Transcript Chapter 5

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Part Two
Foundations for
Creating Value
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Business Marketing, 4/e
Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved.
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Part Two
Foundations for Creating Value
• Chapter 5
• Market Opportunities
• Chapter 6
• Marketing Strategy
• Chapter 7
• Weaving Marketing into the Fabric of the Firm
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Business Marketing, 4/e
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Chapter 5
Market Opportunities:
Current and Potential Customers
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Business Marketing, 4/e
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Finding Business to Business Opportunities
DEVELOP MARKETS
AMONG CURRENT
CUSTOMERS
FIND OPPORTUNITIES
WITH EXISTING
CUSTOMERS
NEW MARKET
OPPORTUNITIES
ACQUIRE
NEW
CUSTOMERS
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Business Marketing, 4/e
DEVELOP
A RESEARCH
PROGRAM
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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
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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
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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
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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
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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
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Exhibit 5-4
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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
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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
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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
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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
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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
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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
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