Patterson nv
bottle filling and capping machines
Case 2022-2023
Authors: Jean-Pierre Thomassen & Eyzo Bakker
Groningen, February 2023
©Jean-Pierre
Thomassen & Eyzo Bakker
This case is especially developed for the IBSCM-course 2022-2023 of the University of Groningen. This case can only be used
by IBSCM-students for group work. No part of this case may be reproduced, stored, or introduced into a retrieval system, or
transmitted, in any form or by any means without the prior written permission of the authors of this case.
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(1) The company
Patterson nv is Europe’s number 2 in designing, building, and selling bottle filling and capping
machines (BFCM). The company is established in 1995 as a result of a merger of two mid-sized
companies that were too small to be successful. Headquarters is located in Brussels - Belgium.
A total of 150 people is on the payroll of the company. In Figure 1 the organogram is given. It
has a traditional functional structure with a general manager, and three managers reporting
to her. The various departments are:
A. Product management: designing the machines.
B. Procurement: buying parts and raw materials for producing the machines.
C. Production: assembling the machines.
D. Planning & Logistics: transportation of parts, raw materials, and end products.
E. Quality control: checking the quality of machines.
F. Technical service: second line technical assistance for installers and customers.
G. Customer service: non-technical service.
H. Sales: selling the machines and managing agents/distributors.
I. Finance: organizing all incoming and outgoing financial transactions.
The departments A-E report to the operations manager, F-H to the commercial manager and
I to the finance manager. The management team consists of the general manager, the
operations manager, the commercial manager, and the finance manager.
The organogram
General manager
Support teams:
marketing, HR,
facilities
Technical
service
Scrum team A
Customer
service
Product
management
Scrum team A
Sales
Operations
manager
Procurement
Finance
manager
Finance
Scrum team A
Commercial
manager
Production
Planning &
logistics
Quality control
Figure 1. Structure of the organization
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The company also has some staff departments. These are marketing, human resources and
facilities.
The company sells two (semi) automatic BFCM-product markets:
 Industrial: this is the market for high-volume and high-speed automatic machines (selling
price between 1 and 3 million euro). These machines are tailormade designed and
produced on customers’ request. Figure 2 is an example of such a machine. They are sold
to end users that are large volume liquid filling companies like beer breweries, soft drinks,
and spirits producers.
 Mass market: this is the market for low-volume and medium-speed semi-automatic
machines. These machines are much smaller than the industrial machines (selling price
between 20.000 and 150.000 euro). They are produced in bulk, stored, and sold. They are
sold to medium sized companies and large companies that produce liquids in small
batches. Think about small breweries and producers of cosmetics, and pharmaceuticals.
Figure 2. Example of an industrial BFCM
The company has grown from an annual revenue of 100 (index) in 2009 to 150 in 2019. This
growth was due to the growth of existing customers, bankruptcy of some smaller competitors
and growth in Eastern Europe, Middle East, and Africa. However, in 2020 the revenue index
decreased to 140, in 2021 it was only 138 and the estimation for 2022 is 135. The main two
reasons for this negative trend in the last years are:
 There is new Chinese competition on the mass market. Machines are produced in China
and sold at prices of about 60-70% of Patterson’s prices.
 There is a small but powerful Italian competitor producing machines for both BFCMmarkets with sophisticated digital/online components and services Patterson does not
have.
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Patterson’s profitability follows the revenue trend. Since 2020 it has a negative trend. The
shareholders of the company, a private equity fund, has strict and high profitability standards.
Since 2021 the pressure on the management is increasing due to the financial situation.
(2) The value chain
Patterson is a traditional manufacturer of machines. It sources the components from suppliers
in Europe and the Far East and assembles the machines in Brussels. The value chain towards
customers/end-users is different for the two product lines.
 Industrial: for the Benelux it sells products (machines, spare parts) directly to end users of
machines. For all other countries it uses independent agents for the sales. Agents get a
percentage of the revenue for their activities. Agents are basically no customers because
they do not buy machines nor spare parts; they are only intermediaries. End users buy
from agents, and when these agents receive an order, they submit it to Patterson. So,
agents do not have machines in stock. The installation of the machines is done by
independent installers. Installers are technical companies specialized in assembling
machines on the location of end users. Also, the maintenance is done by independent
service companies. All sold new machines are billed by Patterson directly to the end user
(not the agent). Therefore, it has the names and revenue figures of all customers.
