The federal, state, and municipal governments are the principal customers in a government market. Private firms provide them with goods and services.
The primary characteristics of the government market are discussed in this article. As an example, we'll look at a company that deals with governments. To begin, consider the distinctions between institutional and government markets.
Markets for Institutions and Governments
The terms institutional and government markets are frequently used interchangeably. They do, however, contain significant distinctions.
Government agencies must pay great attention to the legality of their transactions. Furthermore, they must function under the scrutiny of the general public. As a result, the government market takes on distinct characteristics.
Specific procurement process
Participants in the government market must follow a precise procurement process to avoid charges of money laundering. A public bid or request is issued by a government institution when it needs to purchase something. In exchange, it receives a slew of offers from merchants. The organization must choose the one that offers the lowest potential bid among them. Other factors to consider are the company's market reputation and the higher quality of its goods or services.
Strict contract monitoring
Because government agencies are required to make their spending decisions public, they keep a close check on their contractors. The monitoring covers many stages of contract implementation and necessitates a large amount of paperwork from sellers. As a result, corporations that engage with the government frequently establish entire divisions dedicated to these tasks.
Long sales cycle
The government market's sales cycle frequently outpaces B2B sales cycles. Accepting bids and deciding which offers to accept can take months. Bureaucracy and reconciliation compete for time throughout the execution of a contract.
Preferences to certain sellers
Government agencies have a preference for certain types of suppliers. For example, even if foreigners provide better possibilities, they frequently choose domestic suppliers. Furthermore, government agencies may make decisions based on non-economic factors. They may prefer depressed firms and places, small enterprises, minority-owned businesses, and businesses that do not discriminate based on race, gender, or age.
The minor role of marketing
Sellers in the government market may be able to eliminate their marketing budget. For starters, they don't need frequent marketing activities or a strong strategy because the procurement process isn't based on brand knowledge. Second, saving money on marketing allows a company to cut its product prices.
Working in the government market may appear to be too difficult. There are, however, a slew of firms that specialize in government contracts. Let's see how they do business.
Government Market Example
Small and large enterprises are served by government agencies. Advanced expertise and comprehension of the government market system are in high demand. Envisage Technologies, a tiny software development firm, is one of the companies that know the regulations well.
Envisage Technologies is a provider of training programs and human resource management systems to federal, state, and municipal government agencies across the US. The federal government accounts for more than half of the company's business.
Envisage Technologies keeps an eye on the General Services Administration's website to acquire access to these deals. This platform enables the organization to handle smaller orders. Due to the shortened sales cycle implied by these contracts, Envisage might expect a response within two weeks.
Large contracts, on the other hand, come in more money, and Envisage Technologies does not overlook them. For this type of contract, the corporation has a thorough bid proposal prepared. To meet federal paperwork requirements, this document is 600-700 pages long.
Although marketing isn't a key component of government success, you might need some of its tools to make your job easier. Automated email flows, for example, could help you stay in touch with customers and respond quickly.
Does the government use marketing?
To reach their people, government organizations at the local, state, and national levels are implementing more data-driven solutions, social media platforms, and digital marketing methods. Saving money, raising awareness, agency recruitment, community outreach, and political campaigns can all benefit from this.
How do you market a government product?
To begin, consider what you're doing commercially and how you may leverage it. Determine how your products and services are in line with government goals.
If you choose to focus on the Department of Treasury, for example, consider whether you should go even deeper into the agency, i.e., which departments (such as ATF) could benefit from your services. Not merely who can benefit from your services, but who truly requires them.
Look for opportunities: are there any requests for bids out there? Do you have a point of contact in a certain department? Are you now employed by the Department of Treasury, which will enable you to contact someone at the ATF?
Develop and test your message
No, you can't just recycle your commercial-sector marketing materials.
One of the most common blunders, according to Neumann one of the expertise in the same field , is a corporation entering the market and bragging about its services but never addressing the unique difficulties the government faces.
