HOW THE MARKET IS SERVED
 

 

 

 

 

 

 

 

 

 

 

 

If properly analyzed, information concerning what markets a company has should provide insight into why customers buy the company’s products and how likely it is that they will do business with the company in the future. For example, a paper manufacturer discovered that most of his customers did business with him because, in their opinion, his delivery schedules were more flexible than those of other suppliers. The quality of his paper might have been superior, too, but this was not strategically important to his customers. How Is Each Market Served? The means the company employs to serve different customers may be studied by analyzing the information contained in A careful examination of this information will reveal the current strat- egy the company utilizes to serve its main markets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For example, analysis of the may reveal the following facts pertaining to a breakfast cereal: Of the seven different segments in the market, the product is extremely popular in two segments. Customers buy the product mainly for health reasons or because of a desire to consume “natural” foods. This desire is strong enough for customers to pay a premium price for the product. Further, customers are willing to make a trip to another store (other than their regular grocery store) to buy this product. Different promotional devices keep customers conscious of the “natural” ingredients in the product. This analysis may point toward the follow- ing strategy for the product: product performance profile is shown in . A product may contribute to company performance in six different ways: through profitability, image of prod- uct leadership, furnishing a base for further technological growth, support of total product line, utilization of company resources (e.g., utilization of excess plant capacity), and provision of customer benefits (vis-à-vis the price paid). An exam- ple of this last type of contribution is a product that is a small but indispensable part of another product or process with low cost relative to the value of the fin- ished product. Tektronics, a manufacturer of oscilloscopes, is an example. An oscilloscope is sold along with a computer. It is used to help install the computer, to test it, and to monitor its performance. The cost of the oscilloscope is small when one considers the essential role it plays in the use of the much more expen- sive computer.