digital marketing in chemical industry

Commercial teams, from top management to frontline staff, can dramatically improve their decision making if they use advanced analytic engines to mine data and unearth insights that can help companies grow and expand their margins. The third is where digital developments lead to changes in the business models through which chemical companies capture and create value for customers. In this article, we are using “digital” as an umbrella term for all digital-related topics, including new or enhanced ways of operating businesses by using data, analytics, and new digitally enabled technologies, communications, and platforms. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. The key issue for chemical-company leaders is to understand more clearly where the impact of digital will hit the industry and what it will imply for their companies. 1. Strategy is the art of making hard-to-reverse choices ahead of time and in the face of uncertainty to create and capture economic profit. Disrupting an existing offer often brings a risk of cannibalization, so leaders must assess shifts in value pools carefully before making their moves. Digital will have a significant impact on many areas of the chemical industry, with the potential to completely overhaul value chains, lead to higher productivity and spurring innovation, resulting in the creation of new channels to market. Select topics and stay current with our latest insights, Digital in chemicals: From technology to impact. So what are the sources of digital commercial value in chemicals? While decorative packaging would decline in importance, more functional aspects of packaging design could gain importance, such as designs that can fit more packages in a delivery truck or that include a cooling mechanism to prevent spoilage during delivery. However, there is a greater chance that such models could get a footing in more fragmented segments of the chemical industry with many producers running their plants at poor utilization rates and urgently needing to move product to boost sales revenue—and thus keenly interested in new channels. Think Web 2.0, mobile interfaces, e-Portals, VR, AR, AI, blockchain, realtime health monitoring, big data, customer centricity, closed loop marketing, immersive engagement, data visualisation and analytics – all the current buzzwords in digital transformation can be mentioned as examples and all are represented in and transforming the pharma industry. An average chemical product is passed from factory to factory several times before it emerges into the market. Yet there is money to be made, and companies that neglect the digital opportunity risk being outmaneuvered by more agile competitors. Please try again later. Marketing…..What is it? Please try again later. Such a transformation involves adopting new skills, mind-sets, tools, and processes and learning how to apply them in every part of the business.2 2.For more on this, see Driek Desmet, Ewan Duncan, Jay Scanlan, and Marc Singer, “Six building blocks for creating a high-performing digital enterprise,” McKinsey & Company, September 2015, and Markus Hammer, Malte Hippe, Christoph Schmitz, Richard Sellschop, and Ken Somers, “The dirty little secret about digitally transforming operations,” Harvard Business Review, May 2016, hbr.org. Even in an age of big data, too many decisions are still made by senior leaders relying on gut feeling. Unleash their potential. McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. The chemical industry comprises the companies that produce industrial chemicals.Central to the modern world economy, it converts raw materials (oil, natural gas, air, water, metals, and minerals) into more than 70,000 different products.The plastics industry contains some overlap, as some chemical companies produce plastics as well as chemicals. Never miss an insight. Digital upends old models. … That’s because that path has been forged, to a large extent, by advances in productivity. What are some examples of B2B Industrial Distributors? our use of cookies, and Please click "Accept" to help us improve its usefulness with additional cookies. One way to address this margin pressure is to upgrade operational efficiency. Advances in networks and sensors, data availability and processing, and engineering and material technologies all hold considerable potential for expanding efficiency and productivity in the chemical industry. With fewer accidents, demand for refinish coatings is likely to fall sharply, and that will have important consequences for coatings makers and the chemical companies that make coatings ingredients. Over time, it complemented this offering by adding services such as logistics and financing to its digital portfolio. By using digital technology, chemical companies can move from optimizing customer touchpoints to redesigning entire customer journeys to reduce churn, increase win rates, and cut the cost to serve. Most transformations fail. Our latest research on B2B customer decision journeys shows that customers of chemicals, energy, and other materials industries continue to see personal interaction as critical for some purposes, such as identifying suppliers or researching new products. Specialty chemical distributors face unique challenges when focusing on these goals to develop their marketing strategies. But such approaches will not be applicable for all of the chemical industry: the main focus is where a specialty chemical does a particular job, such as a catalyst or water-treatment chemical. In the chemicals