Customers Analysis PDF

Customers  Definition a person or business that a person or business that buys 1 buys something from a third party. 2 goods or services from...

Customers  Definition a person or business that a person or business that buys 1 buys something from a third party. 2 goods or services from another business. Businesses often follow the Customers are crucial because 3 saying "the customer is always right" 4 they generate revenue. Many businesses closely watch 5 how their customers talk to each other.  Customers vs Consumers purchases the They cannot resell use or use up the goods or product for services but can goods and his/her own consume it to earn services need and his/her livelihood consumes it. and self- employment. CONSUMERS  CUSTOMERS the economic buyers They are the ones who buy goods and services who buy goods and regularly from the seller services. and pay for it to satisfy their need. can also be consumers, Customers are but they can also be important because customers on their own. they drive revenues  Who isn't a customer? ü "Clients" is often used to describe customers who have a relationship with a supplier. ü Also, people who hire a professional are not called customers, but clients.  Considering customers ü Businesses look at customer profiles regularly to improve their marketing strategies and stock to attract the most customers. ü Understanding customers helps businesses make better marketing and advertising plans, make products and services that meet customers' needs and wants  How much is a customer worth? “There will be no sales if there are no customers.” Customer Satisfaction By looking at your target market's complaints, feedback, and opinions, you can learn much about what your target market wants and needs from your service or product.  Internal and External Customers External External customers External customers are persons who are clients” or are the people that pay for and use not directly “accounts”. connected to your the products or organization other services your than by purchasing company offers. your product or service.  Internal Internal customers have a relationship The person who with, and within your depends on other company, either stakeholders and people in the through employment shareholders company to provide (colleagues) or as services and products partners who deliver to the external your product or service customer. to the end user.  Types of customer? Loyal Discount Implusive Customers Customers customers Need Based Wandering Customers Customers  Types of Customers Loyal Discount Impulsive Customers Customers Customers ü are less in numbers but ü These customers are promote more sales and ü are also frequent difficult to convince as profit visitors but are only a they want to do the ü These customers revisit part of business when business in urge or the organization over offered discounts. caprice. time ü mostly related to ü They don’t have any ü They want individual small industries. specific item into their attention and demand product list. polite and respectful responses from their supplier. Need-Based Wandering Customers Customers ü these customers are ü these are the least product specific and only profitable customers. tend to buy items only to which they are habitual. ü These customers are normally new in industry ü These customers should and most of the times visit be handled positively. suppliers only. ü These customers could ü They investigate features of possibly be lost if not most prominent products in tackled efficiently with the market positive interaction.  What is customer service technology? ü Customer service technology is a range of software and hardware solutions. ü Companies can use a range of different tools both on the customer side and internally, on the agent side.  Customer-facing technology Chatbots Self-service Interactive Voice customer portal Response (IVR)  Customer-facing technology Customer service software Internal knowledge AI-powered management automations  How to meet customer needs Identify Distribute Create Collect  With so many technologies how can you keep up to date with the latest technologies that could be cheaper and offer new and transformative features? Obvious answer is to think of innovation, and go above and beyond We should not forget that the customers’ demand and satisfaction are crucial in entrepreneurship. Startups, especially insurtechs should be in a race to understand and help our customers, rather than a race for innovation.  Technopreneurship begins with the customer experience and works backward. The 'art of marketing’ in the digital age is to activate traditional sales skills in a new technology-supported environment. It is important to align the business strategy with technology by driving modernization with a customer-centric approach.  Important Points to Keep i n mind Some businesses keep a careful eye An organization's customers on their interactions with clients 1 are the individuals and entities who purchase from it. 2 to discover new ways to improve the quality of their services and products. The way a firm serves its customers Market goods and services are 3 could provide it with an advantage in the marketplace. 