Unlocking the Power of Marketing

Scrap recyclers can use marketing to augment their businesses and establish a brand identity in the market. Here’s how.

By Leslie Fine

Leslie Fine is an associate professor of marketing in the Fisher College of Business at Ohio State University. In addition to teaching in the executive MBA and undergraduate honors programs, she is a regular presenter in the university’s management certificate, marketing certificate, and manufacturing supervisors programs. Fine also conducts executive management seminars for companies and groups, including ISRI.

When you hear the word “marketing,” do you think of TV ads in which animated frogs promote beer and minor celebrities wax poetic about the virtues of denture adhesive? Perhaps you envision Wal-Mart’s falling prices or Kmart’s Blue Light Specials? On a bad day, you might think of those irritating dinnertime phone calls from strangers trying to sell you vinyl siding or credit cards.
   It’s likely, however, that you—like most people—don’t think of the scrap recycling industry when you think of marketing. That’s unfortunate because marketing has just as much of a place in the scrap industry as in consumer-product businesses. In the latter case, if a beer ad prompts the viewer to head for the refrigerator, then the ad is successful. But once the consumer pops the top of that cold brew, he or she begins the process of creating a recyclable product—and that’s where scrap marketing begins.
   I know that many of you look at a car and envision the different forms of scrap it will become or find it impossible to enjoy a beer or soda without thinking about what will happen to the can. One fact about the diverse U.S. economy is that scrap is created in the process of making and transporting goods and in helping businesses and consumers cope with day-to-day life. It’s also a fact that the same marketing processes that benefit the manufacturers of those goods can benefit scrap recyclers, too.
   That’s not to say that scrap companies are the same as consumer-goods marketers. In a way, scrap businesses operate in the reverse of most businesses—while most businesses are trying to convince people to buy, you’re trying to convince people to sell.
   Don’t overlook the fact, though, that you’re still trying to convince individuals and businesses to behave in a certain way, to choose you rather than your competitors to solve their recycling problems. Marketing is a strategy to influence that behavior and that choice. In short, marketing is the best way to get individuals and businesses to sell recyclable materials to you.

Intro to Marketing
Marketing is essentially the process that links an organization’s strengths with areas of need in the marketplace.
   The strength of many consumer-goods companies is based on their ability to mass-manufacture products that solve problems in the daily lives of ordinary people. The strength of recyclers is found in their ability to deal with unwanted or used materials more effectively than those who generate those materials. The unique relationship between consumer-goods producers and the scrap industry is simply this: The more cars that are sold, the more beers that are consumed, the more washers and dryers that are replaced with the latest models, the more your business is needed.
As in many other industries, generators and suppliers of scrap don’t begin their day thinking about scrap recycling. At some point, though, they will have to deal with their scrap, and recyclers must be ready to capitalize on the opportunities this creates. 
  To illustrate this situation, consider an example from the plasma business, an industry that has similar 
dynamics to scrap recycling.
   The demand for plasma, particularly during certain times of the year, is high. Both nonprofit agencies like the Red Cross and for-profit firms attempt to meet the demand through individual plasma donation and sale. People are dimly aware of the blood circulating in their body, and no one wakes saying, “Gee, I don’t need all the plasma I have at the moment. I think I’ll get rid of some of it at a plasma-collection center.” The facts of the plasma-collection cycle, the features, aren’t inherently meaningful to most people. But many people need to supplement their income or else they need to believe that by donating plasma they’re contributing to the health of their community.
   Recognizing this, plasma centers and nonprofit organizations cater to both needs—the need for cash and the need to be compassionate. They seldom promote the fact that humans are capable of giving a surprising amount of plasma, even a couple of times a week, or that the market for plasma is strong indeed. Instead, they market the benefits to potential donors in terms of money or feelings of munificence.
   This plasma example shows that the role of marketing is to create messages that resonate with the unique needs of potential donors. For the messages to succeed, the marketer must have a deep understanding of present and potential donors. On a demographic level, the marketer needs to know who they are, where they live and work, and how often they’ve given plasma in the past. On a deeper level, the marketer must know the needs of these donors and what motivates them to seek the plasma-collection services. Then, to effectively communicate, the marketer must know how these donors receive information, which media they prefer, and when they’re most likely to be receptive to hearing the message about plasma donation. Finally, the marketer must make sure that when potential donors experience a need—whether it’s a need for extra cash or a need to feel good—that plasma-collection services come to mind as a way to meet that need.
   Now, let’s get back to the scrap industry. How can you take a basic understanding of marketing theory and make it work for you? The plasma example suggests the tools that are used, and now we’ll consider each in a bit of detail. Taken together, these elements are combined into a basic marketing strategy plan.

