part of enterprises day-to-day efforts to develop better products for their customers and generate greater value for their owners. no undertakings today escape the
-vide the good quality products that the customers want ï Not taking into consideration the internal feedback of demand to production will result either in
get new customers for a market Steps to be followed in organising a brainstorming session 1. Selection of a facilitator (she/he has to have good communication skills, hold a certain level of
How can you get new customers? He writes down on a board the problem 3. Set up the rules of the session:
then all the knowledge and information relative to customers must be the start point for the content of the Knowledge management System
Mexican cement company, regularly uses all its employees and its customers for ideas. These firms
-tracting customers and coping with the new competition One of the possibilities that was considered was to have developed a webpage,
The questionnaire asked customers to answer a few questions regarding their use of the Internet and whether they would find it useful
the customer survey (e g. the number of customers with Internet access, the number of customers interested in a Magic Books website, etc
This list included aspects of productivity, communication with customers, marketing and some internal working processes
customers'service and support staff, and procurement managers 6. 1. 3. How NPD is applied One of the most widespread and well-accepted conceptual descriptions of the NPD process is that of
commercial and residential customers. It recruited some of the best people in the industry so that it
-tially surprised by the call from ENERGEX-energy retailing is a long way from our usual customers in
common with those of our traditional customers. While much of the existing process was very thor
with co-workers or customers. In addition, prototypes can be used for design testing. For example, an aerospace engineer might mount a model airfoil in a wind tunnel to measure lift
opinion from our customers is that our exhaust systems have a very precise shape and fit easily, and
a complement, that is, customers will not accept one item unless an -other is also available. Units could be picked up by a customer, or they
Some customers are willing to wait for cer -tain types of products while others expect immediate service on demand.
customers Many Many but fewer Less Few Number of pro -ducts Many Fewer Fewer still Few
Short-range operating schedules take the orders directly from customers, or as generated by the inventory system and plan in detail how the products should be processed through a plant.
That is to say, customers should be able to distinguish, at a glance, between your products or services and those of your competitors and
in the minds of your current and potential customers and in positioning your business in the market.
providing complex systems and original solutions developed ad hoc for its customers. However, the firm does not exclude the use of this intellectual property tool for future activities †in particular in rela
Frequently the interests of customers and R&d centres do not con -verge when it comes to patentable knowledge created within a project.
in order to know what do the customers really need and avoid spending money for products with low demands.
ï Will all customers want the same from your products ï How are distributed products into the marketplace
-tential customers from publicized data. Much of this information is free, or available at low cost, from
ï Directories (they provide details about the activities of your potential customers ï Regular publications
Researching a market usually involves making contact with companies that are potential customers and this can become indistinguishable from personal product/process promotion.
customers, end users, distributors, agents, university specialists, trade journalists, research and technology organizations etc ï Organizational buyer
ï Product Defining the characteristics of your product or service to meet the customers'needs
The goal is to make decisions that center the four P†s on the customers in the target market in order to
Selling to Simulated Customers "Innosupport: Supporting Innovation in SMES "-9. 2. Use of Media to support innovation
reach so many potential customers at such a low cost Advantages ï intensify communication ï ease access to new information
ï e-business should bring new customers ï grow the business from a local one to a international one
This company has a loyalty points scheme to encourage customers to come back and therefore create a community around their site
This allows customers to purchase a bespoke computer which has been built according to their specification Musicroom. com
around their site with 40%of their orders coming from existing customers. Their site attracts 1000
Your visitors are your customers Very often they will give you some valuable wisdom, or advise you, completely
-eries to customers Production Quality control Distribution Production Quality Logistics Problem Cash-flow problems Bad cash-flow man
customers Bad negotiation proc -ess with suppliers about payments pol -icy Budgeting Invoicing Purchasing Financial
customers Distribution Logistics Delivery time rate 98 %Packaging employees Delivery wor -kers Defining and moni
customers after prod -uct deliv -ery ing control system Financial Di -rector and Administrative Manager in
You figure out what customers want on Monday, and on Friday they want something else. And in the week in between, a hungry pack of com
ï ensures that its business processes are aligned to satisfying the needs of its customers ï has a commitment to access finance from a range of sources to fund innovative activity
present in the enterprises supplemented by the cooperation with more enterprises, customers and external know-how carriers
ï Integration of further enterprises/customers/external know-how carriers ï Introduction of changes in the individual enterprises
in its line of business, about demand, preferences of its customers †everything else and possibly even more †since it is important to be always at least one step ahead of others.
