Market to Customer

2. Market to Customer

Understanding customer needs along the entire value chain, developing solutions to address those needs, and capturing the value created for profitable growth are fundamental to Clariant’s success. Clariant focuses on building customer relationships and increasing its marketing and sales capabilities in order to achieve these goals.

2.1. Responding to market developments and evolving customer needs

Due to overcapacity in Asian markets in recent years, competitive and pricing pressure has developed in the specialty chemicals industry. In 2018, the market situation began to improve in China when older and less environmentally friendly chemical production plants were shut down due to the enforcement of regulations.

Also in 2018, customer demand for sustainable products and solutions further increased. To meet this demand, Clariant is continuously bringing forward solutions that are more sustainable while not compromising on performance and particular customer needs. Using 36 sustainability criteria to screen products across their entire life cycle, as part of its Read more, Clariant awarded 24 new products the EcoTain^® label in 2018, given their outstanding sustainability profile. Read more, Read more

The continuing commoditization trend in the chemical markets has required Clariant to increasingly provide innovative products and services and maintain cost-efficient operations in order to meet customer-specific needs and stay competitive. Clariant addresses these challenges by leveraging digitalization capabilities in operations and innovative services to improve production efficiency and customer service. Read more

In 2016, Clariant launched Digital4Clariant, a dedicated cross-functional digital program to integrate opportunities presented by digitalization. By developing digital business models, Clariant explores new ways to spur growth, easily adjusts how it interacts with customers, and thereby meets customers’ ever-changing needs. Customers increasingly prefer self-service when searching for an ingredient for their formulations. By offering comprehensive commercial and technical information about products and services digitally, for example through the new platform Chemberry™, customers are more informed and can make quicker decisions when they speak with sales professionals. Read more, Read more

2.2. Enabling active and consistent customer engagement

Looking through a »customer lens« allows Clariant to understand changing product and service needs, as well as discern how the customer perceives the company. Clariant manifests its customer-centricity through the Commercial Excellence Initiative established in 2011, which underlines its commitment to facilitating dialog with customers, partners, and prospects to evaluate and improve commercial strategies, customer engagement, and sales and marketing operations. In 2018, Commercial Excellence continued to implement the Marketing Excellence Find & Win process in order to increase sales in select market segments. Find & Win maps a market’s value chain and customer needs by interviewing customers and industry experts, allowing Clariant to develop tailored value propositions and go-to-market strategies to achieve targeted profitable growth rates.

As part of all Commercial Excellence marketing and strategy projects, Clariant conducted 538 customer interviews and 150 interviews with industry experts in 2018. Driven by the new roles filled as part of the Leading Marketing Organization, over half of the interviews were conducted by the Marketing & Sales Departments of the Business Units. In addition, customers completed scorecards to evaluate Clariant’s performance compared to its competitors’ product and service offerings. The resulting insights provide direction for Clariant’s commercial and innovation pursuits.

To leverage customer feedback, Clariant conducts biennial customer satisfaction surveys, which provide insights into how Clariant’s operational, commercial, and innovation performance is perceived. In 2018, customers of all Business Units in all regions were surveyed. The results show that more than three-quarters of the survey participants considered Clariant a reliable business partner and solution provider. Overall customer satisfaction and loyalty remained stable at a high level. »Products and Packaging«, which showed improved satisfaction and competitive performance compared to 2016, was ranked as one of the most important buying criteria, along with »Technical Service«. Sustainability, a new assessment criterion, also showed a strong competitive performance and was rated as important for their operations and/or markets by 92% of the survey respondents. Read more

2.3. Developing compelling value propositions

The volatility of raw material prices over the last several years has created pressure on the profit margins of Clariant’s Business Units, requiring close monitoring of costs and supply chain competitiveness while also staying focused on sales growth. Since the institution of the Pricing Excellence initiative in 2017, Clariant has used Value Stream Design to analyze the transactional pricing process and has drafted a roadmap of improvements to create a transparent, fast, and effective way of pricing execution in the market. Clariant is now developing a tool that transparently shows how the forecasted price changes of basic raw materials impact the costs and margins of finished goods, which helps determine where and when pricing actions are required to maintain value creation.

In 2018, Clariant initiated holistic pricing projects that analyze a portfolio of products and services to determine whether value-based or transactional pricing is better suited to maximize value in the long run. If the product or service offering is identified as adding more value than the next best alternative, Clariant uses value-based pricing. If a product or service offering is found to be nearly equivalent to the competitive offering, transactional pricing is employed. In 2018, Clariant also revisited the models that govern service offerings to support the focus on value-based selling. Additionally, it plans to further incorporate customer needs into the definition of customer segments to refine value propositions and focus marketing and sales activities.

Clariant’s strategic marketing experts work with the Sales and Innovation teams to develop solutions that create value for both the customer and Clariant. By carving out the savings or revenue upside in terms of total costs of ownership at a mutually beneficial price point, Clariant’s commercial organization transforms value created for customers into profitable growth. Clariant’s value calculators are a helpful tool to demonstrate a product’s value to customers, as they quantify and visualize the financial benefits of using Clariant’s products as compared to the next best competing alternative.

2.4. Establishing Leading Marketing Organization

In 2017, Clariant launched Leading Marketing Organization, an initiative that further integrates marketing within the Business Units. In 2018, all key positions of the redefined marketing organizations were filled and a training program that reinforces marketing skills was piloted. A »Marketing Essentials« training program was successfully launched and an advanced strategic marketing training program is being developed and will launch in 2019. Clariant also established a Marketing Advisory Board for the Marketing Heads of each Business Unit and Commercial Excellence to share best practices and drive further development of marketing processes, tools, and capabilities.