Download - Retail Marketing - Spotting buying patterns and maintaining a consistent trafficflow all year round
SPOTTING BUYING PATTERNS AND MAINTAINING A CONSISTENT TRAFFIC FLOW ALL YEAR ROUND
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ALL YEAR ROUNDCase Study, Concepts, and Debatable Ideas
Kenny OngCNI Holdings Berhad
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Intro: CNI
1. 22 years old2. Core Business: MLM3. Others: Contract Manufacturing, F&B Retail,
Export/Trading, eCommerce, Shared Services4. Malaysia, Singapore, Brunei, Indonesia, India,
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4. Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam
5. Staff force: ± 500 6. Distributors: 150,0007. Products: Consumer Goods and Services
Types of Buying Pattern Strategy
• Macro •Strategic
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• Micro •Tactical
The World Today;
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The World Today;
13th April 2009
•Two Domino’s employees
•YouTube
•Apology from Domino’s after
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48 hours
•1 million hits
•Twitter: questions on silence
•LinkedIn: suggestions by users in forum
BusinessWeek, May 4, 2009
Guess Who?
Buying Pattern: What and Why?
1. Study of when, why, how, and where people do or do not buy
2. Multi-discipline: psychology, sociology, social anthropology and economics
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3. Used for retail mix: nature of merchandise and service offered, pricing policy, advertising and promotion program, approach to store design and visual merchandising, typical location
Types of Buying Pattern Strategy
• Macro •Strategic
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• Micro •Tactical
• How to fail without trying
1. Wrong Business Model
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The Roadmap to Failure
Fred Wiersema and Mike TreacyPerform
ance
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Perform
ance
Time
Clear Sailing
Today’s performance
Denial & Defense
Doom Projections
Denial and Defense
• “It’s not really good value our competitor is offering, because it doesn’t include a lot of our features.” - ABC vs Air Asia
• “It’s good value but not in our preferred customer market.” - ABC vs Toyota
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customer market.” - ABC vs Toyota
• “Sure they’re hurting us, but with their unfair advantage, what can we do?” – ABC vs MILO
• “The rules we are playing by have always worked before” – AMEX vs VISA
The Roadmap to Failure
Fred Wiersema and Mike TreacyPerform
ance
Downpresure of Unclear Strategy
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Perform
ance
Time
Clear Sailing
Today’s performance
Denial & Defense
Doom Projections
Ad Hoc Tactics• Selectively hold discounts to hold business that has
started to go elsewhere
• Introduce new promotions, terms, conditions, and offers to confuse and cloud the market
• Beef up customer service by adding people to fix mess-ups and quicken delayed shipments
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ups and quicken delayed shipments
• Delay capital investments and adjust accounting methods to portray quarterly financial results more favorably
• Introduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasers
• Introduce Balanced Scorecards and Performance Management Systems
The Roadmap to Failure
Fred Wiersema and Mike TreacyPerform
ance
The Moment of Truth
X
Downpresure of Unclear Strategy
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Perform
ance
Time
Clear Sailing
Today’s performance
Denial & Defense
Doom Projections
Overdue Failure
Performance Freefall
Tomorrow’s actual
performance
“What is the moral of
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“What is the moral of
the story?”
Alignment: 4-Wheels Model
Business
ModelGrowth Strategy
PP
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Customer
StrategyP
P
P
Business Model and Strategic Marketing
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Marketing
The biggest impact
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The McPlaybook*
Make it easy to eat
• 50% drive-thru
• Meals held in one hand
Make it easy to prepare
• High Turnover
• Tasks simple to learn & repeat
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Make it quick
• “Fast Food”
• Tests new products for Cooking Times
Make what customers want
• Prowls market for new products
• Monitored field tests
*Adapted from: Businessweek , Februrary 5th 2007
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What is the Business Model?
USP
•Tata Nano
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Market Discipline
Profit Model
What is the Business Model?
USP
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Market Discipline
Profit Model
Business Model: USP
Unique Selling Proposition (USP)
=
Targeted Customer
=
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Core Buying Purpose/ Customer Value Proposition/ Job To Be Done (JBTD)
Business Model: USP
Obstacles to JBTD:
1. Insufficient WEALTH
2. Insufficient ACCESS
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2. Insufficient ACCESS
3. Insufficient SKILL
4. Insufficient TIME
What is the Business Model?
USP
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Market Discipline
Profit Model
Business Model: Profit Model
Revenue
CostAssets
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MarginCash Flow
Market Discipline
"They are the most innovative"
"Constantly renewing and creative"
"Always on the leading edge"
"A great deal!" "Exactly what I need"
Product Leadership
OperationalExcellence
CustomerIntimacy•Air Asia
•LV
•Ramly
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"A great deal!"