inventive Spanish customers very soon spelled the name in a different way: â€oeno vã¡â€, which means â€oeit
when customers internationally boycotted the company because of the company†s conflict with Greenpeace. Public opinion becomes more and more critical
the idea of cheap, cheaper, cheapest still works but more and more customers are asking how prod
the customers, clients or business partners you will be working wth and adopting your practices accordingly
and have direct contact to customers thereby potentially gaining valuable impulses in the form of customer feedback.
customers, end-users, suppliers and enterprises with complementary skills are encouraged to collaborate for radical innovation that may not yet be described
and services that are attractive to customers and can make a business stand out among the competition.
communication, often providing customers with better service and allowing their needs to be monitored more accurately, facilitating new product development.
suppliers, forward linkages with customers, linkages with  OECD 2004 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY
SMES face unrelenting pressure from powerful customers and competitors to lower prices and accept shrinking margins on sales.
They must offer their customers something different than their competitors offer in order to avoid the same low-margin trap that they now face.
way for SMES to do this is to offer customers new products and services that allow more
offering customers free or below-cost installation, training, and maintenance. They must learn to offer services that can make their products yield greater total return over their useful life than can
customers so that they can co-discover ways to make the best use of their products,
customers use their products more effectively. Changes in organization structure and culture are almost always required to do this effectively
) Similarly, customers in food, textiles, and furniture tend to be conservative, thereby leading firms to be cautious about
The type of customers that SMES serve also influences the type of innovation they undertake
SMES that sell consumer products generally serve a larger number of customers directly or through distributors than do SMES that sell products or services directly to other businesses
have more difficulty getting timely and accurate feedback from their customers. SMES that sell products to other firms, such as equipment, components,
fewer customers than those that sell consumer products. Pavitt (1984) referred to such firms as
customers tend to be large scale-intensive firms in industries such as food, metal manufacturing shipbuilding, automobiles, glass and cement.
Small customers are candidates for services too Ashton et al. 2003) advise SMES to consider segmenting their markets to identify small
customers that lack the technical resources needed to effectively install, use, or maintain operations that are essential to their business.
Also, high-end specialty customers may value the SMES services more than low-end customers 2. 2 Types of Innovation that SMES Undertake
SMES can introduce process innovation to enhance the capability of their production processes or their supply chain operations (e g.,
Innovative technology can be â€oepushed†by technical staff or â€oepulled†by customers. In the former case, products may differ significantly from the firm†s or its competitors†existing
customers and lead to a product failure. Products with â€oepushed†technology may require customers to change behavior
or perception significantly before they are accepted and used. In the case of technology â€oepullâ€, â€oelead-users†can be a significant source of innovative ideas (von
customers as they can only suggest innovative ideas from what they†ve experienced. It is more
important for firms to ask customers what outcomes they value instead of just looking for solutions (Ulwick, 2002.
proposition may be targeted to a select set of customers whose needs are met best by the product
is suited better to the needs of a set of customers that a larger company overlooks.
they call â€oedisruptiveâ€) because their existing customers don†t value them or the emerging market
and targeted customers, also requires articulation of a value chain to produce the new product or service,
SMES can offer customers customized products perhaps supplemented with services. The same SME is unlikely to be
or networking with customers, suppliers or even competitors (Freel forthcoming; Vossen, 1998. A firm with strong marketing skills and weak technical skills can
with a limited number of customers may be able to forgo marketing steps because there is less
customers) do market research and learn about their customer†s needs by working closely with them.
being in direct contact with people (suppliers, customers) whom they know well and trust Lindman, 2002.
and the customers they serve (Mosey, 2005 2. 4 What Innovation Strategies Should SMES Pursue
SMES should cultivate relationships with a small number of captive customers (Lindman, 2002 Intimacy helps make up for lack of resources for market research.
