Essay About Customer Segment And Firm Serve

Quiz Info
Who will the firm serve? Customer segment?Business segmentWhen will the firm serve those customers and those needs?What occasions the firm will target?Where will the firm do business?Geographic area.What needs the firm will meet?How the firm will serve customers and their needs?What distinctive competencies does the firm have? How will they serve the customers’ needs better than the competition?Why will the firm do these things?CostsRevenuesROIWhat is the firm’s competitive advantage?Differentiation strategy OrCost leadership strategyWhat is the firm’s competitive scope?Mass marketing strategyGlobal strategyNiche or focused strategyValueRelative performance/ relative priceGrowth strategiesMarket developmentMarket penetrationDiversificationProduct developmentValue chain analysisWhat are the activities of a company’s value chain?Which of them are strategically important in an industry?How well do they perform on the activities?Which activities generate profits and which cause losses?Which activities constitute competitive advantages or core competences?Which activities should be outsourced? Situation assessment*Before situation assessment is completed define the market the firm competes in or may choose to compete in. By answering the following:In what market does the firm participate?Who are its competitors?Which competitors are serving related product classes with the same technology, same manufacturing process and the same material sources, sales force and distribution channels?What is the geographic scope of the market?Which competitors are currently serving the markets and who are the potential entrants with a capacity to compete?Who are its customers?What benefits are they receiving from the product?Are they considering substitute products? How can you beat substitute products?How the market or submarket as defined is critical to all marketing activities?What are the patterns of substitution on demand (substitutes that customers can buy) or supply (what all competitors could serve the needs of a customer group) side?Situation assessment:External environment:Core competenciesResourcesStrategic decisionsOpportunities/threats in marketplaceInternal environmentCore competenciesResourcesStrategic decisionsAdvantages/weakness of the companyWhat are employees strengthsCompare companies offerings to competitorsWhat the advantages/disadvantages of marketingWhat is being spend on marketingExternal environment assessment:The 4 C’sCustomersCustomer assessmentIdentify trends in needs and demands of customersWhat can impact these wants and needs in the environment.Identify customer insights (Understand the ways customers consume and take value from products connected to innovative ways of meeting those customer  needs)SegmentationIdentify differences across customers/consumers with regards to needs and characteristics. Marketing mix development and testingResearch to test and develop tactics of the 4 p’s, advertising, new products/modifications and merchandising programs. Customer relationship managementData collection tied to accounts, customers to tailor offerings, direct investment and target right customers and segments. Customer and market oriented metricsFocused & ongoing research collecting information on customer responses to marketing mix based on satisfaction, loyalty, profitability and revenue. CompetitionCurrent tacticsHow  will competition act and reactStrategic questions:Who are the competitors?What are their corporate missions, goals, and strategies?What are their marketing strategies and objectives? At each business level? What are the long-term objectives and motivations of the competitor? (Take a look at press releases, annual reports, analyst reports, executive speeches). What are firms strengths and weakness and at the value chain?How badly do they want to play this game?Tactical questions:What does their marketing plan look like? What is there growth strategy? How do they position there products? What are their target segments? Are they using undifferentiated or differentiated approach? (Take a look at price lists, advertisement, promotions, sales force meetings, trade shows, fairs, shared customers and shared distributors). What are their attribute-level product strengths and weaknesses? What are their product line strengths and weaknesses?Can they execute? Do they have (or can they acquire) the skills?ContextPEST (Here find trends that will help target  segment)Political/ regulatoryEconomicSocial/ culturalTechnological/ physicalCompany (Internal analysis)Market dynamicsIs the market growing or declining?How is this relating to customer’s needs, wants, expectations and requirements?Industry analysisPorters 5 (Identify where you have power and build power where you have low power). To gain a sustainable competitive advantage need power in more than a couple of these)Bargaining power of suppliersHow much of the value created do suppliers capture?What is there bargaining power?DriversHigh concentration of suppliersSuppliers do not depend on the customers for its revenuesHigh switching costs of customersHighly differentiated products of suppliersNo substitute productsEasy forward integrationBargaining power of customersHow much of the value created do customers capture?How price sensitive are they?ForceWhat is there power?DriversHigh concentration of buyersUndifferentiated productsLow switching costs of buyerEasy backward integrationProduct represents significant fraction of cost structure or procurement budgetBuyers earn low profits or have to cut purchasing costsQuality of products do not affect quality of customer’s offersFuture developmentDo suppliers change their strategy and structure?Does their bargaining power change?Threat of substitutes How do potential substitutes threaten sales in an industry?Threat of substitutionDriversSubstitute offers an attractive