4 consumed or used by consumers.  VALUE PROPOSITION  VALUE PROPOSITION a simple statement that clearly communicates the product or service benefit you promise to MICHAEL LANNING deliver to your customers. Value P r o p o s i t i o n vs. TA GLI N E Tagline catchy phrase or slogan that is often used in V A LU E P R O P O S I TI O N advertising to create brand recognition and recall. communicates the unique benefits of a product or memorable phrase that service and differentiates it sums up the essence of the brand from the competition. usually compose of a focuses on the value that a sentence or a phrase product or service delivers usually compose 2 to 3 sentences  WHERE AND WHEN TO USE I T  WHERE TO USE IT COMPANY'S WEBSITE COMPANY'S WEBSITE COMPANY'S WEBSITE COMPANY'S WEBSITE COMPANY'S WEBSITE  WHERE TO USE IT COMPANY'S WEBSITE COMPANY'S WEBSITE COMPANY'S WEBSITE PRODUCT PACKAGING  WHERE TO USE IT COMPANY'S WEBSITE COMPANY'S WEBSITE ADVERTISING  WHERE TO USE IT COMPANY'S SALES WEBSITE COLLATERAL  WHERE TO USE IT SOCIAL MEDIA If a company wants to expand its customer base, it can create a new value proposition tailored to the needs and preferences of the new segment.  LAUNCHING A NEW PRODUCTS OR WHEN TO USE I T SERVICES ENTERING A NEW MARKET UPDATING OR IMPROVING EXISTING PRODUCTS OR SERVICES TARGETING A NEW CUSTOMER SEGMENT  IMPORTANCE OF VALUE PROPOSITION  1 Helps differentiate from of customers and investors competitors IMPORTANCE OF V A LU E A clear and compelling value proposition helps a business stand out from its competitors by communicating its PROPOSITION unique selling proposition and benefits to customers. This helps potential customers understand why they should choose the business over its competitors.  1 Helps differentiate from of customers and investors competitors IMPORTANCE OF V A LU E PROPOSITION  2 I m pr o v es acquisition of Improve s acq u isi tion of customers and c u s t omers and investors in v es to rs IMPORTANCE OF A strong value proposition helps attract V A LU E new customers and investors by clearly communicating the benefits of a PROPOSITION product and providing a clear understanding of the value they will receive from the business.  2 I m pr o v es acquisition of Improve s acq u isi tion of customers and c u s t omers and investors in v es to rs IMPORTANCE OF V A LU E PROPOSITION "As an investor, a startup's value proposition is the first place I look."  3 Improves acquisition I n c r ea ses customer loyalty of c u st ome rs a nd investors IMPORTANCE OF By communicating the unique benefits of its products or services, a business can V A LU E create a sense of customer loyalty. This is PROPOSITION because customers are more likely to remain loyal to a business that provides value beyond what is offered by its competitors.  4 Guides product development IMPORTANCE OF A value proposition can help guide a V A LU E business's product development efforts by PROPOSITION ensuring that new products or services align with the company's unique selling proposition and target customer needs.  5 Helps with pricing strategy IMPORTANCE OF If the value proposition is focused on high-quality products or services, a V A LU E business can charge a premium price. If PROPOSITION the value proposition is focused on affordability, the business may need to offer lower prices to attract customers.  6 Increase revenue IMPORTANCE OF A value proposition can persuade potential customers to choose their V A LU E offerings over others which can increase PROPOSITION customer acquisition, retention, and brand loyalty, thereby contributing to higher revenue growth for the company. DEVELOPMENT OF VALUE PROPOSITION  What product or service do you offer? Who is target customer? What problem does your product solve QUESTIONS TO for your customer? BE ANSWERED How does your product or service benefit your customer? What differentiates you from competitors? CHARACTERISTICS OF A N EFFECTIVE VALUE PROPOSITION  CHARACTERISTICS CLEAR A N D CONCIsE CUsTOMER- UNIqUE FOCUsED  CHARACTERISTICS QUANTIFIABLE MEMORABLE SPECIFIC  MISTAKES TO AVOID IN WHEN DEVELOPING VP Using Jargons Disregarding the competition Being too Generic Straying away from target market Not testing the VP Being Synonymous to Competitors Focusing too much on features  EXAMPLES OF STRONG VALUE PROPOSITIONS  “Starbucks offers customers the finest coffee produced by themselves, with a strong commitment to creating a global social impact, served in stores that promote a welcoming and warm atmosphere where everyone can feel “like home.”  MARKET Market refers to the group of consumers or potential customers who have a need or desire for a particular product or service. A market can be defined as a group of individuals or organizations that share common characteristics and have the potential to purchase a specific product or service. TARGET MARKET A target market refers to a specific group of customers or consumers that a technopreneur is aiming to reach and serve with their technology product or service. The target market is the group of people who are most likely to have a need or desire for the technology solution that the technopreneur is offering.  