Excellent/attractive price
Minimal acquisition cost and hassle
Lowest overall cost of ownership
"A no-hassles firm"
Convenience and speed
Reliable product and service
"Exactly what I need"
Customized products
Personalized communications
"They're very responsive"
Preferential service and flexibility
Recommends what I need
"I'm very loyal to them"
Helps us to be a success
Excellence
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Product Leadership
(best product)
Market Disciplines
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Operational Excellence
(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Customer Intimacy
(best total solution)
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Product Leadership
(best product)
Market Disciplines
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Operational Excellence
(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Customer Intimacy
(best total solution)
Product Leadership
(best product)
Market Disciplines
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Operational Excellence
(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Customer Intimacy
(best total solution)
Operational
Excellence
• Competitive price
• Error free, reliable
• Fast (on demand)
• Simple
Customer Intimacy
• Management by
Fact
• Easy to do
business with
• Have it your way
Product Leadership
• New, state of the
art products or
services
• Risk takers
• Meet volatile
Market Discipline: Disciplines, Priorities, and KPIs
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• Simple
• Responsive
• Consistent
information for all
• Transactional
• 'Once and Done'
• Have it your way
(customization)
• Market segments
of one
• Proactive, flexible
• Relationship and
consultative
selling
• Cross selling
• Meet volatile
customer needs
• Fast concept-to-
counter
• Never satisfied -
obsolete own and
competitors'
products
• Learning
organization
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Product Leadership
(best product)
Alignment & Consistency
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Operational Excellence
(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Customer Intimacy
(best total solution)
Product Leadership
(best product)
Alignment & Consistency
Apple powerful products, premium
pricing, limited range
Still Doing
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Operational Excellence
(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Customer Intimacy
(best total solution)
HP well-balanced portfolio, mass customization
Acer super lean cost structure, aggressive pricing
Still Doing well in
2009/2010
Alignment & Consistency: Business Model
USP
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Market Discipline
Profit Model
Alignment: 4-Wheels Model
Business
ModelGrowth Strategy
PP
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Customer
StrategyP
P
P
Growth Strategy
1.Base Retention
2.Share Gain5.New Business
“Double-Digit Growth”, Michael Treacy
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2.Share Gain
3.Positioning4.Adjacent Market
5.New Business
GROWTH
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Growth Strategy
1. Base Retention
2. Share Gain5. New Business
“Double-Digit Growth”, Michael Treacy •Increase switching cost
•Customize products
•Preempt Defections
•Brand
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3. Positioning4. Adjacent Market
5. New Business
GROWTH
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•Neutralize Competitor advantages
•Superior Value
•Buy market share
•Spot growth opportunities
•Organized search
•Promising Market?
•Make or Buy?
How Markets determine Growth Strategies (1)
• Growth Rate
Growth
Rate
Strategy Why?
Fast 1. Market Positioning
•Maintain market share in strategic segments
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2. Share Gain
3. Base Retention
•Prepare for market decline
•Competitors focus too much on getting new customers
Flat 1. Base Retention
2. Share Gain (Acquisitions)
•Lose customers slower than competitors
•Create scale economics, squeeze costs
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• Churn Rate
Churn
Rate
Strategy Why?
Low 1. Share Gain (Acquisitions)
•Buying customer base is cheaper than own efforts
How Markets determine Growth Strategies (2)
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2. Adjacent Markets
•New products, old customers strategy
High 1. Base Retention
2. Share Gain
3. Adjacent Market
•Lose customers slower than competitors
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How Markets determine Growth Strategies (3)
Fast Growth,
Low Churn
1.Market Positioning
2.Share Gain
•Example: XYZ Sector
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3.Base Retention
4.Adjacent Markets
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Types of Buying Pattern Strategy
• Macro •Strategic
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• Micro •Tactical
Business Strategy vs. Consumer
Post Recession Trends and Implications
Industry Convergence/ Extinction
Social Networking
Increased RegulationsWhat do these mean to us?
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Green & CSR
Non-Profit/NGO increase
Increased Regulations mean to us?
Global Trends
Back-sourcing
Bottom-up Innovation/Disruptions
Mobile Devices
Power re-balancing
Mergers, Acquisitions & Divestment
Lower Middle Class rule
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Nationalism and Protectionism
Currency Wars
Mobile Devices
Extreme Emerging Countries
Lower Middle Class rule
BRIC and PIIGS
Retail Trends?
Cutting back
Let consumers help themselves
Smaller stores
In-store Ads
RFID technology
Niche private labels
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Ready-made products
Ethnic stores
Smaller stores
Eco-friendly stores
Niche private labels
In-store restaurants
Most Popular Question
“When will we return to the last time?”
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� Wrong Question
Marketing Today
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Retail Adaptation: McDonald’s Menu
Product Variation:– 80% Global, 20% Local
– home-style meals (Boston Market)
– burritos (Chipotle)
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– coffee (McCafé) ����
– DVD rentals (Redbox)
– Premium menu items (snack wraps, sweet tea Frappes) ����
Retail Adaptation: McDonald’s Design
$2.4 billion to: •redo at least 400 domestic outposts,
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•refurbish 1,600 restaurants abroad, and •build another 1,000
Retail Adaptation: McDonald’s Design
1. Corporate design leader for each operating regions; that person contracts with a regional designer who can figure out what other local design elements might make a space feel individual and
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might make a space feel individual and authentic
2. Solicits ideas from leading design firms such as Ideo, Rockwell Strategic, and boutique firms around the globe.
Grocery Store of the Future
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Future“Supermarket Strategies: What's New at the Grocer”,
Bloomberg Businessweek, June 8, 2009
By Damian Joseph
The Grocery Store of the Future
By Damian Joseph
Going Small
Who's Doing It: Wal-Mart, Safeway, Super Value, Tesco
What's New: Companies known for vast supermarkets are opening
up small-format stores. Wal-Mart's Marketside (WMT), Safeway's
The Market (SWY), Super Value's Urban Fresh (SVU), and Tesco's
Fresh & Easy all focus on selling fresh produce, ready-made meals,
and organic or natural products. The idea is to penetrate densely
populated neighborhoods and inspire daily shopping visits.
