Purchases of Indian Industry

Indian corporate buyers today are value seekers. It is important to note that competition, technology and complexity in the customer’s environment, are constantly changing the customer’s value sets. It is in this context that one has to keep in mind, the dynamic character of the values sought by organizational customers. Further, these values can be arranged in a hierarchy; with the anticipated value set, at the bottom end of this pyramid, comparable to the start line in a cross country race. These are the threshold level values, needing fulfillment at the most basic level, before the marketer is even considered as a probable supplier.

At the next level are desired values which in a way reflect the customer’s desire for the supplier to augment his offer. This is the plus dimensions of the offer. Today, Indian companies and foreign firms are increasingly working towards creating and satisfying this desired value set. Most successful companies do not stop here. While the customer’s anticipated and desired set of values are influenced by his environment and knowledge, customized companies know only too well that they need to go beyond this level to what we call unanticipated values. These are values about which even the customers are not consciously aware. However, these values exist at the latent level. The development of the Walkman by Sony, Windows by Microsoft and mobile communications by Motorola are examples of companies that catered to the customer’s unanticipated values.

As one may infer form this pyramid, customers always first try to satisfy their anticipated values before climbing up the hierarchy. To satisfy these values, firms re-engineer their products and processes, perform to customer defied standards, offer attractive incentives to the decision maker, and create a brand image. They also train their sales and service personnel to be customer friendly. The range of these values as mentioned earlier, are continuously getting enlarged due to competition. The most interesting aspect of this value hierarchy is that once a firm in the industry, responds to the customer’s unanticipated value, the latter comes to anticipate the same from all other firms within the industry. For example, a firm may pioneer a 24 hours service shop concept such that the customer can log in his service request, any time of the day and be serviced immediately.

This concept is based on the assumption that the customer’s service need may occur at any time of the day, especially in the context of the industrial buyer, and he expects it to be attended to, immediately. Now the customer comes to expect this 24 hours service shop from all vendors in the industry. Information technology further builds up the customer’s anticipated values. In the same example, the pioneer firm may provide on-line service support to the customer.

Thus, this value hierarchy is a continuous and evolutionary process.  When a firm seeks to measure how well a customer is satisfied at the anticipated level from its offer, it measures customer satisfaction. In a competitive environment, a satisfied customer is no guarantee for future success and customer retention. Satisfaction of desired values creates delighted customers, but it is the unanticipated value satisfaction which bonds the customer to the organization. The former is an output of filling the gaps left by competitors. But the latter is a function of innovation based on the concept of feed forward.

Feed forward is different from feedback which is more in the nature of post mortem and hence reactive. Feed forward involves analysing structural changes in the market and their implication for the company’s marketing mix. It is this form of analysis that drives an innovative firm’s R&D, manufacturing, vendor developments, and other elements of operations. Another route to feed forward is the analysis of customer complaints.

Value maximization is a process and not an end. This process has a start line but no finish line. The quality journey, the strategy of six sigma, business process re-engineering, R&D, distribution, and service   alternatives are just some of the key milestones in this process. Research showed that Japanese and Southeast Asian suppliers were preferred over Indian suppliers only because the former were far ahead in the value maximization process.

The value maximization process, as shown below, involved linking the customer’s value hierarchy with two key corporate processes product and service. These are important, because they are the principal tools by which all companies reach out to their customers. As can be inferred, customisation is a corporate process and not just another fad. It involves top management commitment and leadership, which believes in gaining competitive advantage through customer bondage. In other words, the strategy of customization involves going back to the basics of the customer.

The most critical input in the value maximization process is a sound   understanding of organizational customers, their decision making process, and the dynamics of their environment. To better understand an organizational buyer, let us first explore the differences between such a buyer and the household buyer.