Emerson Process Management: Accelerating on theInternet
If you were selling automation products for manufacturingplants, the 1970s were a wonderful time—sales were booming. By2000, however, the market had changed. Sales had slowed andpurchasers were beginning to think of automation products ascommodities. So many buyers were using fewer suppliers.
That was the situation that the Fisher-Rosemount division ofEmerson Electric faced. How could it attract the interest andattention of industrial purchasers for services that helped buyersoptimize their plants and processes? Such decisions are madeinfrequently and can involve big money, ranging from $25,000 to$25,000,000. How could Fisher-Rosemount demonstrate in an engagingand dynamic way the benefits of reworking processes in customers’existing plants? How could the company show what itsservices could accomplish?
Fisher-Rosemount tackled this situation by first repositioning itsservices. By looking at the relevant purchase processes from thecustomer’s point of view, it realized that customers were notlooking for individual products that they had to assemblethemselves, if they had the needed in-house expertise.Instead, they were looking for complete solutions.Competitors—especially software vendors—had already realized this.Seeking to capitalize on their own expertise, the competitors hadassembled product portfolios that included everything from PC-basedprocess control solutions to supply chain management solutions.However, although Fisher-Rosemount’s repositioning strategy wassimilar to that of other industry suppliers, the company had theadvantage of being part of a much larger organization.
Emerson Electric was founded in 1890 in St. Louis, Missouri, tomanufacture reliable electric motors. By 1892, it was selling thefirst electric fans in the United States, still one of its majorlines. Over the years, however, Emerson Electric has benefited fromstable management and consistent growth in its product and servicelines. Today, it has over 60 divisions selling a variety ofproducts from fans to process solutions, from to refrigeration andair-conditioning technologies to tools for do-it-yourselfers andprofessionals, from plastics joining and cleaning compounds toworld-class engineering and consulting services. In 2000, Emersonreported sales of $15.5 billion—a 9 percent increase from theprevious year. The company also reported increased earnings for theforty-third year and increased dividends for the forty-fourth yearin a row. To achieve such an enviable record, Emerson stressesincreased growth—particularly in global markets—andinnovation.
One way Emerson stays ahead of the competition is through heavy useof the Internet. It has over 115 e-business projects under way. In2000, it transacted 10 percent of its sales (that’s $1.55 billion)online and 70 percent of its 60-plus divisions had Web projects upand running.
The Internet provides a good channel for selling technicalproducts. A survey of industrial users of the Internet indicatedthat much of the industry (85 percent) has access to the Internet,and that engineers are among early adopters and frequent users ofthe Net. They use the Internet primarily to gather information, butgiven the lack of relevant information found there, they spend onlyup to three hours a week on the Net. Therefore, it appears thatsupplier companies can best increase the value of the Internet inselling their services by providing more detailed information aboutproducts and services.
The folks at Fisher-Rosemount must have seen this report, becausethey chose to develop an information-packed site called ThePlantWeb(www.plantweb.com). The home page of this Web site providesvisitors with information on ThePlantWeb. Right away, visitorslearn how they can understand today’s technologies better, accessinformation more quickly, reduce costs, and increase revenues. Theycan do this by taking advantage of PlantWeb University, whichprovides short business courses on how to improve plantprofitability, and engineering courses in which they can exploreleading automation technologies. The page also provides short”testimonial-descriptions” of companies that have recently usedThePlantWeb to improve their operations. Visitors who want moreinformation than that provided by the short testimonials can callup longer case studies for information. ThePlantWeb News providesrecent examples of new users of ThePlantWeb services and gives achronological listing for the last five years of successfulapplications of its services.
