STRATEGIES AND PLANNING OF VANCE BIOENERGY SDN.BHD

STRATEGIES AND PLANNING

A) CUSTOMER SUCCESS

Customer success shifts the focus from expectations to the customers’ real requirements. Requirements are frequently downgraded into expectations due to perceptions of previous performance, word-of-mouth, or communications from the firm itself. This explain why simply meeting expectations may not result in happy customers.

For example, a customer may be satisfied with a 98 percent fill rate, but for the customer to be successful in executing its own strategy, a 100 percent fill rate on certain products or components may be necessary.

From what I have learned, customer success is focus on how to achieve customer success, value-added services and also developing in customer success.

In achieving customer success, we must understanding of individual customer requirements and a commitment to focus on long-term business relationships having high potential for growth and profitability.

To ensure that a customer is successful may require a firm to reinvent the way a product is produced, distributed, or offered for sale. In fact, collaboration between suppliers and customers to find potential avenues for success may result in the greatest breakthroughs in terms of redefining supply chain processes.

Next, the notion of value-added service is a significant development in the evolution to customer success. By definition, value added service refer to unique or specific activities that firms can jointly develop to enhance their efficiency and /or effectiveness.

Value added services help to foster customer success because they tend to be customer specific, it is difficult to generalize all possible value-added services.

There are four elements in developing of customer success which are gaining cost effectiveness, market access, market extension and market creation.

From the information that i got from my interviewing, firstly the Vance Bioenergy was very care about the quality of their product in order to gain and maintain customer success.

 The quality of their raw materials is too high standard to gain a good product. Secondly is about pricing.

Their pricing were very competitive in term of local as well as overseas market. They also have the certification which are ISO, AAJCCP and FSCC.

The Vance Bioenergy also as top players in term of refine glassily and biodiesel



B) PRICING STRATEGIES

Pricing is aspect of marketing strategy that directly interacts with logistical operations. There are many pricing strategy which is F.O.B pricing, delivered pricing, single-zone pricing, Multi- Zone pricing and Base-Point pricing.

F.O.B pricing means Free on Board or Freight on Board. There are two types of  F.O.B pricing which is the F.O.B factory and F.O.B destination. F.O.B factory pricing is the simplest way to quote price. Under F.O.B factory, the seller indicates the price at the point of origin and agrees to tender a shipment for transportation loading, but assumes no further responsibility. The buyer selects the mode of transportation chooses a carrier, pays transportation charges, and take risk of in-transit loss and or damage.

For F.O.B destination, product ownership title does not pass to the buyer until delivery is completed. Under F.O.B destination pricing, the seller arranges for transportation and the charges are added to the sales invoice. The firm paying the freight bill does not necessarily assume responsibility for ownership of good in transit, for the freight cost, or for filing of freight claims.

The primary difference between F.O.B and delivered pricing the seller establishes a price that includes transportation. In other words, the transportation cost is not specified as a separate item. There are several variations of delivered pricing which are single-zone delivered pricing, multiple-zone pricing and base point pricing system.

Under single-zone pricing, buyers pay a single price regardless of where there are located. Delivered prices typically reflects the seller’s average. The same fee or postage rate is charged for a given size and weight regardless of distance traveled to the destination.

Single-zone delivered pricing is typically used when transportation costs are relatively small percentage of selling price. The main advantage to the seller is the high degree of logistical control. For the buyer, despite being based on averages, such pricing systems have the advantage of simplicity. 

The multiple-zone pricing establishes different prices for specific geographic areas. The underlying idea is that logistics cost differentials can be more fairly assigned when two or more zones are used to quote delivered pricing.

Base-point pricing system in which the final delivered price is determined by the product’s list price plus transportation cost from a designated base point, usually the manufacturing location. This designated point is used for computing the delivered price whether or not the shipment actually originates from the base location. Base-point pricing is common in shipping assembles automobiles from manufacturing plans to dealers.

F.O.B pricing means Free on Board or Freight on Board

In our interview session from Vance.Bioenergy company, they also F.O.B pricing and a few more that we not learn in our revision which is CIF/CFR and FCA. For the pricing, their customers choose what pricing strategy used.

Usually Vance.Bioenergy company follow the market value but cut down on commission not the pricing. Their pricing is very comparable. They have to lower their commission because of the broker. Sometimes, broker is most affected. But, they maintain the pricing to get satisfaction from the competitor and also customer.

To be conclude, the development of menu pricing as a strategy allows a seller to most pricing as a strategy allows a seller to most affectively charge for trhe actual service provided to a buyer.