ARE YOU USING OR Y o u are pla nning CONSUMING IT? to buy a product YES NO YE Has the product S been purchased? YOU ARE BOTH A YOU ARE A CUSTOMER AND CUSTOMER. CONSUMER. YES ARE YOU THE ONE WHO MADE THE PURCHASE? YES YOU ARE A CONSUMER. NO YOU ARE NO ARE YOU USING OR NO YOU ARE NEITHER PART OF THE CONSUMING IT? OF THE THREE. MARKET.  What's the Difference? MARKET Target Market Market refers to the overall The target market is a specific group of people or group of people or organizations organizations that might be that a technopreneur wants to interested in buying a product reach with their product or or service. service. The market includes all Target market is made up of potential customers, customers who have a particular regardless of whether or not need or interest in the product or they have a specific need or service being offered, and who are interest in the product. most likely to purchase it.  Example: Smartphones Market: The market for smartphones includes all potential customers who are interested in buying a smartphone, regardless of their age, income level, geographic location, or other demographic or psychographic characteristics.  Example: Smartphones Target Market: The target market for a high-end smartphone brand may be affluent consumers aged 25-45 who value premium features, such as camera quality and screen size, and who are willing to pay a premium price for a superior product. WHY IS IT IMPORTANT TO KNOW THE TARGET MARKET? Efficient use of resources.  Better understanding of customer needs.  Effective marketing strategies.  Higher profitability. M a r k e t Analysis Market analysis is the thorough process of data collection to choose whether the product or the service that is going to come will cater to customers’ needs. Market analysis provides you with a holistic, or well-rounded picture of the markets you are interested in operating in. M a r k e t Analysis Market analysis is helpful in crafting a business strategy because it assesses the market's size and value, consumer behavior and spending patterns, the competition, and the market barriers and challenges. Thus, the information derived from this analysis is crucial in moving forward with a successful business. An effective market analysis will include an accurate description of the target market and thorough market research. M a r k e t Research Market research, in essence, is an exercise undertaken to gather feedback and information directly from the customers, generally for judging the viability of specific business decisions. It helps in addressing strategic questions about brand management, product development, and consumer perceptions. Market Research Market r e s e a r c h involves two types of data: 1.Primary research experts from a target market are interviewed in order to collect new data. The advantage of this is that it is still your own research purpose in focus. 2. Secondary research uses existing data records from previous surveys. This can be collected both internally and externally.  Difference between Market Analysis and Market Research Market research is focused on M a r k e t Analysis collecting data directly from the Industry market and customers, while Analysis Market analysis pursues a broader Market perspective of putting together Resear ch data and insights from a wide SWO T variety of sources (including market Analysis research) to evaluate all possible Competitor A n a ly sis options of growth and business forecasts for the times to come. Importance of Market Analysis 1.Great help in understanding your customers Having a comprehensive understanding of your customers is key to achieving core business goals. 2. Analyze your competitors Analyzing your competitors' strengths and weaknesses in comparison to your own and to find a gap in the market. It will help you recognise how you can enhance your own business strategy. 3. Helps Determine Your Unique Sales Proposition Using market analysis to determine your entry point and your unique selling proposition is crucial for creating a sustainable business model.  Dimensions of Market Analysis Market Market Market Market Market Industry Distribution Key Size Segment Trends Growth Profitabil Cost Channel Success Rate -ity Structure Factors  MARKET SIZE Market size refers to the current and potential volume of the selected market. The organization studies the growth potential of a particular market and decides to enter into the market only if the results match their expectation.  MARKET SIZING METHODS BOTTOM UP TOP-DOWN determine by determine the size of considering the major the entire market, figure variables of your out how much of that business, such as where market you control and you sell your products, then the number of potential compute the amount customers and the your business may historical numbers of earn from that share of competitors' products the market. sold. focused on broad view focused on of the  MARKET SIZE Example: a technopreneur who is developing a new engineering software that helps streamline the design and prototyping process for small and medium-sized engineering firms.  