What is most interesting, engaging, and unusual about this Web siteis a feature called TestDrivePlantWeb. In the test drive, visitorscan see how much PlantWeb architecture can reduce capitalexpenditures compared to traditional DCS (Distributed ControlSystems) architecture. What does that mean? Assume that you are amanager of a pulp and paper plant. Visit the Web site, go to theTestDrivePlantWeb page, and click on one of the industries listedon the left side of the page. Click on Pulp & Paper, thencontinue with the test drive, and you’ll get a diagram showing allthe processes in the pulp and paper industry, from waste treatmentthrough papermaking, recovery, bleaching, and pulping. By using thevarious buttons, such as Customize Areas and Design CostAssumptions, you can input data for your plant. All the while, thesite provides an estimate of how much you can save using processmanagement from Fisher-Rosemount. In addition to a summary ofsavings, you’ll received information detailing how you wouldachieve those savings. Can’t you just imagine engineers inputtingvarious data to see how much they could save? In fact, the site hasproven very effective in attracting new customers. No doubt that’swhy TestDrivePlantWeb has won several awards.
What is PlantWeb? According to the Web site, it’s a revolutionaryfield-based architecture that changes the economics of processautomation. TestDrivePlantWeb allows you to build your own virtualplant to evaluate the economics of process automation. It employsan easy-to-use, drag-and-drop interface that allows users tocustomize models by adding or deleting process areas, units, ordevices or by adjusting variables such as labor rates and averagewire run. The effects are shown immediately in the summary.Specific benefits of retrofitting your old plant with automationfrom Fisher-Rosemount include reduced process variability,increased plant availability, reduced capital and engineeringcosts, reduced operations and maintenance costs, and streamlinedregulatory compliance.
In 2001, as part of its corporate repositioning strategy, EmersonElectric renamed the Fisher-Rosemount division, calling it theEmerson Process Management division. The goal was to enhance theoverall corporate brand and to provide insight into the division’sservices. The repositioning also involved the integration ofFisher-Rosemount with other services in Emerson Electric, such asEmerson Performance Solutions, in order to provide completesolutions to purchasers.
Emerson Process Management does not rely only on the Internet tosell its services. To promote ThePlantWeb, it hired 50 sales reps(dubbed “PlantWeb Champs”) and trained them on Internet technology.To support their efforts, it used print advertising and directmarketing to reach prospects that it calls “technical evangelists.”The print ads used brilliant colors and images that contrasted oldand new technology—for example, a weather vane and a weathersatellite. These ads stood out amid the wordy competitor adssurrounding them. Emerson also used the TestDrivePlantWeb site tocollect names of prospects and their affiliations. It then sentdirect mail to higher-level executives in each organization. Theidea was to intrigue the “technical evangelist’s” supervisor, whowas more likely to be involved in the purchase decision. Perhapsthey would meet in the hallway, and the technical evangelist, whowas excited from taking a “test drive” on ThePlantWeb, wouldexchange information with the supervisor who had questions aboutcosts.
Such simple hallway conversations can be the beginning of a processthat takes months to complete. During that time, Emerson sendsprospects promotional materials and invitations to seminars to keeptheir interest from flagging. If all of those marketing efforts arenot enough, PlantWeb has a guarantee that the purchaser will reducetotal installed cost using PlantWeb automation solutions ascompared to traditional DCS architectures.
Does this work? You decide. In the first 18 months thatTestDrivePlantWeb was up, Emerson identified 65,000 unique visitorsto the site, and that translated into 850 installations ofThePlantWeb product.
Questions for Discussion
1. What type of purchase decision is involved in buyingsolutions to a company’s process systems from Emerson ProcessManagement (Fisher-Rosemount)?
2. Who might participate in the buying process? How canThePlantWeb and the associated marketing campaign impact each ofthe buying-decision participants?
3. How can ThePlantWeb and the associated marketing campaignaffect each stage in the business buying process?
4. What purpose do the testimonials, case studies, and PlantWebGuarantee serve?
5. Is promotion and selling on the Internet a wise decision forEmerson Process Management? Why or why not? What are the advantagesof using the Internet compared with using only personal selling andadvertising? The disadvantages?
6. In your opinion, is Emerson wise to reposition itself bybranding all of its divisions with the Emerson name? Why would thisbe beneficial in selling to business markets? How might it be adisadvantage?