1. Bronner Slosberg Humphrey Case Analysis – Mkt 642
Presented by:
Michael Miyagishima
Peter Atmali

2. Bronner Slosberg Humphrey
Founded in 1980 as Eastern Exclusives
Distributing coupon books
Early customers: American Express and AT&T
Provides relationship marketing services
Mission Statement: “Enable and assist clients to maximize the value of their customer base, and return on their customer base investments, across all points of contact”

3. Bronner Slosberg Humphrey
Small client roster
80-20 rule
Strategic Interactive Group (SIG)
Wholly owned separate entity
Internet capabilities
Ways to grow - add customers, add capabilities, both?
Now known as Digitas

4. Eastern Exclusives Direct marketing
Bring companies together to create value
American Express & local establishments
AT&T & GE, American Air, JC Penney
Measurements based on response rates
Segmenting customers by value
Profitable customers

5. Behavior Optimization
Behavior gap analysis
Customer’s actual behavior
Desired behavior
Economic value of closing gap
Focus on market communications
Relied on database management & modeling, teleservices, and creative advertising

6. Customer Base Management
Evolved from Behavior Optimization
Includes all sales and service interactions
Client may have to undergo structural changes
Example: FedEx

7. Bronner’s Contribution to FedEx
FedEx’s Problems
Weak market
Increased competition
Stagnant growth
Information overload
Little understanding of customers
FedEx’s Marketing Strategy
Mass marketing – list rate structure
Solution: Construct a more comprehensive database

8. Bronner’s Contribution to FedEx
What Bronner learned:
Dual account
Volumes & classes of service with other shippers
Service requirements
Who values on-time delivery vs. fast shipment
Early delivery options
Greater use of computers

9. Bronner’s Contribution to FedEx
Pilot test: different prices and services to some customers
Segmenting the market
Cost: less than $5 million
ROI: $50 million in incremental revenue

10. Reducing Behavior Gap Assigning segment managers responsibilities
Implement customer base management procedure
Learning from experience
Placing high value on FedEx’s best customers
Deepened customer loyalty

11. Would All Companies Benefit?
Segmenting and targeting customers is important to all companies
Need to have resources available to implement this approach
organizational support
customer information
Packaged or soft goods may be difficult

12. Would All Companies Benefit?
Need to have direct channels of communication
direct mail
Internet
Teleservices
Bronner needs international capabilities
Conclusion: Not all companies would benefit

13. Wal-Mart Would Not Benefit
Bargain
Efficient – Retail Link, no excess, no shortages
Economies of Scale
Speed
70% of its merchandise is rung up at the register before the company has paid for it
Point: Suppliers are doing the behavior gap analysis

14. Wal-Mart Would Not Benefit
Mass Appeal
60% of ad budgets go to retailers for in-store promotions
One-Stop Shop
Economies of Scope
Rotating Seasonal Items
Most Product Categories
Point: Market segmentation not crucial

15. Wal-Mart Would Not Benefit
MASS MARKETING
DIRECT MARKETING
Average customer
Individual customer
Customer anonymity
Customer profile
Standard product
Customized market offering
Mass production
Customized production
Mass distribution
Individualized distribution
Mass advertising
Individualized message
Mass promotion
Individualized incentives
One-way message
Two-way messages
Economies of Scale
Economies of Scope
Share of market
Share of customer
All customers
Profitable customers
Customer attraction
Customer retention

16. Bronner’s Contribution to Coca-Cola - Background
1984 – Coca-Cola was losing market share
Pepsi Challenge
Studies on possible launch of
“New Coke”

17. “New Coke” Findings
Behavior Gap: Coca-Cola had a place in the heart, not refrigerator
Consumers don’t mind line extensions
Consumers were never told about “New Coke”

18. “New Coke” Blunder Coca-Cola executives wanted to make Coca-Cola #1
Even at the cost of Coke loyalists (11%)
Lesson:
Coca-Cola is more than a soft-drink icon
Coca-Cola stood for traditional values

19. Bronner’s Contribution to Coca-Cola
Can Bronner come up with this conclusion using their methods?
Customer Database
Questionaires and Interviews
Metaphors

20. Next Step Segment the market Target the market segments Coke loyalists
“Dual” drinkers
Non-drinkers
Target the market segments
Trigger the love for the brand
Line extensions
Brand extensions

21. Questions?