MARKET SIZE Example: 1 ST Examine the size of the engineering industry in terms of revenue, number of companies, and number of employees. Segment the market by looking at different types of 2 ND engineering firms, such as mechanical, electrical, or civil engineering firms, then estimate the number of potential customers in each segment and the revenue potential of each segment. 3 RD Examine the size of the market for similar engineering software products that are currently available.  Ma r k e t Growth Rate This refers to the rate at which the market is expected to grow in terms of demand for a particular product or service over a period of time. The market growth rate is also the basic information investors need before making an investment decision. If it is likely to grow then investors can decide to put in more money in it.  Ma r k e t Growth HOW DO WE Rate DETERMINE MARKET GROWTH RATE? Extrapolating the past data Product diffusion curve - based into the future, market growth on the study of characteristics of rate can be ascertained in an adoption rate of similar products or organization. services in the past.  MARKET TRENDS Market trends refer to the general direction or pattern of change in a particular market over time. They are the movements or shifts in demand, supply, and pricing that reflect changes in consumer behavior, preferences, and needs. Market trends are influenced by various factors such as demographic shifts, technological advancements, economic conditions, and cultural shifts.  Market S e g m e n t It is the process of dividing a larger market into smaller, more defined groups of consumers who have similar needs, wants or characteristics. There are many ways to segment a market, including demographic, geographic, psychographic, and behavioral factors.  Market Profitabili tyability of a company or refers to the product to generate profits within a specific market. It is a measure of the potential financial returns a business can make from operating within a given market segment.  Industry Cos t Structure It refers to the way in which costs are incurred in a particular industry, including the fixed and variable costs associated with producing and delivering products or services. Industry Cos t EXAMPLE Structure AIRLINE A AIRLINE B more efficient operation outdated equipment lower labor costs higher labor costs DISTRIBUTI ON CHANNEL  Key Success Factors These are the specific factors that are critical to the success of companies operating in a particular industry. Such factors might include: i. Accessibility to essential and unique resources ii. Competence to reach economies of scale iii. Accessibility to channels of distribution iv. Accessibility to the state-of-the-art technology  PORTER'S FIVE FORCES MODEL It is a strategic framework for analyzing the competitive environment of an industry. It was developed by Michael E. Porter, a Harvard Business School professor, and published in his book "Competitive Strategy" in 1980. PORTER'S FIVE FORCES MODEL Threat of new entrants Threat of substitutes Bargaining power of suppliers Rivalry among existing competitors Bargaining power of buyers  Threat of New This force refers to the Entrants potential for new competitors to enter the market and disrupt the current competitive landscape. Factors that influence this force include the ease of entry, capital requirements, and barriers to entry such as patents, economies of scale, or brand recognition.  Bargaining Power This force refers to of the power Suppliers that suppliers have over the industry and their ability to increase prices or reduce the quality of goods or services. Factors that influence this force include the number of suppliers, availability of substitutes, and switching costs.  Bargaining This forcePower ofpower refers to the Buyers that buyers have over the industry and their ability to negotiate lower prices or higher quality goods or services. Factors that influence this force include the number of buyers, the size of their orders, and their price sensitivity.  Threat of Substitute This force refers to the potential for substitutes to take marketsshare away from the industry's products or services. Factors that influence this force include the availability of substitutes, their relative price and performance, and the switching costs for customers.  Rivalry among existing This force refers to the competitors intensity of competition among existing firms in the industry. Factors that influence this force include the number and size of competitors, industry growth rate, differentiation of products or services, and exit barriers. 5 skills that 1 Segmenting the market one must 2 Targeting acquire to 3 Understanding your target understand 4 Analyzing the Competition their target Estimating Potential 5 market Market Demand  1. Segmenting the Market - marketing concept that describes grouping potential customers into segments or groups with comparable demands and responses to marketing actions. Geographic Psychographic Demographic Behavioral 2. Targeting - evaluate and select target segments. - allows you to focus your attention on one market or group at a time 3. Understanding your target - The goal of market research is to better understand the demands of a market by methodically collecting data on individuals, businesses, or both. The outcomes of market research are then applied to assist business owners in making more informed decisions concerning the company's operations, strategy, and potential customers.  