New product development to take UK measurement market into the next century

Citation

(1998), "New product development to take UK measurement market into the next century", Sensor Review, Vol. 18 No. 3. https://doi.org/10.1108/sr.1998.08718cab.010

New product development to take UK measurement market into the next century

New product development to take UK measurement market into the next century

Keywords Markets, Measurement

Future growth in the UK market for measurement instrumentation will depend on new product development, according to a new report from MarketLine International, The Future of UK Measurement and Control.

The report examines market trends for the next five years, and reveals how the future of the measurement industry in the UK will depend on changes taking place in the industry today.

UK business conditions will become the most competitive in Europe due to customer demands on quality and price

The focus on a low cost base by UK manufacturers continues to impact on all suppliers of measurement equipment. Customers are continuing to specify products that meet the three criteria of low upfront cost, ease of installation and product durability. Only ease of installation is providing growth in market value, by giving the customer extra value through technology.

Although falling product costs are pushing volumes in the market up as new customers find themselves above the entry threshold for different types of measurement equipment, values are failing to keep pace due to the price pressure placed on manufacturers and suppliers. MarketLine states that total value growth in the UK measurement instruments market between 1996 and 1997 was 2.3 per cent, but predicts that between 1997 and 2002, the market will grow by just 11.9 per cent.

Moreover, the increased quality and robustness of instruments is reducing both volumes and values in the market by reducing the replacement rate of UK manufacturers.

Many factors are combining to make the UK instruments market the most competitive in Europe, and although this is good for customers, many manufacturers' margins are being squeezed.

The current structure of the market is depicted in Figure 2. Flow and temperature instruments make up the bulk of the market, accounting for just under 73 per cent of the total value.

Figure 2 Value of the UK measurement instruments market by sector, 1997

For value growth to keep pace with volume the substitution of new products for older technology must accelerate

New product development is constantly occurring in the UK measurement instrument market, focusing on both improving old measurement techniques and developing entirely new technologies. Product development acts as the key driver for value growth in the market.

Customer acceptance of new technology is often low, however, especially in the case of new measurement techniques, which may take years to be sanctioned. Thus although product sectors such as radar level measurement instruments and coriolis flow measurement instruments are relatively fast growing, this growth is not currently high enough to offset price falls in other sectors of the market (see Figure 3).

Figure 3 CAGR value growth rates in the UK measurement industry, 1994-97

Only if manufacturers can persuade their customers to buy value added equipment will these value growth rates be improved.

MarketLine industrial research manager Jon Lane comments:

To increase the value of the UK instruments markets, manufacturers must make greater efforts to educate the engineering community about the benefits of new product offerings. Thus, manufacturers must offer training seminars and information combined with a high level of customer support.

The Future of UK Measurement and Control is available from the MarketLine International at a cost of £995. For further information contact MarketLine International, 16 Connaught Street, London W2 2AF. Tel: +44 (0) 171 624 2200; Fax +44 (0) 171 372 0130.