Top 5 Business Challenges in the Specialty Chemicals Industry

by | Aug 3, 2012 | Empower Sales Conversations, Increase B2B Sales, Quantify Customer Value, Why LeveragePoint?

Chemical executives today face tremendous pressure in protecting margin in the midst of economic uncertainty. Over the past year, our customers have successfully dealt with five specific business challenges using a value-based approach. Click the links below to learn more about their success stories and best practices.

5. Fighting Product Commoditization

Product innovation is essential for fighting forces of commoditization within the product lifecycle. Experience shows that the best window of opportunity to optimize margin is at product launch, and to succeed organizations need to align their product development, marketing, and sales functions to establish a value-based price.

4. Communicating Differentiated Value

Chemical companies must effectively communicate their differentiated value throughout a complex value chain of molders, fabricators, OEMs, distributors, and even retailers. Such communication depends upon clearly quantifying the performance benefits of the material, as well as the supporting services. Since the amount of value created varies at each stage of the value chain, a clear process for managing customer value communication is essential.

Visit our Resource Center to view a recent webinar by LeveragePoint, where we share a case study of how to develop a compelling value proposition for a complex product offering.

3. Neutralizing Procurement Practices

OEM procurement practices are fine-tuned to drive down the lowest cost per unit. Reframing the discussion to consider the wider economic impacts of a chemical material offering is essential to establishing a win-win negotiation. Doing so requires careful planning, preparation, and practice.

Visit our Resource Center to view a recent webinar with Jim Geisman of Software Pricing Partners share his practical advice on how to better prepare yourself on how to negotiate with procurement organizations.

2. Responding to Aggressive Competitors

Competing on price alone is a dangerous game, especially in response to an aggressive competitive discount. In such potentially high-stakes situations, it is important to objectively assess the competitor move from a strategic perspective first.

Learn when it’s best to fight and when not to. Read the classic article “How to Manage an Aggressive Competitor” by George Cressman and Tom Nagle.

1. Fluctuating Raw Material Costs

Specialty chemical manufacturers are extremely sensitive to fluctuating raw material costs, especially as they relate to the price expectations of their own customers. Managing “cost-plus” price expectations requires planning and skill to protect customer relationships, as well as margin. This is important both when raw material costs rise and fall.

Visit our Resource Center to view a recent webinar with Tom Nagle, which shares his experiences working with his chemical industry clients.

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