price-performance trade-offLow switching costs of buyersFuture developmentAre new technologies arising that create new substitutes?Do switching costs to substitutes change?Threat of new entrantsHow easy is it for new competition to enter?Time and costs to enter?Do we have a cost advantage?What are the barriers for entry?What are the drivers? (Which reasons is the company taking such action)Economies of scaleNetwork effectsCustomer loyalty and switching costsCapital requirementsIncumbency advantages independent of sizeUnique access to distribution channelsRestrictive government policyRivalry of existing competitorsHow aggressively or friendly do competitors act and react?Rivalry among competitors?DriversNumerous competitors of equal sizeLow industry growthHigh exit barriersUndifferentiated productsLow switching costsHigh fixed costs and low marginal costsPerishable productFuture developmentDoes competition change over time?Critical opportunitiesCritical threatsDevelopContendIntensity of rivalry among existing competitors.What can you do (strategies) to limit the intensity of the rivalry.How do these 5 forces influence industry profitability? Define the market porters 5 forcesStep 1: 4 dimensions to define the marketArray of products or service categoriesThe customer (single vs multiple segmentsGeographic scope (regional, country-wide, global)Activities in the value chain (many or few)Step 2: Identify the participantsWho are the buyers?Who are the suppliers?Who are the competitors?Which products or services are substitutes for the product in this industry?Who are the potential entrants into this industry?Step 3: Drivers of porters 5 forces identify them.Step 4: Possible future industry changes5 questions to determine:Do market entry barriers change? Are new entrants attracted?Do suppliers change their strategy and structure? Does their bargaining power change? Does the customer base change? DO they gain more power?Are there any new technologies arising that create new substitutes?Does competition change over time?SWOT analysisStrengths and weaknesses are internal (Don’t talk about strategies and tactics here)Things we do have control over.Opportunities and threats are externalThings we don’t have control over.Laws of strategic marketingProduct life cycleWhat stage of product life cycle?IntroductoryGrowthMost major strategic gains/losses occur here.Is there high profit margins where competitors will enter?MaturityShare building is tough here and results in price competition.Those who have achieved lower costs have an advantage at this stage.DeclineWhat is the consumer behavior like at the stage?Scale effectsIs cost leverage achieved by both scale and experience?Scale: Economies of scale?Experience effect: Decline in cost with every doubling of units produced. Are there sources of scale effects? Table 2-4 pg.17Market share effectsInternal analysis: The CompanyCompany assessment based on 4 related considerations:Using guidance statements: Missions & ValuesWhat is the mission or vision statement?TBL or 3BLAssessing past performance & current strategyWhich objectives were met and missed? WhyWhat are the current strengths and weaknesses?Competitive advantage?Establishing preliminary objectives & targetsWhat are the company’s objectives?SMART objectivesSpecific: What exactly is to be achieved?Measurable: What quantitative or quantifiable methods and metrics will define the objective?Achievable: Is the objective realistic and demanding/challenging?Relevant: Is the objective under the control of the people or unit for whom it is established?Timed or Time-Specific: When should these objectives be achieved and when will these objectives be assessed?Marketing objectivesSales volume and market share in units or dollarsCustomer readiness variable (awareness and interest)Customer behaviors and attitudes (satisfaction, repeat purchase intention, recommendations, word-of-mouth, complaints)Accounts and distributions (SKU’s, B2b customers, vendor lists)Financial objectivesProfits (overall profits, contribution margins, contributions by units and ROI)Costs of marketing ( sales, COGS)Inventory and logistics (Inventory levels and turns, fulfillment time and stock outs). Identifying strategic gaps or planning gapsWhere we are and where do we want to be?How will you close the gap?Growth strategiesMarket penetrationMarket developmentProduct developmentDiversificationForward integrationIf profitability gap then strategies:Increasing the yield Reducing costsBackward integrationReducing investment intensitySelectivity and focus.Strategy Formation*How to meet some specific needs of some specific customers better than the competition within enduring profitable relationships.Identify competitive advantagesWhat things does the firm do and could it do better than the competition at a profit?Companies with competitive advantages have resources or capabilities that are:Valuable in the marketRareNot imitable or substitutable Transferable to other markets or productsWhat does the value chain look like?Have the 6 activities been completed to bring product out to the market successfully?Technology developmentProduct designManufacturingMarketingDistributionServiceSegmenting the marketWhat are the important differences across customers with regard to their needs and their responses to the marketing mix?How attractive are the various segments?How can the competitive advantages be matched up to the segments? What segment to target? What is the scope?TargetingWhich specific customers and needs (segments) will be served utilizing which specific competitive advantages?How well do segments fit or match with the firm’s competitive advantages? How are the external opportunities going to match the internal strengths?SWOT analysisStrength/attractiveness matricesPositioningWhat is the unique position in the marketplace that the firm will claim>How will the firm claim that position?Implementation