Case Study Title: Givaudan Flavors
1. Major Facts / Major Problems: * Givaudan is a major supplier of flavors to Tastyco, one of Givaudan’s largest customers. * Geoff Morales has been the Tastyco account manager for three years, during which Geoff has increasingly grown volume and returned large profits for Givaudan. Geoff has not had to compete with other flavor suppliers and has been able to charge Tastyco high prices for both new and existing flavors. * Givaudan’s R&D team has been working directly with the R&D team at Tastyco in a number of technical areas, including conducting “Flavor 101” training. * Tastyco has a new Purchasing Manager – Susan Challis – who recently contacted Geoff …show more content…
Part of this would include a quantification of the value provided by the technical services and training Givaudan gives to Tastyco as well as support from the R&D teams, with an emphasis on the fact that these services are part of the composition of the flavor pricing. Additionally, Geoff can present specific values for technology delivered by Givaudan, such as the VAS to aid with sensory managers and consumer testing, which had been provided at no cost. Finally, Geoff should attempt to quantify the value of their shipping process which has guaranteed deliveries and prevent material shortages. This last item not only provides a monetary value to Tasty co but also a psychological value. The aforementioned features provide a customer service value to Tastyco that cannot be met by competitors such as Nan Ya. Tastyco can have confidence that the prices they are paying for flavors represents the total cost of ownership and is a bundled customer service offering providing more than just materials.
- Solution B: An alternative approach could present the value articulated in Solution A but also look to present the prices for flavors in a different and innovative way. Geoff could look to categorize the flavors being offered to Tastyco. Based upon how long a flavor has been offered as well as the quantity typically purchased, he could reduce prices