Increasing profit with customer segmentation
and product positioning
European Innovation Academy
Tallinn, 18th July 2013
S...
Todays presentation and workshop on market strategy and
product/service positioning
• About Sandrine
• Why market strategy...
About Sandrine
Partner at Breadfruit Capital and BlueLago Business Innovation
-> consumer insights, market strategy, produ...
Understanding your customer is the key to building a successful
company
• A good market strategy and execution gives you i...
What is market strategy
Prerequisites:
– Aligned with overall company strategy, core business and vision
– Fit the busines...
There is not such a thing as one single type of customer
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFR...
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
Identify and select ...
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
Create a few CORE co...
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
NEEDS-based customer segmentation !!
• Customer needs are the core parameters leading to purchase and
therewith driving sa...
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
By trying to answer ...
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
– Do you think it is...
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
Formulate a clear an...
Examples of consumer insights
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights ...
Now why did we do all that?
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Re...
Targeting the right customers with a distinct market
message and clear USP will drive sales
PRODUCT POSITIONING
Copyright ...
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
Volume and profit will be maximised when the
target consumer ...
What makes a great Unique Selling Proposition?
The USP should:
• be linked to the consumer insight
• solve a consumer prob...
A USP translates FEATURES into BENEFITS !
Based on customers WANTS and DESIRES
PRODUCT POSITIONING
Copyright © 2013 BREADF...
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
• A mission statement
• A tagline
• A sal...
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
• Makes you stand out from
the pack
• Rai...
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
26
Insight
I’m a bus...
CUSTOMER SEGMENTATION & CONSUMER INSIGHT
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
27
“Chilled filtered...
Famous USP’s
"You get fresh, hot pizza delivered to your door in 30 minutes or less -- or it's
free.”
PRODUCT POSITIONING
...
Famous USP’s
”When it Absolutely, Positively has to be there overnight”
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CA...
Famous USP’s
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
BiznessApps
Website:BiznessA...
Famous USP’s
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
M&M’s
”The chocolate milk me...
Building a USP is not as easy as one think!
“Breadfruit Capital offers complementary business competences to accelerate
it...
Marketing Guru Dan Kennedy says…
PRODUCT POSITIONING
• A USP answers the question “Why should I choose to do
business with...
USP
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
A summary of:
• Target customer and I...
A real-life example of a successful product positioning
THE STORY BEHIND DAILY4TWO
Copyright © 2013 BREADFRUIT CAPITAL AB....
Launching an upgraded version of Electrolux mini dishwasher
DAILY4TWO DISHWASHER
Copyright © 2013 BREADFRUIT CAPITAL AB. A...
Are we sure we know it all?
DAILY4TWO STORY
Deep understanding of consumer needs, wants and desires…
Product Idea addressi...
Observing the users in their homes
DAILY4TWO STORY
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
What is then the real benefit of this product?
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
”My neighbours...
Checking macro trends….
DAILY4TWO STORY
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
0
0,5
1
1,5
2
2,5
3
3...
Daily4Two positioning statement
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
For Affir...
Revising the USP…
DAILY4TWO STORY
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.42
Electrolux Daily4Two dish...
WORKSHOP
PRODUCT POSITIONING
Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
Define the positioning statement for your
product/service
WORKSHOP OBJECTIVE AND EXPECTED OUTCOME
1 Define your consumer s...
How to organise yourselves in the team
• Work on the two first exercise (Mood boards and COB) as a whole team, to
anchor t...
