Customers' value appraisals‐suppliers' value propositions interaction process in developing new services: A case study from the natural gas industry

Abstract

Purpose

Research on customer value in business markets is still at an early stage. More specifically, business marketing literature is largely silent on how customers' value expectations interact with suppliers' value propositions and how the interaction leads to development of new products and services. The purpose of this paper is to explore this interaction process and map the journey of the development of a new service and a new relationship.

Design/methodology/approach

Following a case study approach, data were collected from representatives of supplier firm – GASCO, and the buyers in CERACO, through in‐depth interviews. In total, 21 ceramic manufacturers (customers) were also visited who represent CERACO. Semi‐structured interviews were conducted with few key representatives of ceramic manufacturers, equipment supplier representatives, and GASCO representatives. Also interviewed were two vendors of GASCO and a representative of the gas pipeline (infrastructure) company close to GASCO. Themes were identified in the analysis of the semi‐structured interview transcripts, focus group discussions and the documented information.

Findings

The authors' case study highlights a nine‐step CVE‐SVP interaction process: reduce business discontinuities for customers; latent value co‐creation opportunity for a new supplier; collaborative partnership with high customer involvement; enhancing CVE of the new offering; keeping customer switching costs low; offering alternate customer solutions; reduce potential new business discontinuance for the customers; create value for customers' end customers; and co‐create value for customers in the long term.

Originality/value

The authors' case study, in an emerging market context of India, probably for the first time studies the interplay of regulatory forces, customer value expectations, and supplier‐driven markets in shaping the supplier value propositions. This context of the case study, which is so different from a customer‐driven market, makes this case study unique.

Citation

Singh, R. and Paliwal, P. (2012), "Customers' value appraisals‐suppliers' value propositions interaction process in developing new services: A case study from the natural gas industry", International Journal of Energy Sector Management, Vol. 6 No. 2, pp. 255-272. https://doi.org/10.1108/17506221211242103