Marketing management assignment, the Question is attached in a word file, and two articles for answer questions 2 and 3.
Student Name:Jairo Benitez Assignment Title: Weekly Case Assignment 04 Date: 10 April 2021 1. After reviewing chapters 6, 7, and 8 of the Kotler and Keller text, and using specific information derived from the text, provide a brief comment about each of the following: a. An explanation how an organization identifies and selects the primary target market for its products or services. Be particularly mindful of the criteria used for segmentation and the criteria used for selecting a target market (consider information from pages 92 – 102 of the text). Please use appropriate APA citation and attribution rules for all information sources. [insert the body of the response here] b. How an organization can develop a positioning statement that aligns its products or services to the customers and consumers (consider information from pages 107 – 112 of the text). Please use appropriate APA citation and attribution rules for all information sources. [insert the body of the response here] c. Describe how brand equity can be enhanced and describe the risks to the financial success of the organization of not building and protecting the brand equity of the organization’s products and services (consider issues covered in pages 122 - 133 of the text). Please use appropriate APA citation and attribution rules for all information sources. [insert the body of the response here] 2. After reading the companion article (How to Identify the Best Customers for Your Business); provide a recommendation to a group of executives regarding the importance of considering this information (perhaps review the significance of the step-by-step process).Please use appropriate APA citation and attribution rules for all information sources. [body of response] 3. After reading the companion article (Three Questions You Need to Ask About Your Brand); provide an executive summary for executives regarding the significance to the firm of this information; especially the information contained on page 86 of the article. Please use appropriate APA citation and attribution rules for all information sources. [body of response] The term briefly (or brief) suggests a limit of no more than 500 words per response. References Cited: [use APA style and cite/reference all material used in support of responses provided] untitled How to Identify the Best Customers for Your Business W I N T E R 2 0 1 3 V O L . 5 4 N O. 2 R E P R I N T N U M B E R 5 4 2 1 5 Frank V. Cespedes, James P. Dougherty and Ben S. Skinner III SLOANREVIEW.MIT.EDU WINTER 2013 MIT SLOAN MANAGEMENT REVIEW 53 IT’S DIFFICULT TO start a venture that gains traction with paying customers. In the first decade of the 21st century, fewer than half of all U.S. startups were able to survive beyond three years.1 But it’s even harder to grow a company beyond certain levels of sales. Of the nearly 44,000 companies founded in 2000 and listed in the Capital IQ database — which includes public and privately held companies — fewer than 6% achieved more than $10 million in revenues by 2010, and fewer than 2% grew to more than $50 million.2 Why? Once a venture reaches a critical size, its complexity greatly increases. Not only are there more “mov- ing parts,” but interdependencies are more difficult to manage. The original business model must deal How to Identify the Best Customers for Your Business THE LEADING QUESTION How can businesses achieve profit- able growth so that their costs don’t grow faster than sales? FINDINGS Clarify who the ideal customer is; don’t rely on “heroic” sales efforts. Understand the differences between transaction buyers and relationship buyers and know the cost implica- tions. Be prepared to revisit and adjust the ideal customer profile on an ongo- ing basis. S A L E S M A N A G E M E N T Many companies pursue growth opportunities without adequately defining who their ideal customers are. That lack of clarity can hamper profitable growth. BY FRANK V. CESPEDES, JAMES P. DOUGHERTY AND BEN S. SKINNER III www.sloanreview.mit.edu 54 MIT SLOAN MANAGEMENT REVIEW WINTER 2013 SLOANREVIEW.MIT.EDU S A L E S M A N A G E M E N T with new products or markets, and the early leader- ship behaviors that worked in establishing the business are often inadequate to manage and grow it. Most visibly, SG&A (selling, general and administra- tive) costs often accelerate faster than revenues, and because resource-constrained ventures cannot afford to burn through working capital, promising ventures are forced either to go out of business or to operate in small niches because they are unable to scale their sales activities. Even large, established corporations can face a problem with SG&A expenses: Between 2000 and 2010, production efficiencies reduced the cost of goods sold at the average S&P 500 company by about 250 basis points, while SG&A as a percentage of revenue didn’t change.3 Consider the case of an entrepreneurial company we’ll call BusinessProcessingCo. BusinessProcess- ingCo. (a real company whose name we disguised for this article) was founded in 2000 to provide Web- based outsourced payroll services to small and medium-sized businesses. By 2004, it had about $40 million in sales and 75 sales representatives