Understanding y o u r t a r g e t SURVEY OBSERVATIO PROTOTYPIN S N G FOCUS EMPHATI GROU C TOOLS P 4. Analyzing the Competition when trying to understand your target market, do not neglect to look at your competitors. C o mp e t i t o r ’ s Analysis - What your competitor's marketing is (4PS)  C o mp e t i t o r ’ s Analysis -Why the target market is buying or will buy from the competitor  Estimating Potential Market Demand 5.EStimation iS an educated gueSS. The beSt Way to be certain iS to look for factual information.  Estimating Potential Market Demand EStimating potential market demand iS a marketing Skill that haS an impact on projecting SaleS, SaleS groWth, and capital, machine, and manpoWer requirementS  Estimating Potential Market Demand The eStimated potential market demand iS a numerical repreSentation of hoW Well the entrepreneur underStandS the target market.  How to do a Market Analysis? Should provide the reader a sense of what key activities will be executed to accomplish the objective  Research your industry 6 Steps of a 1 Investigate the Market 2 competitive landscape Analysis 3 Identify market gaps 4 Define your target market 5 Identify barriers to entry 6 Create a sales forecast  6 Steps of a Market Analysis 1.Research your industry Gain a holistic understanding of everything happening in your industry and prepare to navigate it. 2. Investigate the competitive landscape Know who the big players are and how you can differentiate your brand 3. Identify market gaps Market gaps are needs that are currently not being filled by existing brands.  6 Steps of a Market Analysis 4. Define your target market Know your customer's unique characteristics and tailor your offers and marketing accordingly. 5. Identify barriers to entry Know what stands in your way and address challengers head on. 6. Create a sales forecast. Estimate future sales and make confident business decisions. TN COMPETITIVE ADVANTAGE This refers to certain factors that allow a company to produce products and services cheaper and with a higher quality than its rivaling companies. These factors commonly include pricing, branding, cost structure, quality of services, distribution network, intellectual property, and customer service. Creating Competitive Advantage 03 TN Competitor Analysis To be able to create effective marketing strategies, a company needs constant analysis of their existing and potential competitors that includes their prices, strategies, promotions, offers, and many more. Creating Competitive Advantage 04  COMPETITOR ANALYSIS Identifying Assessing Selecting Competitors Competitors Competitors to Attack & Avoid Creating Competitive Advantage 05  COMPETITOR ANALYSIS Identifying Competitors Identifying your company’s competitors plays a major role in keeping your company competitive in the market. 06 Creating Competitive Advantage IDENTIFYING COMPETITORS FROM: 1. Industry Point of View Competitors have the same product/service and target market inside the same category or industry. 2. Market Point of View Competitors have the target market but differ in products/services that they offer. 07 Creating Competitive Advantage  Types of DIRECTCompetitors COMPETITORS This type of competitor offers the same products/services as your business. INDIRECT COMPETITORS This type of competitor is inclined with your category but offers different products/services to solve the same problem. REPLACEMENT COMPETITORS This type of competitor offers alternatives products/services from you offer to solve the Creating Competitive 08 same problem. Advantage Ways to Identify Competitors 1 MARKET RESEARCH 2 KEYWORD RESEARCH 3 ANALYZING GOOGLE SEARCH (PRODUCT/SERVICE + LOCATION) 4 MONITORING SOCIAL MEDIA CONVERSATIONS 5 CUSTOMER FEEDBACKS Creating Competitive Advantage 09  COMPETITOR ANALYSIS Assessing Competitors By assessing competitors, a company can identify its strengths and weaknesses relative to its rivals, and develop strategies to improve its competitive position. 10 Creating Competitive Advantage  ASSESSING COMPETITORS Competitor's Objectives Competitor's Strategies Each competitor has a mix of The company needs to look at all the objectives. The company wants to dimensions that identify strategic know the relative importance that a groups within the industry. competitor places on current profitability, market share growth, cash flow, technological leadership, service leadership, and other goals. Company Standup Meeting 11  ASSESSING COMPETITORS Competitor's Strengths & Estimating Competitor's Weaknesses Reactions Marketers need to carefully assess each The company needs to look at all the dimensions competitor’s strengths and weaknesses to that identify strategic groups within the industry answer a critical question: What can our company wants to know: What will our competitors