Determining customer needs for a niche supplier in the mining industry

Abstract

The richest ever mineral treasure trove discovered in a concentrated area has been found beneath the surface of South Africa. South Africa is known to have one of the lengthiest mining histories in the world referencing back to the late Stone Age. It is, therefore, no understatement that the South African economy has been built on the back of mining. For nearly 150 years, mining has been the driving force behind the South African economy, accounting for 30% of the Johannesburg Stock Exchange and contributing 7.7% to the country's gross domestic product. With a large amount of ore extracted from underground operations, there is major scope for the development of underground mining equipment locally. The current market is dominated by three major international organisations namely; Sandvik, Atlas Copco and Caterpillar. Additionally, due to continued strained labour relations and political influences in the mining labour force, mining companies are increasing the level of mechanisation at their plants, thereby reducing labour costs and inefficiencies. The primary objective of this study is to determine the customers' needs within the mining industry across South Africa. Any organisation's success is dependable on its ability to create products that address the customer' needs. It is imperative for an organisation to realise the importance of a consumer's needs and the effect it has towards the organisation's products and services. The study identified nine factors, all relating to customer needs for the mining industry in South Africa. They are value for money, promotion and distribution, service delivery, products from local Original Equipment Manufacturers, local manufacturing, international purchasing, co-operation, skilled staff and quality and increased business activity. These factors explain a satisfactory cumulative variance of 67%. The Kaiser-Meyer-Olkin measure produced a good value of 0.811, which indicates that the sample is highly adequate. Furthermore, Bartlett's test of sphericity also indicated favourable values. The Cronbach alpha coefficient tested positive (?0.7) for four of the factors. There are several factors that correlate significantly with one another. This study aimd to contribute to the local manufacturing market by assisting local firms to identify gaps in the market. Moreover, the findings and recommendations in this document contradict the traditional section of local versus international and state that the management teams of local Original Equipment Manufacturers can capitalise on opportunities in the market.