Kane: Sum of its parts

Government and private-sector officials can find value in viewing the federal marketplace as a segmented entity.

Grouping federal agencies with similar missions and characteristics can help companies achieve horizontal growth in their markets. Grouping could — and perhaps should — help agency officials who have common needs collaborate and accept new private-sector vendors with fresh insight into mission needs.

For example, officials at a private-sector firm with policy credentials could serve many agencies in the oversight and regulation sector, bringing new vision and ideas from their experience and background.

Here is my arbitrary segmentation of the federal marketplace:

  • Commerce and productivity — The Commerce, Agriculture, Interior and Treasury departments; the U.S. Postal Service; and the Office of Management and Budget.
  • Defense and security — The Defense, Homeland Security, Justice and State departments and intelligence agencies such as the CIA and National Security Agency.
  • Oversight and regulation — The Government Accountability Office, the Federal Deposit Insurance Corp., inspectors general and other regulatory commissions.
  • Physical health — The Department of Veterans Affairs, Department of Health and Human Services and the National Institutes of Health.
  • Workforce and human relations — The Labor Department and the Office of Personnel Management.
  • Housing and transportation — The Department of Housing and Urban Development and the Transportation Department.
  • Conservation and energy — The Energy Department and the Environmental Protection Agency.

Other market analysts may revise the categories, adding or combining agencies and categories. With this analysis, company officials could expand their presence in a broader or more targeted market. The process works for small and large businesses. Gaining credentials within a new agency is a direct route to more business.

For small businesses, concentrating business development on matching limited resources to a specific segment's requirements can improve marketing and operational efficiency. Reviewing a company's success can help increase sales through horizontal expansion.

In his book "Marketing Insights from A to Z," Philip Kotler writes, "Instead of thinking that your compass has a 50 percent market share, it should see itself operating in a larger market where it enjoys less than 10 percent of that market."

Kotler cites some examples from the private sector. The late Roberto Goizueta, when he was chief executive officer at Coca-Cola Co., stressed that although the beverage giant had 35 percent of the soft drink market, it had only 3 percent of the total beverage market.

Horizontal marketing within federal agencies sharing similar characteristics may add new customers and growth. Agency officials also seek collaborative efforts. They may find value in working together to share common concerns and initiatives geared toward citizens.

Kane is a consultant who has worked in the federal market for more than 40 years. He can be reached at rkane@infonetic.com.

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