When Product Life Cycle Meets Customer Activity Cycle

Adrian Ronald Tan

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    Abstract

    Manufacturing companies have traditionally focused their efforts on designing, developing and producing products to offer on the market. Today global competition and demands for greater company responsibility of products throughout their entire life cycle are driving manufacturing companies to shift market strategies from a transactional approach to an approach based on the establishment and management of customer relationships (Grönroos, 1999). A growing number of studies and research programmes have focused on the potentials of business strategies based on providing the value of utility of products throughout their life cycle by designing integrated solutions of products and services. This approach has been dubbed ‘product/service-systems (PSS)’ (Mont, 2004). Although relationship marketing and product/service-system design have their roots in each their own research fields - marketing and engineering design - it seems that the two approaches are complimentary. The principle behind PSS is a shift from a perception that value is mainly embedded in a physical artefact to a perception where the activities associated with the product are considered to be a better definition of value. In this new perspective value is created by supporting the customer’s activities related to the use of products. This is done through intangible services and knowledge intensification that ensures optimal operation and performance of products in relation to the individual customer’s activities. It is believed that PSS approaches can be a step on the path to sustainable development as this will enable and motivate companies to reuse, rationalise and enhance their products and services more efficiently throughout their life phases (Manzini & Vezzoli, 2002). Based on a year’s participation and observation in a development project in a global office furniture manufacturer, this paper attempts to uncover how a manufacturing company is making the move from selling office furniture to selling the benefit of workspace performance. A significant insight is that the definition of value is core to both relationship marketing and PSS approaches. Viewing products alone are not appropriate to determine value – instead the focus should be on the effects from customer activities. This paper presents its findings in relation to a theoretical framework of the expected managerial and organisational implications of PSS (Tan et al, 2007). The framework takes into consideration new activities, roles and responsibilities, knowledge and competencies, as well as value network relationships that the company will have to deal with when adopting a PSS approach. The observations in the case study support the notion that PSS and relationship marketing are similar approaches that might be well suited for manufacturing firms when employed in combination.
    Original languageEnglish
    Title of host publicationProceedings of the 3rd Research Conference on Relationship Marketing and CRM
    Publication date2007
    Publication statusPublished - 2007
    Event3rd Research Conference on Relationship Marketing and CRM : The European Institute for Advanced Studies in Management - Brussels, Belgium
    Duration: 1 Jan 2007 → …

    Conference

    Conference3rd Research Conference on Relationship Marketing and CRM : The European Institute for Advanced Studies in Management
    CityBrussels, Belgium
    Period01/01/2007 → …

    Keywords

    • Workspace design
    • Product/service-systems
    • Relationship marketing
    • Value perception

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