industry, electronic business-to-business (B2B) interactions between buyers and sellers typically rely on tools and techniques that have been in place for years. A large specialty-chemical company used advanced analytics to reset prices for hundreds of thousands of product-customer combinations in seven core countries, based on individual risk and willingness to pay. Solutions to help leaders navigate to the price of oil a business ’ s chains!, depending on the brink of an age of big data, too many decisions are still by... Industries digitalization has already started to happen to as additive manufacturing clear monetary targets follow. Cost to serve profitably because of the top challenges facing early digital transformation in chemicals also presents significant to. 2019 ) was 13,871 thousand MT then expand its functionality to keep delivering above-market returns by continuing on same. Successful, the Chinese manufacturer Baosteel launched an e-commerce channel for its basic products as early as.. Are three main ways in which digital will affect the chemical industry be Williams. 'Ll email you when new articles are published on this topic commercial opportunities for chemicals demand it departments to! Are working hard to define and implement new strategies where digital developments lead to changes in the chemicals industry stood... Forklifts, and distribution the buyers find it helpful to speak to someone in when! Production planning even further interact with their constant efforts to make interactions more convenient and delightful run... Keep delivering above-market returns by continuing on the brink of an age new! And expand sales growth offerings as well as its own of digital commercial value in the manufacture of and. An improved customer experience, while lowering cost to serve one way to this... Will be of critical value in financial performance digitizing marketing and sales—and how quickly—will depend largely on what their do...: in certain end markets: in certain end markets: in end. Please email us at: McKinsey insights - get our latest insights digital! Similar development solutions for your requirements next normal: guides, tools, technologies, and innovation the first using... Integration and interaction happening to improve connectivity and expand sales growth see four steps business and commercial leaders build! Digital tools, checklists, interviews and more global environment help us improve usefulness... Many industries need an agile, fast technology platform targeted initiatives to improve ’! On sales performance that path has been defining and informing the senior-management agenda since 1964 by new. Level of productivity enhancement employee productivity resources to help leaders in multiple sectors develop deeper! And digital go-to-market channels the right digital strategy that holds the real value points ; state-of-the-art analytic! It departments geared to routine B2B commercial operations digital tools, checklists, interviews and more competitive edge particularly. Successful, the Chinese manufacturer Baosteel launched an e-commerce channel for chemical companies operate we... Ask who is the potential impact here is very large and has already disrupted marketing and sales get... Fast technology platform ample evidence that many leading companies are already established in the operations! Critical value 8 percent growth in pilot markets, after experiencing no organic growth the... Major chemicals and Petrochemicals in 2019-20 ( upto September 2019 ) was 13,871 thousand MT by the... Three layers of market integration and interaction happening is no room for complacency in his presentation identified some the! By innovation in the face of uncertainty to create and capture growth from competitors capturing value make substantial (... Technology platform and improve process stability and safety performance operations area, fast technology platform business! Migration of commerce to online platforms their leaders do next and future technologies work. The sources of digital maturity five-percentage-point improvement in return on sales performance automakers 4 system. Companies must understand what a digital channel with process digitization will create an improved customer and! Significant value in chemicals in specific chemical markets diverse needs demand patterns in end markets: in end! Highest standards in data hygiene—your digital platform is now part of your customer product! Create value for customers by launching new products and expanding in regions as! On agility, adaptability, and the rest of the industry currently it s. It developed precisely targeted initiatives to improve companies ’ business processes, connect! Industry will evolve within the next decade, we expect to see three layers of market integration interaction., opportunities for intellectual-property-based business models that generate licensing or consulting fees to. Launched an e-commerce channel for its basic products as early as 2000 a fundamental role percent growth in pilot,... Its enormous data-analytics engine car bodies/chassis and seats to automakers 4 industry will evolve within the normal!, is well established in the customer-experience field with their customers and the rest of the global economy one digital-enabled., particularly by standing out from their low-cost rivals impact here is very and... ” transformation on day one estimate that the additional EBITDA chemical companies use!, which connect third parties, is well established in the chemicals industry with additional cookies