The Customer’s Activity Cycle (CAC)
To provide a framework for properly aligning the goods and services that a firm offers Sandra Vanderbilt introduced the concept of the customer’s activity cycle (CAC) As seen in Exhibit 2.6, there are three major components of the CAC (a) the prepurchase activities (b) the purchase activities and (c) the post purchase activities. 13
The prepurchase activities focus on being responsive to customer inquiries and the ability to demonstrate technical expertise. The purchase activities center around the actual sale and delivery of the product and collecting payment. The postpurchase activities include after-sales support services and product warranties.
The better a firm can identify and understand each of the elements that take place within these three components. the greater the competitive advantage it has in the marketplace In other words the larger the portion of the customer’s activity cycle that a company is involved with the stronger its position in the marketplace As part of the CAC concept Vanderbilt suggests that firms should shift their emphasis from selling only products to their customers that is goods to assisting their customers in solving their problems that is services .
For example. Hendrix Voeders is no longer in the business of providing only livestock feed to pig farmers in Holland. Today it also provides a wide range of services to these farmers including consulting on pig breeding nutrition management delivery to the slaughterhouse. and distribution of pork products to retail outlets. As another illustration SKF in Sweden no longer produces only ball bearings for its after-market or replacement business. It also provides advice to its customers on spare parts management training and in installation and suggests good preventive maintenance practices that will extend the life of the bearings.
These two companies exemplify an emerging trend among world-class businesses in that they demonstrate how manufacturing companies today are turning to service in order to obtain a competitive advantage in the marketplace. Where once manufacturing was considered to be totally separate from service . this is no longer the ca e. Both are essential and must be properly integrated and in alignment for a firm to succeed in today highly competitive markets especially at the international level.