Going EthnicGoing Ethnic
Who's Doing It: Wal-Mart, Publix
What's New: In an effort to serve the growing Hispanic
population, companies are opening up stores dedicated to
them. Wal-Mart's Supermercado and Publix's Sabor sell
Latino-style bakery products and ingredients, prepared foods,
fresh tortillas, and the stores have bilingual staffs.
Meal AssemblyMeal Assembly
Who's Doing It: Super Suppers, Dream Dinners
What's New: Somewhere between takeout and a grocery store,
meal assemblers sell entire dinners that have yet to be cooked.
The meals follow restaurant-style recipes and come with fresh
ingredients that are pre-cut or proportioned. The customer takes
the food home, puts it together, and cooks for an immediate meal
or to freeze for later. Dinners that serve six people are popular for
entertaining.
Smart Packaging
Who's Doing It: Sira Technologies, University of Rhode Island, Who's Doing It: Sira Technologies, University of Rhode Island,
Manchester University
What's New: Researchers are developing packaging that senses
when food spoils. Working with the University of Rhode Island, Sira
Technologies created bar codes that turn red, and therefore cannot
be scanned, when a special ink detects temperature increases,
which can breed contaminates like E coli or salmonella. Scientists at
Manchester University are working on refrigerators that will text or
e-mail an alert when packaging senses fresh meats have gone bad.
Shopping Cart Wash
Who's Doing It: PureCart SystemsWho's Doing It: PureCart Systems
What's New: Anything that people put their hands on becomes a
surface that can spread germs. To keep that from happening,
PureCart is selling a car wash for carts. Employees run shopping
baskets through a machine that looks like a metal detector and
sprays them with a mixture of water, peroxide, and vinegar to kill
bacteria. Though the device costs $10,000, each wash takes only a
few seconds and is cheaper over time than sanitizing carts with
disinfectant wipes
GrocerantsGrocerants
Who's Doing It: Whole Foods, Wegman's, Roche Bros.
What's New: What started as a deli counter or hot food section
has become an entire restaurant. To keep up with competition
from local eateries and ramp up store traffic, grocerants—a play
on grocer and restaurant—are doing the cooking. Whole Foods
(WFMI) and Wegman's are among chains adding sit-down areas
with tables and chairs.
Niche Labels
Who's Doing It: Safeway, Trader Joe's, Target, SuperValuWho's Doing It: Safeway, Trader Joe's, Target, SuperValu
What's New: Private labels are finding their own niches. Safeway
now has Bright Green natural cleaning and laundry products
made from biodegradable ingredients and Organics foods, like
cereals, sauces, and cookies. These products successfully
compete with name brands and typically bring bigger returns to
grocers. Other examples include Wild Harvest at SuperValu's
Jewel, Archer Farms at Target (TGT), and Trader Joe's eponymous
products.
Smart Shopping CartsSmart Shopping Carts
Who's Doing It: Stop & Shop, IBM, Springboard Networks
What's New: Wireless-enabled shopping carts with mini-
computers on board—like IBM's Shopping Buddy (IBM) and
Springboard Network's Concierge—allow customers to keep a
running tab by scanning products as they shop, see what's on
sale in the aisle they're in, search for products, pay, and leave
without waiting in line. Grocers can save on labor costs and
advertisers can connect with highly specific target audiences.
Mobile CouponsMobile Coupons
Who's Doing It: Kroger, Cellfire, Zavers
What's New: Companies are offering coupons on cell phones and
online. Customers can save the coupons to their store's "loyalty
cards" or simply show their phones to the cashier. For customers,
the service makes saving money easier. It cuts costs for grocers,
too, since they don't have to hassle with paper coupons. In
addition, e-coupons provide real-time market data and boost
customer use of loyalty cards.
Mobile Scanners
Who's Doing It: Metro Group, Big in Japan, OccipitalWho's Doing It: Metro Group, Big in Japan, Occipital
What's New: Customers can now use cell phones to scan product
bar codes to comparison shop or read reviews about a particular
item. Big in Japan's ShopSavvy and Occipital's RedLaser relay
product info to consumers after they scan items via the built-in
cameras on their phones. Metro Group's Real hypermarkets in
Germany are testing a system in which customers would register
their cell phones to use as a payment/checkout device.
Advanced In-Store TV NetworksAdvanced In-Store TV Networks
Who's Doing It: Wal-Mart, Premier Retail Networks, Studio 2, DS-
IQ, Kroger, In-Store Broadcasting Network
What's New: Individually programmable video monitors display
advertising and product information. The in-store networks let
advertisers target ads by day, time, and aisle, and provide them
with proof of performance and sales reports. Two years and $10
million in the making, Wal-Mart's Smart Network is powered by
internet protocol television.
