Individuals & Organizations

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  • Individuals & Organizations

    1. 1. Marketing: Session 2 Understanding Customers: Individuals & Organizations
    2. 2. Agenda <ul><li>Finish off last day </li></ul><ul><li>Key Customer Behaviour Concepts </li></ul><ul><li>Market Segmentation, Targeting & Positioning </li></ul><ul><li>Case: Rebel Creek </li></ul><ul><li>StratSim </li></ul><ul><li>Summary </li></ul><ul><li>Next Day </li></ul>
    3. 3. Last Day <ul><li>Market Orientation – value, requirements </li></ul><ul><li>Market Opportunity Identification & Assessment </li></ul><ul><li>6 C’s – particularly Customer, Company, & Competitor </li></ul><ul><li>Market Research – Coors </li></ul><ul><li>StratSim, Business </li></ul>
    4. 4. Research Techniques <ul><li>Market Mapping </li></ul><ul><li>Concept Testing – products/services, ads </li></ul><ul><li>Customer Decision Making & Preferences </li></ul><ul><li>Media usage </li></ul><ul><li>Performance Modeling </li></ul><ul><li>Forecasting & Propensity models </li></ul><ul><li>Behavioural data - transaction capture, loyalty programs - need to complement with cognitive/attitudinal </li></ul><ul><li>Surveysite .com </li></ul>
    5. 5. Competitive Intelligence <ul><li>Strategic perspective - offensive vs defensive </li></ul><ul><li>Direct & indirect competition </li></ul><ul><li>Diversity of needs within organization </li></ul><ul><li>Diversity of sources - reports, speeches, net, customers, partners, etc. </li></ul><ul><li>Ongoing, captured & communicated - used </li></ul><ul><li>Leakage - what you are telling competitors </li></ul><ul><li>Specialized skills & resources </li></ul>
    6. 6. Summary - Research & Market Intelligence <ul><li>Uncertainty reduction - effective decision making </li></ul><ul><li>Abundance of data - not intelligence </li></ul><ul><li>Behavioural & cognitive/attitudinal </li></ul><ul><li>System - technology & people, ongoing </li></ul><ul><li>Learning organization </li></ul><ul><li>Utilization - capture, communicate/share </li></ul>
    7. 7. Framework for Diagnosing Market Opportunity Seed Opportunity in Existing or New Value System Uncover Opportunity Nucleus: Identify Unmet and Underserved Needs Identify Target Segments Declare Company’s Resource-Based Opportunity for Advantage Assess Competitive, Technological and Financial Opportunity Attractiveness Make Go / No-Go Assessment Investigative Stages Final Decision <ul><li>How can a firm generate new business ideas? </li></ul><ul><li>What value can a company unlock or introduce? </li></ul><ul><ul><ul><ul><li>Can the new business fulfill an unmet or underserved customer need? </li></ul></ul></ul></ul><ul><li>Which segments of the market are most attractive to serve? </li></ul><ul><li>What is their profile? </li></ul><ul><li>Does the firm have the resources and capabilities to support the new business and serve the customer needs? </li></ul><ul><li>Is the new opportunity attractive from a financial, competitive and technology standpoint? </li></ul><ul><li>Based on the overall analysis, should the firm launch the new business? </li></ul>
    8. 8. Resources and Assets Needed Provided by the Company Provided Through Partnerships <ul><li>Types of Capabilities: </li></ul><ul><li>Customer-facing </li></ul><ul><li>Internal </li></ul><ul><li>Upstream </li></ul><ul><li>Categories of Partners: </li></ul><ul><li>Complementor partners </li></ul><ul><li>Capability partners </li></ul> Evaluate Capabilities to Deliver Value
    9. 9. Competitive Intensity Customer Dynamics <ul><li>Number of competitors </li></ul><ul><li>Competitors strengths and weaknesses </li></ul><ul><li>Unconstrained opportunity </li></ul><ul><li>Segment interaction </li></ul><ul><li>Rate of growth </li></ul>Technology Vulnerability Microeconomics <ul><li>Technology adoption </li></ul><ul><li>Impact of new technologies </li></ul><ul><li>Market size </li></ul><ul><li>Profitability </li></ul>Opportunity Assessment Factors to Assess the Opportunity