 Mass Market: for all countries it sells the, in bulk produced, machines to national
independent distributors. These distributors buy the machines, pay Patterson and resell
them to end users. Also in this market, the maintenance of the machines is done by
independent service companies. Because of the 10-year technical guarantee on the
products around 99% of the end users in this market is known by Patterson.
 Concerning spare parts: there are end users that do the repairs themselves. Others have
specialized independent service companies that do the maintenance. Both end users and
these service companies need spare parts to replace broken/damaged parts. They order
them directly at Patterson.
So, summarizing:
 Patterson has direct contacts with agents, end users, distributors, and independent service
companies. End users are the users of BFCMs.
 Patterson has financial figures of most of the end users in both markets. They also have
these figures of distributors and independent service companies. These are all seen as
customers.
 The company has no direct contacts with consumers. Consumers are non-business people
like you and me drinking or using liquids in bottles. Patterson is not in the business of B2C.
(3) The market situation
The marketing department has done a study on the market situation last year. It shows that
Patterson, if it continues with the current strategy, will have big problems. Here are some of
the main conclusions of this study.
1. Since the relationship of Patterson with an end user stops after the delivery and payment
of machines in the industrial market, the customer intelligence of and relationship with
end users is limited to the service department.
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2. For the mass market Patterson is in a commodity trap. Several, especially Chinese,
competitors are gaining market share rapidly. They offer similar products at much lower
prices.
3. For the industrial market, this is not yet the case. But this can change in the future.
4. There are current competitors, like an Italian competitor, that have invested heavily in
digitalization of the machines. This gives end users several advantages related to lower
costs and higher productivity.
5. Sustainability (decreasing the ecological footprint) is of growing concern of end users.
The report indicates that Patterson must move from a goods dominant logic to a customer
dominant logic. Not the product, but the customer and its needs, desires, and expectations
should be central in the DNA of the company.
(4) The customer base and research
The company has done an analysis of its customer base in the beginning of the year. Here are
some of the results:
1. The company has about 300 customers.
2. Customers are defined as organizations where there was a billing relationship within that
year (2022). This could be buying a machine with a high revenue, but also buying spare
parts.
3. Customers are end users, distributors, and independent service companies. Agents are not
seen as customers, more as business partners.
4. End users do not buy a machine each year. That means that their yearly revenue with
Patterson fluctuates.
The company has developed 2022-insights in the customer base. These are presented in a
separate Excel-document. Info per customer is:
 Total revenue in 2022 (in euros)
 Growth potential in revenue (classification low, medium, high)
 Indirect financial value (classification low, medium, high)
 The type of customer (end user, distributor, independent service company)
 Cost to serve per customer (very low … very high)
 Relative price expressed in % discount (high discount is low price)
 Type of VFC segment
The Benelux key accounts have their own account manager. These customers are more
involved in product development and prices are lower than those for the other customers.
This segmentation is not used in other departments of Patterson. In a separate Excel file, you’ll
find the information per customer.
In the last five years, each year the company has done a customer satisfaction survey. The
sales department has selected customers and given the data to a research company. This has
conducted a digital survey using a single informant per company. The response has decreased
since 2017 significantly. Was it then around 80%, it is now in 2021 around 40%. Here are some
of the 2021-results:
 60% Of the customers is satisfied or very satisfied, especially the agents give a very high
score (100%).
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 The Net Promoter Score (NPS) shows similar figures (+45 and +100 for agents).
 Strengths are the quality and robustness of the machines, the personal relationship with
Patterson’s service employees and the reliability of the organization.
 Weaknesses are the high prices, low level of digitality, lack of relationship activities.
Various customers indicate that sales is quite opportunistic. Only if they feel there is a
potential deal they are interested in the customer.