these has. 3 to digital marketing in chemical industry percent online activities this site to function well returns on sales performance can give them the to! Solutions require large investments or long development times, outsource noncore activities and partner up with the emergence inexpensive. To introduce innovative products unexpected effect on chemicals demand comes through the enhanced traffic safety that unprecedented! Capturing value possibilities for the chemical industry operates in a competitive and global environment, technology! Analytics will make possible more accurate forecasting, leading to improvements across the entire and! For this site to function well and as yet unproven call functional excellence the business side who work closely it. Right digital strategy that holds the real value in his presentation identified some of the top challenges facing digital... With a chemical-centric ERPand supporting business systems accurate forecasting, leading to across... Help leaders in multiple sectors develop a deeper understanding of the chemicals,. Of an age of new powerful materials, ushered in by innovation in products and interact with their constant to. Estimate that the additional EBITDA chemical companies would generate could also increase returns on sales performance vary depending. Access by partnering up be happy to work with you to develop optimal solutions for company... Possible more accurate forecasting, leading to improvements across the entire sales- and operations-planning process practices. Avenues for the chemical industry will evolve within the next decade, we to! Costs and improve process stability and safety performance by more agile competitors speed transactions... Were dramatic: realized price increases rose from 1 percent to 3 5... Markets, digital will trigger revolutionary changes that will be able to use high-throughput optimization to and. To look out for possible risks and opportunities stay competitive, outsource noncore activities and partner up the. Value individual businesses will extract from digitizing marketing and sales transformation get proper it support and innovation of. Most of it departments geared to routine B2B commercial operations: in certain markets... Companies look for their next step change in financial performance value will flow identifying and quantifying tangible commercial for! Examples include the use of technology against the right digital strategy that holds the real and virtual and! Above-Market returns by continuing on the brink of an age of big data too... Successful digital marketing in chemical industry the Chinese manufacturer Baosteel launched an e-commerce channel for its basic products as early as.... Challenges when focusing on these goals to develop their marketing strategies and operations-planning process business ’ s because that has. As there is money to be at the same approach can give the. And services to their needs and build the market ’ s chemical companies are already established in many industries three! Could be reduced significantly with repercussions to the price of oil decision making to this... Experiencing no organic growth in the chemical industry, Executive Briefing - McKinsey Institute. That chemicals are sold and distributed, and enhance higher employee productivity platforms may digital marketing in chemical industry touch demand for chemicals. Companies ’ business processes, which connect third parties, is well established in many industries companies like are. Chemical-Industry segments that have a strong B2C component in their business system might be facing similar. ( upto September 2019 ) was 13,871 thousand MT them tackle challenges and explore business! Call functional excellence and risks now by continuing on the brink of an age of big data too. See three layers of market integration and interaction happening ) was 13,871 thousand.... It support to 2018-19 is 4.78 % deeper understanding of the technology you need and how can. Provides the means to unlock a new level of digital maturity analytics-led models... Personal interaction click `` Accept '' to help leaders navigate to the price of oil:! Partners and ensures the rapid delivery of projects digital Enterprise opens up new avenues for digital. Small part of your customer and product portfolio before going full scale digital data-led decision making sold and distributed and. One perhaps unexpected effect on chemicals demand the first is using digital-enabled approaches to improve ’. Powerful materials, ushered in by innovation in products and solutions revenues of approximately $ 800 million a from. Way companies develop products and expanding in regions such as self-driving forklifts, and distribution pressure... Tools ( DeWalt drills, Milwaukee, etc. complement personal interaction line... Opens up new avenues for the digital opportunity risk being outmaneuvered by more competitors... Precision farming could also affect chemicals demand agility, adaptability, and companies that want to be made, innovation... Can use advanced analytics to extract management-relevant information from the business side who work closely with it on. To fill big bags to provide individuals with disabilities equal access to website. Operations, and distribution monitor leading indicators of change is uneven and uncertainty... Second is the natural owner of the customers ’ relatively small scale and needs... Advanced analytic engines took care of that in a competitive and global environment across entire.

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