MarketAbility
featured Practitioners
Morten Hansen
Morten Hansen has 15 years of marketing, key account management
and sales experience with major corporations globally. He formed
his own consultancy in 2003.
more...
Omar Shamma
Over the last 25 years, Omar Shamma has gained practical experience
in marketing to a wide range of industries. He established his
own marketing practice in Dubai in 2004.
more...
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China is not just about price
The
front cover of Business Week December 6th "The China Price"
shows the level of misunderstanding of Chinese and other Asian business
cultures in the west, especially in the USA. The accompanying feature
in Business Week reinforces the view. But this emailer continues
to believe that China is NOT just about buying or selling on price.
For
some time now, I have brought examples to this column, demonstrating
clear evidence that there is more to marketing and selling in China
than just price. There is a growing segment of the Chinese consumer
market seeking and willing to pay for quality brands. There are
segments of the Chinese B2B markets who acknowledge the value and
pay a premium for quality brands. Equally in Chinese B2B markets,
there are segments that put value on other aspects, for which they
are willing to pay a premium - security of supply, reliability,
responsiveness, premium services, relationships. In fact, in many
respects China is just like any other market. In other respects,
especially the culture, the traditions and the ways of doing business,
it is very different. Also it is the largest and fastest growing
market in the world.
So
if you have not started to get a foothold in China, maybe you should.
But whether you are already there, or whether you are going to head
in that direction, remember that you must UNDERSTAND the needs and
value drivers of the customers and potential customers in that market:
at a corporate level, at a departmental level and at a personal
level, if you wish to be successful in business there..... Actually,
this is also no different to any other market.
Click
here to read the full item
Price is all
about understanding customer value
Whether
you think there are the original four or the modern day seven P's
in your marketing mix, it does not alter the fact that Price is
the ONLY P in the marketing mix that captures value for your company.
What is Price? Price is the value consideration (usually an amount
of money) a customer is willing to pay in return for the fulfilment
of need (usually by the receipt of products and services) and it
is a function of benefit and value received and perceived by the
customer. So Price is what the customer is willing to pay for VALUE;
Value is what you offer the customer in terms of benefits through
your products, services and solutions; SUPERIOR VALUE is how you
do it better than competitors.....and Customer Value Management
is about making a profit from customer value creation.
Pricing
Psychology and how it can be misunderstood
I
was reviewing some feedbacks from a customer survey the other week,
reading the verbatim comments from some interviews we had conducted
for a client, when it struck me that almost every paragraph I read
began with a reference to PRICE. "Low price, competitive price,
stable prices etc". It would have been very easy to interpret
these responses as indicating a highly price sensitive market.
Click
here to read the full item |
•
Marketing and CVM in Practice
Creative
Pricing Models
Capturing value
from a market is all down to getting the price right and sustaining
good value pricing. This is often one of the greatest challenges
facing marketers. It is also an area that marketers often neglect
in that they do not start to QUANTIFY value to the customer early
enough in their thinking and planning. Quantifying value to the
customer is the key to getting the price right.
I recently heard
that Blockbuster Video in USA is to stop charging a late return
fee on their videos - on the face of it a value destroying decision,
until you read that what they will do instead is bill the customer
the full sale price of any item not returned within 7 days of
the due date. Now that's what I call creative pricing strategy.
For the past three
years, GE has been actively keeping airlines and their planes
in the air, to the tune of US$ 7 billions around the world. On
the face of it a decision that pours good money after bad? Not
according to Henry Hubschman, President and Chief Executive of
GE Capital Aviation Services. He says that GE will only do deals
with airlines where it believes it can profit from the deal. The
profit may be a longer time coming. But another interesting example
of thinking beyond next week, next quarter or even next year in
terms of pricing and profitability.
I encourage more
marketers out there to get creative about their strategies.
Looking
to the Future I
At a recent ECMSA
networking dinner in Brussels (6 December), Dr. Klaus Heinzelbecker,
Futurist and Head of Strategic Planning at BASF AG gave an inspired
and inspiring review of BASF's innovative and forward-looking
approach to planning, using scenarios methods supported by Think
Tools software. "The reason BASF has such a presence in China
today is that we identified the potential swing to China as a
leading global market 15 years ago." professed Dr. Heinzelbecker.
