Management of Technology and Innovation in Japan

82 J. Tomita and T. Fujimoto
Due to these goal differences between AGC and its customers, AGC couldn’t
transmit new product information (seeds information) to the owners adequately.
Based on these results of its analyses, AGC built a market-oriented organization.
In 1985, it tried to develop its markets by using an approach called "Backsell"
in cooperation with a few coating manufacturers. This approach helped to
weaken, remove, or avoid the factors that cut off the flow of information in the
customer system. First, action 1. and 2. described in the last section allowed AGC
to avoid the cut-off factors (channel conflicts) and transmit new technological
(seeds) information and to collect information on needs by contacting owners directly.
Second, action 3. in the last section enabled AGC to weaken the cut-off
factors (channel conflicts) further by giving incentives to wholesalers, general
contractors, painters.
As a result of its analysis, AGC implemented a customer system called Backsell,
and achieved a high market share by feeding back needs information to the
product development process and by promoting new technological (seeds) information
to the end users.
Effectiveness of Customer System Approach
Next, we investigate in which situation the customer system approach is most effective.
Generally speaking, this approach isn’t always critical to the new product
development of a supplier. For instance, when a new product is a commodity that
is difficult to differentiate, or when the intermediate user translates end user needs
into component/raw material specifications adequately, the supplier only has to
correspond to the intermediate customer needs accurately (Tamura 2001; Akase
2000).
On the other hand, when the supplier doesn’t understand the needs information
adequately, or when it doesn’t transmit the new product (seeds) information adequately
owing to above-mentioned factors, i.e., "channel conflict", and "diverse
customers’ negotiation power", etc., the customer system approach should be effective.
In addition, it is important to discuss in which stage of the product development
process a customer system approach should be started. In this case study, this approach
was employed as an emergency measure – so to speak – after the commercialization
of the polymer for coatings. Yet, sales-opportunity losses after commercialization
could possibly have been avoided if this approach had been taken
before commercialization. Based on this case study, we thus argue that executing s
customer system approach during the early stages of new product development is
also effective.
Knowledge Accumulation of Customer System
This chapter suggested the “customer system” and argued how an effective development
pattern in a “customer system” oriented manner should be executed by
means of a case study. It is implied that suppliers not only need to consider the intermediate
user, but also the end user or their customers’ customers in their new