Once you've perfected your message, put it to the test in the same way you would in the commercial world. "When we undertake communications with a customer, we often take it out to an audience via focus groups," Neumann explains. She checks communications for both plausibility and relevance there "We're looking to see if the message is not just understandable, but also if it's the proper message."
Use many media channels
Another blunder Neumann observes is when a corporation invests all of its resources in a single strategy. She says, "We see someone come into the market and execute an ad campaign and be in every issue of a publication "However, in the public sector, putting together an integrated campaign is more vital," partly because reaching your target market is more difficult.
Consider print, interactive, public relations, outdoor advertising, television, radio, trade exhibitions, direct marketing, and executive events. Take note of the following:
Radio and outdoor are also effective sources for a captive audience in DC, which has one of the worst traffic issues in the country.
Be willing to hire
Isn't it all a little bit perplexing? Neumann agrees that it is. If you expect immediate retaliation, your expectations are unrealistic, especially if your employees have no prior expertise in this area.
Your sales team, marketing team, and business development team should all be familiar with the market. This necessitates the establishment of offices within the Beltway. You can't fly in a few times a year and expect to make a difference. You don't want to pay rent for an office? Think about working as a subcontractor.
Expect to spend up to five months just getting a campaign started
It can take up to three months to establish your message and create an integrated communications plan, and it can take even longer if you're not doing both at the same time.
You'll have to add another month or two if you haven't done your research on your target market within the government yet.
This means that if you want to launch a campaign aimed at the federal government in early January, you should start planning in August.
Benefits of Government Marketing Strategy
It's critical for government agencies to not just adapt to, but also to leverage, the fast-changing technological landscape. From raising awareness to crisis communication, digital marketing may aid government organizations in a variety of ways.
Traditional marketing and outreach are costly, to say nothing of the money spent on answering queries and providing services through call centers. Using low-cost digital tools like a well-functioning website and social media can help raise public awareness about important problems. Because the majority of people currently use these channels, it also ensures a more targeted approach.
Communication in a Crisis
Digital platforms, particularly social media, have revolutionized how government agencies communicate during a crisis. In the event of a major natural disaster, first responders and government authorities will have a hard time getting the word out through more traditional channels like television or radio. For example, in response to the continuing COVID-19 pandemic, OSHA issued a set of rules.
Social media and SMS alerts give followers with real-time disaster information, promote evacuation techniques and get people to safety faster, connect evacuated people with emergency help, and provide up-to-date information on the crisis's situation. Social media can also be used to organize fundraisers or resources to assist victims in receiving the assistance they require.
Customer satisfaction has increased.
A pleased audience is engaged. Government agencies that use digital marketing to engage the public have a higher chance of keeping people informed about the most essential policies and concerns.
Platforms like social media also help to increase audience confidence by demonstrating the agency's transparency. Customers value trust in general, but it's especially crucial when it comes to the public's perception of whether a government institution is looking out for the residents' best interests.
Using social media to humanize a brand is also a good idea. Many people forget that a government agency is made up of real people. Using social media and content, however, government personnel can be seen enjoying a special workday, attending conferences, and engaging in other relevant and appropriate events.
Digital marketing provides a quick and generally low-cost means of experimenting with alternative messaging with the general public, such as political campaign slogans. Launching a test campaign is inexpensive, and you'll get immediate feedback that will help you improve future campaigns.
Government organizations are becoming more interested in marketing methods. While a marketing strategy to service delivery can be beneficial, public agencies must reformulate business marketing principles to match the public sector's particular characteristics. The broad aims that government agencies serve, as opposed to the restricted, self-interested goals of the private for-profit sector, are especially essential.
When you want to launch a new product, start a new product line, start a new branch of your firm, or start a startup from the ground up, you need a well-executed plan. Because of a lack of research, the incorrect market, an inability to design a product that customers want or inefficient marketing methods, some businesses fail within the first year of operation. Developing a strategy, on the other hand, allows you to prevent such scenarios with your newly developed product. To accomplish so, you'll need to create a marketing strategy, do market research, and choose the most successful sales technique before launching the product to match consumers' expectations and demands.
Understand the Government Market to Be a Successful Federal Contractor