Testing manufacturers' acceptance of competing subcontractor price-quality-service designs

Article Abstract:

What are the sensitivities to price, quality, and service levels of subcontractor work among industrial manufacturing customers? How are these sensitivities influenced by size of the customers' firms and by the respondents' job functions? Answers to these issues are provided based on an exploratory field experiment of manufacturers' choices of subcontractors in the Finnish metal industry. As hypothesized, customers were most sensitive to achieving contracted levels of reliability of delivery: avoiding low (90%) delivery standards and meeting 100% delivery standards. Large-sized customers were particularly sensitive to price increases: large negative utilities were found for 20% price increases. Contrary to our expectations, offering ISO 9000 quality standards were not highly valued by customers. The findings provide strategic guidelines for designing subcontractor bid responses to requests for quotations: stay focused on the meat-and-potato issues, guarantee that delivery standards will be met, and maintain current prices. (Reprinted by permission of the publisher.)

FABRICATED METAL PRODUCTS, Fabricated Metal Product Manufacturing, Finland, Manufacturing industry, Manufacturing industries, Competition (Economics), Metal industries, Metal products, Metal industry, Industrial suppliers, Subcontracting

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Pricing an industrial technological innovation: a case study

Article Abstract:

The manufacturer of a new fencing wire wanted to know if he should price the wire more than, equal to, or less than a larger competitor's product when introducing the new product to customers. Compared to the competitor's product, the new fencing wire was manufactured using a unique technology and component materials. The physical and performance properties of the new product offered substantial benefits to customers in land-based industries (e.g., sheep stations and cattle range operations). In the case study, three alternative pricing strategies were proposed by three different pricing managers. Which pricing decision would you recommend? A discussion of the likely effectiveness of each of the three alternatives is appended. The case study was based on a field study of marketing new technologies in New Zealand. The descriptions of the new and competing product technologies, and the events presented in the case, are factual. (Reprinted by permission of the publisher.)

Steel wire and related products, Steel Wire & Products, Steel Wire Drawing, Other Fabricated Wire Product Manufacturing, Misc. fabricated wire products, Wire Products NEC, Innovations, Prices and rates, Pricing, Corporations, Technological innovations, Wire products, Wire industry, Corporations, New Zealand

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Testing acceptance of a new industrial service

Article Abstract:

Customers located in different levels within a marketing channel differed in their sensitivities to alternative designs of a new industrial service. Customer acceptance of a new wool testing service by the New Zealand Wool Testing Authority was tested. Samples of marketing channel members at three vertical levels were selected. Based on the results of the study, the NZWTA planned to offer unique marketing mixes to customers at each vertical marketing level. Suggestions are included for testing the customer acceptance of new industrial services. (Reprinted by permission of the publisher.)

Services, Business-to-business market, Business to business market, Textile industry, Distribution channels

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