ASME STRATEGIC MARKETING REPORT

PLEXUS CONSULTING GROUP, LLC

7 JULY 2003

I. EXECUTIVE SUMMARY

Overview

Plexus Consulting Group undertook a study to provide the data that will enable ASME International’s Board of Governors to develop and implement a strategic marketing plan for the Society. Plexus administered both quantitative and qualitative surveys to a wide cross-section of both ASME International members and non-members from several mechanical engineering sub-disciplines that are experiencing, or are likely to experience, growth in the near future: bioengineering; defense; energy, and, transportation. Plexus also supplemented the surveys with demographic research, an environmental scan, competitor intelligence and discussions with both the ASME International BOG Task Force and professional staff.

Survey respondents were selected to ensure representation across function (i.e., corporate and industry, consulting, academia and government) and geographic location (i.e., U.S., Asia and Europe). When compared to the Society’s membership demographics, certain groups of respondents (i.e., academia, persons under the age of 45 years, managers and persons residing outside of the U.S.) were relatively over-represented as they represent a valuable strategic potential to ASME International. For this same reason, the survey focused more intently on persons who were not members of ASME International but who were otherwise qualified to belong to the Society, including stakeholders who have purchased ASME International products and services.

The surveys found that ASME International is perceived to be among the strongest of the discipline-based engineering societies. It is also perceived to be fragile with regard to changing global economic and social trends. Its current strength is based on history, but its future could be perilous if the Society does not adapt itself to these changes according to the respondents.

The growing importance of global standards, the growing need for education, training courses and job referral databases and services, emerging needs in new engineering fields and trans-disciplinary fields, and need for an organization that can bridge differences between industry, academia and government and between the various engineering disciplines themselves all represent opportunities for ASME International. However, if ASME International fails to seize these opportunities, other organizations will fill the vacuum. Indeed, some have already begun to do so.

Global trends from the prevalence of ISO generated standards for professions and industries throughout the world to global outsourcing of high tech jobs are developments that have immediate and long-term implications (representing both challenges and opportunities) for ASME International and the traditional place it has occupied.

ASME International’s image is of a membership organization at the top of its game, poised either to climb further in importance as an organization or to fall into decline. The Society’s fate is in its own hands. Its challenge as an organization is to identify those strategic issues that are changing the environment in which it has historically operated and then to determine how best to integrate them into its vision, mission and operational and programming structures.

The report does not profess to be statistically detailed, but it does capture the best thinking and observations of opinion leaders market analyses as to the strategic trends that have and are likely to have a key impact on ASME International and the profession it serves.

Key Findings

• The primary focus of ASME International is on members and prospective members.
• The majority of ASME International’s revenues come from employers, especially industry.
• ASME International tends to look at the market too narrowly, and without full consideration of key segments.
• ASME International is viewed as one of the top engineering societies in the world, but is also seen as slow moving, stuffy, conservative and academic-oriented.
• A strong customer, market-based focus is essential for future success
• ASME International is known globally for its codes and standards
• Engineers aspire to management responsibility and high technical expertise
• There is strong interest in entrepreneurship, especially among young engineers
• Technologies identified that will be important in the future are of a multidisciplinary nature
• Engineers and their employers want resources that are convenient and ready to use.

• Today the primary focus of ASME International is on members and prospective members. Within this customer segment, there is a perception that the needs of members in academia are being better served than those in industry or government.
• Although ASME International is an individual membership organization focused on meeting the needs of individual engineers, the vast majority of the Society’s revenues come directly or indirectly from other customers, primarily employers, especially industry.
• Respondents thought that ASME International looked at the market too narrowly, as a membership organization without regard to the products and services it supplies. This ignores the rest of the customer base and doesn’t allow full segmentation of the marketplace.
• The Society is generally viewed as one of the top engineering societies in the world and has a reputable overall image. However, other characteristics that the Society’s customers associate with ASME International include slow moving, stuffy, conservative and academic oriented. This perception could be harmful to the Society’s need to stay relevant in the minds of young engineers, industry and other key markets and stakeholders.
• ASME International has non-profit and/or for-profit competitors for all of its products and services. Therefore, a strong customer, market-based focus will be essential for the Society’s future success.
• ASME International is recognized globally for its codes and standards; codes and standards are ASME International’s product leader both in real dollars and in perception.
• Engineers surveyed (members and non-members) aspire to management responsibility and high technical expertise; they want to be experts with direct responsibility.
• There is a strong interest in entrepreneurship, especially among young engineers.
• The technologies identified by respondents that will be important in the future are all of a multidisciplinary nature, e.g., sensors, lean/agile manufacturing, biotechnology.
• Engineers and their employers want career development resources that are convenient and ready to use; resources that require travel or extended commitments are less highly valued.

