In 2010 nearly 70% of US manufacturers said they were now involved in services on top of just making and selling products. Some of this is what gets called “servitisation” and has to do with after care and other bits and pieces which are easier done in the west by western manufacturers than by Asian ones so offer a degree of differentiation, and potentially additional value for a higher price.

And this is where we start to really see the convergence. Why do we pay more for a premium coffee in a fancy coffee shop than we do in an old fashioned corner cafe? It is about value. It is all about what the customer thinks she is getting at the time. She adds up the ambience, the seating, the free WiFi, the quality of the coffee and her feeling about the brand and decides what is the “value in use”. So here is the lesson. The true value is always decided by the user and if properly considered need not be “cost plus”. Forget that and you are selling a commodity and with leather you are doomed. This is co-consumption.

If you follow Lego and wonder how it manages to stay ahead with little plastic bricks while other toy companies are getting swamped by tablets and Xboxes then consider the next step: co-creation. Lego can now advertise products that none of its designers had a hand in: they were designed by their customers in return for some free product.

In many ways co-creation is what successful tanners have done for a long time (co-creationally helped by their chemical suppliers). We craft new leathers with the correct softness, sheen, grain pattern and performance attributes to work with our customers evolving requirements. Occasionally we try to do it in isolation but the best results come when we work together, when it is easier to take risks knowing you can pull back together if needed.

And if you are thinking this has all gone far enough just consider how many of your customers now sell products online. Today the Internet irrevocably mixes communication, distribution and sales. Many marketers are now in charge of a P&L account with revenue coming in 24/7 every day of the year. They are not just spending to budget, they are a vital part of the income stream as a transactional website built wrongly and without good content and communication will lead quickly to disaster.

You thought Marketing was just about brochures and trade stands? Forget it. Things are serious now if you want to survive. 

Mike Redwood

Follow Mike Redwood on twitter: @michaelredwood

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