CIM conference lifts off with leading academic’s insight

Wednesday, 1 October 2014 03:19 - - {{hitsCtrl.values.hits}}

With the development of service economies, companies need to position themselves in a manner that not only “creates value” but also “captures it”, a leading academic from the National University of Singapore (NUS) said yesterday at the 14th annual CIM conference last night.

NUS’s Professor of Marketing Jochen Wirtz made these comments while delivering his keynote speech on ‘capturing value in the service economy.’ The technical sessions of the conference titled Marketing strategy to Execution will continue at Waters Edge in Battaramulla today. He also stated that any competitive advantage gained from even the best innovations will be short-lived as it is inevitable that these ideas will soon be copied and reproduced by competitors. “What is the implication if you can buy almost any asset, any process, and any capability from competitive markets? Our value chains are exploding, so where are you positioning yourself to extract value from such an economy? It is therefore imperative for companies to focus on something that is difficult if not impossible to recreate,” Prof. Wirtz asserted. “This is where the focus on services comes in. In a world where you can buy almost anything from a competitor companies need to think of how they position themselves in the market.”

Even though cost reduction is an obvious, go-to solution to gain a competitive advantage, according to Prof. Wirtz it should be a last resort for companies. “If I don’t like something at 100 I’m not going to like it at 95. Price cuts effectively means your undermining your own future. “By improving on the service aspects of the product, retailers can place themselves in an advantageous position when bargaining with manufacturers as the point of contact between the manufacturer and the client. You own the point of sale and the customer relationship. You can say, ‘If you have to cut my margin then I have to cut my investment and give it to whatever other brand that gives me the best margin’,” he said. Professor Wirtz will also speak at the technical sessions today, on the topic of ‘Strategy to execution in the service economy – delivering productivity and profitability’. Chief Guest Chevron Lubricants Lanka PLC CEO/Managing Director Kishu Gomes also spoke of the growing challenges in the ever-changing business environment and the contribution that retailers can make to the economic development of the country. “I believe as a country we have only the people asset in abundance. With a population of over 20 million we have about 9 million people in the workforce.” According Gomes, when it comes to achieving the national development goals of economic independence, retailers can possibly do more for the country than even its political leaders. “The marketers surely have to take the lead because as a country we don’t have the scale to come up with a strategy. They have to come up with a strategy that is value-based,” he said. The technical sessions will continue at the Grand Ballroom of the Waters Edge today. The itinerary includes a range of topics keeping with the theme of “Marking Strategy to Execution” and is set to feature many international guest speakers. Pix by Upul Abayasekara