Segmentation and positioning
Segmentation and positioning
Segmentation and positioning
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Segmentation and positioning

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Sandrine Vriesman @ European Innovation Academy Summer Session 2013

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Segmentation and positioning

  1. 1. Increasing profit with customer segmentation and product positioning European Innovation Academy Tallinn, 18th July 2013 Sandrine Vriesman Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  2. 2. Todays presentation and workshop on market strategy and product/service positioning • About Sandrine • Why market strategy? • What is market strategy? • What is customer segmentation? • What is product positioning? • Workshop introduction • Application to your product ideas and start-up companies TABLE OF CONTENT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  3. 3. About Sandrine Partner at Breadfruit Capital and BlueLago Business Innovation -> consumer insights, market strategy, product positioning and product launch to drive sales. Launch of many new products on market withing various industries Define market startegy and product positiong start-up Reshaped the market startegy and revise the product offer of existing companies INTRODUCTION Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  4. 4. Understanding your customer is the key to building a successful company • A good market strategy and execution gives you information about important business parameters: – The right to companies existence – Possible sales volume – Potential (niche) market share – Value proposition – Positioning statement and positioning – Possible margins • Conclusion; Targeting the right customers with a distinct market positioning and clear USP will enable product success and business growth. INTRODUCTION Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  5. 5. What is market strategy Prerequisites: – Aligned with overall company strategy, core business and vision – Fit the business model – In line with current and upcoming macro trends (market, technology, social etc) Market Strategy cornerstones: - Market & industry analysis - Customer segmentation - Consumer insight - Product positioning (USP) - Business case validation MARKET STRATEGY Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  6. 6. There is not such a thing as one single type of customer CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  7. 7. CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. Identify and select your target group
  8. 8. CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. Create a few CORE consumers to bring your segment alive Needs Based Segmentation Find Core Consumers in segments Animate Core Consumers Profile Core Consumers
  9. 9. Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  10. 10. NEEDS-based customer segmentation !! • Customer needs are the core parameters leading to purchase and therewith driving sales • Independent of any ethnologic, demographic, geographic and any other parameters Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  11. 11. CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. By trying to answer some key questions… – What are the key wishes and problems consumers encounter in our specific industry/context? – What is the competitive set in serving these needs? – What is the potential value creation for our company from solving the identified problems or serving these needs? – Is our product idea in line with the consumer’s expectations? – Should we pursue with our product/business idea..? How can we answer customers needs then?
  12. 12. CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. – Do you think it is a good idea? – What would you like our company to develop? – What product would you like to solve your problem? – How much would you pay for it? – What functions do you like? – ….. The way we should NOT ask..
  13. 13. CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. Formulate a clear and unique consumer INSIGHT to understand consumer’s drivers towards decision making Can we clearly summarise our customer’s needs ?
  14. 14. Examples of consumer insights CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  15. 15. Now why did we do all that? CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  16. 16. Targeting the right customers with a distinct market message and clear USP will drive sales PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  17. 17. Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. Volume and profit will be maximised when the target consumer can tell why the product: – specifically meets their needs (relevance) – is different from competition (differentiation) Those arguments are summarised in the USP (Unique Selling Proposition)
  18. 18. What makes a great Unique Selling Proposition? The USP should: • be linked to the consumer insight • solve a consumer problem • answer a consumer need A strong USP is: • Relevant (to the consumer) • Differentiated (vs. Competition) • Single minded • And has a strong Reason to Believe PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  19. 19. A USP translates FEATURES into BENEFITS ! Based on customers WANTS and DESIRES PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  20. 20. PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. • A mission statement • A tagline • A sales pitch • “we’re the best”, the biggest”, “the most…” A USP is NOT…
  21. 21. PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. • Makes you stand out from the pack • Raises the bar to a level only you can reach • Puts you in a league of your own • And a USP helps you achieve your goals A USP distinguishes You…
  22. 22. Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  23. 23. CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. 26 Insight I’m a busy person enjoying an active life. I like to drink a lot of water, even more so when it’s warm outside, but often there’s no chilled clean water at hand and I don’t want to drink just tap-water, especially nowadays. Cooling water/refrigeration appliances
  24. 24. CUSTOMER SEGMENTATION & CONSUMER INSIGHT Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. 27 “Chilled filtered water whenever you want and where ever you go” Product solution The new refrigerator with the Brita® water filtration system always gives me chilled and filtered water at an arm’s reach. When I’m on the go, I can easily fill my large sports bottle for the gym or my bike bottle to go cycling. Now there is always sufficient amount of chilled and filtered water available in my home and to take outside wherever I go, whenever I want. The dispenser nozzle is easy to access and designed to accommodate for any kind of sizes and shapes of recipients. For example it’s so simple to fill glasses, jugs or sports bottles of any sizes.