    10. 10. Overall Opportunity Assessment Positive Factor Neutral Factor Negative Factor Competitive Vulnerability Technical Vulnerability Magnitude Unmet Need Interaction Between Segments Likely Rate of Growth Technology Vulnerability Market Size Level of Profitability of
    11. 11. Business Attractiveness Assessment Magnitude of the Opportunity Low High Realization Ease Low High Avoid Priority Selective Short-Term Selective Long-Term
    12. 12. Summary: Assessing Market Opportunities <ul><li>A market opportunity analysis framework helps structure your analyses & thinking </li></ul><ul><li>Opportunities linked to value provision </li></ul><ul><li>Customers determine value – need to understand customer decision process </li></ul><ul><li>Involves identifying & pursuing most attractive customers </li></ul><ul><li>Need to source the required resources to deliver value to customers </li></ul><ul><li>Assessing the attractiveness involves looking at a number of factors – 6 C’s </li></ul><ul><li>Culminates in a go/no-go assessment </li></ul>
    13. 13. Understanding The Customer <ul><li>Importance – market oriented, drives decisions, relevance – value </li></ul><ul><li>Key Elements – process, decision context, decision-making criteria, perceived risk & handling behaviour, experience cycle, metamarket, dissonance </li></ul><ul><li>Disciplines/Perspectives for Understanding </li></ul><ul><li>Organizational vs. Individual Behaviour </li></ul><ul><li>Online vs. Offline </li></ul>
    14. 14. Process <ul><li>Who is involved? When? What role/concerns? </li></ul><ul><li>Search process? Where? </li></ul><ul><li>Considered Set of Options? How? </li></ul><ul><li>Decision Criteria? Why? </li></ul><ul><li>Timing? When? </li></ul><ul><li>Varies by decision type/context, risk </li></ul>
    15. 15. Decision Criteria Possible Factors Salient Factors Important Determinant Factors Important & Options Differ – Swing the Business!! “ Bar or Table Stakes” – Lose if we don’t Offer
    16. 16. Value Drivers <ul><li>Give & Get Factors </li></ul><ul><li>Get - Product & Service Quality Dimensions </li></ul><ul><li>Give - $, time, effort, hassle </li></ul><ul><li>Value types - acquisition, transaction, in-use, redemption </li></ul><ul><li>Best, Lowest Cost, Easiest, Fastest </li></ul>
    17. 17. Customer Experience Cycle - Opportunity Horizon <ul><li>Requirement - Need it? </li></ul><ul><li>Specification - That’s the one! </li></ul><ul><li>Distribution - Who stocks it? </li></ul><ul><li>Availability - Who’s got it? </li></ul><ul><li>Payment - Credit OK? </li></ul><ul><li>Delivery - Want it Now? </li></ul><ul><li>Acceptance - All there? </li></ul><ul><li>Installation - All Mine </li></ul><ul><li>Performance - How’s it going? </li></ul><ul><li>Upgrade - Need some more? </li></ul><ul><li>Repair - Time For service? </li></ul><ul><li>Return - Finished </li></ul><ul><li>Evaluation - Was it worth it? </li></ul>
    18. 18. Customer Utility Map Customer Experience Cycle Purchase Delivery Use Supplements Maintenance Productivity Disposal Simplicity Convenience Risk Fun & Image Environmental Utilit y L evers
    19. 19. Customer Utility Map:Schwab Customer Experience Cycle Purchase Delivery Use Supplements Maintenance Productivity Disposal Simplicity Convenience Risk Fun & Image Environmental Utilit y L evers 24/7 Secure Transactions One Source
    20. 20. Metamarkets <ul><li>Metamarkets - “clusters of cognitively related activities that customers engage in to satisfy a distinct set of needs” </li></ul><ul><li>Major life events - weddings, childbirth, education, career changes, retirement </li></ul><ul><li>Major assets - home ownership, automobile, financial </li></ul><ul><li>Conditions - importance (time, economic), diverse set of providers, mind share (time,$) </li></ul>
    21. 22. What is Cognitive Dissonance? Why should marketers be concerned? <ul><li>Post-purchase tension </li></ul><ul><li>Dissonance creation & reduction </li></ul><ul><li>Marketer’s role – reinforcement strategy </li></ul><ul><li>Word of mouth impact </li></ul>
