Greetings All. Bob Rutherford, here this week with some thoughts on one of the perhaps obvious, but nonetheless very important elements that distinguishes defense sector marketing from the commercial sector. There are several of course, but this one is fundamental: in the DoD marketing environment there is only targeted customer. So rather than shaping a campaign toward a class of consumers with the intent of capturing a market share among several competitors within a given product user environment (that may include thousands of buyers), this strategy must support the goal of attracting a single known customer and winning the total prize against the competition. Generally speaking there is no "market share" in a given specific competition - the stakes accordingly are quite high!
There are exceptions or caveats to every rule and this one is no different, so let me digress on a couple of those. Often a military requirement will originate with a single branch of the armed services, say the Army. A particular capability, system, or platform may also have application to, say the Marines. In fact, both of these services use products that to the untrained eye appear identical - certain helicopters for example. But on closer inspection it will be apparent that the respective services have slightly different missions and the subtle differences in the supporting requirements will demand a similar but technically unique product for that service branch. Thus, one can find oneself marketing to a lead branch with the idea of expanding that market into one of the adjacent services. At the same time, while a company may have garnered a contract award from one service, the competitive field may be wide open again with the other branches and the competition will be every bit as aggressive in pursuing the opportunities. Being comfortable as a market leader is often a myth. A subtext to the foregoing is the international defense marketplace. Again, here a given production use by a branch of the US military may be subsequently marketed to an international customer whose requirements are similar but not identical and the product to be marketed will need the flexibility to adapt to those requirements. The holder of a domestic defense contract enjoys a tremendous advantage here, however, because many international customers apply a bit of a litmus test in seeking a product that is essentially "endorsed" by a US military purchase. Additionally there is the comfort of implied product line and support stability.
the second caveat involves what is called second sourcing. This occurs when the government seeks to reduce the manufacturing risk inherent in awarding a production contract to a single company. If the government owns the technical data and design rights on a given product, which it frequently does as a byproduct of a development contract, it will occasionally award a second manufacturing contract to one of the development phase competitors in the production phase of the product. This is sometimes done for political purposes or to prevent the erosion of the domestic manufacturing base. So a losing bidder in the development phase may see life again on the same product in the production phase. Not somewhere to bet the farm though!
So back to the principal theme. With one customer, his requirements are your requirements, and with a known customer, dialog can and should occur to help shape those requirements. This helps the government make decisions on priorities and gives them data for cost trade-off analysis and decision making. With only a win or lose outcome (forgetting the caveats for the moment) the product marketeer must understand all facets of the the buyer's value system and motivations. A hard fixed budget may drive the competition more toward a price competition where a sophisticated or complex requirement may reveal a more flexible budget on the government's part and a stated interest in achieving capability through innovation. Or an emphasis may be placed instead on streamlining the development with the goal of earliest introduction of a new capability.
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