do? competitors do? As a first step, companies can gather data on Marketing managers need a deep understanding each competitor’s goals, strategies, and of a competitor’s mentality if they want to performance over the past year. Admittedly, anticipate how that competitor will act or react this some of this data is hard to obtain. Company Standup Meeting 12  COMPETITOR ANALYSIS Selecting Competitors to Attack & Avoid 13 Creating Competitive Advantage STRONG OR WEAK COMPETITORS The key to gaining competitive advantage is to examine how a company’s offer compares to that of its major competitors in each customer segment. Customer Value Analysis Creating Competitive Advanatage 14 CLOSE OR DISTANT COMPETITORS Most companies will compete with close competitors that resemble them most rather than distant competitors Creating Competitive Advantage 15 GOOD OR BAD COMPETITORS A company needs and benefits from competition. The existence of competitions results in strategic benefits Good Competitor - plays by the rules in the industry. Bad Competitor - try to buy shares rather than earn, take large risks, and play by their own rules. 16 Creating Competitive Advantage  FINDING UNCONTESTED MARKET SPACES Rather than competing head to head with established competitors, many companies seek out unoccupied positions in uncontested market spaces. Blue-Ocean Strategy - make the competition irrelevant 17 Creating Competitive Red-Ocean Strategy - beat the competition Advantage TN CompetitiveStrategies Having identified and evaluated its major 116 competitors, a company now must design broad marketing strategies by which it can gain competitive advantage. Creating Competitive Advantage  A sustainable competitive advantage refers to a unique advantage that a company has over its competitors, which enables it to outperform them over a long period of time. 117 Creating Competitive Advantage MICHAEL PORTER'S Basic Competitive Strategies 118 Competitive Advantage: Creating and Sustaining Superior Performance (1985) Creating Competitive Advantage Overall Cost Leadership A company works hard to achieve the lowest 119production and distribution costs. Creating Competitive Advantage The Cost Leadership strategy can be implemented in various ways, including: 1 EFFICIENT OPERATIONS 2 ECONOMIES OF SCALE 3 LOW-COST INPUTS 120 4 COST-EFFECTIVE MARKETING 5 MINIMAL PRODUCT FEATURES Creating Competitive Advantage Differentiation A company concentrates on creating a highly differentiated product line and marketing program so that it comes across as the class leader in the industry. 23 Creating Competitive Advantage The Differentiation strategy can be implemented by: 1 MARKET RESEARCH INNOVATION 2 AND DEVELOPMENT 3 ESTABLISHING BRAND 122 REPUTATION Creating Competitive Advantage  Focus A company focuses its effort on serving a few market segments well rather than going after the whole 123 market. Creating Competitive Advantage  COST FOCUS A company aims to become the FOCUS lowest-cost producer in a specific market or industry segment. STRATEGY DIFFERENTIATION FOCUS A company aims to differentiate its products or services from competitors in a particular market or industry segment. 26 Creating Competitive Advantage The Focus strategy allows businesses to: 1 Achieve higher profit margins by serving a specific niche or target market with a unique and targeted product or service offering. 2 Develop a deep understanding of the target market's needs and preferences, which can help them create more effective marketing campaigns and build stronger customer relationships. 3 Build a reputation as a specialist in a particular market or industry segment, which can lead to greater customer loyalty and repeat business. Creating Competitive Advantage 27 Losing Strategy: Middle-of-the- roaders A concept that describes a business strategy that tries to achieve both low cost and differentiation at the same time but fails to excel in either of them. 28 Creating Competitive Advantage TREACY & WIERSEMA'S Competitive Strategies Treacy and Wiersema's competitive marketing strategies are a framework for businesses to gain a competitive advantage in their industry by identifying their core strengths and leveraging them in a way that is most appealing to their target customers. Creating Competitive Advantage 29  TREACY & WIERSEMA Operational Excellence The company provides superior value by leading its industry in price and convenience. 12 Creating Competitive Advantage 8  TREACY & WIERSEMA Product Leadership The company provides superior value by offering a continuous stream of leading-edge products or services. 12 Creating Competitive Advantage 9  TREACY & WIERSEMA Customer Intimacy The company provides superior value by precisely segmenting its markets and tailoring its products or services to exactly match the needs of targeted customers. 13 Creating Competitive Advantage 0 TN CompetitivePositions Competitive positioning is a marketing strategy that refers to how a marketing team can differentiate a company from its competitors. Creating Competitive Advantage 33  DIFFERENT COMPETITIVE POSITIONS MARKET MARKET MARKET MARKET LEADER CHALLENGER FOLLOWER NICHER Market Leader is the Market Challengers are Market Followers are Market Nichers are firms firm with the largest firms fighting to firms that want to hold that serve small market market share increase market share. onto their market share. segments not being pursued or overlooked by other firms. 