    22. 23. Disciplines <ul><li>Sociology, Anthropology, Psychology </li></ul><ul><li>Example from behavioural psychology & cognitive psychology – sequence effects, duration effects, rationalization effects </li></ul><ul><li>Finish Strong </li></ul><ul><li>Get the Bad Experiences out of the way early. </li></ul><ul><li>Segment the pleasure, combine the pain </li></ul><ul><li>Build commitment through choice </li></ul><ul><li>Give people rituals and stick to them </li></ul><ul><li>“ Want to Perfect Your Service?” HBR June2001 </li></ul>
    23. 24. Organizational vs. Individual <ul><li>Similar concepts at play but some differences as well </li></ul><ul><li>Buying Centre Purchasing Role – professional, protocol/policy </li></ul><ul><li>Types of Decisions – Rebuy – New Task </li></ul><ul><li>Specifications, Supplier Qualification, & Bids </li></ul><ul><li>Decision Criteria – rational & emotional </li></ul><ul><li>Supplier-Buyer relationship – more important, long term, functionally integrated </li></ul>
    24. 25. The Buy-grid Framework for Organizational Buying Situations
    25. 26. Segmenting Purchase Categories
    26. 27. Buying Centre Concept – Who, When, How, Why, What ….. <ul><li>The buying center - </li></ul><ul><li>All organizational members that influence the purchase decision </li></ul><ul><li>Composition changes from one purchase to the next </li></ul><ul><li>Isolating the buying situation </li></ul><ul><li>Rebuy: fewer members </li></ul><ul><li>New task: large and complex </li></ul><ul><li>Composition - can be predicted by analyzing the impact of the purchase decision on different functional areas </li></ul><ul><li>Buying center influence </li></ul><ul><li>a. Users are the personnel who will be using the product </li></ul><ul><li>b. Gatekeepers control information </li></ul><ul><li>c. Influencers supply information during the product specification and evaluation stages </li></ul><ul><li>d. Deciders actually make the buying decision </li></ul><ul><li>Influence appears to increase with environmental uncertainty </li></ul><ul><li> Individuals can change roles depending on the purchase; one individual may play multiple roles; many individuals could assume one role </li></ul>
    27. 28. Questions for the Industrial Marketer <ul><li>Which member takes part in the buying process? </li></ul><ul><li>What is each members relative influence in the decision? </li></ul><ul><li>What criteria is important to members in the evaluation process? </li></ul>
    28. 29. Clues for Identifying Powerful Buying Center.
    29. 30. Example: Article on Changing Role of IT in Companies <ul><li>Changing role </li></ul><ul><li>Implications for purchase behaviour – who is involved, solutions considered, purchase criteria, etc. </li></ul>
    30. 31. Why Do Customers Shop On-line? <ul><li>Convenience </li></ul><ul><li>Cost </li></ul><ul><li>Choice </li></ul><ul><li>Customization </li></ul><ul><li>Communication </li></ul><ul><li>Control </li></ul>
    31. 32. CarPoint Case <ul><li>Automobile decision – Customer’s Perspective? </li></ul><ul><li>Dealer’s perspective? </li></ul><ul><li>Value proposition for customers? </li></ul><ul><li>Value proposition for dealers? </li></ul><ul><li>Business model – now? Future? </li></ul><ul><li>Lessons? </li></ul>
    32. 33. On-line vs Off-line <ul><li>Search - scope, agents </li></ul><ul><li>Evaluation - self, comparative sites, WoM - communities </li></ul><ul><li>Purchase - regular, bid, barter </li></ul><ul><li>Possession - wait unless bit based </li></ul><ul><li>Use - similar, support </li></ul><ul><li>Disposition - scope, pricing format </li></ul><ul><li>Cycle compression, control, learning </li></ul>
    33. 34. Transparency <ul><li>Price & Cost </li></ul><ul><li>Availability </li></ul><ul><li>Supplier </li></ul><ul><li>Product </li></ul>
    34. 35. Increased Power of Customers <ul><li>Knowledge - increased transparency – products/services, prices, suppliers & access to other customers </li></ul><ul><li>$$$$$$ - they have the money,they pay our bills – increased affluence </li></ul><ul><li>Conditioning – we are able & continue to give them more recognition & attention </li></ul><ul><li>“ Armed, knowledgeable, comfortable, and expect to be in control, yet they are human and therefore complex” </li></ul>
    35. 36. StratSim Insights & Questions?
