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Introduction
Firms do not sell products and services Firms offer solutions to customers problems Customers always look for an alternative Customer needs change due to
Dissatisfaction Change
in needs
Causes of Dissatisfaction
Two Dimensions
in features and processes involved in its purchase and consumption Criticality of the features Level of dissatisfaction depends on the importance of the needs When needs are not met, entrepreneurial opportunity arises
Discontent
Quadrant 1 high dissatisfaction customer is discontented with a product considered critical. Requires minimal marketing efforts. Quadrant 3 no dissatisfaction with products they feel arent critical. Least attractive Possibility of moving customers to quadrant 1 through Discontent Criticality tunnel
Barbie
Increased Mattels toy sales from $9m to $96m in 5 years Ruth Handler observed her 9year old daughter play with paper dolls. Critical need dolls that enabled her to fantasize adult life Discontentment lack of necessary features in existing products.
Quadrant 2 High discontentment with products that arent critical to customers. Substantial marketing efforts required. Quadrant 4 Highly contented with critical products. Customers tolerate variations. Products with higher criticality have narrower tolerance zones.
Discontentment-Criticality Tunnel
Influence of external & internal factors High Criticality, High discontentment Require high investment. Eg. Kellogs Failures Iridium Project, Ford Edsel
Jakks Pacific
Forbes 200 Best Small Companies in US since 1999 Novelty in Toys Changes preferred by children Socio-cultural elements Pro-wrestling era, Harry potter series Medium criticality low discontentment to high criticality and high discontentment No brand loyalty but uncertainties satisficing & tolerance nature of customers Identify new needs and create needs by shortening life cycle. Eg. Colour Televisions
Where to enter?
Understanding the dynamism of criticality and discontentment. Maximum market attractiveness where both discontentment and criticality are high and currently existing. Promising but not immediate opportunity when both discontentment and criticality are emerging. Opportunity for Tomorrow When one of the dimension is existing now and other is only emerging. Challenges in innovation - Where there is low discontentment and high criticality.
Criticality and discontentment are not only related to products but also to value chain. Customer Dissatisfaction Elimination (CDE) Chain Role of this chain is to eliminate customer dissatisfaction with few or all of the value links. An entrepreneur must analyze this chain and find out where the link lies on the criticality-discontentment matrix. The entrepreneur should assess the attractiveness of the opportunity.
Value Chain : products and services required to consume products; Value chain provides satisfaction and eliminates dissatisfaction i.e. a Customer Dissatisfaction Elimination (CDE) Chain. Links of the CDE chain are also the source for dissatisfaction and opportunities for entrepreneurs.
CDE contd..
The processes and activities linking the firm and the customers often become sources of discontentment. Each one of these or their sub-activities is a possible new entrepreneurial opportunity:
Information Collection Process (Google, eBay) Buying Process (Amazon, Boo.com) Payment Process (Visa, MasterCard) Delivery Process (FedEx, DHL)
Conclusion
Customer dissatisfaction is a source of opportunity. Most human beings are basically selfish, lazy, prefer to avoid work, like to eat tasty things and have all possible comforts CDM & CDE is a tool to evaluate the appropriateness of their existing strategies