Understanding the Customer’s Activity Cycle, and Alliances for Total Gain
by S. Vandermerwe and Marika Taishoff, Case Study abstract from Harvard Business Online
This case about DuPont”s Carpet Fibre Division-Europe demonstrates that, as the company’s Marketing VP saw it, there was no alternative: to maintain DuPont’s European market leadership, the company would have to create a different way of dealing with customers. One of the issues that would have to be resolved was who, in fact, was the customer: the mills that purchased the fibre and manufactured it into carpets, the carpet stores, or the commercial and residential end users? The mills might have been the vital link in the overall industry chain, but unless someone took the lead in truly meeting the needs of the end user, the entire chain would be weakened. And the problems were formidable–most notably, as revealed by market research, the fact that customers detested having to buy carpets. DuPont decided it would need to take the lead in designing services applicable throughout the distribution channel, from the mills to wholesalers, retailers, and end users. This was the only way to enhance the entire carpet buying experience, and reverse the steady slide in overall market sales.
Once DuPont had successfully designed and delivered the kinds of services that improved the customer’s experience by identifying activities where value could be added, or hassles eliminated, a new challenge emerged: how to reassess the links within the entire carpet distribution channel? The relationships within this chain, like those in many other industry chains, had been largely adversarial; each member out to strengthen its part of the whole, even if this meant jeopardizing the integrity of the system. While the farthest removed in the chain, DuPont also had the most to lose should things go wrong: the company annually invested hundreds of millions of Swiss Francs in fibre R&D, but unless these efforts were shared by others in the chain, they would fall flat. A system of customer alliances for total gain was to be launched. The lingering issues included: who would these customers be? What were the selection criteria? And how could people”s attitudes and behaviours be changed?
Adapted from Harvard Business Online abstracts; full case available at: www.hbsp.harvard.edu