Become a value merchant

• Main Authors: ANDERSON, James, KUMAR, Nirmalya, NARUS, James A.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2008
• Subjects: Vendor-supplier relations; cost reduction; sales management; competition; value added; Marketing; Sales and Merchandising
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5202; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6201/viewcontent/ValueMerchant_2008_smm.pdf
• Institution: Singapore Management University

Increasingly held accountable for reducing costs, purchasing and other customer managers don't have the luxury of simply believing suppliers' claims of cost savings. A relatively easy and quick way to obtain savings is for purchasing managers to focus on price and obtain price concessions from suppliers. To enhance their negotiating power, purchasing managers attempt to convince suppliers that their offerings are the same as their competitors, so that they could be easily replaced. In the face of such pressure, suppliers cave in and match competitor prices. Doing business based on demonstrating and documenting superior value is, indeed, a rare commodity. Yet it doesn't have to be so. By adopting the customer value management approach, value merchants can prevail when they encounter challenges. The approach includes: 1. Conceptualize value. 2. Formulate value propositions. 3. Substantiate value propositions. 4. Tailor market offerings. 5. Transform sales force to value merchants. 6. Profit from value provided.