In the 2021-survey, customers were asked to give their opinion on Patterson. In Figure 3 you
see the results. Participants were for example asked if the organization was professional,
amateurish or in the middle.
professional
innovative
flexible
speedy
market/customer
focused
proactive
reliable
nearby
personal
involved
partner
80%
11%
20%
16%
22%
in the middle
19%
53%
50%
69%
37%
1%
36%
30%
15%
41%
amateurish
conservative
rigid
slow
Internally focused
6%
67%
7%
46%
23%
25%
49%
28%
41%
45%
34%
37%
45%
5%
52%
9%
43%
38%
devious/reactive
unreliable
distance
non-personal
disconnected
supplier
Figure 3. Patterson’s image according to end users
(5) Results of developing a Customer Value Excellence Vision
Because of the pressure of the shareholder, the last few months the management team has
worked on a Patterson vision on ‘Customer Value Excellence’. With the help of some experts
and based on both the results of market & customer research, but also based on many
sessions with employees, it has developed a vision and direction for the next years. Here are
the most important cornerstones.
 Patterson must migrate from a goods dominant logic towards a service and customer
dominant logic. The company must transform its DNA, culture, and leadership style.
 The company must grow to a state of servitization or even total solution to increase
value for the customers.
 To realize this, it must invest in digitalization of the machines. Especially those for the
industrial segment.
 The company must develop a more sophisticated and intelligent customer segmentation
based on both VOC and VFC.
 The company wants to understand its end users much better and have a closer
relationship with them (how depends on the segment).
 End user customer segments must get value propositions that correspond with their VOC
and VFC. All elements of these value propositions should be tuned.
 The company should improve its customer journeys and internal cooperation in a
structured way. Therefore, the current ‘silo structure’ could be changed into a structure
with multi-functional account teams.
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(6) Questions
You and your team are the Patterson marketing team. In the context of the case description,
the general manager has asked you to work on four different issues and questions. Develop
an attractive consultancy report and a digital sales pitch dealing with the following
questions.
Question 1. Customer segmentation (max. 24 points)
The General Manager has given you information per customer. She has asked you to segment
the customers on the information that is currently available and given in the Appendix.
(1a-9p) Calculate/determine and describe the VOC and VFC per customer using the
information given. Explain the method that you used. What assumptions (if it all any) did you
make?
(1b-9p) How would the VOC-VFC segmentation look like for Patterson? Develop and describe
a VOC-VFC-matrix. How many segments do you have? How would you name and describe the
segments? Finally, what are the 3 main conclusions?
(1c-6p) The GM asked you to give your suggestion concerning the ideal customer
segmentation (independent of the current situation). How would it look like? What
criteria/antecedents would you use?
Notes:
- Work with the dataset that is given.
- Use tables and figures to present results in an attractive way.
- Use simple methods that managers can understand, and the company can use in a structural
way.
- Relevant literature: textbook B2B-CVM (Thomassen), content of tutorials and lectures,
additional literature.
- Actively use references where appropriate.
- Use a maximum of 1,75 page for answering this question.
Question 2. Scientific theories (max. 10 points)
In the B2B-CVM textbook, several theories are briefly described. The GM wants to
understand more about the link between Patterson’s current situation (and resulting
challenges), and these scientific theories.
(2a-4p) Select the two theories that are, according to you, the most relevant for Patterson’s
challenges. Describe them in a way that the GM understands them.
(2b-6p) Describe per theory (1) why you choose this one and (2) how it could affect/have an
impact on Patterson.
Notes:
- Relevant literature: textbook B2B-CVM (Thomassen), content of tutorials, additional
literature.
- Actively use references where appropriate.
- Use a maximum of 0,75 page for answering this question (Use a table).
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Question 3. Profitability Matrix (max. 18 points)
In the appendix (Excel sheet; page 2) you’ll find information about the cost to serve and the
relative price per customer. The GM has asked you:
(3a-9p) Develop the graphical representation of various customer segments in a profitability
matrix based on the information given. Also, describe how you have approached this and the
assumptions that were made.
(3b-9p) What are the three main conclusions based on 3a? What would you advice the GM
to do with the results?
Notes:
- Work with the dataset that is given
- Use simple methods that managers can understand, and the company can use on a structural
way.
- Relevant literature: textbook B2B-CVM (Thomassen), content of tutorials and lectures,
additional literature.
- Actively use references where appropriate.
- Use a maximum of 1 page for answering this question.
Question 4. Value propositions (max. 23 points)
The GM has concluded that within the company there is a mismatch between the value of
customers and the effort and energy it spends on them. By redesigning the value proposition
and making sure employees spend the right energy on the right customers it can increase
sales and reduce costs. The GM has asked you to develop value propositions for the
VOC/VFC-segments you developed in Question 1.