    36. 37. Summary <ul><li>Begin & end with the Customer!!! </li></ul><ul><li>Complex & dynamic but critical that we understand and respond to them </li></ul><ul><li>Organizational & network commitment </li></ul><ul><li>Competency that can yield competitive advantage </li></ul>
    37. 38. Analytical Process – Questions to Answer <ul><li>Where are the business opportunities*? </li></ul><ul><li>What do they look like? </li></ul><ul><li>What will it take to capture the business? </li></ul><ul><li>What opportunities should we pursue? </li></ul><ul><li>What business do we already have? </li></ul><ul><li>How should we position ourselves to go after the desired opportunities? </li></ul><ul><li>* Could substitute threats </li></ul><ul><li>“ Understanding markets, choices, commitments” </li></ul>
    38. 39. Current Examples – What’s going on? <ul><li>Auto – Mercedes C Class, Jaguar - X Type, Volvo, Porsche Cayenne SUV, Bentley, BMW - Mini, Harley Davidson V-Rod </li></ul><ul><li>Food & Beverage - Pepsi’s Lemon Twist, Heinz EZ Squirt Purple Ketchup, Chicken McGrill, Trident Advantage </li></ul><ul><li>Retail - Nike Goddess, Nike Weather, Roots Vitamins & Roots Water, Columbia Sportswear - Watches </li></ul><ul><li>Airlines – Westjet, Canjet, Jetsgo </li></ul><ul><li>Others???? </li></ul>
    39. 40. Segmentation <ul><li>Grouping of potential customers who have similar buying, usage, & evaluation patterns </li></ul><ul><li>Number of different ways - maximize learning & understanding of different types of business </li></ul><ul><li>Research, analysis, & creativity </li></ul><ul><li>Criteria - profitable, different, separate strategy, & operational </li></ul>
    40. 41. Segmenting by Behaviour <ul><li>Divides consumers into segments on the basis of how they act toward, feel about, or use a product or service. </li></ul><ul><ul><li>Users vs. non-users of a product or service </li></ul></ul><ul><ul><ul><li>heavy users, </li></ul></ul></ul><ul><ul><ul><li>moderate users, </li></ul></ul></ul><ul><ul><ul><li>light users </li></ul></ul></ul><ul><ul><li>Usage occasions or when consumers use the product the most, i.e. seasonal, holidays. </li></ul></ul>Segmenting by behaviour
    41. 42. Dimensions for Segmenting Industrial Markets <ul><li>Segmentation variables that marketers </li></ul><ul><li>use to divide up industrial markets </li></ul>Company-Specific Characteristics Organizational “ Demographics” Segmenting Industrial Markets
    42. 43. Developing Segment Profiles <ul><li>Segment profile is a description of the “typical” customer in a segment including: </li></ul><ul><ul><li>customer demographics, location and lifestyle information, and </li></ul></ul><ul><ul><li>customer usage rates. </li></ul></ul><ul><li>Next, the firm tries to forecast each segment’s market potential , the maximum demand expected among consumers in a segment for a product. </li></ul>Segment Profile
    43. 44. Customer Segmentation - Example
    44. 45. Targeting <ul><li>Targeting </li></ul><ul><ul><li>marketers evaluate the attractiveness of each potential segment, and </li></ul></ul><ul><ul><li>decide which of these groups they will try to turn into customers. </li></ul></ul><ul><li>Target market </li></ul><ul><ul><li>group or groups selected by a firm to be turned into customers as a result of segmentation and targeting. </li></ul></ul>Targeting
    45. 46. Targeting <ul><li>Follows from segmentation </li></ul><ul><li>Choice of which business opportunities to pursue </li></ul><ul><li>Fit - company, climate, customer, competitor, channels, cash </li></ul><ul><li>Proactive vs reactive </li></ul><ul><li>Multi-segments </li></ul><ul><li>One-to-one customization </li></ul>
    46. 47. Example: The Women’s Market? <ul><li>Importance? </li></ul><ul><li>Difference? </li></ul><ul><li>Implications for marketers? </li></ul><ul><li>For your company? </li></ul>
    47. 48. Women on a roll… Today Dominate consumer buying and corporate purchasing Rising control of wealth Rising academic dominance Rising business decision role Requiring business response Future Dominate financial decisions Organizations more female Society older and more female ... we are reaching a breakpoint in business?