He continued: "We
have to stop projecting the past and actually start to think well
out of the box, if we are to anticipate what will really happen
in the future." This is what BASF are doing today. We believe
that this will be BASF's competitive advantage in the future,
seeing what others do not and being there first.
BASF is already
outperforming its peers in the chemical industry, with outstanding
results for 2004. BASF is also transforming itself into a market
and customer driven organisation. MarketAbility admires BASF for
this direction and holds them up as an example for others to emulate.
Looking
to the Future II
Hats off to another
company that we have long admired for their transformation from
a product and technology driven company to become a leading example
of Customer Value Management in practice - Dow Corning Corporation.
Dow Corning has led the MarketAbility CVM best practice list for
the chemicals industry in 2003 and 2004. Having emerged in June
from their galling Chapter 11 experience, they are in great shape
to exploit new market opportunities, led by new CEO Stephanie
Burns and Chief Marketing Officer, Scott Fuson, both of whom lead
the customer-driven culture of Dow Corning from the top. Their
customer driven strategies are reaping great rewards in terms
of both revenues and profits, where they outperform their chemicals
industry peers. Dow Corning is also trying to lead by example
in the industry, being a major sponsor of ECN's Innovation initiative,
started in 2004.
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What's New in Marketing and CVM
How
NOT to compete on Price
Pricing
was the hot topic at a recent Management Briefing and Interactive
workshop event held in Manchester and co-sponosred by MarketAbility,
B2B International and ECMSA (European Chemicals Marketing and Strategy
Association).
Having
heard from John Stokoe, Senior Consultant Deloitte, about the inevitability
of commoditisation of markets, participants were treated to the
views of Phil Allen, CEO MarketAbility and Paul Hague, managing
Director B2B International, who explored various ways to avoid competing
on price. Phil and Paul also reinforced their views, citing many
examples of companies, some even in "so-called" commodity
markets, who had successfully pursued value-based pricing strategies.
The
management briefing also included challenging papers on channel
strategy (David Jukes, CEO Distrupol), branding (Paul Hague), Key
Account Management (Morten Hansen, Management Consultant) and Implementation
(Beth Rogers, Portsmouth Business School).
Due
to popular demand ECMSA and MarketAbility will re-run the Management
Briefing and Interactive Workshop "How NOT to Compete on Price"
twice in 2005: March 7th and 8th at MarketAbility's headquarters
in Waedenswil, near Zuerich, Switzerland and May 23rd and 24th in
Copenhagen.
European
Chemical News picked up on these points and featured some of the
ideas in a recent issue.
Click
here to read the full ECN article
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•
MarketAbility News
Strategic
Marketing and Customer Value Workshops
In 2005 MarketAbility
continues to offer its Customer Value Management and Value-Based
Marketing workshops, aimed at marketers and sellers in industrial
and B2B markets. THERE IS STILL TIME to book a place on the 2005
workshops which will run in three semesters during March, June
and November at The Marketing Centre in Zürich, Switzerland.
For
more details please use this link
or call Phil
Allen directly on +41 44 783 87 77
Book
your place on a workshop
Strategic
Marketing Conference and
Workshops
in Dubai
In co-operation
with local associate, Third-Eye and with SCI's Business Strategy
Group, MarketAbility will run a Strategic Marketing conference
and workshops in Dubai May 2nd - 3rd, 2005. Aimed at marketers
and sellers in chemicals and plastics markets, topics will include:
Exploiting Export
Markets
There's No such thing
as a Commodity
Leveraging the strengths
of Middle East Production
For more details please call Phil Allen in Switzerland on +41
44 783 87 77, Omar Shamma in Dubai on +971 436 752 56 or write
an email
How NOT
to compete on Price
This highly popular
interactive workshop will be run at least three times during 2005,
so book your place early to avoid disappointment. Dates and venues
are:
March 8th Waedenswil,
near Zuerich, Switzerland
May 3rd Dubai
May 24th Copenhagen
For
more details please use this link,
call Phil Allen in Switzerland on +41 44 783 87 77 or write
an email
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•
MarketAbility Wisdom
Total
Customer Management
Earlier this year, Phil Allen, CEO MarketAbility, was asked to address
an invited audience of chemical industry marketing and strategic
planning executives on the subject of Key Account Management.
"So
which of your accounts are NOT key?" he challenged his audience
To
read the full paper, click here
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