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2015 | Buch

Value Chain Marketing

A Marketing Strategy to Overcome Immediate Customer Innovation Resistance

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​Value Chain Marketing (VCM) is a promising strategy to overcome immediate customers’ innovation resistance. By pursuing VCM, material suppliers enlarge their target group beyond their immediate customers and address their downstream customers as well. Treading on relatively unexplored grounds, this book explores the relevance of VCM and comprehends its process; identifies the critical factors for suppliers’ marketing success, and compares the performance of VCM trials, using a multi-method design linking case study research and computational modeling.

Inhaltsverzeichnis

Frontmatter

Focus and Scope

Frontmatter
Chapter 1. Introduction
Abstract
Suppliers innovate in order to stay competitive in global markets and enhance their sales. However, they are faced with difficulties in marketing, i.e. a high resistance to their innovations. They usually approach the value chain by dealing with their immediate customers and essentially pushing their innovations into the value chain. But immediate customers often have low incentives to adopt supplier innovations. The value associated with a supplier innovation is not always evident for suppliers’ immediate customers. It becomes more obvious when materials get closer to their final application. To break through immediate customers’ innovation resistance, suppliers rely more and more on VCM. By pursuing VCM, they enlarge their target group beyond their immediate customers and address their downstream customers as well. Treading on relatively unexplored grounds, the aims of this book are to explore the relevance of VCM and comprehend its process, identify the critical factors for suppliers’ marketing success, and compare the performance of VCM trials, using a multi-method design linking case study research and computational modeling.
Stephanie Hintze

Conceptual and Methodological Foundation

Frontmatter
Chapter 2. Dealing with Value Chains
Abstract
Suppliers are aware of the power and influence of downstream customers. Still, this awareness of derived demand effects does not bring change in suppliers’ marketing programs automatically. They accept derived demand as an inherent characteristic of B2B markets and feel that it is outside their control. They consequently restrict their customer horizon to the nearest set of buyers and pursue push marketing. Meanwhile others genuinely try to deal with the consequences of derived demand. But instead of mapping the whole value chain, they focus on the downstream stages of the value chain and rely on pull marketing. A small number of suppliers try to pursue VCM to encounter the complexities of a value chain and to reduce their dependence on derived demand. A central part of VCM is that suppliers analyze and properly understand the players and their relationships on each level, the industry developments and drivers, as well as the government regulations. Next, supplier firms intending to practice VCM will need to tailor their marketing mix, i.e. strive for the right marketing elements to expose novel ways of stimulating a strong demand pull in B2B markets. As a final point, suppliers have to organize for VCM by considering four critical elements: sourcing the talent, adapting the firm’s mindset, forming dedicated organizational units, and gaining the top management support.
Stephanie Hintze
Chapter 3. Marketing Supplier Innovations
Abstract
VCM describes the practice of influencing the entire value chain to succeed in marketing supplier materials, especially innovative ones. These materials have to be canalized through many stages in the value chain and need to be accepted and forwarded by many firms in the downstream direction. To promote this kind of innovation across the value chain, suppliers have to explain their benefit and functionality explicitly. This implies that they must offer facts about products, processes, and markets for the different players in the value chain. The type of information required depends among others on the newness of innovation. The implementation of supplier innovations is often delayed or hindered by suppliers’ immediate customers. They show a dismissive attitude toward supplier innovations because they do not want to place their business relationships with downstream customers at risk. To break through immediate customers’ innovation resistance, suppliers use VCM even if they have to meet the challenging task of reducing the perceived knowledge distance to applicators. They try to gain some applied or technical as well as product-related or user knowledge. In this way, the differences between the value-chain actors are diminished and the risk of misunderstanding is decreased.
Stephanie Hintze
Chapter 4. Research Design and Methodology
Abstract
This study uses a multi-target research approach and connects VCM with the marketing of innovation. Exploring the meaning of VCM in industrial value chains and understanding the way of practicing and implementing VCM forms the first goal of this thesis. The second goal is to investigate the different VCM approaches and to analyze their effectiveness to increase the success rate of innovations. The third goal is to compare the performance of VCM strategies and to study systematically the impact of the identified factors for the supplier’s marketing success. This effect analysis is essential to determine which factors are sensitive, i.e. produce significant differences in the performance. Considering the interaction effects, the analysis helps to test the robustness of VCM strategies and supports suppliers’ choice of marketing strategy. In this thesis, a two-phase approach is selected. It starts with case study research and continues with a computational methodology. This implicates that the results of the case study are used to design a subsequent agent-based model. The chemical industry, especially coatings and sealants, is the application field for this thesis. This is based on the fact that chemical materials have to undergo several stages of processing or assembling until they arrive to their final destination. Their demand is thus of derivative nature.
Stephanie Hintze

