From a marketing point of view, the big question is how to change those perceptions and climb from one level to the next within the industry. But before that question can be addressed, someone has to tackle the task of defining each supplier level. So from bottom to top, here's how I see the Packaging Pyramid." Of course, everyone attempting this breakdown would end up with a slightly different number of categories, and would assign certain common attributes to players in more than one category. But more or less, most of my colleagues in the packaging industry believe I've structured the pyramid accurately: from Commodity Supplier" at the low end to Strategic Partner" at the pinnacle. Commodity Supplier: A commodity supplier is one that can readily source a certain type of packaging container or component, based on a customer-driven request. They're all about price and efficiency, and wait on the demands of the marketplace to strike. To put it simply, a commodity supplier can get you what you want, when you want it, and at really good pricing. Buyers that seek out commodity suppliers are usually looking for a deal." They're after a relatively generic packaging solution, at the best possible price. While quality is somewhat important, as long as the containers and components are not severely dysfunctional, they are considered acceptable. Trusted Supplier: A trusted supplier is one that has built something of a reputation for consistently meeting commitments. This supplier lives up to its promise, and does what it says it is going to do -- maintaining a consistently high standard of quality. This supplier is the one buyers turn to in a pinch, because they trust the supplier to deliver the goods." Valued Supplier: A valued supplier is one that provides packaging that has direct relevance to the success of the buyer's brand. Buyers perceive the valued supplier as bringing a little something extra to the table that will help establish a true competitive edge in the mind of the consumer. This supplier is often valued for a clear understanding of each buyer's brand attributes, and has a sense of selling through to the end-user. This being the case, a valued supplier will stay on top of potential opportunities in the marketplace and be more proactive and vocal about product improvements. Preferred Supplier: A preferred supplier is one that lives and breathes continuous improvement. This supplier is always looking for ways to enhance product design and performance. From an operations standpoint, this supplier is directly linked to the everyday business of each buyer. Preferred suppliers are the clear top choice for a packaging component or container, or in many cases, multiple product lines. There is a demonstrated excellence in operations, design, manufacturing and a depth of resources capable of providing technical support and troubleshooting serious problems. Innovative Supplier: An innovative supplier is idea driven, actually playing a hand in driving the demands of the market. There is a continuous flow of new thinking that has direct relevance to both the needs of their buyers and to the end consumer. This supplier not only has the big idea approach to the business, but the resources and know-how required to take a big idea into commercial production. This leads to the perception of being a source of knowledge, as well as a quality supplier of product. Partner: A partner is a supplier that has earned the trust of buyers to the point where there is an open sharing of information. This supplier becomes a co-creator, combining its R&D team with the buyer's, and becoming a vital link in the buyer's supply chain. This supplier is not at all considered an outside vendor, but rather an integral part of the buyer's team. The lines between supplier and buyer are completely blurred. This supplier is not the clear choice of the buyer, but the one and only choice for a certain type, or types, of packaging. Strategic Partner: The term strategic partner" is overused and under-delivered in this industry, and in many others. True strategic partners are truly a rarity. In fact, there are only a handful that meet the following criteria. A strategic partner is a supplier that actually joint-ventures on concepts with buyers. There is a complete sharing of resources that extends beyond conceptual development. There is, in fact, sharing in the success or failure of the consumer product. Although rare now, this type of supplier may emerge at the top of the pyramid more often in the future. This is because buyers are turning to their supply chain partner for greater assistance in meeting consumer demands. HOW TO MOVE UP THE PYRAMID? If you are a packaging industry supplier, no matter what your position on this or any other pyramid defining perceived performance, maintaining the status quo is not a real option. Move up the pyramid and prosper. Stay put and be blown away by the next wave of competitors that are already nipping at your heals. All talk of perception aside, the reality of our world is that to simply keep your position within the industry, you have to adapt to changes and make improvements. But most industry suppliers aspire to more than survival, and most want to move to the next level. Many of them, however, believe that they are so permanently type cast, that it will cost a fortune to advance. I say, not so." Consider the size of the packaging industry. The fact that it is relatively small is both good and bad. It's bad because there seems to be a bit of everybody knows us" syndrome going around. It's good because it doesn't take as much effort to change what they know you for. It's just a perception shift, and it can be accomplished in three easy steps. MOVING UP THE PYRAMID Step 1 - Communicate The first step in working your way up the perception pyramid is to communicate your intention to become more of a resource. State what you are going to do, what your new capacity is going to be, what new services you now offer. Step 2 Keep your promise The next is to make it real. Simply live up to your promises. Step 3 Reinforce it The final step is to leverage the new reality of your company's performance capability into a new perception of your company's place within the industry. Now that you've shown that you can meet your commitments at a higher level, makes sure everybody" knows it. Of course, the process requires certain investments. But this is a highly competitive business. To stay in the game, you have to adopt an advance-or-die attitude. You have to invest in process improvements. You have to invest in top talent that has already helped other companies get where you want to be. And, most important, you have to make certain the world of packaging knows about it. None of this requires a massive investment. It requires the desire to change perceptions and a willingness to carefully invest in affecting those changes, one step at a time. To read this article online, visit: http://www.delianet.com/article_perception_pyramid.php Press Contact: Trish Hamer Delia Associates 908-534-9044 thamer@delianet.com
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