Chemicals: Segmentation and value selling
Background
Many products have become commodities where sales are driven largely by price and margins are eroded
To combat this problem, manufacturers have focused on adding value to the total customer offer. In some cases the value added lies beyond the product itself. This approach has helped to increase margin and customer loyalty.
Client issue
After a period of increasing margins and customer longevity, the company found that its sales and margin were both falling despite the continuation of the high added value approach
Project questions
- How does the market segment?
- Does the current segmentation provide a useful understanding of the customers?
- How might the segmentation be changed?
- What value is added to the customer by the added value elements?
- How do we explain recent customer behaviour?
- How should we consider segmentation and value?
- What is the margin growth opportunity?
- What is the revised customer service model?
- How should this model be implemented?
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