that firms can â€oeoutsource†innovation to customers by giving them tools to articulate their needs
that work closely with only a few customers begin to depend mainly on their own internal 11 resources for ideas rather than seek new information from the outside.
pursue price inelastic customers who still want products that larger companies have dropped or ignore Pavitt (1984) indicated that the specialized equipment suppliers he studied tended not to
They can add new customers in their current market by offering them variations of existing products, take market share from competitors,
opportunities from existing customers by offering them a more complete solution to their needs Simon, 1996.
employee-owned company in Pennsylvania, now operates transfer lines for customers such as Caterpillar, SKF and Siemens that previously owned these lines (Anonymous, 2006.
its customers. Fine (1998) discusses how Johnson Controls and Lear continued to acquire suppliers that first made up car seats
These companies now have much more leverage over their customers, the automobile companies. Few SMES have the resources to pursue such an acquisition strategy, but
Another option for SMES is to perform industrial services that their customers currently perform or propose new services that will help them operate more efficiently.
their customers, they might be able to propose new services to perform by observing â€oepoints of
and frustrate their customers when they use their product or other firm†s products. Lastly, new service revenue opportunities can be
•These same pressures on SME customers, on the other hand, are forcing them to focus on their core competencies and turn to outsourcing to provide many of the functions that were
customers. It is relatively easy for a competitor to provide a better and/or lower cost product
and customers •Innovation in services typically results in increased customer satisfaction and loyalty. Both are concerned with the direct attributes of the service offering,
of recommendations to other potential customers 3. 3 Definition of Services There are several different definitions of service found in the research literature.
Often, where customers and employees are in relatively constant contact interpersonal experiences are critical to the delivery of service products (Tidd and Hull
This is done by showing customers the importance of services during the life of a product.
and has reduced costs associated with acquiring new customers The OEM has inherent product knowledge and requires less cost to acquire any additional
They may in fact be of considerable value to customers yet are bundled in â€oefree-of-charge†because of perceived or actual competitive pressures.
relationship-based approach with customers (vertical path) and the other two involve migrating from selling services focused on single products to selling comprehensive services in which the
of its existing customers. Additionally the data accumulated from having a greater knowledge of customers†behavior enables the company to continually add value
decided to listen carefully to customers. He saw there were unmet needs and new sources of value to be accessed.
Customers did not want to buy and own steel drums, they wanted to move toxic chemicals efficiently and safely;
Now Greif solves the total trip problem for its customers †drum supply, cleaning refurbishing, regulatory compliance, transportation, and tracking.
Customers, by foregoing certain tasks, increase their dependence on their suppliers. Switching costs therefore are increased.
and retain customers for later delivery of products and services Mini-Case Example#2: General Fasteners, a supplier of components to the
-in†to its customers both in design and operations making it difficult for competitors to displace them.
by taking over the front-end skilled design work, GF€ s customers have need no to retain these expensive skills in-house for occasional use,
Providing a service component to existing customers builds on past relationships and increases revenue and profits from the installed customer base.
Services demand closer relationships with customers, sometimes requiring regular on-site engagement. These interactions can uncover unmet needs,
customers until their providers innovate. For example, using advanced data collection and data mining tools, coupled with real-time data collection over the Internet may provide a whole new
therefore highly by customers who are willing to pay for the reliability and security that the company provides.
technology innovatively to create added-value for customers while building barriers to competitors The service business model improves customer relationships.
for preemptive actions and regular interaction with all customers either from the local office or from the German HQ.
Customers initiated most of the new products by coming to the company with an unrelated water problem, and
Customers may participate in production because the service preparation and the service delivery are identical (e g.,
An offering not previously available to a firm†s customers, resulting from additions to or
powerful weapon for SMES to create greater value for their customers The fall in the price of computers and data storage devices, coupled with the rise of the
provide their customers with greater value and to create subtle barriers to competition Indeed, this new low-cost digital freedom may even provide smaller companies advantages
obtained by combining information from ALL customers nationwide. This enables the company to make suggestions on
customers provide long lists of future wants and rate past rents), Netflix is able to balance its
its customers with a convenient personalized service, as it continually optimizes its supply chain The following â€oemini-case†shows how, in a business-to-business market, acquisition of data
DBI Services (www. dbi. com) learned by listening carefully to customers that businesses have greater and more complex needs than homeowners.