(4a-4p) How would (aspects of) the product look like for the various segments?
(4b-4p) How would (aspects of) customer service and relationship management look like for
the various segments?
(4c-3p) How would (aspects of) sustainability look like for the various elements?
(4d-3p) How would (aspects of) the total cost of ownership/pricing look like for the various
segments?
(4e-3p) How would (aspects of) risk(reduction) look like for the various segments?
(4f- 6p) Combine your answers of the previous 5 sub-questions (i.e., 4a-4e) and conclude:
How would your value proposition thus look like for each of the segments that you have
identified in Question 1?
Notes:
- Use effective tables that give a good overview, but also show the differences between
segments
- Use the content of the textbook B2B-CVM (Thomassen) as an inspiration, but do not copy it.
Also use the content of tutorials, lectures, and additional literature.
- Actively use references where appropriate.
- Use a maximum of 2 pages for answering this question.
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(7) Submitting your assignment
Submit your work before March 3 (9 AM). Make sure you upload your work on time. Also,
make sure that the work is the result of your teamwork, and you have not used that of other
teams (we will do a plagiarism check).
Please develop the following output:
Output part A (max 75 points):
An attractive and convincing consultancy report for Patterson’s GM dealing with these four
questions. You want to convince the GM of your plan/analyses with your report. It is a Worddocument in PDF with a maximum of 5,5 pages. Documents that exceed this number of pages
will not be reviewed.
 Not counted against this page limit are the mandatory cover (see last page), the front page
and references. Do not forget to add a list of used references. The document should use
Times New Roman or Cambria 12 pts, 1.0 line spacing, margins left/right/top/bottom at
least 2,5 cm. No appendices to this document are allowed.
 For tables, a 10 pts fond can be used.
 Grading of submitted assignments that are not conceived as an attractive consultancy
report will be reduced by a maximum of 8 (out of 75) points.
Further:
 Use the mandatory cover page (see the last page)
 Use the Brightspace page to upload the document
 You have only one attempt to upload the file (make sure you are uploading the correct
version)
 Only one person uploads for each team
 Only use a PDF file format when you hand in the final version on Brightspace
 Name the file as follows: IBSCM_group#_team# (Example: IBSCM_group2_team3)
Output part B (Max. 25 points):
Make an attractive video sales pitch for Patterson’s sales department that they can use for
acquiring new industrial customers in the beer business (large breweries). Use the case and
elements of your answers on Q1-4 for this sales pitch; you don’t have to use everything. If
relevant information is missing, you can make it up and add it to the pitch. Here are the
instructions:
 Use the mandatory cover page (see last page) for the first shot/visual
 Make a Power-Point presentation, use flip over sheets or use another visualization for
each of the 7 steps. Use a maximum of 7 slides/visuals/pages (excluding the mandatory
front page).
 Make a video of your Sales Pitch of 5-7 minutes. Use any common video program.
 At least 2 team members should participate in the video.
Grading of this Part B will be done on the following criteria:
1. Were the 7 steps and their content used in an appropriate way? (10 pts)
2. How was the verbal and non-verbal performance of the presenters? (5 pts)
3. Was the Sales Pitch really convincing? (5 pts)
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4. Were the visuals (Power Point sheets or other means) strengthening the pitch? (5 pts)
For uploading the video:
 Go to the IBSCM Brightspace page: assignments/team assignment upload
 You have one attempt to upload the video file
 Only one person uploads for each team
 Name the file as follows: IBSCM_Video_group#_team# (Example:
IBSCM_Video_group2_team3)
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Cover for team assignment (mandatory)
IBSCM
2022 – 2023
Assignment 1: Patterson nv
Group/Team number: IBSCM [Fill in group & teamnumber]
Tutorial lecturers: dr J-P.R. Thomassen/E.J.B. Bakker MSc
Name student & nr: [Fill in]
Name student & nr: [Fill in]
Name student & nr: [Fill in]
Name student & nr: [Fill in]
By electronically submitting this document to Nestor:
 you declare that (1) your team is the author of the document, (2) that you did not make use
of work from other teams and (3) that nothing has been taken from other sources, without
proper acknowledgement;
 you declare that the submitted work is the product of preparation and discussion within
your own team
 you have not allowed anyone to copy your work with the intention of passing it off as their
own work
Be aware that a plagiarism check will be done on all assignments.
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