leading through differentiation

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Leading through differentiation

Copyright © Mark Тapley, 2009

Antonina Armashula

Co-founder, Marketing DirectorMark Tapley

INTRO. ABOUT ME


INTRO. ABOUT MARK TAPLEY


We help top managers of Ukrainian companies solve theirbusiness challenges by integrating global expertise intotheir everyday work.

Professional development events

Benchmarking research

Consulting

Marketing and SalesHR and People SkillsCorporate Performance ImprovementInformation Management


INTRO. OUR CLIENTS

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PORTER GENERIC STRATEGIES


Cost leadership Differentiation

Market segmentation

DIFFERENTIATION


Process of distinguishing a product or offering from others, to make it more attractive to a particular target market.

Demonstrating unique aspects of a firm’s product and creating a sense of value.

Must be valued by BUYERS

Need to differentiate from competitors’ products as well as firm’s own.

3V MODEL


Valued Customer

Value Proposition

Value Network

London Business School, N.Kumar

3V. VALUED CUSTOMER


Strategic segments that require changes in the

company, not just marketing mix

VALUED CUSTOMER. EXAMPLE

Large enterprise

Have experience, trust and culture for investing in employees’ development

Have budget fro trainings, consulting

Consider educational events part of compensation or motivation of staff or partners

Events are the major communication channel with clients


Basic Active

Usage Green field Competitor #2

Influence Popular guy Friends

Buyer Together with parents Self

Payer Parents (60%) Parents (40%)

Criteria Functional, Price limit Price to peers, Image

3 year position in segment

Strong Weak

Age 10-18 8-30

Town size Less than 20K More than 20K

Idol Big city students ?

Other comments Regional offers?Wallet share possibly bigger

Heavy VAS users

VALUED CUSTOMER. EXAMPLE

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Business travelers (company pays)Entrepreneurs (self-paid)Vacationers (self-paid)Family-related (depends)

AIRLINES. CUSTOMER SEGMENTS

3V. VALUE PROPOSITION


Offer that describes the quantifiable benefits

that individuals or organizations making an offer promise to deliver. Its development is based on a review and analysis

of the benefits, costs and value that an

organization can deliver to its customers.


TO PUT IT SIMPLY

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PRODUCT + SERVICE + PRICE + ATMOSPHERE + SMILE + EMOTIONS… =

EVERYTING THAT CLIENT RECEIVES WHEN MAKING A PURCHASE

EASYJET CASE

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1. Isolate a relevant point-of-difference between you and one key competitor

2. Identify a single customer solving a specific problem

3. What is worrying the customer?• Costs, time, travel, risk, storage, handling,

downtime, parts and supplies, training, productivity, replacement

4. What are you good at?

5. What are you bad at?

ATTRIBUTE ANALYSIS

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ATTRIBUTE ANALYSIS

Important So-so Not

Food

Safety

Connections

Departure time

Frequent flyer program

Price

Close to city

Internet access

Duty free

…

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FOUR QUESTIONS

1. Which attributes that our industry takes for grantedshould be eliminated?

2. Which attributes should be reduced to belowindustry standards?

3. Which attributes should be increased to aboveindustry standards?

4. Which new attributes should be created that theindustry has never offered?

Kumar N. “Marketing as strategy”

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SafetyPunctualityLow priceComfortConvenienceFrillsMilesDestinations

1. __________________

2. __________________

3. __________________

4. __________________

5. __________________

6. __________________

7. __________________

8. __________________

9. __________________

10. __________________

1. __________________

2. __________________

4. __________________

5. __________________

6. __________________

7. __________________

8. _________________

9. __________________

10. __________________

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High Med. Low Customer benefitsPerformance

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EXAMPLE: XIAMETER

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Tall Grande Venti

The share of a product increases

when it is the intermediate

option but decreases when it

is an extreme option

DIFFERENTIATION VS CANNIBALIZATION

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OPT-IN VS OPT-OUT

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Value +

Losses

Value -

$2,500 cash back

Cash back is more valuable than a price

reduction.

PSYCHOLOGY AND COMMUNICATION

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3V. VALUE NETWORK


How to deliver our offer to our client at

a profit

Decreasing variable costsUnbundled the offer, eliminating services or reducing performance toNo free food or drink, lower secondary airport fees, lower commissions with direct channels, no printed ticket costs

Decreasing fixed costsLow-cost headquarters, young staff, outsourcing, single plane type (1st

time purchasing, training costs), cost-saving culture

Generating additional revenueVolumes via making fixed costs ‘sweat’

More daily flights via quick plane turn-around times: Boarding (no seat assignments), secondary airports (less congestion), point-to-point (no waiting for connections), one plane type (inter-changeable pilots & attendants, spare parts, technical service), early check-in requirement, staff in-flight cleaning, pilot culture, no kitchenMore seats (no business class, no kitchen, minimal leg room)

Price discrimination (dynamic pricing)Ancillary revenues (food, insurance, car rentals, etc.)

EXAMPLE: EASYJET

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СПАСИБО!

www.marktapley.com

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http://www.marktapley.com/