  25. 25. Famous USP’s "You get fresh, hot pizza delivered to your door in 30 minutes or less -- or it's free.” PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. Single minded Domino’s Pizza Relevant (benefit) Differentiator (versus competition) Reason to believe (product/service promise)
  26. 26. Famous USP’s ”When it Absolutely, Positively has to be there overnight” PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. FedEx FedEx differentiate itself by ensuring its customers of speedy, secure, guaranteed delivery
  27. 27. Famous USP’s PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. BiznessApps Website:BiznessApps.com
  28. 28. Famous USP’s PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. M&M’s ”The chocolate milk melts in your mouth, not in your hands”
  29. 29. Building a USP is not as easy as one think! “Breadfruit Capital offers complementary business competences to accelerate its customers company growth and offers otherwise hard-to-obtain financing opportunities to start-up and early stage companies”. From a solid experience and with a long-term commitment we offer financing solutions and consulting services to develop and structure businesses with growth potential within the cleantech industry. …. PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. Revised and improved… …and still needs refinement… Relevant Single minded Differentiator Reason to believe
  30. 30. Marketing Guru Dan Kennedy says… PRODUCT POSITIONING • A USP answers the question “Why should I choose to do business with you, over all the other choices I have, which included the choice of doing nothing at all?”
  31. 31. USP PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. A summary of: • Target customer and Insight • Product Name • Competitive reference point • Unique Selling Proposition And finally, let’s formulate a positioning statement From the Formulating the product positioning
  32. 32. A real-life example of a successful product positioning THE STORY BEHIND DAILY4TWO Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  33. 33. Launching an upgraded version of Electrolux mini dishwasher DAILY4TWO DISHWASHER Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  34. 34. Are we sure we know it all? DAILY4TWO STORY Deep understanding of consumer needs, wants and desires… Product Idea addressing the identified needs Distinct positioning Consumer value-based pricing Solid business case    ? ?
  35. 35. Observing the users in their homes DAILY4TWO STORY Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  36. 36. What is then the real benefit of this product? Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. ”My neighbours, they are 2 people as we are, they bought a standard dishwasher and never use it” ”We want to wash every day” Space solution Capacity solution
  37. 37. Checking macro trends…. DAILY4TWO STORY Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. 0 0,5 1 1,5 2 2,5 3 3,5 4 4,5 SE DK FI FR GR IT NL ES UK DE AT 1980 1991 2001 Source: EU, Housing statistics in the European union
  38. 38. Daily4Two positioning statement PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved. For Affirmation of self consumers who only generate small amounts of dirty dishes and want results an convenience of a dishwasher, Daily4Two is the small capacity dishwasher that you can run everyday instead of waiting for your dishwasher to fill up with dirty dishes, so your kitchen is not clutteres or messy, and you are in control.
  39. 39. Revising the USP… DAILY4TWO STORY Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.42 Electrolux Daily4Two dishwasher is perfect for the small household. It’s made to do the washes everyday, so that you can feel good about a fresh- looking kitchen and relax. This compact machine fits in everywhere and can easily take care of one day’s dishes in a two person household. It’s user- friendly, efficient and thrifty of energy. …and consistently use it in marketing & communication
  40. 40. WORKSHOP PRODUCT POSITIONING Copyright © 2013 BREADFRUIT CAPITAL AB. All Rights Reserved.
  41. 41. Define the positioning statement for your product/service WORKSHOP OBJECTIVE AND EXPECTED OUTCOME 1 Define your consumer segment 2 Validate your product idea based on your target consumer segment 3 Define your product USP 4 formulate your value proposition and define your product positioning 5 Start developing a marketing and commercialization plan of your product idea
  42. 42. How to organise yourselves in the team • Work on the two first exercise (Mood boards and COB) as a whole team, to anchor the understanding, definition and values of your target segment in the whole team. • After that, divide your team into 2 sub-groups working each in paralell on the following items: • GROUP 1: USP definition and positioning statement formulation • GROUP 2: Initial marketing and communication plan PRODUCT POSITIONING WORKSHOP

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