Marinade on Demand
Who's Doing It: Sealed Air
What's New: Eliminating the mess, excess packaging, and hassle What's New: Eliminating the mess, excess packaging, and hassle
of marinating raw meat, Sealed Air's (SEE) Marinade on Demand
system puts meat and marinade in separate compartments in the
same package. When consumers get home, they squeeze the
marinade pocket to break the seal between the two and leave the
meat to marinate as long as they like.
Whole Canned Chicken
Who's Doing It: Sweet SueWho's Doing It: Sweet Sue
What's New: Sales of canned meats such as Hormel's Spam have
increased in the recession. Now Sweet Sue, a unit of San Diego-
based Castleberry's offers a precooked, whole chicken that can
be eaten right out of the can. The listed ingredients on the 50-oz.
tin are only chicken, water, and salt.
Instant Coffee WarsInstant Coffee Wars
Who's Doing It: Starbucks, Nestlé
What's New: It was only a few years back that Nestlé (NESN)
introduced "stick packs," one-serving instant coffee packages of its
Taster's Choice brand. Starbucks (SBUX) jumped in this year its own
version, Via, which garnered a lot of attention due to the
company's barista roots. Nestlé has since fired back with a lower
price per stick and an array of flavors.
Social Grocery Shopping
Who's Doing It: Zeer.com, Most Grocery StoresWho's Doing It: Zeer.com, Most Grocery Stores
What's New: Grocery stores are building networks of followers
on Twitter, Facebook, blogs, and other social media sites.
Shoppers can join Zeer.com, an online social shopping site that
lets users scan reviews on more than 110,000 products, join
communities of customers with similar tastes, and create
shopping lists with favorite items automatically added. Zeer has
an application for iPhones, too.
Natural Pet Products
Who's Doing It: Purina, Rachael Ray, Eukanuba, Nature's RecipeWho's Doing It: Purina, Rachael Ray, Eukanuba, Nature's Recipe
What's New: For years, pets munched on indistinguishable
processed food, with only a few brands offering high-quality
products for dogs and cats. Today, natural and organic pet food is
all the rage, with lines from Nature's Recipe (DLM), Procter &
Gamble's Eukanuba, and Nestlé's Purina. Rachael Ray has a
signature line of natural dog food. Canada's Medi-cal sells a vegan
version, and for dessert, TBD Brand of Exeter, N.H., offers Yöghund
organic frozen yogurt.
New Recyclables
Who's Doing It: Frito-Lay, Primo Water, Biota BrandsWho's Doing It: Frito-Lay, Primo Water, Biota Brands
What's New: With the push for green products, companies are
upgrading packaging. Frito-Lay's (PEP) Sun Chips soon will come
in compostable bags made from a plant-based plastic called PLA.
Similar eco-plastics made from corn or sugar cane are being used
for beverages, such as Primo and Biota bottled waters. Another
company, Boxed Water is Better, sells water in cartons made from
85% recycled waste that are re-recyclable.
Conveyor Belt Ads
Who's Doing It: Kroger, EnVision MarketingWho's Doing It: Kroger, EnVision Marketing
What's New: Those revolving black belts that groceries ride to the
cashier's waiting hands are now valuable marketing space. Little
Rock (Ark.)-based EnVision Marketing patented a process to print
ads directly onto the belts, which are nearly impossible for
customers to miss. Kroger (KR) is trying out the system in some of
its stores.
Home Delivery 2.0
Who's Doing It: AmazonWho's Doing It: Amazon
What's New: The world's biggest online retailer is testing the
viability of grocery delivery to homes in parts of Seattle. The
concept isn't brand new—PeaPod and Webvan arose almost a
decade ago—but Amazon's (AMZN) shipping operations are
second-to-none. If Amazon finds big profits where others couldn't,
it probably won't be long before the service expands to other
markets.
Made in Transit Produce
Who's Doing It: Wageningen University, Agata Jaworska
What's New: Instead of growing produce in a field or hothouse
and then shipping it, scientists from Wageningen University are
experimenting with mushrooms that grow as they're shipped. The
school is working with Agata Jaworska, who invented the method
as a graduate student at the Design Academy Eindhoven in the
Netherlands. They think the process could be adapted for micro-
vegetables or baked goods, too.
Three-Tiered Private LabelsThree-Tiered Private Labels
Who's Doing It: Kroger, Food Lion, Winn Dixie
What's New: Introducing a "good," "better," and "best" approach
to food sales, grocers are using tiered labels to reach different
strata of consumers. At Kroger, Kroger Value products are the
cheapest; Kroger is the mid-level, and Private Selection is the most
expensive. Similar approaches have boosted sales at Food Lion and
Winn Dixie (WINN), while providing the chance for higher markups.
