Customer and Dow Corning
Xiameter
1. What factors, internal or external, were responsible for Dow Corning’s poor performance between 1995 and 2001 as show in case Exhibit 3?
Externally, Market was changing. Down Corning kept on losing customers to low-price suppliers. 1) Big global and regional rivals were increasing their efficiency of supply chain to provide lower cost to the customers. 2) Small local players with no R&D costs and low overhead were offering a range of commodity silicone products to bulk customers at low price. 3) The commoditization trend was also denting Dow Conning’s financial performance.
Internally, Dow Corning didn’t change its business and marketing strategies accordingly. 1) Dow corning’s traditional strengths were in innovative products, strong customer relationship and services. They are losing the customers who seek for low price and the number of this segment is increasing. 2) They missed a segment of the customers who buy a big volume but did not need Dow Corning’s services as a total package. 3) They segment the business by end-user application which didn’t fully address the emerging shifts in customer’s needs.
2. What did the new segmentation reveal about customers beyond that which the company knew already? In what ways was the needs-based segmentation scheme an improvement over the previous and traditional end-user segmentation?
The new segmentation revealed that 1) Different segment customers may have different needs on services and needs different resources to support the service; 2) There’s a segment called “price seeker”. They want low price. Service is not important to them.
The difference between the new and old segmentation are that the new segmentation focus on the factors which affect the customers purchasing decisions. And it revealed a new market trend and new needs of the customer beyond the functional needs of the products.
3. Given Xiameter’s performance to date, and recent changes in the competitive scene, is the
1. What factors, internal or external, were responsible for Dow Corning’s poor performance between 1995 and 2001 as show in case Exhibit 3?
Externally, Market was changing. Down Corning kept on losing customers to low-price suppliers. 1) Big global and regional rivals were increasing their efficiency of supply chain to provide lower cost to the customers. 2) Small local players with no R&D costs and low overhead were offering a range of commodity silicone products to bulk customers at low price. 3) The commoditization trend was also denting Dow Conning’s financial performance.
Internally, Dow Corning didn’t change its business and marketing strategies accordingly. 1) Dow corning’s traditional strengths were in innovative products, strong customer relationship and services. They are losing the customers who seek for low price and the number of this segment is increasing. 2) They missed a segment of the customers who buy a big volume but did not need Dow Corning’s services as a total package. 3) They segment the business by end-user application which didn’t fully address the emerging shifts in customer’s needs.
2. What did the new segmentation reveal about customers beyond that which the company knew already? In what ways was the needs-based segmentation scheme an improvement over the previous and traditional end-user segmentation?
The new segmentation revealed that 1) Different segment customers may have different needs on services and needs different resources to support the service; 2) There’s a segment called “price seeker”. They want low price. Service is not important to them.
The difference between the new and old segmentation are that the new segmentation focus on the factors which affect the customers purchasing decisions. And it revealed a new market trend and new needs of the customer beyond the functional needs of the products.
3. Given Xiameter’s performance to date, and recent changes in the competitive scene, is the