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Questions and Answers

February 28, 2001
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Questions and answers in the adhesives sealants industry.

Question: We are a custom footwear maker in California looking for biodegradable adhesives to use in the production of footwear. We are currently using a product called “Barge Cement,” which is the industry standard. We are looking for a non-toxic, biodegradable adhesive with which to bond leather. Do you know of such a product, and who I might contact?

There are many bonding applications involving footwear manufacturing. I know of no biodegradable adhesive used for bonding leather soles. In fact, I cannot imagine a situation whereby one would want to use a biodegradable for bonding the soles. In reference to some internal shoe construction, there are various types of adhesives that find use, such as contact cements, hot melts and others. A waterborne, natural-rubber latex can be used in some applications, and perhaps this is what you are asking. This type of adhesive should be available from the main shoe-adhesives manufactures. There are other suppliers as well, and you could check with your local distributor for that information.

-ROGER LOHMAN

I own a small adhesive-manufacturing firm. Our company is always faced with the challenge of how to price a new product when we introduce it. Typically, we price our products relative to our current offering by making a somewhat subjective judgement about how much better the new product is than the old one. We usually end up negotiating a price with our customers that ends up just marginally ahead of the older offering, despite its cost. I know this is a complex business issue, but are there any general guidelines I can use to better price my products to what the market will bear?

This is an age-old issue facing all businesses in a free market. We have found that there are basically two pricing strategies used by participants in the adhesives and sealants industry. The oldest is perhaps best described as a “cost-plus” strategy. By this we mean that your product cost is established and you simply put your desired markup on it and present the offering to the market. If it’s accepted, you are likely satisfied. If not, you either renegotiate or evaluate your product strategy. You may even decline to introduce the new offering.

We have found that a much more sound strategy is to price to value. This sounds easy, and a lot of businesses think they do this, but unless they truly know the value their customers and their customers’ customers place on the benefits of using your product, this is a blind approach.

To truly understand what value customers place on a product or service offering, you must quantitatively understand the value chain associated with the use of your product or service. It is not dissimilar to the process you yourself might go through as you are evaluating whether to purchase a new product or service for your own business. In such an instance, you would want to understand the financial impact of using this new product or service in your operation.

As a supplier, you also need to understand the value that downstream customers place on your market offering. This information can be used to develop a pricing and product-development strategy that provides a true win-win scenario for both you and your customers.

-BOB SMITH

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