Transcript Chapter 5
Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display 5-1 Part Two Foundations for Creating Value McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-2 Part Two Foundations for Creating Value • Chapter 5 • Market Opportunities • Chapter 6 • Marketing Strategy • Chapter 7 • Weaving Marketing into the Fabric of the Firm McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-3 Chapter 5 Market Opportunities: Current and Potential Customers McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-4 Finding Business to Business Opportunities DEVELOP MARKETS AMONG CURRENT CUSTOMERS FIND OPPORTUNITIES WITH EXISTING CUSTOMERS NEW MARKET OPPORTUNITIES ACQUIRE NEW CUSTOMERS McGraw-Hill/Irwin Business Marketing, 4/e DEVELOP A RESEARCH PROGRAM Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-5 DEVELOP MARKETS AMONG CURRENT CUSTOMERS FOUR STEP PROCESS 1. RANK YOUR BEST CUSTOMERS 2. MAXIMIZE REVENUES THROUGH COLLABORATION EFFORTS 3. DEVELOP SPECIFIC PRODUCTS FOR EACH CUSTOMER 4. LEARN OF SPECIAL NEEDS FROM YOUR CUSTOMER’S CUSTOMERS McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-6 FIND OPPORTUNITIES WITH EXISTING CUSTOMERS FOUR STEP APPROACH 1. ESTABLISH A FORMAL FEEDBACK PROGRAM WITH CUSTOMER CONTACT POINTS (SALES, SUPPORT) 2. DEVELOP DATABASES 3. COMPILE DECILE REPORTS 4. DEVELOP CUSTOMER RESEARCH ASSISTANCE PROGRAM McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-7 RESEARCHING CUSTOMERS FIND OUT YOUR CUSTOMER’S NEEDS THROUGH: 1. FOCUS GROUPS – best for generating ideas and gaining customer insights 2. SURVEYS – asking questions by personal interview, mail, telephone, internet 3. JOINT DEVELOPMENT AND TESTING – use to adjust and adapt products after purchase 4. CUSTOMER VISITS – use on-site meetings for problem identification McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-8 ACQUIRE NEW CUSTOMERS 1. Calculate your current customer’s lifetime value (CLV) to serve as yardstick for planning 2. Find customers in a new segment who “look like” your existing customers 3. Expand into new geographic territory 4. Transfer/modify existing products for other industries McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-9 ScheduTrax Lifetime Value Analysis Expected customer migrations following acquisition Yrs. since 1st Yr. 2nd Yr. 3rd Yr. 4th Yr. the Last Purchase Expected $ Account Acquisition after after after after Purchase Probability Purchases Service Costs Period acquisition acquisition acquisition acquisition 100 0 0.60 $90 $20 60.0 36.0 31.2 27.4 Customers 16.0 9.6 8.3 15.0 4.8 2.9 45.6 1.9 1 2 3 0.40 0.20 0.10 $60 $50 $50 $10 $ 4 $ 2 40.0 24.0 24.0 20.8 14.4 19.2 40.5 18.2 12.5 11.5 17.3 Profit forecasts Acq+1 [60 buyers ($90)]×.8 gr. profit–[100 accts×$20 service/acct] = Acq+2 [36 buyers ($90)+16 buyers ($60)] .8 gr. profit- [60 accts×$20+40 accts×$10] = Acq+3 [31.2 buyers($90)+9.6 buyers($60)+4.8 buyers($50)] .8 gr. profit- [52 accts×$20+24×$10+$24×$4] = Acq+4 [27.4 buyers ($90)+8.3 buyers ($60)+2.9 buyers ($50)+1.9 buyers ($50)][45.6×$20+20.8×$10+14.4×$4+19.2×$2] = NPV @ 10 NPV @ 10% NPV @ 20% Discounting profits Acq+1 $2,109 $2.017 $1,933 Acq+2 $1,455 $1.331 $1,222 Acq+3 $1,144 $1,002 $ 881 Acq+4 $ 919 $ 769 $ 649 LTV/100 customers $5,627 $5,119 $4,686 McGraw-Hill/Irwin Business Marketing, 4/e Exhibit 5-4 Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-10 DEVELOPING OPPORTUNITIES THROUGH MARKETING RESEARCH PURPOSE OF RESEARCH 1 2 CUTOMER MANAGEMENT ACQUIRE NEW CUTOMERS ACHIEVED BY 1. CUSTOMER RESEARCH – through focus groups and surveys 2. INTERACTING WITH CUSTOMERS – through joint product development and product testing 3. DEVELOPING ON-SITE VISITATION PROGRAMS McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-11 FINDING SEGMENTS 1. USE NAICS CODES TO ASSESS INDUSTRIES’ SIZE AND NEEDS 2. EVALUATE COMPANY CHARACTERISTICS SUCH AS SALES, NUMBER OF EMPLOYEES 3. DETERMINE A COMPANY’S BUYING PROCESSES AND HOW THEY BUY 4. MATCH PRODUCT OFFERINGS TO COMPANIES SEEKING WHAT PRODUCT DOES BEST McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-12 PERCEPTUAL MAP BRAND C Reasonable price BRAND A Order process efficiency & accuracy After-sale service Rapid delivery BRAND B Helpful / informative Technical performance BRAND D Exhibit 5-10 McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-13 SEGMENTATION AND OPPORTUNITY ANALYSIS IDENTIFY SEGMENTS THROUGH INDUSTRY CLASSIFICATION (SIC / NAICS) CHOOSE YOUR INDUSTRY TARGETS CHOOSE YOUR SPECIFIC COMPANY TARGETS BY: 1. HOW THEY BUY 2. THE BENEFITS THEY SEEK 3. MEMBERSHIPS IN PROFESSIONAL / TRADE ORGANIZATIONS McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-14 CRITERIA FOR SUCCESSFUL SEGMENTATION • SEGMENT MUST BE IDENTIFIABLEenumerated and evaluated + • SEGMENT MUST BE ACCESSIBLEcan be reached by marketing activity + • SEGMENT MUST BE SUBSTANTIALenough to justify efforts McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-15 ESTIMATING SEGMENT SIZE ANALYTICAL TOOLS FOR SEGMENT EVALUATION: 1. USE OF SCENARIOS - Articulate events and futures 2. BUILDUP APPROACH/FACTORING – Estimate product use in its applications 3. STATISTICAL SERIES – Use correlation between demand and economic activities McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 5-16