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The consumption chain
Finding opportunities for business growth

Yellowbird Marketing Solutions
Your Consumption Chain
Where on the consumption chain can you provide value to your customers?

Yellowbird Marketing Solutions
Awareness of need
How do customers become aware of their need for something you can provide
or a problem you can solve?




Copyright © 2011 Yellowbird Marketing Solutions
The Search
How do customers identify alternative solutions?

The key objective here is to increase product visibility.




Copyright © 2011 Yellowbird Marketing Solutions
Selection
Why does the customer pick one solution over another?




Copyright © 2011 Yellowbird Marketing Solutions
Order & Purchase
What must a customer do to buy from you?

Is there something you can do at the point of sale to differentiate yourself?




Copyright © 2011 Yellowbird Marketing Solutions
Delivery
How does your offering get from you to your customer?




Copyright © 2011 Yellowbird Marketing Solutions
Payment
How does a customer pay?

Optimizing the payment link can improve business in multiple ways.

If the payment is more convenient, that helps to differentiate you.



Copyright © 2011 Yellowbird Marketing Solutions
Receipt
Once the customer has the product, then what?




Copyright © 2011 Yellowbird Marketing Solutions
Installation and Assembly
How does the customer put the product to work?




Copyright © 2011 Yellowbird Marketing Solutions
Storage and Transport
What bothers or worries the customer about storing the product,
or having access to it or watching what is happening with it?




Copyright © 2011 Yellowbird Marketing Solutions
Service
What happens when the offering needs service?




Copyright © 2011 Yellowbird Marketing Solutions
Repairs and Maintenance
What happens when the offering needs to be repaired, or is returned or canceled?




Copyright © 2011 Yellowbird Marketing Solutions
Disposal
What happens when the product is no longer of any use and needs to be disposed of?




Copyright © 2011 Yellowbird Marketing Solutions
Sustainable Competitive Advantage
A competitive advantage exists when the firm is able to deliver the same benefits as
competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of
competing products (differentiation advantage). Thus, a competitive advantage enables
the firm to create superior value for its customers and superior profits for itself.




Copyright © 2011 Yellowbird Marketing Solutions
Advantage
                                  Target Scope
                                                      Low Cost                   Product Uniqueness


                                                   Cost Leadership                Differentiation
                                      Broad
                                 (Industry Wide)      Strategy                       Strategy

                                                        Focus                          Focus
                                     Narrow            Strategy                       Strategy
                                (Market Segment)      (low cost)                  (differentiation)




Cost Leadership Strategy
This generic strategy calls for being the low cost producer in an industry for a given level
of quality. The firm sells its products either at average industry prices to earn a profit
higher than that of rivals, or below the average industry prices to gain market share.




Copyright © 2011 Yellowbird Marketing Solutions
Advantage
                                  Target Scope
                                                      Low Cost                   Product Uniqueness


                                                   Cost Leadership                Differentiation
                                      Broad
                                 (Industry Wide)      Strategy                       Strategy

                                                        Focus                          Focus
                                     Narrow            Strategy                       Strategy
                                (Market Segment)      (low cost)                  (differentiation)




Differentiation Strategy
A differentiation strategy calls for the development of a product or service that offers
unique attributes that are valued by customers and that customers perceive to be better
than or different from the products of the competition.




Copyright © 2011 Yellowbird Marketing Solutions
Advantage
                                  Target Scope
                                                      Low Cost                   Product Uniqueness


                                                   Cost Leadership                Differentiation
                                      Broad
                                 (Industry Wide)      Strategy                       Strategy

                                                        Focus                          Focus
                                     Narrow            Strategy                       Strategy
                                (Market Segment)      (low cost)                  (differentiation)




Focus Strategy
The focus strategy concentrates on a narrow segment and within that segment attempts to
achieve either a cost advantage or differentiation. The premise is that the needs of the
group can be better serviced by focusing entirely on it. A firm using a focus strategy often
enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other
firms from competing directly.



Copyright © 2011 Yellowbird Marketing Solutions
Advantage
                                  Target Scope
                                                      Low Cost                   Product Uniqueness


                                                   Cost Leadership                Differentiation
                                      Broad
                                 (Industry Wide)      Strategy                       Strategy

                                                        Focus                          Focus
                                     Narrow            Strategy                       Strategy
                                (Market Segment)      (low cost)                  (differentiation)




Your choice
To be successful over the long-term, a firm must select only one of these three generic
strategies. Otherwise, with more than one single generic strategy the firm will be "stuck in
the middle" and will not achieve a competitive advantage.




Copyright © 2011 Yellowbird Marketing Solutions

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Consumption chain

  • 1. The consumption chain Finding opportunities for business growth Yellowbird Marketing Solutions
  • 2. Your Consumption Chain Where on the consumption chain can you provide value to your customers? Yellowbird Marketing Solutions
  • 3. Awareness of need How do customers become aware of their need for something you can provide or a problem you can solve? Copyright © 2011 Yellowbird Marketing Solutions
  • 4. The Search How do customers identify alternative solutions? The key objective here is to increase product visibility. Copyright © 2011 Yellowbird Marketing Solutions
  • 5. Selection Why does the customer pick one solution over another? Copyright © 2011 Yellowbird Marketing Solutions
  • 6. Order & Purchase What must a customer do to buy from you? Is there something you can do at the point of sale to differentiate yourself? Copyright © 2011 Yellowbird Marketing Solutions
  • 7. Delivery How does your offering get from you to your customer? Copyright © 2011 Yellowbird Marketing Solutions
  • 8. Payment How does a customer pay? Optimizing the payment link can improve business in multiple ways. If the payment is more convenient, that helps to differentiate you. Copyright © 2011 Yellowbird Marketing Solutions
  • 9. Receipt Once the customer has the product, then what? Copyright © 2011 Yellowbird Marketing Solutions
  • 10. Installation and Assembly How does the customer put the product to work? Copyright © 2011 Yellowbird Marketing Solutions
  • 11. Storage and Transport What bothers or worries the customer about storing the product, or having access to it or watching what is happening with it? Copyright © 2011 Yellowbird Marketing Solutions
  • 12. Service What happens when the offering needs service? Copyright © 2011 Yellowbird Marketing Solutions
  • 13. Repairs and Maintenance What happens when the offering needs to be repaired, or is returned or canceled? Copyright © 2011 Yellowbird Marketing Solutions
  • 14. Disposal What happens when the product is no longer of any use and needs to be disposed of? Copyright © 2011 Yellowbird Marketing Solutions
  • 15. Sustainable Competitive Advantage A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself. Copyright © 2011 Yellowbird Marketing Solutions
  • 16. Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation) Cost Leadership Strategy This generic strategy calls for being the low cost producer in an industry for a given level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share. Copyright © 2011 Yellowbird Marketing Solutions
  • 17. Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation) Differentiation Strategy A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. Copyright © 2011 Yellowbird Marketing Solutions
  • 18. Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation) Focus Strategy The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly. Copyright © 2011 Yellowbird Marketing Solutions
  • 19. Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation) Your choice To be successful over the long-term, a firm must select only one of these three generic strategies. Otherwise, with more than one single generic strategy the firm will be "stuck in the middle" and will not achieve a competitive advantage. Copyright © 2011 Yellowbird Marketing Solutions