Quarter 1

19 March 2018Copyrighted in its entirety, Ernest R. Cadotte,

Q1: Establish a Strategic Direction

Name the company

Analyze market information to evaluate the market opportunity

Consider Available financial resources

Costs to open sales outlets

Costs to set up and operate factory

Establish strategic direction

Q1: Setup Shop, Tactical Decisions

Locate factory in ShanghaiBuild fixed plant capacityOpen 1 initial sales officeDesign two brands for target

market segments

Learning Points for Quarter 1 (1 of 3)

Organizing the workDeciding what one wants from the learning experience

Learning Points for Quarter 1 (2 of 3)

Market opportunity analysis

Strategic and tactical planning

Segmentation and target marketing

Financial management

Learning Points for Quarter 1 (3 of 3)

Game theory – competitive positioning

Brand design• Linking product features to customer benefits• Finding the customer’s response functions

Financial Liquidity –cash versus assets

Customers Buy Benefits, Not Features

Once You Select a Segment, You Must Design a Brand to Meet the Needs of the Segment.

Using the computer on the road is important to the Traveler’s segment.

What features would provide thisbenefit?

What Features Would Enable a Computer to be Used on the Road?

How Far Do You Go in Giving the Customers What They Say They Want?

Is more speed, software applications, memory, keys on the keyboard, etc. always valued?

Could “more of some feature”

even make a customer unhappy?

To answer these questions, you must understand the elasticity of your components.

What is the Elasticity of the Peanut?

Searching for the Market’s Response Function

Suppose You Could Design the Ideal Candy Bar

None // A few? // A bunch? // A whole lot?

How Many Peanuts Would You Put in the Candy Bar to Make You the Happiest?

Which Candy Bar Has the Most Peanuts?

Baby Ruth // Snickers // Payday // Milky Way

Which Candy Bar Do You Like the Most?

Baby Ruth // Snickers // Payday // Milky Way

What Does Your Response Function Look Like For Peanuts?

Is more always better?

Would your happiness increase with every new peanut we added to the candy bar?

Is there a limit?

Influence of Peanuts on Candy Bar Enjoyment

What Would Be Your Response Function to the Following?

Chocolate // Caramel // NougatCoconut // Rice // Peanut Butter

Here Are a Number of Response Functions. Which One Applies to Peanuts, Chocolate, Coconut, Etc?

OR

Response Functions (1 of 3)

OR

Response Functions (2 of 3)

OR

Response Functions (3 of 3)

Take Any PC Segment, How Excited Will It Become if You Provide…

More memoryMore functions on the keyboardMore softwareMore…

Just like the candy bar ingredients, you must discover theresponse function for each PC component.

Take Any PC Segment, How Excited Will It Become if You Provide…?