DBI realized that the value proposition for these customers was focused not on low cost but on the reliability and speed with which a service
business model is based on the principle of providing customers with reliable and customized services supported with proprietary information systems.
Information can be shared between customers and suppliers so that each is locked closely into the other as business partners.
and mining to lock in customers, suppliers and partners. The fifth â€oemini-case†provides an interesting and illustrative example of a company supplying commodity
chemicals yet providing greater value to customers, and partners Mini-Case Example#5: Chemstation was founded by George Homan
His close contact to customers led him to recognize that businesses do not want to handle bulky containers of cleaning chemicals and
serves some local customers and uses its buying power to purchase cleaning chemicals at a lower price than
In this way the franchisee can provide customers with an immediate proven solution to their cleaning problems.
customers, and prevents competitors gaining the account. Since its founding Chemstation captured, in less than ten years, around 25%of the $300 million
service ideas come from a close interaction between customers and employees. Thus, although product and service innovation are thought often of as â€oethe sameâ€,
In order to develop services that customers find valuable, it is important to have customer input Although this will be discussed in greater detail in section 4,
firms should observe customers and their â€oepoints of pain†(Gustafsson and Johnson, 2003), frustrations or unmet needs with existing
Once these unmet needs are uncovered, the firm and its customers should work together in order to generate ideas to solve the problem.
as customers are prone to changing their minds about their desires (Takeuchi and Quelch, 1983.
Customers will not buy products or services that they don†t find valuable for their firm.
relationship between the firm and its customers (y-axis) to shifts in the firm†s strategic focus as
reflected in the value proposition it offers to its customers (x-axis). ) The space between curves
figure offer stand-alone products to customers and sell products in â€oearms-length†single transactions. The new product development (NPD) process for this region involves very little
interaction between the firm and its customers, other than input from focus groups and needs surveys.
Interaction between the firm and its customers during new service development (NSD) may be greater than for NPD,
when customers experience frustration with using the firm†s products and the firm offers solutions that reduce the frustration.
Ideas for services may be offered to customers on a fixed-term contract basis. Customers are active participants in the NSD process and in service delivery
between product/service providers and customers shifts from one-way static information exchanges in NPD to two-way overlapped information exchanges in NSD to dynamic and
collaboratively in TSD with its customers, and most likely with alliance or network partners 31
customers. In addition, new services may not have defined as clearly yardsticks, as new products do, against which a fixed gate could be associated
between a firm (SME in this case) and its customers (see insert in Figure 4. 1). Customer inputs
In addition, the model shows a closer relationship between the service provider and customers It posits that service is driven by unmet customer needs,
customers are â€oelistened to†and information flows primarily from the customer to the SME (see insert in Figure 4. 2). Despite
products and customers (such as a SME), but it does not limit its future innovation to either
static interaction with customers. Some companies go as far as having a full-time relationship person on-site to ensure this continual interaction with the customer.
service already provided to existing customers. Many SMES likely already have established products, and they could certainly explore how to add new services to these products to address
relationship between the firm and customers (see insert in Figure 4. 3). Unlike the static
intimate collaboration with customers with continuous exchange of bidirectional information External parties, other than customers, are incorporated explicitly into the entire process of
innovation. They include potential partners, supply chain members, and competitors Furthermore, TSD suggests the specific interactions between the firm and various external
stage, for example, TSD recommends that the firm work closely with potential customers potential partners, and supply chain members--customers will help assure the new solution does
indeed address their needs, partners will help address challenges in developing such solutions e g.,, IT), and supply chain members will help ensure the new solution is in a form that could be
delivered to customers in an efficient manner TSD dictates innovation should be an iterative and adaptive process;
Immerse Yourself in Customers (needs identification, segmentation, and selection Regardless of the source of new solution ideas (inside or outside of the firm), it is essential that a
firm understands the needs of its customers and ensures that the new solution addresses their
current users of current products (or potential customers), and observe how they initiate and complete various relevant tasks,
customer sort (ask customers to sort the needs. The objective here is to reduce hundreds of
potential) customers. This understanding will help the cross-functional team to select the needs that it will target.
