~Situation Analysis~
Company Situation: Brand Mgt.: Assessing Your Marketing Mix
The Customer Satisfaction category examines your performance from the customer's perspective. Each of your products can earn points if it meets three criteria:
A product’s December Customer
Survey Score is developed using marketing’s "4 P’s" —
Product &
Price
The Survey evaluates the product against the buying
criteria. A perfect score of 100 results when the product:
Is priced at the bottom of the expected range.
Is positioned at the Ideal Spot. (Because the segment moves each month, this can occur only once each year.)
Has an MTBF specification at the top of the expected range.
Has the ideal age for that segment. (Because the product ages each month, it can only have the segment ideal once each year.)
Promotion
Promotion, driven by your promo budget, creates
product awareness before customers shop. If customers are not aware of the
product, they are less likely to buy, and that drags down the Survey score.
Think of it this way. Suppose you had a perfect
product – a perfect design at a rock bottom price. Further, customers have no
trouble finding your product when they shop, meaning that its accessibility is
100%. In this perfect world, you do no promotion at all. awareness is zero. What
would happen to demand? On the one hand, some customers will stumble across your
product when they shop, take the time to discover that it is perfect, and decide
to buy it. On the other hand, some customers will pass over your product on
their way to products they know about.
The simulation deals with the problem as follows. The
customers that know about your product always consider it. Of the customers that
are not aware of your product, half discover it, and half miss it.
Mathematically it looks like this. Your perfect product (with perfect awareness)
would start with a Survey score of 100. If its awareness were 60%, then 40% of
your customers would not know about it. Of these, half (20%) would stumble
across it. Instead of having the Survey score fall all the way to 60, it would
fall halfway between 100 and 60, ending at 80.
Once you see that the score falls "halfway", it is
relatively easy to estimate the result. For example:
|
I estimate my product's design and price are worth: |
Its awareness is: |
So it will fall halfway to its estimated score times its awareness, or halfway to: |
Ending up with a Survey score halfway in between, or about: |
|
100 |
0% |
0, because 100 * 0% = 0 |
50 |
|
60 |
70% |
42, because 60 * 70% = 42 |
51 |
|
20 |
40% |
8, because 20 * 40% = 8 |
14 |
To be precise, multiply the score you think your
product deserves based upon its mix of price and product design by (1-
(100%-awareness)/2). In the examples above:
100 * (1 – (100% – 0%)/2) = 100 * (1 – (50%)) = 100 *
50% = 50
60 * (1 – (100% – 70%)/2) = 60 * (1 – (15%)) = 60 *
85% = 51
20 * (1 – (100% – 40%)/2) = 20 * (1 – (30%)) = 20 *
70% = 14
Place
Place is driven by your Sales budget. It examines the question, "How easy is it
for customers to work with you during and after the sale?" We measure this with
the segment’s accessibility rating. An accessibility of 80% means that only 80%
of customers have an easy time finding a product, talking to a sales person,
taking delivery, etc. If the accessibility is below 100%, it drags down a
product’s Survey score.
The method is identical to awareness. After
considering Product, Price, and Promotion, we arrive at an estimated Survey
score. The Survey score falls halfway to the estimated score times its
accessibility.
Let’s continue the examples from above:
|
After considering my product's price, design, and awareness, I think my product would score about: |
Its accessibility is: |
So it will fall halfway to its estimated score times its accessibility, or halfway to: |
Ending up with a Survey score halfway in between, or about: |
|
50 |
0% |
0, because 50 * 0% = 0 |
25 |
|
51 |
60% |
31, because 51 * 60% = 31 |
41 |
|
14 |
30% |
4, because 14 * 30% = 4 |
9 |
To be precise, multiply the score you think your
product deserves based upon its mix of price, product design, and promotion by
(1- (100%-accessibility)/2). In the examples above:
50 * (1 – (100% – 0%)/2) = 50 * (1 – (50%)) = 50 *
50% = 25
51 * (1 – (100% – 60%)/2) = 51 * (1 – (20%)) = 51 *
80% = 41
14 * (1 – (100% – 30%)/2) = 14 * (1 – (35%)) = 14 *
65% = 9
The Survey Score
Together, Product, Price, Promotion and Place drive
most of the Survey score. For example, if the product had a great price and
design worth 80, but awareness of 60% and accessibility of 80%, customers might
say, "The design is great and we like the price, but only 60% of us ever heard
of it, and of those, only 80% could easily take delivery." The net score would
be:
80 * (1 – (100% - 60%)/2) * (1 – (100% - 80%)/2) = 80
* (1 – 20%) * (1 – 10%) = 80 * 80% * 90% = 58.
However, several remaining factors could cause the
score to fall further.
The Accounts Receivable Policy could cause the score to fall. At zero days (that is, you expect customers to pay cash on delivery) the score falls to 60% of its former value. At 30 days it falls to 95%. At 90 days it keeps 100%.
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