with annual quotas of $600,000 each and target compen- sation of about $60,000 per rep. In 2004, the founder raised nearly $30 million from investors to develop new products and expand the business. But two years later, even though product development plans were on schedule, BusinessProcessingCo.’s reve- nues were stagnant and investors were restless. Management tried a number of tactics, including offering bundled products at a steep discount, six months of “free” services if customers made annual commitments and other incentives to close deals. The result? Over the next two years, the compa- ny’s prices declined faster than revenues increased. By the time the recession hit in 2008, the company’s directors were asking fundamental questions about the venture and its business model. The experience of BusinessProcessingCo. is, unfor- tunately, all too common. Among other things, the company’s early growth led to a seductive but costly ad hoc process for evaluating opportunities, for forecast- ing and for business development initiatives. Probably the biggest problem over time was the leadership team’s inability to define its core customers. Without clarity around that, the sales process becomes a function of individual salespeople’s “heroic” efforts in the field, not a scalable platform for profitable growth. The Importance of Customer Selection In this article, we discuss the importance of cus- tomer selection and how intelligent opportunity management helps companies scale their selling initiatives. While the example used in this article is a young entrepreneurial company, many large, established companies can also benefit from taking a more systematic approach to opportunity man- agement. (See “About the Research.”) Every company, large or small, does things that make it easier for some customers to do business with it, and harder for others. Selecting the right customers is critical, especially if resources are con- strained and the brand is little known. A customer ultimately represents a stream of orders for the seller. That order stream, in turn, has a domino effect on the company’s business. Different customers come with different transaction costs for the seller — for example, in a manufacturing busi- ness, stock vs. custom items, or in a service business, customers that do or don’t require proposals. These customer requirements affect “upstream” capacity utilization at the selling company in two ways, influ- encing both the kind of capacity utilized (the product mix) and how capacity is utilized (for example, pro- duction lines needed in manufacturing or the types of people and skills needed in a service business). The orders also affect “downstream” after-sale economics and organizational requirements. Together, these fac- tors help to determine the cumulative net cash flow associated with the customer exchange, the price the seller needs to charge to earn a profit and the margins available for other business needs. Surprisingly few companies — especially entre- preneurial ones — clarify their core customer selection criteria. Many executives in entrepreneur- ial companies in effect tell their salespeople to “go forth and multiply!” By selling to anyone willing to pay a certain price, though, companies fragment their re- sources and make further growth difficult. As customers use the product, the company modifies the offering and processes associated with making and selling it, typically in contradictory directions uncov- ered by this selling activity. This haphazard process inhibits learning and can blind a company’s leadership team to what is actually going on in its business development efforts. Effective ABOUT THE RESEARCH We have been studying sales processes for years through a combination of consulting and board work with numerous entrepre- neurial ventures; case studies concerning sales practices in startups and established companies; managerial experience at companies; data from ven- ture capital and other databases; insights from workshops and executive- education programs at Harvard and MIT; and im- plementation of sales effectiveness processes at many businesses, includ- ing Allscripts Healthcare, Avaya, Boston Beer, Else- vier, Gartner Group, GE, Innosight, Lotus, Siebel and United Technologies. Individually, we began with the common observa- tion that most profitable sales are attributable to relatively few customers. In investigating why, we ex- amined the data concerning entrepreneurial ventures and the inability of many of them to grow beyond cer- tain levels of revenue. One of the authors had con- ducted interviews on this topic for case studies and previous publications con- cerning how businesses are using “big data” (large data sets and new analytical software) as a tool for un- derstanding and managing customer selection. This re- search was complemented by our own experiences in entrepreneurial ventures and as board members for portfolio companies of pri- vate equity and venture capital firms. The ideal customer process method- ology discussed in the article and illustrated with “BusinessProcessingCo.” (a real company whose name has been disguised) has been used at more than 30 businesses. www.sloanreview.mit.edu SLOANREVIEW.MIT.EDU WINTER 2013 MIT SLOAN MANAGEMENT REVIEW 55 customer selection