by focus groups of potential customers or lead users Screening Ideas. In most cases, managers will end up with more ideas than they can implement
Pseudo-sale involves providing the new product/service to a selected few customers observing whether they are willing to spend money purchasing the new product/service, and
segment/location of potential customers, and utilizing all marketing arrangements that are planned for use in scaling up
customers it should target, it should include a large enough sample (customers) from both segments, and ideally, at geographically separate locations
When considering various test marketing, managers should keep in mind the cost of such testing as well as information leaking to potential competitors.
customers. It also gives the firm experience in working with customers between sales, which can
be a prelude to a shift from transactional to relational selling. At the end of a year warranty
Employees in this unit will need to be motivated to relate to customers differently than those in manufacturing units.
to relate to customers or selected according to certain criteria. Similarly, it is probable that there
value to its customers. Values, norms and beliefs shape the firm and drive employee behavior
number of customers x times per month as a customer relationship building goal. Whatever goals the firm decides to implement,
availability of knowledge about the firm†s basic technologies, customers and delivery processes High expertise determines the success of innovative service concepts.
customers, but before employees can make that portrayal they must be sure of its existence, a
which includes making promises to customers (Gebauer et al. 2005). ) Interactive marketing is the how the firm sells its value proposition to customers
and begins the transition from transactional to relational selling. The first stage in the transition
include any personal interaction between the firm and its customers. If the firm is just beginning
assessment of customer needs can stem from a lack of attention paid to understanding customers
customers. Front-line employees, the ones who commonly work the most closely with customers, need to be in-tune with customer needs,
wants and frustrations, and should be encouraged to have frequent contact with them in order to build relationships (de Jong and
their customers a fixed-term contract for services. Customer interaction in this phase should include employees creating a friendly and helpful atmosphere for the customer.
regular contact with customers via opportunities such as newsletters, users†clubs, chat rooms etc. will help make the transition easier.
The value proposition to customers is equipment availability or up-time. The firm†s responsiveness and problem-solving capability underlie its
The firm might also consider offering consultation services to help its customers develop their own diagnostic and response capabilities
discovery as the firm and its customers deal with problems that emerge over the course of their
Smaller customers may lack the knowledge or resources that larger customers possess to solve their operational problems or pay for infrastructure
and ancillary services that relate to the effective use of their products. This presents an opportunity for market segmentation and focus
on customers with the greatest need for the firm†s services. Firms can recognize the need for
firms and their customers will co-develop and the intensive interaction required to develop them
customers to share ideas with other employees concerning optimal use of the product, and observe points of pain
and frustration that customers experience in using the product. These ideas and observations, if captured, may help create a proprietary database that can give the firm
or frustrations that customers have with existing offerings, and generate ideas for new solutions. Since the employees are very close
What are they offering of value to customers beyond the sale of a basic product (e g
Greif Packaging and General Fasteners observed how customers used or consumed their product and believed that they could do this better by specializing in
activities that customers currently perform but don†t have the skill, time or interest in mastering
their work force to be trained extensively in activities that their customers could not do as well as they could.
result, national customers usually have to work with many centers and fail to get the desired
rated customers, co-workers, marketing and professional journals as more important 61 Booz, Allen, and Hamilton (1982.
Discusses applying NPD to new customers using existing technologies. There is a need to empower cross-functional teams
customers and product uniqueness. Found that technology-focused firms are likely to introduce products that are new and unique to their customers
Scheuing, E. E. and E. M. Johnson (1989.""New product development and management in financial institutions."
"Customers as innovators: A new way to create value "Harvard Business Review 80 (4): 74-81
Ask customers for desired outcomes, not solutions; use ideas for innovation. There are dangers in listening to customers.
Presents 5 steps and a mathematical formula for deciding what innovations are most promising Urban, G. L. and J. R. Hauser (1993.
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