Assessing Your Strengths
As a first step, every scrap company should undertake an honest assessment of its core competencies. Consider, for instance, the materials and amounts of those materials you can handle as well as the geographic area in which you operate.    This basic information provides a starting point for identifying opportunities later in the process.
   These competencies form the core of your business and are the foundation on which your marketing plan is built. But as the plasma-collection example showed, most present and potential customers seek benefits rather than features. They want to know what advantages and services you provide that aren’t available from other recyclers or through other options.

Identifying Your Market
Marketing exists because people and businesses are different, with different needs and preferences. If everyone wanted the same brand of beer or the same kind of recycling, each product or service would operate in a commodity fashion.
   Just as some beer consumers want lite beer while others prefer full-bodied brew, some companies might have the resources or systems to sort their own scrap while others prefer not to sort their scrap. If a recycler can accept unsorted scrap, companies that can’t or won’t sort their scrap might accept a lower price as a tradeoff for the convenience of avoiding the sorting process. While this is a simple example, the same principles apply to more complicated recycler advantages and more complex customer needs.
   Marketing works best when it is focused on numbers of customers with similar needs. This leads to the consideration of the concept of a market segment.
   A market segment is a group of present or potential customers who are similar to each other in ways related to recycling but different from other segments. The differences between customers or markets are critical because a recycler will be uniquely suited to meet the needs of certain customers and ill-suited to meet the needs of others. One of the principles of sound marketing is to devote your resources to finding and communicating with those customers or prospects who best match your company’s strengths and that have the greatest market needs.
   As you delve into market characteristics, you must consider both your present customer base as well as potential customers. For present customers, you want to know whether your relationships have strengthened, as evidenced perhaps by a steady increase in the amount of scrap you collect from them. If possible, it’s helpful to know why a customer prefers your unique combination of features and benefits. Understanding the motivation behind the customer’s recycling behavior enables you to become more focused on providing benefits the customer values most.
   As for potential customers, the most likely prospects are individuals or organizations that are similar to your present customers. The similarity may not be on the demographic level—for example, two firms with the same sales volume might handle their scrap in drastically different ways. Instead, look for prospects that have similar needs to your current customer base.

Creating Your Brand
There are two aspects of the message variable that we consider in a basic marketing plan. The first aspect is the content of the message. One of the most important tasks of any marketing message is the development and maintenance of the recycler’s corporate or brand image. Brands are not just important for consumer goods. The brand is the word, phrase, and/or symbols that communicate the unique benefits offered by an organization. The brand not only identifies who you are, but it should also prompt your customers to remember all the benefits of choosing your firm to handle their scrap. Once a basic awareness of your brand is established, the task of marketing is to create a set of messages that communicates the recycling benefits desired by the particular target segment.
   The second aspect of the message variable is the vehicle through which the message will be delivered. The medium may be personal, such as a salesperson, customer service representative, or individual letter or e-mail, or the medium may be impersonal, such as a brochure or an advertisement in a trade publication. Which medium or media you choose will be based on your knowledge of your target markets. Understanding how your customers receive information and how they prefer to learn about recycling options can help you focus your communication resources toward vehicles that are most likely to reach the targeted segment.
   By now, it should be apparent that marketing and scrap recycling aren’t mutually exclusive. With some thought and initiative, you can use the powers of marketing to help your company establish your unique recycling brand identity and achieve new levels of success. •

Editor’s note: Want to learn more about marketing in the scrap industry and other management topics? Then attend ISRI’s Executive Management Seminar, July 21-24 at Ohio State University in Columbus. In addition to offering an expanded discussion of the marketing issues raised in this article, the program will cover accounting/finance, financial management, operations/logistics, human-resource management, and strategic planning/implementation. For more information or to download a registration form, visit ISRI’s Web site at www.isri.org.