(Feb. 16, 2003) — It's hard to imagine the K show without a big, glitzy GE Plastics booth, but that's the new reality of the global plastics industry. More frequently, these days, what once was “hard to imagine” is happening.
Some of the other radical changes in the past few weeks, like the disappearance of the Van Dorn trade name and the American Plastics Council's decision to cut its $19 million consumer advertising budget, have a common theme: They're related to marketing.
First, let's look at GE Plastics.
If you've never been to the K show, imagine GE Plastics' traditional presence there by picturing the company's NPE booth — except that in Dusseldorf, Germany, the exhibit is multilingual. Otherwise, it's just as slick, with models/presenters talking about the wonders of name-brand engineering thermoplastics in a loud, high-technology, staged industrial drama, complete with plastic-body cars and other nifty applications.
Now GE says it will skip K 2004 and spend its marketing dollars elsewhere. The trend of materials suppliers skipping big plastics trade shows isn't new, although it is for GE Plastics. But it's not surprising. The expense of staffing a really big booth is incredible, and harder to justify during lean times. Don't be shocked if other suppliers follow GE's lead and skip or downsize K spending this year.
GE's move comes down to marketing — or more specifically, how to get the most out of your marketing budget. Marketing is essential, but neglected by many businesses that need to reinforce their brand names and images. But spending everywhere for a global company like GE Plastics might just be impossible. So it has to make tough decisions.
The same is true for Demag Plastics Group, which recently announced it is dropping the 59-year-old Van Dorn trade name and just calling its presses “Demag.”
All brand names have value, so the decision to drop one isn't something a company should take lightly. Keep in mind that even with this decision, Van Dorn will enjoy name recognition among injection molders for at least the next 25 years. But big companies such as Mannesmann Plastics Machinery GmbH have to weigh the cost of continuing to promote the Van Dorn name vs. the potential benefit of streamlining their marketing efforts.
In MPM's case, the company slowly has introduced the Demag brand to the United States since it bought Strongsville, Ohio-based Van Dorn Co. in 1992, so the decision to drop the brand now should be rather painless.
On the other hand, APC's decision to cut ad spending is another matter. The Arlington, Va.-based trade association has done its homework and knows that its “Take Another Look at Plastics” and “Plastics Make it Possible” campaigns significantly have boosted public perception of the industry. APC also knows that cutting spending will result in higher negative ratings for plastics — exactly how much higher remains to be seen and will depend on how much the budget is cut.
The fact is, APC has been losing membership lately, and the remaining companies aren't able to pick up the slack. Like many firms faced with a tight budget, APC's marketing will suffer. In this case, unfortunately, marketing is APC's most important function, so the decision could have very unpleasant consequences.