    48. 49. The lump in the snake…is female Male Female Male Female 13 12 10 10 11 10 10 9 12 12 10 10 10 10 13 14 0-20 20-34 35-50 50-69 2 4 3 5 70+ Total 20 19 20 27 8 Total 25 21 25 20 6 2001 2021 35 16 19 39 20 19 26 12 14 46 23 22 Prime Market 48% Prime Market 54% 16 32 36 13 48 49
    49. 50. “Women’s” market: Facts <ul><li>Women instigate or complete over 80% of all purchases </li></ul><ul><ul><li>All consumer purchases 83% </li></ul></ul><ul><ul><li>home furnishings 94% </li></ul></ul><ul><ul><li>vacations 92% </li></ul></ul><ul><ul><li>new homes 91% </li></ul></ul><ul><ul><li>DIY projects 80% </li></ul></ul><ul><ul><li>Consumer electronics 51% </li></ul></ul><ul><ul><li>Cars 60% plus 30% </li></ul></ul><ul><ul><li>New bank accounts 89% </li></ul></ul><ul><ul><li>Health care 80% </li></ul></ul><ul><ul><li>write 80% of cheques </li></ul></ul><ul><ul><li>pay 61% of bills </li></ul></ul><ul><ul><li>own 53% of all stocks </li></ul></ul>
    50. 51. “ Women’s” market: Facts (cont’d) <ul><li>2/3rds of working women and 50% of working wives earn over 50% of family income </li></ul><ul><li>Constitute 43% of those with net worth over 1/2 million dollars </li></ul><ul><li>Influence 75% of financial decisions </li></ul><ul><li>Take at least 29% of financial decisions alone </li></ul><ul><li>Between 1970 and 1998 female median income rose 63% male 0.6% </li></ul><ul><li>By 2000 more women used the web than men, and 6 out of 10 new web users are women </li></ul><ul><li>Among wired women 83% are primary financial decision makers </li></ul><ul><li>Women constitute over 50% of all corporate purchasing officers, are in a majority in HR and commercial admin officers with attendant purchasing power </li></ul>
    51. 52. “ Women’s” market: Facts (cont’d) <ul><li>Women directly control 51% of the wealth in the USA, and this will rise dramatically as the baby boom ages. The baby boomers control 70% of all assets </li></ul><ul><li>On average, these women will be widowed at 67, and will most likely survive their husbands by at least 6 and as much as 15-18 years*. During this time they have sole control of the household’s assets. </li></ul><ul><li>What no-one knows yet is what kinds of spending patterns we will see from what is undoubtedly the youngest, healthiest, wealthiest, best-educated, most ambitious group of retirees ever </li></ul>*Dr. Nancy Dailey, When Baby Boom Women Retire, 1998, p.39.
    52. 53. How they buy I: Women and men are different! <ul><li>Vision: focused </li></ul><ul><li>hearing </li></ul><ul><li>Smell: relatively insensitive </li></ul><ul><li>Touch: the most sensitive man is less sensitive than the least sensitive woman </li></ul><ul><li>Are all the way on or in a resting state of 30% </li></ul><ul><li>Info processing: men eliminate </li></ul><ul><li>Vision: peripheral </li></ul><ul><li>hearing: discomfort level half that of men </li></ul><ul><li>Smell: more sensitive </li></ul><ul><li>People orientation: by age 3 days baby girls exhibit 2x the eye contact of boys </li></ul><ul><li>Are never off, their resting state is 90% </li></ul><ul><li>Info processing: women integrate (women notice the little things …brain difference…the details not right or wrong, just is) </li></ul>Men Women
