Customer-focused value proposition

In today s environment of sophisticated purchasing techniques and wider-ranging product sources due to entrants from emerging markets, it is critical for chemical companies to create distinctive value propositions for a focused set of target customers by answering three fundamental questions ... 

In launch and market development, finally, the art is to focus on the right market segments and customers with the right value proposition, to align the value chain to adopt your innovation, and to use partners appropriately. 

One common mistake that is made by inexperienced entrepreneurs and pharmacists in selling their product or service is to focus on its features. They describe these features or aspects of the product or service but do not relate to the customer or how the features provide benefit or value. Benefits relate directly to how the product or service will make buyers lives better. Investors are looking for an obvious value proposition and preferably one that is recurring or leads to multiple selling opportunities. 

Total quality management is an approach that seeks to improve the quality of the value proposition that the organisation delivers to the customer in the most effective and efficient way possible. Based on the ideas of continuous improvement it requires the whole organisation to embrace the concept and cannot be undertaken by a department or group of managers alone. It requires the company to work as one team to focus on quality improvement in all systems and processes. Some times referred to as the Deming philosophy. 

In a supply network, no firm is an island that stands on its own. Nor does it compete on its own. A focal firm depends on its network partners for components to assemble, for products to sell, for the movement of goods, and so on. While Part Two focused on the central logistics task of achieving responsiveness to customer demand, most firms cannot achieve this without the support of their network partners. Complete vertical integration of an industry is unusual today - although vertical retailers have developed a similar strategy, as we saw in Case study 4.4. Functional specialisation of suppliers on those parts of the value proposition in which they excel, coupled with integration into the supply network, is more common. 

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