Firstly, what do we mean by tier 1 aerospace companies?

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In aerospace the supplier chain is comprised of 3 tiers:

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• ‍Tier 1 Original Equipment Manufacturers (OEMs)

‍These companies make aircraft, aircraft components, missiles and space vehicles.They supply the military and private airlines with aircraft, as well as private jet companies. They manufacture a wide array of critical finished products such as: engines, control systems, landing gear,braking systems, flight deck, avionics, aerostructures, electronic warfare systems and interior cabin products. Tier 1 suppliers include; Airbus, BAESystems, Boeing, General Dynamics, Lockheed Martin, Northrop Grumman and Raytheon.

• ‍Tier 2 aerospace companies

Tier 2 suppliers provide the sub-assembly for Tier 1’s using parts from Tier 3s. They are typically restricted and only qualified to make certain parts. They are hugely important to the free flow of the supply chain and rate of output. They also have to have strict and thorough safety standards as the parts they make are critical for tier 1’s.

• ‍Tier 3 aerospace companies

These are mainly component manufacturers who provide products like Hydraulic fittings, Hoses, Tubing, Instrumentation fittings, High-strength pins and fasteners, to tier 2s. Some tier 3 suppliers are machine shops that produce thousands of parts and others produce mission-critical components and software that are more than just nuts and bolts.

Tier 1 OEMs have more obvious needs for marketing…
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• ‍What they produce is more marketable
  Marketing a plane or even an aeroplane engine is a lot more attractive than a bolt or hydraulic fitting.
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• Brand awareness is more important
  The visibility and market positioning of T1 OEMs is more important than other levels of the supply chain.
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• They have more stakeholders
  Governments, airlines, space companies, investors and more.
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• They have more money
  The top 10 aerospace and defence companies in Europe generated revenues of$216,853 million with average revenue growth of 10.5% in 2021

It could be deemed that because Tier 1 OEMs are the stars in the aerospace supply chain, Tier 2 and 3 aerospace companies don’t need to investin marketing, but that is a misconception.

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4 reasons why Tier 2 and Tier 3 aerospace suppliers don’t invest in marketing

1. They only need a handful of clients
2. They know their clients very well
3. Their clients already trust them
4. Brand awareness isn’t as important (they are middlemen)

Although these reasons are valid and true, it is imperative that aerospace  companies at all level of the supply chain utilise effective marketing strategies to support their Business Development leaders and sales teams.

Why Tier 2 and 3 aerospace suppliers need to place more importance on marketing

• New market entrants
  New companies emerging with better technology, processes, capability and cost-efficiency.
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• New opportunities
  ‍That come with the commercialisation of space, Advanced Air Mobility (AA), Jet Zero and more.
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• Consolidation of supply chain
  ‍Some T1 OEMs want to decrease the number of suppliers they work with, it’s important to remind them why they should continue to work with your company.
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•  New types of aircraft
  These new types of aircraft include eVTOLs, Blended Wing Flying, Boom Supersonic and more.
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•  Skills shortage
  Across the aerospace, defence, security, and space sectors of the ADS membership, there are more than 10,000 currently unfilled vacancies

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A strong marketing strategy is key to addressing all of these issues and more.

We do aknowledge that many Business Development teams in aerospace companies have dual roles that include marketing activities, but because marketing isn't their specialism it often falls by the wayside. Sustainable business growth requires both sales and marketing functions to truly thrive.

To find out how you can strengthen the marketing capability of your aviation or aerospace company join our next free webinar ‘Introduction to Marketing for Aerospace Companies’

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