Green Grocers
Who's Doing It: Price Chopper, SuperValu, Kroger, PCC Natural Who's Doing It: Price Chopper, SuperValu, Kroger, PCC Natural
Markets, Giant Eagle, Target
What's New: Grocery stores used to burn electricity like Hummers
burned gasoline, but times have changed. Call it green-washing or
a way to cut costs, grocery stores have begun racking up eco-
certifications from the U.S. Green Building Council. From efficient
lighting to bamboo flooring, grocers are becoming lean, green,
energy-saving machines.
Super Discount Shops
Who's Doing It: Aldi, Local Surplus StoresWho's Doing It: Aldi, Local Surplus Stores
What's New: With a sinking economy, shoppers are straying from
expensive name brands and seeking the best deals available.
Though super-discounters like Aldi don't carry wide selections or
brand names, the prices are dirt cheap. Surplus stores are also
springing up that sell slightly older products at lower costs.
Types of Buying Pattern Strategy
• Macro •Strategic
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• Micro •Tactical
Dangers of Best Practice, Benchmarking & Market Research
“Abraham Wald’s Work on Aircraft Survivability”, M. Mangel and F.J. Samaniego
Where would you focus reinforcement?
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Dangers of Best Practice, Benchmarking & Market Research
Company Performance
high
zero Performance
Trend
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Performance
low
‘Best Practice’ theories
low high
Trend
line
“Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005
Dangers of Best Practice, Benchmarking & Market Research
Company Performance
high
zero Performance
Trend
line
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Performance
low
‘Best Practice’ theories
low high
“Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005
Dangers of Best Practice, Benchmarking & Market Research
Selection Bias:
1. Success Traits = Failure Traits
2. Successful Cases + Failure Cases
3. Worst effects in ‘Old’ industries
4. Overvalue ‘best practice’ theories
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4. Overvalue ‘best practice’ theories
5. Current accomplishments unfairly magnified by past achievements
6. Reverse Causal
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Dangers of Best Practice, Benchmarking & Market Research
Also known as ‘Beware of Consultants’:
1. Selection Bias (availability, brand, recency)
2. Big vs. Small company
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2. Big vs. Small company
3. Selective success stories
4. Correlation vs. Causal
5. Survey problems
6. Practical vs. Glamour-to-have
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Correlation vs. Causal
1. 8 out of 10 rich people drive Mercedes in Malaysia
2. 4 out of the top 5 supermarket chains have a loyalty program
3. 4 out of the top 5 supermarket chains increased
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3. 4 out of the top 5 supermarket chains increased sales after having a loyalty program
4. 4 out of the top 5 supermarket chains increased sales after having a loyalty program and adapting promotions
Geo-Marketing: Where?
1. Where do my customers live, and where do they buy?
2. Where are my competitors?
3. Where are my marketing efforts invested?
4. Where are my opportunities? i.e. Where should I put my next Point of Sale?
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5. Where are my sales representatives?
6. To what advertising medium do my customers respond? Billboards? Mobile coupons? Where were they when exposed to my campaign?
7. Are products sold better in particular zones? Where and why?
Geo-Marketing & Consumer Behavior
Some characteristics of consumer behavior are closely related to the:
• place where they live,
• climate,
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• climate,
• location and culture
The New World Order
•history •race •ethnicity
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Newsweek, September 26, 2010
•ethnicity •religion •culture
The New World Order
• Generous Welfare systems
• 6 of the top 8 on Legatum Prosperity Index
• some of the world’s
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• some of the world’s highest savings rates (25 % or more),
• impressive levels of employment, education, and technological innovation.
The New HansaDenmark, Finland, Germany, Netherlands, Norway, Sweden
Newsweek, September 26, 2010
The New World Order
• Poverty rates are almost twice as high, labor participation is 10 to 20 percent lower (vs. Hansa)
• Huge government debt
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• Huge government debt
• Lowest birthrates
• Some of the world’s oldest population
The Olive RepublicsBulgaria, Croatia, Greece, Italy, Kosovo, Macedonia, Montenegro, Portugal, Slovenia, Spain
Newsweek, September 26, 2010
The New World Order
• Rich in minerals, fresh water, rubber, and a variety of foodstuffs
• Suffer varying degrees of political instability.
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political instability.
• Trying to industrialize and diversify economies.
• Household incomes remain relatively low,
• Potential high-growth region.
The Rubber BeltCambodia, Indonesia, Laos, Malaysia, Philippines, Thailand, Vietnam
Newsweek, September 26, 2010
The New World Order
Newsweek, September 26, 2010• The Border Areas
• City-States:
– London, Paris,
Singapore, Tel Aviv
• North American
Alliance
• Stand-Alones:
• Brazil, France,
Greater India, Japan,
South Korea,
Switzerland
• Russian Empire
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Alliance
• Liberalistas
• Bolivarian Republics
• Iranistan
• The New Ottomans
• Maghrebian Belt
• Middle Kingdom
• Russian Empire
• The Wild East
• Greater Arabia
• South African Empire
• Sub-Saharan Africa
• Lucky Countries
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Recession Generation
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Men vs. Women: Getting Dressed
Men vs. Women
Basket Analysis
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Basket Analysis
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None of these 1,800 SKUs are top sellers!
