Kapil R. Tuli, Ajay K. Kohli, & Sundar G. Bharadwaj
Executive Summary
This study draws on depth interviews with 49 managers in customer firms and 55 managers in supplier firms and discussions with 21 managers in two focus groups to propose a new way of thinking about customer solutions. Most suppliers (and scholars) think of a solution as a customized and integrated bundle of goods and services. In contrast, most customers think of a solution as a set of relational processes comprising (1) customer requirements definition, (2) customization and integration of goods and/or services and (3) their deployment, and (4) postdeployment customer support, all of which are aimed at meeting a customer's business needs.
This difference in perspective likely leads suppliers to underemphasize the customer requirements definition and postdeployment support, which are crucial to many customers. Suppliers' inattention to these relational processes appears to result in ineffective solutions, dissatisfied customers, and lower profitability. Viewing a solution as a set of four relational processes can help suppliers organize themselves to deliver greater value to customers, determine their costs to serve more accurately, and charge more appropriate prices.
The study also indicates that the effectiveness of a solution depends on both supplier and customer variables. In particular, the study suggests that suppliers can enhance their ability to provide solutions by (1) adopting contingent hierarchies, in which a business unit with the most to contribute to a particular solution has the authority over other business units to provide that solution; (2) prespecifying the organizational process for developing solutions; (3) aligning incentives of functions and units around providing effective solutions; (4) emphasizing the documentation of customer engagements; and (5) limiting customer-contact personnel turnover.
In addition, the study suggests that the effectiveness of a solution depends on a customer's willingness to (1) adapt to a supplier's offerings (to an extent), (2) share information about its internal operations with a supplier, and (3) share relevant internal political considerations with a supplier. This suggests that suppliers should be selective about customers to which they will or will not provide solutions and target those that are likely to be adaptive and open about their operations and relevant internal politics.
Biography
Kapil R. Tuli is currently Assistant Professor of Marketing in the Lee Kong Chian School of Business at Singapore Management University. He completed his PhD at Emory University (Goizueta Business School) in 2006. In addition, he has a master's degree in Marketing from Texas A&M University (Lowry Mays School of Business), a postgraduate diploma in Marketing from Narsee Monjee Institute of Management Studies (Mumbai, India), and a bachelor's degree in Chemistry from Mumbai University (India). His research interests include marketing strategy, customer relationship management, and customer solutions.
Ajay K. Kohli is the Isaac Stiles Hopkins Chair in Marketing at Emory University's Goizueta Business School and also served as the founding associate dean of Emory's doctoral program in business. He has also taught at the Harvard Business School and the University of Texas at Austin. Dr. Kohli earned his undergraduate degree from IIT Kharagpur, his PGDM (MBA) from IIM Calcutta, and his PhD from the University of Pittsburgh. His expertise is in market orientation, sales management, customer management, market signaling and branding. He has significant work and/or consulting experience in the high-tech, industrial, chemical, consulting, and consumer packaged goods industries. His research appears in several journals, including Journal of Marketing, Journal of Marketing Research, Strategic Management Journal, Harvard Business Review, and Sloan Management Review. Thompson ISI lists him among the 100 most-cited scientists in economics and business during 1993–2003. Dr. Kohli is the recipient of several research awards, including the Alpha Kappa Psi Award, the inaugural Sheth Foundation/Journal of Marketing Award, and the Sheth Award. He is also the recipient of the collegewide Jack G. Taylor Teaching Excellence Award at University of Texas at Austin.
Sundar G. Bharadwaj is Associate Professor of Marketing and a Research Director in the Emory Brand Science Institute at Emory University. He received his PhD from Texas A&M University. His research interests are in the areas of marketing strategy and performance, brand management, innovation, cross-functional coordination, and customer management. He has conducted executive seminars and consulted with technology, pharmaceutical, financial, and business-to-business multinational corporations. He has received several awards for his research, including the Early Career Award from the American Marketing Association's Marketing Strategy special interest group, the Paul Root Award for the best paper to have an impact on marketing practice, the Sheth Award from the Academy of Marketing Science, and several other best-paper awards from the American Marketing Association. His research has been published in Journal of Marketing, Management Science, Journal of the Academy of Marketing Science, and Journal of Product Innovation and Management, among others. He is currently working on research projects on customer solutions, innovation in early start-ups, marketing intelligence, brand building in new firms, and earning management.
Journal of Marketing, Vol. 71, No. 3, July 2007
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