Formulate Strategy by

Identifying and Choosing

Value Delivery Options
Group 5
Contents
• Key Concepts
• Techniques
• Process
• Case application
Drawbacks of conventional segmentation
• There is no one right way to segment a market
• Any of the variables (demography, geography, buying practices etc) can be
used but the best variable depends on the specific situation
• Segmentation is complex in industrial, b2b markets etc
• Complex web of nested variables which are hard to assess

Product Centric: Create a product and then analyze ways to sell the product
Value Delivery Strategy (VDS)
A potential business = a potential primary VDS= a value delivery option within
a market-space
A market-space = a group of related value delivery options
Value Delivery Option: A potential VDS including primary entities and products
Convention Segmentation Value Delivery Option
Purpose Find possible sales targets Formulate strategy, identify
and choose VDSs in a market-
space
Basis for Part of identifiable group, Same resulting experiences
segmenting demographic/product usage variables when value delivered in same
/VDO way
Value After defining a segment figure out a The right proposition, and how
proposition VP best to deliver it, define the
option
Getting into Customers in segments can be Each option is a distinct
action reached easily and efficiently potential primary VDS that
the organization can decide to
pursue
Examples
• Used DPV methodology and analyzed 56 industrial companies
• Formulated four distinct primary VDSs
 Self sufficient
 Help them buy smarter
 Help them convert gas smarter
 Help them use the smartest energy
• Value delivery options range: Easy to implement and long term
profitable , difficult to implement and high long term profitable
• Restructured NGBU Chevron into four businesses

• Identify core competitive strength – they are good in

producing more network data
• Divided customers into hundreds of segments
• Scanned for customers who want more data

Conventional segmentation is confused and wrongly focused on an array of

partly irrelevant variables
DPV methodology