Customer
Loyalty Case Study in the Chemical Industry
Needs Segmentation
BACKGROUND
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Company ABC supplied the paper products
industry with a chemical that served as a
substitute for wood pulp. Because this
product was chemically identical to those
offered by its competitors serving the same
market, Company ABC found itself trying to
profitably market a commodity product.
While its competitors attempted to
differentiate themselves on the bases of
price and logistics, Company ABC chose to
differentiate itself by building its
business model around customized versions of
the standard product.
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SITUATION
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Specifically, Company ABC’s
R&D staff developed and
patented chemical
alternatives for a range of
specific paper applications
including pizza boxes,
newspaper stock, and
shipping containers. These
specialized products worked
far better for the
applications for which they
were engineered then did the
commodity version of the
chemical. However, the
customized products required
a more knowledgeable sales
team to explain the benefits
to the customer and a
technical support team to
work closely with the
customer to illustrate what
the custom chemicals had to
offer. These circumstances
along with the overhead of
the previous and current
development research,
contributed to a higher cost
structure and higher prices
for these customized
products. |
MARKETING
MANAGEMENT QUESTION Should the
marketing effort be focused on the
customers who had a need for the
commodity product, or should it
focus on those customers who had a
need for a specialty product? |
Find out what course of action was taken
and what the results were. Read the full
text -
Case 3: Customer Loyalty Case Study in
the Chemical Industry. |
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For more information contact:
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Tel: (317) 465-1990
Fax: (317) 465-1991
Email: LSeibert@loyaltyresearch.com
web: www.loyaltyresearch.com
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