What are the concerns value chain players have in adopting a new product?

Problem

PackagingCo. has developed a new product for a key market segment, thus it sought to understand how to increase the adoption of the by industry players.

The selected customer industry has a long and complex value chain with multiple stakeholders who influence the adoption of such new products. Thus PackagingCo. sought to identify the concerns of each stakeholder for its product.

Situation

Most customers use the current ‘competitive-product’ primarily due to unit cost, and because of its few key characteristics such as life and weight. Additionally, big customers typically have their own on-site production of the ‘competitive-product’. While small customers opts to buy ready-made product at a higher unit price. Because of such established processes and sunk costs in infrastructure these customers are averse to changing current choice. Additionally, they were also concerned with how the value chain players will adopt a new package.

Our approach

The key questions in the project were:

Q1. What are the key factors that will impact customer adoption of the new product?

Q2. What are the concerns of other stakeholders in the value chain i.e. logistics partners, retailers, regarding the new product?

Q3. What are the financial implications for customers should they adopt the new product?

Methodology

SprintlyWorks team conducted a three-phase project:

Phase 1 – Map key stakeholder

The SprintlyWorks team interviewed PackagingCo. stakeholders to map the value chain of the customer industry. Next, the key players of the value chain were interviewed to understand the factors that they thought were critical with respect to the material of the new product. Further, the SprintlyWorks team also listed their concern with the current competitive-product and its material.

Phase 2 – Feature comparison and analysis

Based on the factors listed by each stakeholder the SprintlyWorks team conducted a feature and performance analysis. These brought insights regarding specific feature improvements for the current product. Additionally, the feature analysis also identified the upper threshold limit for those features per-key player. This was critical information for the R&D team.

Phase 3 – Cost comparison and business modelling

During the final phase, the SprintlyWorks team collected and analyzed the total investment and operational cost to set up and operationalise the new product’s manufacturing site. The SprintlyWorks team conducted this analysis for multiple scenarios, namely for large and SME customers. Based on this it was able to understand the unit economics for each market segment.

Results

With the support of the SprintlyWorks team PackagingCo. was able to accelerate its product R&D focus and go-to-market. Additionally, PackagingCo. was able to identify the critical decision-making factors for each value chain player.