Lesson 5 E-POSITIONING AND ADVANTAGE

What is an Small Business Entrepreneur ? Entrepreneur n. a right brained business man or woman of positive disposition who attempts to make profit from opportunities by risk, initiative and guidance from

SESSION OBJECTIVES EVOLUTION OF MASS MARKETING SEGMENTATION AND CUSTOMISATION NICHE MARKETING E-COMMERCE COMPETITIVE ADVANTAGE

MASS MARKETING STRATEGIES: – EXPLOIT ECONOMIES OF SCALE – RE-INVEST PROFITS IN PROMOTION – USE VERTICALLY LINKED DISTRIBUTION SYSTEMS – DOMINATE MARKET USING HIGH VOLUME / LOW PRICES MASS MARKET BRANDS LATE ENTRANTS INTO E-COMMERCE MARKETS ADVANTAGE IS RECOGNISED BRAND NAME

EMERGING ISSUE OF DEPTH OR BREADTH OF ON-LINE PRODUCT LINE CHRISTENSEN AND TEDLOW SUGGEST BATTLE MAY FOLLOW DEPARTMENT STORE VERSUS DISCOUNT RETAILER PATTERN AMAZON.COM MOVING UP-MARKET OFFERING SIDE BREADTH OF PRODUCTS DISCOUNTERS ENTERING WITH SPECIALISATION (DEPTH) AND LOW PRICES

SEGMENTATION IS ABOUT DIVIDING MARKET INTO SPECIALISED CUSTOMER GROUPS LEAN MANUFACTURING GAVE JAPANESE ABILITY TO MOVE INTO SHORT RUNS OF CUSTOMISED PRODUCTS EMERGENCE OF IDEA TECHNOLOGY WOULD PERMIT ONE-TO-ONE MARKETING OTHER TREND IS CUSTOMER DATA (E.G. LOYALTY CARDS) PERMITS DATA MINING TO FIND PATTERNS

WEB-SITES OFFER REAL TIME DATA ON CUSTOMER BEHAVIOUR INTERNET PERMITS ON-LINE CUSTOMISATION OF PRODUCT NEED EXPERIMENTS BY P&G TO OFFER CUSTOMISED HBAS ON-LINE MARKET NICHE IS VERY SMALL GROUP OF CUSTOMERS WITH SPECIALIST NEEDS

MARKET NICHE USED TO BE PRESERVE OF SMALL FIRM INTERNET OFFERS ACCESS TO ENTER NICHE BY LARGE FIRMS HOWEVER ON-LINE NICHE LETS SMALL FIRM MOVE FROM SMALL MARKET TO BE A GLOBAL PLAYER MICR-NICHING OF INDIVIDUAL PRODUCT FOR EACH CUSTOMER (E.G. SELF-MIXED MUSIC CD ORDERED ON-LINE)

B2B ON-LINE MARKET NICHES BEGINNING TO EMERGE EXAMPLE OF INDUSTRY AUCTION SITE FOR USED CONSTRUCTION EQUIPMENT COMPETITIVE ADVANTAGE MODEL OF PORTER: – COST LEADERSHIP – DIFFERENTIATION – FOCUSED COST LEADERSHIP – FOCUSED DIFFERENTIATION

FIGURE 5:1 AN EXPANDED E-COMMERCE COMPETITIVE ADVANTAGE OPTIONS MATRIX

FIGURE 5:2 AN ALTERNATIVE CUSTOMER NEED MATRIX

CONSERVATIVE TRANSACTIONAL ADVANTAGE BASED ON PRICE / QUALITY STANDARD PRODUCT COMBINATION (E.G. EASY JET U.K.) CONSERVATIVE / RELATIONSHIP ADVANTAGE BASED STANDARD PRODUCT CUSTOMISED TO SPECIFIC CUSTOMER NEED (E.G. FEDEX)

ENTREPRENEURIAL / TRANSACTIONAL ADVANTAGE BASED ON ENTIRELY NEW SOLUTION (E.G. MODBURY BUSINESS PLANNING TOOL) ENTREPRENEURIAL / RELATIONSHIP ADVANTAGE BASED ON INNOVATION DEVELOPED IN PARTNERSHIP WITH CUSTOMER (E.G. MCKESSON ON-LINE DRUG OPERATION)

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