34 Creating Competitive Advantage Market Leader Strategies 1 EXPAND TOTAL DEMAND 2 PROTECT THEIR CURRENT MARKET 3 EXPAND MARKET SHARE 35 Creating Competitive Advantage Market Leader Strategies 1 EXPAND TOTAL DEMAND EXPAND TOTAL DEMAND BY DEVELOPING: New users 134 New uses More usage of its products Creating Competitive Advantage Market Leader Strategies 2 PROTECT THEIR CURRENT MARKET PROTECT THEIR CURRENT MARKET BY: Fixing or preventing weaknesses 135 Maintain consistent prices that provide value Keep strong customer relationships Continuous innovation Creating Competitive Advantage Market Leader Strategies 3 EXPAND MARKET SHARE EXPAND MARKET SHARE BY: Producing high-quality products 136 Creating good service experiences Building close relationships Creating Competitive Advantage Market Challenger Creating Competitive Advantage 39 Strategies 1 FULL FRONTAL ATTACK By challenging the market leader and other competitors in an aggressive bid for more market share (market challengers) 2 INDIRECT ATTACK By carving out toeholds using tactics that established leaders have trouble responding to or choose to ignore.  Market Follower Strategies 1 FOLLOW CLOSELY 2 FOLLOW AT A DISTANCE 13 Creating Competitive Advantage 8  Market Nicher Strategies 1 BY SPECIALIZING IN SERVING ONE TYPE OF NICHE SUCH AS CUSTOMER, MARKET, QUALITY- PRICE, SERVICE. 2 MULTIPLE NICHING 13 Creating Competitive Advantage 9 TN Balancing Customer & Competitor 140 Orientations Creating Competitive Advantage  In the modern business landscape, companies must balance two crucial elements: customer and competitor orientations. A customer-oriented company prioritizes the needs and wants of its customers above all else. On the other hand, a competitor-oriented company is primarily focused on beating its rivals, often at the expense of customer satisfaction. Between these two extremes lies the 141 market-oriented company, which aims to find a balance between customer and competitor orientations. Creating Competitive Advantage Competitor - Centered Company A competitor-centered company is primarily focused on beating its rivals. Its main goal is to capture as much market share as possible, even if that means sacrificing customer satisfaction. This approach can be effective in the short term, as a company may be able to generate quick profits by cutting corners and slashing prices. However, over time, this strategy can lead to a decline in customer loyalty and a damaged reputation. Company Standup Meeting 14 2  Competitor - Centered Company Advantages Disadvantages Competitor-oriented companies are By prioritizing competition over often very aggressive in their customer satisfaction, companies marketing strategies, which can help may neglect the needs of their them gain market share quickly. customers, which can ultimately lead By focusing on competitors, to lost sales and revenue. companies may be able to identify Competitor-oriented companies may weaknesses in their own products or engage in unethical practices to gain services and improve upon them. a competitive edge, which can lead to legal and ethical issues. 45 Creating Competitive Advantage Customer - Centered Company A customer-centered company is primarily focused on meeting the needs and wants of its customers. Its main goal is to create loyal customers who will continue to do business with the company for years to come. This approach can be effective in the long term, as it can create a strong brand reputation and customer loyalty. Company Standup Meeting 46  Customer - Centered Company Advantages Disadvantages Customer-centered companies are Customer-centered companies may often able to charge a premium for be reluctant to take risks or innovate, their products or services, as as they may be afraid of upsetting customers are willing to pay more for their customer base. quality. By focusing solely on customers, Customer loyalty can be a powerful companies may be blindsided by asset, as it can lead to repeat business changes in the market or the and positive word-of-mouth marketing emergence of new competitors. 47 Creating Competitive Advantage Market - Centered Company A market-centered company balances both customer and competitor orientations. Such companies understand that they need to meet their customers' needs while keeping a close eye on their competitors' activities. They also understand that market conditions can change rapidly, and they need to adapt to these changes to remain competitive. A market-centered company invests in market research to gain insights into its customers' needs and preferences. It also analyzes its competitors' strategies and activities to identify areas of opportunity and threats. Additionally, a market-centered company may engage in strategic partnerships and collaborations to expand its market share and improve its competitive position. Company Standup Meeting 8