Basket Analysis
• Low-frequency/high-correlation SKUs
• These items – sell rarely,
– sit on the shelf for along time,
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– sit on the shelf for along time,
– will only sell if the paired item is available
• Problem SKUs
• Capital hogs and always show up in inventory issues.
Concrete vs Abstract Mindset
AbstractBroad and
general
Kelly Goldsmith, Jing Xu, Ravi Dhar,
MIT Sloan Review, Fall 2010
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Concrete
general
Over-arching Purpose
Shared Product
Attributes
Concrete vs Abstract Mindset
AbstractShared Product
AttributesExecution or Usage
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Concrete
or Usage purpose
Lower level
details
Kelly Goldsmith, Jing Xu, Ravi Dhar,
MIT Sloan Review, Fall 2010
Color Psychology
remind us of something familiare.g. blue = calm
Children = Bright Primary Colors e.g. toys, clothes and
Cultural Variations; white = marriage (western) = death (China). Purple = death (Brazil) Yellow = sacred (Chinese) = sadness (Greece) =
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toys, clothes and children's books
sadness (Greece) = jealousy (France)
Young = bold colors; older = subtle palettes.
Red , Orange = to eat quickly and leave
Carpeting to influence patterns of travel
Target: Decision Chain
Influencer Again: different type, different strategy
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Buyer
User
Target: Customer Types
1. Don’t know you
2. Know you, Buy from you
3. Know you, don’t buy from you
4. Know you, Hate you
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Target: Customer Types
Buy From you
Value Swing Former
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Value Swing Former
Opposition
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
Ess
entia
ls
Pos
tpon
able
s
Exp
anda
bles
Your Products/Services
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Surviving
Well Off
Don’t Care
Ess
entia
ls
Tre
ats
Pos
tpon
able
s
Exp
anda
bles
Downturn: Customer Types vs. Branding
Your Products/Services
Essentials Treats Post-
ponables
Expan-
dables
•Necessary •Indulgences •Needed or •Unnecessary
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•Necessary•Survival
•Well-being
•Indulgences•Justifiable
•Needed or desired
•Can be put off
•Unnecessary•Unjustifiable
How should I Service Them?
Self Reliant Need Help
Seek Change
Searchers Collaborators
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Change
Seek Stability
Streamliners Delegators
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Types of Buying Pattern Strategy
• Macro •Strategic
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• Micro •Tactical
The real goal of Marketing and Branding
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Branding
Understanding our role in the whole scheme of things
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What is the purpose of Marketing & Branding?
Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”
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prices.”
Sergio Zyman
“Retention and Loyalty are useless if No Conversion is happening.”
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What is the purpose of Marketing & Branding?
“Retention and Loyalty are useless if No Conversion is happening.”
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“Communication is useless if No Conversion is happening.”
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Which Company?
American Customer Satisfaction Index (ACSI)
• 64 out of100-point scale: lower than IRS (Tax)
• 2nd last among 30 companies surveyed
• Lowest 5% among 223 companies surveyed
• Bottom 5% of all measured private sector
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• Bottom 5% of all measured private sector companies
• 500 million customers
2010 American Customer Satisfaction Index (ACSI) E-Business Report
Which Company?
American Customer Satisfaction Index (ACSI)
• 64 out of100-point scale: lower than IRS (Tax)
• 2nd last among 30 companies surveyed
• Lowest 5% among 223 companies surveyed
• Bottom 5% of all measured private sector
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• Bottom 5% of all measured private sector companies
• 500 million customers
2010 American Customer Satisfaction Index (ACSI) E-Business Report
Popularly Unpopular
Popularity
≠
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≠
Affection
Philosophy
Loyalty is Useless;
• Virtual Consumption vs.
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Real Consumption
Philosophy
Loyalty is misleading;
• Heavy Consumption ≠ Loyalty
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• Loyalty ≠ Heavy Consumption
What is the Objective?
1.Marketing = Relationship (something like Dating)
2.Marketing ≠ Media glitz 3.Marketing ≠ ATL/BTL/BwTL/ArTL/FTL
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3.Marketing ≠ ATL/BTL/BwTL/ArTL/FTL4.Marketing ≠ CSR5.Marketing = Get more people, to buy
more, more frequently, at higher prices
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Loyalty 1: Experience
Operational Excellence: Quality and selection in key categories with unbeatable prices
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* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
Price
Quality
Time
Selection
√
√
Smart Shopper
Relationship Image
Loyalty 1: Experience
Product Leadership: Unique products and services that push the standards
www.myCNI.com.my www.OOBEY.com* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
√
Brand
Time
Function
√
√
Best Product
Relationship Image
Loyalty 1: Experience
Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships
www.myCNI.com.my www.OOBEY.com* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
√
√
√
√
Service Trusted Brand
Relationship Image
Relations
Operational Excellence
• Competitive price• Error free, reliable• Fast (on demand)• Simple• Responsive
Customer Intimacy• Management by
Fact• Easy to do
business with• Have it your way
(customization)
Product Leadership
• New, state of the art products or services
• Risk takers
• Meet volatile customer needs
Strategy: Disciplines, Priorities, and KPIs
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• Responsive• Consistent
information for all• Transactional• 'Once and Done'
(customization)• Market segments
of one• Proactive, flexible• Relationship and
consultative selling
• Cross selling
customer needs
• Fast concept-to-counter
• Never satisfied -obsolete own and competitors' products
• Learning organization
Each Value Discipline Requires A Different Emphasis
Operational
Excellence
• Production,
Logistics,
Finance
• Order fulfillment,
Resource
stewardship
Customer
Intimacy
• Marketing Sales,
Service
• Market
mgmt, Customer
satisfaction
Product Leadership
• R&D, Legal
(Licenses),
Engineering
• Product
development,
Concept-to-
Customer
Functional emphasis
Process Emphasis
Information
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stewardship
• Transactions,
costs, time
• Costs, quality,
speed
• Trends (past),
Transactions
Employee
tools/tasks
• Customers,
analysis, linkages
• Satisfaction,
cust. success,
share, anecdotes
• Today, Relation-
ships, Employee
empowerment
• Linkages, insight,
comm, groupware
• Ideas-thru- funnel,
patents, etc.
