LAUNCHING SPECIALTY PRODUCTS: ARE YOUR TOP MANAGERS READY?

Last week Dow Chemical created a team to evaluate options for reorganizing its businesses that produce plastics used in compact discs, auto tires and food packaging and have become “commoditized.” According to the Wall Street Journal, Dow plans to expand its specialty chemical business which is more profitable and less exposed to the ups and downs of energy markets. Companies that diversify from so-called commodity products toward specialized products that yield higher profits, require new skills from their managers in areas from product development and commercialization to sales and marketing.

Business managers who sell differentiated products into niche markets may have different competencies than those who sell commodity-type products. Important attributes include:

1. Bi-lingual: Marketing managers in specialty businesses need to speak “Entrepreneur” to organize and motivate their team to succeed in new product or market development. This includes framing the project in terms of “Steps to Revenue” and “Project Milestones.” Managers also need to speak “Corporate” to sell their ideas internally and access company resources. Ideas and requirements presented in terms of “Return on Shareholder Value” and “Fiscal Year End” are more likely to get the attention of your Board of Directors.
   


2. Market Perception: The ability to develop and sell specialty products requires sensitivity into market trends and opportunities. Your manager must clearly-define customer benefits that give you an advantage over your competitors and be able to sell them.
   


3. Value Pricing Insight: Many products are still priced according to what they cost to produce. In a commodity selling business, the emphasis may be on selling products by volume or by the ton. Expanding your specialty product line will require managers to draw on market research and customer knowledge to estimate how much benefit your product provides to your customers. Deriving price from that value is valuable manager expertise.
   

SALARY BENCHMARKING: 2007 SALARIES OF SUPPLY CHAIN EXECUTIVES AT FORTUNE 500 INDUSTRIAL COMPANIES.

Source: DHR International data