Selling value….. ….Market Mode ValueMathics Selling value….. ….Market Mode
Market entry options There are several options to enter a market. We call these options : market modes The choice depends on the outcome of the SWAT analysis i.e. what are the strong points –unique value proposition- of the company The options highlight the capabilities of a company in the five main activities in its value chain: TECHNOLOGY PRODUCTION LOGISTICS MARKETING SUPPORT In some sectors, the market modes have specific names, like “maquila” or “CMT” in the garments sector In this presentation, we highlight the market modes in the sector “Manufactures”
Contract farming ++ +++ ++ - + Variety +++ +++ - ++ ++ TECHNOLOGY PRODUCTION LOGISTICS MARKETING SUPPORT AGRICULTURE Outgrowing + +++ + - + Contract farming ++ +++ ++ - + Variety +++ +++ - ++ ++ Brand/variety +++ +++ +++ +++ +++ GARMENTS CMT/Maquila + +++ + - + FOB + +++ ++ - ++ Sourcing ++ +++ ++ + ++ Brand/variety +++ +++ ++ +++ +++ INDUSTRIAL Contract manufacturing + +++ + - - Subcontracting ++ +++ ++ - + License manufacturing - ++ +++ +++ +++ Private label manufact. +++ +++ + +++ +++ Brand manufacturing +++ +++ +++ +++ +++ SERVICES BPO/Call center + +++ ++ + +++ KPO/ITO/Engineering ++ +++ +++ + +++ IP/Own content +++ ++ + + - Brand ++ ++ ++ +++ + TOURISM Tour handler@destination- - ++ + - + Tour handler/transport - +++ ++ - ++ Tour operator/packages + +++ +++ + +++ Brand +++ + ++ +++ ++
1. Contract manufacturing TECHNOLOGY Seller concentrates on production or execution and leaves technology, design, marketing to buyer -low value adding. Typical trade partners are A-brands, companies with simple after sales requirements PRODUCTION LOGISTICS COST MARKETING SUPPORT SELLER BUYER CONSUMER
Example: CMT/Maquila TECHNOLOGY PRODUCTION LOGISTICS COST MARKETING SUPPORT SELLER CONSUMER
2. Sub-contracting TECHNOLOGY TECHNOLOGY PRODUCTION LOGISTICS COST Seller produces under specifications of buyer,sources all materials. Buyer concentates on logistics, marketing and after sales. Typical trade partners are large retail chains, T1/ OEM’s, firms with more complex after sales requirements. TECHNOLOGY TECHNOLOGY PRODUCTION LOGISTICS COST MARKETING SUPPORT SELLER BUYER CONSUMER
Example: Cosmetics - sprayers TECHNOLOGY TECHNOLOGY PRODUCTION LOGISTICS COST MARKETING SUPPORT SPRAYER LTD. “CHANEL” CONSUMER
Example: Automotive – T2 Tier 2 –piston manufacturer Tier 1 – engine manufacturer OEM – truck manufacturer
3. License manufacturing Seller has captive (regional) markets, but lacks the technology or design capacity. Sources technology from third parties and concentrates on marketing. Typical alliances are with enineering firms, design studios, laboratories TECHNOLOGY PRODUCTION LOGISTICS COST MARKETING SUPPORT SELLER BUYER CONSUMER
3. License manufacturing – 2 options “License and buy back” : Buyer provides the design, drafts, formulation of product, often trough a design studio Buyer provides sometimes a “secret component” Seller takes care of production Other modes : Seller takes care of marketing, sometimes under own label, sometimes under licensor’s brand Seller takes care of outgoing logistics Suitable for regional markets, beware of marketing restrictions from licensor
3. License manufacturing FREE MARKETS BLOCKED MARKETS LICENSOR LICENSEE
Example: Food processing TECHNOLOGY TECHNOLOGY PRODUCTION LOGISTICS COST MARKETING SUPPORT BOTTLER COCA COLA CONSUMER
4. Private label manufacturing Seller has a unique technology or design, production or execution facilities, but lacks/does not want to get involved in marketing after sales. Typical trade partners are retail stores, B-brands, OEM’s. TECHNOLOGY PRODUCTION LOGISTICS LOGISTICS COST MARKETING SUPPORT SELLER BUYER CONSUMER
Example: Automotive – car assembly TECHNOLOGY PRODUCTION LOGISTICS LOGISTICS COST MARKETING SUPPORT MAGNA STEYR CHRYSLER CONSUMER
Example: Oil industry TECHNOLOGY PRODUCTION LOGISTICS LOGISTICS COST MARKETING SUPPORT SHELL CONSUMER
Example: Food processing TECHNOLOGY PRODUCTION LOGISTICS LOGISTICS COST MARKETING SUPPORT SELLER MORNING FRESH CONSUMER
Example: The supermarket shelf FIGHTING BRAND HOUSE BRAND A -BRAND
Example: Accessories – sourcing TECHNOLOGY PRODUCTION LOGISTICS LOGISTICS COST MARKETING SUPPORT UMBRALLA MNF. VODAFONE CONSUMER
5. Brand manufacturing TECHNOLOGY Seller has own technology, content or design, markets its products or service under own brand through trade channels or on the web. Typical trade partners are distributors, retail, -or direct sales PRODUCTION LOGISTICS COST MARKETING SUPPORT SELLER BUYER CONSUMER
Example: Garments - brand TECHNOLOGY PRODUCTION LOGISTICS COST MARKETING SUPPORT CLEVER MODA S.A. RETAIL CONSUMER
Example: Food processing - brand TECHNOLOGY PRODUCTION LOGISTICS COST MARKETING SUPPORT BUYER CONSUMER