• Tomorrow, Product
Portfolio, Ideas and
Risks
Information emphasis
Key metrics
Key concerns
Target: Customer Types
Buy From you
Value Swing Former
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Value Swing Former
Opposition
Loyalty 2: Swing
Loyalty = Best alternative at the current moment until I find another alternative
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Solution Strategy: Base Retention
Loyalty 2: Swing
Swing Customers are “loyal” because:
• Individual Relationships
• Convenience (at that point in time)
• Tied-up
• Product Uniqueness
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• Product Uniqueness
• Promotions
• No better alternative
• Downlines
• No known alternative
• Psychologically lazy
Sample Strategies for ‘Swing’
• Increase switching costs
• Mega packages
• Community
• Reward programs
• Newsletters
• Personalized alerts
• Survey
• Suggestion Box
• Switching Techniques
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• Reward programs (Points)
• Membership Subscription
• Email communication
• Switching Techniques (e.g. Balance Transfer of credit cards)
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
Ess
entia
ls
Pos
tpon
able
s
Exp
anda
bles
Your Products/Services
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Surviving
Well Off
Don’t Care
Ess
entia
ls
Tre
ats
Pos
tpon
able
s
Exp
anda
bles
Downturn: Customer Types vs. Branding
Your Products/Services
Essentials Treats Post-
ponables
Expan-
dables
•Necessary •Indulgences •Needed or •Unnecessary
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•Necessary•Survival
•Well-being
•Indulgences•Justifiable
•Needed or desired
•Can be put off
•Unnecessary•Unjustifiable
Downturn: Customer Types vs. Branding
Hand brake
Customer Types •Price
•Smaller Pack•Private Labels
•Low-cost ‘Value’ products
Essentials
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Surviving
Well Off
Don’t Care
•Low-cost ‘Value’ products•Fighter Brands
•Less Variety/Customization•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Shrink sizes•Hold down prices
Treats
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Surviving
Well Off
Don’t Care
•Hold down prices•“You Deserve It”
•Less Variety/Customization•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Low-cost Financing•Exceptional Deals
Postponables
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Surviving
Well Off
Don’t Care
•Exceptional Deals•“Danger of Postponing”•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Offer D.I.Y. versions
Expandables
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Surviving
Well Off
Don’t Care
•Offer D.I.Y. versions•Awareness
•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Lower Price options•Bonus Packs (Stockpile)
Essentials
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Surviving
Well Off
Don’t Care
•Bonus Packs (Stockpile)•“Dependability”•“Good enough”
•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Reward Loyalty
Treats
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Surviving
Well Off
Don’t Care
•Reward Loyalty•“Improve Morale”
•Affordable vs. Luxury•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Simpler Models, Lower Prices
Postponables
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Surviving
Well Off
Don’t Care
Prices•Lower TCO models
•Repair services•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Awareness
Expandables
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Surviving
Well Off
Don’t Care
•Awareness•R&D of Core Products•Immediate cash back
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
Essentials
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Surviving
Well Off
Don’t Care
•Awareness
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
Treats
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Surviving
Well Off
Don’t Care
•“Outstanding Quality”•“You deserve it”
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
Postponables
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Surviving
Well Off
Don’t Care
•“Save from Buying Now”•“You are missing out”
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•Discreet purchase (avoid
Expandables
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Surviving
Well Off
Don’t Care
•Discreet purchase (avoid flaunting)
•“Impress Your friends”
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
Essentials
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Surviving
Well Off
Don’t Care
•Awareness•“You can’t live without it”
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•A.R.O.
Treats
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Surviving
Well Off
Don’t Care
•A.R.O.•“Seize the moment”
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
Postponables
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Surviving
Well Off
Don’t Care
•Monthly Payment Plans•“Quality of Life”
Downturn: Customer Types vs. Branding
Hand brake
Customer Types
•New products
Expandables
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Surviving
Well Off
Don’t Care
•New products•“Must Have”
•“For exclusive people;”
How should I Service Them?
Self Reliant Need Help
Seek Change
Searchers Collaborators•touch and feel
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Change
Seek Stability
Streamliners Delegators
•touch and feel•‘first’ to know
•Talk to technicians/experts•pros and cons, trends, lots
of info
•Offer choices•Online resource
•innovations, new stuff
How should I Service Them?
