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1. What seems to be Pramtex’s strategy?
Pramtex’s strategy: Pramtex is pursuing the goal of being the technology leader in the sector. It has chosen product differentiation over cost leadership. In pursuing this goal, it seems to have fallen behind in the maintaining adequate service standards.
Its strategy involves close cooperation with the lead user customers to get a presence in the developing standards of the industry. Overall, it seems to be focusing on the high-end premium segment of the market. This is also supported by the fact that whereas it’s overall share is only 3% of the market, its share of the premium segment is 8%.
2. What is the “Perceived value” for a customer like Kimura?
Perceived Value: “Perceived value” is different for different customers. Out of its various elements, such as buyer’s image, trustworthiness, customer support etc, different customers give different weightage to different elements. Out of these, a customer like Kimura k. k. falls under the category of price buyer. For such a customer, companies need to offer stripped down products and reduced services.
3. Who are the key players at Kimura in the purchasing decision?
The key players in the purchasing decision at Kimura are:
Senior R&D advisor: Dr. Nomura,
Chief of production: Dr. Komuda,
Company President: Dr. Kimura,
Finance Director: Dr. Eiji Hashimoto.
4. What are their respective roles and interests?
Initiator: Dr. Nomura. His interest is in recommending the best technology product while taking into consideration the strategy of the company.
End-User: Dr. Komuda. His interest was to ensure that the machine would satisfy his technical specifications. It should also meet maintenance requirements. The learning curve should not be too steep. And the downtime should be minimum.
Decision-maker: Dr. Kimura. His interest is in choosing the machine that offers the best value proposition for the company.
Influencer: Dr. Eiji Hashimoto. His interest was in choosing the cheapest machine, which would meet the technical specifications, required by the production department. HE would also take into consideration the maintenance costs of the product.
5. Why did Pramtex fail in Japan? What could /should it have done differently?
Pramtex failed in Japan because it was making the wrong value proposition to the customers. It was intent on providing the best technology solution. The Japanese customers wanted one, which would provide them with the cheapest product meeting their requirements. They also laid a lot of emphasis on after-sales support which area was unfortunately not much stressed upon within Pramtex.
Also, it did not have any significant physical presence in the country. Local competitors had the advantage of quicker response in case of breakdowns, better warehouse access.
Also, the service support level maintained by the company was less than satisfactory. It seems to believe that a superior product is sufficient for it to maintain market leadership.
What it should have done was get some presence in the country, get some local warehouses, open one or two service centers. This would go a long way in alleviating the customers’ worries about after-sales support. Also, it needs drastic in its after-sales support quality.
6. Can this customer be saved? Short-term? Mid-term to long-term? Why? Why not?
Short-term: Possibly not.
Nothing much can be done in the short-term in terms of improved customer-support in the shot-term, which is the primary concern of the Kimura.
They will have to be convinced of the company’s commitment to the Japanese market. This assurance should be backed by concrete actions such as getting physical presence in the country in the form of service centers and warehouses for spares inventory.
Also, the company must customize its product to suit the needs of the customer.