain product speci cations

Find components, equipment, services and suppliers

Instruction manuals

Research

Find pricing information

Request price quote

News and informationFind standards

Purchase parts/products

Find product availability information

Compare products across suppliers

Search for technical application ideas

Download CAD drawings

Request samples

Competitive information

Training/workshops/tutortials/seminars

Download software demos

Career research/job search

Peer reviews of products/suppliers

Collaborative design/project work


The top activities that technical professionals are engaged with online are nding product speci cations, components,equipment, services and suppliers. More than 80% go online for these tasks which indicate that the place where thebuying process begins is on the Internet. Manufacturers, distributors and service providers should focus their market-ing efforts on online media as the most effective way to reach their audience of potential buyers.


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How often speci c sources are used when searching for products, services and suppliers

(1= never use, 10= use every time)

0 1 2 3 4 5 6 7 8 9

General Search Engines (Google, Yahoo etc.)

Online catalogs

Supplier Web sites

Peers/colleagues

GlobalSpec.com

Supplier sales representatives

Industry trade publication Web sites

Printed trade magazines

Online directories and portals

Case studies/white papers

Trade shows

Other Business-to-Business vertical search engines

Networking sites (e.g. LinkedIn)

Webcasts/Webinars

Online communities (chat rooms, news groups, etc.)

Podcasts

Blogs


Four of the top ve sources for searching for products, services and suppliers are online sources.


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Use of printed trade magazines over the past 12 months

30% reported a decrease in the use of printed trade magazines, continuing adownward trend documented over the

past several years.

Increased

7%

Decreased

30%

Remained the same

63%


Corresponding with the rising use of online resources by engineering, technical, manufacturing and industrialprofessionals is the preference for this group to use e-newsletters rather than printed trade magazines as aninformation source. Over the past 12 months, 30% have reduced their use of printed trade magazines, continuing adocumented trend over the past several years.


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Frequency of reading e-newsletters

34 %

8 %

46 %

12 %

0 %

5 %

10 %

15 %

20 %

25 %

30 %

35 %

40 %

45 %

50 %

Daily/several times a week Once a week/twice a month Once a month/every othermonth

Few times a year/never


46% of respondents read e-newsletters at least daily or

several times per week.

Number of e-newsletters received

8 %

3 6 %

7 %

1 3 %

3 6 %

0 %

5 %

1 0 %

1 5 %

2 0 %

2 5 %

3 0 %

3 5 %

4 0 %

No n e 1 - 2 3 - 4 5 - 7 8 or more


56% of respondents receive three or

more e-newsletters.

Additionally, 56% receive three or more e-newsletters, and 46% read e-newsletters at least daily or several timesa week. Given your audiences preferences, e-newsletters and other online media are a better use of marketingdollars than traditional print media.


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How Suppliers Must Respond: An Eight-Point ChecklistDespite current economic conditions, spending is still taking place in the industrialsector. To capture new business and maintain or grow market share, you will needto ght harder and market more effectively. You must focus on speci c target mar -kets that are most viable. You must maintain marketing frequency and consistencywhere you see the greatest opportunity. And you must understand your customersreality and how their buying processes are affected by the economy.

Here are eight strategies to follow to help you succeed:1. Fine-tune messaging . Create product sell sheets, white papers, application

notes and case studies to address the types of projects that engineering,technical and industrial professionals are currently working on and may needparts and services for: projects to save energy, reduce scrap/waste, decreasequality rejects.

2. Reach a higher-level decision maker . Your customers are tightly controlling

projects and spending; therefore you need to reach a higher-level decisionmaker who is motivated by nancial concerns and fast payback on invest -ments. During the selling process, provide nancial justi cation for buyingyour products/services. For example, how does your product create ef cien -cies that eliminate overtime, or generate cost savings by requiring fewerreplacement parts, or increase productivity by reducing production downtime?

3. Emphasize value or cost savings . Make yourself attractive to prospects thathave limited budgets or that have had to cut back on outsourcing by empha-sizing value or cost savings you can provide in terms of additional customersupport, just-in-time delivery, complimentary design services or other value-added services.

