The construction market in the US is expected to witness significant growth over the next 15 years.
In today’s challenging supply market landscape, companies in the manufacturing sector are developing frameworks and tools to improve transparency and mitigate potential risks across the supply chain. The industry is also focusing on realigning their business models to go on par with the rising competitive cost structures and adequately meet the changing market dynamics. In the construction industry, the increasing appetite for infrastructure investment in the developed economies is driving the growth of the industry. Furthermore, the growth of the construction equipment sector can also be attributed to factors such as increasing urbanization and growing population.
However, on the other hand, here are some factors that may hinder the growth of the manufacturing industry.
- The rise of green construction: Today, the construction equipment sector is witnessing sustainability concerns with the sector accounting for more than 40% of the world’s carbon emission. Therefore, governments from across the globe are compelling prominent manufacturers to adopt smart planning and sustainable design techniques that could help in reducing the pollution levels.
- Poor productivity and reliability: Amid the shrinking profit margins, the barriers to the entry in the construction industry are low with the productivity remaining stagnant over the last couple of years. Moreover, the significant rise in the raw material prices has had a substantial impact on the productivity and the overall bottom line performance. Therefore, construction equipment manufacturers are facing the need to invest in advanced technologies to generate adequate profit margins.
- Skilled labor shortages: Recently, construction companies are witnessing a dramatic reduction in their workforce. It is estimated that 54% of the companies are unable to hire employees with the right skill trades. Moreover, the recent recession has also affected the current market with major skilled workers leaving the industry in search of better opportunities.
[spacer height=”20px”]Amid the growing regulatory challenges and shrinking profit margins, companies in the manufacturing sector have started shifting towards the use of digital technologies to tap potential opportunities and address challenges related to poor profitability. Moreover, prominent construction equipment manufacturers should take adequate initiatives to be more productive and stay ahead of the competition. To tap into the potential market segments and identify the most profitable customers, construction equipment manufacturers are facing the dire need to adopt a robust market segmentation solution.
The Business Challenge
- The client: A leading construction equipment manufacturer
A renowned construction equipment manufacturer with manufacturing facilities spread globally, wanted to identify the latest trends in the construction industry and target specific products and services. With the help of a market segmentation study, the client wanted to tailor their offerings to meet the needs of the customers and improve their profit margins. The primary concern of the construction equipment manufacturer was to explore and analyze the characteristics of the potential customers and sell products and services in an agile and efficient manner.
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To profile the most profitable competitors, the market segmentation experts at Infiniti carried extensive research comprising interviews and discussions with key stakeholders in the construction equipment manufacturing sector. The experts also compiled information from a wide array of sources such as paid industry databases, company presentations, and industry forums.
The Solution Benefits and the Business Impact
The market segmentation solution offered by Infiniti helped the construction equipment manufacturer identify the latest industry trends and develop a more targeted approach to engage the customers. The client was able to segment the market based on purchase behaviors and divide markets according to the lifestyle, personality traits, values, and interests of the customers. Moreover, the market segmentation solution also assisted the construction equipment manufacturer in creating different target customer groups based on geographical boundaries.
In the future, the manufacturing industry is likely to promote innovation and productivity with prominent construction companies heavily investing in new technologies to gain a better market share.