Tell your customers what they need
Updated: Oct 11, 2022
Over the years, Opticom has conducted extensive research on buying behavior among customers in the pulp and paper industry. In particular, our Brand Equity surveys have demonstrated the complexity of the paper buying market and the consequently difficult task of segmenting the customers into distinct and easily manageable marketing categories.
Further research has shown that in many cases “the customer” in the pulp and paper industry (not limited to paper) is perceived by the supplier as a somewhat omniscient and unpredictable element on which the supplier nevertheless seems to heavily rely for answers, ideas and suggestions concerning new products. This paradox creates a situation that ultimately distorts the positive meaning of customer focus as well as the original balance between the supplier and the customer.
In reality, customers’ product choices are the weighted sum of a number of perceived benefits and disadvantages of a given product at a given time. And the supplier’s passive stance is the result of a lack of fundamental understanding of the reasons behind this weighting. This text presents a new theory on mapping and linking overall customer drivers to product function, potentially restoring the balance.
Usually, when trying to understand customer choice in this industry, three important facts are overlooked. Firstly, it is not enough to look at end users if you want to get to the root of end user choice patterns. Everything that happens on a particular level in the distribution channel, e.g., the producer level, happens as a consequence of, or will have a consequence on, something else on another level, e.g., the end user. In short, there are ripple effects going both ways. Secondly, all products with similar functions at each level in the channel must be accounted for when predicting customer choice. This is not limited to pulp and paper products since products from other industries must also be considered. For example, information technology might solve similar problems and fulfill similar needs. Thirdly, as we follow the distribution channel leading toward the end user, the availability of similar products increases while the specialist, or peak, knowledge of these products decreases. The closer we get to the final customer the more exposed to perceived equal alternatives the customer will be and the more information this customer will need on the benefits in his individual case of a specific product versus another, initially perceived equal, alternative. Lack of such information will increase the risk of perceived random choice, which will make meaningful market segmentation impossible.
Map needs and demands
How can we generate the kind of understanding needed to present the benefits of a certain product to the targeted user in the best possible way without asking those specific questions that the customer sometimes has problems answering and, in fact, would like the supplier to know? At the core of understanding lies a complete customer mapping in terms of needs and demands equalling drivers within a number of relevant areas not limited to the need for service, product quality, price etc. (the usual segmented suspects). In doing this, the combined drivers of the target customer will indicate desired functions of a current product/product to be, and not necessarily a specific product.
Questions to ask are: what should be the (positive) results of product use and/or what problem should the product solve given the combined customer drivers? Are there other products currently providing the same results/solving the same problems for that customer?
Based on the information derived it will be possible to: 1. Observe which drivers are currently being fulfilled by one and the same product — segmenting the market according to existing products and brands. 2. Observe how many of the drivers in a target group are currently being fulfilled by one and the same product — mapping of “best-in-class products”. 3. Estimate the possibility of creating a product that will fulfil more of the present drivers. 4. Calculate the possible market share of any given product given the knowledge of the relevant drivers.
Creating a win-win situation
With all the information about the relevant drivers being available and matched with the specific capabilities of the individual supplier, the possibility of creating something that comes close to a perfect match or win-win situation increases. Moreover the initiative will be supplier-driven.
Finally, to gather this information about the customer, an unorthodox view on actual marketing activity is needed. In the words of David Packard: “Marketing is far too important to be left to the marketing department.” Quite recently, this statement has materialized in the marketing theory Total Integrated Marketing as presented by Hulbert, Piercy and Capon. The theory states that marketing should be an activity comprising every department in a company, from finance to human resources, transforming this entire set of capabilities into a seamless system.
Ultimately, every point of contact with a brand is that brand to the customer and a possible source of information for the supplier. Make it count!
This article by Opticom’s project manager Camilla Wiwe was originally published by RISI in PPI Magazine, where it can be found in the archives at: http://www.risiinfo.com/db_area/archive/ppi_mag/2005/07/viewpoint.html