    53. 54. How women buy II: Women and men are different! <ul><li>Want to get away from authority and family </li></ul><ul><li>self-oriented </li></ul><ul><li>rights-oriented </li></ul><ul><li>individual perspective </li></ul><ul><li>pride in self-reliance </li></ul><ul><li>hear a language of status and independence </li></ul><ul><li>communicate to obtain info </li></ul><ul><li>write scripts that are direct and linear </li></ul><ul><li>buy and move on, limited research </li></ul><ul><li>Women want to connect </li></ul><ul><li>other-oriented </li></ul><ul><li>responsibility-oriented </li></ul><ul><li>group perspective </li></ul><ul><li>pride in team accomplishment </li></ul><ul><li>hear a language of connection and intimacy </li></ul><ul><li>communicate to create relationships, encourage interaction and exchange feelings </li></ul><ul><li>write scripts that have many conflicts, many climaxes and many endings </li></ul><ul><li>research facts and opinions (personal network) </li></ul>Men Women
    54. 55. How Women buy: Some implications <ul><li>Women are demanding in making the initial purchase in a category, they recoup their time investment by staying more loyal to the brand they’ve chosen in subsequent purchase cycles increasing retention rates </li></ul><ul><li>Word-of-mouth recommendation is more prevalent among women, they are more likely to recommend to others those brands or salespeople that impress them favorably -- in essence, free marketing of the most powerful kind. </li></ul><ul><li>The big risk: Companies as have found that marketing and service improvements designed to enhance brand appeal among women have resulted in greater customer satisfaction among men as well. The reason? In many respects, women want all the same things as men - and then some. Accordingly, when you meet the higher expectations of women, you are more than fulfilling the demands of men. Experience indicates that men do not abandon </li></ul><ul><li>While in many categories, the traditional male targets are saturated, the corresponding women’s segments are untapped and virtually uncontested by competition. </li></ul>
    55. 56. Then add the Boomers: The boomers have the money... <ul><li>70% of all wealth plus multi-trillion dollar wealth transfer by inheritance to come </li></ul><ul><li>over 50% of discretionary income </li></ul><ul><li>79% own homes </li></ul><ul><li>41% of new cars and 50% of luxury cars </li></ul><ul><li>women over 65 spend as much as 25-34 year-olds on apparel with 12% growth rate versus 0.1% </li></ul><ul><li>aging, female boomers will control most of the money or live in dependent poverty </li></ul>
    56. 57. Partial Research List <ul><li>Martha Barletta: Marketing to women: How to understand, reach, and increase your share of the world’s largest market segment </li></ul><ul><li>Joanne Thomas Yaccato: The 80% Minority (Canada) </li></ul><ul><li>Deborah Tannen: You just don’t understand: men and women in conversation </li></ul><ul><li>Faith Popcorn: Evolution: the eight truths of marketing to women </li></ul><ul><li>Tom Peters: Re-imagine </li></ul><ul><li>Andrea Learned: ReachWomen </li></ul><ul><li>Mary Lou Quinlan: Just ask a woman: cracking the code of what women want and how they buy </li></ul><ul><li>Judy Hoyt Pettigrew: Women mean business: the secret of selling to women </li></ul><ul><li>Allan & Barbara Pease: Why men don’t listen and women don’t read maps </li></ul><ul><li>Dr. Nancy Dailey, When Baby Boom Women Retire, 1998 </li></ul><ul><li>Other companies in Canada </li></ul><ul><ul><li>LCBO, BMO, RBC, Air Canada, Calvin Klein, Mountain Equipment, “Looneyspoons ”, Nike etc </li></ul></ul><ul><li>StatsCan: Population projections, plus women and income reports </li></ul>
    57. 58. Example: the 18-24 year olds <ul><li>Information seeking & utilization behaviour? </li></ul><ul><li>Purchase behaviour? </li></ul><ul><li>Implications for marketers? </li></ul>
    58. 59. Segmentation in Your Companies?