Conclusions

The following conclusions are based on the Key Findings:

• Need to develop a market-based culture
• Need to globalize structures, programs and strategies
• Need to become more flexible, agile and responsive
• Need to implement on-going processes to monitor the rapidly changing external environment and to assess the Society’s competitive position
• Need to determine what constitutes a member
• Need to develop culture and structure that welcomes and fosters the creation of specialty groups that may require multidisciplinary approaches
• Need to re-evaluate ASME International’s vision and mission

• Need to Develop a Market-Focused Culture:

ASME International needs to change its marketing culture from one that is product-focused to one that is market focused. Staff and members alike need to know and appreciate what this means and understand how and why a market focus needs to be incorporated into the Society’s systems, programs, products and priorities. Associations are increasingly acting and organizing themselves like their for-profit counterparts in the service industry. They are focusing on those areas where they have a competitive advantage in the marketplace. They do thorough, annual assessments of where they stand and how the needs of their primary and secondary customers may have changed. They structure themselves to deliver their products and services accordingly. Examples of market-focused opportunities identified in this study include:

o Improved market segmentation that would provide the basis for customized product offerings.

o Better leveraging of the Society’s codes and standards leadership into other products and services such as educational offerings and online resources.

• Development of more in-depth relationships with corporate customers. The employer markets (industry, academia and government) may offer significant opportunities for ASME International; building relationships with employers could significantly improve sales to existing employer customers. ASME might well bear in mind the marketing truism that about 80 percent of an organization’s sales come from the top 20 percent of its customers.

o Leadership in multidisciplinary/trans-disciplinary technologies with significant mechanical engineering involvement.

o Additional research on specific needs and opportunities in the areas of engineering management, management and entrepreneurship.

o Development of a proactive jobs initiative that links employer talent needs with appropriate talent, including technical experts.

§ Need to Globalize Structures, Programs and Strategies:

The Society is viewed as being very “American.” ASME International needs to globalize its focus and structure in order to make it more attuned to the rapidly evolving changes in the world economy. It is essential that ASME International develop effective strategies to achieve global legitimacy (that is, broad recognition from foreign governments and multinational entities that ASME International legitimately represents the global community) and relevancy for its products and services.

§ Need to Become More Flexible, Agile and Responsive:

The Society is viewed as overly general and not responsive to emerging trends, opportunities and threats. In order to become both more market-focused and knowledge-based, more authority needs to filter to lower levels that can respond more quickly to changes in the markets and customer needs locally and globally.

• Need to implement on-going processes to monitor the rapidly changing external environment and to assess the Society’s competitive position:

ASME International should consider an ongoing environmental scanning and intelligence assessment process to ensure that the Society has the tools to be a knowledge-based and market-focused organization.

§ Need to determine what constitutes a member:

This is a fundamental issue that every organization needs to examine from a strategic marketing perspective. Organizations that depend overwhelmingly on membership dues to operate cannot be expected to function as a global entity. Constituent members are going to count what they get in return for what they pay. Except for very active members, most will almost always perceive they receive less than they are contributing. Dues value may vary considerably for members around the world, depending on relative costs and the availability of the association’s services. Relationships with key stakeholders, including companies, universities and government agencies, should also be considered in any comprehensive review of membership.

• Need to develop culture and structure that welcomes and fosters the creation of specialty groups that may require multidisciplinary approaches:

Biotechnology, nanotechnology, environmental issues, consumer safety issues and homeland defense are all specialty concerns noted in our research that represent both opportunities and threats for ASME International. All are fast moving and created member interest.

• Need to Re-evaluate ASME International’s Vision and Mission:

ASME International is seen as very competent in the fields of classic technical standards and specifications and in its ability to disseminate this information and knowledge. The Society is seen as weak in identifying and addressing broad political and economic issues, the needs of sub-disciplines, e.g., biotech, where niche players are making in-roads, in leading the case for improvement and modernization of engineering education, and in the recruitment of youth and women into the engineering profession. To achieve all that ASME International needs to do it is important that it starts from a sound base and that it re-examines its vision and mission in light of this strategic marketing analysis. Do the cross-disciplinary and global challenges or the challenge to be customer-focused give cause to re-think any part of what ASME International is about? If so, what are the changes? If not, how can these findings be incorporated into the strategic and operational structures that will be needed to achieve current goals that may have a new or different focus?