4. Review all of the markets you sell into . If you sell into multiple markets,you can reduce effort in markets hardest hit by the economy (automotive;semi-conductor & electronic components; computers, systems & peripherals)and increase effort where more spending is taking place (biotechnology/pharmaceuticals, utilities/energy, aerospace/defense).

5. Seek out new markets . Your existing products and services may be a goodt in markets where you dont have a strong presence but where spending is

taking place. Re-purpose application notes, white papers, case studies andother marketing materials to be relevant to prospects in new markets. Choosemarketing tactics such as industry-speci c e-newsletter advertisements to godirectly at prospects in those markets.

6. Maintain frequency and consistency . You need to get on prospects shortlist for projects currently being researched that will be funded in the future:entering new markets, researching future projects, new product design anddevelopment, and new technology research. The way to get on prospects listof potential vendors is to maintain frequency and consistency in your market-ing so you will be found when prospects are searching for products andservices like those you offer.

The economic situation will inspire us to do more with less and engage in creative,

innovative product develop-ment and value analysis togive our customer more valueand service for their money.

President, CEO & Chief Engineer,Instrumentation & Controls

We are more conscious

of our spending in 2009.Management is reviewingcapital projects for tighter

pay back periods.

Technical Support Services, Manufacturing


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7. Use both push and pull marketing . Use your budget wisely by deployingboth push and pull marketing programs. Push marketing includes direct mail,e-mail marketing and e-newsletter advertisements that reach out to customersand prospects. Pull marketing includes searchable online catalogs providingfull product exposure, online directories, Web sites, and search engines that

your customers and prospects use when searching for information, productsand services like those your company offers. Seek a media partner that hasyour target audience captive and can offer both push and pull programs underan integrated program.

8. Right-size your marketing spend . You cannot afford to waste preciousmarketing dollars in places where your audience isnt lookingprint advertis-ing, trade shows and other traditional media just arent as effective anymore.

Your customers and prospects are online, and that is where you need to reachthem in order to compete and win business. Whats more, online programsgive you 24/7 presence in front of target customers and are easy to measurein terms of impressions, clicks and conversionsso you know exactly howyour marketing spend is performing.


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About GlobalSpecGlobalSpec.com is used regularly by engineering, technical, manufacturing andindustrial professionals worldwide to search for components, products, technicalinformation and services. GlobalSpec users bene t from domain-expert searchengines, a broad range of proprietary and aggregated Web-based content, partnumber search capabilities and 60+ e-newsletters helping them search for andlocate products and services, learn about suppliers and access comprehensivetechnical content. SpecSearch , GlobalSpecs trademarked search technology,allows users to search by speci cation more than 180 million parts in 2,300,000product families from more than 24,000 supplier catalogs.

For manufacturers, distributors and service providers, GlobalSpec offers tailoredmarketing solutions that put you in control and stay within your budget, as well asexpert online marketing advice to help you nd new customers. We work with youto provide highly ltered sales leads and marketing opportunities, quali ed Webtraf c to your site, product promotion and brand advertising platforms, and a wide

range of e-media advertising and marketing solutions including industry-leadinge-newsletter advertisements, an industrial banner ad network, a searchable catalogprogram that makes your products discoverable by the attributes that make themunique, and a company directory program - allowing you to choose the optionsthat t your needs, despite the challenging business environment faced by manycompanies today.

The ability to nd customers to tap into new markets or new regions that areactively seeking your products to understand what prospects are lookingfor to gain an integrated marketing program and a wealth of practical adviceabout online marketing this is the GlobalSpec approach. And its why manymanufacturers, service providers and distributors choose GlobalSpec to help theirbusinesses grow, even in these uncertain economic times.

For more information on GlobalSpecs comprehensive marketing solutions thatcomplement your traditional programs, please call 800.261.2052 or visithttp://www.globalspec.com/advertising .

2006-2009 GlobalSpec, Inc. All rights reserved. GlobalSpec, the GlobalSpec logo, and SpecSearch are registered trademarks of GlobalSpec, Inc.

You are free to copy, distribute and display and create derivative works from this paper provided that you give GlobalSpec, Inc. proper credit as the source.
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