Page 123 - MYM 2016

fig. 2: enterprise value and pro table growth: the 4 core ways enterprise value is created
selection is key to the whole process. e only way that SVA can be achieved is by making o ers to market segments that utilize the entire organiza- tional asset base e ectively and which take account of the needs of all stakeholder groups.
Over 40 years of research into the link between long-run nancial success and marketing strategies reveal the strategies in the table below.
e rst point in the table is key to understand- ing the crucial role of segmentation, because today all products are excellent, so pro table di erentiation is unlikely to come from an organization’s products. It is much more likely to come from the way it relates to its markets and customers through the process of segmentation
Indeed, a Harvard Business Review article claimed that 90% of 30,000 new product launches in America failed because of inadequate market seg- mentation (Christensen et al., 2005).
fig. 3: enterprise value and pro table growth:
• CFOs rightly demand value-creating plans, but are o en unclear about how the plans submit- ted do this
• e goal is to maximize the nancial value of market/customer relationships - the sum total of revenues minus the directly attributable costs now and in the future.
Market segmentation is one of the most fun- damental concepts of marketing and is the key to successful business performance. It’s fairly obviously that there is no such thing as an average customer or consumer – it’s a bit like saying my head is in the oven and my feet are in the fridge, so on average I am quite comfortable.
Let’s also get rid of the myths about market segmentation, such as the a priori nonsense about socioeconomics, demographics, geodemographics and the like. Socioeconomic classi cations such as A, B, C1, C2, D and E are useful generic descrip- tions, but in themselves they can only be useful at a
MarketiNg strategY
fig. 4: Proven strategies for successful market segmentation
excellent strategies
Weak strategies
• Understand markets in depth
• Target needs-based segments
• Make a speci c o er to each segment
• Have clear di erentiation, positioning and branding
• Leverage strengths and minimize weaknesses
• Anticipate the future
• Always talk about products
• Target product categories
• Make similar o ers to all segments
• Have no di erentiation, poor positioning and branding
• Do not understand their strengths and wea- knesses
• Plan using historical data
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