Qualitative Studies

Frontmatter
Chapter 5. Pilot Study
Abstract
To move into the field, a pilot study is conducted. The results confirm the high relevance of VCM in the coating industry, especially in the OEM finishing as well as the textile and packaging coating. In these value chains, the coating is of great importance for the final product. Furthermore, there is a clear power structure, i.e. the applicator represents the center of power. This study further provides an insight into the structure of different application value chains and levels up the understanding of the general VCM process. The nature of this process depends on the timing of integrating the immediate customer. Suppliers pursuing VCM either integrate the manufacturer at the beginning or at a later stage of the process. Based on the results of the pilot study, the field of research is expanded by the sealant industry, and two research propositions referring to VCM and its marketing effectiveness are posed: The design and marketing effectiveness of a VCM process depends on (1) the newness of supplier innovation and (2) the overlap between the knowledge bases of the actors.
Stephanie Hintze
Chapter 6. Case Study
Abstract
A multi-case study is conducted with the purpose to deeply analyze the different strategic approaches to VCM and explore the variables that seem to affect the supplier’s performance. The unit of analysis is the supplier’s attempt to implement his present innovation via VCM. In each of the cases, the supplier introduces a chemical innovation which delivers protection and an attractive appearance to materials such as cardboard, plastic, metal, or synthetic leather. The cases are selected in such a way as to maximize variations on dimensions that are of potential importance for VCM: (1) value chain, (2) VCM process, (3) newness of innovation, (4) knowledge overlap, and (5) marketing result. The results validate the existence of cooperative and non-cooperative VCM. Cooperative VCM is characterized by an early integration of the manufacturer and requires his active participation in the VCM process. Non-cooperative VCM equals the description of the autonomous approach where the manufacturer only takes a passive part in the process. The results further suggest that the newness of innovation and the knowledge overlap between the involved actors enable or inhibit the implementation of supplier innovations via cooperative or non-cooperative VCM. The analysis of the cases also discloses that the newness of innovation and the knowledge overlap are somehow interrelated. Based on the case study results, research hypotheses are developed and tested in the simulation study.
Stephanie Hintze

Computational Modeling

Frontmatter
Chapter 7. Agent-Based Simulation Study
Abstract
In the agent-based simulation study, the basic concept is to model the acceptance and implementation of supplier innovations by first describing simple rules of behavior for the different types of agents and then aggregating these rules. In particular, the case study results are used to set the agents’ rules of behavior. The general aim is to study a multiplicity of VCM settings while looking at the reactions they provoke in population. The simulation study helps to empirically test the validity of case study patterns and to identify additional patterns in the use of VCM. It permits to refine, test, and verify theories that have been previously developed by multiple case studies. The special aim is to analyze the interaction effects between the newness of innovation, the VCM strategy, and the knowledge overlap on the performance of a supplier’s marketing attempt. Based on the simulation results, the newness of innovation has the strongest impact on marketing performance, followed by the VCM strategy. The knowledge overlap is deemed least important but also shows a significant impact on the effectiveness of a supplier’s marketing attempt. The analysis of the interaction effects indicates that cooperative VCM is the more sensitive or less robust strategy, i.e. the newness of innovation and the knowledge overlap need to be considered more carefully. In other words, the performance of cooperative VCM is highly influenced by the newness of innovation and the knowledge overlap.
Stephanie Hintze

Integrating Findings

Frontmatter
Chapter 8. Discussion of Findings
Abstract
This doctoral project began with an investigation of a big problem suppliers are confronted with when marketing their innovations. They usually approach the value chain by dealing with their immediate customers and essentially pushing their innovations into a value chain. But immediate customers often have low incentives to adopt supplier innovations. To break through immediate customers’ resistance, suppliers rely more and more on VCM by enlarging their target group beyond their immediate customers and addressing their downstream customers as well. This doctoral thesis fosters the understanding of VCM. In order to minimize the limitations, the present work uses three different methods, namely a pilot study, a case study, and a simulation study. Based on the pilot study results, research propositions are developed and tested in the second step by conducting multiple case studies. The agent-based simulation study, in turn, tries to remedy the deficiencies of the case study research. The different studies and analyses have answered the question of how supplier innovations could be promoted and implemented more effectively and efficiently via VCM. The strong alignment of qualitative research and computational modeling ensures the validity of the simulation study.
Stephanie Hintze
Chapter 9. Conclusions
Abstract
To disclose the important role of VCM, the current work follows a gradual but holistic approach toward VCM. In brief, it provides new insights that potentially contribute to the formation of a more widely accepted perspective on the impact of VCM when marketing supplier innovations. The results of this thesis contribute to the planning and management of suppliers’ marketing projects. The present analysis shows that the performance of a supplier’s marketing project depends on the selected VCM strategy, the degree of newness the focal innovation has, and the overlap between the knowledge bases of the involved actors. As a result, suppliers who try to implement innovations along industrial value chains should decide a priori which VCM strategy to pursue. The model presented here is intended as a tool for suppliers to evaluate the performance of cooperative and non-cooperative VCM in advance. The supplier’s strategic decision should be based on the innovation that has to be promoted and the knowledge base he possesses. It is also possible to make use of the developed agent-based VCM model in other business fields where similar problems or structures can be observed. An example is the field of multidivisional firms which are characterized by autonomous business divisions.
Stephanie Hintze
Backmatter
Metadaten
Titel
Value Chain Marketing
verfasst von
Stephanie Hintze
Copyright-Jahr
2015
Electronic ISBN
978-3-319-11376-0
Print ISBN
978-3-319-11375-3
DOI
https://doi.org/10.1007/978-3-319-11376-0