    59. 60. Customer Account Analyses – The Business We Have Attracted <ul><li>Value – current, future </li></ul><ul><li>Efficiency & Effectiveness of efforts, resources – 80/20 rule </li></ul><ul><li>Profitability – costing systems </li></ul><ul><li>Vulnerability </li></ul><ul><li>Relationship management </li></ul><ul><li>Multi-channel systems </li></ul>
    60. 61. Example - Dimensions of Loyalty - McKinsey Quarterly - 2002 , #2
    61. 62. Migration vs. Defection
    62. 63. Customer Retention is Not Enough
    63. 64. Strategic Positioning <ul><li>Customer’s mind </li></ul><ul><li>Sustainable competitive advantage </li></ul><ul><li>Unique, important-meaningful, superior, credible, affordable, sustainable, profitable & deliver </li></ul><ul><li>Reflected in all business activities & processes </li></ul>
    64. 65. Perceptual Map Perceptual Map
    65. 66. Positioning Dimensions Occasions Product Attributes Users Lifestyle Image Quality Price Leadership Competitors Product Class Positioning B A E D C H G F
    66. 67. Example: Value Positions <ul><li>Economy – pay less, get less </li></ul><ul><li>Premium – pay more, get more </li></ul><ul><li>Better Value – more for the same price </li></ul><ul><li>Average Value – average quality & price </li></ul><ul><li>Worse Value – pay more, get less </li></ul>
    67. 68. Developing A Positioning Statement <ul><li>Specify Target Market </li></ul><ul><li>Develop a Value Proposition - your distinctive and compelling offer - why this customer segment should do business with you </li></ul><ul><li>Supporting Elements - how you will deliver your value proposition /execute and support your offer </li></ul><ul><li>What is your company’s positioning statement? </li></ul>
    68. 69. 3 Paths to Market Leadership <ul><li>Operational Excellence – Best total cost </li></ul><ul><li>Product Leadership – Best product </li></ul><ul><li>Customer Intimacy – Best total solution </li></ul><ul><li>Examples? </li></ul><ul><li>Requirements to win? </li></ul><ul><li>Minimum requirements to stay? </li></ul>
    69. 70. Why is Value Important? SATISFACTION RETENTION LOYALTY PROFITABILITY VALUE SHAREHOLDER VALUE RELATIONSHIP
    70. 71. Alternatively – If we MUCK UP MISREAD CUSTOMERS & COMPETITORS UNFOCUSED COMPETITIVE POSITION ME-TOO CUSTOMER VALUE CUSTOMER TURNOVER MARKET SHARE INSTABILITY HIGH COST OF CUSTOMER RETENTION & ACQUISITION SPORADIC PROFITS STAGNANT SHAREHOLDER VALUE PRESSURE FOR SHORT RUN RESULTS
    71. 72. Customer Value Creation – Your Opportunity to Differentiate Emotional Elements Organization Interaction Technical Performance Process & Support Core Product or Service REDUCE ADD ++ <ul><li>Confusion </li></ul><ul><li>Frustration </li></ul><ul><li>Disappointment </li></ul><ul><li>Neglect </li></ul><ul><li>Rudeness </li></ul><ul><li>Lack of caring </li></ul><ul><li>Mistreatment </li></ul><ul><li>Delays </li></ul><ul><li>Stockouts </li></ul><ul><li>Waiting </li></ul><ul><li>System Failures </li></ul><ul><li>Inflexibility </li></ul><ul><li>Complexity </li></ul><ul><li>Red tape </li></ul><ul><li>Stupid rules </li></ul><ul><li>Price </li></ul><ul><li>Respect </li></ul><ul><li>Appreciation </li></ul><ul><li>Recognition </li></ul><ul><li>Valued </li></ul><ul><li>Friendliness </li></ul><ul><li>Helpfulness </li></ul><ul><li>Courtesy </li></ul><ul><li>On time </li></ul><ul><li>Accuracy </li></ul><ul><li>Service guarantees </li></ul><ul><li>Warranties </li></ul><ul><li>Payment options </li></ul><ul><li>Features </li></ul><ul><li>Quality </li></ul><ul><li>Options </li></ul>
    72. 73. Article: - Value Players <ul><li>Competitive platform & success of value players? </li></ul><ul><li>Challenges for non value players? </li></ul><ul><li>Your industry & company? </li></ul>
    73. 74. Positioning Contexts <ul><li>Customers </li></ul><ul><li>Suppliers/Partners </li></ul><ul><li>Distributors </li></ul><ul><li>Shareholders </li></ul><ul><li>Employees </li></ul><ul><li>Society </li></ul><ul><li>Corporate Family </li></ul><ul><li>Financial Institutions </li></ul><ul><li>Government </li></ul>
    74. 75. Case: Rebel Creek <ul><li>Segmentation approach? </li></ul><ul><li>Target market selection? </li></ul><ul><li>Positioning? </li></ul><ul><li>Key implementation issues? </li></ul>
    75. 76. <ul><li>Understand the three steps of developing a target marketing strategy. </li></ul><ul><li>Understand the need for market segmentation in today’s business environment. </li></ul><ul><li>Know the different dimensions used for segmenting consumer markets. </li></ul><ul><li>Understand the bases for segmentation in business-to-business markets. </li></ul><ul><li>Explain how marketers evaluate and select potential market segments. </li></ul><ul><li>Explain how a targeting strategy is developed. </li></ul><ul><li>Understand how a firm develops and implements a positioning strategy. </li></ul>Summary Summary

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