Soft Values are Game Changers for Manufacturing Companies : Identifying, Creating and Capturing Consumer Values

Abstract: Business strategies for competitive succession have been captivating the attention of scientists and entrepreneurs from all over the world. As more competitive circumstances are reached within a market, the value perspective expressed by consumers becomes increasingly relevant. The manufacturing industry has somewhat been resistant to incorporating soft consumer values into their business models, as many of them are built up by traditional price- and firm-centric structures and belief systems. In this thesis, we explore how embracing these values can benefit manufacturers and how to strategically use value creation and value capturing processes. Previous research on the topic has found that the ability to create and capture soft values has grown in other industries, however, the manufacturing industry has not yet fully embraced this trend. The reason is mainly due to their traditional structure. If manufacturers do not act now, they are threatened by a decline in market share that might lead to a market exit.  This thesis performs a case study of a Nordic rock bolt manufacturer and investigates what soft values are and how they can be utilized in the manufacturing industry. A question to ask while researching this topic, is what does the consumer evaluate when purchasing rock bolts from the manufacturer? To collect the answers, 6 different methods were used, including a field visit to a mine in Finland and several semi-structured interviews with representatives and actors in the Nordic rock bolt manufacturing industry. The various methods were all applied to get a holistic view of the problematization.  The study identified 9 soft values among rock bolt consumers that can be utilized in different value creation and capture processes. These soft values are based on the needs and wants that matter in the purchasing decision. Manufacturers should seek new and innovative ways of meeting consumer needs and wants. This means engaging with consumers and opening up for value co-creating opportunities. In turn, consumer knowledge will be beneficial to the manufacturer’s competitiveness. Furthermore, service-centric strategies, such as servitization, are ways for product companies to capture consumer value. Moreover, to further gain purchasing interest, it is suggested that manufacturers could incorporate value-based pricing strategies. This can promote the benefits of the manufacturer’s product, leading to a price setting that primarily is based on consumer-perceived values.  All in all, this study has demonstrated the importance and opportunity of soft value identification, creation, and capturing in the manufacturing industry by showing how price can be trumped by other, softer, values influencing the decision-making process.