Self Reliant Need Help
Seek Change
Searchers Collaborators
•Minimize risk•Standardization and consistency (routines)
•Wants systems to follow their habit
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Change
Seek Stability
Streamliners Delegators
their habit
How should I Service Them?
Self Reliant Need Help
Seek Change
Searchers Collaborators•Treats Store Personnel as
consultants
•Pilot projects, process improvements
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Change
Seek Stability
Streamliners Delegators
improvements
•Co-discover new applications for existing
business/products
•Ongoing coaching and value-added services
How should I Service Them?
Self Reliant Need Help
Seek Change
Searchers Collaborators•narrow choices
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Change
Seek Stability
Streamliners Delegators
•narrow choices•Pre-package, pre-select
(default)
•Make it easier to renew than to cancel
•Focus on a specialty (niche)
•Honesty, reliability, Trust
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STORE DESIGN & LAYOUT
Tactical
Apple Store
• Apple tracks retail store revenues at four-minute intervals, and Visitor traffic is tracked at 15-minute intervals
• 5,800 visitors a week per store
• 100,000 persons come to Genius Bars per week
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• 100,000 persons come to Genius Bars per week
• each Apple retail stores averages $3,000 in annual sales per square foot. (national average for malls was $341)
Apple Store
• 5,800 visitors a week per store
• customer experience = design around the customer's life + ownership experience
• Most expensive, highest-traffic locations: high-end malls, hip streets and "lifestyle" and
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end malls, hip streets and "lifestyle" and "destination" centers.
• Store layout: simple, intuitive and logical; for new and established customers
• Perceived as a public place: like a great library
Apple Store
• product zones, vs. solution zones: products are paired with software and peripherals for specific purposes.
• Genius Bar: face-to-face support in neighborhood for high-technology for Free
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neighborhood for high-technology for Free
• interactive front display windows
• Glass Staircase: designed to encourage people to climb the stairs
• store employees not work on commission,
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PROMOTIONS & INCENTIVES
Tactical
Concrete vs Abstract Mindset
AbstractBroad and
general
Kelly Goldsmith, Jing Xu, Ravi Dhar,
MIT Sloan Review, Fall 2010
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Concrete
general
Over-arching Purpose
Shared Product
Attributes
Concrete vs Abstract Mindset
AbstractShared Product
AttributesExecution or Usage
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Concrete
or Usage purpose
Lower level
details
Kelly Goldsmith, Jing Xu, Ravi Dhar,
MIT Sloan Review, Fall 2010
Mindset vs Basket Size
• � Variety of Related but Different Product Categories, Distant Future
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Abstract
Mindset vs Basket Size
• � Products Similar enough to Substitute one another, Immediate Use
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Concrete
Manipulating Mindset to �Basket Size
• Promotions “Overarching Purpose” : Oral Care
����
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Abstract
• “Simple Purpose”: Clean Teeth ����
Manipulating Mindset to �Basket Size
• Promotions: Individual and Unique benefits ����
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• “Overall Purpose”: Quench Thirst ����
Concrete
Promotional Strategy Trends
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What do Shoppers LIKE about Promotions?
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What do Shoppers DISLIKE about Promotions?
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Changing Promotional
Strategies (2007 vs 2009)
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In the eyes of the shopper
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Dangers of Direct Incentives
1. lessen internal motivation, 2. switch to mercenary mode, 3. do something and do not do something else, 4. easier for competitors to poach, 5. less and less impact for same value,
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5. less and less impact for same value, 6. mockery of base pricing7. rebellion from non-incentivised
products/groups, 8. end up incentivizing everyone for everything?,
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CNI Traditional Retail
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CNI Traditional Retail
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CNI Traditional Retail
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CNI – changes in Retail
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CNI – changes in Retail
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CNI – changes in Retail
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CNI – changes in Retail
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CNI – changes in Retail
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CNI – “Retail Experience Marketing”
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CNI – “Retail Experience Marketing”
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CNI – “Retail Experience Marketing”
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CNI – “Retail Experience Marketing”
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CNI – “Retail Experience Marketing”
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CNI – “Retail Experience Marketing”
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CNI Retail: Products
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CNI Retail: Products
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End Notes
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Asian Retail Trends
1. 100 Yen Stores (Dollar Stores)
2. 24-hour Retail1. Tourists/Business Travellers
2. Shift Workers
3. Sleepless
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3. Sleepless
4. Last minute shoppers
3. Retailer � Banker
Alignment & Consistency: Business Model
USP
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Market Discipline
Profit Model
“;in the past 18 months, we have heard that profit is more important than revenue,
quality is more important that profit, people are more important than profit, customers are more important than our
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customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our
performance is inconsistent"CEO, Anonymous
What is the purpose of Sales & Marketing?
Ultimate Objective of Marketing: “Get more people, to buy more
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things, more frequently, at higher prices.”
Sergio Zyman
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Thank You.
soft copy of slides:
http://totallyunrelatedrandomanddebatable.
blogspot.com/